RESIDENTIAL property prices peaked in 2010 and will continue cooling in the next six months as big mortgage brokers report a 20 per cent drop in loan numbers.

Aussie Home Loans managing director John Symond said its new loan volumes had plunged 20 per cent in the past four months because the housing market was soft.

He said Aussie had kept its 5 per cent share of the market and, until December last year, usually settled $1 billion worth of new home loans a month.

"The general consensus is the market is down around 20 per cent in volumes," Mr Symond said.

"Housing generally throughout the country is definitely in a cooling stage, swinging towards a buyers' market particularly for properties above $700,000 or $800,000."

Australia's housing market is past the peak of the cycle and will probably continue to soften over the next six months, he said.

"The cheaper prices close to the city - prices up to $600,000 or $700,000 - are still quite good because you've got first home buyers and small investors vying for those properties."

He said competition between brokers had not intensified despite a host of post-global financial crisis mergers and acquisitions in the sector, making the industry more concentrated.

AAP