One of Australia's leading property analysts is predicting price falls of up to 10 per cent in the east coast capitals as the housing boom starts rolling over.

Key points: Property prices in Sydney fell by 1.3pc in May, Melbourne by 1.7pc

Property prices in Sydney fell by 1.3pc in May, Melbourne by 1.7pc Nationally, property prices down 1.1pc in May, up by 0.4 per cent over past three months

Nationally, property prices down 1.1pc in May, up by 0.4 per cent over past three months CoreLogic's Tim Lawless says May is a seasonally weak month, but a 2-10pc price fall from peak to trough is likely

The latest property price figures from CoreLogic point to a fall nationally during May, led by the previously booming markets of Sydney and Melbourne.

The company's head of research Tim Lawless told ABC News that May is generally a weaker month for prices as the laggards of the autumn selling season are sold.

"If we adjust for seasonality in our series, it looks like the monthly result is probably up about 0.1 per cent and the quarterly result probably 1.3 per cent," he said.

However, Mr Lawless also observed that leading indicators of real estate activity were also showing signs of slowing, with a moderation in mortgage activity, more properties listed for sale and a dip from previously very high auction clearance rates.

Another leading property analyst, Louis Christopher from SQM Research, wrote earlier in the week about a rising trend in unreported auctions - as auction clearance data rely on agent reports of sales, this could indicate that the proportion of properties being sold is lower than the headline suggests.

Mr Lawless said the weaker trends likely reflect reduced investor activity in the market, as regulators push banks to cut lending to that sector.

"There are a lot of changes around credit policies from the lenders and, of course, the new macroprudential requirements to reduce interest-only lending are affecting investment demand," he told the ABC.

"On top of that you've also got mortgage rates which have been rising, particularly for investor mortgages.

"In fact, since August last year, we've seen investor mortgage rates for variable loans rise by about 25 basis points, so essentially a default rate hike."

Sydney 'more exposed' to housing market 'correction'

Mr Lawless observed that Sydney, which had seen the steepest price growth of around 75 per cent over the past five years, was showing the strongest signs of weakening.

"It does look like Sydney is more exposed to a slowdown in investment activity," he observed.

"Nearly 60 per cent of the marketplace in Sydney was driven by investment demand ... so it does look like Sydney is exposed to a slowdown more so than other markets."

However, Mr Lawless is not amongst those predicting this slowdown to turn into a property market crash.

"Generally, very strong growth periods are followed by some level of correction," he argued.

"The correction typically lasts around 18 to 24 months and we see values fall somewhere between 2 and 10 per cent.

"And I can't see any reason why this new cycle would be any different.

"We aren't expecting any sort of crash in the Australian housing market."