From crowded unit markets in the Sydney, Melbourne and Brisbane inner cities to still struggling towns in regional Queensland and Northern Territory, the warning signs are clearly visible, according to hotspotting.com.au.

See below for suburbs mentioned. 

The property research firm’s latest Price Predictor Index uses sales volumes to predict future price movements — more sales point to price increases, falling sales to price declines.

“Sales volume is a precursor to prices, that’s why it’s quite a valuable indicator,” said Hotspotting managing director Terry Ryder.

“The wind-down in Sydney was obvious well ahead of showing up in prices. Sydney peaked really in terms of sales volumes in 2015 and has been gradually tapering off. It was only last year we started to see it reflected in the price data.”

The report lists a total of 66 “danger” suburbs — 17 in NSW, seven in Victoria, 26 in Queensland, three in Western Australia, three in Tasmania and 10 in Northern Territory. South Australia and the Australian Capital Territory escaped unscathed.

The strongest concentrations of danger suburbs were in the Sydney city and Parramatta areas, the Brisbane and Melbourne inner cities, and in the Queensland regional towns of Mount Isa and Gladstone, which have eight and six danger suburbs respectively.

“The ones to avoid are primarily in the Sydney apartment market and the Brisbane inner-city apartment market,” Mr Ryder said. “Then there’s still some in regional Queensland and those areas impacted by the mining sector, [although] there are fewer than there were. A number of Queensland regional markets are actually showing signs of recovery.”

The crowded CBD apartment markets are in for a rough time over the next two years, with rising supply coinciding with falling demand from buyers and a strong reduction in sales.

It comes after data from property research firm CoreLogic showed national median house prices fell at their fastest annual rate since 2012 in July.

The 0.6 per cent month-on-month fall brought the annual decline to 1.6 per cent, with prices now 1.9 per cent below their September 2017 peak. CoreLogic said the weakness was driven by long-running declines in Perth and Darwin and an acceleration of the rate of decline in Sydney and Melbourne.

A number of major banks have recently downgraded their forecasts for the Australian housing market. NAB predicts house prices will flatten in 2020, with a peak-to-trough fall of 6.5 per cent in Sydney and 2.5 per cent in Melbourne.

ANZ said it expects to see peak-to-trough declines of around 10 per cent in both Sydney and Melbourne in the same period. AMP Capital chief economist Shane Oliver believes Sydney and Melbourne will see declines of 15 per cent while the national average will fall by 5 per cent.

The Reserve Bank this week kept the official cash rate on hold for the 24th month in a row — technically 22 meetings — marking the longest ever period without a change.

The RBA last cut the cash rate to its record low of 1.5 per cent in August 2016, after an earlier cut to 1.75 per cent in May. There has not been an official cash rate increase since November 2010.

Experts believe the cash rate won’t move until at least late 2019 or early 2020. Despite no official cash rate move for two years, a number of smaller lenders have been lifting their rates to cope with higher wholesale funding costs.

Source: Hotspotting Price Predictor Index Winter 2018.

Source: Hotspotting Price Predictor Index Winter 2018.

Source: Hotspotting Price Predictor Index Winter 2018.

Source: Hotspotting Price Predictor Index Winter 2018.

Source: Hotspotting Price Predictor Index Winter 2018.

Source: Hotspotting Price Predictor Index Winter 2018.

Source: Hotspotting Price Predictor Index Winter 2018.

Source: Hotspotting Price Predictor Index Winter 2018.

Courtesy: Frank Chung - News.com.au