The property market has been tipped to fall up to 15 per cent from its March peak, only stabilise in the second half of 2027 and not fully recover for three to four years, according to economists.
At the same time, median rents have hit about $700 a week nationally, according to housing data firm Cotality, and fresh polling from the Australia Institute shows the vast majority of Australians favour rental caps.
There were no signs of the housing market bottoming out soon, AMP chief economist Shane Oliver told AAP.
Australians should expect a 10 to 12 per cent total fall in house prices and a similar climb in rents before the market hits the floor, Mr Oliver said on Wednesday.
For Sydney and Melbourne, an 11 per cent dip would pull median house prices down to levels of early February 2021.
Labor clarifying the federal budget's tweaks to negative gearing and capital gains tax would help lure investors back into the market and push home values back up, Australian Property Institute research head Sherman Chan said.
The group predicted a recovery would begin in the three months to September 2027, soon after the tax changes kick in.
But Mr Oliver argued rising interest rates were much more closely watched and any recovery would take up to four years to lift home values back to where they once were.
"Once it's clear that the (Reserve Bank) is heading towards rate cuts, I think that will enable the property market to start recovering," he said.
"But that to me looks to be a fair way off."
The RBA hitched the cash rate up to a 15-year high of 4.6 per cent in its September meeting, which governor Michele Bullock warned might be followed by more rises.
Money markets have priced in a 30 per cent chance of another hike in November but think the bank will hold steady.
Mr Oliver said the boffins' strident language about keeping a lid on inflation was likely to endure.
"Our base case is that the Reserve Bank has hit the high point on the cash rates, but another hike is a very, very close call," he said.
The alarming median rent figures sent the Greens clamouring for the government to institute caps, which Housing Minister Clare O'Neill on Wednesday said would wipe properties off the rental market and cause construction to shrivel up.
Greens housing spokeswoman Barbara Pocock responded with the example of the ACT.
Tenants in the national capital should only expect rises once a year, by a maximum of 10 per cent above the portion of Canberra's inflation attributable to rent increases.
"There is a rent cap here, it follows inflation, and what do we see as a consequence? Rent increases are half the rate in other comparable cities," she told reporters in Canberra.
"There is better availability of rental property, so I see no evidence in support of an argument against rental regulation."
The coalition has pinned renters' pain on Labor paring back negative gearing and capital gains tax discounts, but Mr Oliver said the link between the two things was far from clear-cut.
"What we see at the moment is on par with expectations that existed before the budget," he said.
"If anything, rental growth has slowed down a lot because of the slowing economy."
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