While a nationwide property price slowdown has been predicted by one bank, a prominent economist believes Australia’s real estate markets are more likely to continue on their separate paths.

Macquarie Bank’s wealth management division this week predicted that property prices across Australia would fall by 7.5% over the next two years, but AMP Capital chief economist Shane Oliver believes an Australia-wide price correction would require a specific trigger.

“Nationwide price falls are unlikely until the RBA starts to raise interest rates and this is unlikely before 2017,” Dr Oliver said in a research note.

While he doesn’t believe widespread price falls are in the works, Dr Oliver said there is likely to be some contraction in certain markets.

“[Any] slowdown is likely to be concentrated in Sydney and Melbourne, which are likely to see price growth slow to around 5% over the year ahead,” he said.

“Price growth is likely to remain negative in Perth and Darwin as the mining boom continues to unwind. Hobart and Adelaide are likely to see continued moderate property growth, but Brisbane may start to pick up a bit.”

In spite of the predictions that Sydney’s market will slow, one property professional is still relatively optimistic about its prospects.

“There’s going to be some moderation of growth. The double digit level of growth we’ve been seeing isn’t sustainable for ever, but I still think there’s another 5% - 7% to go over the next 12 – 18 months,” Rich Harvey, managing director of buyer’s agency Property Buyer, said.

“For me, supply is why I think prices will continue to rise. If you look at the numbers from BIS Shrapnel they predict NSW is still short something like 50,000 dwellings, which is going to put pressure on prices.”

In Melbourne, however, Paul Osborne, founder of buyer’s agency Secret Agent, believes Dr Oliver’s prediction could be on the money.

“We’re at the tail-end now of what has been an extraordinary boom and I think it’s likely we’re going to see prices stagnate, and there’s a possibility they could go backwards,” Osborne said.

“Interest rates are likely to go down in the near future and that could provide further stimulus, but over the next 18 months to three years I think we’re going to see some real issues.”

Osborne believes Melbourne is facing too many “headwinds” for it to continue its growth path.

“In the City of Melbourne there’s 3000 individual apartments under construction and that will be 17,000 in 2017, and that’s just in the few suburbs in the middle of the CBD. That’s a huge jump,” he said.

“Unemployment is starting to trickle up which acts as a brake on incomes, and then there’s a tightening of credit availability. It just feels like the headwinds are beginning to outweigh the tailwinds.”

Dr Oliver’s Brisbane prediction is backed by the Real Estate Institute of Queensland (REIQ).

“The Brisbane median house price reached a new high of $610,000 in the June quarter following a trend of positive growth of around two percent since the June quarter of 2013,” REIQ chief executive officer Antonia Mercorella said.

“The reality is that the Queensland property market is increasing in value, in small, steady increments,” Mercorella said.

“We are not seeing a boom and bust cycle here and it is clear that some observers are mistaking the Sydney and Melbourne markets as indicative of the rest of the country.”