National Australia Bank (NAB) tempered its prediction for Sydney property prices, given that the decline of values surpassed its forecasts since 2018.
"We now expect Sydney to decline by around 20% from peak to trough, while Melbourne is expected to fall around 15%," NAB Group Chief Economist Alan Oster said in a statement.
NAB was expecting peak-to-trough drops of nearly 15% in Sydney and Melbourne in January, according to a report by The Sydney Morning Herald.
Basing on CoreLogic data, real estate prices in Sydney have slid about 14% since their peak in 2017, while the downturn in Melbourne has averaged about 10%.
"Overall, we expect some further price declines in 2019, before levelling out in 2020," Oster said in a statement.
The weakness will be caused by ongoing declines in Sydney and Melbourne, according to the economist.
Conditions in Perth are also expected to remain weak, while other capitals are likely to post better results.
NAB analysts forecast Sydney unit prices to slide by 7.2% in 2019 and 2.5% in 2020.
Melbourne unit prices, meanwhile, are expected to drop 4.3% in 2019 and 1% in 2020.
"The key factors we see as having driven these declines include the early prudential tightening (particularly for investors), some tightening in credit conditions (on the expenses side), waning foreign investor demand as well as weaker price expectations themselves," Oster said in a statement.