It would be a massive swing in the pendulum," Dr Mardiasmo told the ABC."I think a 5 per cent drop is more realistic at the moment, given inflation has been going down every month since March."What's happening right now in the market is temporary in nature because it's based on economic conditions like interest rates being high and the government's changes in property taxes."Dr Mardiasmo believes if inflation continues on its downward trajectory to a level the RBA is comfortable with (about 3.4 to 3.5 per cent), the market will see a "change in the winds" by mid-to-late 2027.ANZ economists also see prices recovering over 2028."Given the broader supply backdrop, and the capacity constraints in the construction sector, we think it is hard to see housing prices falling for an extended period," Ms Dunk and Mr Boyton said.RBA governor Michele Bullock says the board is monitoring the flow-on effects of the housing market downturn, but stresses it is not the bank's focus for future rate decisions."The main game here for us is excess capacity, [the] tight labour market, particularly in some areas like construction, the Middle East conflict, the AI boom These are all the things that are front of mind in terms of risks to the inflation outlook," Ms Bullock said.The RBA does, however, see house prices continuing "to decline gradually for a period", according to its latest set of staff economic forecasts.Financial markets see a 60 per cent chance the RBA will deliver another 0.25 percentage point rate rise by the end of the year, which would take the cash rate to 4.6 per cent.