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via finance.nine.com.au

Australia’s housing market downturn is coming to an end, with leading economists predicting a spike in house prices as soon as July.

Property prices fell one per cent nationally in January, with CoreLogic data showing a smaller decline of 0.5 per cent in April – a result tipped to be repeated for May.

It comes after Commonwealth Bank’s incoming, home loan applications jumped to a 10-month high and strong predictions of interest rates cuts.

Expect to see a whole lot more of these in the coming months. (AAP)

“Australia’s house price growth reached its worst on an annualised basis in January. Prices have continued to fall since then, but the rate of decline has slowed,” the bank wrote in a statement.

“If you look at prior cycles, an increase in house prices occurred five to seven months after the trough in the annualised growth rate. Using the average of six months, prices could rise by July.”

The bank said in every Australian house price cycle since 1989, price growth followed within seven months after the monthly annualised price decline bottomed.

Graph showing the trend repeating over the past 30 years. (Supplied)

Macquarie’s prediction extends further than past performance, with the bank also attributing looming interest rate cuts, relaxed lending conditions and the recent election result to its positive outlook.

“With the surprise Coalition election win, APRA’s policy change and an expected June RBA rate cut, we are more confident Australian house prices could rise within months,” the note read.

“This should flow through to better growth in housing finance and building approvals.”

AMP Capital chief economist Shane Oliver shares similar sentiments.

“The combination of the removal of the threat to property tax concessions, earlier interest rate cuts, financial help for first home buyers and APRA relaxing its 7 per cent interest rate test points to house prices bottoming earlier and higher than we have been expecting,” he said in a note.

“We now expect capital city average house prices to have a top to bottom fall of 12 per cent— of which they have already done 10 per cent — rather than 15 per cent and to bottom later this year.”

A swing in property prices has been supported with the Commonwealth Bank saying last week it saw the highest level of home loan applications in ten months.

This also coincides with CoreLogic data from the same period showing median home prices in Sydney and Melbourne increased by 0.3 per cent and 0.1 cent, respectively.

Prime Minister Scott Morrison’s victory has helped the market, economists say. (AAP)

Nine finance editor Ross Greenwood said the threat of changes to the tax treatment on Australian housing created a lot of uncertainty in the market, but since Scott Morrison’s victory this has shifted to a “sense of immediate euphoria”.

“It is actually good news if people kind of feel OK about things,” he told Today.

“But the one thing about this is it now comes back to the old-fashioned leaders of the economy – what the Reserve Bank does, whether we get tax cuts.

“These are the things that put cold hard cash in people’s pockets. At the end of the day, that’s the thing that counts.”

Greenwood added tax cuts would have a bigger impact long-term on household budgets and finances than a decline in interest rates.

“The problem is because one-third of families have a mortgage, whereas two-thirds of families are trying to save for a mortgage to own their home and they have savings in the bank,” he said.