“In the short term the risks appear in softening rental yields and the potential of extended periods of vacancy in areas where there is an increase release of supply,” chair of the Property Investment Professionals of Australia, Ben Kingsley, told SMSF Adviser.

“In addition, if investors have bought unit market recently, especially high rise or medium density off the plan, the valuation pressure could also be a short term concern over potentially the next five years.

“If they are banking on long term – 10 to 20 years, then on the whole they should have confidence in steady capital growth over this time.”

Broadly speaking, although a housing crash looks unlikely, Australian house prices look set to cool as oversupply sets in.

Speaking at an Actuaries Institute seminar in Sydney, NAB global head of research Peter Jolly said Australian residential property prices have appreciated fourfold in the past two decades.

Three factors have driven the increase in house prices, Mr Jolly said: the lowest mortgage rates in history; an influx of foreign buyers; and population growth outstripping the supply of residential dwellings.

While mortgage rates are likely to remain low for the foreseeable future, the second two factors are definitely "waning", said Mr Jolly.

First, the appetite of Chinese buyers for properties on the eastern seaboard is starting to decrease, he said.

Second, a supply/demand imbalance in Australia's property markets is starting to even out.

"What’s very clear to us is that what was absolutely true five to six years ago, where population had very much outstripped the supply of housing, that is not true at all now," Mr Jolly said.

"In fact, generally it’s closed up across the nation, and there are certain markets that are heading into some oversupply," he said.

Mr Jolly pointed to rising rents across the country as evidence of oversupply. The "most obvious" oversupply is within inner city apartment markets, he said.

"NAB’s view on housing is that we’re going to see the housing markets cool appreciably over the next year or two," he said. "Standalone house price growth rates will slow quite a bit, and we actually see unit prices declining.

"We see much more modest house price gains in most cities, and a bit of a decline or a continued decline in Perth.

"[We also see] a bit more of a decline in some of the unit markets where we see some very clear oversupply. [That means] parts of Melbourne, parts of Brisbane, and parts of Sydney," Mr Jolly said.