A new method for modelling general trends in the property market predicts that home prices in Melbourne, Brisbane and Perth are about to tumble, while those in Sydney will hit a plateau after climbing moderately higher.

A study currently under review for the Economic Record anticipates a fall in Melbourne home prices of as much as 9.2 per cent in the upcoming year, with values expected to commence their decline forthwith.

Housing prices in Sydney are tipped to rise by six per cent over the year, yet the study predicts they will hold steady thereafter.

The predictions in the study are based on an analysis of monthly home price data in Australia’s major cities over the past two decades by Abbas Valadkhani of Swinburne University, Ronald Ratti of the University of Western Sydney and Greg Costello of Curtin University.

The researchers used the patterns in the data from 1995 to December 2014 to predict housing prices in May 2015, and then verified the accuracy of their results by means of four different statistical tests.

They then used the same methods to extrapolate the likely state of housing prices in major cities throughout Australia by May of 2016.

According to Valadkhani, while the method is unable to determine the size and timing of detailed price shifts, it nonetheless remains effective as a means of determining the overall direction of price movements in Australian housing markets.

The developers of the pricing model claim it is the first that can be updated on a month-by-month basis, enabling them to predict upcoming inflexion points in the market in an ongoing way.

In addition to the fall in Melbourne home prices, the model also anticipates a decline of 8.1 per cent in Brisbane and 5.2 per cent in Perth. Home prices in Adelaide, Canberra and Hobart are tipped to continue growing gradually.