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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.
[Related: Apartment oversupply 'overstated']