“Worryingly, even first home buyers retraced sharply after previously recovering, albeit holding a 16 per cent share of total loans, the highest since 2012,” Mr Tharenou said.

Sydney and Melbourne, the two capital city markets which have led the property downturn, are expected to face falls of about 20 per cent altogether, according to UBS.

The rate at which values are declining gathered pace for both Sydney and Melbourne in the last three months with the last rolling quarter recording the fastest fall in prices since the start of the downturn.

Despite the Reserve Bank shifting its outlook on interest rates to a neutral guidance, prompting the possibility of a record-low cash rate of 1 per cent by the end of the year, UBS indicated it wouldn’t be enough to stimulate the market.

Property pundits have warned it’s not the price of credit preventing a turnaround in prices but access to credit, which has become harder since the banks and their lending practices faced intense scrutiny during the royal commission.

UBS also expects a further fall in home loans, revising down its original forecast of a peak-to-trough drop of “20 per cent with a risk of 30 per cent” to “25 per cent with a rising risk of 30 per cent”.

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