House prices in Sydney and Melbourne are at the peak of the cycle and by this time next year the downturn will have started, a panel of property valuers, financiers, analysts and fund managers says.

However, the experts, polled by the Australian Property Institute (API) for its six-monthly Property Directions Survey, believe prices will continue to rise for the next six to 12 months.

The API uses the “Property Clock” concept with 12 o’clock at the peak of a cycle and 6 o’clock at the bottom.

API NSW president George Vallas said the experts put Sydney and Melbourne at 12 o’clock.

In a year’s time, the downturn will have started and Sydney and Melbourne will be at 1 o’clock. Within two years, Melbourne will be at 2 o’clock.

Mr Vallas said, historically, prices decline by 5 per cent, to “no more than” than 10 per cent, through a down cycle.

Turnover falls by more as the boom subsides. Brisbane housing will follow the southern capitals. The city is yet to peak and will not enter its downturn till 2017.

Half the experts agreed Sydney housing was in, or was entering, a bubble and 56 per cent thought the same of Melbourne.

Less than 25 per cent thought Brisbane was in, or entering, a bubble.