By Noah Secomb in Canberra

Tens of thousands of dollars could be slashed from home values in all capital cities in coming months, but the federal government says there is no reason to panic.

Commonwealth Bank has reported a “faster and broader” downturn than expected in its latest update on the housing market, flagging a drop of 10 per cent through to April next year.

Housing Minister Clare O’Neil said the forecast isn’t a big concern.

“The housing market in Australia is inherently cyclical,” she told Channel Seven’s Sunrise on Wednesday.

“We see periods of really strong house price growth that are followed by a period of housing downturn. That’s happened now about four times in the last decade.”

House prices have increased by 300 per cent since the turn of the century, and Ms O’Neil said if such gains continued they would shatter aspirations for future generations.

After Labor announced in the May budget that it would remove some tax advantages for property investors, housing prices have slipped.

National home values are 3.6 per cent below the market peak posted in March, according to the latest figures from Cotality.

Adding pressure on the housing market, the nation’s four big lenders are forecasting another interest rate hike from the Reserve Bank before the end of the year, after recent inflation figures came in hotter than expected.

Opposition housing spokesman Andrew Bragg isn’t convinced changing the tax settings for property investments has helped first-home buyers.

“No one wants to see affordability pursued through more taxes,” he told the ABC.

“Anyone who wants to dress up these terrible tax grabs as having helped anyone, I think needs a new brain.”

Senator Bragg has again called for boosted housing supply to address affordability concerns.

Meanwhile, shadow treasurer Tim Wilson said he questions the assumption that the Reserve Bank will cut rates in the next year.

“I see no evidence at all that the government is trying to slow down inflation or slow down pressure on interest rates,” he told News24.

The Commonwealth Bank report predicts house prices will begin to grow again by the start of 2028 regardless of a rate cut.

Treasury modelling in May suggested scrapping the capital gains discount and limiting access to negative gearing to new builds would only slow down market growth.

Ms O’Neil said Treasury did not have to consider broader economic factors when it forecasted future house prices.

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