Property giant Cotality has warned that Australia's housing market could face a downturn as demand softens and the full impact of interest rate rises kicks in.

The warning, reported by the ABC, comes after years of skyrocketing prices that have made homeownership increasingly unaffordable for ordinary Australians.

The housing crisis has been political dynamite for years, with prices only going up. If Cotality is right and we're heading for a downturn, that creates winners and losers – would-be buyers might finally catch a break, but existing homeowners could see their biggest asset decline.

Here's the reality: Australia's housing market has been on an extraordinary run. Prices in Sydney, Melbourne, and Brisbane have doubled or more over the past decade. First home buyers have been priced out. Young Australians have been told to lower their expectations, move further out, or give up on the dream entirely.

The Reserve Bank's interest rate hikes were meant to cool the market. For a while, they did. Prices plateaued or dipped slightly. But they never crashed. Many expected a correction that never came.

Now Cotality – a major player with visibility across the market – is suggesting that correction might finally arrive. Demand is softening. Buyers are stretched. The interest rate rises are finally biting.

But here's where it gets politically complicated. A housing downturn helps people trying to get into the market. It hurts people who've bought in the past few years at peak prices. And it terrifies the roughly two-thirds of Australians who own their homes and see housing as their retirement nest egg.

Governments talk about housing affordability constantly. But they're terrified of actual price falls. Homeowners vote. They vote in large numbers. And they don't like seeing their wealth erode.

The Albanese government has talked a big game about fixing housing. Building more homes. Improving affordability. Helping first home buyers.