The property party of skyrocketing values is over for now, but house values certainly won't collapse either as some commentators have predicted, said an ANZ report this week.

Despite risks such as rising unemployment, mortgage defaults and stressed home sales, ANZ predicted the median house price would soften by between zero to -5% over the next 12 months. A turnaround would then soon be around the corner.

"House prices will recover quickly once the current economic uncertainty has passed," said the report's authors.

One reason for optimism is that residential property values have already greatly defied calls by some doomsayers of drops by 40% or even 50%. Instead, prices have fallen by just 2.1% in the six months following a peak in March. Over the year to September, house prices rose by 2.8%. Rental yields, pushed up by record low vacancies, are another positive for investors. Falling interest rates and incentives to first homebuyers are also starting to spark some downcast investors.

"The Australian housing market is therefore well placed to avert the dramatic declines experienced in some international markets," said the report.

In breaking the situation down state by state, most such as NSW, Victoria and Queensland were given solid future prospects in the report. South Australia, with a rising unemployment rate, could be at risk of a further slide in prices, said ANZ.