A property auction in Brisbane's affluent suburb of Ascot, where a house listed at $3.4 million failed to attract a single bid, has raised concerns about the strength of Australia's housing market.

The result contributed to a low auction clearance rate across Queensland and has intensified debate about whether Brisbane could be particularly vulnerable to a broader property downturn.

Economist Shane Oliver argues that several factors are creating challenging conditions for housing prices, including higher interest rates, recent tax changes affecting property investors, elevated property valuations, and growing political pressure to reduce immigration levels.

According to his analysis, Brisbane houses are significantly overvalued relative to rental yields, making the city one of the most exposed markets if conditions deteriorate.

While some Australian cities such as Brisbane, Adelaide, Perth and Darwin recently recorded price highs, other markets including Sydney, Melbourne, Canberra and Hobart have already experienced price declines.Real estate agents in Brisbane report reduced buyer activity, although they have not yet seen widespread price falls.

The Federal Budget's changes to investment property taxation are expected to discourage some investors from purchasing existing homes, potentially reducing demand.Immigration policy is also emerging as a key factor because population growth has contributed to housing shortages and rising rents.Lower migration targets proposed by political parties could reduce housing demand over time.

Despite these concerns, experts note that future outcomes will depend on inflation, interest rates, employment conditions, investor behaviour and global economic developments.Property prices could either weaken further or stabilise if economic conditions improve.