Westpac report says the good times in the residential property market will "end very soon".

Garry Tranter from Price My House for Free Limited

The housing market is facing a looming slowdown, according to Westpac's chief economist Dominick Stephens.

In a Home Truths Report on the housing market Stephens said although the market was positive for now, it will soon slow.

"In our view the good times for the market are going to end very soon," he said.

"We are forecasting a small decline in house prices in the second half of 2018.

The report pointed to six factors that would likely cause a market slowdown:

- Foreign buyers will be banned from buying existing residential properties, probably by the middle of this year.

- Ring fencing tax losses on residential investment properties, which means investors won't be able to offset any tax losses from a property against other income.

- The Tax Working Group will probably recommend a Capital Gains Tax, although the family home will likely be exempted.

- Mortgage rates are more likely to rise than fall

- Net migration is expected to keep slowing while home construction will keep rising.

"This is a prodigious set of negative factors, but for a few reasons we are forecasting only a slight house price decline, rather than anything dramatic," the report said.