Brisbane, Adelaide and Perth are cushioned against a downturn more than twice as bad as Australia has been through in 40 years, latest figures from housing data analysis firm Cotality show.
But a similar nosedive would knock Sydney and Melbourne's markets back to pandemic-era or even pre-pandemic levels, according to numbers released on Friday.
"If you've been a home owner in any of those mid-sized capitals for an extended period of time, you're actually in a very strong position to withstand a pullback," Cotality research head Gerard Burg told AAP.
Australia's housing market recorded the largest single-month decline in home values in almost four years in July, led by Sydney and Melbourne where values have fallen by more than five per cent from their peak.
Brisbane, Adelaide and Perth have lagged behind the downtrend, recording house price declines of just 0.6 per cent, 0.2 per cent and 0.1 per cent, respectively, in the three months to July.
But extreme scenarios mapping out a property market nosedive of up to 20 per cent illustrate some have much more to lose from a downturn than others.
Melbourne would be worst hit, its house prices having grown much more sluggishly than its peer cities thanks to more of its residents skipping town and Victoria managing to churn out more homes.
"In the early stages of the pandemic, there was a migration out of the city, reflecting the impact of the COVID-era lockdowns," Mr Burg said.
"But there was also a supply success over that period: between the start of 2020 and the end of last year, around about one third of all homes completed across the country were in Victoria."
A 20 per cent downturn would reset Melbourne's house prices to where they were in June 2017, when its median dwelling value was about $675,000.
The worst dive in the housing market in the past four decades was 8.2 per cent, according to Mr Burg.
"This isn't a forecast of what we expect to happen," he said.
Stronger growth in Sydney means a 20 per-cent slump would only set its market back to where it was in May 2021, when the average property fetched about $1.05 million.
But Brisbane, Perth and Adelaide - where prices have surged in the post-pandemic years - might barely notice the plunge, their markets only being knocked back to April 2024 at the earliest.
"Growth over the last five years has really been led by those mid-tier capitals," Mr Burg said.
"A sizeable decline in these markets for a large chunk of people really is not a huge imposition."
The latest downturn still appears to be a routine correction after a strong period of growth, economists say, despite grim forebodings following the federal budget's removal of tax concessions for property investors and a series of interest rate hikes.
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