The latest residential housing price figures confirm what buyers and sellers have known for some time: the drop in housing prices is continuing without any real sign of a bottom being reached. This fall, as with the housing boom, is most pronounced in Sydney and Melbourne. This has seen an improvement in housing affordability but it remains above the pre-boom levels.

In the December quarter last year the average house price across all capital cities fell by 2.4% - the fourth consecutive quarter of falling prices. The last time we had such a run of falling house prices was in 2011 which saw the Reserve Bank respond by cutting interest rates six times in 13 months and then a further six times from the middle of 2013 until 2016, which resulted in the cash rate going from 4.75% to its current rate of 1.5%:

Over the course of 2018 house prices across the capital cities fell 5.1% – the biggest 12-month fall ever recorded by the residential price index, which dates back to 2002.

And while the average of the capital cities is dominated by Sydney and Melbourne, the falls are seen across the entire country.

In the December quarter only Adelaide and Hobart saw prices increase – and in Adelaide it was by a mere 0.08%, while Sydney’s 3.7% fall led the nation:

Sydney also had the biggest yearly slump. Residential prices in the NSW capital fell 7.8% in 2018 – the biggest 12-month fall any capital city has recorded in the past 15 years:

So it is rather tough to argue there is a “soft landing” occurring in Sydney – prices are falling faster than they have in the recent past and they are also coming off one of the biggest booms of recent times.

And the bust has occurred for both established houses and for attached dwellings such as apartments and flats.

In the past year established house prices fell on average 5.5% across the nation, while attached dwellings fell 4.2% – both of which are also record falls:

The drop in established dwelling prices is again largest in Sydney – down 8.4% over 2018 and its 6.4% fall in apartment prices was second only to Darwin:

And while the house price drop in Melbourne has been slightly less pronounced than in Sydney, that city is seeing a greater recalibration of prices. Generally house and apartment prices move in synch, but in Melbourne after 2012 the price of established houses surged well beyond that of apartments.

Now we are seeing a slight merging of the two:

But Sydney remains the most expensive place to buy a house.

While we no longer are seeing a median house price in Sydney above $1m, at $910,000 we are still talking a massive commitment and nearly 30% higher than in Melbourne, 69% higher than Brisbane and nearly double that of house prices in Adelaide and Hobart:

Generally the average earnings of those in Sydney are higher than in other states – average full-time male weekly earnings in New South Wales are $1,808 compared with $1,264 in South Australia – but the difference is not enough to overcome the massive difference in house prices.

A couple earning the average full-time male earnings in NSW and half of the average women full-time earnings would have an annual income of $133,000. Using this measure the median Sydney house price is the equivalent of 6.8 years of annual household income.

And while this has fallen from a peak of 8.3 years in 2017, it remains well above the 5.6 years in Melbourne and 4.0 years in Adelaide.

Indeed, while the housing boom period saw affordability in Sydney and Melbourne significantly fall, in Adelaide it barely changed:

So where are things going from here? Well, unless the Reserve Bank gets involved and cuts rates soon, house prices will continue to fall for some time.

The fall in housing finance suggests that the next six months will see more drops in house prices and a likelihood of it continuing given the speed of the drop in finance:

Right now the market is pricing in a cut in interest rates by August with a big chance of a cut to 1% within the next 12 months.

In the past, such house price falls have seen the RBA act, and in 2011 it also saw the start of a price boom. Whether any cuts now would set off such price rises is harder to gauge, but it does seem that the central bank will be less likely to sit by and watch while house price continue to fall at the current rate. A rate cut during the election campaign must be a big chance now.

• Greg Jericho is a Guardian Australia columnist