Australia's property prices have looked bubbly for a while, but the surge is likely to hit a wall soon amid a combination of few births, high mortality and sparse migration, Goldman Sachs said.
"We estimate Australia's population will likely be 260,000 smaller by the end of 2015, 410,000 smaller by the end of 2016 and 530,000 smaller by the end of 2017," Goldman said in a note Wednesday. "We change our estimate of demographic demand for housing from a 140,000 underlying deficit for established homes by the end of 2017 into a 75,000 underlying surplus."
That's a sharp turnaround from a strong run-up. House prices down under appreciated 23 percent over the past two-and-a-half years and are forecast to increase by 8 percent this year, driven in part by Chinese buyers seeking investment properties, HSBC estimated in February.
While the country's population growth over the past decade had been among the most rapid in developed markets, that's changing, Goldman said.
Slowing income growth and women delaying having children have caused the birth rate to fall 3 percent on-year currently after a spike from 2005-2008, Goldman noted.
Additionally, Australia is getting "older, fatter and forgetful," it said.
The population aged above 65 years is expected to top 20 percent by 2025 and dementia and Alzheimer's disease will "easily" become Australians' leading cause over death over the next decade, it said.
"The rate of growth of deaths will easily double its historical average over the coming decade as the sheer number of individuals moving into age brackets with higher mortality rates swamps any further extension to average years lived," Goldman said. It added that Australian Bureau of Statistics life expectancy forecasts may not be taking into account that Australians are more overweight and obese than the G-7 average, even if Japan is excluded.
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Two-thirds of Australia's population growth since 2008 has come from net migration, Goldman noted, but it asked, "Would you move to a country where you can't get a job?" With Australia's housing and living expenses high and employment opportunities low, Goldman expects potential migrants to look elsewhere.
Goldman isn't alone in expecting a shift in Australian property.
"In the short term, low interest rates point to further gains in home prices," Shane Oliver, head of investment strategy at AMP Capital, said in a note last week. He expects home-price rises will average around 5 percent over the next 12 months, with Sydney and Melbourne likely a bit stronger, while Perth and Darwin areas are likely to see declines amid a mining bust.
The residential property outlook for the next 5-10 years though is messy," Oliver said. "Housing is expensive on all metrics and offers very low rental yields," making other assets a better value for investors.
--Nyshka Chandran contributed to this article.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter