Sydney and Melbourne house prices could fall by 15 to 20 per cent in a repeat of the late 1980s and '90s, an independent equity research firm has argued, citing the "largest regulatory credit crunch in 30 years" as the cause for the slide in property values.

Endeavour Equity Strategy said in a detailed 30-page report that more evidence had emerged to support its claims that about 40 per cent of all mortgages were "non-prime", based on the level of borrower's income relative to debts, as it called on the prudential regulator to force the banks to increase their disclosures of mortgage risk.