The Victorian government is counting on the property market to pick up again from 2021 as population growth and low interest rates boost demand and start lifting prices after a 13.1 per cent peak-to-trough decline it predicts.

Home values, which have already lost 10.9 per cent since their 2017 peak, have further to fall, the state government said in its 2019-20 budget on Monday. Declining values as well as transaction volumes that fell 12.7 per cent over the year to March have cut stamp duty revenues almost 14 per cent this year to $6 billion with a further 1.6 per cent decline predicted to $5.9 billion next year.