Sydney house prices could bounce back by up to 9 per cent next year if the Reserve Bank of Australia pauses interest rate rises, keeping the cash rate below 4 per cent according to the Boom and Bust report.

Louis Christopher, managing director of SQM Research and author of the report, said a pause in the rate rise cycle, which is expected to occur as early as June year, with the cash rate holding steady for the rest of 2023, could ignite a recovery in dwelling prices across the biggest capital cities.