SYDNEY, Jan. 14 (Xinhua)-- Australian house price growth is set to come off the boil in 2016 due to low affordability and prudential regulations.

　　Global ratings agency Fitch on Thursday said Asia-Pacific house prices are set to slow or decline in 2016, noting Australia is headed for 2 percent growth, down from 8 percent year-on-year between 2013-2015.

　　"Stretched affordability and further compression of rental yields are likely to be key factors driving down price growth in Australia," Fitch said in a statement.

　　"This is especially the case in Sydney and Melbourne, where price appreciation in recent years has outpaced wage growth -- leading to decreasing levels of affordability."

　　In 2015, Fitch forecasted Australia's property market to grow by only 4 percent, based on the high cost of housing, misreading the strong investor demand that drove prices to record highs.

　　"Weaker demand from investors has also already begun to affect mortgage demand, as falling rental yields and new prudential measures restrict the growth of investment loan portfolios," Fitch said.

　　The latest ANZ-Property Council survey, released on Thursday, also showed a "muted" slowdown of Australia's property market and future housing construction.

　　According to the survey of property market investors, developers and contractors, there is still strong evidence of foreign investor appetite, however, it may be dampened by stricter government controls.

　　"We expect, however, that the Reserve Bank may provide some relief for the economy this year, through interest rate cuts, if other sectors do not pick up to compensate for the slower path of housing."

　　Relief from the Reserve Bank of Australia is unlikely as official data also released on Thursday shows the diversification of the local economy is slowly taking shape.

　　Australian Bureau of Statistics data showed the unemployment rate remained steady at 5.8 percent for December, while trend-line of hours worked increased 3.4 percent annually, indicated a pick up in services sector growth.

　　The Commonwealth Bank of Australia on Thursday reduced their prediction for an RBA cut from 30-40 percent to 25 percent as risk diminishes, viewing the record low 2 percent cash rate as the bottom of the rate cycle.

　　"The Reserve Bank, for them to ease policy further, they would need to see conditions in the real economy change," Commonwealth Bank of Australia interest rate strategist Gareth Aird told Xinhua.

　　If the labour market stays firm and the low Australian dollar continues to support the local export sector, the Reserve Bank of Australia has no case to cut rates further, Aird said.