The two people with the strongest grip on Australia’s economic steering wheel, Reserve Bank Australia boss Philip Lowe and federal Treasurer Jim Chalmers are tackling the task of managing community expectations very differently.

Chalmers holds the keys to Australia’s fiscal safe while Lowe, through monetary policy, has his hand on the interest rate rudder. While the treasurer has been oversharing the negative in the lead-up to his maiden budget, Lowe has mostly kept the worst-case scenarios for the economy on the down-low.

But as a freedom of information request that surfaced this week has revealed, the RBA has modelled a potential 20 per cent fall in house prices (peak to trough) - almost double the 11 per cent that Lowe had cited earlier as the likely scenario.

The main differentiator between these two outcomes is market sentiment. If homebuyers and investors respond pessimistically about the state of the housing market or the prospect of higher or longer-dated interest rate rises, house prices could slide even lower.

Lowe’s prediction may yet come in closest to the pin, with the downside projection never coming to pass. And there is a chance that the RBA has got it wrong or has misapplied the model it uses to predict house prices.

The internal RBA documents show that it was caught wrong-footed in June when the fall in house prices came in larger than expected. And the RBA’s worst-case is in line with a number of non-RBA economists, who project a fall in house prices that range between 15 per cent and 20 per cent.

Prices may yet turn out to be more resilient, but at the very least, the doubts highlight the extent to which the many “unknowables” in the cauldron are helping drive the housing market.

In the nation’s largest market, Sydney, house prices are already down more than 10 per cent and Melbourne is down 6.4 per cent. On a national basis, the decline from the April peak was 4.8 per cent at the end of September but prices have fallen further over the past three weeks.