Economists predict the territory could experience a fall in house prices, but is more likely to continue its stagnant growth as the most underperforming capital city housing market.

Treasurer Joe Hockey announced in Tuesday's budget that 16,500 public service jobs would go over the next three years, which is the largest cut to the service since the 1990s.

This would translate to at least 6500 jobs in the ACT if the reduction was proportional.

Parliamentary Library research shows the ACT recorded three consecutive years of falling house prices in the mid-1990s totalling 7 per cent, as the public service was reduced by successive governments.

But while the loss in ACT public servants is expected to affect the housing market, similar falls are not expected due to the city’s different demographic.

Australian Property Monitors' senior economist, Andrew Wilson, said the Canberra market had already been reeling over the past two years from job cuts and Tuesday's announcement would continue to damage sentiment in the underperforming economy.

''It’s a scenario that will continue now with these job cuts, it’s certainly not a positive environment for housing market activity,'' Dr Wilson said.

''Certainly there is a prospect of a fall in growth; the conditions are certainly not right there for prices to recover.''

Australian Bureau of Statistics data issued this week showed Canberra was the only capital city to record a fall in home prices in the first quarter of the year of 0.1 per cent, and growth over the past year of just 1.1 per cent.

RP Data senior research analyst Cameron Kusher said it was difficult to compare the current situation with the job shedding of the mid-1990s, but if the losses came quickly prices could fall by at least 5 per cent.

He said the biggest recent fall in home values in the territory of 3.6 per cent had occurred in the year to July 2011.

''The budget’s not quite as severe as that budget, but that’s probably a good historic reference point to see what was happening to the market on the back of some big cuts to the public sector,'' Mr Kusher said.

He said rents in the ACT had fallen by 3.5 per cent over the past year.

Real Estate Institute of the ACT president Michael Kumm said the territory would not be hit as hard as the 1990s because the demographics of the city were different.

In 1996, he said 60 per cent of Canberra’s workforce was in the public service but the figure had now dropped to 39 per cent.

And a high proportion of baby boomers reaching retirement had been and would continue to ''take a handsome package'' and stay in the ACT.

''A lot of the pain has already gone and been felt and people have been offered packages - they’re not just slashing and burning and sacking them on the spot,'' Mr Kumm said.

He said there were 550 fewer properties on the market than at the same time last year and a high proportion of units and townhouses.

''I’m thinking that the market in the ACT will improve, it must improve with the lack of stock we have, that’s a given,'' Mr Kumm said.

LJ Hooker Manuka principal Stephen Thompson said the housing market had already experienced the fall in house prices in the year leading up to the change of government.

He expected prices would remain steady for at least three to six months before ''we’re going to see a different market in Canberra''.

Property investor and fireman James Kavanagh, 34, bought a one-bedroom place in Correa Street, O’Connor, for $270,000 in September last year as a long-term investment.

He plans to move back to Melbourne eventually and rent his place out, but says this could be difficult after the cuts to the public service.

Mr Kavanagh hopes his unit’s proximity to the ANU will provide a steady flow of tenants whatever happens to the rest of the city.

New-home buyer 25-year-old public servant Rachelle Loosen says she is not too worried about the impact of more job cuts for Canberra on prices.

''We bought our house to live in, so even though prices might go down in the short term, it did not stress me out,'' she said.