A general expectation of interest rates continuing to fall would underpin Canberra's real estate market, according to Craig Bright of the Real Estate Institute ACT Division.
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He said it seemed many people believed the market was close to its lower ebb, whether or not the Reserve Bank decided to reduce interest rates further at its meeting tomorrow. There was a propensity for people to invest in real estate instead of shares.
''People are looking to the property market as a safe haven.''
Director of Maloney's Real Estate Peter Maloney was less optimistic about a recovery in Canberra's real estate market. He said concern over job security influenced the market more than interest rates. The likelihood of a change of government continued to depress the market, particularly in Canberra.
Already sales volumes were significantly down, possibly by as much as almost 50 per cent.
''People who do not have to sell are holding off.'' Prices were down by about 5 per cent, which was good compared to the rest of Australia.
Mr Bright said institute members generally felt Canberra was close to the bottom of the market. If there were a flat area it was with apartments, not least because several complexes were being finished at about the same time.
''It takes time for the market to absorb those.''
The upper end of the market, not so affected by interest rates, was quite active. Rents were generally stable though there was downward pressure at the top end.
Mr Bright said he would not expect lower interest rates to encourage a flood of investors but there could be some attractive loans. ''Certainly over the past six to 12 months investors are a bit light on the ground … I don't think cuts in the public service will have the adverse effect some people think.''
The Herron Todd White June Month in Review and National Property Market report says the market performance for established, central locations remains strong, with Canberra being a popular location for young families and young professionals. New one-bedroom units in areas such as Bruce cost from $300,000 and increase to $400,000 for inner north suburbs. Freestanding houses in Tuggeranong, Belconnen and Gungahlin generally cost from the high $300,000s.
