The decision to protect one of the Dickson Towers, pair-houses, three-storey flats, maisonettes and garden flats will still put a stumbling block in the way of the government's plans for redevelopment of the entire precinct between Morphett Street and Wakefield Avenue for new housing.

Despite claims the buildings are ugly and eyesores on the entrance to Canberra, the Heritage Council has granted registration to a sample of each housing type built in the 1950s and 1960s.

The government wants to increase density and reap value from the land as part of its plans for a tram line to Gungahlin. Across the precinct, a masterplan proposes 1100 apartments.

Last month The Canberra Times reported planning directorate officials had approved the demolition of two of the three Dickson Towers, which each contain 21 bedsits used by single men until the last tenant was moved in June.

Following a provisional heritage order, the northernmost building, near the corner of Morphett Street, Dickson, must remain, along with significant trees. A planned 160-apartment complex could have to be scaled back as a result of the order.

The protection decision was criticised by the Property Council on Tuesday.

The Heritage Council has also announced a new registration for the former Australian Automobile Association building on Northbourne Avenue.

Designed by Guy Maron in 1978, the office building is recognised as a "bold and sleek metal-clad beacon of modernity."

Tuesday's announcement says the rundown public housing precinct has "considerable significance for its creative achievement including its architectural style, as a distinctive design of exceptional interest, as a rare and notable example of types of public housing."

The precinct was found to meet five criteria for heritage registration, including technical and creative achievement, as providing evidence of a distinctive function, as a rare or unique example of its kind and strong associations with people or groups.

Heritage Council chair Duncan Marshall said perhaps less than half of the overall precinct had been given heritage protection, despite submissions in a public consultation period describing the precinct as "an eyesore and a disgrace."

The decision could be appealed at ACAT.

"It is important to note that assessing heritage values is not necessarily a beauty contest," Mr Marshall said in a statement.

"I am sure that at various times in the past similar comments were made about places like the Kingston Powerhouse (now the Canberra Glassworks), and the old Hotel Acton (now the centre of the NewActon complex).

"These 'ugly ducklings' are now some of the vibrant cultural and social icons of the city."

Mr Marshall said newly passed planning laws for light rail infrastructure could override the heritage registration orders in relation to some developments like sub stations but the protected buildings were likely to remain intact.

"In terms of this being a housing development, or proposals to redevelop this area for housing, at the moment my understanding is that is not what is going to be captured by that legislation so it wouldn't apply," he said.

Last week the Legislative Assembly passed laws saying the government can declare a project "related to light rail" if it is infrastructure within, or partly within, one kilometre of existing or proposed track.

Property Council executive director Catherine Carter said the decision "sets a dangerous precedent."

"These buildings represent poor quality examples of Canberra architecture, and heritage listing them is a terrible outcome for the people of Canberra," she said in a statement.

"Do we really want to preserve this type of building for future generations, given they didn't adequately meet the needs of former generations?"

She called for a strategy plan on how the buildings would be renewed and incorporated into the urban regeneration of the area.

"Celebrating our history and preserving significant buildings is essential as we enhance our city. But holding on to ageing relics that offer little in the way of amenity or aesthetics is not," Ms Carter said.