CANBERRA homeowners can expect subdued growth this year, but experts say there will be no repeat of the flat market seen at the time of John Howard's rise to power.
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As ACT Treasurer Andrew Barr warned that cuts in the federal budget and to jobs could cause a recession, Real Estate Institute of ACT president Michael Kumm said the market could expect similar movement to last year's 3 per cent house price rise.
Mr Kumm said the expected steady growth meant potential homebuyers should not bank on a dramatic dip before entering the market. "It will be above inflation in both the next 12 months and 24 months," he said. "I think if [first home buyers] are thinking of getting in, get in now."
Australian Property Monitors' senior economist Andrew Wilson said the city continued to be an outlier as prices grew strongly in other capitals, and expected annual growth to be at the lower end of his January forecast. "For [house prices] to move at that 3 per cent to 5 per cent, I think we're going to have to see an improvement in the local economy," he said.
Increases of 3 per cent would be healthy compared with the stagnation of ACT values in the mid-1990s.
Links between federal job cuts and declining or flat house prices were evident from 1994, as Paul Keating began to axe 20,000 public service positions nationwide, shifting some jobs to private operations.
Mr Kumm, a Peter Blackshaw agent, said ACT government figures showed the median house price of $150,000 in 1994 was not seen again until 1998, covering the period when the bulk of the decade's 52,000 federal cuts took place.
He said strong completed sales in Canberra's prestige sector this year, including 31 million-dollar deals, had not yet been matched by equivalent movements at the lower end of the market.
"The lower sectors are the people saying, 'I just don't know if I'm going to be here or not'."
Earlier this month, the Community and Public Sector Union said more than 5000 public service job cuts had been announced since September, a figure that did not include most of the thousands of non-ongoing positions.
It was expected many cuts would take effect by June, but the impact for the local economy could be delayed by redundancy payouts commonly worth about a year's salary.
The federal government was due to be handed the second and final phase report of the Commission of Audit on Monday.
