BIS Shrapnel's Residential Property Prospects 2013-16 report says an excess of dwelling stock and weak or declining employment growth will lead to downward pressure on house prices in the territory.

The report indicates Canberra has experienced one of the strongest new dwelling markets since 2009-10 as investment demand led to record levels of activity.

But the dwelling deficiency has shifted to an excess of stock which should increase as the larger apartment projects under construction are completed, the report says.

BIS Shrapnel senior manager and author of the report Angie Zigomanis said it appeared that purchasers were also "holding fire" due to concerns about employment prospects after the coming federal election.

But he said while this would create downward pressure it would not lead to major price declines due to the high incomes of Canberrans and the fact affordability was not as strained as in other capital cities. The report showed Canberra's median house price is estimated to have fallen by 1 per cent to $490,000 in the year to June 2012, which is a 7 per cent reduction from its March 2011 peak.

The median house price forecast for the territory for the next three years is expected to be more or less flat with an increase of just 3 per cent.

This puts Canberra's growth as the lowest of all the capital cities and the third lowest median house price at $505,000.

In contrast the median house price in Sydney is forecast to grow 19 per cent over the next three years with the median price set to be $795,000.

Brisbane will increase 17 per cent to a median house price of $513,000 and Perth 15 per cent to $600,000.

Mr Zigomanis said Canberra, along with Melbourne, Adelaide and Hobart, would continue to experience challenging economic conditions.

"Canberra may also experience additional downside depending on the direction of public sector employment after the upcoming federal election," he said.