Canberra will avoid a sharp decline in apartment prices in the next year despite decade-high levels of building approvals, a property expert has forecast.
But another veteran in the real estate industry said the government needed to act to change the unbalanced dominance of units in the city's property market.
Domain Group chief economist Dr Andrew Wilson said the latest Bureau of Statistics showed building approvals for 1350 units in the March quarter, quadruple the figure from the same period last year. There were 4154 approved in the year to March, easily the highest for the decade.
But Dr Wilson said what might appear to be an oversupply in units - reflected in apartment sale prices falling by 4.7 per cent in the year to March - was not the problem it might be in other capitals.
"Canberra's biggest problem is there's a continuing downturn in the number of houses being built, and this is offset by apartments," he said.
"The other thing correlating Canberra not being in an oversupply is we have the second-lowest vacancy rate in the country for houses and that looks like it's being soaked up by apartments."
He tipped a flat result for apartment prices this year.
Vacancy rates for Canberra apartments were at just 1.6 per cent in April, down from 3.9 per cent in August. Housing approvals fell to just 1012 in the year to March, down by a third from the previous year and the lowest figure since before 2011.
Macquarie Bank reportedly tightened lending conditions for 120 suburbs across the nation last week, mostly in central city areas where a glut in apartments was feared. This included requiring deposits of 30 per cent for investors. No Canberra suburbs were on the list.
Real Estate Institute of the ACT board member Michael Kumm, speaking personally, said Canberrans were conservative borrowers who posed no risks to banks, but there was a clear oversupply of units in the city and the government should be told it was releasing too many.
"On Allhomes now 70 per cent of properties [for sale] are units, and some of those might represent a development so we could be getting up to 80 per cent units," he said.
"We don't have to hit the panic button, but the warning signs are there that they want to give it some consideration.
"The units are selling, the sellers just have to meet the market."