Pre-Christmas interest rate cuts have helped give Canberrans some of the biggest home value growth in the country but economists are warning the gains may be shortlived.
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While further rate cuts are predicted in February, home values in the nation's capital are already so high experts doubt potential homebuyers can find any extra money.
The latest figures from the RP Data-Rismark Home Value Index showed property values recorded their biggest increase in the past 11 months.
Canberra values had the equal largest increase in the month, at a seasonally adjusted 0.4 per cent in November.
But this was not enough to make up for earlier losses. Values in Canberra are effectively flat (down 0.2 per cent) compared with the beginning of 2011 and still down 1.6per cent on November last year.
The report indicated the unit market was much stronger than for stand-alone houses in Canberra. Unit values were up 1.5 per cent in November to be 0.8 per cent higher than the beginning of the year, while house values were down 0.3per cent in November to be down 0.7 per cent for the year to date.
Nationally, capital city home values grew by 0.1 per cent in November and regional home values by 0.3 per cent, after the Reserve Bank of Australia announced its first interest rate cut in 2 years.
The capital city housing market is still down 3.5 per cent on last year's figures but Canberra had one of the strongest results, recording dwelling values at 1.6 per cent lower than last November, compared with 7 per cent and 5.6per cent falls in Brisbane and Melbourne respectively.
A number of analysts have suggested the data might signify the beginning of a turnaround in the housing market, and some predict a 5 per cent increase in national home values over the next year.
Rismark director Christopher Joyce said the modest turnaround in the market was a direct result of interest rate cuts over the past few months, and predicted house prices would begin rising again in 2012.
But RP Data senior research analyst Cameron Kusher warned Canberrans not to raise their hopes.
He said the market needed a solid three to four months of housing value increases to declare a glut in the market over and suggested further increases might equal inflation at best.
''Canberra is one of the better performers but it could still record falls in the coming months,'' he said.
''Especially considering we had a rate cut in November and saw consumer confidence increasing but then had another rate cut in December and saw consumer confidence fall.
''Combine that with the fact that growth in private sector lending is fairly benign ... and the data shows most people are looking to save money rather than spend.
''While people are acting cautiously I can't see a big improvement in home values.''
ANZ economists predicted the interest rate cuts would have a positive impact on market sentiment but said the volatility of global markets would push housing prices ''sideways or lower'' in the next 12 months.
Meanwhile, many economists are predicting a further interest rate cut in February but analysts are divided as to whether these might continue during the year.
CommSec chief economist Craig James said the four major factors considered by the Reserve - home loan rates, home values, the Aussie dollar and current interest rates - suggested the central bank would cut rates just one more time in February.
''Considering the first interest rate cut [in November] seemed to have worked and we've had another one since then, that suggests they've already sped the economy up a little bit more.''