The slowdown in Canberra's housing market is a "short-term phenomenon" which should not deter potential investors, according to ACT treasury officials.
Chief Minister Andrew Barr and senior treasury officials were grilled on the state of the ACT's property market as the territory's coffers were scrutinised during budget estimates on Monday.
The Barr government's tax reform and commercial rate increases were also put under the microscope, as Opposition Leader Alistair Coe claimed the government had a "hit squad" which was eyeing new areas in which to hike valuations.
Canberra's housing market has softened in the past eight months, with property prices flatlining and demand stagnating.
The Suburban Land Agency's dividend from sales in 2018-19 is expected to be $104 million, about $40 million lower than forecast.
Under Treasurer David Nicol told Monday's hearings that the agency had recorded "significantly lower sales in recent months", causing a hit to its bottom line.
Mr Nicol speculated that a number of factors were contributing to subdued buyer demand, including bank lending restrictions and uncertainty around the federal election result.
But Mr Nicol was optimistic the market would turn, saying the "underlying factors [of Canberra's housing market] remained strong".
"Population growth is still strong, vacancy rates are still very strong. So that's why we see this property market slow down - if you can call it that - as a short-term phenomenon."
"If people react to current market conditions, we could be in a situation where in 12-months time demand bounces back and we don't have the supply to meet the market."
Amid discussion about the risk of Canberra's apartment boom to the territory economy, Mr Barr revealed he met with Westpac in the wake of Sydney's Opal Tower saga to discuss whether the bank might be dissuaded from lending to Canberra developers because of concerns about building quality.
Mr Barr said he was assured that the bank had a "very prudent approach" to evaluating risk.
Monday's hearing became tense when Mr Coe claimed the government had a "hit squad" which was scouting the next batch of suburbs to be hit with commercial rate hikes.
Mitchell, Belconnen and Fyshwick were all on the government's radar, Mr Coe claimed.
Mr Barr took offence to the use of the term "hit squad".
"It implies that we have a team of people out in the revenue office who are out to hit people," he said.
Mr Barr deferred the question to ACT Revenue Commissioner Kim Salisbury, who would not be drawn on whether his office was targeting certain commercial and light industrial areas for revaluations.
"They will be looking for where there is market evidence that values have changed in a particular precinct," Mr Salisbury said.
"They are looking at all parts of Canberra for evidence that markets have changed significantly."
Mr Coe probed again on the issue, but Mr Salisbury refused to budge.
Mr Barr is scheduled to again front the committee when budget estimates continue on Tuesday.
- with Daniella White