House prices in Canberra are expected to remain largely unchanged over the next three years according to forecaster BIS Shrapnel.
BIS Shrapnel's Residential Property Prospects report forecasts only 1 per cent growth for the national capital over the next three years.
"Canberra's median house price is around $525,000.
We think that three years from now it will be fairly unchanged at around $530,000," said report author Angie Zigomanis.
"So no real growth.
But if you strip out inflation, it really means prices are declining." A slight oversupply of apartments coming onto the market, and predicted public service job cuts are being blamed for the price freeze.
It is estimated the low growth in the real estate market will mean a drop in value of 8 per cent in real terms.
"We expect that the very large level of construction that we've seen over the last two to three years, particularly in the apartment sector will take the market there into oversupply," Mr Zigomanis said.
"So we expect vacancy rates to rise, rental growth to be weaker, but overlayed on top of that we are also forecasting very weak economic growth mostly due to public sector employment cuts.
We expect that to have a flow through to the residential housing market."
