Some economists are tipping interest rates will fall further as two major banks announced they would pass on all the Reserve Bank of Australia's 25 basis point cut yesterday.
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The cut will take $45 a month off the average ACT mortgage of $273,500, or an annual saving of $537, and should entice investors back into the Canberra market, offering relief on the rental front.
Westpac and the Commonwealth Bank immediately passed on the full cut. Both had enraged borrowers when they added 45 basis points to their interest rate rises in 2009 and last year instead of the Reserve Bank's 25 basis points increase.
Westpac and the ANZ believe rates could fall again in February, while other economists say it's too early to say whether inflation, a key influence on rates, was likely to ease.
Westpac chief economist Bill Evans, the first to signal a downward move on rates some time ago, said the decision showed confidence inflation would remain within the Reserve Bank's target band for an extended period.
''Finally in contrast with some commentators who appear to be in denial about the household sector, the [Reserve] Bank is in our camp in describing the household sector as having 'cautious behaviour'.''
Westpac believes the easing cycle will amount to a total of 100 basis points.
Reserve Bank Governor Glenn Stevens said subdued economic conditions and a high exchange rate had contained inflation more recently, notwithstanding sizeable increases in utilities charges.
He said while consumer price index inflation was above the target because of last summer's floods, it was now starting to decline as crops recovered, and labour costs outside the resources sector were not likely to rise.
''Financial conditions have been easing somewhat recently, with market interest rates declining a little and competition to lend increasing,'' Mr Stevens said.
Colliers International ACT chief executive Paul Powderly said the territory's property market had slowed, but he expected investors would return in the next 12 months.
''For investors, apartments in and around town centres, particularly Civic, are expected to be popular, especially in light of the ACT Government's recently released Planning Strategy which is focused on urban densification in order to reduce traffic congestion.''
Mr Powderly said the ACT population was predicted to grow by about 5000 people each year and many would live close to their work. Apartment living around community hubs would be attractive to renters and owners alike.
L J Hooker Tuggeranong principal Mario Sanfrancesco said the rate cut's impact on local sentiment could be seen as soon as tomorrow night with an auction scheduled, and four more auctions on Saturday. He said the cut would mean an extra $60 savings a month on a $350,000 mortgage.
''It may entice investors back into the market because there are some pretty good buying opportunities.''
ACT Master Builders Association executive director John Miller said the cut was just the tonic to restore confidence. He hoped this cut was the start of more to come.
