But some experts are cautiously optimistic that a slow but genuine upswing may be closer than we think.
In the year to January 2009 the median house price slipped by just over one per cent, according to Residex, although falls were more substantial in some areas of the country.
Louis Christopher of Adviser Edge told Real Estate Business that although there were signs the lower end of the market may have bottomed out; a recovery at the higher end could still be some way off.
“There are some strong signs that the lower end of the market is now holding, as a result of first home buyer incentives, rate reductions and other government initiatives,” he said.
Jason Anderson of BIS Shrapnel agreed, saying a surge in first home buyer activity would benefit the lower end of the market.
“We are forecasting 180,000 first home purchases in this calendar year – that’s more than the peak recorded in 2002 when the first home owner grant was first introduced,” Mr Anderson said.
LJ Hooker CEO Warren McCarthy tipped the $300,000 to $600,000 markets to pick up first, particularly those close to CBDs and in strong regional centres.
“With demand for properties in this price bracket strong, a shortage of stock will eventually see prices improve.”
Mr Anderson said first home buyer activity would not only stimulate the bottom end of the market but should also have a domino effect on the middle market.
And although the unemployment rate is set to rise, Mr Anderson said this would not necessarily prove fatal, pointing to the early 90s as a guide.
“Substantial rate reductions in post recession 91 and 92 saw property prices increase by 3 to 5 per cent,” he said.
“The great majority of households aren’t effected by unemployment but interest rates.”