With the Australian dollar running at near-historical lows, and the country's mortgage rates the lowest they have been in more than 25 years, now would seem the best time to invest in property Down Under. Analysts, however, are mixed in their views on the Australian market. Some, while admitting there are plenty of bargains to be had - especially in the big cities of Sydney and Melbourne - believe the full impact of the Asian crisis is yet to hit Australia. 'If people are after short-term investment properties, it may not be the best time to buy,' said Lloyds Bank regional marketing director Barry Lea. 'But if people are looking at the long term. Be it investment, rental or a place to live, it is the right time to move in to the Australian market. It is a good time to buy, hold for five or six years, upgrade and move to other markets.' Mr Lea said there had been a significant slowdown in interest in the Australian residential property market in Hong Kong and other Asian buying centres. 'This probably is more due to the fact that people in Asia do not have the money to spend, rather than the lack of attractive investments,' Mr Lea said. 'The same thing is happening in the London market. In Hong Kong, people are showing little interest in overseas properties.' Michael Bentley, Central Equity's regional general manager, Asia, is more positive. 'In the past few months there has been a huge upturn in certain areas of the property market in Australia,' he said. 'Low interest rates and a low Australian dollar - which makes it very attractive to convert funds into the local currency - coupled with strong demand in major cities, makes it very attractive time to buy property.' Mr Bentley said the property market was expected to yield good capital gains over the next few years and with the continued uncertainties about capital markets in Asia was encouraging investors to put their funds into safer and more secure options. Mr Bentley agreed with Mr Lea that Asian investors were 'no longer flocking to exhibitions and buying everything in sight', but pointed out during the stock market crash in the late 1980s, Australian property markets enjoyed substantial growth immediately following the capital market downturn, as funds poured into property from investors looking for a safe haven. 'What already is apparent during this equity downturn is there has been an immediate shift to 'quality' investors, not just those speculating and looking for quick returns,' Mr Bentley said. While Asian investors might have trouble finding funds, there would be little problem finding quality residential property with good investment value, he said. 'Rising demand, project shortages, consumer confidence and low interest rates will push house prices up in the prime markets of Melbourne and Sydney over the next three years.' he said. While some optimistic analysts are expecting prices in prime areas of those two cities to rise by as much as 40 per cent in that period, the Real Estate Institute of Australia (Reia) is a little more subdued in its predictions. 'The Melbourne and Sydney markets are expected to yield good capital gains over the next two years,' it said in a report. Reia predicted Sydney had potential for gains, although it called for caution in the central business district. 'The rest of Sydney looks strong for investment, particularly over the next two years.' Melbourne's fundamentals pointed to the beginning of strong upturn for the next three years, Reia said. 'Unlike Sydney, there appears to be no oversupply of apartments; there is a very low vacancy rate. Demand is growing and there is significant demand.' In Perth, Reia said there appeared to be some concern at oversupply. However fundamentals appeared sound and while not offering the same potential as Sydney and Melbourne, Perth should still perform well up until 2000. However, only prime locations should be considered. The huge oversupply in Brisbane during the past few years finally was being absorbed, setting the scene for moderate price growth for the rest of the year, said Reia. 'Vacancy rates remain the highest in Australia, so investors should secure prime locations, medium priced and near the city to ensure occupancy.'