Mr Mellor said home buyers should not expect a big decline in prices by the end of the year. "There may be a fall in prices before the end of the year, but it won't be more than 1 or 2 per cent," he said.
He added that it was a good time for buyers looking to upgrade to a bigger home.
"With a 10 per cent increase in the amount of people looking to rent, a figure that is expected to increase, it is a great time for investors." The financial markets are factoring in an interest rate cut, possibly as early as next month, but even without it, Mr Mellor predicted an upturn, so long as rates did not rise again.
"Common sense will win out in the end," he said. "Buyers will realise that all the fundamentals that make it a good time to buy are there."