Canberra house price growth rate highest in five years, unit prices fall

Canberra’s housing market is growing at the fastest rate in five years with house prices increasing 7.8 per cent over the past 12 months, new data shows.

After jumping 2.3 per cent over the September quarter, Canberra’s median house price is now sitting at $625,092, according to the latest Domain Group House Price Report released on Thursday.

“The strong result recorded by the Canberra housing market over the September quarter is reflective of rising buyer confidence, which has been restored after a subdued period of buyer activity,” said Domain Group senior economist, Dr Andrew Wilson.

Real estate agent Andrew Chamberlain from Peter Blackshaw Real Estate said he was not surprised by the strong result.

“The factors that influence the Sydney and Melbourne markets are also the ones that drive the Canberra market,” Mr Chamberlain said.

“The strength really is in the owner-occupier middle-market within 10 kilometres of the city”. 

But Mr Chamberlain did note one slightly unusual development in Canberra – that the government is in the process of buying back 1000 houses around the city that are ridden with asbestos.

“To have 1000 displaced people in a market like Canberra is significant,” Chamberlain said.

On the other hand, data from Domain’s House Price Report showed that Canberra’s media unit price fell by 4.7 per cent over the September quarter to $385,825.

It is the first time since the 2009 December quarter that the median unit price has dropped below $400,000.

“While house prices have grown strongly in Canberra this year, unit prices continue to decline,” Dr Wilson said.

“This suggests the high levels of new apartment construction over recent years have moved supply ahead of demand”.

Mr Chamberlain agreed, saying the apartment market seemed to perform on a completely set of influences and principles to the housing market.

“There is a lot of construction going on but not a lot of enthusiasm from investors,” he said.

In terms of house prices, he said the suburbs of Hughes, Garran and Curtin in particular had seen real growth.