Canberra house price growth slumps in March: ABS

A year of solid growth did not shield Canberra from a quarterly slump in residential property prices, new data shows.

House and unit prices in the nation’s capital dropped by 0.4 per cent from the December, 2015 quarter to this year’s March quarter, according to the Australian Bureau of Statistics.

The quarterly result represents the largest fall in residential property prices in two years – when Canberra recorded a 1.5 per cent drop – despite prices growing by 4.6 per year-on-year.

Domain chief economist Andrew Wilson said the quarterly fall wasn’t necessarily bad news for Canberrans but represented a “consolidation” in prices after a strong 2015. 

“I think it was a good start to the year for Canberra,” he said. “Even though the market held back marginally, it still held its ground.

“Canberra had quite a strong year last year. In a sense, it was in catch-up mode.

“With interest in the local economy, confidence back in the market and low interest rates, it did create some momentum.”

Dr Wilson said he expected the momentum to continue with a good chance of a price rise in the mid-year or in early spring.

This comes off the back of a clearance rate rebound and a tight rental market.

“I think the market is showing signs of picking up again,” Dr Wilson said.

“There are signs growth will be resuming on the back of those low interest rates and more investor interest, in case of changes to negative gearing and capital gains tax [as a result of the federal election on July 2].”

Standalone house prices slipped 1 per cent and units 1.1 per cent from the December, 2015 quarter to the March, 2016 quarter, according to the ABS.

In contrast, house growth surged by 6.1 per cent compared to the same period a year earlier.

Unit growth over the year was more modest at 0.4 per cent.

Across the board, Australian property prices started 2016 on a subdued note.

Prices grew modestly in Melbourne, Brisbane and Adelaide, and continued to drop in resource-reliant cities. Perth and Darwin dropped 1.7 per cent and 2.0 per cent respectively.

Hobart was the top performer of all the capital cities, with a 1.1 per cent gain in the quarter, although the city remains to be the lowest priced capital according to Domain Group data.

– with Kirsten Robb