The federal government’s push to decentralise the Australian Public Service could have major ramifications for Canberra’s housing market.
Property experts and stakeholders say the exact impact of the decision to move public sector jobs outside the ACT will depend on the scale of the clear-out.
However, ACT Property Council executive direct Adina Cirson warned uncertainty alone could have a detrimental effect on the property sector.
She said the growing confidence in the ACT highlighted by Thursday’s ANZ/Property Council survey was likely to take a hit.
“The threat of taking out the largest employer in town – even the mention of that – will create uncertainty,” she said.
“Commonwealth occupation represents 55 per cent of the office market. Needless to say, any move to relocate government departments away from Canberra would absolutely decimate the city.”
Ms Cirson said the property sector was the second-largest industry in the ACT and, along with education, health, retail and hospitality, would suffer from a bureaucratic shake-up.
“We are a public service town, they prop up other industries,” Ms Cirson said.
“Look back to 1996 and the 10 years it took to recover from what was a marginal reduction compared to this.”
The Housing Industry Association’s ACT and Southern NSW executive director Greg Weller also warned short-term uncertainty could hurt Canberra’s residential market as decisions to buy or sell may grind to a halt.
“Uncertainty can be real killer for the market as people put off decisions,” he said.
“Obviously the bigger the movement, the bigger the impact this will have on the housing market.
“What we can’t see is this dragging out into growing speculation over a long period of time.”
The federal government’s decentralisation push comes as Canberra’s median house price exceeds $700,000 for the first time.
The Domain State of the Market Report released on Thursday shows house prices have jumped 10.4 per cent over the past year to a new median of $705,059.
Mr Weller said higher-density housing may be more vulnerable to any economic impacts as a result of APS changes, given detached housing was largely driving the residential market’s buoyancy.
He said any net migration out of the nation’s capital risked investment in residential property however, the economy remained strong with a significant higher education sector and a growing private sector.
“What we don’t want to see is the rug pulled out from under that if things change quickly,” he said.
About 57,500 public servants make up 37.5 per cent of the federal bureaucracy.
Mr Weller said he hoped the federal government wouldn’t “rob Peter to pay Paul” when moving public servants to other regional areas.
“If the objective here is to bring people into regional areas, that’s what Canberra is,” he said.
“A lot of these people working here are already living in regional towns, such as Queanbeyan, Yass, Goulburn and Cooma. It’s important the focus is not entirely on the ACT.”
Domain chief economist Andrew Wilson said he did not believe there would be a mass exit of public servants from the nation’s capital and Canberra was still well placed for further house price growth.
“I don’t think in the shorter term at least, or even the medium term, there’s a prospect of migration reversing to the point where it would have an impact on demand for housing and bring prices down,” Dr Wilson said.
“It’s still a very positive strategy to get into the Canberra market because I think prices are going to continue to grow.”