Canberra’s property market continued to rise in the third quarter, with rental rates and median house prices growing faster than the Sydney and Melbourne markets.
The latest Domain State of the Market report, released on Thursday, showed house prices in the capital had reached a new high of $723,980, up 4.3 per cent over the quarter and 10.5 per cent annually.
Experts said under-supply in the market was helping drive growth, with median prices for units increasing by 1.9 per cent to $427,391, recording a slight decrease of 0.5 per cent annually.
The capital’s rental market also remained strong, putting Canberra among the highest movers in the nation alongside Hobart, which saw 4.2 per cent growth.
Median weekly asking rents for houses grew 1 per cent in the quarter to $505, an increase of 6.3 per cent year on year.
Median unit asking rents were steady at $420, but remained up by 5 per cent year on year.
Domain Group chief economist Andrew Wilson said Canberra’s median house price had been down over the June quarter, but the strong market suggested prices would continue to rise through to the end of the year.
“The Canberra market grew significantly quicker than the Melbourne market over the September quarter, and also grew at a much faster rate than Sydney where house prices were down by 1.9 per cent,” Dr Wilson said.
“The two strongest markets at the moment are Canberra and Hobart, and it’s interesting to note that they are the two smallest markets as well.”
Sydney remained the country’s most expensive city, with median house prices of $1,167,616, ahead of Melbourne at $880,902.
The national median house prices was $819,455, down 0.5 per cent in the quarter by 10.80 per cent up on an annual basis.
Canberra had the highest unit rental yield in the nation at 5.77 per cent, increasing at 3.7 per cent year on year.
The figure put Canberra ahead of Darwin, Hobart and Adelaide, while Sydney and Melbourne had yield growth of 3.86 per cent and 4.47 per cent respectively.
“The unit result is quite interesting in Canberra,” Dr Wilson said.
“There’s been a building boom in Canberra for units and we’ve seen prices pick up again over the September quarter – up by 1.9 per cent and it’s set for a consistent increase.”
“This just shows that the return on investment is reflecting that Canberra units represent good value,” Dr Wilson said.
Census figures released in June showed the ACT is the fastest growing jurisdiction by population, approaching 400,000 and with 11.44 per cent growth since 2011.
The ACT looks set to pass Tasmania on population levels, driving in part by the growth of Gungahlin – the fastest growing region in the country.
Dr Wilson said the Canberra property market continued to show upward potential generally, which provided good value perception for both buyers and sellers.
“We saw through 2013-2015 a constraining of the Canberra market through local economic factors – the slashing of the public service budget and the small number of net migration, both had a significant impact on the housing market,” he said.
“Migration has turned around quite strongly now for Canberra, the unemployment rate has fallen back down again and no doubt the public sector is going strong.
“There’s upwards potential for Canberra and a good value perception from buyers and sellers in the Canberra market,” he said.