Canberra’s property market poised for early recovery

Canberra’s residential property market is expected to enter the early stages of recovery in FY26, with both house and unit prices forecast to rise, according to the latest Domain Forecast Report.

Domain chief of research and economics Dr Nicola Powell said the capital’s housing sector was beginning to regain momentum after a period of subdued activity.

“House prices are forecast to reach $1.1 million, an approximate $39,000 gain over FY26,” she said.

“This recovery places house prices about seven per cent below their mid-2022 peak, and halfway into a recovery.”

The report also projects a gradual improvement in the unit market, with prices expected to grow by about three per cent, or $14,000, over the financial year.

However, values are still forecast to sit around 15 per cent below their 2023 peak by the end of FY26.

Canberra stands out as the most affordable capital city in the country based on its low home price-to-income ratio – a measure that may begin to attract growing interest from buyers.

Powell noted that this affordability partly reflected Canberra’s comparatively moderate population growth and a more responsive housing supply.

As such, price growth here is likely to remain more moderate than in other capital cities.

“Nonetheless, the outlook remains positive,” Powell added.

“The re-election of the Labor government is expected to provide greater stability in Canberra’s job market, which is heavily reliant on public sector employment.

“This political continuity, alongside high rental yields, lower interest rates, and government support for first-home buyers, may help strengthen buyer confidence and support the housing market’s gradual recovery.”