Canberra’s house market has been unstoppable this year, while the unit market has recorded only subtle rises. But two Canberra regions recorded double-digit growth for both houses and units, driven by different buyer demographics.
While other areas had recorded stronger paces of growth over the past year, the Inner South and Tuggeranong were the only regions where house and unit prices increased by double digits, according to the latest Domain House Price Report for the June quarter.
House prices in the Inner South had increased by 28.3 per cent year-on-year to a median of $1.7 million, while unit prices increased by 20.8 per cent to $634,000. The Inner South is Canberra’s most expensive region in which to purchase a house or unit.
In Tuggeranong, house prices increased by 19.3 per cent year-on-year to $753,000 and unit prices increased by 14.3 per cent over the year to $520,000. Tuggeranong is the most affordable region in which to purchase a house in the capital.
|The regions that recorded double-digit growth in Canberra|
“The last time we saw double-digit growth in both the Inner South and Tuggeranong was in 2010 for house prices, meanwhile unit growth has [been] more subtle across all Canberra regions,” said Domain chief of research and economics Nicola Powell.
“Although at that period of time, there was double-digit annual growth across every single market. Everything happened in 2010 and this year is no different.
“We’ve seen really strong rates of growth across all of Canberra that have been backed by unusual conditions in the market.”
Bree Currall of Belle Property Canberra, who specialises in the Inner South, attributed the region’s house and unit growth to the lack of stock available.
“The Inner South is probably the most sought-after region in Canberra, with big blocks of lands and tree-lined streets,” she said.
“The number of buyers, mostly upsizers, looking in this area are outweighing what’s available to purchase to the point that these buyers are then pushed to purchase a unit in order to get into the area.”
Interstate buyers, mainly Sydneysiders and Melbournians, are also hoping to relocate to the capital’s Inner South and have a budget far greater than that of local buyers, Ms Currall added.
“There’s been so much growth in this region in what feels like such a long time that we think surely it’ll end. But we have a pool of buyers who have more money to play with and I think it’ll take some time before those needs are fulfilled,” she said.
Meanwhile, further south in Tuggeranong, Robert Peaker of Blackshaw Tuggeranong attributed the region’s growth to first-home buyers and priced-out upsizers.
“This is the most affordable region in Canberra to buy a house and, of course, that would attract many first-home buyers,” he said.
“People who live in Tuggeranong have grown up in the area and purchased their first property there, starting with a unit before upsizing to a house, but this demographic of buyer has always been active in this region.”
Tuggeranong’s house market has been attractive to buyers priced out of Woden Valley – a stand-out performer in Canberra with median house prices cracking the million-dollar mark earlier this year.
In the latest Domain House Price Report, Woden Valley had the strongest house price growth of 34.4 per cent to $1.21 million.
“People who’ve been priced out of the Woden Valley region only have to drive five minutes to get to Tuggeranong where they’re offered the same type of properties, on 700 to 800 square metres of land and for about $800,000,” Mr Peaker said.
Should Canberra’s lockdown extend and its strict real estate restrictions remain, the capital’s real estate market may hit a dent in its price growth,
“Many of the city’s regions have reached that peak of growth and we’ll likely see that ease once we come out of lockdown,” Dr Powell said.