What drove Canberra's property market trends in 2025?

The national property market saw renewed optimism in 2025 after two years of fragile confidence and high borrowing costs, with the first interest rate cuts in more than four years.

According to Domain’s 2025 End-of-Year Wrap report, property seekers who had spent months on the sidelines suddenly saw a more certain path forward.

Domain chief of research and economics Dr Nicola Powell says the initial relief lifted sentiment and strengthened enquiry, setting a more optimistic tone across the market.

“Lower rates didn’t just ease the cost of borrowing; they reset expectations,” she says.

“Many Australians began the year believing 2025 would mark the start of a broader easing cycle – and for a while, that felt true. But the path proved cautious rather than rapid.”

Powell observed that while rate cuts offered relief, they did not provide a complete affordability reset, and households remained mindful of that gap.

“Population growth continued to outpace supply, a severe structural imbalance that kept both prices and rents under pressure,” she says. “Faced with these realities, buyers adapted rather than withdrew.

“Many looked for homes that could support multigenerational living, generate supplementary income or simply provide a more achievable entry point into the market.”

Rise of lifestyle search terms

Against this backdrop of cautious optimism and structural supply imbalance, the Domain report revealed that property seekers in Canberra focused their searches on lifestyle and affordability factors in 2025.

“Pool” became the most-searched term in the capital, overtaking “view,” indicating a strong desire for at-home resort-style features, while searches for “study” increased sharply. This was a clear divergence from national trends.

The ACT was one of the few capital cities where interest in a dedicated workspace increased, reinforcing the city’s commitment to flexible working arrangements.

Powell says that compared to 2024, searches for zoning terms, such as “Z2”, fell sharply to 20th place, while “dual” climbed from 13th to eighth.

“This suggests buyers are focusing more on how a home functions than on zoning details,” she says.

Additionally, ‘courtyard’ also rose from sixth to third place, highlighting renewed demand for usable outdoor areas and low-maintenance living.

Affordability drives suburb popularity

Affordability emerged as a key theme in the demand data, leading buyers to established suburbs outside the traditionally expensive Inner South.

Ainslie topped the list of most-in-demand suburbs, signalling interest in high-quality housing on the city fringe. Though its median house price is still substantial at $1,479,637, it offers a more accessible entry point than the $1.895 million median required to buy into the South Canberra region.

The rest of the top five included the affordable Tuggeranong and Belconnen suburbs of Wanniassa, Kambah, Evatt and Calwell.

Local agent Eliana Rojas-Terry of Better Real Estate says some buyers searching in the Tuggeranong region were willing to spend more than the asking price to secure a property.

“We marketed a home in Calwell in the second quarter, which saw over 100 viewings and sold six figures above asking, showcasing the value that established suburbs in the valley hold,” she says.

Both Wanniassa and Kambah were listed among the most affordable Canberra suburbs by price per square metre in 2025, complemented by their rapid sales times – Kambah homes spent an average of 48 days on market, and in Wanniassa, just 45 days. This is significantly faster than the 122 days on market that properties in Wright averaged, or the 125 days for homes in the city centre.

Turnkey over project homes

In 2025, the ideal property profiles for Canberra buyers remained classic family formats: houses with four bedrooms, two bathrooms, and a double garage; townhouses with three bedrooms, two bathrooms, and a double garage; or one-bedroom, one-bathroom units with a single car space.

In the Tuggeranong region, Rojas-Terry witnessed a clear trend towards move-in-ready homes.

“There’s been a decline in [interest in] project homes with more families valuing, and willing to spend on, polished products,” she says. “Segregated living spaces, outdoor entertainment and family-friendly yards have also proven to be very popular.”

Some of Canberra’s newer suburbs in the Molonglo Valley and Gungahlin regions, offering turnkey solutions, however, demanded the highest prices per square metre: Denman Prospect came in at the highest ($3391 per square metre), followed by Crace ($2736), Taylor ($2704) and Franklin ($2592).

Although a few of these suburbs also offered the largest seller discounts, for example, Gungahlin (6.5 per cent), Franklin (6.2 per cent) and Coombs (5.9 per cent).

Auction hotspots

Auction clearance rates highlighted pockets of strong competition in 2025.

Off the back of a busy spring selling season, Domain data shows Canberra experienced a 60.8 per cent clearance rate in November, up 1.4 percentage points from the month prior, and 14.3 percentage points higher than in the same period last year.

The suburbs that achieved the top clearance rates across the ACT throughout the year included: Charnwood (90.9 per cent), Stirling (90 per cent), Richardson (88.2 per cent), Latham (85.7 per cent) and Holder (83.3 per cent).

These figures underline the intense demand and competitive environment in specific markets, particularly where affordability and established infrastructure meet.

Rojas-Terry says it’s clear that confidence is returning to the Canberra market, which has been cemented by interest rate holds.

“In general, the market seems to have stabilised and is showing signs to be back on track for steady growth into 2026, giving sellers confidence to release their homes to incoming families,” she says.