Canberra house prices hit record high as unit prices bounce back: new report

Canberra’s median house price has hit another record high as heated competition for limited stock shows no signs of cooling off.

The national capital’s median house price climbed to $661,912 over the September quarter, according to latest Domain House Price Report released on Thursday.

Apartments prices have also bounced back over the same period, rising 1.3 per cent to a median of $403,775.

Canberra has cemented itself as one of the strongest capital city housing markets this year, second only to Melbourne for year-on-year growth.

House prices have jumped 4.9 per cent over the past 12 months and a modest 0.4 per cent over the previous quarter.

The latest data comes off the back of a standout June quarter when Canberra outperformed all other capital cities for quarterly house price growth.

“Going into particularly the beginning of spring, we expected a lot more property to come onto the market. There’s actually been a decline since last September,” she said.

“We have seen the number of house sales decline very marginally [but] we’ve also seen houses spend less time on the market.

“There’s huge competition between buyers and we’ve seen more houses sell at auction.”

Canberra has recorded solid sales under the hammer recently with auction clearance rates of 87 per cent, 74 per cent and 79 per cent recorded over the past three weeks alone.

Dr Powell said low interest rates had also influenced buying activity, particularly at the middle to upper end of the housing market.

Real Estate Institute of the ACT director Frank Pompeani​ agreed a lack of free-standing houses continued to push prices up.

“There’s been quite a few apartments built but there’s certainly an appetite for separate title, stand-alone dwellings,” he said.

“We’ve seen a good number of down-sizers coming into the marketplace, capitalising on stamp duty concessions and buying something at a reasonable size.”

Canberra’s competitive housing market may have influenced the quarterly jump in unit prices, as first home buyers struggle to get a foot on the property ladder and look to apartments and townhouses.

But the rise in prices has been largely attributed to the cyclical nature of multi-unit developments being rolled out across the territory.

Dr Powell said Canberra’s building approvals had peaked in 2011, with most units now sold or close to being sold.

“I think the quarterly increase is due to the fact we are seeing an easing of supply of units and apartments, and that goes for the rental market as well,” Dr Powell said. 

“I also wonder if it’s a reflection of buyer habits.”

Similarly, Mr Pompeani said Canberra’s unit market was undergoing an “equalisation”.

“Newer apartments off the plan have had more traction with government subsidies,” he said.

“That’s a natural cycle when new suburbs become available and infill occurs. Newer apartments have the attention in the first instance, and then established units catch up.”

Independent Property Group project marketing director Wayne Harriden said he expected more and more units to be settled between now and April to May next year.

“A lot of apartments are at the end of the construction cycle and are settling,” he said 

“The cycles are getting wider and wider as developments are getting bigger and bigger.”

“Probably in the first quarter of next year we’ll see a lot of releases of new developments that will be completed in the next 18 to 24 months.”