Canberra outperforms other capital cities as median house price hits record high

Canberra’s median house price has hit a record high with the nation’s capital outperforming all other Australian capital cities for growth over the June quarter, Domain Group data has revealed.

The median house price in the nation’s capital has jumped 3.1 per cent to a record $654,306 over the three-month period, according to the latest Domain House Price Report released on Thursday.

Canberra is second only to Melbourne for annual growth, with house prices rising 4.8 per cent over the past year.

The result is in stark contrast to the March quarter when Canberra’s median house price slid by 1.4 per cent to $638,696.

Domain Group chief economist Andrew Wilson said it was a strong result for the ACT amid favourable interest rates, more migration, an improving economy and higher auction clearance rates.

“After prices went backwards over the March quarter, Canberra is roaring back with a stronger rate of growth than any of the other capital city markets,” he said.

“No doubt these lower interest rates will work their way back into the equation.”

Dr Wilson said the June quarter data was a sign of things to come on the back of a “consolidation of confidence” in the Canberra property market.

Canberra’s quarterly growth is well above the national median house price increase of 1.5 per cent. House prices have increased in all capital cities except Perth and Darwin.

Median unit prices have also increased, however the results are mixed amid record levels of apartment building.

Canberra’s median unit price fell 1.6 per cent to $399,505 over the June quarter, the lowest result since December, 2009 and a drop of 4.4 per cent over the past 12 months.

Dr Wilson said high levels of apartment construction in the ACT had pushed supply ahead of demand but the rental market remained tight with unit yields remaining “quite high”.

Real Estate Institute ACT spokesman Craig Bright agreed unit values remained subdued due to an influx of new stock.

He was surprised to see Canberra’s housing market in recovery mode during the federal election period, particularly the upper end of the market.

“There was a fairly prolonged period where the upper end was stagnant and it’s the barometer of the market – it tends to pull the rest of the market along with it,” he said.

Mr Bright said a shortage of stock in the inner suburbs had also put upwards pressure on prices.

Canberra’s Rita and Colin Maclachlan have experienced this firsthand. They sold their Forrest house in May after finding their ideal townhouse.

Peter Blackshaw Real Estate Manuka sold their home of 30 years under the hammer for $2,094,000 three weeks after it was listed.

“We were delighted with the result,” Mr Maclachlan said. “We were told that we would get $2 million-plus and that’s precisely what we got.”

Separate data released on Tuesday revealed housing affordability has worsened more in Canberra than in any other capital city except for Melbourne over the June quarter.

The nation’s capital has become 5.7 per cent less affordable for home buyers over the quarter and 9.4 per cent over the past year, according to the Housing Industry Association’s latest Affordability Report.

However, the Real Estate Institute of Australia and Adelaide Bank’s Housing Affordability Report for the March 2016 quarter, released on Monday, named the ACT as Australia’s most affordable jurisdiction for housing.

This is because the average Canberra homeowner spent 19.3 per cent of their family’s income on mortgage repayments – well below the national average of 30 per cent.