Canberra house prices make a recovery

After a shaky end to 2023, property prices are beginning to look up in Canberra, with the market showing signs of recovery.

According to the latest Domain House Price Report for the March quarter, released on Wednesday, the capital’s median house price rose a slight 0.9 per cent to $1,049,719. 

While the increase is a 1.1 per cent change year-on-year and has nudged annual house price gains into positive territory for the first time in 18 months, the median is still about $127,000 (or 10.8 per cent) below the June 2022 peak.

Domain chief of research and economics Dr Nicola Powell says the downturn in Canberra’s house prices went on for much longer than other capital cities.

“We’re only just starting to see house prices rise in Canberra, but before that they were really sluggish,” she says. 

“The number of homes for sale hit a four-year high in February, [although] we’ve started to see supply shrink again. Overall, supply has been better, which I think is why it has taken longer for Canberra house prices to find that price trough and move into recovery mode.” 

In addition to more buyer choice, Powell says migration is another factor affecting the local housing market. 

“The ACT is losing more people to other states and territories than it is receiving, which means net interstate migration is negative and that can weigh on housing demand in a negative way,” she says.

“We’re not seeing the demand coming interstate that we’ve historically tended to see, particularly when prices were rising during that pandemic boom.

“We have forecast house prices to rise this year between 3 and 5 per cent [but] it’s going to be a slow and steady recovery for Canberra.” 

According to agent Obi Shadmaan of The Property Collective, there has been an uplift in the number of buyers walking through open homes this year, with renovated properties that are “ready to go” transacting the fastest. 

“Turnkey, modern homes, with a great floor plan and in a great location are the properties attracting a lot of buyers at the moment,” he says. 

“They’re getting good numbers through open homes and have a competitive environment on auction day, which has resulted in some really good auction clearance rates in the last few weeks and months. That has been a positive sign in the market.”

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Despite a tighter lending environment, Shadmaan says buyers are willing to pay more for a property rather than commit to the time and effort of undertaking major upgrades.

“The cost of trades and the amount of time it takes to get a property renovated is impacting on buyer behaviour,” he says. “The fact interest rates have held, and there’s speculation they might even drop over the next 18 months, [is imbuing] more consumer confidence.”

Around the nation, house prices in Sydney, Brisbane, Adelaide and Perth leapt to another record high, with Sydney’s median house price surpassing $1.6 million for the first time.

According to the Domain report, property prices continue to defy stretched affordability from cost-of-living pressures and high interest rates, with the growth aided by a chronic undersupply of new homes, strong population growth, cost-to-build blowouts and a tight rental market. 

Powell says that, despite the quarterly increase in most capital cities, growth is slowing, underpinned by a growing choice of homes on the market. 

“However, a cut in the cash rate could change this dynamic, and spark higher housing turnover,” she adds.

Properties for sale with Canberra’s median house price

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