Canberra house prices start the year with a fall, says Andrew Wilson

The Canberra housing market has started the year with falling house prices following a sustained period of growth.

The Canberra median house price decreased by 1.4 per cent over the March quarter to $638,696 and followed five consecutive quarters of house price growth. Despite the fall, Canberra house prices increased by 4.8 per cent over the year ending the March quarter.

Canberra unit prices also fell over the March quarter – down sharply by 2.8 per cent to a median of $400,637. Unit prices have now decreased by 4.7 per cent over the past year, which is the highest year-to-date decline recorded by the local market since the September quarter 1997.

Most capitals reported falling house prices over the March quarter with the exceptions Melbourne up 1.2 per cent and Hobart up 4.3 per cent.

All capitals recorded falling unit prices with the exception of Adelaide where prices were steady over the quarter.

Sydney house prices fell for the second consecutive quarter with the median house price now under $1 million but, at $995,804, clearly remaining the highest of all the capitals.

Low incomes growth, tighter lending conditions from banks, particularly for investors, and flat interest rate settings will continue to constrain prices growth through 2016.

Uncertainty over the political outlook with a looming Federal election and the prospect of significant policy changes will also act to constrain consumer and investor sentiment over the near-term.

Dr Andrew Wilson is Domain Group chief economist. Twitter: @DocAndrewWilson – My Property, 2UE Fridays, 2-3pm, Saturdays. 12.30-1pm