Canberra property price growth gains ground on Sydney and Melbourne: ABS data

House price growth in Canberra has gained ground on Sydney and Melbourne’s booming property markets, new ABS data has revealed.

The Residential Property Price Indexes: Eight Capital Cities report for the March quarter was released on Tuesday and showed Canberra property prices rose 2.8 per cent during the quarter and 8.9 per cent in the 12 months to March 2017.

Strong growth continued in Sydney and Melbourne where 3 and 3.1 per cent quarterly increases were recorded.

Year-on-year prices increased by 14.4 and 13.4 per cent in Sydney and Melbourne, respectively.

However, data from previous indexes showed that growth in the nation’s capital was catching up on the two major cities.

Canberra’s 2016 figures showed a 4.5 per cent increase between March 2015 and March 2016, while Sydney and Melbourne property prices grew 9.7 and 9.8 per cent.

In 2015 Canberra recorded 3 per cent year-on-year growth, compared to Sydney’s 13.1 per cent.

Canberra prices rose just 1.1 per cent in 2014, while Sydney prices rose 15.7 per cent.

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Domain Group chief economist Andrew Wilson said an improved economy was responsible for growth in the nation’s capital.

“In 2011 the Canberra market was on track to match Sydney’s median house price,” Dr Wilson said.

“It really diverged significantly in 2013 to last year, but now we’re seeing an improving economy and certainly a revival in confidence.”

Canberra’s March 2017 results were ahead of the weighted capital city average for the quarter (2.2 per cent) and behind the year-on-year figure (10.2 per cent).

The data showed the ACT had the third highest mean dwelling price in the country.

With a mean price of of $678,400, the territory trailed NSW and Victoria’s mean prices of $886,800 and $708,300, respectively.

Dr Wilson said “a typical winter hiatus” would slow price growth over the cooler months but he expected prices would continue to rise going forward.