Canberra the city to beat for house price growth

The Canberra housing market has continued its recent resurgence and is now recording the strongest house price growth of all the capital city markets.

The latest Domain report has revealed that the Canberra median house price surged by 5.3 per cent over the March quarter to a new record high $705,059 and exceeded $700,000 for the first time.

The March growth rate for Canberra was the highest recorded by all the capital city markets with the next highest Hobart, where prices were up by 4.8 per cent. The quarterly increase was the highest recorded by the Canberra market since December 2009.

Canberra house prices have now increased by $66,345 over the past year – a rise of 10.4 per cent. Melbourne recorded the highest capital city price growth over the year ending the March quarter with a booming increase of 15.2 per cent followed by Sydney, up by 13.1 per cent to a remarkable $1,151,565.

Perth and Darwin were the only capitals to record declines in house prices over the past year – down by 3.0 per cent and 3.3 per cent respectively.

Although Canberra house prices are booming, local unit prices fell for the second consecutive quarter over March – down marginally by 0.6 per cent to $401,661. Lower unit prices reflect the recent surge in apartment construction with the median now down by 2.0 per cent over the past year.

Low interest rates, rising confidence, higher migration and a strengthening local economy are key drivers of recent strong house price increases. ABS reports that the jobless rate in the ACT was steady over the year to March at 3.9 per cent – the lowest of all the capitals. All other capitals, with the exception of Darwin and Adelaide, reported increases in the jobless rate over the year.

Dr Andrew Wilson is Domain Group Chief Economist

Twitter@DocAndrewWilson, join on LinkedIn and Facebook at MyHousingMarket.