Canberra’s property prices are slowly climbing back to their peak

After four consecutive quarters of decline, Canberra’s housing market is on the rise, ending the steepest downturn the market has ever seen.

According to the latest Domain House Price Report, released on Thursday, the Canberra house market has moved into recovery, with prices rising over the September quarter for the first time since mid-2022.

Canberra’s median house price is $1,042,730, marking a growth of 1.8 per cent from the previous quarter.

“Canberra is now officially in recovery,” said Domain chief of research and economics Dr Nicola Powell.

“I think we’re likely to continue to see prices increase, but that growth is moderate compared to the historical average, which for quarterly growth in Canberra is 3.1 per cent.”

According to the report, the combined national property market entered its third quarter of growth for houses and second for units.

Canberra was the final capital to hit a price trough back in June 2023, and while house prices have recouped $18,000 of the $151,000 value lost during the 2022-23 downturn, Canberra remains the furthest from its price peak compared to other capitals, still down 11.3 per cent.

“It’s been quite unusual conditions overall for Canberra’s housing market because it saw such a significant upswing during the pandemic, and then a deep downturn too,” Powell said. “This is the steepest price cycle that Canberra has ever experienced, and I think that in itself meant it took a while for prices actually to find that trough and stabilise.”

While house prices were up, unit prices continued to decline over the September quarter, dropping 0.6 per cent to $567,059. However, the depth has eased compared to the previous quarter. The median unit price is 7 per cent below its June 2022 peak.

“But the listings environment is also much better in Canberra relative to other cities,” said Powell.

“Canberra now has total supply above the five-year average for this particular time of year.”

Jonny Warren from Jonny Warren Properties said this increase in stock levels meant Canberra was experiencing a buyer’s market.

“There’s so much variety for buyers out there, so there’s no urgency, and properties are taking a little bit longer to sell,” he said.

“Buyers aren’t rushed. They’re taking their time to find their home. We’re still even seeing price reductions to try and create a little bit of urgency to sell.”

Will Honey from The Property Collective said the feeling on the frontline was that the Canberra market was plateauing as opposed to rising, with inner suburbs performing better than outer suburbs. Compared to this time last year, Honey said there was more certainty in the market thanks to more stability around interest rates.

“I think with a bit of stability, there is more confidence from buyers that they know what they can afford. Sellers are a bit more confident on their pricing and what they’re going to sell for,” he said.

“And sellers are definitely more realistic in price from the peak. There’s always a hangover after a market peak where sellers’ expectations are back in a higher market, whereas I think they’re starting to settle. But it will be interesting to see what happens over the next quarter.”