‘What happened here is unusual’: The decline in Canberra house prices is slowing

A small quarterly drop has marked Canberra’s biggest-ever annual decline in house prices, according to a new report, but the capital’s median house price remains over the million-dollar mark. 

The Domain House Price Report for the December quarter, released on Wednesday, revealed Canberra’s median house price had dropped by 6 per cent over the year to $1,095,587. 

This was just a 0.3 per cent fall over the quarter, a small drop after Canberra posted the steepest quarterly decline on record in the September quarter, when house prices fell by 5.8 per cent. 

Domain chief of research and economics Dr Nicola Powell said the annual fall was largely attributed to the September quarter.

“The steepest annual decline in Canberra just means that we don’t normally see property prices have significant pullbacks,” she said. 

“When you have an almost 11 per cent annual decline in Sydney, but a 6 per cent decline is the steepest to ever come out of Canberra, you can see that what happened here is unusual.

“It is due to an even more unusual upswing that we saw in Canberra [amid the worst of the pandemic], because the level of upswing was like nothing the capital had experienced before.” 

According to the report, Canberra’s house prices are still 41.2 per cent higher than they were before the beginning of the pandemic in March 2020.

Canberra’s median house price decline was reflective of a wider national trend, Powell added. 

“We are still seeing Canberra’s median house price fall, but this fall was much slower than what we saw in the previous quarter,” she said.  

“What the combination of the two previous quarters has meant, though, is on an annual basis, this is the steepest annual decline that has ever been recorded for Canberra.” 

Canberra remains the second most expensive capital city in which to buy both a house or unit, with units measuring a quarterly decline of 3.1 per cent and a median price of $567,888. Sydney remains the most expensive capital. 

The decline in both house and unit prices over the quarter did little to persuade 21-year-old first-home buyer Georgie Burgess to purchase in the capital. 

Instead, Burgess looked over the border to Queanbeyan as a more affordable option.

“Reduced rates and strata fees were what really drew me towards the area I bought in because it meant it would be more affordable in the long run,” she said.

“Not only were those things more affordable, but the units themselves were also a fraction of the price – but don’t get me wrong, they were still expensive.

“My number one goal was buying something that I knew my budget could handle even as interest rates rise … it had to be something that was not only affordable now, but also in three, six and 12 months’ time.”

Burgess eventually bought a $225,000 one-bedroom unit, but had to make some compromises such as sacrificing an outdoor area. Despite this, she is happy with her home.

However, she raises concerns for others in her age group, as finding a home at her young age was not an easy task. 

“I honestly had to stop myself from looking at what the units I was inspecting had sold for in the past, because it got really disheartening realising I was paying up to 10 times their initial value,” she said. 

James Carter of Carter and Co Agents said he had noticed a general shift in demand for more affordable homes in the December quarter as well. 

“We are seeing a slightly increased demand for downsizer products as well as more and more demand for apartments,” he said. 

“But there are also a lot of people sitting back, still waiting to make a decision about buying or selling in Canberra.

“Holistically, it has been a rough few years for everyone coming off the back of inflation, interest rates hikes and cost of living increases. I think the market is just seeking some form of stability.”