Growth and decline: Canberra's unit prices struggle while houses continue to rise

The latest Domain figures show Canberra regions have had differing fortunes, particularly in the unit market with the unit median price declining during  the past 12 months in Belconnen, Inner North, Inner South and Woden.

The Inner South experienced the biggest drop in unit prices to $495,000 – representing an annual decline of 5 per cent. Nevertheless, it retained its position as Canberra’s most expensive place to buy a unit.

Luton Properties Dickson agent Christine Shaw said she had witnessed firsthand a decline in unit prices across these regions. She cited an example of a one-bedroom unit in Woden bought off-the-plan in December 2013 for $389,900 that was resold in October 2017 for $340,000.

Ms Shaw said there was a heightened supply of one-bedroom apartments.

“There’s a lot of competition for vendors in the one-bedroom apartment market,” she said.

“We wish we had more three-bedroom townhouses or apartments to sell.”

Last week, Geocon managing director Nick Georgalis slammed suggestions of an oversupply in the unit market.

“This myth of oversupply is simply not borne out by sales data. It’s a misinformed or deliberately mischievous argument put forward by people who are opposed to high-rise and clinging onto the ‘bush capital’ idyll,” he said.

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This comes after the Domain March Quarter 2018 House Price Report, released last week, showed Canberra’s overall median unit price has dropped annually by 3.5 per cent to a four-year low of $411,004.

While unit prices have declined overall in the nation’s capital, Gungahlin, Queanbeyan, Tuggeranong and Weston Creek have curbed the trend with each experiencing growth during  the past 12 months.

Queanbeyan led the pack with an annual growth of 7.8 per cent to $259,500 in unit median price.

Domain chief data scientist Dr Nicola Powell said Queanbeyan’s growth was impressive, in spite of coming off a lower base line and the NSW stamp duty exemptions that are helping to attract first-home buyers to the region.

“It’s the lowest priced region in the ACT and when you look at the value of what you can get across the border, I think you can understand why perhaps some first-home buyers are choosing to relocate,” she said.

Belconnen’s housing market is one of the best performing with continuously high clearance rates. Photo: Lucy Bladen

The median unit price in Gungahlin, Weston Creek and Tuggeranong has grown by 3 per cent, 5.5 per cent and 6.5 per cent respectively.

“The population growth and impact of the light rail project in Gungahlin makes it appealing for investors as they tend to follow where infrastructure spending money goes,” Dr Powell said.

“In Tuggeranong, the stock level has declined and that could possibly be impacting that.”

In the housing market there’s been growth in most regions, although the rate of growth has slowed across the board.

Annually, Gungahlin has experienced the biggest growth in house prices, surging 10.8 per cent to a median of $670,000, followed by Belconnen where the median has escalated by 10 per cent during the past year to $590,000.

“Canberra’s population is skewing and shifting north, pulled by the growth in Gungahlin. This is also being reflected in terms of buying preference for new development. As young families and those couples looking to start a family set their sights on the region,” Dr Powell said.

“Belconnen has been one of the stronger housing markets out of all the districts for quite some time. Clearance rates have been very high and there’s a strong underlying demand for houses that’s reflected in its double-digit price growth.”

Weston Creek is the only region to have experienced a negative annual growth in median house price at -0.2 per cent.

Dr Powell said the data shows that Canberra regions are at different stages of the property cycle and it was important for people to keep abreast of occurrences in their area.

“There are multiple property cycles going on, not only in Australia, but also when you drill down on that capital city level. It shows you need to be across not only what is happening in your city but also in your region, and on your street,” she said.