Weekly snapshot: Canberra house price rise bucks trend for capital cities

The Canberra housing market continues to strengthen, with recent house price growth now clearly accelerating.

The Domain house price report for the September quarter revealed that the Canberra median house price increased by 2.3 per cent over the quarter to $625,092. This was the highest quarterly rate of growth recorded by the local market so far this year, and was just behind the leading capital city performers of Melbourne at 2.8 per cent and Sydney 3.2 per cent.

Canberra house prices have now increased over four consecutive quarters for the first time since June 2010, with the local market clearly finding its feet over the past year after a period of mixed buyer activity.

Canberra’s median house price has now increased by 7.8 per cent over the year ending September – a rise of $44,990. Similar to the quarterly growth rate performance, Canberra annual price growth was lower only than the boom markets of Melbourne at 15.6 per cent and Sydney 21.7 per cent.

Although Canberra house price growth continues to strengthen, unit prices are clearly heading the other way. The median unit price fell sharply over the September quarter by 4.7 per cent to $385,825, to be down by 5.7 per cent over the year. This was the second consecutive sharp fall in Canberra unit prices following the June quarter drop of 3.7 per cent.

Recent high levels of new apartment construction in Canberra have predictably pushed supply ahead of demand in the short-term, with softening prices growth always a likely consequence.

Dr Andrew Wilson is Domain Group Senior Economist
Twitter@DocAndrewWilson
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