‘Canberra Real Estate Market Crash’ Hits the Economy

Rent prices in Canberra are rising more than in any other Australian central city and show no signs of stabilizing or falling any time soon.

Rising costs hit the most vulnerable in our communities hard, with Anglicare calling Canberra’s rental crisis a “disaster” according to its annual National Rental Affordability Snapshot. Collation of CoreLogic data from Q3 2022 shows Canberra remains the most expensive central city to rent, with average weekly rent reaching AUD674.

Calls for rental reform from like-minded organizations in Canberra resonate, community advocacy group for high quality and affordable housing, Greater Canberra, has released its 2022-2023 ACT Budget Consultation Submission.

The group proposed key recommendations to reduce rental costs and outlined the impacts on the ACT economy further.

Data in the submission shows Canberra rents rose steadily at an average rate of around 2.8 per cent per year over the past five years to March 2022. Similarly, the annual CPI increase was around 2.6 per cent.

This has caused Canberra’s rents to increase by a total of 15% over the past five years, while Sydney’s only increased by 3%, while Melbourne’s decreased by 2%.

This significant increase in rents has led to a decline in interstate migration, which Greater Canberra says is hurting the ACT economy.

“Essentially, this analysis shows that high housing costs are creating a barrier for employers seeking to bring talent to the ACT, which has a negative impact on both the cost of doing business and worker productivity,” the submission states.

Additionally, the submission shows that, more broadly, current high housing costs in the ACT have increased the cost of living and lowered the real incomes of Canberra families.

Greater Canberra convenor Howard Maclean said, “Canberraans are proud to be a community where people of all backgrounds can find economic opportunities.”

“But our current exclusionary planning laws and high rents mean those opportunities are increasingly out of reach, as many Canberrans are pushed into poverty. We need a planning system that creates more housing options for all Canberrans, young and old.”

Mr Maclean said that paying rent makes up a large part of household budgets for low-income and young families, and rent increases have significantly reduced discretionary income. This results in employers having difficulty attracting new talent to the ACT.

The research also found Australians are likely to put off moving to the ACT altogether due to high living costs and some of the most expensive rents in the country.

“The broken housing market is hurting people and driving new arrivals out of the ACT. That means fewer people can reunite with family in Canberra, fewer talented employees for ACT businesses and fewer people able to take advantage of abundant renewable energy resources,” he said.

Greater Canberra recommends the new ACT Planning Bill should have a core focus on creating affordable housing and allow for more medium density housing to house ‘below average’ people.