Canberra Real Estate Prices Increase 4.4%, Reaching New Record

The ACT’s Canberra property market is a mixed bag of changing trends this quarter, according to Domain’s latest Quarterly Property Price Report for June.

House prices increased by 1.8% to an average price of AUD 1.15 million, while apartments increased by 4.4% to an average price of AUD 599,735.

For the first time since 2012, Canberra became the second most expensive central city to buy an apartment, and remains in the top spot as the second most expensive center to buy a home.

While Canberra property prices have seen a surge, Domain’s Director of Economic Research, Nicola Powell, said annual growth had slowed to an 18-month low and values remained 0.9 per cent below their late 2021 peak.

“While rising house prices have partly reversed last quarter’s decline, they remain more than AUD 10,000 below their December 2021 peak. Favorable conditions are there, but property prices remain below peak prices, and annual growth has fallen to an 18-month low,” Dr Powell said.

“Meanwhile, prices grew rapidly, reversing all of the previous quarter’s decline to reach an all-time high of nearly AUD 600,000. The result has been a further increase in apartment prices, which have increased 50% from March 2020 and peaked in December 2021, while unit prices have increased only 29% from March 2020 to the current peak.

“This sharp growth gap has led to a record price gap, but this is now narrowing as property prices rose twice as fast as unit prices during the quarter.”

Buyer demand is shifting towards Canberra apartments due to affordability constraints, reduced loan availability and high owner-occupied first home loan values, Dr Powell said.

Additionally, investors remain an active buyer segment, continuing to pursue the tight landlord market and rental returns.

“However, demand has softened with investment values and owner-occupied home loans below their early 2022 peak. This is helping to shift the balance between supply and demand,” she said.

“The total inventory of homes for sale is improving from the lows earlier in the year, although still 24% below the June average over the past five years. Buyers will find they are facing less competition as the number of potential buyers is lower since the September 2021 peak.”

“Clear changes are taking place in the Canberra property market; the June quarter was the most active on record, but clearance rates fell to a two-year low at 65 per cent.”