Canberra market holds strong as Sydney and Melbourne slow

Promises of easing interest rates, continued high migration and low property stock levels is placing strong pressure on Canberra real estate, netting another month of growth in March.

The CoreLogic Hedonic Home Value Index, released on Monday, revealed Canberra property values rose by 0.4% in March, resulting in annual growth of 1.9%.

Despite the ongoing recovery, Canberra is still well ahead, with prices 31.2% higher than the onset of the COVID pandemic four years ago.

The median dwelling price across our city is now $838,976.

Windrose Property Principal and Licensed Agent Sam McGregor said the local market was ticking over steadily, but a limited supply of listings was encouraging greater competition amongst buyers.

“At Windrose, we have had another great month with heaps of properties listed to come to the market and a lot of deals coming together,” Sam said. “It continues to be a very stable market.”

Adelaide, Brisbane and Perth recorded the strongest growth in the country, between 1.1% and 1.9% for March. While the growth of Sydney prices has slowed, with a 0.3% rise in values last month, Melbourne remained unchanged, and Hobart recorded a 0.2% increase.

“Brisbane, Adelaide and Perth are really strongly performing markets. Sydney has slowed down a bit and Melbourne is stagnant. That means, Canberra is very close to the national average, which comes back to us being in a very functional market here,” Sam said.

“There are a lot more buyers around than there were three months ago. Whilst buyers are usually offering under the listed price or price guide, I’m finding that the final sales price is either at or sometimes above what was expected because of the competition in the market.

“For the first time in a long time, we are seeing multiple offers on properties that are priced appropriately. The market is very stable, but the competition is still driving higher prices at the moment.”

CoreLogic Research Director Tim Lawless said it was likely that housing values would continue to trend higher, and could accelerate if interest rates ease.

“Rate hikes, cost of living pressures and worsening housing affordability are all factors that have contributed to softer housing conditions since mid-last year,” Tim said.

“However, an undersupply of housing relative to demand continues to keep upwards pressure on home values despite these headwinds.

“With overseas migration having peaked in the first quarter of last year, we should see the rate of population growth easing, however without a catch up in supply, Australian housing markets are likely to be navigating an undersupply for a few years yet,” he said.