Canberra relinquishes title of second most expensive city, as Brisbane growth surpasses national capital in May

Canberra property values continued to make steady progress in May, but the gains were not enough for the city to retain its position as Australia’s second most expensive capital.

The latest CoreLogic Hedonic Home Value Index, released on Monday, shows Brisbane housing values posted stronger increases than Canberra, surpassing the national capital to claim the second-highest median dwelling value of all capitals for the first time since 1997.

Across both houses and units, Canberra’s values rose by 0.5% in May, netting annual growth of 2%. ACT values are up 31.8% since March 2020.

The median value in Canberra is now $840,100, just shy of Brisbane’s $843,231. Sydney remains the country’s most expensive real estate with a median of $1,156,020.

Windrose Property Principal and Licensed Agent Sam McGregor said Canberra was in the midst of an ongoing market recovery, buoyed by improving buyer confidence and measured decision making.

“At Windrose, we have seen a distinct shift in the market where we’ve been selling more properties between $800,000 and $1 million,” Sam said.

“Buyers are still very price sensitive but there is a cohort that is making the decision now is a good time to buy, particularly in that price bracket.

“Three to six months ago anything priced $750,000 and below was in hot demand, and anything above that (price bracket) was taking longer to move. To me, that’s indicative that the market is coming full circle and we’re starting to tick up again.”

Sam said while stock levels were rebalancing, having less property on market meant greater competition, quicker sales and less days on market. For certain homes, the lack of supply was translating to notably higher sale prices.

“There was a period where we had more houses to sell than buyers. Now, I’m seeing days on market reducing,” he said. “The amount of property coming to market is a little less than it was before and deals are coming together.”

CoreLogic Research Director Tim Lawless said it appeared the trend on housing values and activity had been insulated by a number of factors, including the effect of high interest rates and cost of living pressures.

“To say the housing market has been resilient is an understatement,” Tim said.

“Housing values are continuing to rise across most areas and housing types, with growth accelerating in some markets. The common denominator remains a mismatch between housing supply and housing demand.

“It’s this disconnect between supply and demand that is trumping the downside pressures from interest rates, high inflation and low sentiment.

“Despite worsening affordability pressures, from both a purchasing and a rental perspective, Australian residents still need to keep a roof over their heads.”

Nationally, he expected there was likely to be further upwards pressure on housing values alongside greater erosion in housing affordability.