Momentum is building in Canberra’s detached house market with prices rising again in October, driven by the Commonwealth 5 per cent deposit scheme for first-home buyers. According to Cotality’s latest Home Value Index for October, house prices have increased by 0.7 per cent, bringing the year’s total increase to 3.6 per cent, and 3.4 per cent over the last 12 months.
In contrast, the unit and townhouse markets have remained largely stagnant, showing only a 0.1 per cent increase over the month. This year, units have risen just 0.3 per cent, with annual results remaining flat, a reflection of the ample supply of stock in the market. However, the influx of new buyers in the sub-million-dollar range, coupled with a limited number of available properties, is driving up house prices. Overall, Canberra property prices rose by 0.6 per cent across all types.
North-South Divide in Property Growth
The annual price growth figures reveal a clear north-south divide. The rapidly developing Molonglo region leads with a 6.8 per cent increase, thanks to its new stock. Tuggeranong follows at 4.7 per cent, with Weston Creek at 4.4 per cent, and a resurgent South Canberra at 4.3 per cent. Meanwhile, North Canberra lags behind with a modest 0.9 per cent growth, followed by Gungahlin at 2.1 per cent and Belconnen at 3.6 per cent.
Real estate agents report bustling open homes in Tuggeranong, where buyers are drawn to the value offered by the Valley’s standalone family houses. A notable sale includes a Macarthur home that set a suburb record at $1,755,000. This four-bedroom, three-bathroom house, featuring three living areas and an outdoor entertainment area with a pool, had been owned by the same family since its construction in 1991.
First-Home Buyers and Market Dynamics
Will Honey of The Property Collective noted increased buyer activity in October, particularly in the under $1 million range, much of it centered in Tuggeranong. “That million-dollar property price range is getting lots of interest,” he said. “We’ve had a really busy October. The first indicator is the number of visitors through open homes, and we’re seeing an uptick this spring, especially in that lower price range.” Although properties above this range are still moving, most activity remains below the million-dollar mark.
The unit market is progressing more slowly, though location plays a significant role. Honey explained that established apartments remain considerably cheaper than new ones, which is driving many sales. Cotality research director Tim Lawless highlighted the stronger than average price growth in Tuggeranong and Molonglo, attributing it to the affordability of these markets.
“First-home buyers armed with the new deposit scheme are flocking to these areas, but this window may not stay open for long as prices rise,” Lawless said.
Lawless pointed out that Canberra is under-represented in terms of suburbs with a median house value under $1 million, at just 37 per cent. “That’s the second lowest of any region in the country after Darwin,” he noted. In comparison, about 47 per cent of Sydney suburbs have a median value below their price cap of $1.5 million.
Challenges and Future Outlook
The limited stock exacerbates the situation, with house listings 21 per cent below average for this time of year, while unit listings are 14 per cent above average. All of the nation’s capitals experienced price rises as demand continued to outstrip supply.
However, Lawless cautioned that last week’s inflation shock and the dashed hopes for further interest rate cuts have cast a shadow over the market. “It’s not just about reaching the bottom of the rate-cutting cycle, but also the impact on sentiment and confidence,” he explained. “Cost of living pressures have bounced back, likely denting confidence.”
If interest rates remain on hold, their effect diminishes as housing prices rise, diluting the impact of any increased borrowing capacity. As Canberra’s housing market continues to evolve, the balance between supply, demand, and affordability will be crucial in shaping its future trajectory.
