Public service job cuts and high prices have hit home in the ACT's housing sector, inviting competition from a surging NSW market just across the border.
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A new housing scorecard from the Housing Industry Association (HIA) has given the ACT a score 15 points lower than in its last report, the largest fall in any state or territory
In comparison, the NSW housing market has surged over the past year, jumping 17 points since November 2013 and rising to second overall.
HIA chief economist Harley Dale said the policy changes in NSW had seen a rise in competition between the two jurisdictions, putting the spotlight on the ACT government to improve conditions in the territory.
Canberra school teacher Amanda Tutalo, mother of three-year-old Christopher, has bought a block of land in the burgeoning Queanbeyan suburb of Googong .
She said although she had primarily bought outside the ACT to be closer to her husband's work and family, NSW was better value for money than Canberra at the moment.
"It's definitely more affordable for us in Queanbeyan than in Canberra," she said.
"We knew we needed a bigger place because we're having another baby and we looked at either buying an older place in Queanbeyan or buying new."
Mrs Tutalo said there were lots of young couples buying in Googong who were looking to start a family or already had young children.
The HIA housing scorecard compares a range of housing industry indicators, including building approvals, the number of homes under construction and the number of people employed in the construction industry.
Western Australia topped the scorecard for the second year in a row, while the ACT languished in third place, effectively tied with Victoria and the Northern Territory.
Mr Dale said Canberra's housing market had been hit by the ongoing public service job cuts and the uncertainty that had caused in the ACT economy.
"That means the number of decisions actually taken to engage in the housing market are probably fewer than they would be under more certain conditions relating to the government sector," he said.
But he said the territory's market was still surprisingly resilient, coming off the back of a period of record-breaking growth between 2009 and 2011.
"The peak of the pipeline has come and gone, so that income generator within the economy is not punching out the impetus that it once was," he said.
"So that peaking and slowing in the overall construction cycle, along with the uncertainty and real impact of job losses, means that we've gone from being an overperforming housing market to one that is still at par at the moment ... but the momentum is against us at the present point in time."
Mr Dale said the boom in the NSW housing market was due to effective government policies and low interest rates, and the spotlight was now on the ACT government to help kickstart the territory's construction industry.
"We have a long-term policy to reduce stamp duty and that in itself is a good policy, but we still need to do more about the ready availability of shovel-ready land," he said.
"We need to ensure that ... we [are] on a more competitive footing when there's more going on across the border than there was four years ago."
ACT Treasurer Andrew Barr said he wasn't surprised the housing market had been affected by the Abbott government's public service cuts, but he believed the sector was still performing strongly.
"We are confident that the ACT government's construction stimulus measures, in conjunction to further cuts to stamp duty and low interest rates, will help to continue to grow housing construction and create jobs," he said.
