Housing affordability in the capital has improved, so much so that the ACT has recorded one of the biggest jumps in housing affordability in the country.
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But for those entering home ownership, almost two incomes are needed to pay off a mortgage in the capital.
December marked the fourth straight quarter of improved housing affordability, largely because of lower interest rates and reasonable earnings growth, according to the latest Housing Industry Association-Commonwealth Bank housing affordability report, published yesterday.
The report also found affordability was at its highest point nationally since late 2009.
''Monthly mortgage repayments in the December quarter eased by a non-trivial 1.74 per cent on the back of lower interest rates while the average weekly ordinary time earnings of an adult working full time increased by 0.5 per cent over the three months to November 2011,'' the report said.
''Offsetting these positive influences was a modest increase in dwelling prices at the aggregate national level.'' While housing affordability also improved in Sydney and Melbourne, Sydney remains the least affordable city in Australia, followed by Melbourne. The main factors driving the outcome were dwelling prices and income.
The median dwelling price in the ACT decreased during the December quarter, down by almost 2 per cent on the same time the previous year.
Average wages were up 0.6 per cent in the three months - slightly higher than the rate of growth in earnings nationally.
''Given that all three inputs into the housing affordability index moved favourably in the December quarter, it is not surprising that the index improved [in Canberra] by a substantial 6.1 per cent (3.5 points) over the December 2011 quarter to be up 8.9 per cent (5 points) when compared to the December 2010 quarter,'' the report said.
Canberrans had to pay $3288 a month in mortgage repayments, the second highest, behind Sydney's $3635 repayments a month. And 1.7 average full-time wages were needed to service a mortgage on a median-priced home in the ACT, slightly better than the 1.8 incomes needed nationally.
Chief Minister and acting treasurer Katy Gallagher said it was no secret that Canberra's high real estate prices posed a challenge for some Canberrans.
But she said the capital's strong real estate market reflected a population that was ''better paid and better educated compared to other Australian cities''.
''Lower interest rates do help affordability, but there has also been a softening in Canberra's real estate market,'' Ms Gallagher said.
''The ACT has seen a reduction in prices, not in activity - which shows there is still confidence and demand in the market, and it means affordability is improving.''
The ACT government will issue the third phase of the Affordable Housing Action plan later this year, which addresses housing affordability issues in Canberra.
