The Canberra housing market appears to be bouncing back this year, with a rise in value of 2 per cent over the first quarter following a decline at the end of last year.
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But while new data shows an improved result for the territory, the capital is expected to record subdued growth for the remainder of the year.
The RP Data-Rismark March home value index, issued on Tuesday, shows the capital followed a national trend of growth during the March quarter.
Canberra recorded an increase in home values during March of 2.2 per cent, which was just below the combined capitals figure of 2.3 per cent for the month.
But the capital is not keeping up with other jurisdictions and was 1.5 per cent below the combined capitals figure for quarterly growth.
Home values last year rose by 3.5 per cent despite a fall in performance by the territory in the final quarter of the year.
Canberra was the weakest-performing capital city in the December quarter, with a fall of 1.3 per cent. It was the only capital city to record a decline in home values.
As at March 31, Canberra was the fifth strongest-performing capital city over the month and quarter, behind Darwin, Sydney, Melbourne and Brisbane. However, year-on-year dwelling growth in the capital is the second weakest in the country with an increase of 1.7 per cent.
The index shows that Canberra houses recorded a 2 per cent rise in value during the past quarter while unit values increased by 2.4 per cent. In March units dropped 0.3 per cent while houses grew by 2.4 per cent.
RP Data research director Tim Lawless said month-to-month growth was always expected and
that on trend Canberra was experiencing a low level of growth.
''That really does paint a picture that the marketplace has softened quite substantially in Canberra despite the fact that we did see a decent growth figure this month,'' he said. ''More important is the trend, and that suggests … Canberra values are relatively flat at the moment, particularly in apartments, which did show a negative result this month.''
Mr Lawless said there were a number of contributing factors to the modest growth, including the fallout from the election and job-shedding prospects, the weakening of the rental market, and new supply additions were ''potentially dampening the level of price growth as well''. He said nationally Sydney and Melbourne markets were driving the growth with year-on-year value increases of 15.6 per cent and 11.6 per cent respectively.
Mr Lawless expected the nation's capital to track below the combined city figure for the remainder of the year, with lower transaction numbers than a year ago and relatively soft rental market growth.
Real Estate Institute of the ACT president Michael Kumm said while the territory was too small a jurisdiction for reliable value estimations, the high end market was moving well.
He said the housing market was still tight with about 750 fewer listings than at the same time last year and a higher ratio of apartments and townhouses to houses. But he said buyers were still lucky because prices had not risen yet.
