Canberra property values rose 2.5 per cent over the winter quarter, with the value of detached houses counteracting a weaker apartment market to bring overall property values up.
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Canberra was the best performing city after Melbourne and Sydney, as Australia experienced the strongest capital gain over the three months of winter since 2007.
According to RP Data's Home Value Index, capital city dwelling values moved 4.2 per cent higher over the three months to the end of August.
The increase was driven by dramatic capital gains across the Melbourne and Sydney markets where values recorded a 6.4 per cent and 5 per cent lift.
In Canberra the 2.5 per cent increase was driven entirely by a 2.8 per cent gain in detached house values which compensated for a 2.1 per cent fall across the weaker apartment market.
The median dwelling price in Canberra now stands at $510,500, surpassed only by Sydney, Melbourne and Perth.
Other capital cities recorded moderate conditions with Adelaide values up 1.5 per cent, Brisbane recording a 1.3 per cent gain and Perth values up 1.0 per cent.
Darwin (minus 0.6 per cent) and Hobart (minus 0.8 per cent) experienced a modest drop in values.
While the Canberra apartment market was down, apartments in the capital do have a higher gross rental yield at 5 per cent, as opposed to 4.1 per cent for houses, both above the national average.
The data shows Canberra is at the bottom of the capitals when it comes to the change in dwelling values over the past 12 months, experiencing just a 1.4 per cent rise, half that of the next lowest, Hobart, and well below the national average of 10.9 per cent.
RP Data research director Tim Lawless forecast a strong house auction season, which officially got underway at the weekend.
"With today marking the first day of Spring, we are expecting listings numbers to rise over the coming month which will provide a real test for the housing market," Mr Lawless said.
"Considering the ongoing high rate of auction clearance rates, a generally rapid rate of sale and the ongoing low interest rate environment, it's likely that dwelling values will rise even further over the next three months.
"Consumer confidence is also moving in the right direction now after the post-budget slump which will add fuel to the exuberant buying and selling conditions we have seen during winter," Mr Lawless said of the situation nationally.
