The Canberra housing market continues to provide robust results for local homeowners with the latest data revealing nation-leading growth in house prices in Domain's State of the Market Report released on Thursday.
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Domain reports Canberra's median house price surged by 5 per cent over the December quarter to a new record high of $753,516. The Canberra growth rate was the highest recorded of all the capitals with the exception of Hobart where the median increased by 10 per cent over the quarter.
Canberra house prices have now increased by 8.4 per cent over the past year, which is behind only Melbourne at 11.3 per cent and Hobart at 17.4 per cent for annual growth rates.
Although Canberra and Hobart recorded strong house price growth over the September quarter, other capital cities reported subdued results.
Sydney's median house price only increased by 0.5 per cent in the last quarter to $1,179,519.
Brisbane and Darwin both experienced negative quarterly growth at -0.6 per cent and -2.6 per cent respectively.
Domain group chief data scientist Dr Nicola Powell said Canberra's performance has been assisted by strong interstate migration.
"I think there's an element of perceived value in the Canberra market and we are seeing a lot of interstate migrants come to the ACT supported by low interest rates," she said.
"When you compare Canberra to nearby capital cities such as Sydney, that price point is actually great value."
Powell added there is an interesting trend with stock levels in the Canberra market that is also affecting Canberra's median price growth.
"On an annual basis the current total stock on market in Canberra has been steadily declining since March 2016. Last year ended with a slight increase but only by 0.6 per cent, which is minor," she said.
Property Council of Australia ACT executive director, Adina Cirson, said Canberra's median house price growth demonstrates a demand for particular types of housing.
"There's plenty of large family homes with four or more bedrooms at one end of the market and at the other end there's plenty of apartments. What I'm hearing from the sector is there is a huge demand for two- and three-bedroom family homes," she said.
"Wherever there is a higher demand in the market, there's going to be higher prices."
Cirson stated there is a "missing middle" in Canberra's housing market.
"The missing middle includes people who sit just above the public housing threshold, but can't quite afford the higher end of the market," she said.
"We know Canberrans are very keen on seeing a greater housing choice in the market which allows them to buy at different price points."
While Canberra's housing market has had a major surge, the unit market only recorded a slight increase of 0.1 per cent to $426,124.
"The high level of development in Canberra peaked in 2016 which impacted prices. Consequently, what we have seen over the past two years in Canberra's unit market is volatile price movement," added Powell.
"When you go back to what was happening in the boom of the development phase we were seeing annual growth in the double digits but now it has started to ease."
For first home buyers, units offer an affordable alternative said Powell.
"First home buyers are really now priced out of the house market because the number of affordable suburbs in detached housing in Canberra is very small," she said.
"The unit market has an affordable entry price point compared to a house and we're seeing more first home buyers choosing to live in an apartment.
"That increase in demand from first home buyers is helping to balance out the unit market."
