ACT house prices predicted to keep growing, defying national downturn
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ACT house prices predicted to keep growing, defying national downturn

Canberra house prices are predicted to grow by more than 6 per cent in 2019, as the capital continues to defy a nationwide property market downturn, according to a new report.

But a declining auction clearance rate and slowing rate of housing finance commitments suggest demand might be beginning to cool in the ACT, the report from housing research firm CoreLogic and Moody's Analytics finds.

The report, published on Monday, predicts Canberra property prices will rise throughout 2019, following moderate increases in the past six months.

House values are predicted to rise by 6.1 per cent, according to the report, while unit prices are forecast to grow by 3.3 per cent.

Canberra's median house price was $672,332 at the end of 2018, up 3.6 per cent in the past 12 months, according to CoreLogic figures.

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The report suggests the price rises are being driven by the overall strength of the ACT economy, which is underpinned by low unemployment and population growth.

Unemployment in the ACT has dropped to a two-year low on the back of growth in the service and construction sectors, as well as in the public service, according to the report.

"The ACT's population grew by 2.2 per cent in the year ended 2017, the biggest rise since 2012, driven by record net overseas migration," the report stated.

"Strong population growth is helping to underpin the resilience of the ACT housing market."

The report has forecast continued growth in the ACT in 2020, with house prices expected to rise by 4.8 per cent and units predicted to climb by 4.6 per cent.

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Moody's Analytics predictions are more ambitious than those made by Domain, which is expecting more modest growth in Canberra's property market in 2019.

Domain's Property Price Forecast has predicted Canberra's house prices will rise by 4 per cent in the next 12 months, while the value of units will grow by 2 per cent.

Property Council ACT executive director Adina Cirson said a new report on Canberra's property market next week would show housing price and construction activity growth was expected.

Rising public service employment and a high median income would shield the ACT from housing market downturns interstate, she said.

The difference between expected growth rates for the the territory's house and unit values reflected the number of apartments coming onto the market.

"What becomes quite clear in these discussions is the missing middle," Ms Cirson said.

Demand was growing for middle-size dwellings with two-to-three bedrooms among people wanting to downsize, she said.

Ms Cirson said the ANZ/Property Council Survey would also reflect it was becoming harder to access finance.

Master Builders ACT chief executive Michael Hopkins said tightened lending restrictions were partly to blame for signs of a slowdown in the ACT housing sector after one of the biggest years for residential building approvals in the territory's history.

Rising property values could shut more people out of the market in Canberra as the city grapples with affordability questions.

ACTCOSS capability manager Samantha Quimby said saving for a deposit and buying a home was out of reach for many Canberrans.

"The lack of affordable rentals makes saving for a house inaccessible," she said.

Moody's Analytics said it believed the nation's two largest property markets would continue to "correct" following years of significant growth.

Sydney's housing market is expected to drop by 3.3 per cent overall this year, following a fall of 5.2 per cent in 2018, according to the agency's report. It projected houses in parts of the city could lose almost 7 per cent in value.

House prices are tipped for a steeper 6 per cent overall drop in Melbourne, but the fall could reach 11 per cent in some parts of the Victorian capital.

Moody's said the overall national market would edge down through the next 12 months.

"The Australian housing market will continue to correct in 2019," the agency said.

Outside the two largest cities, Moody's believes Brisbane (1.2 per cent), Hobart (2.7 per cent), Adelaide (2.6 per cent) and Darwin (3.7 per cent) will see some growth in values.

The Perth market will, again, edge down with Moody's forecasting a 2.8 per cent drop.

Dan Jervis-Bardy is a Canberra Times reporter.

Doug Dingwall is a reporter for The Canberra Times covering the public service and politics.

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