Only 2.4 per cent of houses in Canberra are under $400,000: report
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Only 2.4 per cent of houses in Canberra are under $400,000: report

Canberra is the toughest capital in the country for people trying to buy under $400,000, with just 2.4 per cent of houses priced under the threshold.

The number has slumped from 9.6 per cent five years ago and means that a lower proportion of Canberra's houses are priced at less than $400,000 compared to Sydney or Melbourne.

In Sydney, 2.5 per cent of houses sold for less than $400,000 in June 2018. In Melbourne that figure was 2.7 per cent. Other cities have a dramatically higher proportion of cheap homes - about a quarter of homes in Brisbane, Darwin and Perth sell for less than $400,000, 37 per cent in Adelaide and 44 per cent in Hobart.

Canberra Nurse Amouri Strydom, who has been actively working towards buying her first home for the past two years. She's finding it difficult to save for her deposit.

Canberra Nurse Amouri Strydom, who has been actively working towards buying her first home for the past two years. She's finding it difficult to save for her deposit.

Photo: Dion Georgopoulos

The figures were revealed on Thursday in a new report by Core Logic for community housing peak body Power Housing.

Canberrans buying under $400,000 are effectively forced into units, with just over a third of Canberra's units selling under that mark.

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Canberra Nurse Amouri Strydom, 25, has been actively working towards buying her first home for the past two years.

Ms Strydom, who has been renting since she was 18, said after she paid off all of her loans, including university student loans, she immediately started working towards buying a property.

"I started speaking to property managers about, realistically, how much my deposit would be and other things I needed to put together, like stamp duty and that kind of stuff," Ms Strydom said.

"Initially I was looking at buying a home in Canberra because this is where I work and I wanted to settle down, but houses you're looking for as a first home buyer were so expensive."

She said she found Canberra's rental market a big hit to her hip pocket when it came to saving for her deposit.

"I've lived in four different states in Australia and I've found Canberra has been one of the highest weekly rental rents which has made it a lot harder to save up for a house because my money's going to paying my rent and other expenses," she said.

"Getting a deposit together has been a lot harder because of that."

Power Housing chief executive Nicholas Proud said the average first home owner's loan was $344,600, leaving many first home buyers unable to get a foot in the market.

"We’ve seen larger numbers of people be unable to purchase homes at the $400,000 mark," Mr Proud said.

"You’re looking at challenging times if you’re a senior or first home buyer because it’s very hard to get into the market in this part of the world."

The report also shows Canberra's house prices have increased by 27 per cent in the past five years - a growth rate ahead of Adelaide and Brisbane but well behind Melbourne (53 per cent in five years), Sydney and Hobart. The median Canberra house price in June was $680,000, compared to $536,000 five years ago - and just $145,000 in 1998.

"The housing market nationally, particularly in Canberra with those figures coming to light, you need to be thinking of housing as a long-term investment and you’re considering it as long-run investment, long gain for people wanting to buy as an owner-occupier," Mr Proud said.

"You do need to save a deposit, you do need to be thinking that it’s going to be a few years of working before being able to buy that home."

Ms Strydom said she's been forced to look across the border in Queanbeyan for affordable alternatives. She said she'd even considered buying an investment property instead of living in and paying off a house just so she could get into the market.

"Not only has it been hard to put my deposit together, but in Canberra, you're looking at much higher deposits," she said.

"I've found that by looking for a home in Canberra, I'm having to go further, and further out from areas I'd prefer to live in that's closer to work and stuff like that."

But the news is also bad for Canberrans who own units. Canberra's unit prices have increased just 1.3 per cent in five years, to a median price of $415,500. It's a dramatic slowdown on previous increases in unit prices and Mr Proud said it meant that someone owning a unit had lost value over the past five years.

The report highlighted the increasing struggle faced by renters around the country. Canberra's high average incomes hide the problem for people on low incomes here - with the city's renters paying an average of 23 per cent of their income on rent, well below the "stress" threshold of 30 per cent.

But single pensioners are worse off in Canberra than any city other than Sydney, having to pay 71 per cent of their income in rent, putting the city in the "extremely unaffordable" category for older people living alone.

While growth in rents is slowing across the country, Canberra bucks the trend, with rents rising 4.5 per cent in the past year in the nation's capital, compared with an average of 1.4 per cent across the country. Nationally, rental growth is slowing, down from 2.4 per cent a year over the past decade.

Mr Proud warns that Australia is heading to a "supply trough", with 200,000 homes needed each year to keep up with underlying demand, but only 170,000 forecast to be built in 2020. That squeeze would make affordability worse, he said, calling for tax and other incentives to organisations building affordable housing.

Han Nguyen reports on property for The Canberra Times. She joined the Times in 2017 after working as a breaking news reporter at The Sydney Morning Herald.

Kirsten Lawson is news director at The Canberra Times