Canberra - a great place if you're an investor, but not if you're trying to buy or build your first home.
The bush capital's residential property values have outshone other Australian cities over the past quarter, growing 2 per cent in the three months to November. However, ACT home values were down 0.5 per cent in the month of November, when houses were down 0.5 per cent and units dropped 0.9 per cent.
Rental yield was 4.1 per cent for houses and 5.1 per cent for units in the capital, according to the CoreLogic RP Data November Home Value Index published on Tuesday.
Canberra retains the mantle of Australia's third most expensive city to buy in, with a median dwelling sale price of $575,000 in the quarter.
Dwelling approvals in the ACT also experienced the steepest decline in the country in October, with private sector housing approvals falling 10.8 per cent in trend terms according to the Australian Bureau of Statistics.
Year-on-year, the value of all Canberra homes rose 5.2 per cent on last year, yielding a gross return of 9 per cent. This compares with 8.7 per cent and 12.8 per cent respectively for Australia's eight capital cities.
Post-global financial crisis, Canberra dwelling values have swelled cumulatively by 22.9 per cent.
However, the news isn't great for investors across the board, CoreLogic RP Data head of research Tim Lawless said.
"As a consequence of the tighter lending environment for investors, as well as gross rental yields being at near record lows, participation in the housing market from investors has reduced from 54.1 per cent of all new mortgages in May 2015 to 45.4 per cent at the end of September, which is the lowest level since July 2013," he said.
Mr Lawless also had a warning for Canberrans considering buying off-the-plan.
"With the housing market moving through the peak of the cycle at a time when there is a large number of new dwellings commencing construction, there is likely to be a heightened level of settlement risk for off the plan purchases," he said.
"Those purchasers who have recently purchased off-the-plan may face challenges at the time of settlement if the valuation of the property is lower than the contracted price, or if mortgage finance is less freely available, or on more expensive terms."
Overall, dwelling values fell across five of the eight capital cities in Australia during November, according to the index.
Slower housing market conditions caused dwelling values to move 0.5 per cent lower last month.
Sydney maintained the highest annual growth rate of residential property values at 12.8 per cent. It had a median dwelling price of $810,000 in the past quarter.
Nationwide, housing approvals also continued their seven-month spiral during October.
The value of the total buildings approved fell 0.3 per cent across Australia, the ABS found.
The Home Value Index is calculated using recent sales data combined with information about the attributes of individual properties such as the number of bedrooms and bathrooms, land area and geographical context of the dwelling.