National housing values are rising at the fastest annual pace since 1989, however the monthly rate of growth is slowing after reaching its peak in March, according to CoreLogic's latest home value index.
Canberra had one of the highest rates of growth in dwelling values last month, with 2 per cent growth compared with the national growth rate of 1.5 per cent.
The figures show Canberra house values also experienced 2 per cent growth, with the median house value now $956,119.
Unit values in the capital rose 1.8 per cent, compared with the national monthly growth rate of 1.1 per cent. The average Canberra unit is now worth $538,071.
Growing house prices are putting pressure on Canberrans looking to buy a home, such as Mel and Ken Hendrie who recently purchased a property in Woden after a 12-month search.
As the market surged, the couple were forced to expand their search location and their buying criteria.
"We ended up engaging a buyer's agent because we felt so out of our depth with auctions and people were just throwing silly money [around] that we weren't prepared to spend," Ms Hendrie said.
With the help of their agent Claire Corby, the couple feel "extremely fortunate" to have found a home in their ideal location, despite the rising market.
"We've already been told that it's very likely that [the house has] already increased in price which is extremely comforting for us, but it's also really worrying for all those other people still in the market," Ms Hendrie said.
According to the latest figures, housing values across Canberra are up 28 per cent on last year, while units have risen 11.6 per cent year-on-year.
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CoreLogic research director Tim Lawless said the latest figures showed monthly housing growth was losing steam since its peak in March when dwelling values increased by 2.8 per cent nationally, as a result of higher barriers to entry for first-home buyers.
"With housing values rising substantially faster than household incomes, raising a deposit has become more challenging for most cohorts of the market, especially first home buyers," he said.
Mr Lawless said those looking to upgrade, downsize or move home might be less impacted and would likely have the benefit of equity thanks to a surge in house values.
"The slowdown in first home buyers can be seen in the lending data, where the number of owner occupier first home buyer loans has fallen by 20.5 per cent between January and July," he said.
"Over the same period, the number of first home buyers taking out an investment housing loan has increased, albeit from a low base, by 45 per cent, suggesting more first home buyers are choosing to 'rent vest' as a way of getting their foot in the door."
Listing numbers putting pressure on housing values
Total number of advertised property listings are down 28.1 per cent below the five-year average across the country, placing upwards pressure on housing values across Australia.
While listings are low, CoreLogic data shows the number of home sales are well above average. Dwelling sales across the country was 25.5 per cent higher than the five-year average and 41.9 per cent higher year-on-year at the end of September.
The gap between supply and demand was keeping selling conditions skewed towards vendors, Mr Lawless said.
"Nationally, homes are selling in 35 days, up from 29 days in April, and vendor discounting levels remain around record lows at minus 2.8 per cent," he said.
The return of one-on-one property inspections in Canberra also points to strong selling conditions, Mr Lawless said.
"By the end of September, the combined capitals clearance rate had returned to 80.5 per cent, its highest since late March," he said.
This weekend, 112 Canberra properties are scheduled to go to auction, up on last week's auction total of 84.
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