Canberra has the second most expensive property prices in the country, according to new data from CoreLogic, with values in the capital rising almost 2 per cent over the month of October.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The median value for dwellings (houses and units) is now $864,909, making Canberra the second-most expensive capital city after Sydney, where the median price is $1,071,709.
The figures come as CoreLogic reports price growth in both capital cities and regional areas is slowing, likely due to a combination of affordability issues, an increase in new listings and recently-enacted lending changes.
Canberra's median dwelling price grew by 1.94 per cent over October and 6.18 per cent in the quarter. That compares with 1.5 per cent and 4.6 per cent respectively across the country.
In the 12 months to October 31, prices grew 25.52 per cent, higher than any other capital city other than Hobart, which clocked a 28.06 per cent rise during the same period.
House values grew at a far greater rate than units in the past 12 months, gaining 29 per cent compared with 13 per cent.
CoreLogic research director Tim Lawless said that across the country monthly growth rates had slowed significantly since March this year, in part due to the diminishing presence of first home buyers.
"Housing prices continue to outpace wages by a ratio of about 12:1. This is one of the reasons why first home buyers are becoming a progressively smaller component of housing demand," Mr Lawless said.
A surge of new listing in the wake of lockdowns ending in several cities had likely also contributed to slower growth rates.
"New listings have surged by 47 per cent since the recent low in September and housing focused stimulus such as HomeBuilder and stamp duty concessions have now expired," he said.
"Combining these factors with the subtle tightening of credit assessments set for November 1, and it's highly likely the housing market will continue to gradually lose momentum.
The report said interest rates would be a central factor in the housing market's performance over the medium to longer term.
"Although housing risks are becoming more evident, the short-term view is for further growth in values, albeit at a slower rate than what has been seen over the previous 12 months," it said.
As the economy continues to benefit form easing COVID-19 restrictions, current low interest rate should continue to support demand, along with tight advertised supply levels and improving consumer sentiment.
AMP Capital chief economist Shane Oliver said prices could keep rising for a little while yet.
"Still ultra-low mortgage rates and an ongoing relatively low level of homes for sale along with a resumption of economic and jobs market recovery following the end of lockdowns point to further home price increases ahead for a while yet. And the return of immigrants may provide a source of support at some point," he said in a note.
"However, storm clouds are starting to gather for the property boom and we expect a further slowing in price gains ahead of falls from later next year. Listings are on the rise reflecting the end of lockdowns and high prices, poor affordability is pricing more and more borrowers out of the market, a rotation in consumer spending back towards services as reopening occurs may reduce housing demand, higher interest rate serviceability buffers and likely further macro prudential controls will likely slow borrowing, fixed mortgage rates are on the rise and the RBA is expected to start raising interest from late next year."
Higher inflation and the faster than expected recovery could mean the first rate hike will come late next year, pushing up mortgage rates.
"As a result we have revised our 2022 capital city average dwelling price forecast down to 5 per cent (from 7 per cent) and with prices likely to start falling from later next year we expect a 5-10 per cent decline in average prices in 2023," he said.
Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:
- Bookmark canberratimes.com.au
- Download our app
- Make sure you are signed up for our breaking and regular headlines newsletters
- Follow us on Twitter
- Follow us on Instagram