Are prices surging across Canberra?
Encouraging signs of growth have emerged from the local housing market. Spring has been set from a strong foundation that formed through winter. It appears that the customary slowdown during the cooler months did not materialise with activity and price growth remaining robust.
Canberra was one of only three n capital cities to record a quarterly house price improvement. Canberra notched a quarterly jump along with the robust Hobart and Melbourne house prices. Other house values fared much worse than Canberra in the three-month lead-up to September. Negative quarterly adjustments were recorded in Sydney, Brisbane, Adelaide, Perth and Darwin.
Before September, the previous annual moderation was experienced in the March 2013 quarter, where prices made a minor 0.02 per cent backward adjustment compared to the March 2012 quarter. It should be noted that over the four years, between 2013 and 2017, numerous quarterly fluctuations have occurred.
Improving values tend to trigger concern among buyers vying to get a foot on the property ladder. As house prices steam ahead, it moves the deposit goal post for those first homebuyers who are vigorously saving a lump sum. Vendors who already have their homes on the market or are on the verge of listing would welcome the price gain.
All Canberra districts produced an annual price rise, some areas to a greater extent than others. The highest priced markets had some of the steepest price gains. The largest increase – 13 per cent – was recorded in the inner south, pushing the median to $1.3 million, $150,000 higher than last year. This is the only district to achieve a seven-digit median price.
Woden Valley has the third highest median at $815,000 and had the second greatest jump in price, 8.7 per cent, a healthy $65,000 annual increase. The second most expensive district produced another big price leap over the year – the inner north gained 8.1 per cent to reach a median of $854,000 in September, advancing by $64,000 compared with last year.
Price rises were logged in Belconnen, growing by 8.2 per cent to $560,000 ($42,250 annual increase), Tuggeranong by 7.3 per cent to $550,000 ($37,500 annual increase), Weston Creek by 7.3 per cent to $665,000 ($45,025), and Gungahlin by 6.7 per cent to $635,000 ($40,000).
Quarterly price movements were noted across every district, apart from Weston Creek, with prices remaining unchanged over the quarter. Gungahlin house prices rose by 3 per cent over the quarter, Tuggeranong by 2.2 per cent, Belconnen by 1.8 per cent, the inner north by 1.7 per cent, the inner south by 1.6 per cent, and Woden Valley by 1.2 per cent.
A crackdown on lending practices is currently in full swing, with banking regulators enforcing tighter lending standards, ensuring new loan applications are scrutinised and a tougher stance is taken when assessing the borrower’s income. Despite this, and out-of-cycle rate hikes, the Canberra market appears to remain unscathed.