Canberra – momentum slows in our million dollar capital
Canberra is our second most expensive capital city with the median for houses now sitting right on $ 1 million . Unlike our most expensive city , Sydney , prices seem to be flat lining in Canberra as opposed to falling . While it may be that there ’ s a bit of a lag between our biggest city and the rest of Australia , it could also be that for now jobs growth is balancing out the rising cost of debt . With interest rates , however , expected to see ongoing increases this year , it ’ s likely that we ’ re in for a pretty slow 2022 when it comes to price growth .
While prices are slowing , there ’ s an interesting story with rental growth . Canberra has seen very strong rental growth through the pandemic , increasing by 16 per cent for both houses and units since March 2020 . House rents seem to have stabilised somewhat , pulling back a little bit since May . Unit rents , however , are continuing to increase and are now at their highest level recorded . This strength is likely driven in part by development of better quality , and therefore more expensive , units . But it ’ s also likely that population growth has played a role here .
Overall , we ’ re looking at a slower remainder of the year for house price growth but continued strength in the rental market . New development is likely to be subdued primarily because construction costs continue to rise and this is flowing on to the viability of many projects . Longer term , this will lead to continued pressure on affordability on the Canberra market .
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