CANBERRA has recorded the fastest quarterly increase for house prices in nearly three decades, pushing affordability further out of reach, according to the latest Domain house price report for the March quarter.
Sydney also recorded the fastest quarterly increases for house prices, although the report revealed that the growth isn’t likely to continue.
Over the March quarter, Domain senior research analyst Dr Nicola Powell said house prices surged by 9.7 per cent to $927,577.
“This is the fastest acceleration of house prices over a quarter since Domain records began in 1993 and the first time they have cracked the $900,000 mark,” she said.
“This has pushed annual house price gains to 19.5 per cent, the steepest annual increase in 17 years.”
Dr Powell said Canberra is a breakaway performer compared to the other capital cities, recording the strongest annual and quarterly house price growth.
“Houses at the upper end of the market are leading, with the strongest quarterly gains recorded in north Canberra, south Canberra and Woden Valley,” she said.
“All three areas have a median above $1 million. A higher average wage, job security and low mortgage rates have spurred buyers to upsize.”
Ms Powell said units in the ACT have declined 5 per cent in the last quarter to $473,304, which is 2.8 per cent higher than the same time last year.
“It has been a consistent Canberra trend, units providing more subtle growth compared to houses,” she said.
However, she said the unit market is not uniform across the territory, with apartments in Gungahlin, south Canberra and Tuggeranong growing over the quarter and year.
Dr Powell also said that another quarter at the same percentage growth rate would push house prices above $1 million.
“That said, this rapid growth is likely to be the peak quarterly rate and not sustained in following quarters at such ferocity,” she said.
“This level of quarterly growth is normally the output of an entire year and is extremely rare for Canberra to experience in one single quarter.
“A lack of houses for sale at a time of strong demand has ultimately created stiff competition between buyers, depleting overall stock to a multi-year low.
“Canberra’s auction clearance rate soared to 89 per cent in March, the highest point on record. It has been above 80 per cent for two months in a row, highlighting the market fierceness.
“Record low interest rates, high household savings, low stock volumes and incentives are fuelling a strong housing market performance.”