Canberra Property Market – Prices, Trends, Forecast [January 2025]

Canberra’s property market showed a slight decline in 2024, with an annual value drop of -0.4% and a median dwelling value of $844,277. This downturn reflects broader national trends of cooling property growth amid rising affordability constraints.

Canberra Property Price Growth

Housing values in Canberra fell by -0.5% over the month of December 2024 and -0.3% over the last quarter. Over the year, the city’s slight annual decline contrasts with notable growth in other mid-sized capitals like Brisbane and Adelaide. This underscores slower growth conditions in Canberra.

CoreLogic Home Value Index

CoreLogic Home Value Index, Released on 1st January 2025

Canberra Property Market Trends

Key drivers of the downturn include:

• Affordability challenges: Reduced borrowing capacity and high cost of living pressures are weighing on buyer demand.
• Rental trends: Canberra saw gross rental yields stabilize at 3.3% for dwellings. The city’s rental market also rebounded slightly after previous years of weakness, partly driven by increased migration.

Within the ACT, Molonglo experienced the highest annual growth at 2.3%, while areas like Gungahlin saw notable declines of -3.2%, highlighting the uneven performance across regions.

Change in dwelling values over key time periods

Canberra Property Market Forecast

The outlook for Canberra aligns with national expectations:

• Modest price recovery could occur in 2025, particularly if interest rates decrease as forecasted (77 basis points expected reduction through 2025).

• Housing affordability is anticipated to improve as income growth outpaces house price changes and interest rates ease.

The Reserve Bank of Australia’s ongoing adjustments to interest rates will likely play a crucial role in shaping market dynamics, as higher borrowing costs limit purchasing power for many buyers.

Here are some of the most recent forecasts by the big-4 banks in Australia:

• ANZ predicts a 5-6% increase in capital city property prices in 2024, with Brisbane expected to see the highest rise at 9-10%, Perth property values could go up by 1-11%, Sydney by 4-5%, and Melbourne prices by 2-3%.
• CBA forecasts a 5% rise in capital city prices, with some variations: Brisbane is anticipated to grow by 6%, Melbourne and Perth by 5%, Sydney by 4%, and Adelaide by 1%.
• NAB projects a 5.4% average increase across the capitals, with Brisbane expected to see a 6.5% rise, Perth and Adelaide by 6.2%, Melbourne by 5.5%, Sydney by 5%, and Hobart remaining flat.
• Westpac expects a 6% growth across the combined capitals, with Perth leading at 10%, followed by Brisbane at 8%, Sydney at 6%, Adelaide at 4%, and Melbourne at 3%

Oxford Economics recently released property forecasts predicting where house prices will be in three years.

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Conclusion for Homeowners

Canberra’s real estate market reflects stability amid challenges, with slight declines contrasting with national gains in some regions. Improved affordability and potential interest rate cuts may bolster demand in 2025, but a sharp rebound remains unlikely.

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