Canberra's property market has recorded a third consecutive monthly decline, with dwelling values dropping 0.5% in March, according to CoreLogic's latest Home Value Index. The decline follows a 0.3% fall in February and a 0.2% drop in January, signaling a sustained downturn in the nation's capital.
Monthly and Quarterly Trends
The March result brings Canberra's quarterly decline to 1.0%, making it one of the weakest-performing capital cities in Australia over the past three months. CoreLogic research director Tim Lawless noted that the persistent weakness is largely driven by affordability constraints and elevated interest rates. "Canberra has been underperforming relative to other capitals, and the trend continues," he said.
Over the past 12 months, Canberra dwelling values have fallen 1.8%, with the median home price now sitting at approximately $840,000. Units have fared slightly worse, with a 2.1% annual decline.
Comparison with Other Capitals
Nationally, the combined capitals index rose 0.6% in March, driven by strong growth in Perth (1.8%), Adelaide (1.4%), and Brisbane (1.1%). Sydney and Melbourne recorded modest gains of 0.3% and 0.2%, respectively. In contrast, Canberra, Hobart (down 0.3%), and Darwin (down 0.1%) were the only capitals to record monthly declines.
"The divergence between the stronger markets in Western Australia and Queensland and the weaker markets in the south-east is becoming more pronounced," Mr Lawless said.
Impact of Interest Rates and Supply
The Reserve Bank of Australia has held the cash rate at 4.35% since November 2023, and markets expect rates to remain elevated for much of 2025. Higher borrowing costs have reduced buyer capacity, particularly in Canberra where median incomes are high but so too are property prices relative to incomes.
Additionally, increased housing supply has contributed to the softening. New dwelling approvals in the ACT have risen over the past year, adding to stock levels. "We are seeing more properties on the market, which gives buyers more choice and puts downward pressure on prices," Mr Lawless explained.
Outlook for Canberra Property
Looking ahead, CoreLogic expects Canberra's market to remain subdued until interest rates are cut. "Until we see a shift in monetary policy, it's hard to see a strong recovery in Canberra," Mr Lawless said. However, he noted that if the RBA begins easing later this year, the market could stabilise.
Despite the declines, Canberra's housing market remains relatively expensive, with a median dwelling value still above $800,000. First-home buyers continue to struggle with affordability, though softer prices may provide some relief.
