House prices in Canberra increase given limited supply: HTW

House prices in Canberra increase given limited supply: HTW
House prices in Canberra increase given limited supply: HTW

Canberra house prices have grown significantly over the past 12 months, according to Herron Todd White’s recent report.

The property valuation firm says that this could be due to both limited supply of houses and low interest rates.

“Like most capital cities in Australia, Canberra has seen a significant growth in house sale prices over the past 12 months," the report said.

"This is partly due to low interest rates and a limited supply of houses coming onto the market.

"It is expected this trend will continue as properties in established suburbs remain tightly held and highly sought after.

"Currently houses are providing much stronger capital gains than apartments.

"This is probably due to an oversupply of apartments in the Canberra market and a number of apartment developments beginning construction.

"These low capital gains look set to continue as new apartment developments are beginning construction in the CBD, Molonglo Valley, Woden and Gungahlin."

The report noted low interest rates seem to be contributing to the strong housing market.

"An increase in interest rates may see some property owners being stretched financially which could result in them being forced to sell.

"If several of these sales are introduced onto the market it may reduce prices and could represent good buying opportunities.

"Alternatively an interest rate rise may force more buyers out of the market which could reduce demand,” the report stated.

Detached housing are also increasing in the area Herron Todd White commented.

“Detached houses in established suburbs have been performing very well throughout the ACT recently due to a perception of low supply and high demand.

"This trend may slow over the next six to twelve months due to new dwellings built on Mr Fluffy reclaimed blocks coming onto the market.

"A change in planning regulations allows multiple dwellings to be built on what were previously only single dwelling blocks.

"This would result in an increase in the number of dwellings in the sought after established suburbs of Canberra and may slow the strong capital growth seen lately,” the report advised.

Herron Todd White stated that other factors for the price growth includes stamp duty and similar changes.

“Another factor likely to change the direction of the property market would be changes to legislation.

"Recently we have seen the stamp duty costs being abolished for properties under $600,000 in Victoria for first home buyers.

"There hasn’t been any talk of similar legislation being implemented in the ACT but if it were it would incentivise first home buyers to enter the market.

"This could affect the market in different ways. It may help balance the apartment market by providing more demand for an over supplied market.

"However in the housing market it would increase demand for what seems to be an under supplied market therefore increasing prices further,” the report commented.

A three bedroom house at 15 Cunningham Street, Kingston (above) was recently sold for $1.25 million.

Similarly a two bedroom apartment at 401/155 Northbourne Avenue, Turner (below) was recently sold for $770,000.

House prices in Canberra increase given limited supply: HTW

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Canberra Htw

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