The house market in ACT is forecast to grow 6% in 2019: Moody's Analytics

The Australia Capital Territory’s residential real estate market held up well in 2018, with house and unit values rising moderately year over year, according to the latest report from Moody's Analytics.

However the report found that growth in house and unit values has turned down noticeably since late 2017, approaching lows not seen in close to two years.

Auction clearance rates have declined to around 40%, well below year-ago levels, while growth of housing finance commitments in the ACT has been trending lower, suggesting demand is cooling.

The report authors said, the ACT economy moderated in the September quarter, with growth of state final demand slowing to 0.9% quarter over quarter, down from 2.4% in the June quarter, as household consumption was flat and government consumption fell.

"Investment, however, was strong, driven by robust construction."

"The ACT’s population grew by 2.2% in the year ended 2017, the biggest rise since 2012, driven by record net overseas migration," according to the authors.

ACT house values are forecast to rise 6.1% in 2019 following ongoing strength in the labour market and population growth.

In 2020 however a slowdown is forecast with house price growth slated for 4.8%.

Unit values are forecast to rise 3.3% in 2019 off the back of 2.9% growth in 2018.

Growth in unit values is set to increase in 2020 however reaching 4.6%.