Howard government era Canberra property price falls tipped in Abbott budget fallout
Canberra dwelling values dropped 1.1% last month, the weakest property market among Australia's capital cities.
It also ranked the weakest in dwelling values across the capitals during the past three month, with a 0.2% quarterly gain against a combined 2.6% gain across all capitals.
It also ranked as the weakest over the past year.
Source: RP Data-Rismark Index
With an estimated 40% of the country's public service located in Canberra, the city is understandably on edge on budget eve.
BIS Shrapnel economist Angie Zigomanis forecasts cuts will have a very negative influence on the Canberra/ACT property market for the next few years, including investors who will be hit by departing tenants in its sizeable rental market.
There were points to the current emerging scenario last July when the then Shadow Treasurer, Joe Hockey suggested that then might be a good time to sell Canberra housing, noting that home prices could be pushed lower by a Coalition government.
“There is a golden rule for real estate in Canberra – you buy Liberal and you sell Labor,” he said.
He did not specify that this result would be due to cuts to the public sector that were being promised by then Opposition leader Tony Abbott after the September election.
House prices in the territory eased when John Howard made big cuts to the public service in his first term of government, falling by around 7% over two years on the back of the lower employment and confidence.
Property Observer uncovered a dozen resales during the early years of the Howard government which were lower than their prior purchases, many of which were bought during the Hawke-Keating recession. John Howard's government was elected in March 1996 with the first Peter Costello budget delivered in August 1996.
12 property sales in Canberra in 1997 showing price drops:
- 3 Mialli Place, O'Malley sold in 1995 for $561,500 and resold in 1997 for $520,000.
- 27 Mawson Drive, Mawson sold in 1993 for $402,000 and resold in 1997 for $379,000.
- 1 Blaxland Crescent, Griffiths sold in 1994 for $345,000 and resold in 1997 at $308,000.
- 17 Harkness Street, Monash sold in 1992 for $165,550 and resold in 1997 for $155,000.
- 8 Hedley Street, Hackett sold in 1992 for $177,000 and resold in 1997 for $173,500.
- 7 Discovery Street, Red Hill sold in 1991 for $202,500 and resold in 1997 for $189,000.
- 11 Traynor Court, Melba sold in 1994 for $149,950 and resold in 1997 for $143,500.
- 8 Hunter Street, Yarralumba sold in 1994 for $607,500 and resold in 1997 for $605,000.
- 39 Jackie Howe Crescent, Macarthur sold in 1992 for $285,000 and resold in 1997 for $275,000.
- 19 Novar Street, Yarralumba sold in 1993 for $290,000 and resold in 1997 for $278,000.
- 21 Beagle Street, Red Hill sold in 1992 for $385,000 and resold in 1997 for $330,000.
- 55 Archibald Street, Lyneham sold in 1992 for $152,500 and resold in 1997 for $143,500.
Of course the silly spin this year is that politicians are expected to share the burden, no doubt arising from last October when the departing former Prime Minister Kevin Rudd joined the loss takers.
The former Prime Minister Kevin Rudd and wife Therese Rein paid $2.175 million for their home in leafy Yarralumla, Canberra in 2010.
Listed for sale at $2.25 million through the Peter Blackshaw agency in May, it sold at $2 million.
Set in the prestige suburb behind electric gates, with double lock up car accommodation, the house (pictured below) was described as sophisticated and luxurious.
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The contemporary Mueller Street house was bought after departing The Lodge so as their son, Marcus, could finish his schooling.
The five-bedroom, four bathroom house is set on 936 square metres which traded at $778,000 in 2005.
Back in 2011 Canberra was within cooee of again matching Sydney’s median house price, according to the RP Data-Rismark index.\
The 2011 gap for houses was $12,625, with Sydney’s house median at $561,625 and Canberra’s house median at $549,000.
Sydney's median house price is now at $802,000, and Canberra house price median at $560,000, so the gap is now $242,000.
Much of Canberra's then strength came as household incomes in Canberra are among the highest in the nation.
Canberra’s average equivalised disposable weekly household income was put at $1,101 in recent ABS data - about 30% above the national average.