The monthly change in the median asking price for houses listed for private sale in May. Photo: Andrew Wilson The Canberra housing market continues to strengthen and clearly remains a leading capital city performer heading into winter.
Median asking prices for Canberra private sale listings surged by 4.1 per cent over the month of May to a new record high $630,000. The Canberra result was second only to Melbourne where asking prices increased over the month by 4.9 per cent.
The Canberra was also the second highest of all the capitals trailing only the Sydney market with $799,000. Canberra’s monthly growth rate however was well ahead of the Sydney result of 1.1 per cent.
Over the year ending May, Canberra’s monthly median asking price for private sale listings has now increased by 14.5 per cent and is behind only Hobart at 15.5 per cent and the remarkable Melbourne market where annual prices have increased by 20.0 per cent.
Asking prices for Canberra units also increased over May although not as strongly as houses – up by 1.2 percent to $410,000. Canberra monthly unit prices have now risen by 4.7 per cent over the past year.
With the typically quieter winter selling season now commenced, listing and sales activity can be expected to decline before the usual spring revival for housing markets. The top performing Canberra market however enters winter with clear buyer and seller momentum.
Low interest rates are a key catalyst for the recent increase in Canberra home prices. The Reserve Bank has predictably decided to again leave interest rates on hold over June at the record low 1.5 per cent – and where they have been since the cut in August last year.
Although rates are on hold the national economy continues to underperform and may need more stimulus from lower rates unless it improves. Latest GDP data was clearly underwhelming and just scraped over the line with insipid March quarter growth of just 0.3 per cent.
Dr Andrew Wilson is Domain Group chief economist. Twitter: @DocAndrewWilson Join on LinkedIn and Facebook at MyHousingMarket.