Marching to the Beat of its Own Drum Canberra marches to the beat of its own drum and the Canberra housing market is no exception. The residential housing market in the nation’s capital is displaying greater resilience than the national housing market. Dwelling prices expanded by 0.6% in Canberra in April and by 2.6% in the year to April, according to CoreLogic data. The combined performance of the eight capital cities across Australia was much weaker; prices in the combined capital cities contracted 0.3% in April and fell by 0.3% in the twelve months to April. The resilience of the Canberra housing market can be explained by a number of key economic factors. A buoyant jobs market, strong population gains and a robust economy are helping to support demand for housing. The jobless rate remains one of the lowest of all the jurisdictions, business and household spending is solid, regional and international flights have been expanded, helping to boost tourism to reach record highs and enhance international trade. Infrastructure investment and capital initiatives have, and will, continue to contribute positively to the economy and stimulate business. Canberra’s rental market is also in better shape than most other capital cities around Australia. Gross rental yields in Canberra stood at 4.3% for houses and 5.6% for units in April, which are among the highest of the capital cities in Australia.
Besa Deda
It is a right that benefits both parties as it recognises that in a modern Australia, each workplace is different.
New building approvals reached record highs in September 2016, largely supported by mid-to high-density dwelling starts. Apartments represented almost 80% of construction approvals – a step up from the 67% average over the past decade. Dwelling price growth peaked at an annual rate of 8.8% in Canberra in April and May 2017. Canberra dwelling prices have continued to rise (albeit it at a slower pace) and annual dwelling price growth remains in positive territory, unlike some of the other capital cities. The slowdown in housing has been spurred by the widening of macro-prudential measures by APRA last year and the combination of weak wages growth and high household debt. Furthermore, considerable supply of housing stock, especially apartments, means the demandsupply fundamentals have shifted. The slowing in Canberra’s housing cycle has further to run, but the softening will be moderated by the positive fundamentals underlining the Canberra economy. Besa Deda, Chief Economist St.George Bank
The Canberra housing market might be more resilient, but it is not immune to the slowdown in the housing cycle that the rest of Australia is experiencing. The housing market in Canberra has passed its peaks in terms of both approvals to build dwellings and price growth.
MASTER BUILDERS ASSOCIATION NEWS EDITION 2 2018
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