With property prices rising in most Australian states, ACT property values experienced the sharpest fall in the June quarter this year.
However, this is unlikely to alleviate rental fees.
According to the Australian Bureau of Statistics (ABS), average Australian capital city house prices increased by 0.5%, for the first time since the end of 2010.
In contrast, ACT properties experienced a drop of 1.3%. This trend was followed by Hobart and Melbourne, where house prices fell 0.4% in both cities
Housing Industry Association ACT executive director Neil Evans, speaking to Canberra Times, said that a fall in house prices might be a positive indication that Canberra had the right number of houses for its population.
Many economic forecasters are less optimistic, and claim that the fall in housing prices reflects an emerging oversupply of housing, where Canberra’s building boom has outstripped population growth.
BIS Shrapnel predicts that falling house prices will accompany a decrease in household spending and fewer job vacancies.
The ACT has had above-average population growth at 2% compared to the national average of 1.4%, but will likely be affected by jobs cuts in the Australian Public Service, together with the weakening of the ACT’s construction trade.
However, the ABS found that apartment, unit and townhouse prices in Canberra experienced a significantly softer fall in the year to December 2011.
Sliding less than 1.8%, a ACT Real Estate Institute spokesperson told Canberra Times that apartment complexes are more appealing for Canberrans.
”There are a lot of professional couples, [and] single people who prefer the lifestyle of an apartment where they can just lock up if they go travelling or whatever it might be.”
Unfortunately, the fall in housing prices is unlikely to affect Canberra’s rental market. Analysts are adamant that Australia’s housing market remains strong.
This means rental prices are likely to remain competitive. Vacancy rates have remained strong up to June this year. This does not come as good news to students residing in the capital, where rental prices are viewed as unaffordable at best, exorbitant at worst.
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