Projections: Canberra 2010 and beyond

The Real Estate Institute of Australia forecasts moderate growth in Canberra’s property market over the coming two years.

“While there are some indications that the upward trend is starting to slow, urgent answers are needed to address the increasingly tough market conditions for first home buyers and low income earners,” REIA president, John Hill, said.

“The REIA believes that demand for residential property will continue to be high across the nation in the short to medium term at least, especially in south east Queensland “.

“Whilst there are some signs that the heat in the market is starting to ease, a significant decrease in property prices in the short to medium term is unlikely. We are increasingly concerned about the difficulties faced by low income earners and first home buyer,” Mr Hill said.

Housing prices in Canberra continue to soar, as evident today by the sale of a three bedroom house in Canberra’s inner North for almost $700,000. This begs the question – will Canberra’s property prices become affordable to the hundreds of first home buyers in the region? If not, how can this be achieved?

In the short term, its anyone’s guess as to whether prices will fall or continue to rise. What is certain is that $700,000 can buy you a two bedroom ocean front property on the NSW north coast; a beautiful three bedroom unit on Melbourne’s North Bank Yarra, or a high level, two bedroom unit overlooking the Brisbane river and a stone’s throw to the CBD.

Two decades after Canberra recorded its first million-dollar sale, almost half of the territory’s suburbs have smashed through the milestone. As the local property market booms, the Sunday Canberra Times can reveal 41 of the ACT’s 98 residential suburbs have achieved a million-dollar sale or beyond.

The traditionally affluent inner-south enclaves of Forrest, Red Hill and Deakin have been joined by more far flung suburbs such as Bonython, Amaroo and Harrison at the million-dollar mark.  Industry figures predict house prices will continue to rocket.  Canberra’s first million-dollar house the former Mugga Way residence of newspaper publisher John Fairfax was sold in 1989.

But according to the director and namesake of Richard Luton Properties, it is inevitable the Canberra market will move past the $10million mark. And soon. ”Canberra has come of age,” Mr Luton said. ”In the 10 years our business has been open we have sold well in excess of 100 million-dollar properties. The market is very strong and house prices tend to double every 10 years. We had a property today in O’Connor that went for $1.265 million, which was $315,000 above the reserve.”  Mr Luton said a dramatic shortfall in the supply of houses in the ACT had led to a seller’s market.

But buyers had not been deterred, turning up in droves at auctions and engaging in fierce bidding wars.  ”People are tending to hold on to their properties and if they are going to buy a second they will keep the other as an investment,” he said. ”With the stockmarket taking such a hammering through the financial crisis, people are returning to residential investments.”

An O’Malley address was sold in 1993 for $200,000. Sixteen years and four owners later, the property achieved a $4million sale.  There are still bargains in the market a one bedroom unit in Campbell sold for $97,500 last year.  At the other end of the scale, the current record for a house belongs to a Moresby Street residence in Red Hill which sold last year for $4.5 million.