It won’t be as rushed as other capitals, but Canberra’s market is on the up. Photo: Michelle Kroll.
Canberra house prices will return to record levels in 2026, completing the recovery from the post-pandemic downturn, according to Domain’s forecast report.
Driving the price recovery will be first homebuyers taking advantage of the Federal Government’s Home Owner Guarantee Scheme, which offers 5 per cent deposits without having to take on Lenders Mortgage Insurance.
In Canberra, first home buyers can access the scheme for purchases up to $1 million.
Domain is tipping that in 2026 Canberra house prices will rise by 5 per cent to reach a record median of $1.18 million, $78,000 above current levels. Units are expected to rise 3 per cent for a record $631,000.
It says house prices will finish the year 4 per cent up, but the unit sector, where stocks are high, will end -1 per cent down.
Domain is predicting that house prices will surge 7 per cent over the 2026 financial year, while unit prices will rise 2 per cent.
“The rebound in the unit market will be supported by improving affordability, a gradual return of investor demand, and sustained population growth as labour market conditions remain strong and migration stabilises,” it says.
Interest rate stability and rising incomes were also factors.
Domain believes rents for both houses (3%) and units (4%) will go up to reach record levels – $725 and $609 a week, respectively.
The mini price boom is expected to fade beyond the Home Owner Guarantee Scheme’s first year.
Domain says price rises in Canberra will be more subdued than in other capitals, reflecting modest population growth and a less pronounced housing shortage, although that is skewed towards apartments.
Prices are rising – but the pace is a little slower in the ACT. Tables: Domain.
Real Estate Institute ACT CEO Maria Edwards said the Domain forecasts appeared reasonable.
Ms Edwards said they aligned with agents’ reports that the most active segment of the market was first-home buyers looking at homes between $800,000 and $1.1 million.
“There’s definitely competition in there in that first-time buyers’ market, which has really strengthened,” she said.
“If you’ve got a property that’s kind of just over a million dollars, say $1.1 million, a lot of those are slipping back a bit because first-time buyers are trying to get them at that million-dollar mark, whereas if you’ve got something in that $800,000 mark, they’re pushing up to the $900,000s because they can and also keep under that million-dollar mark.”
Homes over $1.5 million were taking longer to move.
In the apartment market, owners who bought off the plan relatively cheaply about five years ago were offloading them at a profit, and these were still cheaper than current off-the-plan purchases.
Ms Edwards said some developments were completing with only 60 per cent sold compared with 90 per cent five years ago.
She agreed that Canberra was a more stable and better-supplied market than other capitals and that price rises would not be as significant.
“There are lots of little different market speeds at the moment,” she said.
“I’d say that’s probably constraining prices overall.”
Domain also says Canberra’s increased property listings have gone against the trend elsewhere.
Ms Edwards said this reflected a more stable interest rate outlook, encouraging owners who had been sitting on their hands to take the plunge during the spring-summer selling season.
Rents were not moving much at present, mainly because new Commonwealth appointments had been delayed until February, which dampened the usual demand at this time of year.
The tight vacancy rate of 1.6 per cent also meant tenants were sitting tight.
Ms Edwards said there were still plenty of apartments available, but as ever, houses were harder to come by.
