Domain’s latest Housing affordability: The price per square metre report, shows insight into the connection between house price and property size, and delves into urban density versus the ‘not in my backyard’ debate.

With a median dwelling price of $1,095,903, Canberra’s average price per sqm is $1517, and has a median land size of 748sqm.

Canberra’s price per sqm ranked the third most expensive out of all Australian capital cities, only exceeded by Sydney ($2466) and Melbourne ($1811).

The Canberra suburb with the most expensive price per square metre in 2022 was Crace with a median dwelling price of $868,000, average block size of 293sqm, and a median price of $3,392 per sqm.

Will urban density slow house price growth?

According to the report, Canberra’s housing market has significantly changed over the years.

The market pressure previously seen exclusively in Melbourne and Sydney has now leaked to both Canberra and Hobart.

For Adelaide and Brisbane, steady growth has kept affordability relatively level, while in Perth and Darwin, relative affordability has improved.

The report states: “Shrinking block sizes should help to slow the growth in house prices. However, per square metre, the land cost has not reduced – buyers are just purchasing less of it.

“As a result, areas with the largest decreases in block size have had growth in price per sqm outpace house price growth at a faster rate, meaning that the true cost to buyers is growth faster than the median house price alone suggests.”

Domain described one of the key arguments against boosting urban density is the ‘not in my backyard’ mentality.

“A premium house price reflects our housing preferences of living close to a city or the coast, while the city fringe offers the greatest value for money,” the report stated.

“This is clearly evident across all of our capital cities, although the differences are starker for some.”  

Canberra’s ‘not as unaffordable’ as we thought

Since the pandemic began, Canberra has experienced one of the largest house price increases of Australia’s capital cities.

While prices soared above Melbourne, Canberra still has a lower price per sqm than the Victorian capital.

Canberra’s block sizes are 38 per cent larger than Melbourne’s, giving Canberra buyers greater value for money.

The report clarified that this data doesn’t mean Canberra is necessarily affordable or not experiencing growth in housing costs.

“Canberra did have a price per sqm similar to Adelaide, Darwin, and Brisbane, but extreme price growth through the pandemic upswing and a different housing landscape makes it more difficult to find smaller and more affordable blocks in Canberra,” the report stated.

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