This year has seen Canberra’s property market take a tumble from the pandemic price peak; however, dwellings still remain $320,000 more expensive on average than before the global pandemic hit in 2020.

Domain’s End of Year Wrap for 2022 revealed median prices were up in Canberra 41.2 per cent than the pandemic trough despite a six per cent median dwelling price decrease since the peak earlier this year.

Chief of Research and Economics at Domain, Dr Nicola Powell, said the overall landscape of Canberra’s property market changed as 2022 progressed and shifted away from 2021 conditions.

Last year, Canberra had the strongest upswing of property prices ever recorded in the city’s history, but as this year progressed, the dial shifted to becoming more in favour of buyers, Dr Powell said.

“Overall, the housing market has tipped in favour of buyers,” she said.

“In the beginning of the year, Canberra had record prices but as the year went on and we saw the RBA hike interest rates and owners battling mortgage affordability.”

Although prices have dropped by six per cent this year, they’re still substantially higher than pre-pandemic levels, Dr Powell said.

There was a reported seven per cent volume decrease of ACT city sales this year compared to the decade average, and affordability constraints and reduced borrowing capacity were contributing factors.

But there’s suspected good news for 2023 thanks to the tight rental market and migration; units and more affordable houses are expected to perform well and help close the gap between houses and units, easing the upsizing difficulty.

Canberra has seen record price gaps between houses and units, and in 2023 we’re likely to see that narrow, said Dr Powell. This will be an opportunity for Canberrans to find more affordable upgrades in the market.

She said Canberra is likely to see purchasing conditions improve for buyers, with overall supply rising to create greater choice.

The impacts of mortgage affordability will continue to weigh on buyers’ minds, as seen this year, along with the aggressive rate hikes.

“Now, buyers are much more mindful on how much they spend on a home and are not overcommitting,” Dr Powell said.

“When you look at price cycles, Canberra house prices are unlikely to erase all the growth in the pandemic. They’re likely to continue to soften but we’re unlikely to see pre-pandemic levels.”

Another factor looming for the Canberra housing market is the expected population growth over the next year thanks to overseas migration and students returning to Australia’s capital.

Dr Powell said this will have an impact on the housing market but particularly the rental sector.

In combined units and houses data, Charnwood, Duffy, Spence, Scullin, and Forde reported dwellings with the shortest days on the market, making them the top locations for sellers due to increased competition.

Macarthur, Duffy, Kaleen, Latham, and Dunlop saw rising demand and had the highest clearance rates for both houses and units.

The most viewed property in the ACT in 2022 was 45 National Circuit in Forrest which fetched $7,250,000.

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