New data reveals a clear trend in the Australian Capital Territory's property market: homes in Canberra's more affordable suburbs are experiencing significantly stronger price growth than their expensive counterparts. This shift in demand is reshaping the city's real estate landscape.
Affordable Areas Outperform Premium Markets
According to Cotality's Home Value Index for November 2025, overall dwelling values in Canberra rose by 1 per cent last month. However, the real momentum is concentrated in the lower price brackets. Research director Tim Lawless confirmed that geographically, the more affordable markets are generally showing a higher rate of price growth.
Leading the charge is the Tuggeranong district, where the median house price jumped 5.8 per cent over the past year to reach $889,453. Close behind were Molonglo, with a 5.7 per cent increase to $742,920, and Belconnen, rising 5.2 per cent to $863,773.
In stark contrast, the more expensive Woden Valley, where the median house price sits at $1.04 million, saw a modest increase of just 2.7 per cent. The average house price increase across Canberra over the last 12 months was 4.2 per cent.
First Home Buyer Demand Fuelling Growth
Local buyer's agent Ben Power from Jonny Warren Properties is witnessing this trend firsthand. He reported scenes of queues stretching down the block at a recent open house in Kambah, with the agent confirming over 80 groups inspected the property.
"What's happened is that demand has now shifted into that lower-end bracket and it is fuelling price growth," Mr Power said. He emphasised that anything under $1 million is currently experiencing price growth.
Experts point to the federal government's 5 per cent deposit scheme, introduced on October 1, as a key catalyst. Mr Lawless noted that growing unaffordability was already pushing median households towards the lower end of the market, and the scheme has likely added further upward pressure.
"This is a demand side policy that's very targeted towards stimulating demand towards those lower price points," Lawless explained. He argued that additional demand below the price caps is contributing to the rising prices in suburbs like Tuggeranong, Molonglo, and Belconnen.
Market Outlook for 2026
Both analysts and agents predict Canberra's house values will continue to grow in the coming year, albeit at a potentially slower pace. Mr Lawless suggested some of the current market strength may dissipate in 2026 as buyers adjust to the likelihood that interest rate cuts are off the table, with the next move potentially being upwards.
"There's renewed inflationary pressures, housing's quite unaffordable. I think all those factors will probably start to weigh on housing markets as we move into next year," he said.
Despite this, Ben Power maintains a bullish outlook for prices, particularly for family homes. He warned that it won't be long before any four-bedroom, two-bathroom house anywhere in Canberra will command a minimum price of $1 million, highlighting the ongoing pressure on the affordable end of the market as first-home buyers gain greater purchasing power.
