The Property Price Paradox: Canberra's Tale of Two Markets
Since taking on the role of property reporter for The Canberra Times in November, my daily inbox has become a battleground of conflicting narratives about the local real estate landscape. Two parallel stories unfold each day, each with its own emotional weight and economic implications.
The Dual Reality of Canberra's Housing Market
One narrative describes a market that's "strong," "healthy," and "good" - a scenario where established homeowners feel financially secure, watching their investments grow while providing stable homes for their families. This perspective celebrates increasing property values as a sign of economic vitality.
The contrasting story reveals a darker reality: soaring unaffordability, families crammed into one-bedroom apartments, and young Australians facing the prospect of dedicating half their salaries to rent for decades. This housing crisis has created a profound rift between the "haves" and "have-nots" in our capital city.
Both perspectives contain truth. Both resonate emotionally with different segments of our community. What economists, real estate professionals, and property journalists typically label as a "healthy" market primarily benefits those already invested in property, while what they might call "weak" or "broken" markets paradoxically offer hope to aspiring first-home buyers.
An Economist's Perspective on the Conundrum
My Bui, an economist at AMP and host of the Econosights podcast that speaks directly to young Australians about economic matters, describes the framing of rising property prices as "positive" as an "interesting conundrum."
"With house prices posting a bit stronger, two-thirds of households in Australia do benefit," Ms Bui explains. "The other one-third may or may not benefit from it." This statistic aligns with 2021 census data showing two-thirds of Australian households are owner-occupied.
Ms Bui acknowledges the difficulty in explaining to Generation Z listeners that understanding the property market requires examining Australia's entire economic structure. "When house prices are a little bit stronger, it actually reflects positive economic signals - strong demand, population growth, and confidence in both the housing market and broader economy," she states.
She recognizes the inherent tension: housing must function as an investment to encourage supply in a free market, yet it remains an essential item. This dual nature has exacerbated affordability issues and widened the gap between property owners and those struggling to enter the market.
A Glimmer of Hope in Canberra's Unit Market
For Canberra's younger residents, there's a silver lining emerging in the local property landscape. According to CoreLogic data, unit prices in the capital remained stagnant throughout 2025, with a 0.4 percent decline recorded in the final quarter. This trend has been attributed to an oversupply of new apartment developments across the city.
Tim Lawless, CoreLogic's research director, offers a refreshing perspective on this development. "We talk about that as being a bad thing, but in many ways, put on its head, it actually demonstrates how high supply levels can help to keep a lid on price growth and affordability," Mr Lawless observes.
He suggests this situation serves as a valuable case study: "It's a good testament to, if we did pull our fingers out as such, and build a lot more in Australia, we probably wouldn't see as unaffordable a market as we have at the moment."
The Canberra property market thus presents a complex picture where rising prices create winners among existing homeowners while presenting significant barriers to new entrants. The recent stability in unit prices, driven by increased supply, offers a potential blueprint for addressing Australia's broader housing affordability challenges.
