Canberra real estate agents are sounding the alarm over the growing trend of remote work in the Australian Public Service (APS), which they say is wreaking havoc on the local property market. With many public servants now able to work from anywhere, demand for housing in the capital has plummeted, leading to rising vacancy rates and falling prices.
Vacancy Rates Soar as Demand Drops
According to the Real Estate Institute of the ACT, the vacancy rate in Canberra has climbed to 2.5%, the highest in years. This is a sharp increase from the ultra-tight market of 2020, when vacancies were below 1%. Agents report that properties are taking longer to lease, and some landlords are offering incentives such as rent-free periods to attract tenants.
Falling Prices Hit Homeowners
The downturn is not limited to rentals. House prices in Canberra have fallen by 5% over the past year, according to CoreLogic data. Agents say the shift to remote work is a key factor, as fewer public servants need to live close to their offices in Civic or the parliamentary triangle.
“We’re seeing a significant reduction in demand from APS employees,” said Michael Kumm, a director at Canberra-based agency Belle Property. “Many of them have moved to cheaper regions like the South Coast or even interstate, and they’re not coming back.”
Impact on Local Economy
The property downturn is rippling through the broader Canberra economy. Local businesses that rely on the spending power of public servants are feeling the pinch. Cafes, restaurants, and retail outlets in areas like Braddon and Kingston have reported lower foot traffic on weekdays as fewer workers commute to the city.
“The whole ecosystem is affected,” said Sarah Thompson, an economist at the University of Canberra. “When public servants work remotely, they spend less on lunches, coffee, and after-work drinks. That has a multiplier effect on jobs and incomes.”
Government Response
The federal government has so far resisted calls to mandate a return to the office for APS staff. Prime Minister Anthony Albanese has said that flexible work arrangements are here to stay, but some ministers have expressed concern about the impact on Canberra.
“We need to strike a balance between flexibility and the needs of the national capital,” said Finance Minister Katy Gallagher, a Canberra senator. “But we can’t force people back to the office if it’s not necessary for their jobs.”
Outlook for the Market
Agents are bracing for further price declines if remote work becomes permanent for a large portion of the APS. Some predict that Canberra’s property market could take years to recover, especially if the government does not intervene.
“This is a structural shift, not a temporary blip,” said Kumm. “Unless the government changes its policy, we’re looking at a prolonged downturn.”
