Canberra's housing market is experiencing a notable shift, with properties priced under $1 million dominating sales, according to the latest data from Domain. In the June quarter, homes in this price bracket accounted for 62% of all sales, up from 57% a year earlier. This trend reflects growing buyer demand for more affordable options amid rising interest rates and cost-of-living pressures.
Sub-$1M Sales on the Rise
The data reveals that the median house price in Canberra now stands at $1.05 million, but the majority of transactions are occurring below this threshold. Suburbs such as Belconnen, Tuggeranong, and Weston Creek have seen strong activity, with many properties selling for between $800,000 and $950,000. Agents report that first-home buyers and downsizers are particularly active in this segment.
Factors Driving the Trend
- Interest rate hikes: The Reserve Bank's aggressive tightening cycle has reduced borrowing capacity, pushing buyers towards lower-priced homes.
- Affordability constraints: With the cost of living rising, many households are seeking to minimize mortgage repayments.
- Increased supply: A rise in new listings in the sub-$1 million category has given buyers more choice.
Domain chief of research and economics, Dr. Nicola Powell, noted that the shift is part of a broader national trend. "We're seeing buyers recalibrate their expectations in response to higher interest rates. The sub-$1 million market is now the most active segment in Canberra," she said.
Market Outlook
While the premium end of the market remains subdued, demand for affordable homes is expected to continue. Agents predict that properties priced between $900,000 and $1 million will remain competitive, with multiple offers common. However, further interest rate increases could slow activity.
For sellers, pricing realistically is key. "Properties that are well-presented and priced at market value are selling quickly, while overpriced homes are sitting on the market," said local agent Michael Jones of LJ Hooker.
The data underscores a normalization of Canberra's housing market after the pandemic boom, with affordability becoming the primary driver of buyer behavior.
