Canberra property values have bucked the trend of falling prices and the territory has so far been the best performing capital city market during the coronavirus pandemic, according to an analysis by Corelogic.
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While the national value declined by 1.4 per cent between the onset of the pandemic in March and the end of July, Canberra values increased by 1.3 per cent.
But there is a chance the Canberra market could have a delayed downturn, Corelogic head of research Australia Eliza Owen said.
The property market in Canberra had performed as anticipated with record low interest rates, Ms Owen said.
"While it may seem counterintuitive that prices are rising across the ACT amid a global pandemic, the property market is actually performing as may be expected when the cash rate is reduced," she said.
"Research from the Reserve Bank of Australia has found that for every one percentage point reduction to the cash rate, property values may increase by 8 per cent over the following two years."
Ms Owen said while the relationship between property price growth and low interest rates had been tested during the pandemic, the nation's capital had remained relatively insulated due to the low COVID-19 case numbers.
As well, she said the share of Canberra's workforce in sectors where the most jobs had been lost - hospitality, tourism and arts and recreation - was lower than other cities. She said most people in these sectors would rent.
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While property values had increased, rent values have declined by a 0.5 per cent since the start of the pandemic.
Canberra's property market had been trending upwards since August last year but Ms Owen said the territory could still possibly experience a decline.
"While the dwelling market is currently a breakaway performer there is a chance that this market will experience a delayed downturn as the economic repercussions of Melbourne's second lockdown become more broad-based," she said.
"Investor demand, while already low relative to Australia-wide participation may also be impacted by lower rent values.
"As a result, prolonged growth in this market will be subject to how quickly Australia can suppress new virus cases and see recovery in the labour market."
Ms Owen said there was a big difference in the performance between houses and units.
She cited Canberra's median house value of $721,912 was at a record high in July 2020 while the median unit value of $445,135 was 3.6 per cent below its record high.
Canberra's unit value peaked a decade ago.
Lucy Bladen
Lucy Bladen has been a journalist at The Canberra Times since 2019. She is an ACT politics and health reporter. Email: l.bladen@canberratimes.com.au
Lucy Bladen has been a journalist at The Canberra Times since 2019. She is an ACT politics and health reporter. Email: l.bladen@canberratimes.com.au
