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Canberra's apartment market is experiencing a significant oversupply situation in 2025, with new listings up 30% year-over-year and unit prices falling 1.4% annually.
The capital city faces a record influx of new apartments, driven by government land release programs targeting 26,000 new homes over five years. While vacancy rates remain stable at 1.6%, the combination of declining prices and slowing rent growth clearly indicates market oversupply, particularly in high-density development areas like Belconnen, Gungahlin, and Dickson.
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Canberra's apartment market shows clear oversupply signals with new listings hitting record highs and unit prices declining 1.4% year-over-year as of September 2025.
The government's ambitious housing program aims to deliver 26,000 new homes by 2030, with suburbs like Belconnen and Gungahlin most affected by the supply surge.
| Market Indicator | Current Status (Sep 2025) | Year-over-Year Change |
|---|---|---|
| New apartment listings | Record high levels | +30% |
| Vacancy rate | 1.6% | Stable |
| Unit sale prices | $594,769 median | -1.4% |
| Weekly rent | $565-$667 | +2.6% |
| Rental yield | 5.0% average | Slight decline |
| Population growth | 483,000 | +1.05% |
| Future supply pipeline | 26,000 homes planned | Next 5 years |
What's the actual number of new apartments coming onto the market in Canberra right now?
As of September 2025, Canberra is experiencing a record influx of new apartments hitting the market.
New apartment listings rose by 30% year-over-year to June 2025, representing the highest level on record. This surge reflects the substantial completion of multiple high-density projects across the city. Individual developments like De Burgh in Lyneham continue adding hundreds of new units, while numerous precincts are delivering multi-dwelling projects simultaneously.
The ACT government's ambitious housing program supports the delivery of up to 26,000 new homes over the next five years, with a significant portion targeted at mid- and high-density apartments. This represents one of the most aggressive residential development programs in Canberra's history.
Current construction activity shows multiple large-scale apartment complexes reaching completion stages across key suburbs, contributing to the unprecedented supply levels hitting the market.
This substantial increase in new apartment availability is creating competitive conditions for both buyers and renters in the Canberra market.
Are vacancy rates showing a clear oversupply, or are they staying fairly stable?
Canberra's residential vacancy rate stands at 1.6% as of February 2025, which appears stable on the surface but masks underlying supply pressure.
The 1.6% vacancy rate sits slightly higher than the national average and remains in what's technically considered the "tight" range for rental markets. However, this stability doesn't tell the complete story of the apartment market dynamics.
Official statements and market analysis warn that oversupply in the unit sector is increasing as more new stock enters the market. While the overall vacancy rate appears controlled, anecdotal evidence from property managers and real estate agents suggests increased choice for tenants, particularly in apartment segments.
The apparent stability in vacancy rates likely reflects Canberra's steady population growth absorbing some new supply, but the pace of new apartment completions is beginning to outpace absorption capacity in certain suburbs.
Market observers expect vacancy rates to rise in coming months as the full impact of current construction completions flows through to the rental market.
How have rents been moving over the past year—are they rising, flat, or falling?
Canberra apartment rents have been rising but at a significantly slower pace compared to other Australian capitals and below inflation levels.
Over the past year, Canberra apartment rents increased by 2.6% through 2024, marking the weakest rent growth among all Australian capital cities. This modest increase contrasts sharply with national rent rises of 5% and indicates competitive pressure from increased apartment supply.
Unit rents did pick up momentum in early 2025, but pricing remains highly competitive due to expanded tenant choice. The median advertised weekly rent for apartments ranges between $565-$667, depending on location and apartment specifications.
The slow rent growth reflects landlords' need to remain competitive in a market where tenants have significantly more apartment options than in previous years. Properties are taking longer to lease, and landlords are offering incentives to secure tenants.
This rental growth pattern clearly indicates that apartment supply is beginning to exceed demand growth in the Canberra market.
What's happening with apartment sale prices—are they dropping, holding steady, or still climbing?
Canberra apartment sale prices are declining, with clear evidence of downward pressure from increased supply.
| Time Period | Price Change | Current Median Price |
|---|---|---|
| Past 12 months | -1.4% | $594,769 |
| Past quarter | -0.6% | $594,769 |
| Market trend | Declining | Supply pressure |
| Most affected areas | Belconnen, Gungahlin | High construction activity |
| Buyer conditions | Favorable | Increased choice |
| Seller conditions | Challenging | Extended selling times |
| Future outlook | Further pressure expected | Ongoing supply delivery |
Are rental yields for apartments improving or shrinking compared to a few years ago?
Canberra apartment rental yields remain relatively robust at 5% average but are showing signs of moderate decline due to market conditions.
The current average rental yield of 5% for Canberra units compares favorably to other Australian capitals, with some suburbs delivering significantly higher returns. Hawker delivers 7.1% yields, while Lyons achieves 7.0% yields, demonstrating strong performance in specific locations.
However, yields have moderated slightly from previous years due to the combination of flattening rental growth and slight price declines. The 2.6% rental growth significantly lags behind historical averages, putting downward pressure on yield calculations.
Apartments in oversupplied areas are experiencing more significant yield compression as both rental competition increases and sale prices face downward pressure from new supply.
Investors focusing on suburbs with limited new apartment supply are maintaining stronger yields, while those in high-construction areas face declining returns.
Which suburbs or districts in Canberra are most affected by a possible oversupply?
Several Canberra suburbs are experiencing clear oversupply conditions with concentrated apartment development activity.
Belconnen leads the list of oversupplied areas, with numerous large apartment projects completed and under construction. The suburb reports significantly increased listings, competitive pricing, and extended selling times for apartment properties.
Gungahlin faces similar oversupply pressures with multiple high-density developments delivering hundreds of new units simultaneously. The area's rapid expansion has created intense competition among apartment sellers and landlords.
Lyneham, Dickson, Braddon, City (2601), and Phillip also show clear indicators of oversupply including high turnover rates, competitive rental and sale pricing, and increased time on market for properties.
These suburbs typically feature government-driven urban renewal projects, proximity to employment centers, and zoning that encourages high-density development, making them focal points for apartment construction activity.
Is there evidence from official data, or is a lot of this "oversupply" narrative just based on rumours?
The apartment oversupply situation in Canberra is confirmed by comprehensive official data from multiple authoritative sources, not media speculation or industry rumors.
Australian Bureau of Statistics data shows substantial increases in building approvals, construction completions, and new dwelling supply specifically in the apartment segment. CoreLogic property data confirms the 30% increase in new apartment listings and documents the 1.4% price decline over the past year.
ACT government reports and budget documents explicitly acknowledge the significant apartment supply increases through their housing programs. The government's own projections target 26,000 new homes by 2030, with substantial apartment components.
Property Council data reveals the sharp fluctuations in apartment approvals, including the dramatic drop to just 16 new apartment approvals in April 2025, indicating developer concerns about oversupply conditions.
Domain, Real Estate Australia, and other industry data providers all confirm increased apartment inventory, longer selling times, and competitive market conditions based on transaction data rather than anecdotal evidence.
What are the main reasons driving the increase in apartment supply in Canberra?
Multiple interconnected factors are driving Canberra's apartment supply surge, primarily centered on government policy and demographic planning.
Strong population growth of 1.05% in 2025 has prompted government initiatives to increase housing supply proactively. The ACT government's aggressive land release program and construction incentives specifically target apartment development to accommodate this growth.
Planning reforms and density policies encourage high-rise development in designated urban renewal areas. These reforms streamline apartment project approvals and provide incentives for developers to build multi-dwelling projects rather than detached housing.
The desire to provide housing for diverse demographics drives apartment construction, including students, public sector workers, downsizers, and first-time buyers who require more affordable housing options than detached homes.
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Affordable housing mandates and social housing requirements also contribute to apartment supply increases, as these policies often favor higher-density developments over single-dwelling construction.
Based on current construction pipelines and approvals, will the oversupply get worse in the short term?
The short-term outlook suggests apartment oversupply will intensify before improving, though approval data indicates potential moderation ahead.
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Current construction pipelines show substantial apartment projects still under development that will deliver hundreds of additional units over the next 12-18 months. These projects were approved and commenced before recent market softening became apparent.
However, the collapse in new apartment approvals to just 16 units in April 2025 represents a dramatic shift from previous approval levels. This suggests developers are reassessing market conditions and may pause new project commencements.
Supply pressure will worsen through late 2025 and early 2026 as existing projects complete, but the sharp reduction in new approvals indicates supply growth could flatten within 1-2 years.
Rising construction costs, tightening financing conditions, and waning developer confidence are creating natural constraints on future apartment supply despite government housing targets.
The short-term oversupply situation will likely peak in mid-2026 before moderating as both supply completions slow and population growth continues absorbing available stock.
How is the medium-term outlook shaping up once current projects are absorbed by the market?
The medium-term outlook for Canberra apartments suggests market stabilization once current supply projects are absorbed, though timing remains dependent on absorption rates and economic conditions.
The ACT government maintains ambitious targets for 30,000 new homes by 2030, with apartments comprising a significant share. However, construction activity may be constrained by rising costs, financing challenges, and reduced developer confidence following the current oversupply experience.
Market absorption of current apartment inventory will likely take 2-3 years, assuming steady population growth and stable economic conditions. During this period, competition for tenants and buyers will remain intense.
Once oversupply conditions normalize, Canberra's fundamental housing demand drivers should reassert themselves. The city's stable employment base, government sector growth, and educational institutions provide consistent housing demand that will eventually absorb excess supply.
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Medium-term price recovery will depend on supply discipline from developers and continued population growth maintaining housing demand above new supply delivery rates.
What's the long-term prospect for Canberra apartments considering population growth and demand trends?
Long-term prospects for Canberra apartments remain fundamentally positive despite current oversupply challenges, supported by strong demographic and economic fundamentals.
Canberra's population is projected to reach nearly 800,000 by 2060, representing sustained annual growth that will create consistent housing demand. This long-term growth trajectory provides the foundation for apartment market recovery and future appreciation.
The city's economic base centered on government employment, defense spending, education, and technology sectors offers stable income sources that support apartment demand from various demographic groups.
Evolving household trends toward apartment living, particularly among young professionals, empty nesters, and international students, create sustained demand for well-located apartment properties.
After the current supply bulge is absorbed over the next few years, the combination of resumed population growth and more disciplined supply delivery should support price and rent recovery through the late 2020s.
Long-term investors willing to hold properties through current market cycles will likely benefit from Canberra's fundamental demographic and economic strengths once oversupply conditions normalize.
If you're a property buyer or investor, how should you position yourself in this market right now?
Property buyers and investors should adopt a strategic approach focusing on specific suburbs and property types while timing market entry carefully.
1. **Target high-yield suburbs with limited new supply** - Focus on areas like Hawker (7.1% yield), Lyons (7.0% yield), and Crace where rental returns remain strong and new apartment construction is limited.2. **Avoid oversupplied districts** - Stay away from Belconnen, Gungahlin, Dickson, and other high-construction areas where rental competition and price pressure will persist for 2-3 years.3. **Emphasize unique property features** - Prioritize apartments with location advantages, superior amenities, or architectural distinction that can command premium rents and maintain value during oversupply periods.4. **Plan for medium to long-term holding periods** - Position investments to benefit from Canberra's strong demographic trends and employment base over 5-10 year time horizons rather than short-term gains.5. **Consider timing market entry strategically** - Monitor supply pipeline developments and market absorption rates to identify optimal entry points as oversupply conditions moderate.It's something we develop in our Australia property pack.
Successful investors will focus on data-driven decisions, selective suburb choice, and patience to outperform the broader Canberra apartment market during this challenging period.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
The Canberra apartment market is experiencing clear oversupply conditions with record new listings and declining prices, but long-term fundamentals remain positive for patient investors.
Strategic buyers should focus on high-yield suburbs with limited new construction while avoiding oversupplied areas until market conditions normalize over the next 2-3 years.
Sources
- Real Estate Australia - Canberra Apartment Market
- Statista - Canberra Vacancy Rate
- OpenAgent - Canberra Property Market
- ACT Government - Housing Program
- Property Council - Building Approvals
- Region.com.au - Rental Market Analysis
- ACT Government - Budget Housing Support
- Property Update - Vacancy Rates
- Broker News - Rent Price Analysis
- Savings.com.au - ACT Rental Yields