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Canberra's property market is showing signs of recovery with modest price growth for houses while units continue to face pressure from oversupply.
As of September 2025, the Canberra residential market reflects a balanced environment where buyers have more options, interest rate cuts are boosting confidence, and rental demand remains exceptionally strong with vacancy rates at historic lows.
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Canberra house prices are recovering with modest growth while unit prices remain under pressure from high supply levels.
The market shows clear segmentation with properties under $900k for houses and $600k for units moving fastest in the current environment.
| Market Indicator | Houses | Units/Apartments |
|---|---|---|
| 3-Month Price Change | +0.8% | -0.6% |
| 12-Month Price Change | -0.5% | -1.4% |
| 2025 Forecast Growth | +6.0% | +4.1% |
| Current Rental Yield | ~3.8% | ~5.0-5.8% |
| Median Weekly Rent | $700 | $575 |
| Time on Market | 49-57 days | 49-57 days |
| Best Price Point for Sales | Under $900k | Under $600k |
What's happening with property prices in Canberra right now?
Canberra property prices are experiencing a modest recovery after a period of decline, with clear differences between houses and units.
The median dwelling value in Canberra currently sits around $855,000 to $860,000 as of September 2025. Houses are showing stronger performance than units, reflecting buyer preferences and supply conditions.
The market is demonstrating signs of stabilization with quarterly increases becoming more consistent. Lower-priced homes are particularly benefiting from improved buyer activity as interest rate cuts boost affordability.
Properties priced under $900,000 for houses and $600,000 for units are experiencing the fastest sales cycles, indicating strong demand in the more affordable segments.
Overall, the Canberra residential market reflects a balanced environment where buyers have increased choice but sellers need realistic pricing strategies.
How have prices changed over the past 3, 6, and 12 months?
Canberra's property price movements show a clear recovery trend in recent months, particularly for houses.
| Time Period | Houses | Units |
|---|---|---|
| Last 3 Months | +0.8% | -0.6% |
| Last 6 Months | +1.3% | Nearly flat/slightly negative |
| Last 12 Months | -0.5% | -1.4% |
| Overall Dwellings (12 months) | -0.7% | |
| Market Direction | Recovery trend | Continued pressure |
What's the forecast for property values in the next 1 to 3 years?
Canberra property forecasts indicate moderate but steady growth over the next one to three years, with houses expected to outperform units.
House prices are forecasted to rise 6.0% through 2025, while units are expected to see more modest gains of 4.1%. These projections assume continued interest rate easing and stable employment conditions in the ACT.
The longer-term outlook for 2026-2027 suggests continued moderate growth, particularly if borrowing conditions remain favorable and population growth continues to support housing demand.
Supply-side factors will play a crucial role, with the completion of many unit developments expected to keep apartment price growth subdued compared to houses.
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Which suburbs are showing the strongest growth and which are slowing down?
Lower-priced suburbs and outer areas are demonstrating stronger short-term growth as demand shifts toward affordable houses and townhouses.
Outer areas including Queanbeyan and developing zones in Gungahlin are benefiting from first-home buyer activity and families seeking value. South Canberra suburbs are also showing resilience due to established infrastructure and community amenities.
Inner north and south suburbs are experiencing more subdued growth, particularly in the unit and townhouse sectors where higher supply levels are creating competition.
Suburbs with upcoming infrastructure improvements and transport links are positioning themselves for stronger medium-term performance, while areas with high development activity face near-term price pressure.
The performance gap between established single-dwelling suburbs and high-density development areas continues to widen as buyer preferences favor space and lifestyle.
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What's the current rental yield across different property types and areas?
Canberra rental yields vary significantly between property types, with units offering substantially higher returns than houses.
Houses currently deliver gross rental yields of approximately 3.8%, while units and apartments provide yields ranging from 5.0% to 5.8%. These yields reflect the capital city's strong rental demand and relatively affordable purchase prices for units.
Median weekly rents have reached $700 for houses and $575 for units, representing steady increases over the past two quarters as rental demand intensifies.
Suburban areas with strong university or government employment connections tend to achieve more stable rental returns, while newer developments may experience more volatile occupancy rates.
Investment-focused buyers should note that unit yields compensate for slower capital growth, making them attractive for income-focused strategies.
How do vacancy rates look in the short term versus the longer term?
Canberra's rental market shows exceptionally tight conditions with vacancy rates at historically low levels.
The current vacancy rate sits at approximately 1.2% to 1.6%, representing the lowest levels since 2022 and indicating very strong rental demand across all property types.
Short-term vacancy trends suggest continued tightness as population growth and limited new rental supply maintain pressure on available properties. Students and government workers continue to drive consistent rental demand.
Longer-term vacancy forecasts depend on new development completions, particularly in the unit sector where significant supply is coming online in areas like Gungahlin and Belconnen.
Investors can expect rental markets to remain favorable, though some normalization may occur as new apartment projects reach completion over the next 12-18 months.
What's the level of supply versus demand across houses, apartments, and townhouses?
Canberra's property market shows varying supply-demand dynamics across different property types, creating distinct opportunities and challenges.
Sales volumes have increased 8% to 12% year-on-year, but properties are taking 49 to 57 days to sell on average, reflecting a balanced market environment. New listings are down 9% while total listings have increased 3%, providing more options for buyers.
Houses experience stronger demand relative to supply, particularly in established suburbs where new development is limited by planning constraints and land availability.
Units and apartments face higher supply pressure due to multiple medium and high-density projects nearing completion, especially in central and northern suburbs.
Townhouses occupy a middle ground, offering compromise between unit affordability and house lifestyle, though supply varies significantly by location.
How many new developments are in the pipeline and where are they located?
Canberra has substantial development activity underway, primarily focused on medium and high-density projects in strategic locations.
Major pipeline activity is concentrated in Gungahlin, Belconnen, and City precincts, with many projects scheduled for completion through 2025 and early 2026.
The majority of new developments are apartment and unit projects designed to address urban density requirements and provide more affordable housing options.
Infrastructure-supported areas including light rail corridors and town centers are seeing increased development interest, though delivery timelines depend on planning approvals and construction capacity.
This high supply of new units is a key factor keeping unit prices soft and creating competitive rental markets in affected suburbs.
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What's happening with interest rates and borrowing capacity for buyers in Canberra?
Interest rates have been cut three times during 2025, with rates now sitting around 3.35%, significantly improving borrowing conditions for Canberra buyers.
Lower rates are directly boosting buyer confidence and increasing borrowing capacity, particularly benefiting first-home buyers and upgraders who had been priced out during the higher rate period.
Improved borrowing capacity means buyers can consider properties in higher price brackets or secure better loan terms for their target purchases.
Banks are showing increased lending appetite, and pre-approval processes have become more favorable as economic conditions stabilize and employment remains strong in the ACT.
The easing borrowing environment is a key driver behind the modest price recovery, particularly in the more affordable segments of the market.
At what budget levels are properties moving fastest and where are the opportunities?
Properties priced under $900,000 for houses and $600,000 for units are experiencing the fastest sales cycles in the current Canberra market.
The strongest opportunities exist in affordable suburbs with upcoming infrastructure improvements and areas with tight rental markets that support investor demand.
First-home buyer activity is concentrated in the $600,000 to $850,000 range, while upgraders are targeting properties between $850,000 and $1.2 million for houses.
Investment opportunities are particularly strong in suburbs where unit prices have softened but rental demand remains robust, creating attractive yield-to-price ratios.
Well-connected suburbs offering community amenities and lower supply levels present the best opportunities for both owner-occupiers and investors seeking longer-term capital growth.
If I want to buy to live in, which suburbs and property types make the most sense right now?
Owner-occupiers should focus on South Canberra, Queanbeyan, and outer north areas which offer good value for families and first-home buyers.
Houses and townhouses below the median price point are most attractive for owner-occupiers, providing better lifestyle outcomes and stronger long-term capital growth potential compared to units.
Key considerations for owner-occupiers include:
- Established suburbs with mature infrastructure and community amenities
- Areas with good school catchments and transport connections
- Neighborhoods with limited new supply competing for buyers
- Properties offering renovation potential within budget constraints
- Locations with planned infrastructure improvements boosting future liveability
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If I want to buy for investment or resale, where and what should I be focusing on?
Investment buyers should focus on suburbs with low vacancy rates, rising rents, and unit prices that are slowly recovering from recent softness.
Gungahlin, Belconnen, and suburbs near university or commercial hubs offer the best combination of rental demand and potential capital growth as supply pressures ease.
Units and townhouses in established areas may currently be undervalued, providing strong yield while waiting for prices to recover over the medium term.
Investment strategy recommendations include targeting properties that attract stable tenant demographics such as government workers, university staff, and long-term residents rather than transient populations.
Properties offering renovation potential or development upside provide additional returns, though buyers should carefully assess planning constraints and infrastructure capacity before committing.
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 property market in September 2025 presents a balanced opportunity for both owner-occupiers and investors, with clear segmentation between property types and price points.
Success in this market requires understanding the distinct dynamics affecting houses versus units, identifying the right suburbs for your strategy, and acting decisively in the sub-$900,000 house and sub-$600,000 unit segments where activity is strongest.
It's something we develop in our Australia property pack.
Sources
- Which Real Estate Agent - Canberra Property Market Update
- OpenAgent - Canberra Property Market
- NAB - Canberra Property Market Insights
- KPMG - House Prices Forecast
- SQM Research - Canberra Property Prices
- Region Media - Canberra House Price Analysis
- Real Estate Shop - Canberra Market Comparison
- Your Mortgage - Australian House Prices