Canberra 2025 property forecast: stability and the next growth cycle

Summary:

Canberra’s property market is entering an early recovery phase, supported by higher incomes, strong rental yields and improving buyer confidence.
Prices are expected to rise steadily over 2025 and into FY26, with houses outperforming units but units offering stronger yields and better affordability.
Recent data shows early momentum, with auction clearance rates strengthening in affordable regions and two consecutive quarters of house price growth.

Canberra’s property market is shifting into a more stable phase as income strength, reliable public sector employment and improving buyer sentiment support early signs of recovery.

While growth is not expected to match the pace of higher-population capitals, Canberra’s consistency, combined with rising confidence, is helping set the foundations for a new cycle through 2025 and into FY26. This aligns with the broader ACT property market outlook 2025, which points to steady conditions supported by strong incomes and resilient demand.

A steady outlook for 2025 and beyond

Recent data points to a market gaining traction. According to Domain, Canberra’s median house price rose 2.4% ($25,422) over the September quarter to reach $1.1 million, reinforcing Canberra’s status as a city with a stable housing market. This marks two consecutive quarters of growth. This is the strongest quarterly performance in 1.5 years and has pushed annual house price growth to 2.7% ($29,154), even though values remain 6.2% ($72,684) below their 2022 peak.

Unit prices declined 1.5% ($9,216) in the September quarter to $597,929, reflecting a slower recovery. However, a gradual improvement is forecast, with unit prices expected to rise 3.0% ($14,000) over FY26, narrowing some of the gap between houses and units.

KPMG projects similarly steady growth, forecasting houses to rise 1.0% in 2025 and 5.0% in 2026, and units to rise 3.0% in 2025 and 6.0% in 2026. Together, these Canberra property market forecast updates point to a measured but strengthening recovery.

Auction activity also signals early momentum. Canberra recorded a 59.3% clearance rate in October, up 9.2 percentage points year-on-year, with the strongest results in affordable districts such as Tuggeranong and Belconnen. Higher supply in October gave buyers more choice, but demand remains solid for homes up to $1 million and well-located townhouses priced up to $750,000.

What is driving the next growth cycle?

Economic stability

Canberra remains the most affordable capital city in Australia when measured against income. With a large share of residents employed in the public sector, the city benefits from stable wages, low unemployment and clear long-term career pathways. Political continuity following the federal election has added another layer of confidence, particularly as household budgets begin to improve with lower interest rate expectations.

Borrowing conditions

The Reserve Bank of Australia has cut interest rates by 50 basis points since February, with markets expecting another 80 basis points of cuts by the end of FY26. Cheaper borrowing is supporting serviceability and helping buyers step back into the market after a period of subdued activity.

Lower rates are also expected to lift transaction numbers through 2025, particularly in established areas where supply is tight.

Government incentives and first home buyer support

Policy settings continue to favour buyers. Recent initiatives include LMI removal for eligible first home buyers and expanded shared equity schemes, which are helping more households purchase sooner. The expanded 5% deposit scheme, introduced in October, has already contributed to stronger competition in affordable suburbs.

Supply, vacancies and long-term pressures

Housing supply remains a key influence. Canberra’s vacancy rate of 1.2% is comparatively high for a capital city, yet new housing completions are still projected to fall short of ACT targets, especially for standalone houses. Rezoning initiatives, density planning and easing construction costs may help over time, but the shortfall supports moderate price growth through 2025 and FY26. High ACT rental yields, particularly in the unit market, continue to support investor demand.

Suburbs showing momentum

Insights from Savings.com.au highlight several districts attracting heightened interest for 2026 and shaping some of the best suburbs in Canberra for investment.

Gungahlin

Family appeal, strong demographic growth and major budget-funded community upgrades continue to support long-term demand. Expansion of the town centre and new mixed-use projects reinforce its position as one of Canberra’s fastest-growing regions.

Woden Valley

High-rise development around Westfield Woden, government leases and strong resident demand are supporting price resilience. Suburbs such as Lyons and Pearce offer attractive unit pricing, higher rental yields and potential uplift due to limited new supply.

Weston Creek–Rivett

Five-year house price growth of 37% and no new developments commencing in 2026 point to ongoing demand in an undersupplied pocket.

Belconnen

Anchored by major institutions and benefiting from the revitalisation of Lake Ginninderra, Belconnen remains more than 30% cheaper than the ACT median while still recording steady annual growth.

Macquarie

Tight vacancy at 1.2%, strong rental yields and no new developments planned for 2025 or 2026 position Macquarie as an appealing option for investors seeking stable tenant demand.

How a broker supports your next step

Buyer confidence is gradually improving, with stronger quarterly performance, rising clearance rates and better borrowing conditions shaping a more balanced outlook for 2025. Loan Market Canberra brokers can compare loan options, unpack ACT-specific incentives and help structure finance suited to your goals in a market where stability and timing matter.

To check borrowing capacity and prepare finance ahead of demand building in Canberra through 2025, contact your local Loan Market broker.

FAQs

What is the outlook for Canberra property prices in 2025?

Prices are expected to rise steadily, with modest house price growth and a gradual recovery in the unit market as borrowing conditions improve.

Are Canberra units a good option for investors?

Units continue to offer strong rental yields and better affordability, particularly in suburbs where new supply is limited.

Is it a good time to buy in areas like Gungahlin or Belconnen?

Both regions show growth potential due to infrastructure investment, population demand and relative affordability.

Are first home buyers active in Canberra?

Yes. Government incentives, reduced LMI requirements and improved affordability relative to income are helping first home buyers enter the market.