WATCH: What to expect for the Canberra property market in 2025

What to expect for the Canberra property market in 2025

Transcript

00:00Heading into 2025, the Australian economy is at one of its weakest points in decades,

00:05there's a federal election looming, and there's pressure for the RBA to cut interest rates.

00:10So let's have a chat about what all of that means for the Canberra property market in the new year.

00:14It looks like we're going to have a case of the rich getting richer and the poor getting poorer,

00:19at least in terms of property prices. In the spring quarter of 2024, the luxury housing

00:25market in Canberra, so properties above about $3.5 million, went up by 0.4%. It doesn't sound

00:32like a lot, but that market in Canberra has been holding steady, when in the rest of the country,

00:36it's been pretty dramatically decreasing in value. On the flip side, the lowest quartile

00:41of Canberra properties has been trending downward in 2024, and that's set to continue. Now that area

00:47of the market is mostly made up by units, and unit prices decreased by 3.5% across the year.

00:54That's mostly due to an oversupply of apartments. Unit listings were up 9% across the year,

01:00whereas house listings were down by 6.5%. Those low values in apartments has been matched by

01:06pretty limited borrowing capacity, particularly for first home buyers in 2024, as we see high

01:12interest rates. The obvious question for a lot of first home buyers now is whether or not we'll see

01:16an interest rate cut in early 2025. It's looking pretty unlikely at the moment, but even if we have

01:22one, economists are warning first home buyers that a rate cut isn't necessarily the silver bullet

01:27to a bigger loan. Last time interest rates were low, a lot of first home buyers took out loans

01:33that they couldn't afford to service once the rates rose again. Now there is a requirement that

01:38people can afford a 3% interest rate rise when they take out a loan, but economists think that

01:44banks might put in even stricter safeguarding measures to protect first home buyers.