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Canberra Property – boom before the bust?

By Kramer - 27 October 2007 62

It seems the media is in a tizz at the moment about property prices. Canberra has been highlighted as one of the capital cities where property prices are booming. Although prices in the Canberra market do appear to be slightly overinflated, so with another interest rate rise looming, are we seeing the boom before the bust?

All this speculation is being driven by the latest price guide from Australian Property Monitors. They report an annual growth figure for Canberra houses of 17.7% and units 9.7% (figures for the quarter June to Sept 07 are 1.7% and 4.6% respectively). This equates to the average Canberra house price now coming in at $485,262 and an average unit price of $339,553 – wow!

What’s Your opinion?

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62 Responses to
Canberra Property – boom before the bust?
boomacat 3:08 pm 27 Oct 07

Yes, but it undermines your argument that interest rates will always be higher under Labor.

BigDave 3:07 pm 27 Oct 07

But Howard’s not the treasurer is he?

boomacat 3:04 pm 27 Oct 07

Like 22% when Howard was treasurer, the highest rates since WWII?

BigDave 3:01 pm 27 Oct 07

How can a possible re-election of the Coalition be linked with another 6 rate rises? I think you’ll find that the Reserve Bank is independent and they are the ones who call the shots. Why blame the Coalition? Is it their fault that everyone is spending? I think you’ll find that rates will be a hell of a lot higher under any Labour government, as they have been in the past.

boomacat 2:27 pm 27 Oct 07

True true. Unless the long heralded socialist revolution those dirty hippies have been waiting for all these years finally comes about, the best response is to maximise your economic value, retrain, move into a higher paying profession, invest wisely, yada, yada, yada.

Deano 2:26 pm 27 Oct 07

despite much discussion by pollies and the media, housing supply problems still have not been fixed.

That’s because any ‘fixes’ would hurt many, many more people (current homeowners) than it will help (first home buyers). Anything that causes the price of housing to fall will cause a larger, much more serious problem than the current one with housing affordability.

VYBerlinaV8...the_or 2:23 pm 27 Oct 07

Property prices operate according to market forces of supply and demand. Fair, unfortunately, doesn’t come into it.

Ingeegoodbee 2:07 pm 27 Oct 07

Why the hell not nyssa? Souldn’tr what people are prepared to pay be exactly what people pay – and not a cent more?

nyssa76 2:03 pm 27 Oct 07

The fact is, no one should have to pay $350,000+ for a piece of dirt and some bricks and mortar.

VYBerlinaV8...the_or 2:01 pm 27 Oct 07

I’d be very surprised if we get a genuine bust. I base this opinion on the fact that , despite much discussion by pollies and the media, housing supply problems still have not been fixed. Of course, higher interest rates will impact housing costs out in the mortgage belts. Those people who bought recently and are hocked to the eyeballs will experience some pain, but people who have owned for a while (and are smart enough not to borrow against their house for items and services that lose value), or borrowed sensibly, will have no real problem. The fact that luxury good spending is at an all time high is a clue here.

I still plan on buying additional investment properties in good suburbs close to the city over the next few years.

boomacat 1:53 pm 27 Oct 07

Aint a 4 br house a pretty ambitious starting point? Maybe stick the kids in a bunk bed in the garage of a 1 br studio? :-p

nyssa76 1:38 pm 27 Oct 07

I hope it goes bust too, so I can actually buy a house instead of saving for a larger deposit every time the damn rates go up.

Oh and I just want a 4br (girl, boy, girl) house without mod-cons. Nothing flash, just a home of my own. I don’t want a McMansion.

boomacat 1:37 pm 27 Oct 07

22% is the Howard standard apparently, so there might be some forward movement there Igb.

Ingeegoodbee 1:33 pm 27 Oct 07

I suspect that things would have to get pretty pear-shaped for there to be a considerable downward swing. Even if mortgage rates go up a few percent and mortgagees that have over-stretched are forced to sell there’ll still be a bunch of cashed up investors looking to snap up a ‘bargain’ so first home buyers will still be in a pretty competetive market.

That said it would only take the relection of the Coalition and, based on their past performance, you could pretty much factor in anoth six rate rises so “really pear-shaped” isn’t that much of a stretch of the imagination.

Adza 11:34 am 27 Oct 07

Being a first home buyer on a single income, I have no hope in hell of buying a home at the moment.. I can’t settle for a unit as I have a family.

So yeah I hope it does go bust.

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