Canberra real estate is predicted to turn a corner in 2024 to make a solid recovery on the back of market turnarounds in Sydney, Melbourne and Brisbane.

MARQ Property Partner and Licensed Agent Justin Taylor expected a steady year for Canberra’s property market, predicting price increases of between 3% and 6%.

“Melbourne, Sydney and Brisbane have bounced back and are well beyond recovery mode,” Justin said. “Their markets are looking buoyant, and that’s promising for Canberra because history shows we usually follow suit not far behind those cities.

“I think Canberra is either at the bottom or very close to the bottom of the property cycle and it’s been that way for a little while. Because those other capital cities have started to move upwards, I expect that we’re next.”

Justin said the latest decision by the Reserve Bank of Australia to again put a hold on interest rates would give buyers renewed hope and confidence.

“Interest rates have now stabilised. Buyers have borne the brunt of that over the last 12-18 months so they’re in a position now where they’re probably a little bit more confident that rates are on hold,” he said.

It comes as the latest CoreLogic Hedonic Home Value Index shows property prices across Canberra dropped by 0.2% in January after small gains in recent months.

After increases of 0.3% in August, 0.3% in September, 0.1% in October and 0.5% in November, prices dropped slightly by 0.1% in December.

There has been 1.2% growth in property values in Canberra over the past year, with the median price across all dwelling types now at $842,971.

But Justin said with high construction costs and the labour shortage impacting the number of new builds, demand for established houses and apartments was surging. As a result, heightened call for established homes would fuel greater competition from buyers.

“New build approvals are significantly down by about 40-50% on the 10-year average,” Justin said.

“That’s largely due to high construction costs and the labour shortage, and this will lead to more demand and competition for established homes.”

“The rental market is still tight. Two years ago vacancy rates were 1%. They have eased a little bit and are now 2.5% but it’s still hard to get a rental property, and because it’s expensive to rent in Canberra people seriously thinking about making the change. It’s more worthwhile to pay a mortgage rather than rent.”

Justin said Canberrans were fortunate to be backed by a solid government jobs sector, which underpinned the strength of the property market.