Canberra's Housing Affordability Crisis: What Happens Next and the Key Decisions Ahead

The ACT government's latest housing affordability report has revealed that the median house price in Canberra has surpassed $1.1 million, leaving many public servants and residents struggling to find affordable housing options.

This matters now because the ACT is facing a critical shortage of affordable housing, with many public servants and low-to-middle-income earners being priced out of the market. The situation is exacerbated by the fact that Canberra is a federal government city, with a high demand for housing driven by the public service workforce. As a result, the ACT government is under pressure to deliver solutions that will make housing more affordable for all Canberrans.

In suburbs like Gungahlin and Belconnen, where housing development is booming, the issue of affordability is particularly acute. Organisations like the Australian National University (ANU) and the University of Canberra (UC) are also feeling the pinch, as they struggle to attract and retain staff due to the high cost of living in Canberra. The light rail stage 2 project, which will connect the city to the northern suburbs, is also expected to put upward pressure on housing prices in areas like Dickson and Lyneham.

According to data from the Australian Bureau of Statistics (ABS), the number of first-home buyers in the ACT has declined by 23% over the past year, with the average price of a first home now standing at $640,000. Meanwhile, rents in Canberra have increased by 15% over the same period, with the average weekly rent now standing at $640. The ABS also reports that the vacancy rate for rental properties in Canberra is just 1.1%, indicating a highly competitive market. As of June 2026, the ACT government's rent freeze, which was introduced in response to the COVID-19 pandemic, is due to expire, leaving many tenants facing uncertainly about their future rent payments.

Key Decisions Ahead

So what happens next? The ACT government has announced a range of initiatives aimed at improving housing affordability, including the release of more land for development and the introduction of inclusionary zoning policies. However, critics argue that these measures do not go far enough, and that more needs to be done to address the root causes of the affordability crisis. In the short term, public servants and residents can expect to see more apartments and townhouses being built in areas like the city centre and Braddon, as part of the government's urban renewal strategy. However, with the median unit price in Canberra now standing at $620,000, it remains to be seen whether these new developments will be affordable for the average buyer.

In practical terms, Canberrans can take steps to prepare themselves for the changing housing market. This includes seeking advice from financial planners and mortgage brokers, as well as exploring alternative housing options like community land trusts and co-housing models. The ACT government's Housing Affordability Strategy, which is due to be released later this year, is also expected to provide more guidance on the support available to first-home buyers and low-to-middle-income earners. As the situation continues to evolve, one thing is clear: the ACT government will need to make some tough decisions to ensure that housing remains affordable for all Canberrans.