In June last year, then Shadow Treasurer, Joe Hockey, warned that now might be a good time to sell Canberra housing, noting that home prices could be pushed lower by a Coalition Government:
Joe Hockey suggests house prices in Canberra could be pushed lower under a Coalition government.
“There is a golden rule for real estate in Canberra – you buy Liberal and you sell Labor,” he said on Friday morning.
…house prices in the territory dipped when John Howard made big cuts to the public service in his first term of government.
Indeed, Canberra dwelling values took a battering during the Howard Government’s first term, falling by 7% over two years, according to RP Data, on the back of lower employment and confidence.
Canberra’s housing market looks to be facing similar stiff headwinds this time around, with Treasurer Hockey announcing that 16,500 public service jobs would go over the next three years, which is the largest cut since the 1990s. According to The Canberra Times, “this would translate to at least 6500 jobs in the ACT if the reduction was proportional”.
Already, Canberra’s housing fundamentals are worsening.
Dwelling construction has risen strongly recently (see next chart), suggesting that falling demand from worsening employment will be met with rising supply – a bearish signal if ever there was one.
In a similar vein, both stock on market and rental vacancies are elevated, according to SQM Research:
And asking prices across the capital are a see of red:
Joe Hockey’s suggestion to sell Canberra housing are beginning to look more and more prescient.
