Canberra’s recent solid performance appears to be cooling but there are hopes of a first homebuyer-led recovery during summer
After racking up impressive gains over the past few months, Canberra, like Sydney, has finally surrendered to the overall weakness in sentiment.
According to Residex, median house values fell by 0.70% over the three months to September to $536,500. APM recorded a bigger drop of 1.4% over the same period. However, Canberra remains the only capital city recording any growth over the year ending September, according to APM data.
The slowdown looks like it’s going to be short-lived with Residex reporting a 1.03% increase in median house price during September. Real estate agents say this is fuelled by first homebuyers.
“We had two web-based marketing campaigns running concurrently – one was focusing on investors and one was targeted at first homebuyers – and we had probably five times the enquiry to the first homebuyer than the investor site,” says Independent Property Group sales and marketing director John Minns. “That’s a turnaround, and it surprised us.”
Ray White Canberra CEO Doug O’Mara adds that properties in the sub- $500,000 price bracket are receiving a good number of buyer enquiries, while days on the market for these in-demand properties is a strong 30–35 days.
He singles out Tuggeranong and Belconnen as a couple of areas whose lower end properties have been selling well. Higher up the scale, however, the market tells a different story.
“As you move up the pricing scale and get to $600,000-plus, we’re seeing our open for inspection numbers halved,” he says. “And when you’re getting to the premium end of the market – which is the inner south and inner north markets and parts of the Woden Valley – anything over $1m demand is quite patchy.”
He expects this year’s sales numbers to reach around 6,500 properties, which is a halving of the 13,000 sold last year. But, with long-term annual averages sitting at closer to 8,000 or 9,000, Canberra appears to be going through a correction.
“I think we over-transacted over the last couple of years, and this is a hangover of that. But, we’ve also got the issue to do with increased supply,” he says, citing ongoing government plans to release land for further residential development.
In the meantime, however, Canberra’s rental market remains tight, with SQM Research recording a residential vacancy rate of just 0.6% at last count in August.
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