17th April 2009
With fundamental employment still strong and improved buying conditions, some investors are pulling out of their slumber and slowly returning to the ACT market.
While the market is far from fully recovered in Canberra, there's signs confidence has started to ooze back into investors.
Both quarterly and monthly house prices are up in the nation's capital, and unit rental rates remain above most others in the country. But perhaps of greater importance, the job market has remained stable, and Canberra residents are not experiencing the same fears as other parts of the country.
"What we're finding is that our market has increased a fair bit in February," says Real Estate Institute of ACT President Michael Wellsmore.
The first homebuyers are still a strong factor, but that's been an impact already for months. Rather, it's also now the second homebuyers who are also making a push, says Wellsmore. After selling their home to first homebuyers, many second homebuyers are looking for an upgrade as well.
"I think there is a little bit more confidence after it was lacking so much last year," he says. "Usually, the second homebuyers have a property to sell, and they now can feel confident that their first home can sell fairly well."
Attitudes have definitely changed from a low point last year.
"Last year, the market was dead," says Wellsmore. "Because of the negativity going around, people weren't buying. With interest rates down, they are perhaps now seeing there is more opportunity."
Herron Todd White valuer Angus Howell agrees the ACT market has improved.
"Things are looking pretty good," he says. "The activity is increasing."
Sellers are also marking their prices fairly now, he says, and the more reasonable listings are moving well. Any fears of a collapse in prices in Canberra have thus far been unfounded.
"The doom and gloom predictions from mid to late last year, I don't they've come through," says Howell. "We're pretty safe here in Canberra."
Part of that has to do with the city's employment levels and above average incomes. It's a city full of stable government jobs that pay well.
"The government jobs, they are a bit more secure than some of the other jobs around the country, I suppose," says Howell.
These jobs and others also pay well, allowing for higher rents and more luxury houses.
"One of the better things about Canberra is the fact that we have the highest household incomes in the country," says Wellsmore.
Properties are still taking a bit longer time to sell on the market, he says, but the prices aren't showing any major drops. And after a bit longer look by potential buyers, these homes are still selling.
"Across the board here, when the financial crisis hit, people were taking longer to make a decision about anything," says Wellsmore. "But people are getting used to the changed market environment. They are thinking they still have a job, market conditions are favourable, so 'Let's do something.'"
Howell says the majority of activity is currently in Gungahlin, where there's many new homes being built.
"The inner areas are still holding well in price, but there's jut not as much activity," he says. "The value is still there, though."
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