Canberra real estate strengthens, buoyed by high sales in the lower price bracket

Canberra’s property market has made its greatest show of strength in recent months, with real estate values surging by 0.7% in the three months to October.

The latest CoreLogic Hedonic Home Value Index, published today (Wednesday), shows the nation’s capital recorded marginal growth of 0.1% last month, contributing towards the quarterly growth of 0.7%.

Windrose Property Principal and Licensed Agent Sam McGregor said the steady rate of growth was reflecting a warming of the market in the ACT.

“0.7% growth on a quarterly basis equates to around 2.5% for the year, which is pretty significant,” Sam said.

“The CoreLogic figures are starting to reflect consistent quarterly results, so if we are facing a 2.5% growth for the year that’s a strongly performing market.”

Since bottoming out in March, ACT property prices have risen by 1.3% across all dwellings.

The median dwelling value in Canberra is now $842,722.

Sam said the customary peak spring selling season was tracking well with a high number of properties listed in September and October.

The CoreLogic report found listings in the ACT had jumped 21.3% since the start of spring.

“We are seeing a lot of money transacting at the lower end of the market,” he said. “Those homes, particularly under $700,000 or $750,000, are performing extremely well and without a doubt we are seeing an uptick in values at that end of the market.

“The lower end of the market is performing like nothing I’ve seen before. It would not be remiss of me to say that properties in this bracket have seen a 10% to 15% uptick in the last three or four months.

“That has come off the boil in the past two to three weeks, but it has largely been driven by the fact that rental prices are still very high. Buyers are thinking it makes a lot more sense to buy at the lower end of the market than it does to rent.”

Sam expected the market to further strengthen in the lead-up to the festive season.

“I’m expecting to see a lot of movement between now and Christmas because there are a lot of properties on the market and there will be vendors getting itchy feet wanting to lock down a sale before Christmas, as well as buyers wanting to purchase before the end of the year.

“If the Reserve Bank of Australia does what the banks expect them to do, and that’s increase interest rates again, there’s probably going to be some down pressure on prices.”

CoreLogic Research Director Tim Lawless said although housing values were consistently rising across most capital cities, there has been a clear slowdown in the quarterly pace of growth trend.

Nationally, the three months to June saw capital city home values rise by 3.7%. Since then, the growth trend has drifted back to 2.6% over the three months to October.

“The slower rate of appreciation can probably be attributed to a combination of higher advertised stock levels alongside stretched affordability,” Tim said.

“With an acceleration in the flow of new listings coming onto the market, it’s unlikely buyer demand will be able to keep pace as we move through spring amid high interest rates and low sentiment.”

The RBA Board is due to meet on November 7 to make an official cash rate announcement.