Canberra real estate thrives in the best month of price growth this year

Canberra real estate experienced its greatest monthly gain of the year in June with property prices rising by almost 1% on the back of falling interest rates.

The latest Cotality Home Value Index shows Canberra continued on its upward trajectory with prices increasing by 0.9% across all property types last month. House values rocketed by 1.1%, while units saw a 0.3% increase.

Since the start of the year, Canberra has seen modest growth of between 0.2% and 0.4% each month, except in January when values dipped by 0.5%.

The report puts Canberra among the strongest markets in the country with the second highest level of growth behind Darwin, which recorded a 1.5% boost to property prices.

And the ACT now has the third highest median dwelling price, at $855,197, behind Sydney and Brisbane.

“What this is, without a doubt, is the flow-on effect of interest rate cuts – it’s outstanding to see the strength in the Canberra market,” said Windrose Property Principal and Sales Agent Sam McGregor.

“This data really does line up with what we’re seeing on the ground. In the last 6-8 weeks there’s been an influx of houses selling. There’s not dramatic price pressure on properties, but obviously it’s significant enough if we’re almost seeing 1% growth in a month.”

Sam said all stock – both new-to-market listings and homes that had been lingering – were drawing greater interest from buyers and a more competitive spirit was enabling good sale prices.

“The buyer inquiry is probably the metric, which has changed significantly,” he said. “A lot more buyers are engaged with the market.

“For new properties, we are seeing more inquiry, but more importantly, for properties that have been around a while, the inquiry is clearly picking up. It’s been an interesting phenomenon in the last 2-4 weeks where we are seeing inquiries coming in thick and fast for some of the properties that are at the higher end.”

Cotality Research Director Tim Lawless said the drop in interest rates had been a clear catalyst behind the renewed momentum.

“The first rate cut in February was a clear turning point for housing value trends. An additional cut in May, and growing certainty of more cuts later in the year have further fuelled positive housing sentiment, pushing values higher,” Tim said.

The Cotality report shows that nationally, advertised stock levels are low, tracking 5.8% below the same time a year ago.

“Given the upside risk that housing values will accelerate further from here as interest rates reduce, the reality is we will likely see home values rise by more than this over the coming 12 months,” he said.

“However, despite the prospect for lower interest rates, affordability constraints will likely temper the extent of a housing market upswing.”

Sam urged prospective buyers to ready themselves if they want to have the best chance of securing their next property.

“There are a lot of buyers around at the moment so my advice is to work with the agent who is selling the property. If they tell you there are multiple parties interested, there very likely is. Right now, there are definitely multiple buyers out there for every property, which is reflected in that 1% growth in the past month.

“It’s my view that buyers need to get their ducks in a row and be ready to buy because there will soon be an influx of listings. There will be a cohort of people who will list in the later part of winter, wanting to sell by spring, and then there will be a lot of people holding off for spring too.

“Over the next 10 weeks, buyers will have a lot more to pick from, but it’s also going to be a more competitive market.

“The speculation is that interest rates will be cut another couple of times before the end of the year. If that translates, I think that will definitely spur more strength in the Canberra market as they ease…I feel like it’s going to be a strong run to the end of the year.”