Last-minute rush by buyers to secure a new home before Christmas

The traditional peak spring selling season has translated to an early summer rush in Canberra as circumspect buyers make last-minute offers on new homes before Christmas.

Windrose Property Principal Sam McGregor said the market appeared to be bucking the usual end-of-year wind-down, with house hunters having perused the spring stock and now ready to do deals.

“We are without a doubt seeing a rush of buyers trying to lock something in before Christmas, and I expect next month’s data to show more upward pressure on prices,” Sam said.

“There’s no doubt in my mind that some of the buyer sentiment is being driven by the Reserve Bank of Australia talk about cutting interest rates in February. If that happens, it will only be a minor slip, but the buyer sentiment is that it’s time to buy now before the interest rate cuts when there will likely be more upward pressure on price.

“People are saying: ‘Let’s get it done before Christmas’ and that’s both the buyer and vendor sentiment. Vendors know there will be new stock on the market in the new year and they don’t want to compete with new stock looking old.”

According to SQM Research, the number of listings in Canberra grew from 4666 in October to 5051 in November. The number of listings is significantly higher than the same time last year when 4096 properties were on the market.

The latest CoreLogic Hedonic Home Value Index, released on December 1, shows property prices in Canberra rose by 0.1% in November – a positive result after a series of small declines in recent months.

The median dwelling price in Canberra is now $851,731 – the third highest of all capital cities, behind Brisbane at $886,540 and Sydney at $1.196 million.

“There’s been a minor shift in sentiment in favour of vendors,” Sam said. “It’s definitely not dramatic and I wouldn’t be writing it on the Christmas cards, but you can feel it. Buyers have had their pick and they are now prepared to do deals and pay a reasonable price.

“I can see we’re not going to stop before Christmas. It’s exciting. It’s nice to see the market just being functional. Growth of 0.1% shows there’s a bit of momentum.”

CoreLogic Research Director Tim Lawless said financial markets were pricing in a rate cut mid-next year, while economists from the Big 4 banks expect rates to drop between February and May.

“A lower cash rate will be a positive factor for housing markets,” Tim said. “Lower mortgage rates will provide a lift to borrowing capacity, and, along with lower inflation, should see an improvement in serviceability assessments and see a further rise in consumer sentiment.

“A couple of rate cuts might be enough to shore up a declining trend in home values, but it is hard to see any material upward pressure returning until interest rates reduce more substantially and affordability barriers are less formidable.”

Tim said the shortage of newly built homes was likely to support growth in housing values into the new year, despite expectations population growth will ease further in 2025.