The surge in listings across Canberra has driven a marginal decline in property values, prompting more buyers to strike deals this spring.
The CoreLogic Hedonic Home Value Index, released on Tuesday, shows property prices in Canberra dipped 0.3% last month on the back of a 0.4% drop in August, zero growth in July and a 0.3% increase in June.
Canberra remains the third most expensive market in Australia – behind Sydney and Brisbane – with a median price of $844,882.
Windrose Property Principal and Licensed Agent Sam McGregor said the marginal price decline was not unexpected as predictions of a boost in listing numbers translated in September.
“I have never seen a busier spring,” Sam said.
“What I was seeing in August was a lot of people sitting on their hands ready to buy but waiting to see what was about to come to market in spring. A lot of those people are moving on deals now as more property comes to market.”
On a national level, the CoreLogic index found the flow of new listings onto the market tracked 3.2% higher than a year ago.
Data from SQM Research shows more properties were listed for sale in Canberra this September than the same time last year, with 4305 properties on the market last month compared to 3735 last year.
Sam said the small dip in price growth was a by-product of the increased supply.
“The type of market we’re in at the moment, buyers are price sensitive, which is understandable because money is still more expensive to borrow than what it has been,” he said.
“What I’m seeing and what I’m expecting to continue to see into spring is that when property in the $650,000 to $900,000 bracket starts selling, then that money flows into the $1 million-plus bracket then the ball really starts rolling and property starts moving. That will mean continued upward pressure on prices as more money comes into the market.”
CoreLogic data shows the ACT market it peaked in May 2022, but prices are still 30.8% higher than the onset of COVID in March 2020.
“We’re on the way up but it’s not going to be a steep, fast increase,” Sam said. “There’s still a supply side pressure that we’re hearing about – as in, there’s not enough new homes being built in Canberra so quality established homes are still very competitive.
“The spring supply influx appears to be keeping a lid on price growth but come summer and early next year there’s likely to be a squeeze on supply again and upwards price pressure – even more so if it coincides with what the RBA is talking about with an interest rate cut by the end of the year or early next year.
“Right now, it’s flat and that doesn’t surprise me, but on the horizon that will change. It’s a great time to buy a house because there’s a lot of choice and there’s not huge upward pressure, but give it three months and that could change.”
CoreLogic Research Director Tim Lawless said there was a good chance listing numbers would rise further through spring and early summer, and provide buyers with additional leverage at the negotiation table.
“The rise in real estate inventory is a seasonal trend, with spring and early summer one of the busiest periods of the year for selling,” Tim said. “However, the flow of freshly advertised housing stock hasn’t been this high at this time of the year since 2021.”
“If the first month of spring is anything to go by, purchasing activity isn’t keeping pace with the flow of new listings.
“Markets where stock levels have lifted the most are unsurprisingly the weakest from a values perspective. A further rise in advertised supply is good news for buyers, but for vendors, it means more competition and the potential for a softening in selling conditions.”