Prices plateau as market activity remains steady in Canberra

Activity in Canberra’s real estate market is steady ahead of the spring selling season, despite latest data showing property values plateaued last month.

Prices remained stable in July with zero growth in property values, according to the CoreLogic Hedonic Home Value Index, released on Thursday, but market activity is continuing to gain momentum.

Across the region, house values sustained a marginal increase of 0.1%, while unit and apartment prices dipped 0.6%. Annually, property prices have risen by 1.7% to net a median price of $870,910.

Windrose Property Principal and Licensed Agent Sam McGregor said while real estate values in Canberra had stagnated in July after solid growth of 0.3% in June, there was still plenty of positive market activity.

“What we are seeing in Canberra and surrounds is a very balanced market,” Sam said.

“Off the back of June’s results, we have seen continued steadiness and the hold on interest rates has helped create a climate where people are feeling that it’s a good time to buy and a good time to sell.”

Sam said vendors had tapered their price expectations and buyers were meeting those prices, even it took longer to secure the right deal.

“I’m seeing a lot of properties selling. It doesn’t surprise me that July was flat. We’ve just come off some data in June which showed that things were on the uptick. Even though it wasn’t dramatic, it was noticeable, and that has continued. We are doing a lot of deals and the market is steady.”

Sam said buyers seeking homes in recent months were realising now was a good time to transact property.

“Everyone is thinking, the market is not going to come back any more nor is the bottom going to fall out of it, so it’s probably time to buy,” he said.

“Those houses that were on the market for three, four or five months are now selling – and selling at the asking price that they have been sitting on for five months.

“I’m meeting some buyers that have been in the market for the last six or nine months. They’re telling me they now understand the market and happy to commit, whereas six months ago they wanted to pay $150,000 less than the asking price. That’s for no reason other than they were worried the bottom would fall out of the market.”

PropTrack insights show Canberra had the highest year-on-year increase in total listings in June, up 29.2%, with Sam saying this boost had buoyed confidence in the market.

PropTrack says the winter market has been unseasonably strong in many capital cities, and the outlook for the fast-approaching spring selling season was positive. Recent tax cuts and a stable cash rate could further increase demand moving into spring.

Sam said Canberra’s functional market was setting the scene for a busy spring selling season, with expectations more properties will come to market and buyers were more confident to purchase.

“I think we will see a lot more listings come to market in spring, we always do – and what we have coming to market is reflective of that. The interesting thing is that the buyers out there are aware of that too, which is why they’re starting to look now,” he said.

CoreLogic Research Director Tim Lawless said available supply was a key factor that explained the diversity of housing growth trends across the country.

“Most cities now have a median house value that is at least 1.5 times higher than the median unit value,” Tim said.

“With stretched housing affordability, lower borrowing capacity and a lift in both investor and first home buyer activity, it’s not surprising to see the unit sector outperforming for a change.”