Strong hopes of a market recovery for Canberra in 2024

Canberra’s property market is forecast to make a strong recovery in 2024, following Sydney’s spectacular lead and the economy’s positive progress on inflation.

The CoreLogic Hedonic Home Value Index, released on Thursday, shows dwelling prices across Canberra slipped marginally by 0.2% in January, resulting in growth of 1.2% over the past year.

The median price across all dwelling types in Canberra is now $842,971 – the second highest of all capital cities, behind Sydney at $1.122 million.

Windrose Property Principal and Licensed Agent Sam McGregor said the dip was not unexpected for January or December, which were traditionally quieter times as the market ramped up after the festive and new year break.

But he said growing buyer confidence, a greater willingness amongst vendors to test the market and a bumper last week of December for Windrose had heightened hopes for the Canberra market this year.

“I expect a bit of growth in the first few months of this year because the competition is returning to the market now,” Sam said. “Vendors are more positive and buyers are more confident that they’re not overspending at the current prices.

“Confidence, without a doubt, is coming back to the market.”

Since the onset of COVID in March 2020, property prices have surged by 30.4% in the ACT. From the peak in May 2022, housing values have gradually dipped by 6.7%.

Values have steadily increased in recent months, including 0.3% in each August and September, 0.1% in October and 0.5% in November, before prices dipped 0.1% in December.

The Canberra market is traditionally buttressed by a strong jobs market in the public service, stable employment and population growth. And now, with increased buyer confidence and a potential hold on interest rate rises, the year is shaping up to be a positive one.

“Sydney is flying high at the moment and the murmur is that Canberra is not far behind,” Sam said.

“Canberra’s market generally tracks six months behind Sydney, so reading the tea leaves and if we start looking at that timeline, Canberra is likely on an upward trajectory.

“It’s almost like the stars are aligning for us…Market sentiment is strong because prices are steady, there is more confidence due to more sales clearing, and the financial environment is stabilising a little.”

This week it was announced that inflation had moderated slightly more than expected, with consumer price index in December at 4.1%, down from 5.4% in September and its 7.8% peak a year ago.

It had been expected that inflation for December would be 4.5%, so the latest announcement signals more positive progress than anticipated, and relief that an interest rate hike in February is less likely.

Nationally, Australia’s housing upswing continued through the first month of 2024 with the CoreLogic index showing a rise of 0.4% in January. It is the 12th consecutive month of value rises nationally.

CoreLogic Research Director Tim Lawless said despite worsening housing affordability on the national stage, the volume of home sales has held slightly above average over the past three months.

“Despite ongoing cost of living pressures, high interest rates, low consumer sentiment and affordability constraints, homes are still selling,” Tim said.

“Housing demand has been buoyed by high migration, but also tight rental markets that have probably incentivised renters to transition towards home ownership if they can afford to do so.”