Winter buyers out in force seeking quality entry-level houses across Canberra

Buyer activity has bucked the trend of a winter hibernation this year, with strong attendance rates at open homes in July, particularly for homes in the $750,000 to $1 million price bracket.

The heightened interest comes as the latest Cotality Home Value Index, released on Friday, shows Canberra property values received another boost in July, with prices surging by 0.5% – the city’s sixth consecutive month of growth this year.

While house prices grew by 0.6% for the month, units and apartments saw a more modest increase of 0.2%, culminating in a median property value of $861,281 for Canberra.

“Traditionally, July and August are the slowest months in real estate, yet half a percent of growth is significant when you expand that out over a year,” said Windrose Property Principal and Sales Agent Sam McGregor.

“What we are seeing is a strongly performing market and a lot of competition for high-quality properties and good entry-level homes.”

Sam said he had been pleasantly surprised by the dynamic market and high buyer attendance rates at open homes this winter, which he believes is indicative of the start to a stronger real estate cycle.

At 102 Chuculba Crescent, Giralang, Windrose Property welcomed around 170 people to view the property in its first two weekends on market ahead of its August 9 auction, while 130 buyers have inspected 26 Pennefather Street, Higgins in the past three weeks.

“This is indicative of the property cycle coming full circle,” Sam said.

“Where people have made money selling units because of the strength in the unit market 6-8 months ago, those people are now looking to upsize into freestanding homes, which is putting more competition into that bracket.

“It’s like the perfect storm where people are getting really great prices for apartments and townhouses, and our borrowing capacities are increasing because we’ve had a couple of interest rate cuts, so freestanding homes between $750,000 and $1 million are looking like extremely good value.”

Sam expected the run towards spring would see greater competition amongst buyers, coupled with a probable interest rate cut in August after the release of this week’s inflation and employment data.

“If that rate cut translates, as we move into spring the market will get even more competitive as good homes come to market. It’s probably going to be a sellers’ market come spring.

“When you look at what should have been one of the slowest months of the year, and it saw 0.5% growth, it’s indicative that it’s going to be a competitive spring for buyers.”

Cotality’s Research Director Tim Lawless said the outlook for housing values across Australia remained positive, with values expected to continue to make modest gains during the rest of the year. This would be supported by lower interest rates, improved sentiment and short housing supply.

“Lower interest rates go well beyond providing a lift to home loan serviceability and borrowing capacity,” Tim said.

“We expect to see a further rise in consumer sentiment as cost-of-living pressures are contained and the cash rate moves lower. Historically, consumer sentiment and housing activity have shown a close relationship.”