Canberra Property Market Update September 2020
Spring in Canberra is welcomed by all as the cold days gradually reduce and the temperature increases to assist the flowers to bloom. The warmer temperatures also see an increase in outdoor activity and rise in demand for properties as some locals prepare for upcoming transfers interstate and university students look for accommodation opportunities for the new year. These traditions influence the Canberra market on an annual basis and as such, spring is known as the peak time to buy and sell. Given the impact of COVID-19 on the ability for people to inspect and view property, the effect on the market has been minimal.
Transactions appear to be at pre-COVID-19 levels and agents report that stock has been improving as restrictions are lifted. Sale levels are good and stock is being purchased as fast as it reaches the market. At present, market sentiment indicates listings will increase and the market will continue to improve. Recent sales results have been stable with some records being achieved in a few suburbs. According to Domain data, the ACT had a 75.5 per cent clearance rate and a median auction price for houses of $829,167 for the month of July, being a record high. Refer to the graph below which indicates the gradual increase in house prices over the past three months.
Demand for dwellings has resulted in a recordhigh of $819,090 median house price. According to the Domain House Price Report, banks had the cheapest median house price of $520,000, up 5.1 per cent year-on-year (source: Allhomes, 21 August 2020).
The strongest sectors are single dwellings and townhouses. Units are selling, but as an increased number come onto the market, some areas such as Belconnen are reaching saturation levels resulting in reduced sale prices for older stock. The level of construction has reached a point of saturation for the short term.
Reports are that the market is currently dominated by local purchasers who are exceeding current stock levels even without overseas investors, who have left the market due to COVID-19 travel restrictions.
As prices increase, there are still some suburbs in Canberra where homes are readily affordable and available as noted in a recent Allhomes report covering the ten affordable suburbs in Canberra.
The table below shows the most affordable housing in the ACT at present; Tuggeranong is the dominant region with six of the most affordable suburbs.
Belconnen has three affordable suburbs: Holt; Dunlop; and Macgregor. Gungahlin is only represented by Ngunnawal, reflecting the growth in demand for house and land packages in the newer estates located in the outer northern suburbs of Canberra.
Given low interest rates, continuing JobKeeper payments and the stable market, indications are for a strong platform for potential sellers approaching spring.