Canberra property prices gain traction in June in surprise result

Canberra real estate values made up some ground in June after prices took a slight dive in May.

CoreLogic’s latest Hedonic Home Value Index, released today, shows property prices in Canberra improved by 0.3% in June, with annual growth tracking at 16.3%.

It comes after the market slipped a gear in May, recording a dip of 0.1%, and expectations that property prices would slide even further since the peak in August last year.

The median dwelling price is now $937,568, while the median house price is still sitting in seven-figure territory at $1,065,317.

Nationally, the index recorded its second consecutive decline in values with a 0.6% drop, fuelled by continued falls in Sydney and Melbourne of 1.6% and 1.1% respectively.

And while advertised stock across the country is still lower than 2021 levels, particularly in Sydney and Melbourne where housing conditions are weakest, inventory is now 20.7% higher in Canberra.

Canberra’s rents for houses have surged by 10.4% in the past year, while rents for units made less progress with an increase of 7.0%. Gross rental yields are at 3.9%.

McGrath Canberra Managing Director Craig Chapman said the market was swinging back in favour of buyers and price was a significant and sensitive factor in the current market.

“The market hasn’t really moved but there is starting to be a level of awareness of the ‘new market’,” Craig said. “It’s not crazy and frenzied, it’s a little bit more considered.

“I like these markets because buyers get the treatment they deserve. They aren’t pushed to the side in a flurry of overzealous offers.

“More experienced agents will be having more honest and current conversations with their clients around the position of the market and that, at the moment, it’s very sensitive to price. We need to listen to the purchasers we do have and buyers are going to enjoy the newfound leverage that they have.”

Craig said tougher selling conditions had manifested in lower auction clearance rates.

“Our auction programs are producing lower clearances,” he said “We are hovering around the 60% mark and that’s not likely to improve any time soon.

“There’s a lack of purchasers in the market. At a micro level, I think it’s because sellers still have their hearts in the busier market from October to December last year.

“Clients should be looking for agents who have experienced these times before so they know how to navigate them with current and relevant strategy and enthusiasm.

“They also need to realise if I transact today, it is what it is. If I don’t have to transact today, then I won’t. And that’s our advice, if you don’t have to sell, just sit for now.”

CoreLogic Research Director Tim Lawless said the national housing market’s sharper reduction in growth had coincided with the May cash rate hike, surging inflation and low consumer sentiment.

“Housing value growth has been easing since moving through a peak in March last year, when early drivers of the slowdown included rising fixed term mortgage rates, an expiry of fiscal support, a trend towards lower consumer sentiment, affordability challenges and tighter credit conditions,” he said.

“More recently, surging inflation and a rapidly rising cash rate have added further momentum to the downwards trend. Since the initial cash rate hike on May 5, most housing markets around the country have seen a sharper reduction in the rate of growth.

“Considering inflation is likely to remain stubbornly high for some time, and interest rates are expected to rise substantially in response, it’s likely the rate of decline in housing values will continue to gather steam and become more widespread.”