Canberra Property Values (January 2019)

This is an archive of our previous property value report from January, 2019. We’ve recently updated our statistics and added greater depth to our report – jump onto our Canberra Property Value Report (July 2019) article now to get the latest figures!

Canberra’s Property Values Are Rising

Non-existent peak hour traffic, beautiful architecture rivalling major cities across the globe and a salary to living expense ratio that’s the envy of Australia. As our country’s sunniest capital, there’s a reason us Canberrans so passionately defend this little pocket of paradise we call home.

However, the way people see Canberra has come a long way over the years.

Only a decade ago was our beautiful territory the joke of the nation. For too long the ACT was unable to shake that image as being a boring country town lacking in culture and atmosphere. We’d landed ourselves with the title as the most boring capital.

But thanks to some clever marketing from the CBR Group and government investment into music and the arts, we’ve been able to shift public perception. People are starting to discover the amazing quality of life that Canberra has to offer and are piling into the territory in droves. This has increased demand for housing, which has led to a significant increase in property value across the ACT.

Property Values for houses inside of Canberra have risen by an average of $40,000 in 2018

Based on data from Domain Group (owner of Allhomes, the most accurate source of property value data in Canberra) and the REA Group the median house price has increased from $640,000 to $680,000 since 2017. This represents an average increase of 6.1% or about $40,000 over the 12-month period.

Property Values for apartments in the ACT have dropped by an average of $7,550 in 2018

Using the sales history information provided by allhomes, we can see that the median apartment property value has dropped from $440,000 to $432,450 over the last year. Based on these numbers, it shows an average decrease in value of 1.7% or $7,550.

What is influencing Property Values in Canberra?

Property values are mainly determined by supply and demand. If there are more people looking to buy property than to sell, the price increases. Alternatively, if too many houses are on the market and there aren’t as many buyers, values decrease. Looking at certain statistics such as population growth, wages and data that shows liveability for a location helps us identify which way the trend is heading.

For instance, data collected during the 2016 census in Canberra shows our population has grown by a massive 11.2% over the 5 year period since 2011. Our crime rate is amongst the lowest in Australia sitting at 1 in 100,000 affected by criminal activity (just under half the national average of 1.9) and Canberra’s median income sits 35% above the national average at $1,016.

Which statistics affect Property Values?

Number of Properties Sold

This is arguably the most important piece of data, giving us a glimpse into which direction the market is trending and allowing us to see demand in the property market. We can identify not only seasonal trends, but by knowing how many properties are selling we can also determine buyer confidence and the level of demand. If homes are selling then prices increase but if not, you’ll begin to see a drop.

Number of New Listings

Used in conjunction with the number of homes sold, this piece of data shows us the current supply for the property market. When we know how many new properties are being listed for sale, we can understand the level of supply.

Average Time Homes Spent on Market

When properties sit on the market for longer periods of time than normal, it’s an indication that demand for real estate has begun to decline. This could be for many reasons ranging from inability for potential homeowners to secure financing through to investors being put off the market due to the perception of future price drops. Alternatively, when listings stay on the market for shorter periods of time, it’s a good indication that demand is high and market sentiment is strong.

Properties Turned-in at Auction

Another important statistic to follow, auction clearance rate is a great way to gauge market sentiment. When dwellings fail to sell at auction time (often after an extensive marketing campaign) it indicates a mismatch between seller’s and buyer’s expectations. Often this means that buyer’s perceive property values to be lower than what a homeowner has envisioned.

Population Growth

When looking at long term trends, population growth is one of those data points that should be followed closely. As population grows, so too does demand. This is one of the reasons Canberra’s property values have steadily increased whilst other cities have seen loss in value. Many investors throughout the country have seen steady returns on their ACT rental properties fuelled by Canberra’s healthy growth in residents.

Upcoming issues that could impact Property Prices

As you may have read in the news recently, the Royal Commission into Misconduct in the Finance Industry is likely to lead to tighter regulation of mortgages. This may make it harder for many potential property purchasers to obtain finance to purchase a property and therefor reduce overall demand in the national housing market.

Compounding with this, the Opal Tower crisis in Sydney has brought extensive media coverage to poor building standards of many large developments. With foreign investment driving large numbers of off-the-plan unit sales, this sort of media coverage will likely have a big impact on demand for these types of properties. As we’ve already seen in Canberra with issues such as the Wayfarer Development in Belconnen, this perceived lack of quality in pursuit of profit is likely to turn many investors off apartment sales.

Conclusion

Summing up all that we’ve learnt, it’s clear that freestanding suburban homes in Canberra are continuing to grow in value. With an average rise of 6.1% in 2018, or $40,000 extra in property value, this trend looks as though it will continue well into 2019. Apartment values, whilst slightly increasing in the 2^nd half of 2018, appear to be trending slightly down at 1.7% and with media coverage on developments such as the Wayfarer Building in Belconnen as well as the Opal Tower building in Sydney attracting negative publicity, this may continue throughout the year.

If you’re considering selling your property, why not speak to one of our senior agents? Our agency principal, Peter Tolhurst, has over 25 years experience and would be happy to perform a free, no obligation market appraisal at a time that suits you.

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