Canberra Property Values (July 2019)

Canberra’s property values have grown significantly over the last decade.

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.

Driven by this large demand for housing, homeowners smart enough to see the benefits our beloved capital has to offer have enjoyed healthy returns on their investment. From a Median House Price of $456,000 in 2009 to $685,000 in 2019, ACT property values have seen significant growth over the last 10 years.

Has Canberra’s property market hit a peak?

Looking at the most recent quarterly figures from the Australian Bureau of Statistics and we can see that the ACT market is holding its own over the year, with 0% growth. Growth from the beginning of 2018 has been negated, with a negative growth figure of -0.9% in the December-March Quarter. Small dips in value are a result.

Quarterly Growth Rates (Australian Bureau of Statistics)

As we can see, property market supply has increased and the number of days properties are spending on the market prior to selling has seen an increase, especially for those selling units and townhouses in Canberra.

Whilst the last quarter showed negative growth, it’s still too early to say we’ve entered a property market downturn, as Federal Elections have always had a big impact on values in the capital. Housing prices usually tend to stabilize in the months immediately following an election. As our Government gets back to business as usual and Parliament begins afresh, we should start to see a return to normality for ACT’s property values.

In saying this, although we have weathered the Real Estate market storm better than many other parts of the country, it is likely our property prices have hit their peak for this cycle.

Median Sale Price in Canberra (Houses, Townhouses & Units Combined)

Median Property Values in Canberra have dropped by $15,542 over the last 12 months

We’ve broken down the ACT median property values of houses, townhouses and units from Allhomes, one of the most reliable sources of property value data in Canberra. This is based on data provided to Allhomes by the ACT Government.

Based on the most recently available stable statistics, median property price for houses, townhomes and units combined has decreased from $631,354 (Monthly Average from June 2017 to May 2018) down to $615,812 (June 2018 to May 2019).

This represents an overall average reduction in value of 2.46% in the last 12 months.

Statistics compiled by Allhomes.com.au based on ACT Government data.

Median House Sale Price in Canberra

Median House Value has dropped from $675,521 down to $656,667 based on monthly averages over the last 12 months

House prices have seen a sharp decline in value over the 3rd quarter, with a 2.79% drop in value when comparing median house values from June 2018 – May 2019 against June 2017 – May 2018. This represents an average drop of $18,854.

Statistics compiled by Allhomes.com.au based on ACT Government data.

Median Townhouse Sale Price in Canberra

Median Townhouse Value has declined from $475,854 to $466,244 in the last 12 months

Townhouse prices have also seen a reduction over the last 12 months, seeing an average decrease of $9,610 (approximately 2.02%) when comparing month to month.

Statistics compiled by Allhomes.com.au based on ACT Government data.

Median Unit Sale Price in Canberra

Median Unit Value has reduced from $366,583 to $339,333 when comparing the last 12 months against the previous period

Units have seen a significant drop in value when comparing 12-monthly averages, unit prices have also seen a decline in values. Median unit value sat at $366,583 – a full $27,250 higher than the latest figure of $339,333 from June 2018 to May 2019. This represents a decline of 7.43% when looking at monthly averages over a 12-month period, compared to the same time a year prior.

Statistics compiled by Allhomes.com.au based on ACT Government data.

How much is your home worth?

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What upcoming events are likely to influence Canberra’s housing prices?

Market changes which may negatively impact home values.

As the Liberals secure another term in power, the result of the election was unexpected by many who factored key Labour policies into their predictions. Whilst it’s difficult to predict how Canberra’s property market will trend over the next 12 months, these are a few of the issues which may impact negatively:

 

  • Obstacles for foreign investors wishing to purchase a property in Australia. As our state governments add extra taxes for foreign investors, purchasing an investment property in Australia has become less attractive to this demographic. As numbers of international buyers in our domestic real estate markets decline (less buyers = less demand), we may see a small decrease in housing prices too.

It’s not all doom and gloom though, with these events likely to be good for our housing market.

In contrast, we believe the following changes will positively effect ACT property values:

 

  • Return of the current Liberal government which means there will be no changes to negative gearing. This has reassured those seeking to purchase homes as an investment, leading to increased confidence in the investment property market.
  • The first home buyers deposit scheme, a new government initiative which has the potential to allow an unprecedented number of first-time buyers to purchase a property.

New land availability is likely to ease pressure for homebuyers.

Another important factor which was driving an increase to Canberra’s property values was a shortage of land supply for prospective homeowners seeking to buy off the plan or build from scratch using their own design. This put pressure on the established home market, with many of those wishing to start from an empty plot being forced to purchase “Mr Fluffy” blocks.

These buyers were also competing with developers looking for a great deal on rezoned Z2 blocks, which can be knocked down in pursuit of higher density living near commercial and shopping districts.

Now that construction of several new suburbs is well underway, a greater supply of land is being released to the public. Areas such as Taylor, Throsby, Strathnairn and Denman Prospect within the ACT’s borders, as well as South Jerrabomberra and Googong just outside the capital in New South Wales are becoming increasingly attractive to those looking for a brand-new home.

With this new supply of land, much of that pressure has been lifted from the established home market. Prices for these homes may have seen slight over-inflation, but as the data shows, property values are levelling off and it seems to be back to business as usual.

Which statistics affect Property Values?

 

When analysing the local property market, it’s important to look at figures indicating supply and demand. Levels of supply usually cause the greatest change in the market, with Government policy and market forces combining to influence this statistic.

The crucial figures we monitor from Allhomes are the number of homes on the market, number of property sales and the amount of time a property sits on the market prior to selling.

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 Monthly Exchanges (Combined)

Statistics compiled by Allhomes.com.au based on ACT Government data.

Number of Monthly Exchanges (Houses)

Number of Properties Sold (Houses)Jan…Mar…Ma…Jul ‘…Sep…Nov…Jan…Mar…Ma…Jul ‘…Sep…Nov…Jan…Mar…Ma…Jul ‘…Sep…Nov…Jan…Mar…Ma…0100200300400500600Number of Monthly Exchanges (Houses)Number of Properties

MonthNumber of Monthly Exchanges (Houses)
Jan ’16154
Feb ’16395
Mar ’16407
Apr ’16397
May ’16381
Jun ’16358
Jul ’16305
Aug ’16354
Sep ’16402
Oct ’16418
Nov ’16447
Dec ’16381
Jan ’17138
Feb ’17458
Mar ’17447
Apr ’17353
May ’17437
Jun ’17346
Jul ’17282
Aug ’17352
Sep ’17405
Oct ’17397
Nov ’17548
Dec ’17390
Jan ’18140
Feb ’18350
Mar ’18437
Apr ’18315
May ’18399
Jun ’18309
Jul ’18258
Aug ’18259
Sep ’18310
Oct ’18323
Nov ’18405
Dec ’18283
Jan ’19178
Feb ’19338
Mar ’19391
Apr ’19314
May ’19400

 

Statistics compiled by Allhomes.com.au based on ACT Government data.

Number of Monthly Exchanges (Townhouses)

Statistics compiled by Allhomes.com.au based on ACT Government data.

Number of Monthly Exchanges (Units)

Statistics compiled by Allhomes.com.au based on ACT Government data.

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.

Number of New vs. Sold Listings (Combined)

Statistics compiled by Allhomes.com.au based on agency reported data.

Number of New vs. Sold Listings (Houses)

Statistics compiled by Allhomes.com.au based on agency reported data.

Number of New vs. Sold Listings (Townhouses)

Statistics compiled by Allhomes.com.au based on agency reported data.

Number of New vs. Sold Listings (Units)

Statistics compiled by Allhomes.com.au based on agency reported data.

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.

Average Number of Days on Market (Combined)

Statistics compiled by Allhomes.com.au based on agency reported data.

Average Number of Days on Market (Houses)

Statistics compiled by Allhomes.com.au based on agency reported data.

Average Number of Days on Market (Townhouses)

Statistics compiled by Allhomes.com.au based on agency reported data.

Average Number of Days on Market (Units)

Statistics compiled by Allhomes.com.au based on agency reported data.

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.

How much is your home worth?

Use our “Big Data” tool to get an estimate of your home’s current value in less than 90 seconds, based on statistics provided by one of Australia’s leading data providers.

Conclusion

Whilst Canberra’s property values have declined following a peak in late-2018, long term growth has been substantial. Prices are likely to remain stable in the short term and consistent population growth as more people discover our picturesque capital will drive healthy gains in equity in years to come. Small drops in price have balanced out the highs and even though much of the growth from 2018 has been neutralized, it is unlikely we will see values drop much (if any) further.

On the flipside, as we see home values stabilizing in conjunction with drops in stamp duty and other taxes, excitement is stirring among buyers. If you’ve been hunting for homes yourself, you’ve probably noticed a rise in prospective purchasers hitting the weekend open homes. Combined with a forward-thinking government initiative set to help thousands of first-time homeowners realize the great Australian dream, there’s plenty of reasons to share in the excitement.

So, there you have it! If you’ve been carefully planning your next move – waiting for that perfect time to pounce – there should be absolutely no doubt that 2019 is shaping up to be a sensational year to sell property in Canberra.

In creating this statistics-based article, we invested significant time in both research and planning to ensure we provided information that is as factual as possible. We take great care in providing genuine and trustworthy advice to ACT homeowners; however, this is our own interpretation of the data and should not be used in substitute of your own independent financial advice.

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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