Is 2019 the year to sell a property in Canberra?

While property prices are still in an upward trajectory, should owners sell now or when prices peak?

Property in Canberra hasn’t seen such a sharp rise in price for a while. Last year, as one of the best performing cities in Australia, asking prices for homes in Canberra rose by 3.6% and units by 2.2% towards the end of 2018 – however with certain big changes impacting the property market country-wide – who knows what they’ll do this year.

The Canberran market is particularly well-rounded because we’ve managed to sharply increase the number of people moving to the ACT, looking to experience the fantastic quality of life living in the “Bush Capital” has to offer. This is thanks to some savvy marketing from the CBR Group, and as we all know is greatly boosted by our strong Public Service sector.

 

But with all this fanfare, is 2019 really the best year to sell a house?

If we take our NSW coastal counterparts as an example – after several years of sharp incline, prices tapered off and started to decline. The prices of property in Sydney peaked in mid-2017 followed by months of dismal and lacklustre performance – resulting in a sharp decrease in prices.

In property markets, a sharp rise is generally followed by years of slow and steady change of marginal value. This happens as the market readjusts in line with true buyer demand and housing supply. Some say that Sydney’s biggest foe is over-development, which led to an avoidable surplus of properties (particularly units) on the market.

Many of us have become accustomed to increases in Canberra’s property values, however a number of issues have combined to create a situation where future drop in market value is possible. Problems such as the banks cutting back on approved applications (making it harder for buyer’s to obtain finance), upheaval of the Mortgage Broking industry and an oversupply of units is likely to have an impact on the ACT’s house and unit prices moving forward.

Compounding with these challenges, it is common for Canberra’s property market to slow as we move towards a federal election, especially with the possibility of a change in Government. Potential policy changes create uncertainty in the Public Service sector, which is why this happens. Labor’s proposed changes to negative gearing may also have an impact.

 

Benefits of selling your property in 2019

If you’ve been considering selling your house, there hasn’t been a better time than 2019 as conditions are creating a cash paradise for Canberra’s homeowners. These are just some of the benefits:

 

Increased Buyer Demand

Buyers are hungry for mid-sized homes and units in the capital and are snatching them up quite readily in private treaty, auction and tender, causing each of these to be quite profitable for sellers and popular with buyers. This demand means that even at an auction (popular with seasoned buyers and investors) you’re able to get quite a hefty sum if you’re smart about it. Private treaty is another favourite with first time buyers and families because they’re able to make a “connection” with the home and won’t face the kind of stiff, nerve wracking competition of an auction. Bottom line: this higher demand easily inflates prices regardless of how you choose to accept bids/offers.

 

Higher Property Prices

The numbers for 2018 are in, and Canberra has claimed its spot as the nation’s property champion of the year. Prices now average at $672,332 for homes and $440,813 for units. This would be Canberra’s sixth year of property price increase – prices haven’t been this high in recent history.

 

Incomplete Developments

Many of the major residential developments in the ACT are only set for completion in 2020 and 2021. That means that homeowners who sell before then won’t have to contend with new supply on the market. These developments will collectively add more than 1,000 units (and approximately 70 townhouses) to Canberra’s property market – most of which could be snatched up by first time buyers and investors (two core buyers in Canberra).

 

More Buyers

There isn’t just increased buyer demand, but far more buyers. Many natives who left for other states and even countries are slowly moving back to the capital possibly due to higher prices and rates elsewhere – making Canberra a very attractive option. But besides these natives, Canberra is becoming quite popular with those bringing families to Australia as well as interstate expats.

 

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Drawbacks of Selling Houses & Units in 2019

Although there are numerous benefits to selling your house in Canberra this year, it’s important to consider these drawbacks if you want to make a decision that’s right for you.

 

Increased prices could make profiting hard

If you’re selling a home in Canberra you’ve only purchased recently, making a profit may be difficult. The biggest benefit to selling is also the biggest drawback, higher prices. That’s where it really pays to have an experienced real estate agent walk you through the ACT housing market boom. You don’t want to over-exert your finances when submitting an offer for your new home.

If you’re moving to the coast or further inland where property prices are lower, this may not be as much of an issue, but getting the best possible price means an exciting holiday for your family or extra cash to invest in upgrades for your new home. Choosing an agent with extensive experience and an innovative marketing strategy is a great way to ensure maximum property selling price.

 

Competition is stiffer

Everyone’s competing for the attention of buyers and the higher prices that accompany them, so if you want your home to be recognized it might be important to make some minor adjustments. Adjustments that will undoubtedly draw the attention of potential buyers and help to push your final sale above asking price. This isn’t always necessary or possible, because whilst many aesthetic improvements can be inexpensive, certain renovations come at a cost that may not be affordable.

 

Buyers are aware of these conditions

Yes, prices are rising, but with the breadth of content and information available online, so too is buyer’s awareness of the market. Property purchasers are perceptive to the fact that sellers may be over-inflating prices due to recent demand, so it’s important that you keep your home’s price in line with market value to avoid being overlooked. Avoid making the costly mistake of having to readjust your asking price after weeks on the market without interest or having your property passed-in at auction.

 

Conclusion

Selling, while it may be spurred on by personal factors, should be approached in a manner that’s cognizant of the financial climate. And from a purely financial standpoint, there’s no doubt that 2019 is shaping up to be one of the best years to sell a property in Canberra.

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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