3 May 2021

Apartments on rise as house prices continue their march

| Ian Bushnell
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Woden development

Unit prices rose 7.6 per cent in the April quarter in the ACT. Photo: Michelle Kroll.

The rise in Canberra’s home values over the past year is the second-largest in the country, as both units and houses continue to fetch record prices in the capital.

The latest data from CoreLogic shows a 14.2 per cent increase to the end of April, with units up 7.6 per cent and houses up 16 per cent. Only Darwin saw greater increases.

In April, the all-dwellings figure rose 1.9 per cent, 6.7 per cent for the quarter and 8.7 per cent so far this year.

Stand-alone houses continue to outperform units, rising 2.1 per cent in April, for a 7.8 per cent increase for the quarter and 9.1 per cent in 2021, notching a median value of $833,000.

Unit values rose 1.2 per cent last month, 2.6 per cent for the quarter, and just 3.6 per cent over the year, but the median value is tracking towards the half a million mark at $493,000.

High auction clearance rates and fast sales show demand for houses remains red hot, particularly from those upgrading to bigger homes or better locations.

Last weekend, 75 properties were listed, 63 were reported and 57 sold for a clearance rate of 90.5 per cent.

The highest winning bid was for a contemporary four-bedroom residence with a pool in leafy Red Hill on a large 1,096 square metre block, at $3.5 million.

The top 10 results were all over the million-dollar mark, while the lowest result was $615,000 for a three-bedroom house in Theodore in Tuggeranong.

Almost all houses sold for a clearance rate of 98 per cent and a median price of $965,000, while the few units going to auction recorded a median of $671,000.

Table of home values

CoreLogic Home Values Index table. Image: CoreLogic.

CoreLogic says that nationally a little of the steam has come out of the market in April with only a 1.8 per cent rise after March’s 32-year high of 2.8 per cent, which was also the Canberra figure.

Canberra house values rose a scorching 3.3 per cent in March so it may be that the market is easing down for the traditionally slower winter months or merely catching its breath.

Units rose only 0.7 per cent last month but picked up some momentum in April, possibly as potential buyers reassessed their options in the face of the fierce competition for houses and turned their attention to the townhouses and apartments on offer, not to mention downsizers.

CoreLogic’s research director Tim Lawless says national price rises could slow further over the coming months as more properties are listed, and buyers baulk at what they need for a deposit and the amount required to borrow.

CoreLogic says there is already some evidence of fewer first-time buyers in the market, with the Australian Bureau of Statistics reporting a 4.0 per cent fall in the value of first home buyer home loans through February, the first drop since May last year.

It says the strong prices are tempting more homeowners to test the market, but while listings have risen, total advertised stock levels were 25 per cent below the five-year average in late April.

Overall, CoreLogic expects housing values will continue to rise throughout 2021 and into 2022, albeit at a gradually slower pace, supported by low mortgage rates and high consumer confidence.

In Canberra, high average incomes and stable employment, along with a degree of FOMO, will continue to buoy the market.

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