Canberra’s house prices continue to defy the corrections being experienced by Sydney and Melbourne with the latest Domain House Price Report showing a 4 per cent gain over the year to the end of September.
The report found Canberra’s house prices remained steady over the September quarter with the median price at $740,215, the third highest behind Sydney and Melbourne. But unit prices fell 3.4 per cent over the September quarter and 4.0 per cent over the year to $412,888.
Domain said the Inner North had the strongest house price growth of 9.6 per cent over the past year, but the price dropped in the Inner South by 3.3 per cent. The quarter capped six years of consecutive growth.
Sydney’s house prices fell 3.1 per cent over the September quarter, reaching a median of $1,101,532, the third consecutive quarter of declines, with the median dropping 6.5 per cent year-on-year. Unit prices also fell, down 0.7 per cent over the quarter to $734,775, a 1.3 per cent decline over the year.
In Melbourne, the median house price decreased 3.9 per cent over the September quarter to $852,980, a fall of 3.2 per cent annually. Median unit prices declined 1.6 per cent over the September quarter to $496,260 but year-on-year they grew 1.5 per cent.
Ray White Canberra CEO Ben Faulks said Canberra’s booming economy continued to support the market with infrastructure investment, such as light rail, providing confidence and employment remaining strong and wages high.
But tighter credit requirements from lenders in preparation for the findings of the Financial Services Royal Commission were starting to make an impact, and there were fewer investors in the market than 12 months ago.
“What used to go through in three or four days with a broker is now taking three or four weeks. They’ve really tightened up on servicability requirements,” Mr Faulks said.
He said Canberra had quite a balanced house market in terms of buyers and sellers, with Ray White auctions attracting multiple bidders for established homes and maintaining a clearance rate just shy of seven per cent across Canberra.
But there was more of a preparedness for a seller to take an offer rather than hold out for more. “On auction day, it’s now about making sure your seller is ready for the buyer,” Mr Faulks said.
He said apartments were being sold but sellers will have to be prepared to negotiate.
“Unit prices continue to level out and approvals have peaked so there will be little less supply in the next two to three years,” Mr Faulks said.
But he expects house prices to hold up with net interstate migration remaining strong and supply still an issue. “Anything from $600,000 to $1 million, families will still be stepping in to snap that up. That price bracket in particular will remain strong,” Mr Faulks said.