Canberra Property Market Update – November 2017
The month of November saw the Canberra property market maintain growth, reaching at the heels of Sydney and Melbourne.
Sustained Property Growth – November Canberra Property Market Update
Canberra has been drawing more and more limelight as it steals its way towards the peak growth city in Australia. With Sydney and Melbourne dominating the Australian property market for so many years, Canberra is a refreshing change.
This comes as Sydney and Melbourne house prices are reaching a level where confidence may be wavering and prices beginning to outstrip demand. Although it is unlikely that we will see large falls in the Sydney and Melbourne markets, we will likely see more volatile and falling growth in those markets.
Whereas, Canberra’s market is only getting more stable. Government employment continues to sustain the small state in Australia’s South-East allowing for job security. This in turn feeds into the property market with strong economic activity and consumer confidence. Hence, median prices are actually bordering on that of Sydney and Melbourne.
Charles Tarbey (Central 21 Australasia) has posited that growth will continue at this rate sustainably throughout the year. Although, affordability questions are already being raised as median prices have consistently risen all year.
A Joint Investor/Buyer Market – November Canberra Property Market Update
With auction clearance rates maintaining an average above 70% for the mid-late year auctions, Canberra has been an involved investor/buyer market. The market has not only seen sustainable investment in rental properties but high clearance on residential property.
Coming off the back of this mid-late year boom the market is maintaining a strong stance. Auction levels are still high, clearance rates positive and investors continuing to move into the market.
It has been suggested by Domain Group CE Andrew Wilson that this growth will slow as the market enters ‘catch-up mode’. However, this is a sustainable option as the market balances from the strong growth in the mid year.
Hence, we should see economic activity maintain high levels, investor action remain and positive growth to sustain throughout this year and into the next (just at slower rates).
Units Causing Fluctuations – November Canberra Property Market Update
As rental properties and ‘close-to-CBD’ properties rise in desirability unit prices are causing market fluctuations. We have seen some ups and downs in the unit market and it has impacted statistics reflected in the market.
This has meant we have seen a fall in residential house pricing this year due to a higher turnover share on units. However, this is in comparison to an all up sustained residential growth in the past 5 years. This is also in relation to increased property value in aggregate throughout Canberra.
The graph below shows this in the relation between house and unit prices. Although unit prices have declined in part, house prices begin to rise. The widening gap is a potential affordability issue but one that should balance out over the coming months. This will happen as economic growth and activity maintains with rental units potentially beginning to grow and house prices slowing.
ACT Residential Property Market Update. Source: ACT Government Access property transaction data. Access: https://apps.treasury.act.gov.au/__data/assets/pdf_file/0007/399985/RESPROP.pdf
ACT Excerpt From The 2017 December Market Report. Your Investment Property. Source: http://www.yourinvestmentpropertymag.com.au/market-report/act/act-excerpt-from-the-2017-december-market-report-243118.aspx