The Canberra real estate market has been behaving differently to the rest of Australia. Picture: Supplied
Initial sales and inquiry activity in Canberra (beyond the Government-imposed auction and inspection ban) has shown that while Australia’s capital city is not immune to the effects of COVID-19, it’s showing fewer symptoms than other markets.
REA Group’s chief economist Nerida Conisbee said that although the property market is experiencing a “drawback” in buyer activity along with “high levels of distress” in rental activity due to the coronavirus crisis, Canberra’s market was travelling at its own pace.
This two-bedroom unit in Phillip received more than 25 enquiries in just three days amid the COVID-19 crisis. Picture: Supplied
“We’ve seen an increase in buyer activity compared to the same time last year. It’s up about 16 per cent. If we have a look nationally the comparable figure is down about 10 per cent and we are even seeing increases in searches for new development,” she said.
“This is probably driven by the fact buyers and renters are far more confident and also, mainly because there is growth in government employment.
“It is a government-run town and that does make it a fairly stable market.
This four-bedroom house on 985sq m surpassed the suburb’s price record by $38,000. Picture: Supplied
“It isn’t often a market where we talk about outperformance, but at this stage when you compare Canberra to pretty much the rest country of the country it’s behaving a lot differently on realestate.com.au,” Ms Conisbee explained.
She highlighted that even first-home buyer activity was up in the city.
“When we look at March 2019 to March 2020 – we’ve actually seen a little bit of a pick up in [first-homebuyer] inquiry levels. It’s very small, at a national level it’s only up about 4 per cent, but given what’s happening it does seem quite surprising,” she said, adding first-time buyer inquiry for Canberra was up 58 per cent in March.
REA Group chief economist Nerida Conisbee says Canberra has shaken off its tag as an underperforming property market.
It’s not just the government jobs
Claire Corby, from Capital Buyers Agency, said the buzz of activity in Canberra goes beyond the perceived safety of government jobs during the pandemic, pointing out that less than 25 per cent of the local workforce were public servants at the time of the last Census.
“There is this knee jerk reaction of people thinking ‘Oh lucky Canberra, everyone is safe there with their government jobs’ but in reality there has been all this pent up interest that actually started last year,” she said.
“We had so many buyers hit pause leading up to the election last year, then it took off. Then we had the bushfires with so much smoke you couldn’t see the end of the street. Demand was hot, but supply wasn’t there. Vendors held off listing in January because they didn’t want to start their campaign when no one wanted to go outdoors, it was awful,” Ms Corby said.
“Then we had super high clearance rates through February – upwards of 90 per cent – it was FOMO,” she said.
This five-bedroom house at 13 Luehmann Street, Page sold for $947,500 at auction. Picture: Supplied
“Then we came into March, and of course coronavirus arrived while there was still a lag of auctions. People were rushing to buy properties faster than toilet paper.”
Ms Corby said investors fled the tumbling stock market and turned to real estate in early March, but had backed off by the end of the month when the coronavirus eviction moratorium kicked in.
“There’s too much uncertainty for investors right now. But with interest rates so low, many renters are becoming buyers. The problem is, there’s no supply again because vendors have been pulling their properties left right and centre. Right here, right now agents are desperate for listings but sellers don’t want people coming through their homes,” she said.
An apartment in this building is one of the few properties that have been listed in Canberra since the Federal Government imposed strict rules around auctions and inspections. Picture: Supplied
It’s about supply and demand
Mark Larmer, of Independent Property Group in Canberra, agreed local buyers have slim pickings.
“Sellers might be thinking ‘Well, I don’t know if this is a really good time, I might not get the price I want because of this economic uncertainty’. But the reality is, Canberra already had a seller’s market coming up to this,” he said.
“The available stock out there is being bought and it’s not being replaced with new stock so we’re about to drive ourselves into a huge undersupply,” he said.
The hottest property according to Mr Larmer are homes listed below the $800,000 price point with plenty of purchasers ready to settle.
This family home at Cavill Close, Holt sold for $823,000 under the hammer via an online auction. Picture: Supplied
“Buyers are still going to buy because interest rates are cheap and you can lock in a loan at 2.25 per cent. It’s actually the most affordable it’s ever been to get a mortgage and pay it back – as long as you’ve got a job. And we’re seeing less unemployment in Canberra than other parts of the county,” he said.
Currently, Mr Larmer has a two bedroom, two bathroom unit with two car spots in the southern Canberra suburb of Phillip which has generated more than 25 inquiries in just three days.
“It’s a nice enough unit, and we could argue that the unit market isn’t nearly as strong as the house market, but there isn’t a lot like it. As a result we’re getting every bit of enquiry,” he said.
“Here’s the clincher though, it’s owned by my colleague. My argument is, why would a real estate agent list their own property if there really was all this uncertainty about with no buyers and a market about to crash?
“Why not wait? Because it’s about supply and demand. The reason for selling is because he realised he doesn’t have any competition – and that’s the time to sell.”
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Article Source: https://www.realestate.com.au/news/canberra-property-in-high-demand-despite-coronavirus-uncertainty-hitting-the-national-market-hard/
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