Canberra’s property market is likely to stabilise in 2023, so long as the threat of continued back-to-back interest rate rises eases.
MARQ Partner and Licensed Agent Justin Taylor said while there was no doubt eight consecutive interest rate rises since May had impacted buyer activity, there was widespread hope that any price falls would be more moderate in the new year.
“I expect prices to remain steady into the new year,” Justin said.
“Most of the market correction has happened already. The average dwelling between $1 million and $2 million has come back 15% from the peak. That happened three, four or five months ago, so going forward I think prices will start to stabilise.”
The Canberra market has remained robust on the back of two years of incredible growth. CoreLogic data has shown that since the COVID trough to peak growth in June this year, ACT housing values rose by 38.3%. The market has experienced falls of 6.5% since June.
Justin said the auction market clearance rates were also a positive indicator of the strength of the market.
CoreLogic data shows Canberra recorded the second strongest preliminary auction clearance rate across the smaller capitals last week with 57.1%, compared to Adelaide which was the busiest auction market with a 65.5% clearance rate.
“Clearance rates are back to normal; it’s a balanced market and I expect that to remain through most of next year. As the normal market cycles, it will start gradually creeping back up,” he said.
But the risk of further interest rate hikes was real – and after eight consecutive rises this year, experts have predicted a ninth increase in February when the Reserve Bank of Australia next meets.
Interest rates are already at a 10-year high after a series of rises netting a 3.1% surge this year.
Justin said a halt on climbing interest rates would boost buyer confidence and encourage more purchasers to the market, but the key to a successful sales campaign now was setting a fair and achievable price.
“The market is still good now if you price properties correctly,” he said. “But if you’re hanging on to yesterday’s prices or peak prices then you’re unlikely to sell.
“If you’re prepared to accept where the current market is, you’ll still get lots of interest and you’ll still have a strong campaign. Most properties that Dimi and I have sold, when priced correctly, have attracted numerous buyers and multiple offers.”
He said while Canberra was a traditionally stable market, a number of external variables meant the market had been changeable and subject to act out of character.
“Canberra will still remain a strong property market in 2023 but the reality is if you are hanging out for prices to drop further, I’d recommend you don’t adopt that strategy.
“Canberra has always been a lot more stable than the other capital cities. Other than 2021, generally prices don’t go through the roof like we saw last year. Normally Canberra is pretty consistent so the fluctuations aren’t as drastic as Sydney.”
“There’s a quote I like: ‘The best time to buy real estate was 40 years ago and the second best time is today’ and it couldn’t be further from the truth. Hindsight is a wonderful thing.”