The pace of Canberra’s slipping property values eased slightly in January, as speculation mounts of another interest rate rise next week.

The CoreLogic Hedonic Home Value Index, released on Wednesday (February 1), shows Canberra dwelling prices fell by 1% in January, marking a 5.9% downturn over the 12 month period.

The monthly fall is in line with a national weakening, with the average property value Australia-wide also dropping 1% in January.

Unit and apartment prices in Canberra remained more buoyant than houses over the past year, sustaining 0.9% growth, while houses were hit by a downswing of 7.7%.

The report shows Canberra is weathering the national property slump better than other capitals. Canberra’s milder falls compare with Hobart which sustained the largest drop by 1.7%, Brisbane with a 1.4% loss and Sydney and Melbourne values down 1.2% and 1.1%.

The median property price in Canberra is now $841,605 – the second highest to Sydney where the median price slipped below $1 million in January to $999,278.

It comes amid another expected interest rate rise when the Reserve Bank of Australia Board meets on February 7. Since May last year, the RBA has raised the cash rate by 3.1% – the highest in 10 years.

Rental price increases for houses in Canberra have flattened, with the annual change down to 2.7%, compared to units and apartments where rent prices surged by 4.7% over the past year. Canberra’s rental yield is now 4.1%.

MARQ Partner and Licensed Agent Craig Chapman said many homeowners were opting to hold-off on listing their properties for sale in the current market, acknowledging the ongoing threat of interest rate rises and the knock-on effect on mortgage rates as a major factor.

“Unless you have a death, divorce or some sort of unplanned circumstances, you’re not generally selling at the moment,” Craig said.

“Prices have been affected, there’s no doubt about it, but at the moment the lack of volume is holding prices up. We have an imminent rate rise and there’s talk of even more throughout the year, and that has left people feeling like they want to stay on the sidelines for now.”

The CoreLogic report shows that since the onset of COVID, property prices in the ACT surged by 38.3%, but have gradually slipped by 8.6% since June last year.

Craig said sellers needed to be mindful of the extraordinary growth sustained during COVID and remind themselves that the property cycle had transitioned.

“All in all, the market grew around 30% on average in the 18 months during COVID, and even though the market has slipped back a bit, homeowners are still up on where they were. That’s the reality of it,” he said.

“The property cycle is generally 10 years and we have had about four years’ worth of growth in 18 months, so if we’re flatlining or coming back a bit, the message is don’t panic.”

Craig said potential sellers needed to hone their attention on the presentation and saleability of their properties to attract buyer interest.

“There are still buyers out there, but there is definitely less urgency. If you must sell you need to concentrate on presentation so you’re not giving any potential purchaser a reason to discount your property,” he said.

“This will help you be at the top of the shopping list. How can you make that happen? How can you be the shining star at the top of the tree?

“Presentation and maintenance will help you get there. You can re-lawn, you can paint, you can put down fresh carpet, you can style it to be saleable. A buyer has choice, so we need to recognise that and respect the leverage that the buyer has, particularly in this market.”

CoreLogic Research Director Tim Lawless said the record declines in home values had followed a record upswing in both magnitude and speed.

“The National Home Value Index was up a stunning 28.6% in the space of just 19 months,” he said.

“Despite the recent sharp drop in values, every capital city and rest-of-state region is still recording home values above pre-pandemic levels.”

But he said it was unlikely activity would return until consumer sentiment starts to improve.

“There is a strong relationship between consumer attitudes and the number of home sales. With sentiment remaining around recessionary lows, it’s harder for consumers to make high commitment decisions such as buying or selling a home.”