The spring selling season has not yet sprung in Canberra as hesitant sellers hold off on taking their homes to market, amid widespread uncertainty and more interest rate rises.
MARQ partner and licensed agent Craig Chapman said the number of new listings traditionally seen during the peak spring-time property season in Canberra was lagging this year.
“Spring still hasn’t sprung just yet,” Craig said. “But the Canberra market is really holding its own right now.
“Fundamentally, interest rates are rising and people aren’t going to sell because they know people aren’t buying. But on the upside, we have not seen sharp declines in prices because we have adequate stock for the demand we have. That’s shielding us from larger falls seen in some of the bigger capitals.”
The comments come as CoreLogic’s Hedonic Home Value Index, released on October 3, revealed that, along with Darwin, Canberra was one of two Australian capitals to record a higher than average flow of new listings in the past four weeks.
The report found that nationally, the usually fervent property selling period was off to a slow start, with the number of new listings in the four weeks to September 25, 12% lower than the same period last year and 10% down on the previous five-year average.
Values for Canberra real estate dipped by 1.6% in September, but still remain 4% higher for the past year.
Canberra’s continued downswing was the third most significant of all Australian capitals for the month, behind Sydney, which recorded a 1.8% drop and Brisbane with a 1.7% dip. Every capital city saw a decline in property values, except Darwin, which recorded no change.
The median dwelling price in Canberra is now $886,990.
On the rental front, price increases slowed in September, with a 7.5% rise in rents raised for houses in the past year and a 6.9% boost to units and apartments. The rental yield is now at 4%, slightly up on the national rate of 3.6%.
On Tuesday, the Reserve Bank of Australia imposed the sixth consecutive interest rate rise since May, although the board decided to slow the pace of the hikes by voting for an increase of 0.25 percentage points rather than the widely expected 0.5.
Craig said despite month-on-month property price declines, most homeowners were well ahead in terms of equity, compared with the onset of COVID-19 in March 2020.
“Our advice to clients is if you don’t have to sell, don’t, because once rates stop rising and once this hurt hits, inflation is going to drop like a balloon out of the sky and we’re going to be talking about a recession,” he said.
“However, I think it’s important to add that once inflation is under control, and the August figures were lower than July’s, we will see interest rates come back down to stay off a recession,” Craig added.
“If you have to sell, weather the storm. Pick a great agent, invest in a solid campaign and go for it.”
CoreLogic research director Tim Lawless said it was probably too early to suggest the national housing market had moved through the worst of the downturn.
“It’s possible we have seen the initial shock of a rapid rise in interest rates pass through the market and most borrowers and prospective home buyers have now ‘priced in’ further rate hikes,” Mr Lawless said.
“However, if interest rates continue to rise as rapidly as they have since May, we could see the rate of decline in housing values accelerate once again.
“(Nationally) we’ve also seen the flow of fresh listings continue to slide through the first month of spring, which is uncommon for this time of the year.”
The reduced flow of new listings could be a key factor helping to keep a floor under larger price falls, supporting the subtle reduction in the rate of decline through September, CoreLogic said.