The month in review: Canberra
By Herron Todd White
The Canberra residential market is complex with many factors interacting to affect demand, supply and ultimately price. On a macro level, the Canberra residential market aided by historically low interest rates has a number of underlying positives including generally strong employment and a perception of good job security.
Overall, 2015 saw the Canberra residential sector continue on a level path, with noticeable improvement in the housing sector occurring in the last quarter. Established residential housing in the $700,000 to $2,000,000 sales bracket performed well with increased demand as a result of the Mr Fluffy buy back scheme and extra buyers entering the market. Features driving demand included larger block sizes, established grounds and proximity to services.
The high supply of new unit developments notably in outer suburb locations saw some softening in this market segment. Selling prices for 1-bedroom unit, off the plan stock have come back to around $260,000 with earlier prices around the $300,000 mark. The weakening new unit market was offset by sales agents reporting strong interest from foreign investors looking at new housing in developing areas. Price points for this style of housing investment range from $450,000 to $1,000,000.
The spring sales season towards the end of 2015 saw several sales records achieved in the housing market with a $2,000,000 sale in Nicholls, a $1,185,000 sale in Harrison and a $1,470,0000 sale occurring in Crace.
Given current stock levels both for sale and rent, softening dwelling commencement numbers and increased demand levels, we anticipate the residential market in the ACT to tighten over the short term with prices to firm. Small segments of the market including units along the Flemington Road corridor in Gungahlin and properties situated in less sought after locations or providing inferior accommodation are expected to remain soft.