Canberra’s house prices are reaching record highs during the COVID-19 pandemic. Here’s why
The global health crisis is crippling economies across the world and Australia’s real estate market is feeling it too … but not in Canberra, where values are going up.
Total stock levels of property for sale in the ACT is currently at a five year low, according to CoreLogic data.
In July, Australian home prices fell 0.6 per cent — continuing a downward trend in the nation’s property markets. But in the ACT, low supply and high demand is driving prices up.
The national capital bucking the trend has caught people like Farhan Abbasi by surprise.
“I was thinking with COVID the prices would go down just like Melbourne and Sydney,” Mr Abbasi said.
“It seems the market here in Canberra is quite consistent, and in fact I have seen a hike”.
Mr Abbasi is a first home buyer who was hoping to bag a bargain, finding a property big enough for him, his wife and his child.
His budget is around $750,000, but in this climate he said it would seem that was not enough.
“I do a 9-to-5 job but maybe I have to look for an alternative as well,” he said.
So, is it a good time to sell a house in Canberra?
Yes and no.
Canberra real estate agents say with a lot of buyers, houses are being snapped up fast — many above market value.
But they say with not many sellers on the market, those who decide to sell could end up in the same position as those who are looking for a place.
“The current market in Canberra is very drastic,” real estate agent Shaun Iqbal said.
“Not many people are moving and they are not selling because they can not go anywhere.
“When there is no stock, obviously the demand and supply factor kicks in and the prices in the Canberra market are rising at the moment.”
Mr Iqbal said even though values were going up, there was still a lot of uncertainty from homeowners about what the future holds.
“I am spending the whole day chasing listings and people are not ready to list and sell,” he said.
“I am working long hours, making lots of phone calls and constantly answering inquiries from buyers.
“As soon as we list a property in their price range we let them know, but currently it is short supply everywhere you look.”
What will it take for Canberra’s house prices to fall?
Not a global health pandemic, apparently.
Since the onset of the coronavirus crisis in March, property values in Canberra have risen by 1.3 per cent.
This might seem counterintuitive, but CoreLogic’s head of Australian research, Eliza Owen, said COVID-19 had not impacted Canberra as badly as other jurisdictions.
“The most resilient market has definitely been the ACT,” Ms Owens said.
“Jobs have been relatively stable in the higher paid sectors and in the public and safety and administration sector employment has declined less than one per cent.
“There have been increases in some sectors as well.”
Canberrans not saving for annual holidays left with cash to splash
Real estate agent Peta Barrett said it was understandable that Canberrans with relatively steady jobs were looking to take advantage of record-low interest rates.
“Canberra’s always a bit funny because of the public service,” she said.
“We’ve got a lot of people with a bit of money around and they can’t travel at the moment.”
But she said the news that Canberra’s housing market was going against the grain was not something bargain hunters wanted to hear.
“There is so much competition,” she said.
“There are a few people being let down and missing out.”
According to research from the Reserve Bank of Australia, for every one percentage point reduction to the cash rate, property values may increase by eight per cent over the following two years.