ACT house prices have continued to soar, reaching a record-high median of more than $900,000.
According to new figures from Domain, prices increased 9.7% over the March quarter with the ACT’s median house price now sitting at $927,577 – an increase of almost 20% on last year.
“Canberra’s auction clearance rate soared to 89% in March, the highest point on record,” says Domain’s senior research analyst, Dr Nicola Powell.
“It has been above 80% for two months in a row, highlighting the market fierceness.”
Local real estate agency principal Michael Potter, of Michael Potter Real Estate, says the “sizzling hot” market is the busiest he’s ever seen it in more than 20 years in the industry.
He puts the ACT’s growth down to a culmination of factors including low stock, low interest rates and high employment rates, as well as the return of expats from overseas due to COVID-19.
“Our prices here have just gone ballistic,” he says.
“The buyers are getting frustrated, the market is frustrated, because there’s no stock.”
Specialising in the South Canberra region, Mr Potter says prices in places like Weston Creek and Garran have gone “through the roof”.
“Is it going to slow down? I don’t know.”
Dr Powell says the strongest gains over the quarter were in North Canberra, South Canberra and Woden Valley – all areas which have a median house price of more than $1 million.
“A higher average wage, job security and low mortgage rates have spurred buyers to upsize.”
She says while unlikely, another quarter at the same growth rate would push the median ACT house price above $1 million.
First home buyers feeling the pinch
Mr Potter says first home buyers in particular are feeling the brunt of increased growth, finding themselves priced out of the market, unable to compete with wealthier older buyers and investors.
That’s something prospective first home buyer Brenton can relate to. He’s been looking in the Tuggeranong and Woden Valley areas, and says the process is “stressful, trying and frustrating”.
“Prices have risen approximately 10% in the six months I’ve been looking. Prices have skyrocketed from January 1 2021 especially,” he says.
Brenton says current prices are “extremely unsustainable” for first home buyers trying to crack into the market.
He says projected market growth, low wage increases and the inevitable increase to interest rates, given they’re at an all-time low, only adds to the stress for first time buyers and means ownership is unlikely for a number of young Canberrans.
Mr Potter says some buyers are turning to apartments and townhouses – “they’ve got no choice” – but even then are faced with stiff competition at auction.
“I’ve never ever seen apartments, one-bedroom apartments, getting auctioned… it’s unprecedented.”
Unit prices declined 5% over the quarter but are still up nearly 3% on March 2020 values, with the median currently at $473,304.
“It has been a consistent Canberra trend, units providing more subtle growth compared to houses,” says Dr Powell.
“The unit market is not uniform across the Territory, with apartments in Gungahlin, South Canberra and Tuggeranong growing over the quarter and year.”
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