If you’ve been following the Canberra real estate market, no doubt you’ve noticed that auction sales are on the rise. This is positive news as an upswing in auction listings is generally a sign of a strengthening property market.  This can be seen locally with Canberra’s median house price up by 3.8% year-on-year for the month of April and average days on market down by 8.1%  (Source: Allhomes Property Market Index Report April 2015).

In my core suburbs of Downer and Hackett, I have not seen the traditional slowing in demand over the cooler months. This is in large part due to record low interest rates and the impact of the ‘Mr Fluffy’ buy back scheme. Increased demand is also coinciding with a shortage of new property listings. According to CoreLogic RPData, the number of listings advertised for sale over the four weeks ending 3 May, 2015 is down by 18.5% year-on-year.  A tightening in supply and increased demand creates a competitive market and this is an environment where we see more properties auctioned. 

The strongest segment of the market continues to be established homes with high demand for renovated inner city property or new homes on larger blocks (850sqm+) in the $650,000 to $1,000,000 price bracket. In the last quarter, several suburbs in the inner city have reported new record prices including Watson ($1,050,000) and Ainslie ($1,330,000). A shortage of available land across the Territory has also contributed to higher than expected prices. 

Knock-down/re-build opportunities in Canberra's established suburbs are very sought after with prices in excess of $1000 per sqm increasingly common. Another emerging demographic which we are seeing is buyers looking to take advantage of the Over 60’s Home Bonus Scheme.  Announced at the last ACT Budget (3 June 2014), the schemes provides eligible homeowners who are looking to downsize a substantial saving in Stamp Duty payable. This is creating extra demand, particularly for properties which are single storey, or two storey with a living area and bedroom suite on the ground floor. A purchase price of $610,000 will result in a substantial saving of over $21,200 in stamp duty payable.

While signs of a revival are evident in Canberra’s established house sector, the apartment market is still suffering due to higher stock levels and longer days on market. With a high proportion of one bedroom apartments in the marketplace, we’re seeing a trend amongst some developers toward townhouse-style developments in an effort to capture broader appeal. Allhomes' Property Market Index Report April 2015 shows year-on-year apartment prices are down by 1.9% with a modest improvement in townhouse prices of 0.7%.