Agents report that the Canberra property market now has confidence. Photo: Michelle Kroll.
The election result and last week’s interest rate cut have injected new confidence into the Canberra residential property market, with agents reporting a burst of interest in the last few weeks.
This supports figures from property data analyst Cotality that auction listings and results in the national capital are rebounding.
Cotality said 96 auctions were held in the ACT last week, the third highest so far this year. The preliminary clearance rate reached 61.1 per cent, up from 56.6 per cent the week before.
SQM Research lists 109 ACT properties for auction this week, including 84 on Saturday.
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Agents say Labor’s election victory, or more precisely the Coalition’s defeat, brought a sigh of relief to Canberrans worried about the impact of a possible purge of public service ranks.
Last week’s interest rate cut confirmed many undecided buyers’ intentions to commit to a purchase.
The Property Collective’s Will Honey said there were a lot of people sitting on their hands waiting for the election to happen, but the result and the rate cut had changed buyer intent over the past couple of weeks for both the established market and projects.
“Rewind the clock a couple of months, it was just research and research and research, now it’s a bit more buy-buy oriented,” he said.
Agents were getting better numbers to open houses and more competitive bidding at auctions, with some now wanting to get into the market before prices start to rise, particularly with more interest rate cuts to come and more government incentives to kick in.
Mr Honey said there were more people interested in entry-level single homes around the $700,000 mark, indicating some had lifted their horizons from an apartment or townhouse to a house and land.
Auction numbers are also on the rise. Photo: The Property Collective.
McIntyre Property’s Col McIntyre agreed that the few homes priced between $600,000 and $800,000 were not lasting long on the market now.
He said the newfound stability had brought out a broad range of buyers, including those trying to break into the market and those with a bit of FOMO, now that interest rates were easing and prices potentially on the move.
Independent’s director of operations Narelle Casey said it wasn’t just the level of inquiry that had risen, sales were also up too, after a tough first part of the year.
“The good thing about purchasing right now is that we have seen the market come back a little bit, and the stimulus packages, along with that interest rate reduction, mean that people who are buying right now are able to secure the [current] prices [before they rise],” she said.
Ms Casey said recent buyers included upsizers, downsizers and more confident first-home buyers.
That confidence sprang from the security of knowing the Coalition’s public service cuts were now off the table for at least three years and probably more, given the extent of Labor’s victory, as well as having a bit more borrowing power since the rate cut.
Ms Casey said that from Greenway to Gungahlin, open home visit numbers had been strong across all sectors.
Agents expect the number of listings to shrink during the winter as usual, followed by the spring rush, but Ms Casey said there were pluses in not waiting until then.
“If you wait until spring, you’ve got a lot more competition, whereas in the winter, especially with all the stimulus and the current rate drop, and the constant talk of up to 1.5 per cent more in rate reductions, if it were my own property, I would have no hesitation selling it in the winter,” Ms Casey said.
Mortgage brokers are also enjoying a lift in enquiries since the election.
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Clarity Home Loans managing director Mark Edlund said the election result had definitely spurred interest and renewed confidence, with digital inquiries tripling in previous weeks after the Saturday polling day.
The increase after the rate cut was not as dramatic, and most of them were first home buyers, he said.
“The rate cut did not have as big of an impact as I was expecting,” Mr Edlund said.
“I still think people are a little bit hesitant about it. Another two rate drops or another 50 points will probably change that fundamentally.”
Mr Edlund said most of the inquiries were about borrowing capacity, and the average loan size each month was growing.
“Given the average loan size is increasing, maybe first home buyers are looking at things that are a little bit more expensive,” he said.
“If they’re looking at a two-bedroom now but they want to have some kids, it may be a little bit more comfortable to go into the three-bedroom to future-proof the property.”
The Reserve Bank Board will next meet on 8 July to decide its next move on interest rates.
