Canberra median house prices down a 'statistical' 8.7% as property market treads water in March quarter: REIA report

Canberra median house prices down a 'statistical' 8.7% as property market treads water in March quarter: REIA report
Larry SchlesingerDecember 7, 2020

The Canberra property market underwent a signficant statistical correction in the first three months of the year with average median house prices falling 8.7%, figures compiled by the Real Estate Institute of Australia show.

The headline Canberra correction is large and alarming, but only partially representative of the market as the biggest fall recorded across Canberra districts were 4% in Tuggeranong ($480,000) and 3.2% in Gunghalin ($455,000) with these two more affordable suburbs accounting for 80% of the 294 preliminary sales.

The much bigger weighting to lower priced house sales (which fell) were responsible for the higher 8.7% fall in the median price, using the REIA methodology.

The REIA determines median prices based on the reporting of sales information based on sales at the date of contract exchange.

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Canberra, Sydney, Melbourne, Adelaide and Perth median prices are based on preliminary unrevised figures based on a high (75% -90%) sample of final sales. Brisbane, Hobart, Darwin median prices are not revised.

Prices held firm in the more expensive districts closer to the centre of Canberra.

In the Inner Central district (Canberra North and Canberra South) house prices gained 0.6% to $746,300.

In the inner South (Woden and Weston Creek) house prices lifted 0.8% to $617,300.

REIA researcher Evgeniya Hawthorne tells Property Observer while final figures are usually revised upwards, the estimates are a “right reflection of the market” with Canberra vendors having to discount their offerings to achieve a sale.

Overall, the property market tread water in the March quarter with the weighted average median price for the eight capital cities falling 0.2% for houses to $534,015 with units down 0.9% to a median of $434,601.

Darwin was the strongest performer in the detaching housing market with its median house price up 2.4% to $592,000 with Sydney (up 1.6% to $673,681) and Perth (up 1.0% to $505,000).

Apart from the steep decline in Canberra house prices, the other capital cities to record noteworthy declines in their detached house prices in the March quarter were Brisbane (down 2.3% to $430,000) , Hobart (down 1.4% to $360,000) and Adelaide (down 1.3% to $395,000).

In the unit market, only Perth (median prices up 2.4% to $425,000) and Hobart (up 1.0% to $290,000) recorded gains.

Apart from Canberra’s 6% correction in its unit prices, Adelaide (down 2.3% to $300,000), Sydney (down 1.6% to $473.808) and Darwin (down 1.2% to $425,000) all recorded declines of more than 1% over the quarter.

Year-on-year house prices are up 4% with median house prices increased in all capital cities apart from Canberra, with values down 7.2%.

Darwin recorded the largest rise across the capitals, up 7.6% followed by Perth (5.2%) Melbourne (4.8%), Sydney (4.2%) and Adelaide (3.4%)

Unit prices are up 1.7% over the past year with Hobart recorded the largest increase, up by 13.7% followed by Perth (3%), Darwin (2.4%), Melbourne (2.2%) and Sydney (1.7%).

In terms of rentals, the REIA data shows that nationally, median house rents increased over the March quarter across the capitals, with Perth and Canberra recording the highest increases of 4.4% and 4.3% respectively.

Rents for two bedroom other dwellings increased in Melbourne, Brisbane, Adelaide, Perth and Hobart while median other dwellings rents remained unchanged in Sydney and Canberra.

Darwin recorded a 0.2% decline in rents for two bedroom other dwellings, which probably reflects the increased supply of apartments coming online in the Top End’s capital, said Bendigo and Adelaide Bank retail executive Dennis Bice.

The report was co-sponsored by Bendigo Bank.

Bice said that despite the slight decrease in the March quarter, the weighted average median house price has risen 4.0% in the past 12 months.

“With the exception of Canberra, there has been median house price growth in all Australian capital cities,” he said.

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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