Could Canberra’s market overtake Melbourne?
Australians have witnessed actions and government intervention unimaginable only months ago. A global pandemic, Australian States and Territories independently restricting travel by closing their borders, and Melbourne citizens being placed in a Stage 4 lockdown where police enforce a night-time curfew, is a chapter in Australian history that will be long remembered.
Unlike other jurisdictions, the ACT has so far managed to avoid widespread community transmission of COVID-19. This has allowed the lifestyles of Canberrans to function rather normally, but with an increased level of vigilance, hand washing and maintaining social distancing. Looking to the future once an effective vaccine becomes available and people can travel more freely, will those living interstate and overseas continue to stay? Or will migration from global cities to areas which were able to contain the virus create increased demand in those markets, creating the potential for future growth?
Either way, Canberra’s property market has decoupled itself from other capital cities nationally with values continuing to increase. CoreLogic Australia’s Monthly Home Value Index showed house values in Canberra increased by 0.7% during July and 1.5% for the quarter. Units increased by 0.1% for July and 0.5% for the quarter. In contrast, sales for all dwellings, combined houses and units fell by 0.9% in Sydney and 1.2% in Melbourne where their median is now only $36,974 greater than Canberra. Continued growth may see Canberra’s property market assert itself into the position of having the second highest values of any Australian capital city.
Nationally, markets are operating off low supply volumes; however, in Canberra, supply of established dwellings has been steadily increasing since bottoming out the week ending 5 June, where Allhomes recorded only 100 established properties advertised as new. Since then, the weekly number of established properties appearing as new listings has increased to 144.
The market has been comfortably absorbing increased stock levels. Domain reported Canberra has maintained the highest capital city auction clearance rate nationally for five of the last six weeks. Over this time, the total sales value has increased from $11,520,000 with a median of $731,500, to last weekend achieving a total sales value of $22,105,000 with a median of $843,500.
Lower rates of value inflation have long been the trade-off Canberra property owners accept in return for exceptional resilience during market adversity. Should the median dwelling value in Canberra overtake Melbourne, it will illustrate the value slow-moving, consistent markets have over those with higher levels of volatility. Canberra’s population comprises the highest median household incomes nationally, can borrow money at the lowest historical interest rates, and our market has positive sentiment from both buyers and sellers, meaning it may not be a case of if, but when values in Canberra overtake Melbourne given our positive outlook compared to the speed and potential acceleration of declining values in their market.
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