Blink and you’ve missed it
As market conditions change, very few people have the internal fortitude to make proactive property purchasing decisions. The voice inside your head needs to be reconciled to differentiate between making a perfect decision and what measures have you taken to mitigate risk to make a sound decision. Reaching the point of being able to do this successfully is easier said than done.
Property buyers can have inherently flawed logic when it comes to researching the market. An example is sourcing market intelligence from media sources and compounding newfound beliefs by seeking the opinions from others peddling fear. This herd mentality removes intellectual debate, market analysis and the ability to capitalise on any opportunities which present themselves.
Current data shows property market analysts to date have been wildly wrong on Canberra. A big shift in vendor confidence saw, during the prohibition of on-site auctions, weekly new listings on Allhomes.com.au fall by 36.53%. This is a huge reduction in weekly new listings during a time which can be one of the busiest of the year. The auction clearance rate from last weekend was 57%, providing encouragement for those considering selling now.
I will concede nothing is perfect and there are parts of the market where vendors’ commercial interests have led to re-pricing stock. Finding them can be difficult as examples are minimally applied to a small selection of off-plan developments.
Those seeking to take advantage of favourable conditions in the off-plan market need not be paralysed by the responsibility of making their decision. Astute buyers are recognising this opportunity and are being decisive, leading to significant transaction volume during the last week. I expect it will only be a matter of time before property developers secure sales required and restore pricing in this part of the market.
This shift of market conditions has demonstrated a valuable lesson in asset allocation. Values do not increase equally across all properties, which can be a crushing blow if or when you choose to sell. According to Allhomes ACT Property Report, houses offer superior appreciation in value; the median price has increased by 40.19% since 2010. Houses do have higher acquisition and holding costs compounded by lower rental yields, which can make ownership prohibitive to some investors.
The median price of multi-unit dwellings is up by 18.25% over the same period. Apartments and townhouses are more affordable for investors to own as they have lower holding costs and higher rental yields but are a tricky proposition to get right. Medium-density apartments and townhouses make the largest contributions to increasing values in this part of the market.
Without a serious second outbreak of COVID-19 infections in Canberra, the best time to buy a property in 2020 was three weeks ago. The next best time is the six weeks ahead as normality (potentially) restores to the market.
Your property questions answered
Do you have a question about Canberra’s property market you would like answered? This Saturday 16 May at 9.45am, Sam will be hosting a Facebook Live for Canberra Weekly to answer your property questions. You can send through questions in advance via email to [email protected] with ‘Facebook Live’ in the subject line. Tune in via the Canberra Weekly Facebook page.
More Weekly Market Wrap:
- Property values hold: Weekly market wrap with Sam Dodimead
- Timing the market: Weekly market wrap with Sam Dodimead
Find more property news and listings at Canberra Weekly Real Estate.