Strong results in June: Weekly market wrap with Sam DodimeadBack
Canberra market sees strong results in June
On Saturday 27 June, Canberra recorded an 89% preliminary auction clearance rate, achieving the highest capital city result nationally for the second week in a row. June was a particularly strong month for auction results, achieving an average preliminary clearance rate of 75.75% across the month. Results improved as the month progressed, indicating strong underlying buyer demand.
The number of established properties advertised for the first time on Allhomes has remained low since the week to 3 April. This was a logical cut-off for vendors to decide to either wait for restrictions on open homes and public auctions to be relaxed or push their property to market as they had already invested time and money into preparations.
Last week saw a sharp increase in listing activity with 137 established properties advertised for the first time on Allhomes, the highest result since April. New listing activity has bobbed up and down during June averaging 117.5 listings per week. Those considering selling established properties, especially houses, still enjoy little competition across Canberra. This has created some exceptionally strong sales results from $750,000 to $1,000,000.
Questions for HomeBuilder after high levels of interest
In the new market, buyers initially perceived the HomeBuilder Grant as a fantastic benefit to buy. This was evidenced by a flood of new enquiries, anticipating receiving $25,000 for buying their new home. A glaring flaw in Treasury’s HomeBuilder FAQ (which at the time of writing had last been updated on 18 June) is it fails to accommodate a significant proportion of the market who need their new home in three to six months.
These buyers would very happily buy a new property, in turn supporting the construction industry, however, will either delay their decision or buy established properties due to the narrow definitions within Treasury’s FAQ sheet.
If the ACT Government chooses to join Tasmania, SA, WA and the NT and sign on to the HomeBuilder National Partnership, they should strongly consider using their discretionary powers to provide $25,000 to eventual owner occupiers purchasing all new properties. This encourages consumers to build or buy a new home, irrespective of its current stage of completion.
Higher sales volumes encourage property developers to increase investment and either bring forward or expand development pipelines, resulting in retention and creation of jobs for construction workers and the collective of associated industries that contribute collectively to the construction and development of new homes.
The 2019 calendar year saw a large proportion of multi-unit sites offered for sale by the ACT Government fail to sell. A number of these being offered for the second time include Braddon Place, Macarthur on Northbourne, plus multiple medium-density sites in Taylor. As the primary seller of land suitable for multi-unit development, the ACT Government benefits from broader application of HomeBuilder Grants by increasing buyer demand to sell out projects faster; a larger pool of potential buyers is created for multi-unit development sites currently for sale.
With Sam Dodimead, local property professional and host of Canberra Property Podcast where you can get to know the consultants contributing toward deliver of new buildings. Stream from wherever you listen to podcasts.
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You can check out the market wrap from last week here.