Clearance rates: Weekly market wrap with Sam DodimeadBack
Over the last three weeks, auction results have demonstrated strong demand for properties in Canberra. Clearance rates exceeded 70% for two weekends and just nudged past 90% on the third. The number of scheduled auctions explains the variation in results.
CoreLogic reported for the week ending 23 February, there were 75 scheduled auctions with 50 confirmed results, achieving a 70% preliminary clearance rate. For the week ending 16 February, there were 48 scheduled auctions with 31 confirmed results, achieving a clearance rate of 90.3%. The previous week, ending 9 February, had 70 scheduled auctions with 45 confirmed results, achieving a 77.8% clearance rate. These results show higher clearance rates during weeks with fewer properties going to auction.
Kris Hellier of McGrath Gungahlin said “from the experience I’ve had this year, buyer demand has led to five of the properties I’ve sold this year selling prior to auction. Buyers don’t want to risk waiting for auction and are actively seeking to secure properties prior.
“Properties in Belconnen and Gungahlin are experiencing strongest demand from $550,000 to $900,000,” Hellier said.
On Saturday 22 February, there were two auction results exceeding $3 million. One of these, the sale of 13 Bass Gardens, Griffith, set a suburb record.
During the final quarter of 2019, seven properties in Canberra sold for more than $3 million.
According to Andrew Chamberlain of Blackshaw Real Estate, “quality homes and unprecedented buyer confidence” were driving the volume of transactions at this level.
“A significant number of high calibre listings and similar transactions are in the pipeline,” Chamberlain said.
Favourable for investors
Current market conditions are favourable for those considering investing in property. Historically low interest rates and attractive rental yields, especially in the multi-unit market, make a compelling case for property investment.
During the December 2019 quarter, ABS data showed a 15.47% increase on the previous quarter in lending to investors. This is consistent with the increased demand I’ve experienced from buyers seeking investment properties.
According to Hellier, “investors are actively seeking all types of dwellings”.
“Yield and rental prices are at the highest they have been and are steadily increasing. If the market jumps 5-10% this year as forecast, that’s an opportunity for investors.”
SQM Research found the average gross rental yield for all multi-unit dwellings is 5.5% and increased to 5.8% for those with two bedrooms.
“I recently sold a property in Ngunnawal which attracted eight offers from people looking to invest,” said Hellier.
Canberra’s property market is supported by a robust local economy which continues to perform highly in comparison to other jurisdictions. The Australian Bureau of Statistics reported the ACT recorded 3.6% annual employment growth. ACT’s unemployment rate reduced from 3.1% to 3% between December-January and has average weekly earnings of $1,826. The ACT recorded nationally superior performance in each result.
Find up-to-date local news, lifestyle, entertainment, sports and more at Canberra Weekly.