Canberra clearance rate fall for March, but hope still remains: Domain report

Capital cities across the nation are celebrating an increase in clearance rates for March … except Canberra. 

The Domain Auction Report for March revealed that Sydney, Melbourne, Brisbane and Adelaide reversed year-long trends of declining auction clearance rates and a 13-month high across combined capitals, sitting at 65.6 per cent. 

However, Canberra experienced both a monthly and yearly fall, dropping 2.8 percentage points from the month prior, and a shocking 18.8 percentage points compared to this time last year to 54.1 per cent.

Industry professionals remain positive that the market will shift.

“At the start of March, there did seem to be a lot of apprehension in usually steady auction market categories, however, this changed towards the end of the month, and especially after the April rate decision, it is almost like a confidence switch was flicked,” said Andrew White of Belle Property Canberra.

The Reserve Bank of Australia (RBA) voted to press pause on interest rate rises at its April board meeting. After a historic 10 rises in a row, the cash rate is now steady at 3.6 per cent for at least another month.

“As sellers align to the current market forces, and buyers’ confidence stabilises, I expect clearance rates to normalise,” White said.

White’s observation echoes Domain’s research, which indicates sellers are better aligned with buyers’ current expectations, especially amid interest rate announcements.

The research also revealed that auction listings have been lower than usual since May 2022, with the combined capitals reporting a decrease of 26.7 per cent compared to this time last year and an increase in properties sold prior to auction or withdrawn. 

When houses did go to auction, Sydney and Melbourne saw impressive increases in median auction prices for houses, up 6.5 and 9.2 per cent respectively. Sydney’s median auction price for a house was $1,843,359, while in Melbourne it was $1.201 million.

However, Canberra saw a fall in median auction prices for houses of -1.3 per cent to $996,500.

So, what does this mean for sellers and buyers currently? White said it would create a more balanced market for all parties involved. 

“Buyers will have to compete for property – not at the crazy levels of 2021 – and sellers who are realistic and listen to feedback will sell well,” he said. 

“Decisions for both buyers and sellers will have consequences, so I expect that transparency and up-to-date information will play a big part for both sides.”

Nationally, this month’s data revealed clearance rates are higher for units than for houses for the fourth month in a row, helped by a combination of affordability, perceived value, and lower borrowing capacity. 

Mark Wolens of Independent Woden has been in the property game for a number of years and reflects White’s views on a more balanced market and stable selling of units. 

“I’ve seen a lot of doom and gloom, but it’s definitely a more balanced market. We have agents who have only been around in a hot market and are unsure how to work a market like this, but it is really good,” he said. 

“Apartments are relatively strong at the moment, especially good quality units and those that are priced well, and that could be to do with affordability or a number of factors.”

A breakdown by Canberra’s region revealed the biggest annual change in clearance rates in March was found in Gungahlin, down 33.9 percentage points to 37.5 per cent.

The only region that recorded a positive result was Tuggeranong, up just 1 per cent over the year to 68.6 per cent. This was also the highest clearance rate of all Canberra regions.

Wolens said that despite this, prices were still good for Canberra houses, and there seemed to be no shortage of buyers. 

“There can be a bit of surprise from sellers who think they will get peak pandemic prices, but it’s pretty easy to show someone what the price was three years ago and what it is today,” he said.  

“Prices have still increased, but it’s just taken out that last 12-month spike.” 

And as to whether to put houses to auction in the current market, White still thinks the option should be on the table.  

“For the right property with the right target market, auction still creates competition and set sales timelines,” he said.