Canberra experiences first annual improvement in clearance rates since 2021

The month of June has delivered good news for the Canberra property market, as the capital’s clearance rate experienced its first annual improvement since November 2021. 

As reported in the Domain Auction Report – June 2023, Canberra’s clearance rate is sitting at 73.6 per cent, up 9.8 percentage points on May, and an impressive 15.2 percentage points on this time last year. 

Luton Properties Weston Creek and Molonglo Valley director and licensed agent Justine Burke said the figures were reflective of a visible surge in the local market. 

“Over the last couple of months, we have had more enquiries on properties and more people through the door, along with more registered bidders and a lot more properties with pre-auction offers put on them,” she said. 

“I would say it’s probably based on lower stock levels at the moment because we just aren’t seeing as many properties come onto the market.”

It seems it’s not just Canberra experiencing the surge in clearance rates, as the report shows a 78.2 per cent figure for the combined capital cities, and 81.7 and 76.2 per cent rates in Sydney and Melbourne, respectively.   

Solely Properties principal Andrew Thorpe mirrored Burke’s experience in the Canberra market and explained a recent shift in the receptiveness of both buyers and vendors. 

“Since the first rate hold in April, we have noticed a slight improvement in the market,” he said. “I think buyers, who were previously holding off to see if the market would continue to decline are now realising we may have hit the bottom of this particular price cycle and prices appear to be on the rise again. 

“They have now adjusted their budgets – and vendors’ price expectations – and everyone is getting on with the business of buying and selling again.”

Interestingly, the data also showed that Canberra was the only capital city where the unit clearance rate was not outperforming that of houses. 

In Sydney, the unit clearance rate was 83.7 per cent against that of 80.8 per cent for houses, while Melbourne saw 78.3 per cent for units and 75.7 per cent for houses.

Burke explained, however, that there was a different type of home that was currently sought after in the Canberra market. 

“Homes in the $1.2 million to $1.5 million range are where we are seeing five to 10 registered bidders at an auction because these homes tick a lot of boxes for a lot of people,” she said. 

“They are either newer or have been extensively renovated and that’s really attractive for people because there isn’t a lot of appetite to take on renovation projects at the moment based on the cost, the time it takes and finding someone to do it.”

Thorpe added that the data could also point to the demographic in Canberra that is buying into the unit market.  

“The target market for units tends to be first-home buyers, investors, or those looking to downsize,” he said.  

“Generally speaking, these demographics tend to find the auction process a little daunting and therefore the auction clearance rate may not be as high.”

House prices have remained fairly steady in the nation’s capital, reporting no change over the month and just 2.9 per cent under the median auction price at this time last year, at $1,034,251. 

As to what this means for those looking to sell in the Canberra market – and what method is best – there are still mixed reviews. 

“Going to the market in the next couple of months will see houses perform very well, but there will be more property on the market from September onwards so it will be interesting to see what impact that has on the market,” Burke said. 

Thorpe added: “I believe the auction process is a great method of sale, but all the boxes have got to be ticked for it to be the one I would recommend to my vendors.”