Confidence restored in ACT market after sellers slash property prices in March

Property discounts spiked in Canberra in March as vendors slashed their prices amid the uncertain economic climate brought on by COVID-19, according to new Domain data.

The data showed that for March, 10 per cent of listings in the capital were discounted, up from 7.6 per cent in 2019 and 5.9 per cent the previous year.

The following month, however, the percentage of listings discounted dropped to 8.1 per cent in Canberra, compared with 5.9 per cent in 2019 and 4.8 per cent the year before.

“At that period of time, a lot of reaction from sellers were driven by the immediate fear of what may lie ahead, so vendors who really needed to get that sale were discounting their homes,” said Domain senior research analyst Nicola Powell.

Dr Powell noted in 2019, the percentage of properties discounted in Canberra declined in the second half of the year and indicated “a more improved market”.

“In a softening market where house prices are falling, you tend to find that there is a high percentage of listings that have a discount and the reverse during periods of a market upswing.

“In Canberra, it peaked at one in 10 in March but in April, that figure declined. It’s still elevated but Canberra has definitely fallen from that peak.”

Meanwhile, in other capital cities such as Sydney and Melbourne, property prices were slashed at a greater percentage than Canberra at 14.1 per cent and 12.6 per cent in March, respectively. 

“What we have seen at the beginning of this year is a ramp-up in the number of listings on the market and the increase in the proportion listings that saw a discount aligns with the health crisis that has unravelled and that’s the trend that is unanimous across all our capital cities,” Dr Powell said.

When looking at Canberra regions, the inner south had the most discounted properties at 10.2 per cent in March, up from 6.7 per cent in 2019 and 6.3 per cent the year before.

This was followed by the inner north at 9.9 per cent of listings discounted, up from 7 per cent in 2019 and 5.6 per cent the year prior; and Tuggeranong at 9.5 per cent, up from 6 per cent in 2019 and 3.9 per cent the year before.

According to Alexander Anlezark, of Instyle Estate Agents, several of his clients opted to accept lower-than-anticipated prices in a bid to get a sale in March.

“We had some vendors in Tuggeranong and Gungahlin discount their homes because of fears of what was going to happen, so to get some security, they locked in a sale,” Mr Anlezark said.

“In Tuggeranong, in particular, it’s relatively entry level-priced homes and the people that are buying in that area are mostly individuals whose jobs were somewhat affected by the pandemic, so vendors were adjusting the prices of their homes.”

With restrictions to be eased further from midnight, May 29, Mr Anlezark expects to see fewer houses discounted as the economy slowly returns to pre-pandemic norms.

“In the last fortnight since the easing of restrictions, there’s definitely been a lot of confidence restored in the market, across open home attendees, offers being presented and properties listing on the market,” he said.

“Canberra is somewhat blessed that it is a government-led city and coupled with the government incentives available to potential buyers, buyers and sellers are now returning to the market. Sellers have the confidence to list their homes and believe they will get a good result for their property, which they will.”