‘Defying the winter slowdown’: Median auction price for a house in Canberra cracks $1 million

Pent-up buyer demand has driven Canberra’s auction market to new heights, pushing the median auction price for houses past $1 million for the first time, new data shows.

The Domain Auction Report Card for the month of June showed the city’s median auction price now sits at $1.014 million for houses, up 3.68 per cent from the month prior and up 26 per cent from the previous year.

The overall auction clearance rate for the city sat at 86.7 per cent, down from its peak of 90 per cent in May. Despite this, Canberra has recorded consistent clearance rates above 80 per cent since February this year.

The result was based on 327 auctions, of which 260 sold and just 27 passed in. The proportion of properties sold prior to auction was 19.7 per cent, and only 4.3 per cent of homes were withdrawn.

“Canberra’s auction market has really shown extraordinary strength this year, and this just highlights how competitive the environment is for buyers out there,” Domain chief of research and economics Dr Nicola Powell said. 

For houses, clearance rates reached 91.3 per cent. This was the only time since Domain records began in 1999 that house clearance rates pushed past 90 per cent. Meanwhile, the clearance rate for units was 67.8 per cent, significantly below last month’s results.

“It was the busiest June on record for Canberra’s auction market,” Dr Powell said.

“Sellers are defying the winter slowdown, with 127 per cent more auctions scheduled over June compared with the month’s decade average. Sellers clearly have confidence in sending their homes to auctions.”

Jonny Warren of Jonny Warren Properties wasn’t surprised by the new record, noting that buyers fear losing on the auction floor and are increasing their own budgets in an attempt to be the new home owners.

“A few weeks ago, a couple asked if I could bid on their behalf at an auction. Their budget was $900,000 and as the price increased, so did their budget. They ended up placing a $995,000 bid,” Mr Warren said.

“They didn’t think about the consequences; they just wanted to win, wanted to get into the market. It’s something I’ve seen time and time again in recent months at auctions as an agent and auctioneer.”

A typical June auction market is quiet; however, buyers are “bidding with confidence” and creating a busy winter market, Mr Warren added.

“Despite the shortage of stock in the market, something all Canberra agents are familiar with at the moment, demand is there, and I think more demand will be created as we head to spring,” he said.

Buyers are also desperate to secure a property now rather than wait for the spring market to boom with more stock, Sean Rogers of Blackshaw Weston Creek & Molonglo said.

“Buyers want to buy now and pay these [high] amounts at auction because they’re worried that come springtime, more buyers will come out, as will more properties, but prices will probably go up as well,” he said.

When looking at Canberra regions, Weston Creek had the highest clearance rate of 96.2 per cent, followed by Tuggeranong at 95.7 per cent.

Mr Rogers, who specialises in the Weston Creek region, said the area was popular due as it is close to Woden Valley, the city centre and Belconnen.

“For the past 10 years that I’ve worked in this region, all I’ve seen is growth. It’s a sought-after location, especially for three-bedroom properties, which have been selling like hot cakes,” he said.

Of the remaining 4.3 per cent of properties not selling under the hammer, Mr Rogers attributed that to seller’s expectations and buyers’ assumptions.

“Sometimes a seller’s expectation is unrealistic come auction time and, at other times, buyers assume a property will go above their own budget, so they won’t register as a bidder and the property would pass in,” he said.

“If a property doesn’t sell on auction day, it will sell pretty soon after.”

Dr Powell expects Canberra’s house prices to continue to increase but said, “the rapid level of growth that we saw earlier in the year is unlikely to continue”.