‘Had it so good for so long’: Will auctions still be the preferred method of sale for Canberra sellers?

Canberra’s auction market has run at a steady pace in recent months but with interest rates set to increase and the federal election now behind us, will auctions remain the preferred method of sale for vendors?

With Domain data anticipating 84 auctions on Saturday and 91 auctions next week, agents are adamant that sellers will continue to sell their homes under the hammer.

“It’s certainly been a disruptive few months with all these different events happening but I’d say the sentiment has remained strong across the board,” said David Stokes of Blackshaw Manuka.

Mr Stokes, who has a property scheduled to go under the hammer on Saturday in Wanniassa, said auctions “allow the market to determine the true value of a home and I think there are enough buyers to get a good sale for sellers”.

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“We’re not seeing a deterrent in buyer activity or seller sentiment … it seems that everyone is just adjusting their expectations.”

In the last week, Canberra’s auction clearance rate recorded the biggest weekly uptick compared to other cities, reaching above 80 per cent for the first time since February and being the only city to record a figure above that mark.

Since February, Canberra’s auction clearance rate has been hovering around 70 per cent.

“While there are some improvements recorded, clearance rates continue to trend lower annually across most of the capitals, aligning with the broader softening of market conditions,” Domain researchers wrote.

Chris Hetherington of Hayman Partners said the volume of properties going to auction had dropped ahead of the federal election.

“But now that that has passed, I’m expecting the volume of auctions to increase,” he said, though not as high as it had been in the past two years.

“While the overall property market has seen a drop, I think it has stabilised … it’s dropped to a more standard pace. We had it so good for so long but that uphill trajectory, which was the norm last year, is no longer the norm. This stable growth is the new norm.”

Mr Hetherington added that auction volumes may increase in the coming weeks, including an auction he will hold on Saturday in Denman Prospect.

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“They say that it’s a seller’s market until the clearance rate dips below 60 per cent, so while we’re still floating around the 70 per cent mark every month, I think auctions will be a very strong method of sale,” he said.

Despite agents’ optimism regarding the next few months, Capital Economics’ Australia and New Zealand economist, Ben Udy, said prices would drop in the second half of this year.

“We certainly don’t expect the property market to perform anywhere near what it has gone through in the last few years,” he said.

“Despite a change in government, interest rates will really drive that decline.”

The Reserve Bank of Australia announced earlier this month that it would lift the official interest rate to 0.35 per cent after it had remained at its record-low 0.1 per cent since 2020.

“While prices have somewhat stabilised, it hasn’t seen much of a downfall in Canberra so I think there’s more scope for the capital’s property market to experience a significant downturn,” Mr Udy said.