‘The quote has to be accurate': Sellers feel the pinch as Canberra region median house prices drop

As Canberra’s median house price has dropped at the steepest rate on record, the capital’s regions have largely followed suit, meaning agents and sellers are having to change their campaign strategies to adjust to the changing market.  

All Canberra regions, aside from Molonglo Valley and Gungahlin, recorded a decrease in their median house prices over the September quarter, according to the latest Domain House Price Report. 

Woden Valley recorded the largest drop in its median house price, decreasing by 4.3 per cent over the quarter to $1.34 million, while Molonglo Valley recorded a large-scale increase of 9.7 per cent over the quarter, reaching a median of $1.325 million

Every Canberra region still recorded a year-on-year increase, with house prices in Molonglo Valley leading the way, up 23.7 per cent over the year.

Despite Molonglo Valley’s jump in median house prices, there are localised nuances that impact the different regions’ growth or decline, said Domain chief of research and economics Dr Nicola Powell. 

“What we are seeing across Canberra is houses are declining in price – more or less – and we are seeing slower paces of growth in other areas,” she said

“Generally speaking, aside from the Inner South, you’ve got Woden Valley and the Inner North – Canberra’s higher-priced areas – and the trend we are seeing in cities like Sydney and Melbourne [is that] higher priced markets are seeing deeper declines … [that is] also happening here.

“It all kind of feeds into the same bigger picture … there is no area that has avoided the change in the housing environment.” 

When Brendan Howe of Homes by Howe sold his townhouse in Weston Creek earlier this month, the property attracted a high level of interest as soon as it was listed.

The four-bedroom home at 3B Tudawalli Place, Chapman, was being used as a display home before it hit the market. 

The townhouse brought in around 50 groups through the first viewing, and a number of offers were made straight away, Howe said. 

“I was lucky with my house … to be completely honest, I think it was a completely fair and reasonable price,” he said. 

“The home was very high spec, it was what you would have in the Inner South with the materials that were put in the home.”

The property sold via private negotiations for $2.27 million.

According to the Domain report, Weston Creek recorded a median house price of $1,052,500, down slightly over the quarter by 1.2 per cent but up 14.4 per cent year-on-year.

Howe said he suspected that homes matching the quality of this one would sell for much the same price in different regions across Canberra.

“If you went to buy this block in the Molonglo Valley, you would surely be looking at paying the same cost,” he said. 

“The home has materials and quality that you would see in the Inner South, so it was a mixture of things that encouraged the sale price.” 

Alexander Smout of Belle Property Canberra said homes of this kind were still successfully selling in the current market.

“I have certainly seen a cut-back in sales prices for land, with properties that need renovations, and knockdown-rebuilds as well,” he said. 

“The homes that have still performed really well where I haven’t seen much change in costs are those turnkey properties, and obviously well-renovated homes too.

“There is definitely that raised awareness around rising interest rates, and certainly when your borrowing capacity is less, it puts that downward pressure on the market as a whole.” 

Smout added the changing market had required a change in marketing strategies for homes, but the current market was not as bad as it was in the winter months. 

“The quote has to be accurate for homes going to market, so you now have to go off the sales that have occurred in the last four weeks rather than the last eight, or the last three months,” he said. 

“A reserve that is overpriced because the seller’s expectations are too high has simply not been going anywhere … [but] buyers are definitely back in the marketplace. We have seen suburbs and overall records in Canberra in the past month, but I don’t know if there will be much growth in the near future.”