What to expect from Canberra’s housing market in the countdown to Christmas

With just over six weeks left until Christmas, the time to buy a home before the holiday season starts is fast running out. But this pre-Christmas market might be a bit different to normal, agents say. 

The Christmas and New Year period was usually busy as it was when university students and new residents looked to move into the capital, said Eliana Rojas-Terry of The Property Collective. 

“The lead-up to Christmas is usually quite fruitful for both buyers and sellers alike,” she said. “Everyone is keen to lock in a purchase or achieve a sale prior to the holiday season.

“The market then springs back into action in mid to late January, with interstate buyers seeking to secure accommodation before going back to work or school.

“Our core local market will likely jump back into the swing of things after the Christmas and New Year break too, but nobody has a crystal ball to tell exactly what the future will look like.” 

However, the auction clearance rate for Canberra is 23 percentage points below where it was this time last year, measuring 65 per cent in October compared to 88.1 in the same month last year, according to the latest Domain Auction Report. 

That said, the clearance rate is also the highest it has been since May this year, increasing for the second consecutive month for the first time since October 2021. 

Nik Brozinic of Carter and Co Agents said one of the main factors that caused this shift in the market and affected clearance rates was a change in buyer attitudes which continued to linger. 

“Buyer activity now is certainly not what we normally encounter in November, with buyer sentiment being affected by a changing economic climate,” he said. 

“I think we will see the trend of the last few months continue into the final weeks of 2022, where homes that are priced correctly will still sell at auction, but buyer hesitation will certainly be present.” 

There are still strong levels of inquiry despite the shift away from the regular end-of-year market, which David Stokes of Blackshaw Manuka said would likely continue.

“Contrary to popular belief, the pre-Christmas market is buoyant with many buyers still looking for homes as well as an influx of transitional buyers moving into the ACT ahead of the new year,” he said. 

“We are seeing continued strong levels of inquiry, which has been driven by a number of factors, including rental prices and decreased stock levels in Canberra at the moment.

“As agents and buyers continue to assess the market’s level over the coming weeks, I anticipate clearance rates will stabilise and likely increase.”

With the Reserve Bank of Australia indicating there will be further rises in the first quarter of 2023, Brozinic said buyer confidence may not return to the market until later in the year. 

“As we look towards some basic market fundamentals including positive population growth, as well as the return of the student population, we are still expecting activity to be strong in the established market next year,” he said. 

“Throughout the remainder of the year, confidence may return to the market as we see a more stable position around interest rates.”