Canberra apartment sales have plunged, with data indicating demand for new apartments has significantly declined.
In the six months to June 2019, unit sales in the territory dropped 28 per cent on the same time last year. Apartment sales in Molonglo Valley – most of which were built within the last five years – had the steepest drop, down 38 per cent, Domain data shows.
Listing views for apartments are also down across the nation’s capital. Views per listing for new units are down 39 per cent, while listings for established units are down only 12 per cent.
It comes as the territory grapples with the fall out from apartment defects. A recent report revealed more than $260 million is needed to fix structural and safety defects in apartment complexes across Canberra.
In April, an ACT legislative inquiry into building quality heard a lack of experience in building multi-units has contributed to defects in Canberra over the past 15 years.
Buyers agent Claire Corby of Capital Buyers Agency said negative press around apartments was having an impact on buyer sentiment.
“I am seeing a shift in buyer preferences towards things that are known and are safe and secure,” she said, “there’s a definite shift in preferences and if that is translating through to sales then I would think there’s a definite correlation between the two.”
Ms Corby said she steers clients towards freestanding dwellings or older and low-rise apartment blocks.
“I really like to look at freestanding homes as a preference for my clients and anything that is lower density or is low-rise,” she said.
“I’m talking about units and apartment blocks that are really older and in more established suburbs, so they might be 30 or 40 years old.
“We’ve got relative certainty of future costs when we can look at the history of the body corporate records.”
- Related: Demand for apartments grows in some cities but not everywhere – yet
- Related: Units being discounted across Canberra, houses not so much
- Related: Sydney Olympic Park agents say suburb tarred with the same brush as Opal Tower
The Master Builder’s Association of the ACT chief executive Michael Hopkins attributed the sales decline not to defects but a slowdown in building approvals.
“The recent decline in apartment sales in the ACT is consistent with a slowdown in apartment approvals, as forecast by Master Builders Australia which shows apartment approvals returning to the long term average,” he said.
“This decline is not expected to have a significant impact on the ACT industry over the long term as other parts of the construction industry remain strong.
“In the short term, growth in the ACT’s construction sector is being impacted by high taxes and charges and significant delays processing development approvals.”
Australian Bureau of Statistics figures, released on Monday, found the value of total building work in the ACT was down 76.9 per cent on the same time last year.
Real Estate Institute of the ACT president Michael Kumm indicated the impact of defects in falling sales volume was minimal. He said the drop could be due to investor hesitation and the pre-election lull.
Mr Kumm said if buyers were concerned they should investigate the body corporate of a complex, as buildings with an active committee were more likely to find solutions to problems quicker.
He said such complexes typically had a high live-in owner population.