Canberra property market holds firm as winter slowdown shifts buyer behaviour

Winter has arrived in Canberra, but the property market isn’t necessarily putting itself on ice.

While the colder months typically bring a seasonal slowdown, buyers are still active, house prices have returned to record highs and some agents report that buyers still inspecting homes are among the most motivated of the year.

What does appear to be changing is the way they are buying. After years of interest rate rises, construction cost pressures and economic uncertainty, Canberra buyers haven’t disappeared, but experts say they have become more deliberate.

“The market has become more considered, not necessarily weaker,” says Dan McAlpine from Belle Property Canberra.

“Higher interest rates have not removed buyers from the market; they have changed buyer behaviour and capacity. People are taking longer to decide, conducting more due diligence and becoming more cautious about overextending themselves.”

According to the latest Domain House Price Report, Canberra’s median house price reached a record $1.084 million earlier this year, fully recovering from the downturn that followed the pandemic-era boom. House prices have now recorded four consecutive quarters of growth, although the pace of gains has begun to slow.

“In Canberra, we’ve seen house prices rising, but they’re not rising as fast, and this is in line with what we’re seeing overall for market dynamics,” says Domain chief of research and economics Dr Nicola Powell.

“We are starting to see the handbrakes go on, and that is understandable considering we’ve had three rate hikes this year already, and the expectation for another one. Plus, overall supply in Canberra is now rising year on year, and that is a telltale sign that you’re starting to see the market slow down,”

That change of pace is particularly evident when it comes to the types of properties attracting attention. McAlpine says buyers are willing to pay strong prices for homes that feel low-risk and move-in ready, while properties requiring significant updates are facing greater scrutiny.

“The gap is widening between properties that feel move-in ready and those that require updating or future spending,” he says. “Many sellers still expect 2021-style urgency, while buyers today are rewarding transparency, preparation and realistic pricing.”

McAlpine believes many buyers are also experiencing a different kind of fatigue.

“A lot of buyers are not as financially stretched as they are mentally exhausted,” he says. “They have spent two years navigating uncertainty, interest rates, policy discussion, construction costs and media noise. Many are now looking for simplicity and confidence more than ‘the perfect deal’.”

A similar trend appears to be emerging among investors. As debate continues around potential changes to negative gearing and capital gains tax concessions, Richard Davies of Belle Property Canberra says the conversation has shifted away from speculation and towards long-term certainty.

“The bigger shift we may see is not investors exiting overnight, but investors becoming more selective,” he says. “Properties with weaker fundamentals or high holding costs could face pressure, while quality homes in tightly held suburbs may become even more desirable.”

Powell says Canberra could actually benefit if the proposed capital gains tax and negative gearing changes exempt newly built homes.

“Some investors are always going to want a negatively geared property, so in essence you could see investors being funnelled into new developments,” she says.

With ample new developments in Canberra, and apartment prices remaining comparatively affordable compared with many other capitals, Powell believes the city could attract increased attention from interstate investors seeking value.

At the same time, she notes the ACT remains far less reliant on investors than larger markets such as Sydney and Melbourne, meaning any policy changes are likely to have a more muted impact locally.

While economic uncertainty may influence sentiment, the chillier season shouldn’t automatically be viewed as a period of inactivity. In fact, for buyers willing to stay active, winter could be a great time to buy.

“If you’re a buyer, often you find there’s less competition during those winter periods,” Powell says. “And if you navigate the housing market in the right way, we’ve also got slowing dynamics. So for some, it could open up opportunities.”

McAlpine also believes some sellers may achieve better results during the quieter months than they would in spring.

“Winter in Canberra often surprises people,” he says. “In all my years as a real estate agent in this town, I have always seen exceptional outcomes in winter.

“Genuine buyer numbers do not reduce over winter. The buyers still inspecting homes are usually highly motivated and better prepared.

“Spring typically brings increased listings, but that also creates a new challenge: standing out. Given global affairs, inflation and interest rate predictions, we are likely to see a slowdown in pricing.

“I think winter sales this year have the potential to yield better outcomes than their spring competitors.”