Canberra unit owners are slashing their prices across the territory, but for houses there are only a few regions where vendors are discounting their initial sale price.
New data analysis by Domain looked at the average rate of vendor discounting across every Canberra region for both houses and units over the six months to March this year. Figures are only available for regions where there were more than 30 instances of discounting.
The data shows Woden Valley units have the steepest reductions, with the average discount on the initial listing price at 6.2 per cent. Units in the Inner North and Inner South are being marked down 4.6 and 4.4 per cent, respectively.
In Belconnen, the discounting rate for units of 4.4 per cent is at the lowest level in more than six years. Gungahlin and Tuggeranong experienced average reductions of 4.1 and 4 per cent, respectively.
For houses, only Belconnen, Gungahlin and Tuggeranong recorded enough instances of discounting over the period. Gungahlin had the highest average rate at 4.3 per cent, followed by Tuggeranong at 4.2 per cent and Belconnen at 4.1 per cent.
The difference between discounting rates for houses and units comes down to auctions, according to LJ Hooker Dickson director Stephen Bunday.
“The logical explanation for why there is not enough data [for houses] in most regions is that a lot of properties would have gone to auction and sold,” he said.
“The ones that haven’t sold are usually listed at a price-plus, for example, $950,000-plus … you can’t record discounting for those.”
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Mr Bunday said the regions where discounting had been recorded was mainly due to location and the percentage of auction to private treaty sales.
“[Belconnen and Tuggeranong], they contain the outer suburbs, and the further away from the city it’s a bit harder to sell,” he said.
“The auction to private treaty ratio in the Tuggeranong office [LJ Hooker], is about 30 to 70. Belconnen is auction-oriented but not so much when you get to suburbs such as Macgregor and Charnwood.”
Woden Valley had one of the starkest differences between houses and units. There were not enough instances of discounting for houses, but units were being reduced, on average, by 6.2 per cent. Luton Properties Woden manager Anthony McCormack attributed the unit discounting to supply.
“We’re seeing a lot of units in developments, and that’s probably what’s causing the pricing adjustments there,” he said.
Woden’s median unit price dropped 2.2 per cent, the latest Domain data shows, with Phillip units leading the decline, down 13.8 per cent. Average time on market for units in the region is 109 days.
House prices in Woden Valley were up 6.7 per cent over the same period, and the average time on market is 72 days.
“People that are buying houses in Woden are long-term buyers, they’re not really at the whims of trends,” said Mr McCormack.
“It’s the location, geographically it’s very central and it’s underpinned by a good town centre and hospitality offerings. It’s very sought-after and easy to get everywhere – that’s what keeps the market really strong.”
Over the 12 months to March 2019, both house and units prices dropped in the nation’s capital. According to the Domain House Price Report, Canberra’s median house price dropped 2 per cent and the median unit price fell 1.7 per cent.