It’s a few days into the new year, meaning we should probably start implementing those resolutions. If buying or selling a home is on your list, you may be wondering what the market will do this year.
So what can we expect from the Canberra property market in 2019?
Will prices fall or decline?
Falling house prices across Australia was one of 2018’s biggest stories. The Melbourne and Sydney markets led the fall, but Canberra defied the trend, recording six consecutive years of annual house price growth.
According to Domain’s Property Price Forecast report, annual growth is set to continue. House and unit prices in the nation’s capital are expected to increase, but only modestly. Houses prices are forecasted to grow by 4 per cent over 2019, and units by 2 per cent.
Of course, the future is uncertain, and the forecast stated events that could push property prices lower than predicted include a mortgage rate rise earlier than expected, and further tightening of home lending.
How will the auction market perform?
Over January, the Canberra real estate industry will remain relatively slow, with auctions not kicking into full swing until February. But last year, auction clearance rates finished on a low note in the capital, with less than half of the auctioned homes selling under the hammer in November and December.
It’s hard to tell what auction clearance rates will do this year. The impact of tighter lending conditions makes it more difficult for buyers to secure unconditional contracts in the lead up to an auction.
However, stock levels are unlikely to be as high as they were in the spring selling season over the first half of the year, which may prove beneficial for vendors.
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What will the market be like for first-home buyers?
First-home buyers are likely to make their mark on the capital over the year, with the abolition of stamp duty on all properties in the ACT for those purchasing their first property.
The changes will be coming into effect on July 1, and many are tipping it will result in a surge of first-home buyers into the established market.
When NSW implemented the change in July 2017, the proportion of home buyers jumped by more than 5 per cent in the first five months. In neighbouring Queanbeyan, the number more than double, with many buyers moving from Canberra.
Currently, stamp duty concessions apply only to new builds in the ACT, where a grant of $7000 is also offered. First-home buyers make up a large portion of sales in off-the-plan apartment developments, but this could change when the concession is applied across the market.
What does the expert say?
“New residents have and will continue to be lured to the capital, with interstate buyers attracted by greater affordability, growing job prospects, a higher average wage than neighbouring state capitals and a family-friendly lifestyle,” she said.
“As the population continues to swell, it will support the future demand for housing. Although, given the lending environment, the price cycle will be one of more moderate growth.