September 2010 Market Update

Sales Director Review

John Minns - Sales and Marketing Director


The more things change, the more they stay the same.

I am told that the source of this pearl of wisdom was a 19th century French writer by the name of Jean-Baptiste Alphonse Karr. Regardless of who said it first, as we enter a new financial year it is interesting to look back at this time 12 months ago to see where the property market was heading.

There are 3 things that have changed however, and it is these that will have an impact on the ACT market in the coming months.


  1. Price growth has slowed. This is a good thing, as if prices are driven to unrealistic levels through a combination of increasing demand and a lack of properties for sale, it would ultimately require a correction somewhere down the track. BIS Shrapnel’s latest residential property report has forecast 14% growth for Canberra property prices over the next 3 years. The really important thing for ACT property owners is that even on this conservative forecast, values will stay ahead of inflation and property will continue to be the attractive investment class it has always been.

  2. Housing finance is available and the banks are lending. There was considerable uncertainty 12 months ago on how tight lending criteria could become as the impact of the Global Financial Crisis became clearer, but in Australia the strength of the banking sector has been a real benefit in mitigating this risk. Australian Finance Group’s (Australia’s largest mortgage broking group) May figures demonstrated 36.7% of mortgages were for investment purposes and this shows strong confidence and attractive property options for real estate investors.

  3. Media reports are looking for things that are wrong! Over recent weeks I have seen reports talking about slower growth levels (true, but a benefit not a drawback as discussed earlier); increased days on the market for advertised properties (a sign that the property market is not becoming overheated); and prices are dropping (not true but I think what they meant to say were that owners were not achieving unrealistic sale prices which by definition is not good for anyone in the long term).


For the 12 months to the end of March 2010, it took an average of 26 days for a property listed by Independent to sell from the time it was first advertised. The outlook remains positive and we have always believed that with the appropriate marketing plan and partnership with our clients that any property selling within 4-6 weeks has the optimum chance to achieve the outcomes required by the owner.

It is worth considering however that if the number of properties for sale increases significantly as we move closer to Spring (which is a common seasonal occurrence), then the time it takes to sell your property could increase and with higher competition levels you may need to review your price expectations. In today’s market there are less than 1000 properties being advertised on a weekly basis in Canberra and if you are considering marketing your property, now may be the ideal time to do so as it will give you greater strength in negotiations and more ability to obtain the price and terms you need. Contact your local Independent office for a confidential appraisal or email sell@independent.com.au for assistance or advice.


John Minns

Sales and Marketing Director

john.minns@independent.com.au


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