More Canberra apartments are being taken to auction as unprecedented buyer interest and favourable borrowing conditions fuel the market.
Agents say a growing number of units and apartments are being listed to go under the hammer rather than being sold by private treaty, amid the groundswell of buyer activity in the nation’s capital.
Realestate.com.au economist Paul Ryan said in many cases it was now cheaper to be an apartment owner than a tenant due to extreme rent increases in the past year.
“Over the past 12 months to February, we’ve seen apartments in Canberra increase in price by around 5.5%,” Mr Ryan said.
“Borrowing rates have fallen faster than rents, which has made it very advantageous for people, particularly first-home buyers, to switch from renting to buying.
“Momentum is strong and that’s driven by the fact that buying conditions are very favourable at the moment, both for investors and for owners. I would expect to see continued price growth in Canberra.”
Tony Trpeski, from Blackshaw – Braddon, said prospective owner-occupiers were extremely active in the apartment market, which was dominated by investors five years ago.
Mr Trpeski said clearance rates were now around the same levels as residential houses and many apartments were selling within 25 days, often before the scheduled auction dates.
“COVID has got people to re-evaluate what they’re doing and how they’re doing it so we’re seeing everything from one-bedroom to four-bedroom apartments regularly going to auction and regularly selling before or on the day,” he said.
“We are seeing everything from $300,000 to $3 million apartments. We’re getting waterfront apartments that are selling at $1.5 million to $2 million, but the sweet spot is somewhere between $500,000 and $1 million – that’s where we’re seeing the most activity.
“It’s given confidence to owners to say we don’t have to just auction houses, we can take apartments to auction too, and we’re getting some good prices.”
Emma Baker, principal at InStyle Estate Agents, said the trend of moving apartments to auction was also about transparency.
“With the market in Canberra being as crazy as it is and the huge amount of buyer interest, a lot of agents are taking properties [to market] they wouldn’t have traditionally taken to auction,” Ms Baker said. “I think it’s mainly happening because of transparency.
“Buyers are starting to get upset with seeing a property online on a Wednesday or Thursday, they don’t make it to the first open home and suddenly it’s under offer and they’re not getting an opportunity.
“By moving into the auction space, we are giving buyers a true time frame. This is a consequence of the market going a little bit berserk and agents wanting to offer some degree of transparency.”