How Canberra has weathered the COVID-19 storm

“We are now, at the time of writing this, almost two months into these tough social distancing rules, restrictions and temporary closures of many businesses across many industries. Although it feels like it has been a lot longer, it is still quite early into the influence this COVID-19 pandemic is likely to have on our lives, the (macro) economy and what was and will be considered the norm for many different things moving forward,” Herron Todd White said.

“When specifically looking at the residential property market, there were some obvious sudden impacts, such as the banning of on-site auctions and all open homes to be by appointment only. There were also sudden changes to levels of market sentiment, for instance, how confident purchasers in the market felt buying a new property and committing to a mortgage in a time of current economic uncertainty or paying top dollar for a property in a desirable location. 

“What has been less sudden and to be frank, what most of us are interested in, is the impact on property values. The property market (value speaking) is a lag indicator, so changes in value due to the COVID-19 pandemic are still too early to call. However, to get some indication of where things are tracking, the best evidence to look at is: properties that have sold from April to now, how long properties are taking to sell, and whether there have been (and how many) downward price adjustments made to properties with an advertised price guide.

Speaking specifically of Canberra, the market has held its ground since late March, with prices remaining consistent with pre-COVID-19 levels, Herron Todd White said.

“But moving forward, it may be a case of groundhog day with prices remaining where they are and growth very much negated by the fact that confident market sentiment is no longer there,” it added.