The number of properties for sale in the ACT is growing amid "extraordinarily low" and "deeply pessimistic" buyer sentiment thanks to recent interest rises, new research suggests.
Cotality's Home Value Index showed Canberra's property values dropped for the third month in a row in June as buyers hold off on purchasing to try to buy at the bottom of the market cycle.
The median Canberra dwelling dropped 0.6 per cent in June, and 1.3 per cent over the last quarter.
"It's not like we're seeing a lot of property owners dumping their homes into the market. It's more reflective of slower demand, a slower rate of absorption and seeing an accumulation of stock build up," Cotality's head of research Tim Lawless said.
"When confidence is this low, you generally see some downwards pressure on turnover as well."
Justin Taylor from Marq Property said there was "very little urgency" for buyers to commit in the ACT at the moment.
"They are spoilt for choice with the amount of stock available, and they know that many properties are sitting on the market longer than they have in recent years," he said.
"That means buyers feel they can take their time, do their research, compare properties and make a well informed decision rather than rushing in."
Overall listings were up 20 per cent above average in June according to Cotality, but new listings were about 12 per cent below the five-year average. Apartment listings were up 24 per cent above the five-year average, while house listings are about 15 per cent above the five-year average.
Mr Taylor said the consensus in the industry was that it was not a good time to sell, which meant it was a good time to buy.
"Buyers have plenty of choice, they're in a stronger negotiating position than they have been for quite some time, and they have the luxury of making considered decisions rather than feeling pressured by rapidly rising prices," he said.
Golden Haven Properties director Ankit Karwar said it was only properties over the $2 million mark which were taking time to sell.
"For separate title homes of $700,000 to $1 million, you can sell it in two to three weeks," Mr Karwar said.
Properties in the low $1 million range were attracting more buyers thanks to the ACT's new stamp duty exemption, Mr Karwar said, but changes to the capital gains tax rules have made buyers uncertain of the market.
"They are still looking. They have got the pre-approval, the finance is ready, but they're not going ahead to put an offer. They're just looking and browsing," Mr Karwar said.
In a significant turnaround, house values fell at a higher rate than apartments, which have been historically poor performers in the ACT.
Houses fell 0.7 per cent over June, while apartments dropped just 0.2 per cent.
Mr Lawless said houses had a "higher base to fall from" than apartments, which have not seen much growth in the past five years, and that he would be "very surprised" if apartments were to start going up in value.
"Canberra doesn't have the same affordability challenges as a lot of other markets. Even though prices have risen, incomes tend to be quite a bit higher across the ACT as well, so affordability metrics probably aren't deflecting as much demand towards the apartment sector," he said.
