Houses in the capital are no longer flying off the shelves as rising interest rates cause a downturn in prices.
House values have fallen in every Canberra suburb analysed by CoreLogic for the September quarter.
Around this time last year, the clearance rate was consistently around 90 per cent.
Earlier this month, the auction clearance rate was just over 50 per cent — the lowest since the onset of the pandemic.
Research analyst Kaytlin Ezzy said at the end of the day it all comes back to interest rates.
"It is unlikely we will see values rise while interest rates are still rising — the outlooks for values are very much tied to interest rates," Ms Ezzy said.
Sinivasa Rao Subramanya is looking to upgrade and is keeping a keen eye on the market, regularly visiting open homes.
He is looking to buy in the next few months and has noticed a market that is not as hyper as it used to be.
"Houses which should have sold easily around six months back are no longer selling all that easily — they are selling, but not that easily," he said.
"We are transiting from a sellers' market to a buyers' market and that trend is going to continue for the next few months at least."
Canberra boom was 'unsustainable'
Chris Wilson from the Real Estate Institute ACT said the rising interest rates are making buyers more cautious.
"Buyers … are not wanting to overspend," Mr Wilson said.
"We are also seeing a number of buyers who have had pre-approvals on loans and the banks are revising those pre-approvals and marking those down in terms of their spending capacity."
Mr Wilson believes Canberra's market will level off and the drop in prices will not be too dramatic.
"What we saw last year was unsustainable and I think it will level off to a manageable level, which is not a bad thing because it gives everyone a fair chance to get into the marketplace," he said.
"We are lucky here because of the employment situation, and there is a tight rental market as well which is keeping things pretty stable in that regard."
Canberra's median value still more than $1m
In the September quarter, home values in Canberra fell by 5.2 per cent.
But that is off the back of an upswing in home values of 44 per cent since the onset of the pandemic.
"Over the past 12 months, values are actually up across Canberra by about 4 per cent," Ms Ezzy said.
"There are more expensive suburbs that typically lead the downturn and they are starting to see their values fall below the levels they saw this time last year."
The median value of a home in Canberra is more than $1 million, the second highest in the country.
Just three suburbs in Canberra have a median house value under $750,000: Charnwood ($705,323) Greenway ($650,597) and Belconnen ($623,496).
CoreLogic is also reporting a marginal slowdown in the pace of decline in Canberra, by about a tenth of a per cent every month.
"That could signify we have moved past the peak rate of decline," Ms Ezzy said.
"That being said it is linked back to interest rates."
