Canberra is not only the capital city of the ACT, it’s also Australia’s capital city. Canberra may seem like a bit of an unusual choice for a capital city (given the size of Melbourne and Sydney) but it was in fact chosen in 1908 as a compromise between the two. Some people feel that the city itself could do with some upgrades and that’s acknowledged by the ACT government who have big plans to transform the CBD by 2031. The big plan is said to be modelled on the transformation of the Melbourne CBD in the 1990s and aims to create a vibrant city centre that mixes both residential and corporate communities.
Canberra is home to a strong economy, supported by the nation’s lowest unemployment rate at 3.75%. According to the latest Census, the capital’s population has increased by a significant 1.8% and this was the second highest growth seen, after Victoria. So, what does this all mean for real estate? Well, the good news is, with the demand growing, we’ve seen commission and fees in real estate drop in Canberra.
How do real estate commissions and fees work in Canberra?
Let’s start with how an agent charges commission in Canberra. Like the rest of ACT, real estate agent fees are deregulated. A deregulated fee and commission structure mean that agents usually set fees based on market demand. Market demand in Canberra is higher, as the states capital city we would be more likely to encounter a high level of market activity when compared to regional areas in the ACT. In city areas, there’s a high demand for real estate agents, so agents generally charge a lower commission rate, whereas regional areas have fewer servicing real estate agents, so a higher commission rate is usually the norm.
Real estate agent fees can vary dramatically depending on location and property type, so it’s always worth researching what agents are charging in your local area by comparing a number of local agents. Comparing agents will help you understand the varying factors that contribute to a difference in commissions and fees charges.
Commissions and fees in Canberra will be charged at a lower rate than the rest of the state (generally speaking) and that’s good news for those selling property in Canberra. It’s also important to consider how we define what is charged under the terms “commissions and fees”. Agents will usually allocate different costs under the term “commission” and “fee”. For example, the term commission will usually refer to the percentage allocation of the total cost of the property sold. Fee, however, is sometimes charged a little bit differently. Marketing and advertising costs can sometimes sit under the term fee and so it’s important to define how much you are willing to pay for both commission and fee as a separate value.
Real estate agents in Canberra are aware of the competition in the market and so are usually willing to negotiate fees and commission rates with homeowners in order to win your business.
What is the average commission rate in the Canberra?
The average real estate agent commission rate is 2.18% in Canberra. Below is a chart showcasing how Canberra compares to the rest of the countries state city averages.
Commission Rates May 2018 based on a $500,000 property sale
We see that Canberra is fairly average when it comes to the cost of fees and commissions. Hobart, Tasmania is unsurprisingly top of the leaderboard in terms of expense followed closely by Darwin, capital of the Northern Territory. The lack of competition in these cities empowers real estate agents to allocate costs they deem suitable, rather than creating costs in order to compete in a competitive marketplace. The lowest fee average in Canberra is charged is 1.1%, and the highest average is 3.3%.
In December 2017, the median house price in Canberra sat at $753,516 and increased by 8.4% since the previous year. (Source: Domain Group House Price Report, December 2017). Canberra has become a focus for both investors and owner occupiers in the ACT. The median property price for houses and units is growing at a steady rate and we are not seeing the same trend for other Australian states. In fact, the rate is so significant that Canberra is expected to record 16% increase between now and 2020 and this is the highest price growth of all capital cities.
Canberra average commission and fees rate are fairly competitive and so if you’re selling property in Canberra, you are in a strong position to negotiate. It’s a good idea to remember that whilst these averages offer a guide, they aren’t set in stone. Rather they should be used to help give you an idea of what is a fair amount for you to pay in relation to your property.
In terms of your property value, the below will also give you an indication of what people in Canberra are paying in commission costs in various price brackets.
Property Value Average Commission Rate
Negotiating fees and commissions in Canberra
The above averages act as a great guide to help you understand what other people in a similar location are doing in terms of a bottom line for commissions and fees. Commission rates will also depend on a number of other factors – like the type of property you are selling, the suburb you are located in and the overall state of the property.
It’s a good idea to have a solid knowledge of how fees are calculated before agreeing on a final sum of commission with your real estate agent. The below terms should give you a good understanding of the general options an agent will use when calculating commission.
Option 1 - Fixed rate
Agreeing to pay a fixed rate with your agent means you pay a specific agreed dollar amount after the sale of your property. The rate is fixed, it doesn’t matter what the final price is, you will always pay the same amount. This approach gives you certainty over the fee, but this approach can sometimes cause fear that the agent will sell the house quickly, even if that results in a lower price. The benefit of this option is that you are certain of the fee you will pay from an early stage. However, some people feel that this can encourage the agent to sell the house quickly and potentially not secure the highest price.
Option 2 - The tiered percentage
This option operates on a sliding scale and this is genuinely believed to encourage agents to secure a higher sale price. For example, you may agree to a 2% commission rate if the sale price is $480,000 or less, and an additional amount if the property is sold for more than that. So, if the sale price is $500,000 you’ll pay 2% on first $480,000 (being $9,600) and, for example, 10% on the additional $20,000 (being $2,000). The total commission payable would be $11,600. The potential disadvantage of this is that you may end up paying more commission than you had initially believed you would.
While this information is useful, we encourage you to consider it as a guide and we also encourage you to remember that commission and fees will depend on an array of other circumstances. For example, the size of your property, the current market and the suburb you are based in Canberra will all be contributing factors. Commissions rates are of course going to contribute to your overall decision when choosing a real estate agent but it’s important to consider other factors like; reputation, local knowledge and the agent’s background.
Top Tips for selling your home in Canberra
Selling in Canberra may be a challenge but with the current property climate and the average commission price looking reasonable in Canberra, it’s not a bad time to sell.
We’ve done our homework, we’ve looked at the data, analysed the facts and made sure we’re always looking at the bigger picture, and we’ve learnt some things along the way.
1. Your time is invaluable, don’t waste it
You don’t need to waste time doing the hard yards when we’ve done it for you. We know the agent Canberra real estate market like no one else. Use LocalAgentFinder to define your most important requirements, and we’ll recommend you with the most suitable agents.
2. Comparisons are necessary
Your home is probably one of the most valuable assets you’ll sell, it’s important to hire the right agent. LocalAgentFinder allows you to check the background of agents so you can be assured you are making an informed decision.
3. No hidden fees
We know that hidden fees are always a concern when selling your house and the good news is that LocalAgentFinder is completely free for homeowners. The agent you choose will only pay LocalAgentFinder a referral free after successfully selling your property.
So, if you’d like to compare real estate agents in the Canberra region, take a look at LocalAgentFinder today and see if we can help. We also have a fully operational Australian based call centre, so if you have any questions, give us a call on 133 033.
Fees & Commissions by City
To determine average commission rates, LocalAgentFinder took the average commission of all active agents respectively on 1 May 2018. This included agents with tiered and fixed commission structures based on a $500,000 selling price. This page was updated on 4th May 2018.