The Canberra property market has been this year’s quiet achiever. While Melbourne has pulled all of the attention with its supersized capital growth, Canberra has been steaming along in the background, delivering solid results for astute investors.
According to Residex, capital growth in Canberra’s unit market is second only to Melbourne, while rental yields eclipse those of every other city except Darwin
. For houses, Canberra is number three on the capital growth and yield tables.
David James, director of independent property advisor Herron Todd White in Canberra, notes that both government action (the First Home Owner Grant) and government inaction (lack of land supply) pushed prices up through turbulent times. “Since that time, they’ve made moves to increase the stock levels of land,” he says. “At the same time, demand is starting to soften. We should start to see an increase in supply, which will then obviously stabilise prices.”
This indicates a clear danger of oversupply, which could undermine Canberra’s recent stellar performance. Those areas most at risk are northern suburbs with large tracts of developable land, like Bonner, Casey and Crace. There is also a new satellite town centre under development west of the city at Molonglo Valley.
Canberra’s inner-city unit markets continue to outperform in terms of rental yield. Braddon
are still very strong. “You’ve got the government agencies dotted around Barton,” James says. “That’s why Kingston and Griffith are in high demand.”
In order to spread the population more evenly across the ACT, the federal government has made a concerted effort to decentralise its agencies. As a result, the Department of Health and Ageing is headquartered in Woden, and Medicare, Centrelink and the Department of Families, Housing, Community Services and Indigenous Affairs have their head offices in Tuggeranong.
Perhaps the greatest beneficiary of decentralisation has been Belconnen
. It hosts the head offices of the Department of Immigration and Citizenship, the Australian Communication and Media Authority, and the Australian Bureau of Statistics. “They’ve got some new developments around the lake – the new Oracle Apartments – so there’s been some activity through there, and that’s been good for the district,” says James.
Residex figures show that 121 units were sold in Belconnen in the three months to 31 May. The suburb features regularly on Residex’s ACT capital growth Top 10 list.
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