Canberra has enjoyed a sustained period of capital growth over the past two years and it seems set to continue – albeit at a slow, steady pace.
The Canberra market continues to quietly power ahead, boosted by steady demand underpinned by above-average population growth, a stable and highly paid labour force and increased interstate investment according to Andrew Donnelly, CEO of Braxton Chase.
The political drivers of Canberra's property are unique for an Australian market. A highly transient population that readily provides tenants has kept rents high and vacancy rates low, particularly for attached housing. The median price of units grew to $361,000, a 15.13% increase for the year, reports Residex.
"Demand in the past year for units within a 5km radius of Canberra's city centre has created a big buzz, pumping up both prices and rental yields," says Donnelly.
The renter demographic has also created an anomaly that can translate into healthy yields on a purchaser’s capital investment.
"Just consider Canberra is the only capital city where the median price of renting a two-bedroom apartment is more than the median price of renting a three bedroom house,” notes Donnelly.
There are also some infrastructure works at play likely to improve growth in the city. The Ghugahlin Drive Extension upgrade is set to improve accessibility to Canberra’s northern suburbs as well as the congestion-reducing road duplications in Tugeranong.
However, the upside of the infrastructure boost and ongoing rental returns is tempered somewhat by a land supply increase due in the northern suburbs throughout 2008.
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