Market Report - ACT (September 2007)

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Peter Blackshaw, President of the Real Estate Institute ACT (REIACT) says Canberra is in urgent need of investors in the market as "supply is being outstripped by demand".

"The market is currently very strong, and rents are at their highest levels," says Blackshaw.

"I think we'll continue to see a similar rate of growth, unless there's a significant increase in interest rates."

Property values in the ACT have grown by 3.35% in the three months to May 2007 to reach a median price of $420,000, reports Residex, with a median rental return of 5.06% or $410. This figure is higher than the average yield in Sydney, and is the highest median rental amount of all states across Australia.

Blackshaw says that available property stock is diminishing, which, together with the ACT's strong economy and low unemployment levels, is driving property values upwards.

"Two years ago in Tuggeranong, for example, there were 650 residential properties for sale. At the moment, there are below 150 in the same area – so supply is being outstripped by demand," Blackshaw says.

"The ACT economy is very strong at the moment. We have the lowest unemployment rate, and that's going to get lower as the federal government has committed to a further 5,000 positions in the next two years. Because we already have a low unemployment rate, these people will predominantly come from interstate."

Although Blackshaw admits that some areas in the ACT have performed much better than others, with "certain pockets where prices have risen more steeply", he believes property prices will continue on an upwards trend.

"You pretty much couldn't make a mistake buying property in Canberra at the moment," Blackshaw says.

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