With the stability of government and military jobs exerting a strong influence, it's not like Canberra's market will do anything worse than stall.
Situated far from the faster paced cities to its north and south, the more peaceful atmosphere in Canberra fits well with its more relaxed lifestyle with a seemingly slower pace. And unlike the other nearby cities, Canberra's property market has been less volatile, showing few major swings in one direction or the other in the past 12 months.
"We're a country town, but we don't have the same economic troubles as other country towns, unless those troubles are politically related, but that doesn't happen often," says Michael Wellsmore, president of the Real Estate Institute of the ACT.
Investors know they can count on stability here, where the seemingly guaranteed government and military jobs underpin the market. Unemployment in the ACT is lower than anywhere else in the country, still below 3% in April, while others were much higher, such as neighbouring NSW at a ten year high of 6.9%. "That makes for a very stable area," says Wellsmore on Canberra.
The latest market movement in the capital has largely been supported by the rush of first homebuyers, but that doesn't mean only the lower priced homes have been affected. Wellsmore says first homebuyers have had a flow-on effect, pushing the sellers of these more affordable homes into their second or third home. "There have been substantial purchases of established homes," says Wellsmore. "Those properties have been moving."
The buying activity has not been limited to one area, however. Although the Gungahlin development area has remained strong, other suburbs such as Belconnen, Woden and Tuggeranong have also seen strong activity in house sales, says Wellsmore. Colliers International Residential Research Director Jonathan Rivera says 16 suburbs of the ACT are with a median under $400,000, leaving plenty of options for buyers looking for an affordable home.
Units are selling fastest in the north of Canberra, says Wellsmore.
Rentals have been especially strong in Canberra, where the vacancy rate was at 1.1% in March, according to SQM Research. No other capital had a lower rate, although Perth equalled the mark. That figure comes even as a large number of renters have turned to buying their first home this year.
"I can't find any (real estate agency in Canberra) with a vacancy rate above 2%, and some of my largest members are saying it is below 1%," says Wellsmore. Some of the most popular units for investors are the smallest, says Derek Whitcombe, director of residential project marketing in Canberra for Colliers. "The smaller one bedroom and studio apartments are being snapped up," he says.
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