Foundations laid for growth
A stoic performance in the latter stages of 2011 should complement a high demand for accommodation and see Canberra’s property market beat the growth of other major centres in 2012.
Canberra has proved resilient for property over the past three years, according to APM senior economist Andrew Wilson. He puts this down to a combination of low unemployment, a shortage of accommodation and a lack of reliance on volatile industries.
“Canberra was reasonably solid at the end of 2011 for property performance,” he says. “Considering the strong price and interest rate rises that we got through 2009 and 2010, its adjustment process has been reasonably orderly and we expect that to continue.”
Wilson is predicting growth for the ACT of 3–5% in 2012 and believes low unemployment will play a big part in that.
“Canberra has got one of the lowest unemployment rates in the nation and usually sits at around 3%. Being a public service city it relies on the government sector and not on other more volatile industries such as tourism, agriculture, large retail and manufacturing,” he says.
Like most Australian capitals, Canberra has a shortage of new housing, but Wilson notes that this is especially significant for entry level buyers.
“The Canberra housing market is very dense in terms of its price at the bottom and the middle,” he says. “It tends to be expensive for entry level and mid-level buyers and that’s the greater proportion of its market.”
Wilson believes the tough, competitive climate will drive the market forward in spite of any uncertain surroundings.
Real Estate Institute of ACT president Michael Wellsmore is expecting a slowdown in activity by private developers in Canberra, due to fees imposed by the government.
Development aside, the Canberra property market does not have the same variables as some of the bigger, more volatile cities and therefore grows or suffers as a unit. Wellsmore believes established areas such as the parliamentary triangle in the inner south and regular CBD in the north will continue to perform regardless.
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