Growing Demand for Canberra Homes
Canberra has been one of the strongest performers in the Australian property market over the last 12 months, and that trend seems set to continue this year.
While inner-city homes are still the top choice for buyers, the positive turn in the market has not just been limited to the CBD but has extended to properties in the outer ring, likely due to their lower prices.
“We have seen such a strong demand for detached houses,” says Nicola Powell, data scientist at Allhomes. “That has really helped push up the prices and resulted in more homes sold by auction.”
Powell attributes the recorded increase in sales to low interest rates, since loans have become cheaper to obtain for buyers in the last few years. While she expects interest rates to increase, the shortage of quality stock should sustain the market as demand continues to surpass supply.
The unit market in particular has been favourable for investors, with rental yields increasing over the past 12 months, according to CoreLogic’s head of research, Tim Lawless.
This could be one of the motivating factors behind the heightened investor interest in Canberra.
Oversupply could slow growth
Michael Yardney, director of Metropole Property Strategists, maintains a rosy view of the state’s future, though he cautions investors to be wary of the apartment market.
“Canberra’s property markets have always been affected by the federal government’s expenditure policies, but 2017 should be another good year for ACT property, especially in the inner ring locations,” Yardney says. “However, there is still an overhang of new apartments that will dampen unit price growth.”
In the meantime, sales in the state have been strong: Canberra recorded the third-fastest average selling time of all the capitals (44 days, according to CoreLogic) – just behind Sydney and Melbourne.
The district of Belconnen has been a standout, experiencing significant growth in all price points. Peter Walker, principal of Peter Blackshaw Belconnen, says suburbs like Cook, Aranda and Kaleen are being considered by buyers who have been priced out of the inner north.
Tim McInnes, agent at Luton Properties Belconnen, says: “People are seeing the value that’s on offer in Belconnen, and that demand has been positive for sellers. “As Canberra continues to grow outwards the Belconnen region has become much more central.”
SUBURB TO WATCH
Kaleen: Belconnen suburb benefits from boom
A suburb of the booming Belconnen district, Kaleen is well stocked with amenities and boasts of its accessibility. The suburb has been recording consistently strong growth over the past five years, with an annual growth rate of 5.4%. Due to demand, vendors have been able to sell houses at a low discount rate. Although yields are not very high, the average vacancy rate is a very low 0.73%.
Kaleen is home to several ovals that cater for sports such as soccer, cricket and rugby. There are a number of bicycle trails running through the suburb to neighbouring Giralang. Kaleen also contains two small shopping hubs, with another larger shopping centre near the suburb’s western border.
Kaleen houses two primary schools and a high school. It is bordered by Baldwin Drive and Ginniderra Drive and is less than 15 minutes from Canberra by car. Commuters can also take the bus to the CBD.
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