Steady growth in the ACT market is supported by employment security and high levels of rental demand
Canberra remains in a strong position as housing prices soared over the May 2017 quarter. Charles Tarbey, chairman and owner of Century 21 Australasia, believes ACT’s growth is supported by the positive economy.
“There is security in the market, thanks to government employment, which is supported by a good-quality supply line,” he says.
“We have seen the market grow steadily over the year, with CoreLogic reporting a 5.7% yearon- year increase in dwelling values to the end of May. I believe it will continue to [grow].”
Canberra joins Melbourne as one of the best performers in the national property market in recent months, taking over from Sydney. In this political hub of the nation, the auction market performed admirably in May, with the overall clearance rate clocking in at 70%. This represented a near-10% increase compared to the previous year.
The Belconnen region reported the most activity, hitting an auction clearance rate of 80%, followed by central Canberra, Gungahlin, Woden Valley, Tuggeranong and Weston Creek, which weren’t far behind. These high clearance rates suggest strong ongoing demand in these suburbs.
Reno opportunities abound
The rush to buy at auction may be motivated by the renovation potential of properties in Belconnen, Woden Valley and Weston Creek that are situated on large blocks of land.
“Recently, there has been some significant capital growth in these areas. Well renovated houses have been selling at a premium,” reports Herron Todd White in its June 2017 Month in Review.
Renovators looking to work on older houses that simply require upgrading can find such homes in inner-north suburbs like Lyneham, Watson and Downer, which offer houses built in the 1960s and ’70s.
In addition, Ainslie, Braddon, Campbell and Yarralumla teem with dwellings constructed in the 1930s to ’50s.
Small, ex-government properties on large blocks are also popular since there is a lot of room for expansion, which is perfect for families. Thus, many renovators actually do not intend to profit off the end results but aim to occupy the homes themselves.
With the recent influx of new unit supply, however, renovators would do well to avoid apartments since the competition would surely limit the potential for profit.
Jane Slack-Smith, director of Investors Choice Mortgages, sums up Canberra this way: “[It] is its own little ecosystem – it responds to government changes more than any other driver. Over the long term it has been a solid performer; however, it is a hard area to model and predict.”
SUBURB TO WATCH
BONYTHON: Tuggeranong suburb offers high yields
Located less than five minutes from the Tuggeranong Town Centre, the suburb of Bonython has been recording strong, consistent growth.
The median house price has leapt past $600,000, but investors can get good returns of over 4% in the process. Units are still fairly affordable at under $450,000.
Given Bonython’s proximity to Tuggeranong, residents mainly head there for their shopping and dining needs, while enjoying the suburb for its natural charms, such as the black swans and kangaroos around Stranger Pond.
Bonython Primary School sits in the centre of the suburb. There is also a community oval for recreation and sports nearby.