Confidence in the employment sector is supporting a stable economy in Canberra, boosting the property market in the process
Canberra is maintaining its upward trajectory as median rents an the number of first home buyers increase.
According to Malcoml Gunning president of Real Estate Institute of Australia (REIA), the median rent of a three-bedroom house rose by 6.7% over 2017. However, affordability has become an issue for tenants as result.
“Over the [September 2017] quarter, the proportion of median family income required to meet rent payments increased by 0.3 percentage points to 24.6% [across Australia], with rental affordability declining in New South Wales, Tasmania and the Australian Capital Territory,” Gunning says.
The proportion of income required to meet the median rent in the ACT rose to 18.1% – 0.8 percentage points higher than in 2016.
At the same time, the average vacancy rate in Canberra fell by 0.4 percentage points over the September 2017 quarter to a very tight 0.7%. This is painting a rosy picture for investors, who are in the box seat.
Growing number of FHBs
Though renting may be becoming less affordable in Canberra, the cost of buying a home in the ACT has become more affordable over the September quarter, with the proportion of income required to meet home loan repayments decreasing to 18.5%.
This represents a decrease of 1.3 percentage points over the September quarter and 1.5 percentage points compared to the same quarter last year.
Perhaps unsurprisingly, the number of first home buyers has increased by 20% in the ACT. REIA reports that the number of loans given to new owners skyrocketed by 64.4% compared to the September 2016 quarter.
“Of all Australian first home buyers over the quarter, 2.4% were from the Australian Capital Territory, while the proportion of first home buyers in the Territory’s owner-occupier market was 26.8%.”
The employment sector plays a crucial role in the capital’s appeal, given the availability of positions in government, tourism and agriculture.
“The job security offered in Canberra is something that should appeal to an investor’s agenda, and with Canberra’s numerous government departments I believe confidence will remain in the marketplace,” says Charles Tarbey, chairman and owner of Century 21 Australasia.
“This, along with a steady flow of new property coming into the market, has created a stable and strong real estate economy in the state.”
SUBURB TO WATCH
PALMERSTON: Demand is high in Gungahlin suburb
The second suburb to be developed in the Gungahlin area, Palmerston may be primarily residential but its bustling commercial centre caters very well to residents.
Houses are performing excellently, with prices going up by 12.1% in the 12 months to December 2017. For investors seeking good yields, units may be the better bet, as the average rental return is 5.6%. Apartment values are also reasonable at a median or just over $400,000.
There are small shopping and community centres in the centre of Palmerston, as well as medical facilities. Parents have a school option in Palmerston Primary School. The suburb is also linked to Gungahlin Town Centre and Belconnen via bus.
Amenities: Palmerston has medical facilities, shopping hubs, community centres and a primary school
Accessibility: Residents can travel to Gungahlin and Belconnen via several bus routes
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