In combination with a strong economy, population growth is expected to support Canberra’s rise up the ranks
Folks are flocking to Canberra, and the capital city is standing out after a significant increase in population.
“The ACT government predicts ongoing strong population growth of 6% in Canberra by 2020. Around 60% of this growth will be due to natural increase and about 40% through net overseas and interstate migration,” says Michael Yardney, CEO of Metropole Property Strategists.
The above-average rate of growth is part of the cycle driving Canberra’s overall success, along with the economy and an active job market.
“Canberra’s property market is a ‘quiet achiever,’ having performed well over the last few years, and it is likely to continue to do so. House price growth has outpaced its flatter apartment market,” Yardney says.
“Having said that, I don’t consider Canberra a good place to invest as their horrendous land tax rates chew into your cash flow more than anywhere else in Australia.”
The lifting of stamp duty on commercial properties priced at under $1.5m is also primed to bring in more investors, in addition to boosting small businesses, according to Colliers International.
“Removing this expense could mean that a small business operator who previously thought owning their own premises was completely out of reach can now seriously consider this option,” says Matthew Winter, manager of investment services at Colliers International.
“The conveyance duty abolition will also make the ACT more attractive for commercial property investment by making it cheaper to purchase here, which in turn increases potential returns and makes the territory more competitive when weighed against other jurisdictions.”
A portion of the southern gateway to Canberra, Section 100, is also set for an upgrade, with Morris Property Group at the helm of the development.
“Section 100 is adjacent to the New Acton cultural precinct, Australian National University, City Hill and the ACT courts precinct. It is smack in the middle of a major employment hub, which includes many Commonwealth Government departments, and is of course a short walk to the city’s shops and restaurants,” says Paul Powderly, chief executive of Colliers International.
Morris Property Group plans to construct over 1,000 residential apartments at this site, adding to Canberra’s unit supply over the next few years.
SUBURB TO WATCH
MONASH: Units stumble in this central spot
Named for the general who commanded Australia’s army in World War I, the young suburb of Monash is enjoying overall growth.
The median house price in Monash passed $650,000 following a 5.2% boost, continuing a positive trend observed since 2013. Although units generally performed well, the year to May 2018 saw values hit a snag, falling by 2.3% to a median below $450,000.
Rental returns for houses also soared by 10.2%, while unit returns increased by 2.9%, suggesting that homes in this area are attracting high demand from tenants. Units recorded a higher average yield than houses did, at 5.1% as of March 2018.
Monash is home to the Canberra Islamic Centre and the Australian National Islamic Library.
Rental market: Both houses and units are attracting demand from renters
Growth: There has been a five-year trend of house price increases in Monash