Canberra has been going from strength to strength, recording 0.2% growth in property prices over the three months to May 2019 to become the top performer for the period and upsetting Hobart.
“The great driver for real estate in the ACT is a very healthy 2.2% population growth, and when coupled with the lowest unemployment and highest average salary, demand is always there,” says Michael Kumm, president of the Real Estate Institute of ACT.
“The inner areas of Canberra are always popular due to their proximity to areas of attraction, work, shops and restaurants.”
The resulting need for housing has pushed the government to make provisions for new residential construction, particularly of highrise apartments.
“We are now experiencing an increase in high-rise unit development whilst reducing the size and number of single residential allotments,” Kumm explains.
The rental market is gaining ground, and buying a home is becoming increasingly difficult due to a lack of affordability.
“For the past 40 years, around 30% of the total residential market has been tenanted. This figure is now increasing, and in the past few years is slowly creeping up to 40%, partly due to the increase in government contractors but also the superannuation guarantee levy making owner-occupied housing less affordable.”
While population growth, economic strength and job availability have helped keep the capital steady throughout the national downturn, Canberra has not been entirely immune to its effects.
CoreLogic’s Home Value Index for May 2019 indicated that over the month of May dwelling prices fell by 0.2%, although the growth rate over the quarter clung to a positive 0.2%. Moreover, across the state, some suburbs have recorded declines in year-onyear transactional sales values, with Isaacs in particular taking a considerable blow of 36.8%. On the flip side, however, the suburb of Higgins saw its total value of sales soar by a whopping 63.9% in February 2019.
Nonetheless, with the federal election over and the political uncertainty clearing, CoreLogic head of research Tim Lawless expects greater confidence in the market.
“The federal election outcome has removed the uncertainty surrounding taxation reform, which should see an improved level of confidence amongst homeowners and prospective buyers, particularly investors,” he says.
SUBURB TO WATCH
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The suburb of Page in Canberra’s Belconnen district has been characterised by a steady increase in property prices over the last decade. House values recorded growth of 4.4% in the most recent 12-month period – to May 2019 – while unit values inched up by 0.7% to a median price of $432,625.
At the same time, landlords were thrilled as rental returns soared in the year to March 2019. For houses, rents increased by an impressive 11.1% to reach an average of $500 per week, while unit rents jumped by 10.0% to $440.
This translates to landlords profi ting well from average rental yields of 4.3% for houses and 5.9% for units.
