Canberra is one of the few consistent property markets in Australia, maintaining a trend of gentle but persistent growth throughout the years.
CoreLogic’s Home Value Index for September 2019 indicated that over the August–September period Canberra was among the capital cities that saw positive increases in dwelling values, averaging 1% growth, alongside price rises Brisbane, Sydney and Melbourne.
Auction activity has risen in Canberra as well, another indicator that buyers are on the move. CoreLogic’s Quarterly Auction Review noted that the city’s average clearance rate had jumped to 62.3%, an improvement on the last quarter and a boost compared to 12 months ago.
“The number of listings across the capital cities is 10% lower than a year ago, and fresh listings being added to the market are 15% lower than a year ago. As buyer activity rises, the lack of available stock could see a renewed sense of FOMO [fear of missing out], supporting further price growth,” suggests CoreLogic’s head of research, Tim Lawless.
The considerable potential for profit from resales may also contribute to heightened buyer demand. In CoreLogic’s most recent Pain and Gain report, Lawless notes that, in the ACT, a remarkable 97.3% of house resales generated earnings for their owners.
“Despite a downward trend nationally, the vast majority of home owners continue to resell their properties for a profit, highlighting the longer term positive trend in market conditions. Over the three months to June 2019, owner-occupiers were more likely than investors to realise a profit from selling their property,” he says.
“This trend was evident across the combined capitals, but particularly in Melbourne, Brisbane and Canberra, where investors were more than twice as likely to sell at a loss compared to owner-occupiers.”
For renters, Canberra is the second-most expensive capital city to live in, with an average rent of $538 per week. However, this certainly hasn’t kept tenants from filling up vacancies.
“The ACT seems to be ticking a lot of boxes, with low vacancy rates and low unemployment,” says Matthew Lewison, director of OpenCorp.
“This bodes well for price growth, but being a smaller market that averages only a few hundred building completions each month, a slight increase in the supply of new houses could quickly change the economics of the city from a housing perspective.”
GARRAN: Houses experience a slump
After a period of consistent positive growth, the house market in the suburb of Garran hit a wall in the 12 months to September 2019, with values slipping by 2.2%, although the median value of this type of property remains above $1m.
Units fared better during this period, with prices up by 2.6%, pushing their median value above $600,000. The average rental rate increased by 5.6% to $570 per week in the year to July 2019, and the average rental yield is reasonably high at 4.8%.
There are several primary schools in Garran, which is located in Canberra’s Woden district, and the suburb is also home to Canberra Hospital.
Amenities: Canberra Hospitaland many primary schools are located in Garran
Units: Units have recorded consistent growth over the last five years