According to Domain’s June Quarter House Price Report, Canberra’s median house price increased by a nation-leading 3.1% over the three-month period to $654,306.
In the year to June, Canberra’s median house price increased 4.8%, the second best annual rate of growth behind Melbourne’s 7.4%.
Domain Group senior economist Andrew Wilson said signs point to Canberra’s house prices continuing to improve and there is a similar sentiment on the ground in the national capital.
“The strength we’re seeing started around Christmas. Usually over Christmas Canberra just closes down and is a really dead market, but last year we were still doing inspections right up to Christmas Eve for clients,” Penny Hyde, principal of Penny Hyde Buyers Agent, told Your Investment Property.
“Agents across the city were working and the common talking point was just how busy it was and it’s just gone from strength to strength since then. There’s still a lot of momentum in the market right now and I really can’t see it stopping anytime soon,” Hyde told Your Investment Property.
While a strong run over one quarter or a half a year may not fill everybody with confidence that Canberra’s market is on the improve, Hyde said this year has seen the city’s market show a surprising amount of resilience.
“It’s been quite unique recently [during the election period]. Usually when we have a period of political uncertainty the market just stops and we people just put everything on hold,” she told Your Investment Property.
“But that didn’t occur this time around, there really seems to be lot more confidence in the market at present.
According to Hyde, Canberra’s house market has performed well across the spectrum, with momentum first picking up at the upper end of the price range before trickling down through the market.
The performance hasn’t gone unnoticed either, as investors from outside the ACT increasingly turn their eyes to the area.
“We’re certainly starting to see a lot more investors come into the market, in the past week I’ve had three new clients from out of state come to me,” Hyde told Your Investment Property.
“Some of them have moved down here because they’ve been priced out of say Sydney or Melbourne, but there’s also a few astute investors that have started to pick up on the buzz that’s around at the moment.
“People start looking a bit deeper after that and then they realise that it’s a pretty good investment opportunity all around.”
While an investor from Sydney or Melbourne who looks to Canberra may not face the difficulties that come with investing in a more far flung location like Brisbane or Perth, Hyde said some local knowledge is still likely to be a big benefit for investors in Canberra.
“In Canberra at the moment I do think houses are the better choice. We do have a large supply of units here and the last four to five years has seen a lot more go up, so there’s quite a bit of competition in that sector.
“Most of the property in Canberra sits in that $500,000, $600,000 or $700,000 mark and there are good pockets of returns in all of those segments.
“There’s not a lot of difference between one side of Canberra and the other, but one thing that can make a difference is school catchments. A lot of the schools in Canberra have small catchment areas and if you happen to be in one of them then you can see much better returns in terms of growth as well as rental returns.”