While real estate prices are expected to stabilize over the course of the year, the Canberra market remains strong – for now
Canberra has one of the highest real estate prices in the country and was one of the most important markets in Australia at the end of 2018.
"Price growth is still strong and the demand for purchase and rental is good. Canberra is well worth seeing for those who really understand this market, "says Nerida Conisbee, chief economist at REA Group.
However, she advises buyers to worry about the property tax. This tax has led potential buyers to areas just beyond the border with New South Wales, such as the city of Queanbeyan. But buyers who have assessed and accepted the Canberra Property Tax have only the embarrassment of choice for what they can buy.
"There is an opportunity in Canberra in the area of ​​improvement, whether it's renovating or adding value to a site through subdivision and gentrification," says Damien Lee, Acquisitions Manager at Caifu Property.
"Many very good mixed-use developments also go through here, with retail injection, coffee injection downstairs and beautiful apartments on the floor."
In line with the downturn in Sydney, Lee expects the value of properties in Canberra to stabilize. But while most other capitals signal a decline, a flat market remains a good market.
"During the September 2018 quarter, non-house housing prices declined in all capital cities, with the exception of Melbourne and Canberra," said Malcolm Gunning, incumbent chair of 39, Australian Institute of Real Estate, December 2018.
Of all states, ACT also recorded the largest increase in housing finance trends compared with October 2018, at 2.3%.
Rental conditions tighten
The positive performance of the rental market in Canberra should be of interest to investors. "The median rent for three-bedroom and two-bedroom homes has remained stable in Sydney, Perth and Canberra," said Gunning.
"The markets of Sydney, Melbourne, Brisbane, Canberra and Hobart have vacancy rates below the 3% mark, indicating strong demand for rental housing in these capitals."
CoreLogic's data and analysis support this view. The Hedonic real estate value index in December 2018 indicated that Canberra had Australia's most restrictive rental market, as demand for rental housing outstripped supply available. CoreLogic also points out that Canberra has the strongest market conditions after Hobart.
SUBURB OF WATCH
HARRISON: The apartment activity up
One can observe the strength of ACT in the Gungahlin suburb of Harrison, which has recorded consistent positive growth in recent years.
The unit market in particular has recovered. After a slight decline in December 2013, values ​​increased by 14.8% in 2015. Over the 2017-2018 period, prices continued to rise, rising by 3% to reach a median of a little less than $ 400,000.
Sellers can unload properties with a discount of only 3.9%. Rental returns are also strong, with unit investors achieving an average yield of 5.7%. Tenants pay an average rent of $ 420 a week, after a remarkable 13.5% increase in rents over the 12 months to October 2018.
Growth: the unit market recovered after negative growth, prices have been rising since 2015
Returns: Rental yields are high in this suburb, with 4.2% and 5.7% for homes and units, respectively
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