While other real estate markets weaken, Canberra is experiencing price growth – but concerns could be expressed about potential oversupply
The slowdown in Sydney and Melbourne was the main target of the national real estate market, but in the meantime, Canberra posted a strong performance, one of only two capitals to have recorded positive price growth at the time. December 2018
According to CoreLogic data, the city also recorded the highest growth in rents for all capital cities in 2018, with rents increasing 5.6%. CoreLogic's quarterly rent review in January 2019 also indicates that the Canberra rental market has become the second most expensive market in the country, with an average rent of $ 539 per week.
The capital is supported by the strength of its local economy, itself supported by a good job market. Nevertheless, this positive trend may soon slow down. According to Geof Snell, a leading real estate economist at BIS Oxford Economics, Canberra could face problems once the new housing stock is installed.
"There is excess supply potential due to high construction levels – moderate levels of insufficient supply are diminishing," Snell said.
He also points out that the economy is highly dependent on public spending.
"On the economic front, ACT's momentum should also moderate slightly after its recent performance," he says.
Values ​​decline in premium suburbs
With these potential problems on the horizon, affordability will become crucial to maintaining demand in ACT. The number of suburbs with a median minimum price of $ 1 million was reduced to nine in January 2019 – down from 10 in 2017 and 2018. However, these suburbs continue to outpace the capacity of many buyers. According to Domain data, these pockets are generally centered on Canberra's inner ring, with the exception of O'Malley.
High real estate prices led to a decline in first-time home purchase commitments: the number of financial commitments in this group decreased by 15.1% in February 2019. In year-over-year, the rate of decline was 16.2%.
For those who prefer the location of the most expensive suburbs but do not have the budget, there are other options – namely the nearby suburbs whose prices are considerably lower. For example, those who wish to buy from Forrest might consider Deakin instead, or Griffith rather than Narrabundah or Ainslie instead of Reid.
SUBURB TO MONITOR
WATSON: Price Correction in the Suburbs of Canberra
The young suburb of Watson, located just 15 minutes drive from Canberra, has had a generally positive growth trend in recent years, but may already be starting to take corrective action.
House prices fell 6% between January and January 2019, following a 15.7% increase from 2016 to 2019. This brought the median value down to less than $ 750,000.
Things are a bit more stable in the unit market, with prices falling just 0.9%. Since this sector has traditionally experienced low growth, it is not as strongly affected by market movements. It also remains affordable – the median value of units is less than $ 400,000.
Affordability: Units cost only $ 383,347 – an added bonus for those seeking easy access to the city
Units: Watson units perform better than homes, despite more moderate growth
Can you afford to buy in this suburb? Find out how much you can borrow
Top suburbs:
Mt Lawley
,
Darlington
,
Greenwood
,
balga
,
willliamstown
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