During what could easily be labelled as the year of the buyer, Canberra’s proving to be the standard bearer for capital growth amongst Australia’s major cities.
“Over the year values are up 0.7%, and over the month they’re up 1.4%,” explains RP Data senior research analyst Cameron Kusher.
“It’s the safest market in a lot of ways,” says APM senior economist Andrew Wilson. “One of the reasons for this is that Canberra has more of the middle range belt of properties. It doesn’t have so many prestige $1m-plus suburbs, so there isn’t any of the disparity in price sectors that other cities see.”
Low volatility
Wilson adds that the Canberra market is compressed as a whole, with unemployment sitting at 2–3% and wages generally falling within the relatively narrow $70,000 to $140,000 range. Combine this with the city’s high proportion of mid-range property and there’s a lot of median priced activity. This has helped the city to stave off the price volatility that can plague more diverse property markets.
“Even when buyer confidence is low and there needs to be a price adjustment, you still get demand for property, and unemployment is low,” says Wilson.
“What changes that situation is when government policies start looking at cutting public service numbers, as that can have an effect on the market.”
The rental market, too, continues to strengthen, with average yields reaching 4.8% for houses and 5.4% for units, notes Kusher, and Luton Properties principal Richard Luton puts this down to government employees.
“Our rentals stay pretty strong, because there are a lot of people coming here for the year for government work. So we find that our vacancy rate’s below the national average,” says Luton.
And when it comes to finding the most competitive rental markets, REIACT president Michael Wellsmore suggests targeting employment nodes.
