This month, NextHotSpot.com.au has contributed the market report for AUSTRALIAN CAPITAL TERRITORY
The national capital is more or less seeing the inverse of Sydney’s current surge of consumer confidence. Historically strong and almost certain to come good again, the market stands a chance of weakness after this year’s federal election. A Liberal National Party (LNP) victory, which looks probable at the time of writing, would see the loss of thousands of public service jobs and areas of weakness in real estate pricing.
Canberra’s residential property market has been one of the most consistent performers of any major city in Australia over the long term. It is a city purpose built for the business of government, and one long-standing quip is that there “are no recessions in bureaucracy”.
About as close as Canberra gets is when there are large-scale retrenchments in the public service. It’s a widely held view that the Howard government’s sacking of over 10,000 public servants in 1996–97 was largely responsible for a drop in house prices of up to 20% in some areas over that time.
Potential LNP Prime Minister Tony Abbott has recently affirmed his view that Australia has around 20,000 too many public servants.
Whether or not property prices in some areas were dropping towards the end of Keating’s term as prime minister or not, the Howard government’s cuts to the public service were clearly a contributor to the process. It’s also likely that many public servants could see the writing on the wall in the twilight of the Keating government.
This is not political comment, just investor reality. Pricing is unlikely to run o anywhere in a hurry, and there’s a strong chance of cheaper stock being available later this year.
