Stronger house prices signal a rise in confidence, but the lingering worry about oversupply in the unit sector continues to cast a dark shadow on the nascent recovery
Things are looking up in the Australian capital city. The numbers are stronger and the more upbeat sentiment is palpable in the housing market.
During the month of May, Canberra houses outperformed all other capital cities by recording a solid 1.6% growth in values as the majority suffered losses, bar Darwin’s 0.4% gain. During the May quarter, Canberra was the third-best performing capital city for houses, gaining 2.1%.
Recent data from the Real Estate Institute of Australia shows similar upbeat results. It shows that when compared to the same quarter a year ago, median house prices rose by 5.9%.
The West and North and Outer South areas of the city led the outperformers, with their median house prices surging by up to 7.9%.
However, the unit sector remained weak, with the median unit price dropping by 2.5% during the three months ending May, according to the CoreLogic figures. During the past 12 months, unit values have dropped by 3.9% to $409,700.
Andrew Wilson, chief economist at Domain, points out that Canberra has shown steady growth recently, thanks to improved sentiment.
“Canberra has had a good start to the year and the property market is certainly looking better,” he says. “Domain recorded three consecutive quarters of growth in Canberra for the first time in four years. Canberra saw the highest auction clearance rates in four years and the highest auction volumes in six years.”
Wilson notes that the turnaround is boosted by growing confidence as the job shedding that many feared before the budget hasn’t materialised.
“The movers of that market have been in the mid to upper range because of the perception that it’s a good time to buy.
“With the lower interest rate, we’ll have another solid year. Things are a lot better there. Canberra is a solid market but it has always suffered from the nature of the economy and the federal government.”
SUBURB TO WATCH
Macgregor: Spectacular suburb attracts young, wealthy residents
For impressive views of nature, such as Ginninderra Creek Valley or the Brindabella Range, look no further than Macgregor. It is about 20km northwest of the Canberra CBD and perfect for families attracted by its proximity to Belconnen (less than 10 minutes away), one of Canberra’s busiest shopping centres, and to schools (both public and private) and public transport links.
According to the most recent ABS Census, Macgregor’s population is young and well off, with a median age of just 31 (six years younger than the national average) and a median weekly household income of $1,898 ($664 above the national average).
There is a great combination of new and established housing in this suburb, with renovation opportunities as well. Houses are more affordable than in neighbouring Dunlop, where the median house price is $490,000. Moreover, landlords shouldn’t struggle to find a tenant as the vacancy rate is just 1.01%.
Houses on Mileham Street and Archdall Street are close to buses and Macgregor Primary School, and a few minutes’ drive from the Kippax shopping hub and the Charnwood and Dunlop supermarkets. Three-bedroom single-storey houses on big blocks of land can be bought for around $450,000. Some properties have lovely mountain views.
