According to Eliza Owen, market analyst for OnTheHouse.com.au, the ACT’s tendency to lag behind the Sydney property market has worked to its advantage.
“The July [2016] statistics reflect that rents are adjusting to increased growth and popularity in the southeast markets, which have recently benefited from a spill over of growth from Sydney,” Owen explains. Canberra represents one of these markets.
Furthermore, Canberra was one of only three cities to avoid a decrease in rental rates – in fact, rates rose by 2.6% over the past 12 months, according to CoreLogic.
This represents an increase in annual rental growth. In the process, returns have gone up as well, which could entice more investors into this market.
Buyers’ top picks
Pioneer suburbs like Yarralumla, Griffith and Kingston contain the traditional homes that are most in demand due to their central location. Herron Todd White reports that many such homes have been expanded over time, making block size another factor.
Developers are also looking into modern construction techniques to save costs while enhancing building efficiency.
“There is a trend towards contemporary designs using modern lightweight cladding material. These materials and construction techniques are cost-efficient for builders and allow high rates of production of dwellings which has been required due to housing demand,” Herron Todd White states.
Derek Whitcombe, director of residential project marketing at Colliers International, says the performance of three-bedroom apartments has been particularly strong.
“They are renting quite well and the return that you’re getting for such apartments in Canberra is quite high,” Whitcombe says.
“It’s a changing landscape. In the past, developers have provided a high percentage of small apartments targeting investors, but investors are oversupplied in those sorts of apartments. Developers in Canberra are pretty savvy and they’re adjusting their mix to meet demand.”
SUBURB TO WATCH
Yarralumla: Diplomats’ dwelling choice draws interest
Already regarded as one of Canberra’s most sought-after suburbs, Yarralumla’s stock is blazing even further in 2016 as its house market has recorded a whopping 14.4% growth in the past 12 months.
Its popularity has mainly been supported by its ideal location. Yarralumla is situated along Lake Burley Griffin and is less than 10 minutes away from Canberra, with daily bus services that make it easy to get there.
There is also a great deal of open space in Yarralumla, which lends itself to the establishment of recreational areas such as the Royal Canberra Golf Club and several parks. The local shopping centre provides a supermarket, restaurants and specialty shops, among other amenities.
Because Yarralumla is primarily a home to diplomats, a schooling option is provided for students from Japan by the Canberra Japanese Supplementary School Inc. There are also preschools, daycare facilities and a behavioural centre for problem children.
