A good employment market and low interest rates facilitate the national capital’s positive performance
Demand for housing is improving in Canberra as residents are becoming more confident of their job security following the Liberal Party’s re-election to government, which is maintaining the availability of jobs in the public sector.
“With a transient population and periods where government departments employ graduates and new staff, both rental and sales demand increase,” Herron Todd White states in its Month in Review report for August 2016.
“Demand for family homes is a local market driver. Second and third home-buyers with families are looking for centrally located housing in close proximity to schools and services.”
The property market is also supported by “historically low” interest rates.
Andrew Wilson, chief economist at Domain Group, adds: “Vacancy rates are still quite low in Canberra as well. I think investors will start looking at the apartment market in Canberra with interest, given those 5.6% yields [year-on-year].”
Houses rise while apartments take a back seat
Over the June 2016 quarter, the ACT faced oversupply concerns and its median unit price dipped by nearly 2%, although rental yields remained firm.
The Building in Australia report for 2016–2031, released by BIS Shrapnel, indicates that unit building levels will decline by a substantial 45% across the ACT.
Although Wilson agrees that construction levels have outstripped demand, he believes Canberra has already peaked in terms of new apartment builds.
ABS data supports this viewpoint, showing that approval levels rose by 8.2% in May. By contrast, house market prices jumped by over 3% in the June quarter, besting the other capitals in terms of quarterly growth.
In the face of a dynamic market, “Canberra tends have a sense of a more controlled environment for new land for residential purposes”, Wilson adds.
SUBURB TO WATCH
Ainslie: North Canberra suburb rides the wave of positivity
Living within the well-located suburb of Ainslie puts one within reach of many different attractions – the lights and buzz of the city, the natural wonders of Mount Ainslie, and the historic Australian War Memorial. This residential area itself embodies the traits of all these, with heritage-listed homes, tree-lined streets and a lively shopping hub.
Ainslie’s qualities have supported a boost in values, particularly in the past 12 months. Both houses and units reported more than 10% growth over this period, and the vacancy rate has decreased to a very low 0.3%, highlighting the suburb’s remarkable popularity.
Single-dwelling houses are the main housing structures in Ainslie, although there has been much development recently to include dual occupancy homes. Residents’ needs are met by the local shops, supermarket, cafe and restaurant and pharmacy. Toddlers are catered for at the Inner North Playschool, and kids can be enrolled in the preschool and primary school. Sports ovals and parks also encourage outdoor activity.
