With buyers continuing to compete fiercely for a limited supply of properties, Canberra’s house price has peaked yet again over the September 2016 quarter, following an outstanding run in which this capital outperformed its peers back in the June quarter.
“Canberra has cemented itself as one of the strongest capital city housing markets of 2016, second only to Melbourne for year-on-year growth,” says Andrew Wilson, chief economist at Domain Group, in the Domain House Price Report for September 2016.
Indeed, Canberra’s strength lies in how it sustains growth in a manner similar to Sydney and Melbourne, but offers lower prices. Its fiery rental market, the only one to record a rental rate increase over the September quarter, also draws investors.
Nicola Powell, property expert at Allhomes.com, adds that time on the market has decreased while the auction clearance rate passed 80% at one point in October 2016. She chalks up this high demand in part to low interest rates, which have influenced the middle and upper end of the market.
The big driver, however, has been low housing supply.
“Going into the beginning of spring, we expected a lot more property to come onto the market, but there was actually a decline since last September,” Powell says.
Short supply of houses sparks demand
Frank Pompeani, director of the Real Estate Institute of the ACT, affirms that free-standing houses continue to be the property of choice for buyers.
“There’s been quite a few apartments built, but there’s certainly an appetite for separate title, stand-alone dwellings,” he says.
This demand has not been limited to houses, however – the unit market has also experienced an upswing in response as first home buyers look to apartments and townhouses.
“That’s a natural cycle when new suburbs become available and infill occurs,” Pompeani adds. “Newer apartments have the attention in the first instance, and then established units catch up.”
SUBURB TO WATCH
Amaroo: New suburb reflects Canberra’s increasing popularity
Amaroo is a fairly young suburb, having been established in 1991, but it is growing up nicely. The house market recorded almost 5% growth over the past year, while the unit market offers excellent returns of up to 5.3% on average.
Amaroo lives up to its name – a local Aboriginal term for “a beautiful place”– and has several parks in the area. It also offers residents an easy lifestyle, with access to shops and schools. In fact, Amaroo School is regarded as one of the best educational institutions in the ACT for preschool to high-school students, with a strong community orientation and up-to-date facilities.
In the vicinity of the school, the local shopping centre is nearing completion, and in the meantime locals are only 1km from the Gungahlin Town Centre and from precincts such as the Gungahlin Marketplace. Bus services are also provided for commuters headed to Canberra, which is just 12km away.
