Strong fundamentals underpin property prices, keeping Canberra from fully feeling the eastern seaboard downturn
Despite the tumult in the eastern seaboard, Canberra, like Melbourne, holds on.
“[Canberra] will probably be a little impacted by what’s happening in Sydney, but at the moment, we’re not seeing the same negative conditions,” notes Nerida Conisbee, chief economist of REA Group.
“I think everyone in the eastern seaboard is being impacted by [what’s happening in Sydney] in a different way, but I don’t expect Canberra to be as negative as Sydney because the pricing isn’t so expensive.”
According to the CoreLogic Home Value Index released in March 2018, Canberra dwelling values recorded a drop of 0.3% month on month. While the lack of confidence in the Sydney market could wind up influencing feelings on Canberra’s housing, thus far, rental demand remains strong, particularly in the north.
Low interest and steady employment|
Housing approvals going down could help keep Canberra from experiencing oversupply down the road. As per the ABS, approvals for new dwellings fell by approximately 80% in the three months leading up to January 2018.
According to Housing Industry Association senior economist Shane Garrett, this is a huge drop for the ACT – however, it may just be a reaction to the approval of several major apartment projects in Braddon, Greenway, Turner and Farrer in August 2017. Unit construction is on the rise especially since the high prices of ACT land have been reducing the affordability of detached housing.
Nonetheless, the Mr Fluffy Asbestos Removal Scheme is helping land sales along especially in the inner north, inner south and in Woden Valley, as per Herron Todd White’s Month in Review report for March 2018. These sales can be attributed at least in part to changes in the Territory Plan that have permitted dual occupancy residences and units slated for professionals and investors
“The market has already seen completion of many of the unit titled properties, with strong demand for the much anticipated new houses in established suburbs which up until recently have been quite limited,” the report states.
With Canberra’s strong employment market being one of its top draws, the availability of appropriate living spaces could inspire migration to the country’s capital.
SUBURB TO WATCH
With Canberra’s strong employment market being one of its top draws, the availability of appropriate living spaces could inspire migration to the country’s capital.
SUBURB TO WATCH
CALWELL:
Near the Monaro Highway, the suburb of Calwell in Tuggeranong is enjoying the perks its accessibility to Canberra gives it.
Calwell is seeing growth across both the house and unit markets. Houses remain the most popular, with the median price passing $600,000 after a value increase of 11% in the 12 months leading up to February 2018. Meanwhile, the average rental return for units is strong at 5.3%, which could attract a lot of investors.
Monaro Highway gives Calwell residents a straight path to the Canberra CBD. Calwell Centre is a shopping centre that includes a Woolworths, restaurants and retail stores. The suburb is home to three schools as well.
Accessbility: The nearby Monaro Highway offers access to Canberra and Cooma
Yield: Calwell houses generate an average rental yield of 4.6%, while units get 5.3%
