Canberra Property Investment Overview

While steady migration and high disposable incomes continue to influence demand for property investment in Canberra, affordability is waning, thanks to rising prices over the past couple of years. The Housing Industry of Australia (HIA) in its housing to 2020 report estimated that the higher rate of home building in the ACT in recent years has exceeded demographic demand and reduced the lag accumulated in the first half of the last decade. Modest population growth has eased pressure in the Canberra property investment market. Vacancy rates have edged up marginally and rental growth has slowed. The federal government has also prioritised spending away from the public sector.

Despite this easing of growth, the labour market has remained solid. We have seen a lot more people refinancing with the intention of renovating or extending their properties rather than for new properties or upgrading. It is estimated that the ACT will be home to an additional 22,600 households by 2020. Demand is keeping pace with supply unlike other states and is projected to continue to do so.

Fundamentally Canberra is a city that has a high proportion of non resident or semi permanent population. Negative sentiment has overwhelmed solid fundamentals and what we anticipate for the next couple of years is diminished demand for the residential property market in the ACT.

Despite the general slowing down of the market, there will be opportunities in some sectors, investors will need to be very selective and do their homework.

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