Canberra Property Investment
The latest Australian Bureau of Statistics figures add up to an average performance in Canberra for 2008, but future growth looks likely. While the ACT has not returned the most spectacular results for the last half of 2007 and first quarter 2008 reasonable growth of 3.48 percent has been recorded. Rents remain high, with healthy returns of 4.67 percent placing it second only to Darwin and country Northen Territory.
Australia's capital has been a solid performer over recent years, and was arguably the country's best market along with Brisbane and the Gold Coast for residential property over 2007. Strong migration and a stream of new well-paid public service jobs have served to strengthen underlying demand, while a major shift of military personnel and their families to the region added further market stimuli. This has resulted in strong demand for investment in property and a construction industry trying to keep pace.
Canberra and Brisbane property investment demand in the past 12 months is not yet hitting affordability. A report from the Commonwealth Bank and the Housing Industry Association found that for both these cities buying a home actually became more affordable in the September quarter.
Top performing suburbs
A recent survey by Money Magazine named Braddon, Nicholls and Griffith as Canberra's top performing suburbs.
According to the survey, priced jumped 60 per cent, 67 per cent and 68 per cent respectively over the past three years, leading to average annualised growth of 14 to 10 per cent.
Top performers in the year to June included Forrest (up 51 per cent), Chifley (up 52 per cent) and McKellar (up 51 per cent).
Agents say suburbs adjacent to those affected by fire are experiencing strong demand from both renters and buyers.
The strengthening of the Canberra housing market has also increased demand for small rural residential acreages within 30 minutes of the CBD. Braidwood, situated between Canberra and Batemans Bay, has experienced a sharp price boom with prices apparently doubling in the last six months.
Projections to 2009
The Real Estate Institute of Australia forecasts moderate growth in Canberra's property market over the coming two years.
"While there are some indications that the upward trend is starting to slow, urgent answers are needed to address the increasingly tough market conditions for first home buyers and low income earners," REIA president, John Hill, said.
"The REIA believes that demand for residential property will continue to be high across the nation in the short to medium term at least, especially in south east Queensland ".
"Whilst there are some signs that the heat in the market is starting to ease, a significant decrease in property prices in the short to medium term is unlikely. We are increasingly concerned about the difficulties faced by low income earners and first home buyer," Mr Hill said.
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