If only we had a crystal ball when it came to buying, selling, and renting property. The next best thing we can rely on is forecasts from reputable property experts. Fortunately, there are a few of these available, and Canberra’s future is looking bright.
Canberra property has had a good run over the last few years, with house prices steadily increasing year-on-year. The local property market is currently bolstered by a few unique factors, including:
Captive property market from people employed in the public service and other businesses supporting this sector
Employment growth and the lowest unemployment rate in the nation
Overseas students studying at Canberra universities and other educational institutions
Canberra is also feeling the benefits of national property influences, such as:
Continued low interest rates
First home buyer stamp duty exemption from 1 July 2019
The combination of these factors has clearly worked in Canberra’s favour. Canberra’s rental market was hot in 2019. Last year was Canberra’s “the year of the landlord” with vacancy rates as tight as 0.6% in March and median rents up by 21% for detached houses and 16% for units between June 2016 and March 2019, according to the recent QBE Australia Housing Outlook Report.
There is no sign of Canberra’s rental market slowing down in 2020, with Domain’s December 2019 Rental Report finding Canberra the most expensive city in Australia to rent a house. Canberra’s house rental rate has risen 3.6% over the past year, with the average rent now sitting at $580 per week, ahead of Sydney’s average of $525 per week. The unit rental market is slightly slower than houses, but still recorded a 2.1% increase over the last year and an average rent of $480 per week.
Units in Belconnen and houses Tuggeranong of have performed particularly well over the last year, with 6% and 5% increases respectively. South Canberra recorded the highest weekly rental rate at $750 for houses and $528 for units. The only decrease in house rental rates was in Woden Valley, falling by 3% over the last year. Domain attribute this overall growth to strong population growth of 2% annually over the past three years. The growth in the market is predominantly driven by houses, with an annual increase of 4.4% and the median price sitting at $705,000 as of June 2019.
There is no sign of Canberra’s property market slowing down, with a number of property reports (such as Domain’s Property Price Forecast) forecasting a rise of 4% in house prices over the next year, and up to 6% by June 2022 (QBE Housing Report). The confidence in this growth lies in continued employment and population growth in Canberra. Whilst the QBE Housing Report predicts the median house price will increase from $710,000 in 2020 to $750,000 in 2022, it will be interesting to see the effect the first home buyer stamp duty exemption will have on median house prices, and if there is more interest in the affordable end of the market.
It is still unclear what impact the recent South Coast bushfires will have on Canberra. As displaced people from fire-impacted areas consider their future options, there is the possibility they will consider relocating or investing in Canberra.
Building continues in Canberra, with a number of exciting apartment developments in the City Centre, as well as new releases of residential blocks in suburbs such as Ginninderry, Whitlam, Throsby and Taylor.
The combination of low interest rates, plus the steady increase in property prices due to continued population growth ensures Canberra remains a solid choice for investors. Growth in the unit and house market also offer investment options for any budget or rental strategy. There is no better time to reach out and connect with a local agent to discuss your property investment goals for 2020.