State of the Canberran property marketCanberra's property market managed to rack up modest gains during the July quarter. While experts are forecasting a strong showing over the near to medium term, they remain wary about the apartment oversupply situation.
- Underlying oversupply still exists in the Canberra apartment market
- Canberra has the highest incomes of the capital cities and such has the capacity to push prices higher
- Property prices are rising modestly but steadily
- Earnings from international student enrolment soared
- No imminent signs of renewed phase of deeper federal cost-cutting
- Vacancy rates have dropped from their recent peaks
- The rate of fall in rents is slowing
- Solid population growth and land release to stimulate the market
- Susceptible to China’s economic performance
- Potential cost cutting by the Federal government
- Oversupply in units remains a worry
- Median house price to rise by a total of 7% over the next three years, a drop of 1% in real terms.
- Median unit price to remain flat, or a drop of 8% in real terms over the same period
- $700 million Capital Metro light rail project
- $288 million Majura Parkway upgrade
- $800 million Manuka Oval redevelopment
- $600 million research and business precinct between ANU and the city
- $200 million National Agricultural and Environmental Sciences precinct at the ANU and CSIRO
What's in store for investors in Canberra?Just like Hobart, Canberra’s property market is enjoying a revival with the recent data from both CoreLogic RP Data and Domain showing solid gains for the market. Domain showed the median house price in Canberra surging to a record $654,306, over the June quarter after a 3.1% rise in price. This is the strongest growth of all the capital cities according to Andrew Wilson, chief economist with Domain.
“Canberra was the top market performer this (June) quarter, surpassing the rest of the nation’s capitals with strong growth in house prices. As market conditions continue to strengthen, it’s likely that Canberra prices will remain on the risk” Andrew Wilson, DomainIn contrast, Canberra unit prices fell 1.6% to $399,505, losing 4.4% over the past year. “Canberra unit prices are now at their lowest since December 2009 as high levels of apartment construction push supply ahead of demand,” says Wilson. As is true across Australia as a whole, the combination of low-interest rates and the low Australian dollar has fuelled the property market and the international student market.