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The month in review: Canberra
By Herron Todd White
July, 2010
The median price of houses in Canberra is currently
hovering at the $500,000 mark, making it amongst the
highest in the country. It is safe to say that $500,000 in
Canberra is not going to get you very far. The newest
land releases lie to the north of the city in Gungahlin.
Stock is pretty standard in this area - $500,000 will get
you a relatively newly built three to four bedroom plus
ensuite dwelling with the standard inclusions of stone
benchtops and ducted heating/cooling. A new ‘super
school’ is currently under construction in the Gungahlin
town centre, along with other amenities and services. It is
hoped that one day the Gungahlin town centre will have
government departments as long term tenants. All this
suggests good capital growth in the long term for the
area.
In the Belconnen area (also to the north), established
suburbs such as Kaleen, Giralang, McKellar, Cook and
Aranda are experiencing rejuvenation, with renovators
very active in the area. Entry price into these suburbs is
at least $500,000 for a four-bedroom, ensuite dwelling.
They represent good growth as they are closer to the city
and mostly located next to a major arterial road leading
into the city. The inner Belconnen suburbs of Macquarie,
Weetangera and Page are experiencing a different
kind of rejuvenation. Developers are active in these
suburbs constructing high quality boutique townhouse
developments consisting of one to two-bedroom
townhouses. The townhouses are selling for an average
of $400,000 to $500,000. Their close proximity to the
Belconnen town centre represents a good rental yield.
The best place for investors looking for a good return in
the Belconnen area is the suburb of Bruce, which borders
the Belconnen town centre. With its close proximity to the
University of Canberra, Canberra Institute of Technology,
Australian Institute of Sport and Calvary Hospital, a tenant
is almost a guarantee for any property. New two to threebedroom
units can be purchased for under $500,000 with
the prospect of good returns. A significant number of high
density residential unit developments have shot up in the
Belconnen/Bruce area in the past two years. The biggest
is yet to come – ‘Altitude’ is a high rise unit development
to be built on Emu Bank near the Belconnen town centre.
It will reportedly consist of over 300 residential units.
Although Belconnen is a good area to invest, the sheer
amount of existing residential units and those to be
constructed poses the question of whether that market
is headed for an oversupply.
Coming into the inner city suburbs of Lyneham, O’Connor,
Turner and Braddon, $500,000 is simply not enough to
get you a stand alone residential dwelling. The best place
such a sum of money can go is into a residential unit.
Living in the city has the advantage of combining high
yields with high capital growth. Braddon and Turner in
particular are experiencing a change in landscape with
developers knocking down stand alone residences and
building boutique unit developments. Most of these
are within walking distance to the city or the Australian
National University. One to two-bedroom units range
from $400,000 to $600,000. So for those with a lazy half a
million in their pocket, these city units probably represent
the best value for money in Canberra.
Similarly in the inner south, residential units in the
Kingston/Griffith area have always had a good return in
rent. $500,000 will get you a one to two-bedroom unit
in Kingston. As Kingston is composed of mostly older
developments, some of the units may need some work to
become more appealing to tenants.
Moving further south to the Woden and Weston Creek
districts, choice becomes limited and generally $500,000
again is simply not enough to get into these areas.
Investors would have to go further south to the suburbs
of Kambah, Wanniassa, Chisholm and Gilmore in the
Tuggeranong area. Capital growth in some Tuggeranong
suburbs is probably not as high as in the north. But
some of the properties do represent a good long term
investment, for those who are not in a hurry.
The new land release of Molonglo (just west of the
Canberra CBD) is already underway. Close to the National
Zoo also which we are told is quite secure, Molonglo is in
a very good location, being an easy 10 minutes to the city
on the Parkway. But with small blocks reportedly starting
at $300,000 to $350,000, it is clear that $500,000 will not
get you much in this location.
Ultimately, the best place to spend half a million dollars
in Canberra may be outside of Canberra! The New South
Wales government recently announced that stamp
duty in NSW will now be abolished on properties sold
off the plan with a purchase price of up to $600,000.
This announcement has suddenly made places like
Queanbeyan, Murrumbateman and Yass attractive
options for people who are employed in Canberra.
$500,000 is not enough to get you into Murrumbateman
village, but it can get you into Yass or Queanbeyan. Yass is
approximately 40 minutes north of Canberra on the Barton
Highway. For a little over $500,000 you can purchase a
new four-bedroom plus ensuite dwelling on a 1000sqm
block in the new subdivision of Hatton Park Estate, which
is not far from the town centre. There are quite a few
subdivisions happening in and around Yass. There is a
planned duplication of the Barton Highway, which will
ease traffic congestion, making it even more appealing
to work in the ACT, but live in NSW. Unfortunately capital
growth in these areas is much lower than in Canberra, so
there is a trade off.
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