The month in review: Canberra

By Herron Todd White
June, 2009

Currently Canberra is in a strong residential phase thanks to affordable housing developments released by the LDA and generous government incentives for first home buyers. The vast majority of this activity is happening in newly released suburbs in the outer north such as Macgregor West, Bonner and Franklin. There are other areas that first home buyers are targeting in Canberra, with property less than $550,000 in the inner suburbs and less than $450,000 in the outer suburbs deemed to be first home buyer territory. This means that a number of people living in developed suburbs are cashing in on eager first home buyers, and subsequently trading up to bigger and better property.

Due to the transient population in the Capital a number of people selling properties to first home buyers will move out of the ACT as their government contract has ceased. The following examples are scenarios faced when trading up in Canberra.

The majority of people in Canberra who have the opportunity to purchase a second or third house have a family. Trading up for these people means buying a bigger house in the same region as they have established links with work, school and friends. A recent example of this was a family who sold their small home in Kambah for $420,000 to enthusiastic 1st home buyers. The sellers have the intention to buy a bigger family home in the same region as they wish to remain close by to parents, friends and work.

A number of individuals will be selling their 1 or 2 bedroom units in Braddon, Turner or the other inner suburbs as they now have a family to take care of, so they move to the districts of Belconnen, Woden and Weston Creek and purchase a large family home. These homes fit
the bill for families as they are close to schools, work and entertainment and provide family accommodation at a reasonable price.

Other people will want to trade up and buy a house in a better suburb closer to work and the city. These suburbs include the inner north and inner south where price restricts the first home buyer to the more affordable unit and town house options. The buyers who are trading up in these suburbs are more cautious as they will be moving from a market that is quite active with lots of demand, to a more thinly traded market, with limited supply. Generally buyers who can afford these properties will have equity in other homes, be cashed up or have a large deposit thanks to recent sale of their first property.

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © 2008 Smartline Home Loans P/L. ABN 38 085 370 270