The month in review: Canberra
By Herron Todd White
The residential market in Canberra was relatively stable throughout 2016. Market activity declined during the federal election, however record sales suggest a return of confidence in the market which we expect to continue into 2017.
The state election held in October resulted in a Labor win. This win secured the future of the proposed light rail scheme which is now under construction. This will provide a new transport system for Canberra with the first stage connecting North Canberra to the City with stops at Harrison, Franklin, Gungahlin, Mitchell and inner north suburbs. This may have an effect on residential property prices in suburbs serviced by the new transport system.
The Mr Fluffy Asbestos Removal Scheme is continuing into 2017 with more vacant land blocks coming onto the market. Overall the resale of affected blocks was strong in 2016 with the highest sales exceeding $1 million in the inner south suburbs. As a result of these sales there has been a number of dual occupancy dwellings beginning construction that are slowly being introduced to the market.
The number of new apartments coming onto the market has continued to build with more stock expected during the start of 2017. The threat of oversaturation is a very real one and continues to be observed in several market segments including the Flemington Road corridor in Gungahlin and the Belconnen Town centre. There has also been significant apartment growth in Molongolo Valley and Tuggeranong town centre.
There were record sales in the detached housing market for a large number of suburbs throughout the ACT in 2016. There was also significant growth in established suburbs especially in the Woden Valley and inner north. We expect this trend to continue into 2017 in suburban areas of Weston Creek and Woden Valley and regions within close proximity of the light rail network.
There are continuing residential land releases in Canberra’s north which are providing a steady supply of new detached housing. Construction of detached dwellings in Moncrieff and Denman Prospect is now entering the final stages with a number of completed dwellings starting to enter the market.
We anticipate 2017 will be a year of flat growth with demand shifting further away from the unit market in most segments and towards new detached houses.
If the economic outlook continues to strengthen, it is possible the Reserve Bank may increase rates, which would have a significant impact on overall affordability
Find out more information and to chat with a local Canberra Mortgage Brokers.