Canberra March 2018

The month in review: Canberra

By Herron Todd White
March 2018

The Canberra residential market has continued to see strong capital growth for residential dwellings, with historically low interest rates and strong employment viewed as key factors. Inner suburbs have experienced considerable capital growth, while outer suburbs have experienced steady growth.

The Mr Fluffy Asbestos Removal Scheme is continuing with some of the strongest land sales being located in the inner north, inner south and Woden Valley regions. The strength of the land sales has been in part due to the change in the Territory Plan to allow dual occupancy and unit titling on many of these blocks.

The market has already seen completion of many of the unit titled properties, with strong demand for the much anticipated new houses in established suburbs which up until recently have been quite limited. Many of the inner suburb unit titled houses appear to be catering for professionals and investors, with a higher level of building inclusions.

Gunghalin offers a range of affordable housing options for young families and first home buyers, with commuting distances to the CBD being less than 20 kilometres. There is a mixture of modern detached 3- and 4-bedroom dwellings with 2-car garages on your typical 450 square metre lot, selling at below Canberra’s median house price. Young families make up the majority in the Gunghalin region and subsequently the local schools are running at a higher capacity. There is a new primary school in the developing suburb of Taylor, located on the fringe of Gunghalin.

Canberra’s light rail currently under construction is viewed as a strong attraction for buyers to Canberra’s inner north suburbs and the Gungahlin district. This has also contributed to the strength of the civil works employment market.

The residential apartment market is expanding with a number of developments newly completed and many still under construction. Notable areas include the rejuvenation of Northbourne Avenue, Kingston foreshore precinct, Flemington Road corridor in Gungahlin and the Belconnen Town Centre. There has also been significant apartment growth in Molongolo Valley and Tuggeranong Town Centre.

The unit market has been more volatile with some value reduction, generally in the outer locations. Unit market growth is expected to be minimal, with long term demand shifting towards new and established detached houses.

Nevertheless, the Canberra unit market continues to offer investors strong rental demand, high yields and low vacancy rates, which contribute to the growing market segment.

The Canberra residential housing market is expected to experience steady to strong capital growth during 2018.

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