It may not be the first city to come to mind when you think of buying an investment property.
But the fact is, over the past two years Canberra has outperformed many other capital cities in Australia in terms of growth and return on property prices.
Last year, CoreLogic said the value of the median ACT dwelling shot up 22.5% in the year to September. Canberra's house and unit prices were second only to Sydney's as of last year.
Data from all research and property analysis firms confirmed the strong growth of property prices in Canberra and the ACT region.
Tiffy Rubinat, General Manager at Wealthi, said, “The Canberra market has been performing strongly over the past couple of years. And I don’t see any signs of changes or any slow down at the moment.”
She added that unit prices in Canberra have gone up 17.6% in price as of late 2021.
“What is more impressive is that the rental income of units in Canberra has grown by more than 10%. In other markets – even Sydney and Melbourne – rental income has not grown as much as in Canberra,” she said.
What’s driving property prices in Canberra?
Growing population and housing shortage – as more people and the younger generation return to Canberra, the city which has had a housing shortage for years now is seeing property prices go higher. With more people needing accommodation and the lack of affordable property stock, prices are bound to continue to rise.
For property investors, a growing population in a given area or region is a good sign of growing demand, which ultimately can push property prices higher.
Infrastructure and development – while known as the nation’s capital and seat of government, Canberra used to paint a sleepy town picture in many people’s minds. But that is also changing. With more infrastructure – commercial centres, light rail and transport system improvements – Canberra is gradually morphing into a vibrant and lively city.
Some recent visitors noted the upbeat atmosphere in Canberra that may compete with the vibrancy of Sydney or Melbourne. With more cafes, shopping centres and leisure activities readily available and accessible to visitors and residents alike.
Government employment – whoever wins the next Federal election and with the government still growing, there are lots of people who need accommodation in Canberra. Whether they are there for a few days or a few weeks at a time, you have top quality renters with high disposable income and who are ready to pay the rent.
The outlook for the Canberra property market is expected to remain strong as the newly introduced regional home guarantee scheme aims to help property buyers.
Top 3 Canberra suburbs set for further growth
While many areas in the ACT are experiencing growth, Rubinat identified three top suburbs that will continue to benefit from infrastructure build and population growth. These suburbs include:
Phillip – located in the centre of the Woden Valley district, Phillip enjoys a growing residential population. Being the commercial and geographic centre of Woden, Phillip enjoys many amenities including a large shopping centre, a bus interchange and a vibrant business community. It is also close to schools and universities that attract interstate and international students.
Belconnen – as the most populous suburb/area in the ACT, Belconnen has been spruced up with recent developments. It shares the same types of amenities as Phillip, with the added bonus of having a beautiful lake.
Gungahlin – stage one of the Canberra light rail has connected this suburb to the city centres and it has its own shopping precinct. There are lots of government developments in the area that makes it attractive to investors. The completion of the light rail and other infrastructure build in this area will bring further growth in property prices in this region.
If you would like to discuss the Australian property market in more detail, please reach out to the Wealthi team. We’re happy to have a chat and show you how we can help you build a successful property portfolio.