The heart of the Australian Capital Territory, Canberra has performed quite well over the past few years. In 2017 it recorded 8% growth in median house prices to $670,000, an almost identical rate to that achieved twelve months prior.
In 2016-17 the Australian Capital Territory recorded the second highest rate of population growth at 1.7% (6,933 people): the figure sits slightly above the national rate of 1.6%. The Australian Capital Territory’s economy is also one of Australia’s top performers, boasting the lowest unemployment rate in the country at 3.8% as at November 2017.
Canberra currently has a vacancy rate of 1.3%, well below what is classed as a balanced market of 3%. The Canberra rental market has benefited from above average incomes and low unemployment rates.
The risk with the Australian Capital Territory’s property market is the volatility around public sector job cuts and the lack of government investment in infrastructure. The 2017-18 budget revealed that the Australian Capital Territory was allocated the smallest portion of the infrastructure budget. In 2017, The industry with the strongest growth was the tourism industry which grew by 7.1% as opposed to general employment growth of 3.1%. Although strong, the tourism industry is one which is more susceptible to volatility risk.
Outlook for 2018
The September quarter of 2017 saw a reduction in sales volumes and plateauing of the median house price. Canberra’s property performance is likely to be similar to Sydney’s in 2018 as growth rates are likely to moderate.
When selecting a market, we look to identify those which are at the right time of their cycle while also offering the key growth fundamentals. The presence of long term sustainable growth drivers is critical for us to ensure our clients are investing in properties which can be held for the long term and will help them to grow a property portfolio.