For those who are buying a house in Canberra, the Australian Capital Territory (ACT) is featured on many homebuyers’ wish lists. Homeownership, in particular, is a step many Canberran renters aspire to.
And if you’re new to the capital or unfamiliar with buying a house, you must acquaint yourself with the fundamentals. This guide offers a useful checklist for buying a property to call home in Canberra, with a brief look at the city’s property market.
Buying a House in Canberra: Your Checklist
- Budget: Work out your budget, and don’t forget to add extras such as stamp duty, legal fees and inspection costs.
- Financing: Secure pre-approval for a mortgage to streamline the purchasing process.
- Where: Consider different suburbs and neighbourhoods to find a location that suits you.
- Inspections: Attend open houses and arrange private inspections to assess the condition of properties.
- Legalities: Engage a conveyancer or solicitor to handle the legal aspects of the purchase.
Buying a Property in Canberra: What to Expect
- Market Research: Stay updated on Canberra’s market trends and median house prices.
- Employ a Buyer’s Agent: To make your life easier in navigating the minefield of the market and to do the haggling for you, this could be a particularly useful investment and save your wallet.
- Building Reports: Obtain building and pest inspections to ensure the property is structurally sound.
Buy a House in Canberra, Australia: Long-Term Value
- Investment Potential: Canberra’s stable market and growth potential make it worthwhile.
- Services: It offers excellent public service; cultural activities; and recreational facilities. It has excellent public services, public gardens, high culture, and festivals.
- Quality of Life: It has a quality of life. It is appreciated for excellent public service, public urban spaces, and a superior atmosphere.
Is It Worth Buying a House in Canberra?
- Capital Growth: Historically, Canberra has seen steady capital growth, making it a sound investment.
- Rental Demand: The rental market is very strong due to the government and university sectors that attract a transient population
Buying a House in ACT: Making It Your Home
- Community: Canberra’s community-oriented neighbourhoods provide a welcoming environment for new residents.
- Education: One of the nation’s strongest educational systems from kindergarten through university.
Why ACT?
During the past ten years, the property market in the Australian Capital Territory (ACT) has changed considerably in terms of both national trends and local market dynamics.
- Median Price Growth: Median house and unit prices in the ACT have demonstrated medium-term trends of growth.
- Market Cycles: Like all of Australia, the cycle of supply and demand in the ACT has seen boom and bust, with the long-term trend being an upward rise in values.
- Unit v. House: The value of units in Canberra grew by 190% in the past two decades. Most of the growth occurred between 2000 and 2010, with more modest growth from then on, indicating a stabilisation in unit prices in the last decade.
- Regional Differences: Regional differences in the ACT have played a role in the growth in house prices. For example, the northern half of the ACT, particularly areas that were undeveloped around Belconnen, have seen significantly stronger growth compared with other areas within the ACT periphery.
- Rental Market: The rental market in the ACT has defied the weak economic conditions there and experienced another record year, with strong demand from the city’s role as a centre for government and as a university town.
Historical evidence is useful, but the property market is affected by many things – such as the state of the economy, interest rates and government policies – so past experience is not a reliable guide to the future.
Anyone who is thinking of investing in property in the ACT should make sure they do their research and connect with their local real estate agents to find out where the market is going and where they think it might head.
Demand and Supply Dynamics
Narrow demand from the strong rental market benefits from Canberra being Australia’s political centre and having several universities.
Tight supply reflects limited land parcels, which would be used for new developments, and their location in the most desirable housing areas.
Rental Prices
Although rental prices vary in different suburbs, the upward trend is clear across all suburbs. Burley Griffin, Pialligo, Campbell and Red Hill are the cheapest suburbs in Canberra to rent in.
Vacancy Rates
Vacancy rates are also typically lower than in other major capital cities, and the tight market (as well as agile landlords) can translate into fast turnovers and intense competition over rent levels.
Tenant Preferences
Young families are attracted to properties in attractive leafy suburbs with primary schools and parks nearby. In contrast, properties located near workplaces and transport routes or in close proximity to universities attract students and professionals.
Furthermore, areas with high-value amenities, such as restaurants or shopping centres, tend to attract a higher number of applicants for a property and result in higher rental rates.
Investment Opportunities
Canberra’s residential rental yields are good compared with smaller cities as well. Because demand for living quarters is sure, and the region’s economy is diversified and robust, real estate investors should expect decent returns on investment.
If you buy a house in a good location or near another infrastructure project, such as a government office or shopping mall, major yields will be waiting for you.
Future Outlook
The rental market in Canberra will remain strong because of the large population increase and the development of schools and hospitals. As long as you are aware of what’s going on, you’ll be fine.
Key Takeaway
To put it the other way round, for tenants, the rental market of Australia’s capital presents challenges. For those seeking to invest in property, however, the market presents opportunities in the form of predictable rental returns and capital growth. It’s an exciting time to be looking to invest in property in ACT and especially Canberra.