Canberra Property Investment

Canberra's residential property investment market is statistically showing signs of slowing down. The Australian Capital Territory has not returned the most spectacular results for the last half of 2007 and first quarter 2008 reasonable growth of 3.48 percent has been recorded. Rents remain high, with healthy returns of 4.67 percent placing it second only to Darwin and country Northen Territory.

Canberra has been a solid performer over recent years, and was arguably the country's best market along with Southeast Queensland for residential property over 2007. Strong migration and a stream of new well-paid public service jobs have served to strengthen underlying demand, while a major shift of military personnel and their families to the region added further market stimuli. This has resulted in strong demand for investment in property and a construction industry trying to keep pace.

Canberra and Brisbane property investment demand in the past 12 months is not yet hitting affordability. A report from the Commonwealth Bank and the Housing Industry Association found that for both these cities buying a home actually became more affordable in the September quarter.

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The median house prices in Canberra went up by 110% in the last 4 years. Overall, what has happened is that the inner suburbs, and that's usually the ones that are more affluent, probably tended to grow quicker and earlier. That's why property investment in a more central location tends to get more capital growth at the expense of rental returns.

Canberra suburb Overview

The suburbs in Canberra's top ten are predominantly either inner suburbs, or more affordable middle-ring suburbs. Suburbs such as Griffith will always tend to do well. It's one of those central suburbs that has performed admirably over the past few years and will continue to do so.

Mawson / Lyons are both small, thinly traded suburbs located in Woden Valley. These suburbs are affordable and people can go in there and do some work to the older style homes to make them more comfortable.

Curtin, also located in Woden Valley, many experts believe it's undervalued and offers good growth prospects.

Gordon's median house price grew strongly in the past year, largely boosted by new development. This area has a natural restriction on the supply of land since its near the NSW border. Values are expected to grow but in the long term.

Suburbs such as Braddon, Reid, Aislie and Turner are inner north suburbs and are going through revitalisation period which should see the values of standard residential houses grow in the long term.

Projections to 2009

The Real Estate Institute of Australia forecasts moderate growth in Canberra's property market over the coming two years.

"While there are some indications that the upward trend is starting to slow, urgent answers are needed to address the increasingly tough market conditions for first home buyers and low income earners," REIA president, John Hill, said.

"The REIA believes that demand for residential property will continue to be high across the nation in the short to medium term at least, especially in south east Queensland ".

"Whilst there are some signs that the heat in the market is starting to ease, a significant decrease in property prices in the short to medium term is unlikely. We are increasingly concerned about the difficulties faced by low income earners and first home buyer," Mr Hill said.