Big gains, rising rents draw investors into Canberra apartments

One of Australia’s most prolific apartment developers says investors are likely to turn their attention from detached housing to multi-residential dwellings in coming months, as the nation’s unprecedented simultaneous property upswing continues to broaden.

Nick Georgalis, Geocon managing director
Nick Georgalis says investors have traditionally enjoyed strong returns from Canberra property. Photo: Geocon (Image source:

One of Australia’s most prolific apartment developers says investors are likely to turn their attention from detached housing to multi-residential dwellings in coming months, as the nation’s unprecedented simultaneous property upswing continues to broaden.

Geocon managing director Nick Georgalis told Australian Property Investor Magazine demand for his company’s apartments in Canberra was starting to push up sales prices, in line with a historical lag between value uplifts for detached housing and multi-residential dwellings.

“We have seen record sales in the past 12 months for apartments and the market should see the same increases in value for apartments over the next 12 months that we have seen in housing over the past 12 months,” Mr Georgalis said.

“On top of that, what we are seeing is skyrocketing rents. We have the highest rents in the country now, all within the space of a year.”

Mr Georgalis is uniquely qualified to make that assessment, having steered Geocon to become not only the largest apartments developer in Canberra, but also one of the country’s biggest.

Established by Mr Georgalis in 2007, Geocon is currently building Australia’s biggest mixed-use precinct in Belconnen, which is known as The Republic and will comprise 1,350 apartments, a 150-room hotel and 6,000 square metres of retail and commercial space.

The Canberra-based developer is also coming off a bumper financial year in terms of sales, exchanges and settlements, recording more than 1,000 sales in 2020-21, collectively totalling $438.5 million.

At the same time, Geocon recorded more than 840 settlements valued at $385 million.

Mr Georgalis said the sales results particularly illustrated the strength and appeal of Canberra property for investors, who made up 70 per cent of those sales.

CoreLogic data shows Canberra’s median dwelling price rose 18.1 per cent to hit a record high in the 12 months to the end of June, with sales volumes rising by 19.4 per cent over that same period. 

In the rental market, an increase of 7.3 per cent over the year to June pushed Canberra’s weekly rents up to $620/week, the highest in the nation, while rental yields average 4.2 per cent.

Mr Georgalis said in some market segments median values had risen by 40 per cent to 50 per cent over that same period, while rents for the most sought-after dwellings had risen by between 12 per cent and 15 per cent.

“We have the highest rents in the country, some of the highest yields and still even through COVID, almost 0 per cent vacancy in both detached housing and apartments,” Mr Georgalis said.

“Investors have always been quite attracted to the ACT, not only by the yields and returns but also the tax benefits. 

“Because it is a leasehold system in the ACT, there are tax benefits with stamp duty and depreciation in the ACT that differs from other places. 

“We also don’t have any foreign investor surcharges or stamp duty, albeit it only makes up about 10 per cent of our sales.

“Canberra is quite appealing to investors nationally, and for owner occupiers it has always been quite appealing, but even more so now that we have seen such extraordinary growth in the housing sector.”

Me Georgalis said the value uplift underway in the ACT was not too dissimilar to the experiences in other capital cities, with all property markets recording significant increases in value over the past 12 months.

“What we have seen following housing increasing in value is apartments increasing in value,” he said. 

“That lag may be a bit further than what it has been in places like Sydney and Melbourne traditionally, because of the fact that there is more vacancy in those areas, but what we are seeing in the ACT is the volume of sales for investors is happening now.

“Everyone is anticipating major price growth and huge capital gains to be made in the apartments sector, but what we also have is yields, rental returns and vacancies to support that as well.”

To capitalise on the investor interest, Mr Georgalis said Geocon would focus its attention on immediate opportunities in its development pipeline, which totals several thousand apartments already having been approved by planning authorities.

Geocon’s next project, WOVA, to be built in Phillip in Canberra’s Woden Valley, will comprise 797 apartments across four buildings ranging from 12 to 24 storeys.

WOVA will also include a 53-room hotel, 2,415sqm of retail space and a wide range of amenities including a lap pool and sauna, a private cinema, co-working spaces, a rooftop terrace, a chef’s kitchen and a club lounge.

Other current projects include the 334-apartment Nightfall in Belconnen, the 622-apartment Aspen Village in Greenway and the 552-apartment Metropol in the near-city centre suburb of Reid.

In total, Geocon’s current developments will deliver 2,595 apartments to the Canberra market by 2024.

“We always have a pretty healthy release per annum and they are always mega projects,” Mr Georgalis said.

“We meet what the market wants - we did 1,000 sales last financial year and we’re on track to make another 1,000 this year. 

“It’s really up to the market. We have an enormous pipeline of a few thousand apartments approved and ready to be released to the market if the demand is there.

“We never like to say we are fast-tracking anything, we are always in a position to meet what the market demands are. 

“But one thing we have noticed during COVID is a slowdown in the processing of approvals from all local governments. 

“I don’t think that’s isolated to the ACT, I think that’s a general feeling across every capital city but things are slower to get approved and things are slower to get done. 

“We have a healthy pipeline of projects approved but we would like to expand that and have a much bigger pipeline of projects approved as well.”

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