Canberra’s 10 best and worst property markets, and what's hot into 2024
Growth in Canberra’s apartment market has outpaced houses over the past year but as the best and worst lists highlight, it is a fine line between capital growth and price declines.
Growth in Canberra’s apartment market has outpaced houses over the past year, however, in the CBD where demand for units is typically highest, median prices have lulled.
Domain’s House Price Report June Quarter confirms Canberra apartments have been consistent performers, with the lowest increase in its top 10 growth list a 10-minute drive from the CBD in Griffith, at 5.8 per cent, while Denman Prospect in the Molonglo Valley showed the highest growth at 28.7 per cent.
Maria Edwards, CEO, REIACT, told API Magazine, the areas with the biggest drop in growth are closest to the city but are more likely to have had the highest increases during the post-Covid peak and are experiencing a correction.
Source: CoreLogic.
One exception is Barton, a suburb adjacent to Parliament House, where the median apartment price in June was listed at $762,500, a 25.6 per cent 12-month increase. But just 4 minutes from the CBD in Braddon, growth fell 5.2 per cent to a median apartment price of $550,000.
Chris Wilson, Managing Director, Cream Residential, described one suburb to the city’s south, which is predominantly high density and mostly apartments, as one on the rise due to an increase in development there.
“We’ve been given properties to manage in Phillip, which do sell and rent well, and I believe a lot of that comes back to the hospital, which has had a massive expansion though it’s not completed yet, and there’s a number of other suburbs that are pretty reliable if you’re looking for investment return, including Hughes, Garran, and Curtin; those three suburbs are doing pretty well, again I think because of the hospital,” Mr Wilson said.
The Northside Hospital Project in Bruce, 12 minutes’ drive from Phillip, is the largest single health infrastructure project delivered in Canberra, with a $1 billion price tag.
10 suburbs with the highest YoY pc increase in median house price
10 suburbs with the highest YoY pc increase in median unit price
Source: REIACT.
Another driver of apartments over houses for investors and owner-occupiers has been affordability in inner south areas like Kingston and Griffith because of their proximity to the Parliamentary triangle and Defence offices in Russell, allowing people to live near their work.
Ms Edwards explained Canberra’s recent conversion of contracting staff to the public service to permanent employment raises certainty for investors about tenants’ ability to pay and sustain rent increases.
Fifteen minutes from the city centre, Belconnen has also been included in a Hotspotting National Top 10 Apartment report for its 295-unit sales versus 23 house sales in the past 12 months, where the median price rose 7 per cent in the year to May 2023, but still offers affordability at $490,000 as well as a low vacancy rate of just 1.4 per cent.
“The location of the sprawling University of Canberra campus alongside Belconnen generates steady demand, while also nearby are the Canberra International Sports and Aquatic Centre, Calvary Hospital, Canberra Institute of Technology, the Australian Institute of Sport and the Australian Federal Police regional headquarters,” Terry Ryder, Director, Hotspotting said.
Domain’s top 10 list of apartments with the biggest value decreases includes Belconnen with an annual drop in value over the past year of 1.2 per cent, and a similar median price of $494,000.
“The market presents better value for purchasers than it has over the past few years where our rental market at present is not as tight as some of the other states,” Ms Edwards said.
“It is the poster child for regulation being considered by other states and is in less of a crisis mode, so should be less susceptible to reactionary intervention from the Government, therefore more predictable.”
Canberra house market’s modest growth
While six out of top 10 suburbs showed growth of more than 10 per cent in the past year (Denman Prospect, Barton, Franklin, Macquarie, Phillip, and Narrabundah), just two from the top 10 house value growth list showed a year-on-year double digit increase (Taylor and Bonner).
The gap between suburbs with the highest and lowest growth is a broad pendulum swing between O’Connor (down 18.8 per cent, with a median house price of $1.14 million and Taylor, which showed 28.6 per cent growth and median house price of $1,080,000).
10 suburbs with the highest YoY pc decrease in median house price
10 suburbs with the highest YoY pc decrease in median unit price
Source: REIACT.
Jason Roses, Director Residential, Verv Property says all eyes are currently on a new estates under construction in Whitlam, where sales are exceeding expectations.
“We’ve just sold a large five-bedroom house there, and it’s now the new record price for the suburb with an extraordinary result of $1.93 million, which is a huge price to achieve for a suburb that doesn’t even have its local shops yet,” he told API Magazine.
“The buyers were coming from an older suburb living in an older house and for them to be able to move into something that’s new and shiny and offers all the high-level inclusions they might want, that’s the real attraction to the new suburbs and I think for a lot of people, they’re looking at these newer suburbs for the lifestyle,” Mr Roses said.
“We’re seeing a lot of new builds there, new homes, townhouses and apartments, and it’s located in the Molonglo Valley so it’s across the road from the Arboretum, it’s surrounded by some beautiful walking trails and bike paths, and it’s a very central location.”
On the flipside, the worst performing suburbs for houses declined in the past 12 months between 7.7 per cent in the outlying suburb of Wanniassa and 18.8 per cent in the inner-city suburb O’Connor, compared to the worst decline for unit growth at 6.7 per cent was in Forrest, which is still one per cent better than all top 10 suburbs for housing growth.
“When you take a snapshot of Canberra over five or 10 years, it’s had tremendous growth; it’s got some excellent returns, the rental market is very strong, though a little bit tough at the moment, but we are a transient population with a workforce sector of public servants, government jobs, Parliament, so there’s a lot of people constantly needing accommodation,” Mr Roses said.
“It’s also important to consider the ACT also has the highest median incomes in Australia and the rental affordability ratio in the ACT is second highest in Australia, even with our rents being second highest in Australia, which the latest REIA Housing Affordability Report from March 2023 found,” Ms Edwards said.
