A HEALTHY OUTLOOK PREDICTED FOR THE ACT PROPERTY MARKET

By Nicole Cox

Canberra’s robust economy has helped deliver strong housing growth with analysts predicting moderate price increases and a positive medium to long-term outlook.

The latest RiskWise Property Research Risks and Opportunities report shows the national capital’s economic growth rate of 4% pipped the rest of the country, providing a strong indication of Canberra’s future.

Canberra exceeded national growth, with data showing a 2.3% increase in property values across the country in the past year.

The national median property price is now $537,506 compared to $611,841 in Canberra.

RiskWise chief executive Doron Peleg says Canberra’s market has been supported by healthy levels of both private capital expenditure and government expenditure.

“While this growth is more moderate since the second half of 2017, the current growth remains solid and the market is showing resilience,” Mr Peleg says.

“This is largely driven by solid economic growth and a relatively low level of effective unemployment which sits at 3.3%, compared to Australia with 5.3%.

“These conditions are favourable for a strong housing market and make it an attractive destination for property buyers.”

Peleg says lower interest rates, including another expected dip early this year, and a relaxation of credit restrictions, has encouraged a promising outlook.

But he says the situation is not reflected in the market for units and apartments, which is suffering an oversupply of new dwellings relative to population growth.

Units delivered only 3.9% capital growth in the past three years, well below the capital growth of houses with 14.5%, mainly driven by an increased number of properties in the pipeline.

“So, the risk associated with units is higher than houses, particularly in high-supply areas such as Gungahlin where there are 315 units in the pipeline at 20.6% of the current stock,” he said.

Nerida Conisbee, realestate.com.au chief economist, says Canberra’s property market has recorded decent growth in the past couple of years, signalling promising property investment opportunities.

Conisbee also says growth in population and jobs has flowed on to the housing market.

Article extrapolated from:

Nicole Cox ( Jan 15 2020 ) A healthy outlook predicted for the ACT property market. Available at: https://www.realestate.com.au/news/a-healthy-outlook-predicted-for-the-act-property-market/