A new report conducted by PRD Nationwide shows buyers are willing to pay more to secure properties in Canberra’s Inner North.
The region, which includes suburbs such as Ainslie, Braddon, Dickson, Reid and Turner, has recorded a median house price annual growth of 9.8% and units have grown by 13.3% in the third quarter of 2017.
PRD Nationwide national research manager Dr Diaswati Mardiasmo believes the growth in the Inner North is sustainable.
“Whenever I see an annual increase price of double digits, normally what we see is that there is a decreasing amount of sales due to scarcity issues,” Dr Mardiasmo said.
“But with the Inner North we are seeing an increase in the number of sales both for houses and units.
“It’s one of those markets where the price growth isn’t because of an undersupply but because there is a real increase in demand due to population growth and from more jobs being created.”
The report forecasts there will be approximately $595.4 million of new projects commencing in the Inner North in the second half of 2017.
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While undersupply is not an issue, recent research from the Australian National University found the Canberra jurisdiction has the second largest oversupply of housing in Australia. However, Dr Mardiasmo feels this won’t be an issue with the new developments coming in the Inner North.
“Most of the developments that are coming are mixed use so there is opportunity for more offices, commercial and retail spaces,” she said.
“When there is that, more people are drawn to the area, and the whole area gets a bit more lifted in terms of gentrification, it makes it more attractive.”
Midnight development in Braddon (artist’s impression). Photo: Supplied
One of the most significant changes is the number of average days on the market from listing to sale. This has decreased to 77 compared to 102 a year ago.
PRD Nationwide Canberra director Andrew Early said there has never been a better time to sell in the region.
“I think with the amount of exposure that Canberra has had recently in Australia and internationally has all helped out with the Inner North market,” he said.
“Buyers are getting a lot of choice and are able to look at the different opportunities as well.”
The report found that a strong rental demand remains in the region with vacancy rates trending at a low 1.4% as of October 2017.
Investors are benefiting from a combination of low vacancy rates and yields of 3.2% (house) and 4.2% (units).
Median rents have also increased by 14% over the last 12 months, with the median price currently sitting at $570 per week.
“The vacancy rates are unbelievable in the current market,” said Early.
“I think the demand for rental accommodation is huge. There is more and more choice around the CBD with nicer apartments coming onto the market.”