Canberra

[Quakin]

Hi all, I've been reading the forums for a good few weeks now but I've finally signed up So happy new year!

I'm currently in the ACT and I'm finally in the position to buy my first property. I've weighed up the costs and benefits of PPOR and a IP and I've decided to go down the IP route.
My intentions are to rent out the place for 2-3 years before I'll move into it myself. So I'm only looking into buying into places that I would be interested in living in myself (ACT only).
I've been doing as much research as I can and I've made a shortlist of places in Braddon, Turner (apartments) and Bruce and Watson (townhouses).
I've seen a bit of variation in the capital growth between these suburbs but I believe (and correct me if I'm wrong!) that the places closer to the city such as Braddon and Turner could have more potential for growth. Though Bruce seems to be considered highly desirable. The rental yield is pretty appealing too for all the places at around 5.8% (I know there's better out there, but I don't want any of those places to be a future PPOR).

I've searched "Canberra" several times on the forums and I've read through countless pages but I can't seem to find any idea on any ideal or recommended inner north suburbs? Are there any recommendations out there?

I've read many articles suggesting things like interest rates will continue to rise and this will lead to potentially some bargains on the market. Also in a recent article on these forums I read that Canberra was at its "peak". Obviously taking the plunge for the first time I'm taking a lot of note of any articles regarding Canberra. What are your opinions? I don't intend on selling, but I also don't want to be paying more for a place if only I had just waited 6 months...

Finally does anyone know when the next CRIN meeting is? I'd love to attend atleast one to find out what they're like.

Thanks for any info, I've already learnt so much from these forums! Hopefully I'll meet some of the Canberra people in the future.

Rob (sorry for the long post)

 

[ml320]

Rob

I too reside in canberra and the suburbs which you selected are all great. It's just a matter between unit' V's houses......all comes down to affordability and end goal. My experience thus far has proved that houses in the ACT perform stronger then unit's. In fact Civic is getting flooded with many unit's. I also know that majority of families don't reside in these units as they are mainly let out on short and medium term. Occasionally all those babyboomers that have had enought of moving their lawns on their precious weekends get finally sick and tired and move into these units or townhouses.

As you know the rental return in the ACT are pretty good but then again so is the land tax .

I am not sure about these CRIN meetings as I've not had much contact with anyone thus far. Maybe try going to the next land ballot and get your self a block of land and build a home. Historically people who have done that as investment have made over 80k in profits.

Cheers
LK

 

[WillG]

Quakin,

Good questions you have asked but they are very difficult to answer because everybody has differing personal preferences.

I am not a fan of units and townhouses because of the limited land content, large number of units being built, body corp, privacy issues and limited rental possibilities. Houses in Canberra in the older areas will have a good run in the future because offer better proximity to services, are generally on larger blocks, have greater scope for rennovation/redevelopment and offer more privacy due to the larger block size.

The areas you have mentioned in the inner north and Bruce are good in terms of proximity but tend to lie in suburbs that are being heavily developed with Townhouses and units. Such areas tend to attract renters rather than owner occupiers. You have probably read in many investment books that it is best to buy in suburbs with a high percentage of 'owner occupiers'.

If you can find yourself a townhouse in Braddon/Turner with car parking, low body corp and something unique such as a view/'good natural light' at a reasonable price, it may be worth buying.

Hope this helps

 

[Mooze]

Units in Canberra tend to get let to the Uni students, houses tend to be more the pubes with families.

Bruce is still being heavily developed - another 120 units going in near the AIS/CIT/UC along with more townhouses, and thats just one area.

Drawback about Braddon is that it has the highest breakin rate in ACT.

Also you need to keep in mind the new Molonglo development starting up at the end of the year.

Sorry to sound negative - turner is great, as can be the other areas if you look for townhouses/houses with good blocks and good light.

 

[foxygirl]

I too am in Canberra and am currently saving to buy my first investment property. Unlike the other post, I am not planning to eventually live in the property, so am happy to buy something outside civic and am thinking a 3/4 bedroom house would be a good investment to attract families.

Any advice on suburbs which have good bargains at the moment but have good rental returns and good growth prosects?

thanks

 

[VYBerlinaV8]

I live in Canberra, and have 3 IPs in Braddon. Two are in the Saville, as semi-commercial, and one is a few streets further over.

Braddon is apparently due for some major redevelopment in the next decade or so. I think there will be some good gains then, already Braddon has already crept up a little in the last few months. Braddon units generally get reasonable return, and being so close to the city should increase in (rental) demand over time.

For example...

http://www.allhomes.com.au/ah/ah0073?slid=3153826

Asking 435k, renting currently at 550pw. Body corp 2.5k per year. And it's fairly new so the depreciation schedule should be good. Don't forget to claim your stamp duty back on tax as it's leasehold land, either!

 

[Quakin]

Thanks for the replies

The main reason I've looked to buy in Turner and Braddon is because I work in Civic and I'm a person that hates the idea of paying for parking (I'm not keen on catching a bus that takes 45 mins for a 15 min drive either, but I do it to save the $$$).
But, also before I move into it, I believe there would be no hassle getting tenants. The only places I've been looking at have been 2 bedroom, 1 bath + ensuite, and 2 car spots. They're reasonably new so the depreciation would be good as well.
Bruce and Watson I figure are easily in bike rides distance being only approx 6-7km. I would probably look at a townhouse then (I want to check out the Solstice townhouses).

I've done loads of research on the tax side of things (love the leasehold) and it just made so much more sense to get an IP, it more than cancels out the benefits of the FHOG, which is still available if I want.
Foxy, I've seen a lot of people like the prospects for areas like Giralang, Holt, Higgins, Scullin etc.
I've had a look at the Gungahlin area but the land size is just lacking. There was a decent sized place in Amaroo I found though. Potential for resale would be good, but I've read soooo many posts about people regretting selling their IP's! I'm worried about the challenge of finding a tenant in the Belconnen suburbs that aren't that close to UC. I'll be putting in as much money as I can into the repayments so to have rental income asap would be fantastic.

My dream was to always own a house in Ainslie, and ever since I started saving I've seen them slip away Going from $300k to now around $500k. I'd love a house, but I couldn't afford one close to the city. One day though... One day...

 

[dex123]

There are several reasons why prices in Canberra are unlikey to "crash":
1. Growing demand - hundreds of graduates get jobs in the public service every year and move to Canberra. 3 years later, they have saved up enough for a little deposit, are tired of renting and are looking to buy.
2. Double income households - Canberra is full of them, and they have the borrowing power.
3. Rising rentals, making property in Canberra attractive to landlords. Also, the leasehold gets stamp duty exemptions.

In a challenging market, I dont see distress sales in Canberra - not when the property can fetch a good rental. I've noticed more properties for rent than for sale recently (over the last 2 weeks or so) in Canberra, probably a sign of the times.

Some suburbs like Charnwood or Dunlop may experience a correction, but if you buy in suburbs with established infrastructure, close to City Centres and other amenities or around the lakes, its hard to see prices falling drastically.

 

[foxygirl]

I am just starting out and am single, but have a good income. Have zero investments at the moment, and am just starting to save up and educating myself, so anyone who can pass on some tips, especially about Canberra, who be great!

I live in Canberra, and have 3 IPs in Braddon. Two are in the Saville, as semi-commercial, and one is a few streets further over.

How have you found the returns of the Saville places as investments? They are one idea I am considering but I've seen some posts warning people against these type of investments.

I currently live in the civic/braddon area, so one option would be to buy a 2 bedroom apartment place to live in and rent out the second room, with a possibility of later renting it out or selling it down the line. Do you think it is easier to get finance for an owner occupier purchase?

I was also thinking of managed funds and/or property trusts (to diversify). Any experiences with these?

So many options, I just need to make sure I make the right choice!

 

[foxygirl]

one more question, what do people think of 1 bedroom apartments V's 2 bedrooms. I would prefer a 2 bedroom, but might be able to afford a 1 bedroom in Braddon sooner than a 2 bedroom.

Are 1 bedroom apartments worth it, or should I hold off and save for a 2 bedroom?

 

[ml320]

Foxygirl - financial institutions don't really like serviced apartment style investments and they'll go a little harder on you because of this. There are also some serious fees associated with these type of investments. I've found that often they deliver an OK yield but bugger all CG.

Also, if the management team at Saville on any other type are pretty poor then you will notice a drop in your return. My advise is stick to the average.

In regards to your question about 1Bed or 2Bed appartments - well it's all about affordability. Not saying that it's always best to purchase 2bed, but you need to look at demographics and decide for yourself.

Good luck - maybe you should join our Canberra group which is soon to be organised. Just keep on checking this forum

Cheers
LK

 

[foxygirl]

Foxygirl - financial institutions don't really like serviced apartment style investments and they'll go a little harder on you because of this. There are also some serious fees associated with these type of investments. I've found that often they deliver an OK yield but bugger all CG.

Also, if the management team at Saville on any other type are pretty poor then you will notice a drop in your return. My advise is stick to the average.

In regards to your question about 1Bed or 2Bed appartments - well it's all about affordability. Not saying that it's always best to purchase 2bed, but you need to look at demographics and decide for yourself.

Good luck - maybe you should join our Canberra group which is soon to be organised. Just keep on checking this forum

Cheers
LK

thank you very much for your help. I would definetely be keen to join any Canberra group that is set up, so I'll keep an eye out!

thanks again

 

[Quakin]

100% cashed out of my shares today. It was hard to do from the highs we had only a few months ago But it's time to move forward into other vehicles!
Time to seriously get down to business. It'd be interesting to see the effect of the interest rate rises this week.

 

[TheCamel]

.

Drawback about Braddon is that it has the highest breakin rate in ACT.
.

i think you may find this is actually watson.

 

[Quakin]

Is information like that available from the ABS website? I've had a click around there in the past and didn't really get too far when I was looking for statistics.
Has anyone here used the Residex reports for Canberra? Have they been reasonably accurate?

 

[ZXR250]

If you wanted to head out a little tiny bit further than Braddon/Turner, have a good look at Ainslie, Dickson, O'Connor, Lyneham and possibly Downer.

-ZXR

 

[Quakin]

Yeah, I've recently expanded my search to those areas as well. I figure it's only marginally further (I can ride my bike) and I could probably buy a house. Maybe not Ainslie though, it's still too far out of my price range.
Obviously the whole houses vs unit debates rages on but in the past it seems like houses have been the strongest performers (well, land).
I went to a few exhibitions on the weekend and I'll head out to their auctions to get a better idea of the price range in that area. Too bad I saw a house I really liked already... I don't really want to dive in without knowing enough about the area/price range and I don't want to fork out a few hundred dollars for a builder's report when I'm not going to buy the house.
Does anyone have any recommended conveyors? i.e. meticulous in detail.

 

[dex123]

I don't want to fork out a few hundred dollars for a builder's report when I'm not going to buy the house.

You don't have to. Here in the ACT, the seller organises the inspection report, including general condition report, pest inspection, title search, EER report, etc. As a prospective buyer, you can request a copy of this. When the property is finally sold, the successful buyer reimburses the seller for the report as part of the settlement.

Does anyone have any recommended conveyors? i.e. meticulous in detail.

William Heage in Belconnen is not bad. Stay away from the "discount" ones onless it is a fairly straightforward deal and you don't need much involvement of the conveyor.

 

[Quakin]

That's quite useful Thank you for the info.

 

[gomum]

I hope it's not too late to join the discussion.
I'm still a novice and bought my first IP in Kaleen last September.
I've kept a keen eye in the inner north/ Belconnen and Gunghalin area for a while. The properties in this area have gone up in the last 5 months. Properties with 3b + ensuite seem to struggle to keep under $400K. Where they would be mid $350 5 months ago. I wish I had money to buy another property back then.
I bought in Kaleen because it's with in proximity to the city. Near a Uni and close to high price suburbs. Properties also have a larger land content.
At the moment I am looking at 3b properties that have a large land content for future subdivision purposes. The problem is, most houses are built smack bang in the middle of these 1000sqm blocks.
Getting started is always the hardest. I wish I looked at Canberra yrs earlier.
Good Luck!