Canberra

It looks to me that canberra market is heating up again, or somewhat more so than before, the sale listings are fewer, each day, and they are marked with sold in record time , I have no real evidence of this in true numbers but when you look and watch the all homes site every day for 10 years you get the gist of whats happening around here. But i suppose in three months time somone will read the paper and believe its true.... after it happens ? .:rolleyes:
 
Hi Craig,

You-re right. I've been looking for last 12 months for my first ppor, and have noticed that since mid-jan this year:

* for sale signs have been replaced with for lease signs
* not much stock on r/e windows, if they are then they've been sold ages ago and are after content (ie stock) to make the windows look full
* over the last 8 weeks my husband and i have been playing a game where as soon as we see a a new property appear on all homes we forecast how many days (ie 2-3-4??) until it is stamped under offer.
* we go to auctions/ open house and the proportion of tyre-kickers are quite small. cross-section of the market represented too. the r/e is the new celebrity chef in da berra.
*apartments that were sold 8months ago in civic are now on the market again for 120-150k more (proerty market equivalent to short-selling i guess)
*apartments that sold 3 months later appearing in the rental market for outragous prices- who are these tenants, surely there must be a tipping point, you can't have 10 students sharing a 2bedroom apartment??
*buyers bidding 10-15% more than the asking price. Do they not know about value, perceived value, and buying strategy? this part concerns me bc i know people who have looked at 550k apts, offered at 570k as a starting price then wonder why they end up paying 620k for a 2 bedroom when they are buying privately (ie not at auction)...

i've been looking at this from both renter and buying perspective, as at one stage recently we were so despondent with the market (ie quality of housing- don't really want to buy an ex-govie 2 bedroom dump for 670k in curtin as a first home) that i was considering moving to a newer proeprty to rent (our current house is falling apart despite telling the landlord) but couldn't justify $700pw rent for a 2 bedroom apartment close to our work, school etc.
 
Definitely agree. Even in MacGregor here, where new houses are somewhat overpriced IMHO, places that shouldn't sell for that high a price are. On my best estimate my PPOR would have increased around 40k-50k in the last 7 months.
 
my partner and i have done up a home to buy , its currently in a sub lease environment, the previous/current owner was getting 375 wk we spent 6k on it and improved the value to 500k or so and we rented it for $500 wk with a two year lease , she wanted a five year lease at first??? and we still have the one in the backyard to build it should cost us $150k to build and we expect $550wk for this one total cost we hope to be , $575 for the two 4 beddies , ;)
 
Interesting Craig. Having been a renter for 20 years (but not for longer..!!) there has always, ALWAYS been a rental vacancy problem in Canberra. ie demand has ALWAYS exceeded supply. There will always be a rental market (students, public service graduates, gen x-ers who insist on renting in the inner north and hope to buy a first home for 700k, interstaters on postings here for work). My point about a moment when people don't want to pay 700pw for a 2 bedroom is that at that stage they'll rent for 12 months and start looking- broadening their horizons (perhaps buy). But at the middle of the range rentals, you will always get people, and if you can secure at 2 years then better than having a new tennant every 6 months.

Canberra and surrounds is just such a different environment to other parts of Australia. As a renter and as a I'er, or home owner. I wish I'd been more astute in my 20's and bought a workers cottage in Ainslie back in the 90's and rented out the 2 rooms to help pay the mortgage. But oh nO, I didn't want the financial commitment!! So am determined to catch up (lots of work to do but I'll get there) and intend to own 3 IPs within the next 5 years (here in da berra region, syd, and o/s). I guess hindsight is a wonderful (or depressing) thing, but we make decisions on what is best for us at that stage in our life. I had fun in my 20s, worked like mad to the point of exhaustion over the last 7 years, but it's now time to knuckle down and work smarter not harder.

PS- I only joined this forum yesterday, and it just hit me writing these posts tonight that as of yesterday we OFFICIALLY BECAME HOME OWNERS- hope all you IP-heads can for a moment find time to remember when you first owned a property. Whether it be your first home, or IP....
 
Hi all,

Yeah I've noticed the heat as well and I even commented on it in another thread only last week.

I've actually given up on thinking of buying anything in Canberra at the moment as i don't think the value is there. The cost of entry is too high.

I saw a 3bedroom unrenovated ex-govvie in Dickson go for 680k the other day. Also saw an ex-govvie in Downer that had been renovated into 4 bedroom but still only one bathroom and toilet and single garage. It's going up for Auction and the agent predicts 680 or so for that one. Who really knows. But that is a lot of money and i really don't know who is paying such prices and how they are paying.

I noticed that Charnwood houses are now hovering around 400k and for anyone who knows Canberra, Charnwood is not the ideal place to buy into. Also Kambah pricing has really gone through the roof too as people are starting to go there as Woden Valley housing has become too expensive for the average family.

There may be plenty of people in Canberra on relatively high incomes, but there are still people on lower incomes - ie teachers, shop assistants, service industry etc. I'm puzzled as to how these people can afford to pay for the high rents, and even contemplate on buying a place.

Sure - they may be buyng or renting the small house and land packages in Macgregor for 360-400k, but these places are still commanding very high rents. So how are families in the lower demographics affording these, and how are they getting their deposits etc?

As I said before, I'm stepping outof the Canberra market and i'm going to watch the heat from the sidelines. I may regret this when seeing other people's CGs, or i may not. Who knows. I'm still happy with my positives in the regional areas.



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GGG1965- i know people that are paying these ridiculous prices for houses that you would expect to see in the poorest suburbs of Liverpool.

When I moved to Canberra many many moons ago I wouldn't even rent these places. They remind me of houses around Sadlier, Miller, Green Valley...but everyone wants to get into the market and are carrying around pre-approval $ as a badge of honour...our bank has told us we can borrow 700k, 800k...so they go to the auctions knowing that they can go up to these limits without thinking about value and what component of their fortnightly repayments are actually going towards teh principal. There is only so much credence in location, location. I personally could not fathom the idea of having a first mortgage that high. I've argued with these people that teh entry point is too high for the quality that you are getting. If you live in Downer and work in Barton then it's a 15 minute drive + time to look for parking. Why not go over the border and pay 300k less for a 10 minute drive to work?? It's so idiosyncratic of Canberra though.

Earlier this year I was looking at a 2 bedroom apartment (looking at in horror not in interest) in Lyneham, not even new, shoebox ugly thng for 550k then comparing to a 2 bedroom shoebox art deco apartment in Bondi for 520k. There is no price parity.

We just bought in bellweather. And with the 300k we've saved (well don't have to repay the bank in interest) from NOT buying a 700k over-priced ex-govie on 600m2, it frees us up to buy IPs, and still live life on our incomes. Not pay the bulk of the fortnightly on interest.

We also know quite a few other people like us- inner northers- who still want to be close to restaurants, cafes, farmers markets, silo, tilley's, edgars who are migrating over the boarder and snagging some great buys as first homes. It's close to the airport too when we want to get away for the weekend to sunny QLD in winter, or when we have to catch the red-eye for day trips to sydney or melbourne for work. And now that the airport is being set-up to accommodate A330s, we're looking forward to driving the 5 mins to the airport and jump on a plane straight to Singapore on long weekends....
 
I own a number of properties in Canberra and in the region, and have noticed that some suburbs are priced very strangely compared to similar properties in similar suburbs. For example, over the past few years I have bought 3 properties in Braddon, and the most I paid was $322k which was a nice 2 BR unit with secure parking. Have a look at what is available in Braddon, now, and what it costs.

http://www.allhomes.com.au/ah/act/sale-residential/braddon/121483810

Ignore the first half of the page - these are all semi-commercial serviced apartments.

The trick with the Canberra market is not to fight it. There are lots of people in Canberra who get really attached to specific suburbs, and especially to general areas (ask a Canberran about the north versus south thing...). Many of these people will continue to rent rather than buy in a different suburb or area.

Now, I must say that the $700 a week for the 2 bedroom apartment "close to work and school" must be in one of the most expensive suburbs in town, because even for Canberra, that's a lot. Instead of doing this, try instead looking along the major bus routes for something further out. Or look just over the border in NSW. There are beautiful properties (free standing homes) available in Queanbeyan (15 mins drive from the centre of Canberra, 25 mins in peak hour) from $500k.

Back to whether the Canberra market is heating up... There are lots of people whinging in Canberra about the ridiculously, outrageously, impossibly high house prices. And frankly, I think the market will get higher before it corrects, especially in certain suburbs which are underpriced given their location. Bear in mind too that there are LOTS of people in Canberra who seem to think it's their God-given right to eat out several nights a week at pricey restuarants, drink expensive beers (there's a pub near my work that serves $28 pints), and travel overseas whenever they feel like it. The thing that is a bit scary is supply, or more specifically, the lack of it. Over the past 12 months I've watched supply dwindle. There's no much land being released by the government, and they want a lot of $$ for it. There is also the problem is expensive builders and tradies, meaning new property costs are high.

Me, I'm not that concerned, because my properties were all bought significantly below current market, and my rents are trending upward nicely. Not that this is very helpful for anyone else...
 
i would have never have said this before but i can see some movement within the areas that have their own epi center, ie wanniassa, chisolm, and the like , they are being supported very well by tugernong, and then the other side (DARK SIDE) LOL ! the areas surrounding gungalin, seem to be getting a ride , but i would check out what infrestructure is yet to be built over there, ie office blocks , for the government.
 
I like gungahlin side for investment, because there is so much planned over there, that hasn't even been started yet. Almost all of the new development in Canberra over the next 10+ yrs is planned in or around Gungahlin. There are still a couple of planned releases right next door to gungahlin town centre on the civic side (right near and around franklin). There are GOOD schools around the gungahlin area, shopping, churches, sporting fields, recreational facilities. Although nothing is as yet been planned in terms of government offices (that I know of), I beleive it is simply a matter of time (think how tuggeranong evolved). There is an increasing number of people who will purchase in Yass and murrumbatman and commute to gungahlin, belco and civic for work.

The extreme prices are definitely because of supply, but IMHO people will continue to ppay these ever increasing pricesfor two reasons.

1) because a large majority of canberra's population can. We have a higher average wage in canberra, then the national average wage. And most households in Canberra are double income. Generally the only single income families you will find will either be tempory (ie, 12mths for maternity leave), households who can afford for one parent to remain home (ie, high single wage, like my own situation), or those surviving on centrelink benefit (often in government housing).

2)Because they have no choice. Those who struggle to meet the payment because of real financial limitations, but who would otherwise be homeless. Easy to say they should move to a different town - but in my experience these people are emotionall attached to the town they live in, having their family, friends, support network and memories tied up here. often have that mental barrier stopping them from moving - "better the devil you know..."
 
I can relate to this discussion. Not only is it difficult to buy into good areas at an affordable price it is impossible to upgrade. We'd like to go from Narrabundah to Griffith but this would involve paying around $1.4m!
 
I can relate to this discussion. Not only is it difficult to buy into good areas at an affordable price it is impossible to upgrade. We'd like to go from Narrabundah to Griffith but this would involve paying around $1.4m!

So you'd like to move 1 suburb over into one of the most expensive suburbs in town? That Griffith place you have your eye on must be one seriously good property for the price differential to be $1.4M!

Not to be rude, but this sounds more like an aspirational issue.
 
So you'd like to move 1 suburb over into one of the most expensive suburbs in town? That Griffith place you have your eye on must be one seriously good property for the price differential to be $1.4M!

Not to be rude, but this sounds more like an aspirational issue.

Entry level in the suburb at the moment seems to be $900k-1m, $1.4m is a nice, decent size family home. Totally aspirational, which is why I haven't done it - the figures don't add up!
 
:D My aspirational upgrade is alot more then that. I saw this house (I use that term loosely, more like a palace) advertised a couple of weekends ago in the paper. No price - much to expensive to put a figure down... It is apparently Canberra's Largest house, sits on a 13000 block and looks absolutely stunning. Of course for something like that, I would be aspiring to have the staff to maintain the manor and the grounds as well. :D

We have looked at uprading a few times, our house is a little 3 bedder on an average block (512). Would like a four bed +study or a 5 bed, but unless it is a significant improvement (our house is only 3yrs old and would be extremely positively geared), it just isn't worth it - and unfortunately the houses which would be a significant improvement are out of our servicibility range until I join the workforce fulltime (another 4yrs). So we will invest until such a time as our servicibility increases. No rush.
 
:D My aspirational upgrade is alot more then that. I saw this house (I use that term loosely, more like a palace) advertised a couple of weekends ago in the paper. No price - much to expensive to put a figure down... It is apparently Canberra's Largest house, sits on a 13000 block and looks absolutely stunning.

Would that be a certain house on Mugga Way in Red Hill ... ??
 
Agree that it's certainly a problem for many upgraders. I have friends who bought into Ainslie etc 5 years back, and even if they sold after making a decent capital gain, 800k doesn't really get you very much value anymore. So they're staying put and gentrifying their houses instead, upgrading vegie patches, and purchasing new cars. Just drive passed Ainslie Primary in Braddon, or Ainslie shops, or drive along Duffy, Campbell, and Ebden sts these days and see the 2001 scubyru outback replaced with new 4WD Lexus and Audis...new entry requirements to be part of The Republic...

Ironically it's us Gen X'ers who are entering the market for the first time in our mid 30's with something of a deposit and dual high incomes who have realised that we need to buy a house and have a baby as quickly as possible who are pushing entry level prices up. And then we sit at debacle for our 2 for 1 pizzas on Mondays, or schnitzel and beer at edgars on wednesdays and complain about baby boomers.

So we're all getting in now regardless of any government incentives because even if we have saved something of a deposit we see it eroded 12 months later bc property goes up 10%. So we;'re all getting in now before prices go up more. Well that's the fear. And the cycle continues. Instead of a self-fulfilling prophecy it 's a group fulfilling prophecy and we buy into the illusion, the ponzi scheme, the more in interest rate repayments. And we're pumped at auctions and bid in 50k increments not realising that we're ripping ourselves off. Call us the Ponzi-X-Nesters....
 
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The Canberra market is definitely very hot at the moment.

My husband and I just purchased IP three which will eventually be our PPOR. It's an 'entry level' home and they took over 100 people through it over two days. Thirty-five offers were put forward.

It was put on allhomes on a Thursday and was under offer on Monday.

People are paying a lot more than asking price - I think this is driven by competition and urgency to get into the market. It must be very intimidating, especially for someone buying their first home to turn up to an open home to find that 20 of the 50 people there are filling out offer forms.

I have heard that a house advertised for $395k plus went for $434k. Another at $380k plus was sold for $420k and another advertised for $415k (asking price) went for $440k.

There must be some very happy vendors around Canberra at the moment.
 
Just a small revival of this thread, have you canberrans seen the prices for the north weston land release , it on all homes under land , 900m2 for $650k :rolleyes:

i wonder how much these sale prices will reflect on the rest of weston , as i have 1789m2 up here and our UCV is at $610k at the moment? it would be nice to think our value mooved to $1m UCV :D
 
Craig - WOW that is alot! Be interesting to see how it goes. Will be keeping an eye on it, I wouldn't mind building out that way, but cann't afford those prices for a block of land just yet.
 
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