Growth in Canberra?

From: Michael Croft

Hi all (except for Colin who ain't interested),

Thought some of you may be interested in the following stats.

Property A; O'Connor, 34.5% in one year (coat of paint)
Property B; Ainslie, 14.6% p.a. compound over 5 years no reno
Property C; Ainslie, 18.2% p.a. compound over 4.5 years no reno
Property D; Ainslie, 10.8% p.a. compound over 9 years partial reno 5 years ago.
Property E; Campbell, 10.9% p.a. compound over 11.5 years no reno (long overdue!)

There's more but I haven't looked at these yet. Not bad for a bit of a backwater! A word of caution though, these are specific properties which were purchased by yours truely; they do not represent the growth of the suburbs or area as a whole.

Michael Croft
"The best parachute folders are those who jump themselves."
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Reply: 1
From: Simon and Julie M

Hi Michael
Now the cat's out of the bag about growth in the Nation's backwater capital here are some more figures:

Property A: Fisher 22% pa compound in 4 yrs
Property B: Fisher 17.5% pa compound in 2 yrs
Property C: Fisher 28% in eight months
Property D: Weston 40% in one year

Property A, big reno, others minor reno.
These figures, likewise, do not represent growth in the area, however they are based on current bank valuations. We are getting better at spotting the potential.

It's a fun game - even in a backwater!

Julie & Simon
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Reply: 1.1
From: Michael Croft

Great results you guys! No wonder you are out of the rat race.

Warm regards, Michael
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Reply: 1.1.1
From: Bruce Templeman

Hi Michael,
I can see your quite chuffed with the capital growth of you IPs in Canberra.If your fa miler with the last 10 years of price trends in the ACT you can see that the last recession and the election of the Liberal government had a major detrimental effect on prices.It is only in the last 3 years or so the values have in some cases doubled and I have heard real estate agents call this catch up.However I do agree with you that Canberra is as good as any place to invest and recent media reports say that it is second to Sydney for house prices.I have been to a few real estate investment seminars and they all bag Canberra as a place to invest in.The reason for this I think is they all push units which don't do as well as suburban houses when it comes to capital growth in the ACT, also if the government had a change of policy,say relocate the defence sites out of Canberra, what would that do to the value of your Campbell IP?.
Regards Bruce
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From: Michael Croft

Hi Bruce,

I was a new home spec developer in 1995 in Canberra and got creamed by the change in Govt. I was offered $235k for a display home in Palmerston which I decided to keep for another 6 months. BIG mistake, I ended up selling that one for $185k 6 months after the $235k offer. I also had blocks in Nicholls and Amaroo, sold most of those at a loss as I could see the writing on the wall - no recovery for 4-5 years was my guess at the time. But all these were business decisions not IP ones.

The local real estate agents are pushing the line of catch up, and they are right. The trend line is approx 8% so with zero growth from 1995 to 1999 that's exactly what is happening. But beware overcorrection/overshoot.

The likely hood of Defense being relocated out of the ACT is so small as to be non existent. To costly in infrastructure relocation personnel dislocation etc. They are also in the process of rebuilding the Russell precinct and spending tens if not hundreds of millions on the area. Plus ADFA and Duntroon next door, and the new joint services college in Weston - nah they ain't going anywhere fast.

As for the seminar presenters, they also say to stay clear of Adelaide, Perth, Melbourne, Sydney, infact any where that they don't have property to sell ;^)

Michael Croft
"The best parachute folders are those who jump themselves."
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