IP's in Canberra

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From: Will G


I have been researching the Canberra market for an IP for several months now and can't seem to find a suitable one based on some yield calculations.

I am concerned that the Canberra market is close to or at it's peak and realise that I must pay the market price or less.

I am looking to hold the property/s for at least 10 years.

I have looked at the Weston Creek area for a while but the majority of houses are 25 - 35 years old and I can only get 5 to 6% gross yield. Most of them need some renovation and may not have a great deal of depreciation to claim.

I will be looking at a 1 year old 4 bed/en, DBL Garage townhouse in Ainslie on Friday. The asking price is 309K and is currently tennented at $400/week (6.6% gross yield)

I feel that the Ainslie property would make a good investment property because :-
1. Has a tennent already
2. Only 1 year old
3. Should have good depreciation (building etc )
4. Location is close to the centre of Canberra.

Any advice is welcome. Thanks
 
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Reply: 1
From: Michael Croft


Say hello to Peter Andrigetto for me. The property you are looking at is on Limestone Ave (Angas St) and is one of Canberra's busier streets. Other than that the numbers work if you are into new stuff and depreciation and all that. Haven't seen the property but look closely at the build quality.

Michael Croft
 
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Reply: 1.1
From: Will G


Hi Michael,

Thanks for your comments.

I believe a colleague of Peters 'Lynne Hall' will be showing me through the property.

I am not necessarily looking at newer properties but this one seems to be good value.

Ainslie seems to be a suburb that hasn't taken off as much as others in the inner north. It appears to be cheaper than O'Conner however there seems to be a lot of townhouses and appartments being built in Ainslie. Similarities with Braddon.

Can you suggest suburbs that represent good value ?

Thanks,
Will
 
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Reply: 1.1.1
From: Sharon Luttrell


I'm not an expert by any means and have less knowledge of the North side. However, with the expansion of Woden Plaza and the demolition of Bernie Court in Lyons (and the removable of the "bad element"), the Woden and Weston Creek areas are good candidates for some good growth over the next couple of years.

They are pretty central, close to a major shopping area and well established. It might be hard to find the return you are looking for but it is worth keeping in mind.
 
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Reply: 1.1.1.1
From: Duncan M


> removable of the "bad element"

I always wondered where all the Labor Pollies lived!

Duncan.
 
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Reply: 1.1.1.1.1
From: Michael Croft


Hi Will,

I am biased as I own a few properties in Ainslie and O'Connor.

They are suburbs in transition from fibro/monocrete workers cottages to larger modern homes and trendy townhouses. I believe they still have a way to go and my money is where my mouth is. I also think the local buyers are taking a breather whilst the dust settles as the suburbs have had 30% + growth in the last couple of years.

There is a moratorium on development (dual and tri occs) which is affecting the pace of change. This is in place for another 3/4 months but could be extended.

O'Connor is slightly better located for access to both uni's CSIRO, technology park and the like. Ainslie has slightly better access to the CBD (because it's divided by Northbourne Ave) and the Defense precinct. Housing stock and type is similar.

Michael Croft
 
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Reply: 2
From: Donna L


Anyone in Canberra have any views on
the proposed Kingston development??


Donna L
 
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Reply: 1.1.1.1.1.1
From: Will G


Hi again Michael,

I checked out the property today. It does tend to get quite a bit of road noise being the closest of the townhouses to Limestone Av. Other than that the place was OK. Bedrooms were a good size and it has a spa bath !

Difficult to tell if the place is built well. Do you have any pointers on determining if a newer place is built well ?

Cheers,
Will
 
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Reply: 1.1.1.1.1.1.1
From: Michael Croft


Hi Gill,

Haven't been in that complex but watched them being built from a distance. Any cracks anywhere? It's not a leading question by the way as there should be some minor ones.

Michael Croft
 
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Reply: 2.1
From: Rachel Freedman


Re Kingston development
I do not know that much about it but I just worry that so many units/townhouses are going up in that area that your potential capital gain may not be that safe. Then again it is prime property.
I just don't think I am willing to pay that sort of premium for Kingston...(not that I have the money anyway!).

Rachel
 
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