National Property Report – November 2015

NEW SOUTH WALES

Sydney investors trade yield for growth

As prices continue to run hot in Australia’s biggest city, investors seem happy to take lower rental returns in the hope of strong capital growth prospects

Another month, another strong performance for the Sydney market. Despite APRA’s move to quell the irrational exuberance of buyers, there’s no sign that buyers are abandoning the market in droves.

According to the latest results from CoreLogic RP Data, median dwelling values jumped 17.6% over the 12 months to August 2015. While this is a slight drop from the July growth of 18.4%, it’s a robust performance nonetheless.

“Australia’s largest city, Sydney, remains the hottest housing market,” says Cameron Kusher, research analyst at CoreLogic RP Data.

“While the recent data shows a slight slowing from the annual rate of growth in July, nevertheless it remains a rapid rate of growth from a historical standpoint and relative to the other capitals.”

The key driver of this ongoing strong performance is the low level of available housing stock on the market, according to Kusher.

In Sydney there are approximately 17,700 properties currently for sale. In late 2011 when market conditions were much softer than they are now, Sydney had around 40,000 properties for sale.

The flip side of this strong capital growth is that investors now have to deal with lower yields. Median rents across Sydney are increasing by only 2.3% per annum, which has resulted in gross rental yields falling to record lows, according to CoreLogic RP Data.

“The typical Sydney house is now showing a gross rental yield of just 3.1%, which is the lowest on record, while units are showing an average gross yield of 4.1%, which is also a record low,” says Kusher.

Strong spring season on the cards

Angus Raine, executive chairman at Raine & Horne, points out that while there’s currently a slight drop in properties being appraised for sale compared to last year, he thinks stock will ramp up quickly in the next few weeks.

“Listings have been down a bit during winter; that’s why we’re seeing those massive price increases. However, I think this is simply the calm before the storm. I think there would be a lot of properties entering the market for spring,” Raine predicts.

He believes the anticipated deluge of properties to be listed for sale will test the market in terms of how much more it can grow in value.

“There’s plenty of buyers out there at the moment, but there’s not a lot of stock, and this is partly what’s driving the prices up and the auction clearance to more than 80%,” he says.

“There’s just so much demand for Sydney properties at the moment, but the additional stock should still test the market.”

Most of the intense buying is occurring in the Lower North Shore, Inner West, Eastern Suburbs and St George areas, according to Raine.

“We have one case where one of our agents is selling a large apartment block for over $8m in the Eastern Suburbs, and the agent is now reporting there are over 40 interested parties inspecting the property. That shows how deep and wealthy the Sydney market is,” says Raine.

People power

Rapid population growth – more than 50,000 people are moving to Sydney every year – is the biggest source of demand, says Raine.

“I call that insurance policy. There’s nothing better than solid population growth to underpin the market. That’s why investors love the Sydney market. All these people coming into Sydney every year have to live somewhere. The Sydney market is so deep and so resilient it should be able to withstand a flood of property coming on to the market.”

VICTORIA

Melbourne: The next big thing?

Sydney may have been the boom city over the last few years, but could Melbourne be poised to steal its crown?

Sydney may have been the jewel in the Australian property market crown over the last two years, but Melbourne is poised to take its place.

Both confidence and momentum are picking up in the Victorian capital ahead of the key spring selling season, with the market about to ‘shift up a gear’.

Spring forward

Melbourne’s capital growth has run second only to Sydney’s in the last 12 months. Median capital growth for all dwellings in the year leading up to 31 August 2015 was 10.6%, according to the latest CoreLogic RP Data figures, with houses increasing in value by 11.4% on average and units by 4.4%.

The median dwelling price in Melbourne at end August was $563,500, with the average house price $620,000 and the median unit price $475,000.

Domain chief economist Andrew Wilson highlights that the signs are positive for a bumper spring despite a noticeable slowdown across Melbourne over the winter.

“Clearance rates rose and prices grew over the autumn due to an improvement in the local economy,” says Wilson.

“We did see moderation through early winter which looked like the market flattening out, but overall Melbourne has reinforced itself.”

Wilson says clearance rates during the winter were higher than they were a year ago – indeed, they were on par with the post-GFC boom years of 2009–10.

“The market’s full of confidence working its way into spring,” adds Wilson. “We’re seeing rising numbers of first-time buyers looking at house and land packages on the fringe, and a lot more investors in the market as well.”

Melbourne’s improving prospects are being driven by the glut of apartment developments in and around Port Melbourne, the South Bank and the CBD, although it isn’t the owners in those suburbs who are reaping the rewards.

“Growth isn’t necessarily being driven by the mid- to higher-priced market segments in the east. There’s more widespread buyer activity in the budget markets to the north and to the west,” says Wilson. “That’s probably down to the CBD apartment boom providing a lot of jobs, particularly to tradesmen and in the manufacturing sector.”

Property researcher John Lindeman, founder of Property Power Partners, agrees that the best investment prospects are outside of the CBD.

“There is strong demand for units away from central Melbourne,” says Lindeman. “There is significant demand for rental properties from overseas immigrants, especially in middle-distance suburbs with good infrastructure links and amenities, like Caulfield, Doncaster and Sunshine.”

Development hell?

Those apartment developments occupying the South Bank and Docklands could be the albatross around Melbourne’s neck. Valuer Herron Todd White (HTW) warns of a growing concern about oversupply.

“There were 1,518 new apartments settled in the CBD over the past 12 months to May 2015,” says HTW’s September Month in Review. There is even more to come too, with a “plentiful” supply of apartments likely to emerge in the CBD and inner suburbs in the next few years.

“It is estimated that there will be 160,000 established contemporary apartments in the market by 2018, a 43% increase compared to 112,000 apartments in 2015,” says HTW. “Demand will need to remain strong in order to match the large influx of new apartments over the short to medium term.”

That demand may well come from overseas. HTW highlights that 95% of 941 apartments within the proposed 92-storey Aurora skyscraper were sold in a fortnight, and approximately 75% of the buyers were from Southeast Asia and China.

However, it’s worth noting that established inner-city apartments can already be purchased at a lower price than new apartments. With the number of apartments coming onstream in the next few years set to soar, prospective buyers should keep their feet on the ground when it comes to urban skyscrapers.

Forecast: Plain sailing ahead

They say a rising tide lifts all boats. Despite concerns over the CBD unit market, it seems that may be the case where Melbourne is concerned.

The general trend is upwards, with the Victorian capital perceived as good value as we enter the final months of 2015.

“Those perceptions of value will keep driving buyers, with especially solid results from the lower end of the market,” says Domain’s Wilson. “There’s a real momentum in the market.

“Melbourne may not get ‘boom time’ price growth this spring, but it will be solid – and certainly ahead of where it was at the end of last year.”

Spring outlook

• Market conditions: Excellent
• Segments to watch: Budget suburbs; middle-range unit suburbs with good amenities
• Segments to avoid: CBD, South Bank and Docklands apartments
• Potential hotspots: Caulfield, Doncaster, Sunshine

QUEENSLAND

Southeast Queensland braces for a surge in spring buying

Local buyers are feeling the heat from interstate investors who are coming in droves and snapping up Queensland’s cheaper offering

The big-picture growth prospects for Queensland may not be as sexy as those of Sydney and Melbourne in recent times, but local experts are upbeat that it’s going to be a solid spring buying season.

According to Zoran Solano, senior buyer’s agent at Hot Property Buyers Agency, buying activity is building up and the market is getting more competitive.

“Every property on the market that we’re considering is in a multiple offer situation and we expect that trend to continue till the end of the year,” he says.

David Bennett of Raine & Horne Qld notes that there’s currently a low level of listings that has helped push auction clearance rates and prices even higher.

“In Southeast Queensland (Brisbane, Gold Coast and Sunshine Coast), we noticed that listings for residential properties have been hard to secure because the vendors are reluctant to move at this stage,” says Bennett. “We’re confident that spring is going to be buoyant in terms of listings. Confidence among buyers and sellers is showing signs of returning. Vendors generally get very close to get what they want.”

Bennett says the tight competition has made buyers more willing to meet the market.

“I think when people go to an open home and find that there’s already a contract on the house, they’re more willing to pay the asking price. They’re more driven by feature, not by price.”

Investors are particularly strong in the unit and townhouse sector, he says.

“I’ve never seen it so strong in the last 10 years and it’s right across SEQ. I would say at the moment the investors are being driven by the Sydney and Melbourne markets. I see all areas in the SEQ region performing well over the medium term.”

The increasing numbers of interstate investors coming in is starting to bother local buyers who are not used to seeing such exuberant buying, Solano says.

“The local markets are being inundated with interstate buyers,” he says.

“What we’re seeing is that interstate buyers fly in over the weekend, inspect some properties and then buy. It’s starting to frustrate local buyers. We’re not used to this level of interest since seven to eight years ago when Brisbane boomed. There are a lot of Sydney, Melbourne and South Australian buyers’ agents coming here and buying for their clients. They’re getting a bit of a reputation for heating up our market.”

Interstate investors beware

As more investors move into Southeast Queensland, Solano warns they are facing the risk of paying too much for property.

“The biggest concern is that interstate buyers are overpaying,” says Solano. “Because they’re used to paying high prices in their home cities (Sydney and Melbourne), when they come here and see properties are listed for $500,000 even if they’re located away from the city, they fall over themselves. They don’t mind paying a premium.”

Solano says that when buyers get into multiple offer situations they are putting themselves at risk, especially if they’re starting to remove conditions that are designed to protect them.

For example, he is seeing more and more exuberant buyers removing the finance clause from the contract to make their offer more competitive.

“These buyers still need finance and they’re taking the risk by not putting the clause in the contract due to competition,” he says. “You have to protect yourself and put in the appropriate clause.”

Rapid growth areas

Suburbs within 10–15km from the Brisbane CBD are now beginning to exceed the prices achieved during the boom years of 2007–8, according to Solano.

“We’re starting to see price growth in uncharted territory, and that makes local buyers even more frustrated. Buyers from Sydney and Melbourne are used to outbidding each other because of strong growth.”

Solano prefers to focus on the suburbs within 15km of the CBD or closer, to maximise growth potential.

“The reason is simple. The farther you go out of the city, the more volatile the market becomes,” he says.

He also warns against buying in large apartment complexes of 30–40 or more units to avoid the risk of oversupply.

“Focus on boutique complexes in areas that aren’t oversupplied. If you look at the amount of construction that’s going on in Bowen Hills, Fortitude Valley, Kedron and Chermside, you can see there is a lot. There are pockets of Mount Gravatt and Coorparoo that are oversupplied. These are the markets to be cautious of if you’re buying in Brisbane. It could potentially turn into what happened in Melbourne in terms of oversupply,” he says.

WESTERN AUSTRALIA

Perth grapples with crisis of confidence

The heady days of the mining boom are long behind Western Australia – and things don’t look set to improve any time soon

Last issue, Domain chief economist Andrew Wilson commented that the Perth market was talking itself into a downturn and a potential crisis of confidence.

Well, it looks like that prophecy has already come true. It seems that wherever you turn in the WA capital you’re facing an indicator of the market going into a potentially dangerous tailspin.

Exhibit A: Falling property prices

Perth’s annus horribilis is continuing. The latest CoreLogic RP Data statistics reveal that the average property price in the city has fallen by 4.1% in the last 12 months. This is the biggest drop of any Australian capital in the last year, and as much as three-quarters of Perth suburbs are going backwards in value.

The value freefall isn’t limited to one type of property either: the median house price has plummeted by 4.1% over the last year, while the average unit has decreased in value by 3.3%.

It’s all down to the slump in iron ore prices and the ensuing impact on the city’s fortunes.

“We’ve seen the unemployment rate in Perth rise from the mid-fours to the mid-sixes in the last year with the end of the mining boom,” says Wilson.

“Fly-in fly-out workers are no longer supporting the local economy and housing market – when they fly out and don’t fly back in again, there’s a price to pay.”

Wilson adds that the slide in values isn’t as painful as many expected – probably due to the low interest rate environment over recent months – but it’s set to continue for the foreseeable future.

“Confidence has taken a hit: price corrections haven’t been sharp but they have shifted backwards,” he says.

“Until there’s a floor established for a rebound in the local economy, that’s unlikely to change.”

Exhibit B: Increasing vacancy rates

Compounding falling property values is a worsening rental situation. Demand from new migrants pushed up rents 18 months ago, but as employment opportunities have dwindled those workers have upped sticks and headed east.

That’s resulted in a sharp decline in weekly rents and a rise in vacancy rates – measured at 3.8% citywide by SQM Research in July.

Exhibit C: A looming apartment oversupply

To add insult to injury, there’s also a looming unit oversupply issue emerging, with buyers of off-the-plan properties likely to suffer.

Herron Todd White’s (HTW’s) latest Month in Review says “recently released residential apartment projects struggle to achieve pre-sales as overall market confidence dwindles and the prospect of a diminution in value over the construction phase of a project weighs heavily on prospective buyers’ minds”.

“At this point in the market, a significant concern lies in the settlement risk for many of the development projects which were pre-sold throughout 2014 as values may have declined by up to 10% relative to when pre-sold,” it continues.

The dramatic slowdown may be worst for those who are already committed, but may be mitigated by mooted future projects being delayed or cancelled altogether.

“Our involvement and discussions with agents for new residential development within the inner ring of Perth reveal pre-sale interest still exists, albeit at much lower levels relative to 2013 and 2014,” says HTW.

“However, there is potential that many of these projects will not proceed in the current market due to an inability to meet pre-sale covenants, unless alternative funding sources are secured.”

A glimmer of hope?

So, are there any bright spots on the WA horizon? Very few, sadly. Wilson suggests that buyer activity can only improve from here on.

“Investors are active, albeit from a lower base, and first home buyers are also active,” he says.

“Some inner-city higher-priced areas to the east are performing the best out of what is a flat market.”

However, it seems the reality is that Perth – as well as regional markets like Port Hedland, which are being hit even harder by the slowdown – is a no-go zone for investors until there are clear signs that the bottom of the market has been reached.

Spring outlook

• Market conditions: In correction; weekly rents falling and vacancy rates increasing
• Segments to watch: Higher-priced suburbs in the east and south
• Segments to avoid: Everything else

SOUTH AUSTRALIA

A study in resilience

Adelaide’s property markets have remained robust across the board, despite its economic travails. Here’s why

If you look at the numbers alone, the indicators suggest that Adelaide’s property market should be tanking. South Australia is far from an economic powerhouse – indeed, it’s often regarded as the worst-performing mainland economy, with unemployment nudging 8%, according to the latest ABS data.

One would expect the August CoreLogic RP Data figures to reveal a slide in values on par with that of western neighbour Perth. Instead they reveal that values are holding firm.

Over the three months leading up to 31 August 2015 – the traditional ‘winter lull’ for property markets – Adelaide’s overall dwelling price decreased by the smallest of margins (0.1%), with unit prices actually increasing by 1.9%.

Growth between September 2014 and August 2015, meanwhile, stands at 0.5% for all dwellings, 0.3% for houses and 2% for units. The median dwelling price is now $405,000, making Adelaide the most affordable mainland capital.

Sure, it’s not spectacular growth – indeed, it’s less than the inflation rate – but when values in cities like Perth and Darwin are tumbling, Adelaide looks steady in comparison. But why?

Steady as she goes

If anything, it’s because of the relatively sleepy nature of the Adelaide property market, which has been little influenced by external factors such as the resources boom and bust and the variations in interest rates.

The peaks and troughs of the Adelaide property market are often smoother than those elsewhere, making for a slower-growing but less volatile market.

Domain chief economist Andrew Wilson says Adelaide is “remarkably resilient”.

“Adelaide has suffered from a number of factors, not least the loss of the car manufacturing industry,” he says. “Even so, the housing market’s showing moderate prices growth despite those economic constraints.

“Those economic constraints have certainly made themselves felt in the north of the city out to Elizabeth,” he adds. “There’s no doubt that high levels of unemployment and economic insecurity are affecting those markets.”

Wilson pinpoints the higher-priced end of the market as a solid performer, citing a general perception of good value as an influence that has seen buying continue.

Warming up

Wilson is positive about Adelaide’s prospects as the chilly winter turns to spring. The approval of major new submarine manufacturing and infrastructure spending should help lift the market, he comments.

“Adelaide had quite a good clearance rate for August, and the prospects are good for moderate growth,” he says. “I think that prices growth will be higher than last year.”

Valuer Herron Todd White’s (HTW’s) latest Month in Review indicates that development potential may also be part of the reason.

“There are large parts of Campbelltown have been rezoned for medium density housing,” it says.

“Areas such as the inner western suburbs including Seaton, Brompton and Bowden, and suburbs surrounding the airport are all undergoing urban renewal to some degree.”

Houses built between the 1950s and 1970s in middle-ring suburbs are particularly prized by developers, says the report.

“The tendency is to now look to fitting two or three dwellings on a site that formerly accommodated a single residence. Competition for these sites is fierce.”

While both Wilson and HTW are wary of the ailing suburbs to the north of the CBD – Elizabeth and its neighbours in particular – property researcher John Lindeman takes a different view.

“Salisbury and Elizabeth are very interesting,” says Lindeman. “Prices have hit rock bottom and you can buy a house for less than $200,000.”

Lindeman points out that, even with “very affordable” rents, an investor can still secure a 6% yield from these properties.

“That provides great cash flow,” he adds. “Medium- to long-term price growth may also be on the cards, especially as more investors come looking for cash flow.”

This may be the case especially if banks start tightening lending criteria, as expected later this year.

For those seeking capital growths – modest as it may be – Wilson recommends sticking to middle-range suburbs in the east, west and south.

“There’s a lot of value in the market, and you can still get properties in the $400,000 to $500,000 price range near the CBD,” he says. “Adelaide’s ultimately a low-rise city, and that’s part of the story as to why the market is quite resilient.”

Spring outlook

• Market conditions: Steady, with prospects for low-to-moderate growth
• Segments to watch: High-yield ‘bargain’ suburbs; middle-ring suburbs with development potential
• Segments to avoid: Northern suburbs, especially if you’re focusing on capital growth
• Potential hotspots: Salisbury, Elizabeth (for rental yield); Campbelltown, Seaton, Brompton and Bowden (for development potential)

TASMANIA

Going sideways

After early signs of a recovery last autumn, the Tasmanian market has fallen back into a lull. Could positive cash flow suburbs jump-start the island’s market?

Tasmania’s property market has rarely been one characterised by booms and busts, instead being one that quietly chugs along. However, it is also one of the most difficult to read, due to its small market size.

Even so, the latest CoreLogic RP Data figures seem fairly conclusive about the state of Tasmania’s biggest city, Hobart. The research firm’s August figures reveal that property prices in the Tasmanian capital are holding firm despite a sluggish economy and an unemployment rate of 6.7%.

Average dwelling prices increased by 1.7% in the three months leading up to 31 August this year, with growth from September 2014 to August 2015 at 1.4%. There’s no risk of the island losing its crown as Australia’s most affordable state though – the average dwelling price still hovers around $300,000.

Even so, the general forecast for the Tassie market is little or no value growth for the foreseeable future. The only markets showing any meaningful activity are the urban centres of Hobart and Launceston: Property Power Partners founder John Lindeman says there are “zero prospects” for any locations outside of Hobart.

“Rural Tasmania is fantastic if you’re looking for solitude,” he says, “but it’s not a realistic investment prospect in any way.”

Domain chief economist Andrew Wilson says a turnaround in the state’s economic fortunes will be key to any improvement in the picture.

“An economic revival will be key to sustained price growth, and that’s a problematic outcome given that it’s been an underperforming economy for some time now,” he says.

Wilson adds that a lower dollar could help the state’s fortunes.

“There is a lot of niche industry in Tasmania that hopefully a lower dollar will activate in terms of exports,” he says. “It looked like tourism would be a strong element of that market, but that industry seems to have drifted sideways following some promising growth.”

Yielding to the pressure

Capital growth may be a pipe dream for many Tasmanian property owners, but there is a flip side that may be welcomed by investors.

Hobart and Launceston are home to some of the lowest vacancy rates in Australia.

SQM Research reports the average vacancy rate in Hobart as 1.2%, with several suburbs seeing vacancy rates of less than 1%.

In addition, rental yields in Hobart are among the highest seen in urban areas across the country – second only to Darwin, according to the latest CoreLogic RP Data figures.

Indeed, Lindeman says positive cash flow properties can be found in some of Hobart’s outer northern suburbs – places like Chigwell and Claremont – although he cautions that investors looking for capital growth will be disappointed.

That may not matter to investors looking to build a portfolio in the current market, however. It has been widely reported that many banks are tightening lending and serviceability requirements for investors.

The ability to produce cash flow could be critical for investors seeking to build and maintain a portfolio: Tasmania could therefore provide a useful source of affordable, high-yield and easily rentable properties for interstate investors looking to prop up the rest of their portfolios.

Spring outlook

• Market conditions: Flat for growth; healthy rental markets in urban centres
• Segments to watch: Outer-ring suburbs with extremely low vacancy rates, high yields and affordable properties
• Segments to avoid: Anything outside Hobart or Launceston
• Potential hotspots: Chigwell, Claremont

NORTHERN TERRITORY

Bottoming out at the Top End

The Northern Territory’s capital looks set to follow a similar trajectory to its western cousin Perth, but could there be hope on the horizon?

The NT’s days may be numbered. Come 1 July 2018, the Territory is planning to be a territory no more, instead becoming Australia’s seventh state.

While the name is up for grabs, one thing’s for sure: the Top End will retain its place as one of Australia’s most volatile property markets. With capital Darwin hosting a smaller population than most NSW regional towns – and other NT cities even smaller – it only takes a small change in fortune to produce significant swings in the property market.

The resources slowdown is far from a small change in fortune. Like many of its WA counterparts, from Port Hedland to Perth, the end of the mining boom – and subsequent disappearance of fly-in fly-out workers – has hit Darwin’s housing market hard, with price falls across the board.

The median property value fell 2% between September 2014 and August 2015, according to CoreLogic RP Data. The average house price fell 2.1% and the average unit price 1.7%.

Even so, the average price of a property in Darwin has remained above the half-million mark at $527,500, making it Australia’s fourth most expensive city above Perth, Brisbane, Adelaide and Hobart.

Darwin’s downward trajectory is set to continue with the ongoing impact of the resources bust, but Domain chief economist Andrew Wilson suggests other industries could help mitigate the slide.

“Darwin isn’t just an iron exporter; it has a wider reach in terms of the NT export markets and a strong tourism industry. Plus you also have the offshore gas fields, which are still quite strong,” Wilson says.

Price falls over the last year have meant that affordability pressures are beginning to balance themselves out, he adds.

“Buyers are becoming more active and there are early signs of Darwin bouncing back with more sustainable outcomes,” Wilson says, highlighting prestige suburbs such as Fannie Bay as trailblazers for any recovery. However, vacancy rates remain high: SQM Research reported a citywide vacancy rate of 3.5% in July 2015.

At the crossroads

Property Power Partners founder John Lindeman suggests Tennant Creek as a potential location for investors on the hunt for rental yield. “Tennant Creek is a regional administration, transport and service hub at the crossroads of the Bruce and Sturt Highways. It’s got the highest rental yields in the state but also hasn’t suffered from decreases in property prices in order to achieve those yields,” he says.

Spring outlook

• Market conditions: In correction
• Segments to watch: Prestige suburbs which have seen price corrections
• Segments to avoid: suburbs with high vacancy rates
• Potential hotspots: Fannie Bay, Tennant Creek

AUSTRALIAN CAPITAL TERRITORY

The mid-term bounce?

Just one year out from the next election, is the Canberra market about to benefit from a calm before the storm?

The Canberra property market is all too often held hostages by political fortune – ebbing and flowing thanks to the whims of those in charge.

Indeed, the winter lull saw average prices chilled to the bone, with the median dwelling price falling by 0.8% to $537,000, and the average house price dropping by 1.1% to $587,800 (as reported by CoreLogic RP Data).

However, early indicators suggest that Canberra could be on the cusp of a mid-term bounce, with auction clearance rates hovering above 70% throughout July and August (compared to around 50–60% this time last year).

In addition, new listings are increasing in the ACT – up 17.7% on 2014 – while total listings are down by 8%, according to a CoreLogic RP Data spokesperson.

“It seems that there is a level of confidence (or urgency) to bring new stock to the market,” added the spokesperson.

Domain chief economist Andrew Wilson suggests all this adds up to a sign of “upwards momentum” for the ACT.

“Canberra has been pushed around by budget cuts in the last few years, but this year’s budget has put a floor under confidence,” says Wilson.

“The auction markets are strong and clearance rates are up: it’s definitely in revival mode.”

Indeed, Wilson is happy to stick his neck out and say Canberra is “second only to Melbourne” in terms of upward momentum.

Supply and demand

There’s also another parallel with the Melbourne market, albeit not a pleasing one: the risk of oversupply in the apartment market.

Herron Todd White highlights “a significant number” of unit developments currently under construction or nearing completion in Belconnen, Central Canberra, Gungahlin and Woden Valley.

In addition, the Flemington Road corridor in both Franklin and Harrison could see the addition of a large number of residential apartments in 2015.

Herron Todd White warns that some developments may be delayed “until demand strengthens”, depending on pre-commitment sales.

Instead, Property Power Partners founder John Lindeman pinpoints outer suburbs as a safer bet to take advantage of the ACT’s legendary constraints on new land release, as well as the security of dealing with buyers and renters who are moving to Canberra for the long term.

Spring outlook

• Market conditions: Improving, with potential for limited growth
• Segments to watch: Outer-ring suburbs
• Segments to avoid: CBD apartments – potential oversupply

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