Canberra’s property market is proving to be a goldmine for investors, with the territory recording the largest quarterly growth in rental yields for both houses and units in the country.
The latest Domain State of the Market Rental Report, released on Thursday, showed Canberra’s gross rental yields for units grew by 2.2 per cent in the last quarter of 2017. This is the highest in the country, representing a 4.7 per cent annual growth and investors gaining a 5.8 per cent return on income year on year.
In the same period, gross rental yields for houses grew by 2.6 per cent to 4.37 per cent. This is the third highest in the country trailing Darwin at 4.91 per cent and Hobart at 5.34 per cent.
“Canberra’s level of growth is quite astounding actually, it’s a really strong market,” Domain chief data scientist Dr Nicola Powell says.
Despite the seemingly ideal conditions in Canberra for investors, Powell says the nation’s capital has not yet experienced a boom in investor activity but expects this will change.
“We haven’t seen a boom in investor activity as our other capital city markets have, namely Sydney and Melbourne,” she says.
“However, with Sydney’s market growth moderating and Melbourne producing lower levels of growth, investors will start to look elsewhere.
“When you look at the outputs Canberra is offering, we may find investors looking to the nation’s capital to provide that better rental yield.”
Canberra’s performance is further reflected in the median weekly asking rents for houses and units, which were both the second highest recorded in the country.
Median asking rents for houses experienced a growth of 5.9 per cent in the quarter, reaching a new high of $540 a week. This represents an annual increase of 8 per cent and is positioned well above the national average of $435 a week.
Sydney and Darwin were the only capital cities to record a higher asking price than Canberra, both sitting at $550 a week.
“Canberra is a very expensive place to rent but we also have one of the highest median weekly incomes, and the high participation rate drives up that wage,” Powell says.
“You have to keep in mind this figure does not include Queanbeyan, so there are other options for those who are finding the rental market in Canberra tough going.”
For units, the median asking rental price in Canberra grew by 2.4 per cent. This increased by 2.4 per cent from last year to $430 a week, trailing Sydney’s $545 a week.
Canberra is one of only three capital cities to experience a growth in weekly unit asking rents over the quarter, with the majority of cities stagnating and Sydney experiencing a negative result at -0.9 per cent.
“Canberra’s top-performing economy is one of the key drivers for growth in the housing and rental market,” Powell says.
“The growth is quite remarkable.”
reposted from domain.com.au