Open Spaces, Historic Homes and Rising Prices Define Canberra
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Open Spaces, Historic Homes and Rising Prices Define Canberra

The city’s highly sought-after and tightly held inner south is commanding top dollar.

By Kirsten Craze
Mon, Aug 23, 2021 10:14amGrey Clock 7 min

Despite being the country’s capital, Canberra is only Australia’s eighth-largest city with just over 431,000 residents, but is now home to the second-highest dwelling values. The 12-month median cost of a home in Canberra is $793,872, only behind Sydney’s $1.017 million but higher than Melbourne’s $762,068, according to CoreLogic data as of August.

Sydney has its glitzy harbour and beaches; Melbourne its edgy European vibe, however Canberra is affectionately known as The Bush Capital, as it’s located inland. As an entirely planned city, and the seat of parliament, Canberra has long existed under the real estate radar maintaining a serious persona since its conception in 1913. Fast-forward 100 years and the capital started coming of age—and hasn’t slowed down.

Today’s Canberra has ranked among the world’s best cities; earning bronze in Lonely Planet’s 2018 Best in Travel series and voted the world’s most liveable city by the Organisation for Economic Co-operation and Development (OECD) in 2014. With a booming local food scene, a billion-dollar lakeside redevelopment, plus a world-class arts and culture movement, Canberra has transformed from a sober political city to a dynamic destination.

Canberra emerged this year from Covid-19 with a seemingly pandemic-proof property market bolstered by high average household incomes, a secure public service workforce and successful handling of the virus (at just over 130 confirmed cases since records began in March 2020. As a result, local property values skyrocketed by 18.1% in the 12 months to July, with the luxury-home market leading the charge, according to CoreLogic figures.

Canberra’s highly sought-after and tightly held inner south, in particular, is currently commanding top dollar with experts agreeing values are on track to rise further. Three Canberra suburbs in high demand, and experiencing solid price growth as a result, are Kingston, Griffith and Forrest.

Boundaries

A prestigious patch of real estate measuring approximately one square mile, the three most in-demand suburbs of Canberra’s inner south—Kingston, Griffith and Forrest—are anchored by one common denominator: They surround the exclusive shopping and dining precinct known as Manuka. The waterfront suburb of Kingston sits to the east of the Manuka strip along Lake Burley Griffin, Forrest is located to the west, and Griffith to the south.

CANBERRA

Price Range

According to data firm CoreLogic, 18 new Canberra suburbs surpassed a median price of $1 million in the year to June, taking the reported total to 27. Forrest, however, is so tightly held it often doesn’t register a median price through lack of sales. Of the few local homes which sold over the past year, the median was $2.7 million.

It’s a similar story in Kingston. After a recent A$1 billion redevelopment of Kingston’s foreshore, potential purchasers have more opportunity to buy into the coveted waterfront lifestyle close to Manuka’s shopping and dining precinct. Apartments and townhouses in Kingston have a $626,000 median for two bedrooms or $945,000 for three bedrooms—well over the Canberra apartment median ofA$470,000.

Luxury Portfolio International

Photo: Luxury Portfolio International

Claire Corby, a broker with Capital Buyers Agency, said the Manuka-adjacent Griffith, where the median house price is A$1.82 million, was a suburb to watch.

“You can walk to Manuka village, you’re right in the thick of the action with great restaurants at the end of your street. If you’re buying something there at A$3 million today, you could quickly see that becoming A$4 million,” she said.

Luxury Portfolio International

Photo: Luxury Portfolio International

Housing Stock

Suburbs in the city’s south are in high demand as they offer something many other Canberra suburbs can’t—heritage homes on large blocks with easy walkability to monuments, the lake, parks and prized schools.

Forrest, Griffith and Kingston are three of Canberra’s oldest suburbs, dating back to the original designs of city planner and architect Walter Burley Griffin. While both Forrest and Griffith feature many historic bungalows, Kingston’s redevelopment has made it one of the city’s more modern and high-density suburbs.

Luxury Portfolio International

Photo: Luxury Portfolio International

“Buyers fall into two camps; they either want a slice of Canberra’s history, so they’re after established 1920s to interwar homes in these blue-chip locations. There’s a lot of history in those properties and they’re very scarce. With sympathetic renovations they’re perfect for investors, because they’re not making any more of those,” she added.

The other camp, according to Ms. Corby, is buyers seeking newer houses. “If they don’t find what they want, they’ll buy a rundown property in one of these established areas and bulldoze it to pop up a beautiful modern home.”

What Makes It Unique

Ms. Corby said Canberra is now on the map thanks to its value for money.

“People are looking to exit big cities, partially driven by COVID, and they’re looking at Canberra realizing it’s quite unique. Canberra has everything a bigger city has to offer, but it’s fairly low density with low traffic congestion. Our peak hour lasts just 30 mins,” she said.

Luxury Portfolio International

Mario Sanfrancesco, sales agent with Blackshaw Manuka, said soaring prices in Sydney and Melbourne were filtering through to the capital.

“We don’t have the A$30 million to A$50 million sales they have, but you can buy those homes here for just A$10 or A$15 million. And that’s pretty special,” he said.

With Manuka’s popular village-style hub at the heart of these three suburbs, the neighborhood has maintained a sense of exclusivity. Given the historic significance of the area several public and private buildings, as well as ‘street furniture’ including the fire hydrants, kerbs and lights are under heritage protection.

Even the contemporary apartment buildings of Kingston have been restricted to a four-story height to maintain the integrity of the meticulously master-planned city.

Luxury Amenities

Famous for its exclusive boutiques, critically acclaimed restaurants and five-star hotels, Canberra’s inner south is a magnet for all things luxury.

Kingston Foreshore precinct is the place for an artisan shopping experience from renowned local photographer Scott Leggo’s gallery to the Canberra Glassworks, Australia’s only cultural centre dedicated to contemporary glass art. On Sundays, the Old Bus Depot Markets deliver gourmet food stalls to Kingston along with one-off fashion and handmade crafts. The gentrified neighbourhood also dishes up plenty of popular pubs, bars and restaurants including La Rustica, The Dock and Molto Italian.

Manuka Shopping Centre, predominantly on the Griffith side, is the go-to location for high-end jewellery, shoes, gifts and clothing stores such as celebrated Australian fashion designer Carla Zampatti. Locals flock to Manuka village on weekends for brunch at Urban Pantry or dine in at Belluci’s or multi-award winning Aubergine. A yet-to-be completed project will see the art-house cinema get a makeover and the arrival of a new five-star hotel.

Historic Manuka Oval, which is bustling with Australian Rules Football matches each weekend and the restored art deco swimming baths are also a draw, along with the high proportion of local parks and playgrounds.

UNSW Canberra Oval

UNSW Canberra Oval. Photo: VisitCanberra

Who Lives There

As Canberrans are tempted to upgrade with historically low interest rates, they are being joined by cashed up Sydneysiders, Melburnians and even returning expats seeking greener, lower-density pastures.

Eliza Owen, head of Australian research at CoreLogic, said Canberra’s highly paid professionals, who may be seizing the opportunity to upsize, were leaving their mark on the prestige market.

“Certainly high incomes and a tight labour market has contributed to Canberra’s very resilient property market performance throughout the year,” she said.

HISTORIC HOMES AND RISING PRICES DEFINE CANBERRA

“If we look at some of these top-performing high-end suburbs in the capital they tend to have detached housing stock, pleasant leafy settings and—I suppose relative to Sydney—some semblance of affordability,” Ms. Owen said, adding that CoreLogic’s analysis revealed Canberra to be one of Australia’s most expensive capital city housing markets.

“However, when considered relative to incomes, it’s actually one of the most affordable,” she said.

Outlook

Regardless of the pandemic, Canberra is set to experience further house price increases.

“It’s just had an extraordinary growth story, and was virtually unaffected by the pandemic. Incredibly, June 2021 marked 23 months of consecutive record highs for the local dwelling market,” Ms. Owen said.

The top 25% of Canberra’s home price values was the strongest of any of the upper quartile house markets across Australia’s capital cities for the year, according to CoreLogic.
“Basically, this high-end segment of the house market across Canberra is a top performer. It’s grown by 24% over the year,” Ms. Owen said.

“We often talk about how this upswing has very much been concentrated in the high end of Australia’s housing markets, but it’s especially the case for Canberra,” she added.

Mr. Sanfrancesco said it is Canberra’s lack of volatility that places it in good stead.

“Historically we haven’t had the booms and busts that other cities have. We traditionally have had a gradual growth of values over time,” he explained, adding that supply would be the biggest challenge to the Canberra market moving forward.

“Up to the $4 million mark there are very few luxury homes for sale, but quite a depth of buyers,” he said. “If you’re a buyer looking to secure a place in Canberra I’d say jump right now if you can, because prices are just going to keep on going up.

Reprinted by permission of Mansion Global. Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: August 22, 2021



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Based on 40 percent of household income, just 37 percent of properties would be serviceable on a mortgage covering 80 percent of the purchase price. ANZ CoreLogic suggest 40 may be the new 30 when it comes to home loan serviceability. “Looking ahead, there is little prospect for the mortgage serviceability indicator to move back into the 30 percent range any time soon,” says the report.

“This is because the cash rate is not expected to be cut until late 2024, and home values have continued to rise, even amid relatively high interest rate settings.” ANZ CoreLogic estimate that home loan rates would have to fall to about 4.7 percent to bring serviceability under 40 percent.

CoreLogic has broken down the actual household income required to service a home loan on a 6.27 percent interest rate for an 80 percent loan based on current median house and unit values in each capital city. As expected, affordability is worst in the most expensive property market, Sydney.

Sydney

Sydney’s median house price is $1,414,229 and the median unit price is $839,344.

Based on 40 percent serviceability, households need a total income of $211,456 to afford a home loan for a house and $125,499 for a unit. The city’s actual median household income is $120,554.

Melbourne

Melbourne’s median house price is $935,049 and the median apartment price is $612,906.

Based on 40 percent serviceability, households need a total income of $139,809 to afford a home loan for a house and $91,642 for a unit. The city’s actual median household income is $110,324.

Brisbane

Brisbane’s median house price is $909,988 and the median unit price is $587,793.

Based on 40 percent serviceability, households need a total income of $136,062 to afford a home loan for a house and $87,887 for a unit. The city’s actual median household income is $107,243.

Adelaide

Adelaide’s median house price is $785,971 and the median apartment price is $504,799.

Based on 40 percent serviceability, households need a total income of $117,519 to afford a home loan for a house and $75,478 for a unit. The city’s actual median household income is $89,806.

Perth

Perth’s median house price is $735,276 and the median unit price is $495,360.

Based on 40 percent serviceability, households need a total income of $109,939 to afford a home loan for a house and $74,066 for a unit. The city’s actual median household income is $108,057.

Hobart

Hobart’s median house price is $692,951 and the median apartment price is $522,258.

Based on 40 percent serviceability, households need a total income of $103,610 to afford a home loan for a house and $78,088 for a unit. The city’s actual median household income is $89,515.

Darwin

Darwin’s median house price is $573,498 and the median unit price is $367,716.

Based on 40 percent serviceability, households need a total income of $85,750 to afford a home loan for a house and $54,981 for a unit. The city’s actual median household income is $126,193.

Canberra

Canberra’s median house price is $964,136 and the median apartment price is $585,057.

Based on 40 percent serviceability, households need a total income of $144,158 to afford a home loan for a house and $87,478 for a unit. The city’s actual median household income is $137,760.

 

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