Savvy Canberra property investments harder to secure: HTW

Property investors in Canberra now have to do more to secure a good investment, according to Herron Todd White’s latest August report.

The property data firm says that this is due to first home buyers having more options.

“Recent changes to lending and legislation, aimed at enabling first home buyers to enter the market, has had an effect on property investors looking to expand their portfolios.

“These measures were introduced in an effort to allow first home buyers to be more competitive in a heated market.

“As a result, property investors looking for an asset with good yield and growth will have to do their research and be willing to go the extra mile to secure a pro table investment.

“Unlike other states, the ACT has not introduced a scheme which cuts stamp duty for first home buyers.

“There are some incentives available via the government and private developers however nothing similar to those in New Sourth Wales and Victoria,” the report stated.

An increase in the number of apartments have resulted in slow growth for this market Herron Todd White commented.

“With the increased supply of apartments coming onto the market over the next year, the ACT has seen relatively slow growth for this style of property with some properties loosing value.

“However, rental demand for apartments has remained strong despite the increase of supply.

“If property investors are chasing yields and not capital growth, purchasing a new apartment may be a good option.

“This is particularly relevant for apartments in the CBD and district centres such as Woden, Tuggeranong, Belconnen and Gungahlin.

“It should be noted that new apartments in Molonglo Valley, Gungahlin and Tuggeranong may experience low to no capital growth over the next few years due to increasing supply,” the report commented.

A two bedroom apartment at 16/1 Waddell Place, Curtin (above) is available for rent for $400 per week.

Built in 1995 the property was last sold in 1999 for $149,750 before being rented in 2014 for $345 per week.

Another two bedroom apartment at 30/11 Ijong Street, Braddon (below) is available for $450 per week.

Rental yields for detached housings remain steady Herron Todd White advises.

“Rental yields in detached housing have remained steady but like other capital cities, capital growth has been very strong.

“An option for investors in the ACT may be to purchase a vacant block through the Mr Fluffy Asbestos Removal Scheme.

“There are several hundred blocks being introduced to the market most of which are in sought after established areas.

“Land banking one of these blocks and either selling or developing later may be a pro table option providing investors are able to cover the initial costs.

“However, developers should be wary of the changes to the Lease Variation Charge which took effect on the 1st of July 2017.

“These changes have significantly increased the fee required to build multiple units on residential blocks,” the report advised.