Canberra's fringe suburbs seeing spike in home prices: HTW
The fringe property market of Canberra has undergone significant development within the past 24 months, say valuation firm Herron Todd White in their April 2016 property clock.
The once greenfield sites on the fringes of the city are now being developed into well planned and flourishing suburbs providing opportunity for owner-occupiers, investors and government housing alike.
The Gungahlin district near the ACT and NSW border is considered a fringe location by many locals due to its relatively new development and up until 2010 consisted of only five suburbs which were developed in the mid 1990s. Gungahlin is now a thriving area with half a dozen new suburbs emerging in the past five years.
One of the newest suburbs to be developed is Moncrieff which is still under construction. Local demand for vacant land in Moncrieff was so high that 77 residential blocks were sold within three minutes and many potential purchasers missed out. The average price of a vacant land in Moncrieff was $280,000. Naturally one of the factors causing such high demand in the fringe areas is the high prices being achieved in areas closer to the CBD.
In the past 24 months, we have seen a massive hike in prices for older stock within the Inner north and inner south precincts. For example, buyers have been purchasing older dated homes for $700,000 plus and then knocking them down in order to build a more modern custom-designed home, which essentially means they are paying $700,000 just for land.
For entry-level buyers it is hard to compete in these areas therefore they have ventured to areas such as Gungahlin which allows them to buy vacant blocks and build their dream homes at a much more affordable price. Gungahlin is tipped for strong growth in the next decade with the first stage of the light rail designed to cater to the Gungahlin region and due to be complete by 2020. With transport being a key factor in the success of a fringe area the long-term expectations for Gungahlin are strong in relation to other fringe areas in Canberra.
Property Observer found a few examples of recent sales in Canberra's fringes:
1. A two-bedroom apartment at 24/80 Gozzard Street Gungahlin ACT 2912 (above) sold for $331,000
2. A three-bedroom villa at 78 Mary Gillespie Gungahlin ACT 2912 (above) sold for $522,000 recently.
Across Canberra 69 auctions were held this week with a 64 percent sales success including the $1,515,000 sale of the former bolthole of the former Federal Treasurer Joe Hockey.
Over the three months to December 2015, 7.6 percent of Canberra homes re-sold at a loss compared to 11.2 percent over the previous quarter and 10.9 percent a year earlier, according to the latest Pain & Gain report from Core Logic RP Data.
The median price for a house in Forrest is $2,150,000, according to CoreLogic RP Data.