ACT News


Capital gains in the capital

Canberra has been one of the strongest performing cities for rental growth in the past 15 years, new data shows.

RP Data on capital city rental markets issued on Thursday indicates that despite a softening in the market in the past year the overall long-term performance of houses and units remains competitive with other capital cities.

During the past 15 years to April this year capital city rental rates have increased at an average annual amount of 4.2 per cent for houses and 3.7 per cent for units. In the ACT house rents have risen on average by 4 per cent each year and units by 4.5 per cent.

This puts the territory alongside Perth, Sydney and Brisbane as the strongest performers over the 15-year timeframe.

RP Data research director Tim Lawless said during the past 15 years Canberra had been a strong rental market especially when considering the high dwelling values in the territory.

He said normally a marketplace recording strong growth in house and unit prices would not experience a similar strong growth in rent - but this was the case in the ACT.


And Mr Lawless said Canberra was still an attractive place for investors because it offered good rental yields as well as capital gains.

While in the past it was common for people to target just capital gains things had changed.

''Now I think we are seeing investors looking for a more balanced portfolio,'' he said.

The data shows Canberra has recorded the second highest gross rental yield for units at 5.7 per cent behind Darwin with 6.1 per cent.

Canberra recorded the third most expensive median rents for houses in the country at $539 a week and units at $448 a week as of last month. A decade ago the median rent for a house in the ACT was $339 while a unit netted $284 a week.

Mr Lawless said in the past 12 months rental growth in the territory had flatlined at 0.4 per cent for units and fallen 1 per cent for houses, but this just represented a pause in the market. He said this partly could be attributed to politics. ''A lot of people … are still waiting to see how the election will affect them.''


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