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ACT tops property hot spots

By RedDogInCan - 17 January 2012 32

Just to add some fuel to the debate that has been raging lately over housing prices,  an expert panel for magazine Smart Property Investment have identified Canberra top of a list of 50 investment hot spots.

The panel reckons the city’s high incomes and a scarcity of land would underpin strong growth in property prices.

Investment hot-spots were chosen based on their population growth, demand for housing, income level, employment, vacancy rates, previous capital growth and current gross rental yields.

Goulburn also gets a guernsey.

What’s Your opinion?


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32 Responses to
ACT tops property hot spots
1
Chop71 1:59 pm
17 Jan 12
#

Not suprised at all.
We get it pretty good here.

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2
poetix 2:06 pm
17 Jan 12
#

I wonder if Goulburn gets a guernsey (nice alliteration) because of all the people from Canberra forced to look for housing there?

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3
DermottBanana 2:54 pm
17 Jan 12
#

Having seen three bedroom ex-govt houses selling in Goulburn for under $200K less than a year ago, I’m not surprised it’s considered an investment hotspot. An hour from Canberra city? I’m sure commuters in other capital cities would be content with a mediocre house an hour from the office for that sort of price.

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4
Pestiness 2:57 pm
17 Jan 12
#

“we get it pretty good here”… is that “we” as in investors, or “we” as in first home buyers?

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5
chewy14 3:03 pm
17 Jan 12
#

“The panel reckons the city’s high incomes and a scarcity of land would underpin strong growth in property prices.”

Scarcity of land? Did they even look at a map?

Or do they mean scarcity of land being released by the government to prop up house prices and underpin the budget?

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6
arescarti42 3:04 pm
17 Jan 12
#

That there can be “scarcity of land” in a city like Canberra is a marvel of government interference in markets.

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7
Pestiness 3:43 pm
17 Jan 12
#

I posted this on the ‘how’s the affordability’ comments but thought I’d share here too.

“In the 1980s, houses used to cost an affordable three times the median household income. In recent years, they have climbed to nine times the household income in Sydney, according to the 2011 Demographia International Housing Affordability Survey. And this is despite more households now having more than one breadwinner.”

There’s also a good graph on p11 comparing Canberra to other capital cities. Flawed metrics, but the bottom line is housing is less affordable (for people intending to live in those properties, that is), regardless of how you crunch the figures. Stamp duty comparison on p16 is also interesting.

Source: http://www.cis.org.au/images/stories/policy-monographs/pm-125.pdf

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8
arescarti42 8:38 pm
17 Jan 12
#

Pestiness said :

I posted this on the ‘how’s the affordability’ comments but thought I’d share here too.

“In the 1980s, houses used to cost an affordable three times the median household income. In recent years, they have climbed to nine times the household income in Sydney, according to the 2011 Demographia International Housing Affordability Survey. And this is despite more households now having more than one breadwinner.”

There’s also a good graph on p11 comparing Canberra to other capital cities. Flawed metrics, but the bottom line is housing is less affordable (for people intending to live in those properties, that is), regardless of how you crunch the figures. Stamp duty comparison on p16 is also interesting.

Source: http://www.cis.org.au/images/stories/policy-monographs/pm-125.pdf

Nice link, I’ve not seen that one before.

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9
LSWCHP 9:45 pm
17 Jan 12
#

I can think of at least two people I work with who live in Goulburn. They car-pool to split running costs and have about a 50 minute commute each way. They’re prepared to trade the commuting time and expense for house prices that are less than half of those in Canberra.

And in the great scheme of things, their commute is less than the 2 hour Gosford-Sydney commute of one of my neighbours when I was a kid.

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10
OpenYourMind 9:46 pm
17 Jan 12
#

Pestiness said :

I posted this on the ‘how’s the affordability’ comments but thought I’d share here too.

“In the 1980s, houses used to cost an affordable three times the median household income. In recent years, they have climbed to nine times the household income in Sydney, according to the 2011 Demographia International Housing Affordability Survey. And this is despite more households now having more than one breadwinner.”

There’s also a good graph on p11 comparing Canberra to other capital cities. Flawed metrics, but the bottom line is housing is less affordable (for people intending to live in those properties, that is), regardless of how you crunch the figures. Stamp duty comparison on p16 is also interesting.

Source: http://www.cis.org.au/images/stories/policy-monographs/pm-125.pdf

Leaving aside the median for the moment, the simple fact is that if you are looking to buy an average 3 beddie in Canberra, you’re talking about $450k (median Kambah price for 2010) and given the large number of two income public servant families and two income contractor families which for the most part would be earning at least $150k+ gross, the 1980s 3 times annual household income for a house hasn’t shifted. I’m not suggesting every household in Canberra is bringing in $150k+, but this is the typical household you are competing against when bidding for that average house. This is a public service town and $150k is less than two APS6s or an EL1 and an APS3-4. There’s plenty of contractors I know that earn a lot more than that.

This is why those that like to imagine a massive property crash in Canberra are misguided. This could happen, but it would need either massive public service cuts or some other game changing event such as massive land release.

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11
Grail 9:46 pm
17 Jan 12
#

Pestiness said :

“In the 1980s, houses used to cost an affordable three times the median household income. In recent years, they have climbed to nine times the household income in Sydney, according to the 2011 Demographia International Housing Affordability Survey. And this is despite more households now having more than one breadwinner.”

ROFLMAO!

They can’t be particularly bright if they think that more households having access to more money should somehow make houses more affordable. Twits.

Then they suggest that the way to make houses more affordable is to simply flood the market with them. This, in a city where the water utility is talking about permanent water restrictions due to inability to secure supply. We’re a mountain town, with limited choices of where to source water from. We can’t just go double the population without thinking about where we get our fresh water, and what we’re going to do with our sewage.

I agree with the other methods mentioned: removing negative gearing for property investors will remove a significant advantage that investors have over home buyers.

Other options for affordability include arranging with a group of friends to buy houses and rent off each other.

“Just add more property to the market” is not a sensible answer.

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12
arescarti42 10:37 pm
17 Jan 12
#

OpenYourMind said :

Leaving aside the median for the moment, the simple fact is that if you are looking to buy an average 3 beddie in Canberra, you’re talking about $450k (median Kambah price for 2010) and given the large number of two income public servant families and two income contractor families which for the most part would be earning at least $150k+ gross, the 1980s 3 times annual household income for a house hasn’t shifted. I’m not suggesting every household in Canberra is bringing in $150k+, but this is the typical household you are competing against when bidding for that average house. This is a public service town and $150k is less than two APS6s or an EL1 and an APS3-4. There’s plenty of contractors I know that earn a lot more than that.

This is why those that like to imagine a massive property crash in Canberra are misguided. This could happen, but it would need either massive public service cuts or some other game changing event such as massive land release.

What are you trying to suggest? If households earning far in excess of the mean household income are looking to buy $450k houses in Kambah at far below the median house price (~$550k), who is buying the majority of houses that sell in Canberra?

Statistically speaking less than 30% of households in Canberra are making 150k+. You can’t just take the top 30% of households and say they are representative of the wider community, and therefore the 1980s mean hasn’t changed. It has changed massively.

http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6523.02009-10?OpenDocument – the ABS data set on household income for those wanting to check.

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13
Tetranitrate 11:31 pm
17 Jan 12
#

arescarti42 said :

OpenYourMind said :

http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6523.02009-10?OpenDocument – the ABS data set on household income for those wanting to check.

Be very careful with the ABS numbers for household income, I’m 99% sure they include imputed rents, which while necessary for comparing household income between different countries, isn’t really something the average person would considered to be a part of “household income”.
(imputed rents = the imaginary income owner occupiers enjoy because they aren’t renting, ie: the rent they pay themselves)

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14
OpenYourMind 6:58 am
18 Jan 12
#

I guess what I’m trying to say is that if you took that comment of 1980s vs now, you’d assume that no Canberrans could possibly afford a house. Instead what I see is a similar situation now as it was in the 80s, i.e. a working couple making ok money can still afford to start out buying in an ok suburb such as Kambah. This hasn’t really changed.

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15
drfelonious 8:00 am
18 Jan 12
#

What you are saying Open Your Mind is this:

In the 1980s an average family could buy the average house.

Now it takes a family making big coin at the top end of the income scale to buy the average house.

And as (I assume) the owner of one or more of said houses (bought before the bubble) that’s fine with you.

I would be fine with me, too, if I were in your shoes, but don’t try and convince me that Canberra houses are affordable or that a situation where the average family cannot buy the average house is sustainable or good policy.

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