Compromise key to ‘affordable’ real estate in Canberra

You would be forgiven for questioning if affordability actually exists in Canberra, with its runaway property market and median house price at more than $1 million.

While McGrath Canberra sales agent Kris Hellier said tracking down an ‘affordable’ home was a tough ask in the current market, you may hit paydirt if you’re willing to compromise.

“It’s no secret that the market has gone absolutely bonkers and many people have been priced out of the market when it comes to buying houses,” Kris said.

“The reality is: if you want ‘affordable’ it’s now in that $700,000 to $850,000 range.

“With the median house price in Canberra now more than $1 million, buyers wanting more affordable options are looking towards apartments and townhouses. That is the affordable buying right now.”

Latest CoreLogic data shows property prices have surged 20.9% in the past year.

Kris suggested trying “mid-range suburbs in Gungahlin”, including Harrison, Franklin, Casey and Moncrieff.

“You used to be able to buy little duplexes or three bedroom homes in Amaroo, Palmerston, Ngunnawal – the old suburbs of Gungahlin – but now you need $700,000 as a bare minimum for an original 3x1,” he said.

“Back 12-18 months ago in Ngunnawal, you’d be able to get pretty much any three bedroom house you want for between $500,000 and $700,000. Now you’re looking at a base of $700,000.”

Kris said newer homes were generally fetching higher prices, so it was possible to make an initial saving if you’re prepared to renovate an older property.

“If you want to stay in the northern part of Canberra in Belconnen and Gungahlin, your minimum would be $700,000-plus and even then that’s slim pickings. If you’re spending that kind of money, be prepared to spend a bit extra to modernise it or fix things,” he said.

“If you’re prepared to do some renovating and updating yourself, the older suburbs, not just Gungahlin, but also Belconnen in areas like Strathnairn and Holt, people have always added value to older homes on bigger parcels of land.

“A newer home in Harrison or Franklin, which were only a couple of years ago one of the most desired parts of Gungahlin, is probably getting outperformed by Throsby next door because it’s a year or two old.”

Kris said buyers considering a townhouse or apartment purchase should also research the body corporate or strata fees in advance to determine if a cheaper home would actually be cheaper in the long run.

“You need to think outside the box. Consider the three criteria: the right home in the right location at the right price.

“In my experience, there generally needs to be a bit of leeway with at least one of those criteria. Budget is usually a non-negotiable so if the location is the next most important, be prepared to compromise on the property.”

The Bright Starters?report from Canstar and buyer’s agency Hotspotting, released in April, found Canberra was the 12th most affordable location in Australia, out of 14 metropolitan and regional centres.

The report identified Charnwood in Canberra’s north as one of the most affordable suburbs with some houses in the high $500,000s and low $600,000s, and ultra-low vacancies.

Units in Dickson and Gungahlin were also singled out, particularly apartments in Gungahlin which were close to major amenities and job opportunities, as well as both homes and units in Ngunnawal.