Is Canberra the best place to buy an investment property?

With the exception of Canberra and a small number of outliers, Australia’s property market is still reeling nearly two years after the housing market downturn officially began. Recent market updates, however, have given worried investors a glimpse of hope as cities like Sydney experienced four months of consecutive growth in the months leading up to October 2019, with growth primarily driven by record low interest rates making mortgages the cheapest they’ve ever been. Although this is a sign of hope, growth is still a far cry from Sydney’s property values peak of July 2017, as nervous investors in the city grapple with further year-on-year decline.

In Canberra, however, there couldn’t be a starker contrast. While the ACT didn’t feature as prominently during the property boom, our beloved capital has quickly positioned itself as one of the most investable markets in Australia – simply because of how stable and reliable the Canberra market remains for investors.

The ACT’s annual growth rate coupled with continued investments in infrastructure and the community make Canberra a very enticing destination for shrewd investors looking to add to their rental property portfolio. And since property values are continuing to grow at a reasonable rate, it’s unlikely Canberra will experience a similar downturn any time soon; the likes of which crippled homeowners in Perth, Melbourne, and Sydney.

Rental property returns in Canberra and Sydney



Taking the latest data into consideration serves only as proof that Canberra is far more investor-friendly than the country’s largest property investor hub of Sydney. While purchasing a home in Sydney will set investors back over $1million, you can net yourself a comparable home in the nation’s capital for only $740,000. Since rental prices and demand in Canberra continue to soar, the ACT region is quickly bridging the gap between rental prices in Sydney, right now only falling short by a mere $50 for units.

These numbers mean that a return on investment is far more likely in Canberra than anywhere else in the country – and while rental and housing prices in the capital remain stable, rental prices in Sydney recently fell to levels not seen since 2016.

Canberra: The City Recording Consistent Market Gains

For the past 15 years, Canberra has consistently produced rental market gains. While many of Australia’s major cities are seeing a steady decline – with weekly rents falling by more than 5% year-on-year for those hit hardest by the property bubble – rental prices in the ACT continue to fetch healthy increases at each yearly review.

Furthermore, with rental prices just slightly below that of Sydney – and sale prices far beneath that of Sydney – investors are getting a better rate of return. The total return for dwellings in Sydney is -3.6%, while it’s sitting at a very tempting +5.8% in Canberra. Add that to Canberra’s median dwelling value of $592,000 compared to Sydney’s $790,000 and it’s clear that Canberra is offering investors a stable, consistent, and reliable return. Certainly, a more profitable return.

The biggest advantage Canberra has over other capitals is that far fewer buildings are being approved in the region. Only 3,484 units are set to hit the capital by the end of 2020, compared to over 70,000 units predicted to near completion in Sydney by the end of the same period. While that’s much-needed relief for the overwhelming demand, units have been continuously losing value short-term. With recent negative media coverage on the poor construction of several new apartment buildings in Sydney having left tenants (and even investors) with a bad taste in the mouth, only time will tell whether these newer complexes prove to be solid long-term investments.

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Why invest in ACT property?

Canberra has always been an excellent option for property investors, and this has only been solidified by recent flaws in our country’s most prolific cities.

This has much to do with housing and unit prices stabilizing in the capital, however the primary reason to invest now has less to do with market fluctuations and more to do with policy. As of November, the Reserve Bank of Australia has kept official interest rates unchanged at the record low of 0.75%. With many banks changing their lending structures to revitalize and boost the property market, it’s now cheaper than ever to secure a mortgage. While the conditions are relatively easy to borrow, now is by far one of the best times to get into the market.


Although Melbourne and Sydney reaped the lion’s share of benefit during Australia’s property boom, they’re also facing off against the brunt of its decline. Canberra on the other hand, might not get as much attention as these Australian behemoths, but for the past decade our glorious country capital has experienced property and rental value increases outstripping Australia’s more mainstream property investor destinations.

With both short-term and long-term growth looking quite positive, it comes as no surprise that risk-conscious investors are moving away from the unpredictable markets of Sydney and Melbourne to more stable markets like Canberra.

For those wondering about where your next investment property should be – it’s simple; Canberra is the only contender.

If you’re considering selling your property, why not speak to one of our senior agents? Our agency principal, Peter Tolhurst, has over 25 years experience and would be happy to perform a free, no obligation market appraisal at a time that suits you.

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How much is your home worth on the market in Canberra?

Use our “Big Data” tool to get an estimate of your home’s current value in less than 90 seconds, based on statistics provided by one of Australia’s leading data providers.