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Correlation between Canberra Property prices and government in power
Topic Started: 14 May 2012, 12:55 PM (1,264 Views)
georgie
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Does anyone know if there is any correlation of property prices in Canberra and their growth rate depending on the government in power.

I am trying to figure out if there will be a big swing when the labor government is booted out in 2013 (my opinion)
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peter fraser
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georgie
14 May 2012, 12:55 PM
Does anyone know if there is any correlation of property prices in Canberra and their growth rate depending on the government in power.

I am trying to figure out if there will be a big swing when the labor government is booted out in 2013 (my opinion)
This is merely an opinion with absolutely zero evidence to back it.

I think that the ALP will be massacred in the polls in 2013, so we pretty much agree on that.

The coalition has made noises about cutting expenditure and that likely means the public service. So when the come to power there will be a lot of rumour and headlines about LNP razor gangs to rein in expenditure, and some heads will roll.

That should have a very negative effect on prices in Canberra, especially during that period of turbulence. In the final analysis the public service will continue to grow and the cuts won't be anywhere as severe as the headlines suggest, so a house in Canberra should be a good long term hold.

Is that along your own thought lines?

Any expressed market opinion is my own and is not to be taken as financial advice
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stinkbug
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As population and tax revenue grow, government grows. As government grows, there's more money in Canberra to pay for housing. Longer term, government will grow rather than shrink.

Canberra is a bit strange in that the ACT uses land development as a major source of local government income, so new land is REALLY expensive, and tradies here are expensive also, so new houses in Canberra cost heaps to develop. As a result, there is lots of money chasing the existing property in good locations.

Also, the reason why Canberra property has a high median price is not because all housing is insanely expensive, but rather because there is stuff all cheaper housing.

When the Libs went through the public service like a dose of salts in the mid 90's, we had an interesting outcome. Property didn't crash, but rather took a small short term hit then stagnated for quite a few years. Public servants are pretty well paid for what they do, and this sets a level of support for housing. The current feeling in Canberra is that cuts to the public service are definitely on the cards, but that such cuts will be through voluntary redundancy and attrition rather than actually sacking people.

At the moment, Canberra is almost at crisis point for non-professional non-public servants. Small businesses, especially builders, have no work on and no demand. Much of the new housing being built are spec homes that are unsold at the time of building, being built by larger companies just to keep the local office open. Despite this, the only part of the market that has seen significant (ie 10% or more) falls has been the top end, where there are some real bargains right now. The bottom end is still in strong demand.

For buying in Canberra, there are several suburbs that are cheaper than neighbouring areas, and for no good reason. This is kinda normal in Canberra, and bargains can be found by seeking out such areas. In the longer term, there are good gains to be made by buying existing stock in high demand areas. Be very careful with new buildings, though, as the quality of work over the past few years has been mostly poor.

Rents add to the story too, as there is a reasonable transient population who don't want to buy, but have the means to pay a lot for rent. This distorts the market a bit, and needs to be considered. It's not that hard to find properties that are likely to be positive cashflow in 3 years or less if you buy right.
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georgie
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peter fraser
14 May 2012, 01:09 PM
This is merely an opinion with absolutely zero evidence to back it.

I think that the ALP will be massacred in the polls in 2013, so we pretty much agree on that.

The coalition has made noises about cutting expenditure and that likely means the public service. So when the come to power there will be a lot of rumour and headlines about LNP razor gangs to rein in expenditure, and some heads will roll.

That should have a very negative effect on prices in Canberra, especially during that period of turbulence. In the final analysis the public service will continue to grow and the cuts won't be anywhere as severe as the headlines suggest, so a house in Canberra should be a good long term hold.

Is that along your own thought lines?
Hmm Good point, I guess that both governments are similar in size and that both require the same amount of administrative work.
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Admin
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Quote:
 
No sale: units reaching saturation point

Noel Towell
May 14, 2012

Canberra's market for apartments and units could be at ''saturation point'', with the ACT government failing in recent attempts to sell residential land packages zoned for multi-unit development. The land at Belconnen, Gungahlin and Molonglo failed to sell despite being ripe for development into apartments, shops and offices and being free of the controversial change-of-use charge. Treasurer Andrew Barr said the lack of takers for the sites was an indication that the market for units and apartments is cooling.

''We went to the market last week to sell three multi-unit sites and none of them sold,'' he said.

''It would appear in the marketplace right now that units are pretty much at saturation point.''

Mr Barr said approvals for units in Canberra reached an all-time high in October 2010 when 819 such dwellings were approved. ''A lot of those properties are now hitting the market and hence as supply lifts up, you're starting to see the impacts on price,'' he said.

Read more: http://www.canberratimes.com.au/act-news/no-sale-units-reaching-saturation-point-20120513-1ylaw.html#ixzz1uqGOPaou
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