The Ultimate Guide to Buying an Apartment in Canberra
For Aussie property investors, Canberra has become one of the most sought-after cities to buy an apartment in. It’s certainly not surprising given the fact that, within the past 10 years alone, Canberra has been crowned the world’s most liveable city (OECD, 2014), the world’s third best city to visit (Lonely Planet’s Best in Travel, 2018), Australia’s most liveable city (realestate.com.au and Ipsos Life in Australia report, 2017-2019) and the second most hygienic city in the world (GotParts747 research, 2021), among many other raving awards and reviews from tourists and locals alike.
If you’re reading this article, it’s highly likely that you’re considering purchasing your first house or apartment in Canberra, so let’s talk through the how, what, when, where and why of doing so, in order to make the most of your transaction.
First Home Buyers Guide to Buying in Canberra and the ACT
Being handed the key to your first home is such a great feeling but purchasing a home can be quite the task. Whether your preference is an apartment, a house or something in between, there’s quite a lot to consider for first home buyers, especially ones with the additional job of moving interstate to the ACT as part of the process. It can be both stressful and exciting, but as long as you’ve got a basic understanding of what’s required, you’ll be fine.
Here’s a bit of a rundown of a few things to keep in mind as you’re working through the process of doing your research and eventually purchasing property in Canberra.
The ACT Home Buyer Concession Scheme (formerly the First Home Owner Grant (FHOG))
As with other states in Australia, the ACT government does offer financial support for home buyers.
Previously, up until 30 June 2019, the ACT government offered the First Home Owner Grant to first home buyers looking to purchase a new home. Essentially, if the value of your apartment was less than $750,000, which is absolutely on the cards in most areas in Canberra, you could be provided a handy $10,000 to put towards what you have to pay in order to secure an apartment, house, villa or other property you plan to live in.
Now, the government has updated its offerings and provides a range of other home buyer concessions to help home buyers avoid paying costly duties on their homes.
The eligibility requirements include…
- An 18+ year old age requirement for all buyers.
- The total gross income of all buyers must not be greater than the income threshold.
- All buyers including their partners must not have owned any property within two years prior.
- At least one buyer must reside in the home for a period of at least one year on a continual basis after settlement.
More handy information about concession schemes and eligibility requirements in the ACT can be found here.
Choosing Your First Apartment in the ACT
When looking at apartments in the ACT, it’s important to research which properties are going to be best suited to your personal needs and circumstances. Make yourself aware of the property market, best suburbs to buy in, community aspects, core needs of tenants in the area, costs that may be involved and other factors that could impact your choice.
Here are a few of our recommendations…
- Look into CoreLogic RP Data and Australian Property Monitor websites to help in understanding market trends and price shifts.
- domain.com.au and realestate.com.au are helpful tools to see exactly what’s on the market in a broader sense, whereas liviti.com.au shows you a selection of available properties and their prices, as well as other key details, for properties in our exclusive network.
- Team up with a real estate expert (agent or consultant) who has knowledge of the Canberra real estate market to help with finding a property, how to purchase and contract-related advice.
Ways to Buy Property in the ACT
Deciding on the best way to buy (or sell) property can be one of the most stressful factors in real estate transactions, especially when it’s your first time around the block. Below you’ll find some advice surrounding the most common ways in which the purchasing of both houses and apartments tends to move forward.
A private treaty sale generally involves an agent, a vendor and a buyer. Essentially, the vendor will list the price of their property and, through their agent, the buyer will negotiate the purchase price, as well as terms and conditions of the sale until an agreement is found on both ends of the deal. A great point to note is that a private treaty comes with a five-day cooling-off period for property in the ACT which can be negotiated to be increased or decreased from either party.
An auction is run by an auctioneer on behalf of the seller. It involves multiple bidders making offers on the property until the fall of the hammer when a bid goes over the reserve (the minimum amount the seller wants to get for the home), bids have slowed and a final price is settled upon. There is no cooling-off period for auctions in the ACT.
The tender process is similar to a private treaty, however, there is no listed price to refer to. All prospective buyers submit their offers (usually the maximum they are willing to pay) – you may also be required to provide a deposit. The seller then has the opportunity to accept or reject these offers and is under no obligation to accept an offer made by written tender. Tenders offer no cooling-off period post-purchase in the ACT.
Buying an Investment Property Off-The-Plan
Buying an investment property involves purchasing a home that is yet to be built. This usually happens through a qualified agent or consultant partnered with a developer. It might be partially constructed or still in the planning process but either way, it’s a viable investment opportunity for both first home buyers, seasoned investors and others looking to upsize or downsize their current property.
Where to Look for an Apartment in the ACT
Reid is a suburb that neighbours Canberra’s CBD, so it is a highly sought-after area for buyers to place their money in a high-end apartment. Reid’s central location to most of Canberra’s nightlife, entertainment venues, markets and the Australian National University attracts an array of young people including students and professionals, so investing in a unit with two or three bedrooms could offer tenants the opportunity for a spare room to be used as a home office or study. Other notable areas close to Canberra’s CBD worth looking at right now include the Kingston Foreshore and Yarralumla.
Located in the heart of the beautiful Woden Valley, Phillip is just over a ten-minute drive southwest of Canberra’s CBD. It has all the essential amenities, stores and entertainment facilities and is right next door to Canberra Hospital. There are quite a few established apartments and off-the-plan developments under construction in Phillip, as there has been considerable growth in the region, especially in recent years, to accommodate the growth of people wanting to buy and rent in the ACT in general.
Belconnen, in Canberra’s northwest has become a popular place to invest as it offers high lifestyle appeal for young couples and growing families. With Lake Ginninderra, Westfield Belconnen, University of Canberra and Canberra City all within easy reach, Belconnen is the perfect combination of suburban and urban living. We have a range of beautiful Belconnen two to three bedroom apartments available, most falling well under the $750,000 sale price required to apply for the First Home Owner Grant.
Situated in the ACT’s leafy southwest, Greenway was actually named after the famed architect Francis Greenway, and its streets are also named after architects – that’s just one of the signs that this region has been well designed and built. With a lower median unit price than the Australian Capital Territory’s median, now is a great time to search for and invest in an apartment in this vibrant suburb. Check out the adventurous Black Diamond apartments and luxurious Aspen Village apartments for top-tier investment opportunities in Greenway.
The suburb of Gungahlin, with its beautiful Yarrabi Pond District and Mulanggari Grasslands Nature Reserve is a prime region of growth in the ACT. A majority of residents are independent youth and maturing couples and families, both suited to living in and investing in the type of apartments and lifestyle offered here. With many office workers migrating to a work-from-home environment, suburbs like Gungahlin, a little further out of the CBD with two to three bedrooms, are now prime real estate for young professionals and families. According to realestate.com.au units rent for $490 PW with a rental yield of 6.0% and, based on five years of sales, Gungahlin has seen a compound growth rate of 2.7% for units.
Get Savvy with Finance
In order to seriously consider buying property in Canberra (or anywhere, for that matter), it’s important to plan ahead with your money and account for every cent to ensure you’ve got all the costs covered before the moment comes for you to sign a contract.
Find Out How Much You Can Borrow
A key part of purchasing an apartment is finding out how much you can borrow and also how much of a deposit you can save. Generally, a deposit sits at between 5 & 20 per cent of the total cost of the property.
Consider Land Tax, Stamp Duty And other ACT Government Enforced Fees
Aside from the price of the property itself, there are a few other fees to consider including land tax (a tax that applies to properties that aren’t an owner’s principal place of residence) and stamp duty (essentially, the compulsory tax paid when purchasing a home).
Both of these additional Government enforced fees must be taken into account when planning your apartment buying budget.
Have A Budget and Stick To It
Speaking of budgets, if you have a budget for say, groceries per week, and you go over it by a few dollars, it’s not the end of the world. With bigger purchases like a home, for instance, going over budget could mean the difference between being able to easily cover your mortgage each week or not. Don’t fall into the trap of compromising your financial position – even if it might mean missing out on your dream home at auction.
What Buyers Need to Know When Purchasing a Home in Canberra’s Rising Market
With house prices further expected to increase in Canberra and a consistent surge of buyers, you need to make sure you’re fully capable of standing out from the crowd to search for and nab a quality apartment.
- Research the little details of the property and keep them in mind – don’t risk being caught out with issues after purchase.
- Be transparent with your real estate agent or property consultant as to which apartments you like/don’t like and why.
- Review the contract and clarify the deposit payment required before bidding at auction.
Of course, there are many other ways to ensure you’re prepared for homeownership, contact us if you’d like a comprehensive rundown.
Be Objective and Logical, Not Emotional
- Recognise that you may be one of hundreds of parties interested in a specific property – try not to become attached to one single option.
- For investment properties, look at apartments for their resale value, location and likelihood of high rental yield, not an emotional connection you may have formed.
Put Your Best Offer Forward, Quickly
When prices are on the rise (now), it is the best time for buyers to act, whether it be a house, land, unit or another property type of interest. Don’t sit on your offer. Chances are, there are many other buyers looking into the Canberra property market – you want to be one of the first offers a seller is handed.
With our wide array of locations, Liviti can offer options in an apartment building that’s perfect for your investment or occupancy needs and circumstances. Chat with one of our real estate experts by calling (02) 9056 4311 today!
Alternatively, check out our Canberra-based apartments yourself via our online Canberra property listing collection.