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ACT Real Estate: Pain Points and Positives for Homebuyers

September 6, 2021

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Whether you want to buy real estate property in Australia’s capital city of Canberra, or other smaller, laidback townships like Naas, Williamsdale, Uriarra, Tharwa, or Hall, you’ll find unique challenges that you may not find anywhere else in Australia.

But chances are, you’ll head straight to Canberra. Having a home in Canberra comes with many advantages that you may want to consider.

Why Should You Buy Real Estate Property in Canberra?

For starters, Canberra offers a slower pace, yet not really slow. Slower than Sydney and Melbourne definitely — but who wouldn't really mind a little less traffic?

Canberra is easier and quieter.

It has excellent roads, fine restaurants—and guess what?

Unlike Sydney, Melbourne, or Brisbane, you don't have to get out of your suburb to hear the chirping sounds of birds.

In Canberra, nature is at your doorstep.

But there are downsides as well.

Canberra is a city built for the car. So If you prefer public transport, you may not find it as user-friendly as other big cities in Australia.

Source: chartingtransport.com

In fact, Canberra leads Australia when it comes to car usage per person.

What about housing costs?

The Cost of Real Estate Properties For Sale in Canberra Compared To Other Cities in Australia

An analysis of the ACT real estate market against other states and territories shows that Canberra is the third most expensive city.

If you want to have an idea of the cost of real estate properties for sale in Australia, you may want to do a cost comparison.

But don’t worry. We do this for you in the following table:

City Cost of a Home Average Monthly Mortgage Repayment How many incomes required to service average monthly mortgage repayments
Sydney $1. 15 Million $2, 500 1.7
Melbourne $901, 951 $2, 000 1.4
Canberra $788, 621 $2, 058 1.2
Brisbane $577, 664 $2, 167 1.1
Hobart $530, 570 $1, 733 1
Adelaide $542, 974 $1, 733 1
Darwin $509, 452 $2,167 0.8
Perth $537, 013 $2, 042 0.8

You need to also know that in Canberra, you can’t sell land or buy land. Land is owned on a leasehold basis.

Land in Canberra is on Leasehold Basis: What This Means To a Home Buyer

Before you place a call to your real estate agent about properties for sale in ACT, you need to be aware that all real estate transactions in any suburb in ACT are on a leasehold basis.

But What Really is a Leasehold Sale?

It’s like this...when you’re buying land in Kingston or any other suburb in Canberra through a real estate agent you are technically buying only the building.

The land beneath does not belong to the seller. Therefore, the seller cannot sell it.

The Commonwealth government bought all the land on which the capital stands. Property owners only buy the right to use the land for a period of 99 years.

At the end of the lease, the owner of a home or an apartment is required to pay the ACT government some fees to renew the lease.

This is an addition to the land rents that the ACT government charges real estate property owners annually.

How much is the annual charge?

2% of the market price.

Houses in Canberra Must Be Rated For Energy Efficiency: What This Means To a Home Buyer

Since 1999, the ACT government requires all real estate properties for sale, whether it’s an apartment, a townhouse, or a home, to have a professional energy assessor rate the property for energy efficiency. This rating must be disclosed during a sale process.

What does this mean to the home buyer?

When you are evaluating an apartment or a house for sale in ACT, you need to ask for this information. Your real estate agent may help get an energy assessor to give you detailed information with regards to the energy efficiency of the house.

According to the Nationwide House Energy Rating Scheme (NatHERS), houses are rated on a range between zero, for minimum rating, and 10 for maximum rating as follows:

Source: nathers.gov.au

If your real estate agent has identified a property in ACT, or you have discovered a house or apartment through ListingLoop.com.au — you need to look for a property which has higher ratings on the energy efficiency score.

You can find a qualified and licensed assessor at the website of the Environment, Planning and Sustainable Development Directorate of the ACT government.

It can save you thousands in future energy costs.

Though you’ll also pay a premium of up to 30% on the value of the house.

But it’s really worth it.

While other states and territories only have energy efficiency regulations for new homes and apartments, ACT has implemented the rules for all real estate properties and all suburbs within the ACT jurisdiction.

Real Estate Agents May Underquote: What This Means To a Home Buyer

This is what sometimes happens.

A real estate agent in Canberra or any area within the ACT may want to have a higher number of buyers interested in a real estate property.

Doing this will increase competition — and guess what else?

Sales price.

So a house may be correctly valued at, say, $500,000 - $550,000.

But what does the real estate agent do?

They quote it in the real estate price-list at $450,000.

When you receive such a quote, and you’ve got the bucks, you punch the air in excitement.

ListingLoop.com.au

You view the house or the apartment in Canberra and start the negotiations. If you are satisfied, you start doing the paperwork. You call your mortgage broker for a financing deal.

The property may be going to auction and you find your hopes are dashed when it sells above your budgeted price.

You’ve lost time and money.

Is there a way to prevent this?

This is what you need to do. When a property is listed in an ACT suburb of your choice, do your research. Often the price quoted may differ by 10-20%.

Your real estate agent in ACT will guide you, then proceed cautiously.

You can avoid many of these risks by sidestepping auctions — and narrowing your search to off-market properties.

Other Things To Consider When Buying a Real Estate Property in Canberra

There’s something positive and negative about all the suburbs in the capital. Charnwood is prestigious. It’s surrounded by nature and a well-informed neighbourhood. A place like Gungahlin is fairly affordable with good internet speeds.

Generally, the south is less expensive and in most cases, only 10-20 minutes drive to the capital.

Then you also need to check safety records.

Source: policenews.act.gov.au

You also need to check the neighbourhood for social amenities like schools and hospitals.

The purchase process can feel overwhelming.

But it doesn’t have to be that way.

Why You Don’t Need Feel Overwhelmed

ListingLoop.com.au is a useful marketplace for those who want to buy property in the capital. This is especially true for those who want to buy off-market property to avoid the bumpy road of purchasing property through auction.

listingloop.com.au

How much would you expect to pay for this incredible service? Probably a lot, but you’d be wrong. The cost to you?

$0.

That’s right… Absolutely nothing. You have nothing to lose and everything to gain. We look forward to working for you.

Photo by Pressfoto / CC BY

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