What are the best property investments in Canberra?

Authored by the expert who managed and guided the team behind the Australia Property Pack

Yes, the analysis of Canberra's property market is included in our pack

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Australia, Indonesia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Australia. If you'd like to learn more about us, you can check our presentation page.

What types of properties can you invest in around Canberra right now, and what are the pros and cons of each?

Canberra's property market in 2025 offers five main investment property types, each with distinct advantages and challenges for investors.

Detached houses represent the premium segment, typically starting around $830,000 and offering strong capital growth potential. These properties attract families and provide more space and privacy, making them ideal for long-term tenants. However, they require higher entry capital and generally deliver lower rental yields around 3.6% compared to other property types.

Townhouses provide a middle-ground option, priced between $600,000-$900,000, combining space benefits with more manageable maintenance requirements. They appeal to both families and downsizers, offering rental yields of 3.8-4.2%. The main drawbacks include potential strata fees and less privacy than detached houses.

Units and apartments offer the most accessible entry point, starting from $500,000-$700,000, and deliver the highest rental yields at 4.2%+ due to strong demand from young professionals and students. They require minimal maintenance and are popular in areas like Belconnen and Gungahlin. However, they typically experience slower capital growth and are subject to body corporate fees and oversupply risks.

Co-living spaces represent an emerging opportunity, delivering yields of 5-7% by targeting students and young professionals seeking flexible accommodation. While management complexity and regulatory risks exist, the growing demand in university-adjacent areas makes this an attractive option for hands-on investors.

It's something we develop in our Australia property pack.

Does it make more sense to buy or rent property in Canberra in today's market, and why?

As of June 2025, the buy versus rent decision in Canberra depends significantly on your timeline, financial position, and the specific property type you're considering.

For units and apartments, buying makes strong financial sense for long-term residents. Mortgage repayments represent approximately 36.3% of median household income compared to 30.1% for rent, making the premium for ownership relatively modest. With rental yields around 4.2% and steady capital growth prospects, the total cost of ownership often equals or beats renting over periods exceeding five years.

For houses, renting currently offers better short-term affordability, with rental costs at 37.2% of median income versus 60.3% for mortgage repayments. This significant gap means renters can potentially invest the difference elsewhere or maintain greater financial flexibility. However, buyers benefit from building equity and protection against future rent increases, which averaged 8-12% annually in Canberra during 2024.

The decision also depends on Canberra's unique market characteristics. The city's stable government employment base provides confidence in long-term demand, while relatively affordable prices compared to Sydney and Melbourne make ownership more accessible. Current rental vacancy rates below 1.4% indicate a tight market favoring landlords, suggesting rental costs will continue rising.

For investors specifically, buying remains attractive due to strong rental demand, steady population growth from government employment, and Canberra's position as a more affordable capital city option.

What's the typical buying process for property in Canberra, step by step, especially for investors?

The Canberra property buying process follows eight essential steps that investors should understand before entering the market.

Step one involves comprehensive budgeting and financial preparation. Investors need a minimum 20% deposit (though 5% is possible with government schemes), plus additional costs including stamp duty (around 4-5% of purchase price), legal fees ($1,500-$3,000), building inspections ($400-$800), and ongoing costs like council rates and insurance. Pre-approval from lenders should be secured early to establish your borrowing capacity and strengthen negotiating position.

Research and suburb analysis form step two, focusing on growth prospects, rental demand indicators, and infrastructure developments. Investors should examine comparable sales, rental rates, vacancy levels, and planned developments that might affect supply or demand. Areas like Gungahlin and Molonglo show strong growth potential due to ongoing development and transport links.

Property inspections require attending open homes and arranging professional building and pest inspections for serious candidates. In Canberra's competitive market, being prepared to move quickly while maintaining due diligence is crucial. Many investors engage buyers' agents to access off-market opportunities and provide local expertise.

The offer and negotiation phase may involve auctions (common for premium properties) or private treaty sales. Successful investors prepare maximum bid limits beforehand and understand local market conditions. Legal review through qualified solicitors or conveyancers ensures contract terms protect your interests, particularly around settlement dates, inclusions, and any special conditions.

Final approval and settlement complete the process, typically taking 30-45 days from contract signing. This period allows for final finance approval, property valuations, and final inspections before taking possession.

How have property prices in Canberra changed over the last 5–10 years, and what's the current forecast?

What are the current real estate market trends in Canberra that investors should know about?

Several key trends are shaping Canberra's property market in mid-2025, creating both opportunities and challenges for investors.

The rental market remains exceptionally tight, with vacancy rates holding steady at 1.2-1.4%, well below the balanced market level of 3%. This scarcity drives consistent rental growth, with median weekly rents reaching $700 for houses and $575 for units. Investors benefit from reliable tenancy and regular rent increases, though this tight market also reflects limited new construction in some sectors.

Auction clearance rates demonstrate market strength, with houses consistently achieving higher clearance rates than units. This trend reflects buyer preferences for larger properties and indicates continued confidence in detached housing as a growth asset. However, units often present better value for investors seeking immediate yield returns.

Listing patterns show an interesting dynamic: while new listings have decreased by approximately 15% compared to 2024, total active listings have increased. This suggests properties are taking longer to sell, providing more negotiating opportunities for prepared buyers. The combination indicates a market transitioning from the seller-dominated conditions of 2023-2024 toward more balanced conditions.

Infrastructure development continues driving growth in outer suburbs, particularly Gungahlin and the Molonglo Valley. Light rail extensions and improved road networks enhance these areas' appeal for both residents and investors. Government employment remains the market's stable foundation, with public sector wages providing consistent rental demand regardless of economic cycles.

Supply constraints in well-established suburbs like Inner North and South maintain price pressure, while newer developments offer more affordable entry points with strong growth potential.

Don't lose money on your property in Canberra

100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.

Download Now

What kinds of people or profiles are investing in Canberra property, and what's attracting them?

Canberra attracts a diverse investor base drawn by the city's unique combination of stability, affordability relative to other capitals, and consistent rental demand.

Local professionals and public servants form the largest investor group, leveraging their stable employment and knowledge of local market dynamics. These investors typically focus on units and townhouses for rental income, understanding which suburbs attract their colleagues and peers. Their insider knowledge of government employment trends and infrastructure planning provides significant advantages in timing purchases and identifying growth areas.

Interstate investors, particularly from Sydney and Melbourne, are increasingly active in Canberra due to more affordable entry prices and stronger rental yields. A typical Sydney investor might purchase a Canberra unit for $600,000 that generates 4.2% yield, compared to Sydney equivalents costing $800,000+ with yields below 3%. These investors often target newer developments in Gungahlin or established areas in Belconnen for reliable rental returns.

First-home buyers entering the investment market represent a growing segment, often purchasing units as stepping stones before upgrading to family homes. Government first-home buyer schemes and Canberra's relatively affordable prices make this strategy viable, with many retaining their first property as an investment when upgrading.

Downsizers from larger properties increasingly view Canberra investment properties as retirement income strategies. They're attracted by the city's stability, excellent healthcare facilities, and cultural amenities, often purchasing units in areas like Woden or Belconnen for both investment returns and potential future residence.

Key attraction factors include economic stability anchored by government employment, infrastructure investment creating growth corridors, rental yields higher than Sydney and Melbourne, and entry prices significantly below other capital cities.

What are some good reasons to invest in Canberra real estate right now—and what are bad ones?

Canberra presents compelling investment opportunities in 2025, though investors should understand both the advantages and potential pitfalls.

Strong reasons to invest include the city's economic stability, with government employment providing recession-resistant rental demand and steady population growth. Unemployment rates consistently below national averages and rising public sector wages create reliable tenant pools. Infrastructure investment, including light rail expansion and road improvements, is driving growth in suburbs like Gungahlin and Molonglo, where property values are expected to benefit significantly.

Rental market fundamentals strongly favor investors, with vacancy rates at 1.2-1.4% creating consistent rental growth and minimal void periods. Rental yields of 4.2%+ for units and 3.6% for houses exceed most other capital cities, while entry prices remain 20-30% below Sydney and Melbourne equivalents for comparable properties.

Government incentives for property investment, including depreciation allowances and negative gearing benefits, enhance returns for investors in higher tax brackets. The stable political environment and planned infrastructure spending provide confidence in long-term growth prospects.

However, several factors represent poor investment motivations. Expecting rapid speculative gains is unrealistic, as Canberra typically delivers steady rather than explosive growth. The market's stability means quick profits are unlikely, making it unsuitable for short-term speculation. High body corporate fees in many unit complexes can significantly impact net rental yields, particularly in older buildings requiring maintenance or upgrades.

Oversupply risks exist in certain unit markets, particularly in areas with significant new development. Investors ignoring due diligence or purchasing solely based on rental guarantees often face disappointment when these guarantees expire.

It's something we develop in our Australia property pack.

Which areas in Canberra are best for property investment depending on your goal: living there, renting long-term, reselling later, or short-term rental?

Canberra's diverse suburbs cater to different investment strategies, with location choice crucial for achieving your specific objectives.

For owner-occupiers planning to live in their investment property, Campbell, Griffith, Watson, and Wanniassa offer the best lifestyle balance. These established suburbs provide excellent schools, parks, and community amenities while maintaining strong property values. Campbell and Griffith command premium prices due to their heritage character and proximity to the city, while Watson and Wanniassa offer more affordable family-friendly options with good growth prospects.

Long-term rental investors should target Mawson, Hawker, Amaroo, and Bonner for optimal rental yields and tenant stability. These suburbs attract families and professionals seeking value for money, with reliable rental demand from government employees and growing families. Properties in these areas typically achieve rental yields of 4-4.5% with minimal void periods due to their practical locations and family appeal.

Capital growth-focused investors should consider Inner North suburbs, Gungahlin, and Molonglo Valley for future resale potential. Inner North areas benefit from heritage protection and proximity to the city center, while Gungahlin and Molonglo offer growth potential from ongoing development and infrastructure investment. Light rail connections and planned town centers in these growth corridors position them well for long-term appreciation.

Short-term rental opportunities concentrate in Inner South areas, particularly around Kingston, Braddon, and the City. These locations attract business travelers, tourists, and temporary government contractors willing to pay premium rates for convenience. Proximity to Parliament House, cultural attractions, and nightlife makes these areas ideal for Airbnb investments, though investors must comply with ACT's increasingly strict short-term rental regulations.

For each budget range, what types of property can you realistically expect to get in Canberra?

Canberra's property market in 2025 offers options across various budget ranges, though investor expectations should align with current pricing realities.

Under $600,000 budgets access primarily one to two-bedroom units in outer suburbs like Belconnen, Gungahlin, and some parts of Tuggeranong. These properties typically target first-time renters, students, and young professionals, offering rental yields around 4.5-5%. While capital growth may be slower, strong rental demand in these price points provides steady income. Older units in Hawker, Charnwood, or Kambah represent good value in this range.

$600,000-$900,000 budgets open townhouse opportunities and smaller houses in growth suburbs. Gungahlin townhouses, entry-level houses in Amaroo or Bonner, and premium units in established areas become accessible. This range offers the best balance between rental yield (3.8-4.2%) and growth potential, attracting family tenants and professionals seeking more space than units provide.

$900,000-$1.3 million enables purchase of solid three to four-bedroom houses in established suburbs like Kambah, Chisholm, or newer areas in Gungahlin. These properties appeal to families and provide stable rental income around 3.6-4%, with good prospects for capital growth. This price range also includes premium townhouses in desirable locations with excellent amenities.

Above $1.3 million accesses premium properties in prestigious suburbs like Campbell, Griffith, Forrest, and parts of Inner South. These investments focus primarily on capital growth rather than rental yields, typically attracting executive tenants or serving as future owner-occupier properties. While yields may be lower (3-3.5%), these areas offer prestige, heritage character, and proximity to the parliamentary triangle.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Australia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

If I want to rent out long term, which areas should I target, what kind of tenants will I attract, what do they want, and what returns can I expect?

Long-term rental success in Canberra depends on matching property location and type with tenant demographics and preferences specific to the capital's unique employment landscape.

Mawson, Hawker, Franklin, Harrison, Chifley, Curtin, and Lyons represent the strongest long-term rental markets. These suburbs consistently attract stable tenants including public servants, young families, and professionals seeking value-for-money accommodation. Rental yields in these areas typically range from 4-4.5% for units and 3.6-4% for houses, with minimal vacancy periods due to consistent demand.

Your typical tenant profile includes government employees (comprising about 40% of Canberra's workforce), healthcare workers, university staff, and growing families seeking affordable suburbs with good amenities. These tenants prioritize proximity to employment hubs, reliable public transport, quality schools, and shopping centers. Properties near bus routes to the city, Belconnen, or Tuggeranong town centers command premium rents and attract longer-term tenancies.

Successful rental properties feature practical layouts, adequate parking (essential in Canberra), modern kitchens and bathrooms, and air conditioning for the capital's temperature extremes. Tenants particularly value properties with outdoor space, storage, and proximity to parks for families with children. Units near universities attract student renters, while houses appeal to families and professional couples.

Expected rental returns vary by property type and location. Houses typically rent for $650-750 weekly in these areas, delivering yields around 3.6%, while units achieve $550-650 weekly with yields of 4.2%+. Premium properties in sought-after locations can command higher rents, though yields may be lower due to higher purchase prices.

Tenant retention rates are high in Canberra due to stable employment, with many renters staying 2-3 years or longer. This stability reduces turnover costs and provides predictable income streams for investors.

If I want to rent short term (like Airbnb), which neighborhoods are good, what's the income potential and yield, and what are the local rules or restrictions?

Short-term rental opportunities in Canberra concentrate in specific areas with strong demand from business travelers, tourists, and temporary government contractors, though regulatory compliance is essential for success.

Prime short-term rental neighborhoods include Kingston, Braddon, City area, and parts of Inner South like Forrest and Barton. These locations attract premium nightly rates due to proximity to Parliament House, government departments, embassies, and cultural attractions. Properties within walking distance of restaurants, cafes, and nightlife in Kingston and Braddon command the highest rates, typically $150-300 per night depending on property size and quality.

Income potential varies significantly by season and events, with parliamentary sitting periods, major conferences, and festivals driving peak demand. During busy periods, well-located properties can achieve occupancy rates of 70-80%, while quieter months may see 40-50% occupancy. Annual yields can exceed 5-7% for properties in prime locations, significantly higher than long-term rental returns, though this comes with increased management complexity and costs.

However, ACT regulations have become increasingly restrictive for short-term rentals. All short-term accommodation providers must register with Access Canberra and comply with fire safety, insurance, and taxation requirements. Properties in residential areas face additional restrictions, with many strata schemes implementing by-laws prohibiting or limiting short-term rentals. Investors must verify both government regulations and body corporate rules before proceeding.

Operating costs include platform fees (typically 3-5%), professional cleaning between guests, increased insurance premiums, utilities, and potential property damage. Success requires active management or professional property management services, adding 15-25% to operating costs.

It's something we develop in our Australia property pack.

What makes a property investment in Canberra great—or one you'll regret—and are there better alternatives nearby to consider?

Great Canberra property investments share specific characteristics that align with the city's unique market dynamics and rental demand patterns.

Exceptional investments typically feature locations within growth corridors or near confirmed infrastructure projects, such as light rail extensions or major road upgrades. Properties appealing to broad tenant bases—like three-bedroom houses in family-friendly suburbs or two-bedroom units near employment hubs—provide consistent rental demand and minimize vacancy risks. Strong rental yields combined with reasonable body corporate fees (under $4,000 annually for units) ensure positive cash flow, while purchase prices below suburb medians offer both affordability and growth potential.

Properties in suburbs like Amaroo, Bonner, or Franklin often represent great investments because they combine reasonable entry prices, strong rental demand from government employees, and benefit from ongoing area development. Units in established areas like Hawker or Charnwood can deliver excellent yields when purchased below market average due to cosmetic issues easily addressed through renovation.

Regrettable investments typically involve overpaying for properties in oversupplied unit markets, particularly new developments with rental guarantees that expire after two years. High-maintenance properties or those with excessive body corporate fees (above $6,000 annually) quickly erode investment returns. Properties in areas with limited transport links or those requiring significant renovation without corresponding value increase often disappoint investors.

Buying purely for quick capital gains or ignoring due diligence around building quality and strata management creates risk. Properties in areas losing government employment or facing major supply increases may underperform expectations.

Regional alternatives near Canberra include Goulburn and Queanbeyan, offering higher rental yields (5-6%) and lower entry prices. However, these locations lack Canberra's employment stability and growth prospects, making them higher-risk investments despite attractive initial yields. For most investors, Canberra's stability and consistent demand make it preferable to nearby regional alternatives.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. BambooRoutes - Canberra Property Analysis
2. YourMortgage - Buy vs Rent Capital Cities
3. Star Investment - Property Investment Strategies 2025
4. Jonny Warren - Complete Guide to Buying in Canberra
5. Aussie Home Loans - 25 Years Report
6. OpenAgent - Canberra Property Market
7. KPMG - Property Price Forecasts 2025
8. API Magazine - Canberra Property Markets 2025
9. AllHomes - Canberra Rental Market
10. LinkedIn - Canberra Property Opportunities 2025