Is buying a property in South Canberra a good investment?

Last updated on December 20, 2023

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

If you've marveled at the leafy streets and urban lifestyle of Inner South, you may have daydreamed about living in this vibrant Canberra region, savoring its cosmopolitan amenities and central location.

Is it a good idea though? What's the current state of the real estate market in that area? Are property values appreciating or depreciating? Are investors seeing returns on their real estate investments? How's the demand for rentals?

We'll answer all these questions for you! When building and updating our property pack for Australia, our team has been researching and surveying this area. In fact, there is significant customer interest in investing there. Therefore, we believe it would be beneficial to include some information about it in our property pack.

Why do property buyers like investing in South Canberra?

Inner South in Canberra is a gem for property buyers, and there's a bouquet of reasons why it's become such a hot spot.

Picture this; you're looking for a place that's not just a house, but a home, an environment that enriches your life. That's exactly what Inner South offers, setting it apart from other real estate markets.

First off, think about location. Inner South nails this. It's nestled close to the city's heart, yet it maintains a serene, almost village-like ambiance. This unique blend is hard to find. You're close to the action think cafes, theaters, and shops but when you step back into your neighborhood, it's like entering a peaceful, leafy retreat.

Then there's the historical charm. This area is steeped in history, with heritage-listed properties and established gardens. It's like living in a piece of Canberra's story.

This historical aspect isn't something you'd find in many newer suburbs. It adds a character and depth to your living experience that's quite rare.

Well, it's been on the rise for quite some time, but really surged in the last couple of decades. People started realizing that living here meant they could enjoy the best of both worlds city convenience and suburban tranquility.

It seems likely. The charm of Inner South isn't something that fades. As long as people value a blend of history, beauty, and convenience, this area will remain in demand.

Inner South has a bit of a magnetic pull for professionals and families. The professionals love being close to the city center, making their commute a breeze. Families, on the other hand, are drawn to the excellent schools and community feel.

It's a suburb that suits a range of lifestyles, from the bustling life of a young professional to the more settled pace of family life.

But let's be real, no place is perfect. Inner South does have its drawbacks. For one, the cost. This area isn't the most budget-friendly. If you're looking for a more affordable entry into the property market, this might not be your first pick.

Also, for some, the quiet, settled vibe might feel a bit too laid back, especially if you're after a more vibrant, energetic community.

So, when you're weighing your options, think about what matters most to you. If a blend of history, serenity, and convenience tops your list, Inner South in Canberra could be your dream spot.

But if budget or a high-energy neighborhood vibe is more your thing, you might want to explore other areas. Remember, the right place isn't just about the house; it's about how it fits into your life and aspirations.

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Why is Inner South a nice place to live?

Living in the Inner South is like stepping into a well-balanced world, where the charm of a peaceful neighborhood meets the pulse of city life.

It's a place that offers a unique lifestyle and culture, something you might find appealing if you're considering moving there.

Let's talk about the lifestyle first. Imagine tree-lined streets, heritage buildings, and a community vibe that's both relaxed and refined. This area is known for its blend of modern living with historical charm.

It's not just about the houses; it's about the lifestyle they encapsulate. There's a strong sense of community, with local markets, festivals, and events that bring people together.

The culture here is diverse and welcoming, making it a great spot for expats. You'll find a mix of people from various backgrounds, adding to the area's cosmopolitan feel. The expat community is well-integrated, with many finding the transition to life in Canberra smoother thanks to the welcoming nature of the locals and the availability of international amenities.

Cost of living, however, is something to consider. Inner South is known for being one of the more upscale areas in Canberra, which means it might not fit everyone's budget. Property prices and rents tend to be higher here compared to other parts of the city. That said, many find the quality of life justifies the cost.

Safety is another strong point. Inner South is generally considered a safe area with low crime rates, making it a desirable location for families and professionals alike. It's the kind of place where you can feel comfortable walking around, even in the evenings.

You're well-covered here. For families, there's an array of reputable schools, such as Telopea Park School and Narrabundah College. Healthcare needs are met by facilities like The Canberra Hospital, which is just a short drive away.

For your shopping needs, areas like Manuka and Kingston offer a variety of shops, boutiques, and eateries, providing both convenience and quality.

Infrastructure quality is top-notch. Roads are well-maintained, and utilities like water, electricity, and internet connectivity are reliable. This aspect makes everyday life smoother and hassle-free.

Getting around and accessibility is a breeze. Inner South is well-connected to the rest of Canberra.

Major roads and public transport options link it seamlessly with other parts of the city. Speaking of public transportation, you have buses that are frequent and reliable, making commuting to the city center or other suburbs convenient.

So, in essence, Inner South Canberra offers a blend of comfort, convenience, and culture. It's a place where you can enjoy the perks of city life without the usual hustle and bustle.

However, remember, the higher cost of living and the tranquil lifestyle might not align with everyone's preferences or budget. It's all about what you're looking for in a home and community.

How much does it cost to buy real estate in South Canberra?

If you need a detailed and updated analysis of the prices, rents and yields, you can get our full guide about real estate investment in Australia.

Buying a property in the Inner South is an investment that's both exciting and significant, especially when you consider the range and quality of properties available.

Let's dive into what this area offers in terms of real estate and why it might be the right choice for you.

Inner South Canberra is a tapestry of residential options. From cozy apartments to sprawling houses and even luxury villas, there's something for every preference and lifestyle. Each type of property has its unique charm and utility.

Apartments, often favored by professionals and smaller families, offer the convenience of low maintenance living.

Houses, on the other hand, are sought after by those looking for more space and privacy, often popular among larger families. Luxury villas, while fewer in number, cater to those seeking exclusivity and high-end living.

In terms of demand, houses in Inner South are particularly sought after. It's their blend of space, character, and location. Many of these homes come with rich histories and are situated in neighborhoods renowned for their leafy, serene atmosphere.

This demand is driven by families and professionals who value space, privacy, and the unique character that these homes offer.

The property scene here is a mix of new developments and resale properties. While the charm of established homes continues to attract buyers, there's also a growing interest in newer, modern developments that offer contemporary amenities and designs.

For instance, you might find apartments starting from around AUD 5,000 to AUD 8,000 per square meter, while houses and luxury villas can command significantly higher prices.

These numbers, however, are just a rough guide, as prices can fluctuate based on specific locations within the Inner South, property size, and other factors.

Over recent years, property values in the Inner South have shown an upward trend. This increase is driven by the area's desirability, limited supply of new developments, and the overall growth of Canberra's real estate market. It's a trend reflective of the area's ongoing popularity and the general stability of the Canberra property market.

Looking ahead, there are several factors that could influence property values in the Inner South. Planned developments, infrastructure upgrades, and city planning changes can all play a role.

For example, any new transport links or commercial developments can make the area more accessible and attractive, potentially driving up property values.

Predicting the real estate market is always a bit of a crystal ball exercise, but if current trends are anything to go by, Inner South is likely to continue being a sought-after area.

Factors like its proximity to the city center, the continued demand for quality housing, and the limited supply of new properties are all indicators of potential value increases.

Where is the best area to buy a property in South Canberra?

When you're thinking about buying a property in the Inner South, you're entering a world of diverse neighborhoods, each with its own character and appeal.

The best area for you really depends on what you're looking for in a home and community.

Let's break it down by atmosphere and property types. Areas like Kingston and Manuka are known for their vibrant, bustling streets filled with cafes, shops, and restaurants.

They offer a more urban lifestyle, with a variety of apartments and townhouses. These areas are perfect if you enjoy being in the heart of the action and don’t mind a bit of noise and activity.

On the other hand, areas like Griffith and Yarralumla offer a more tranquil setting. Here, you’ll find leafy streets, larger blocks, and a mix of charming older homes and modern residences. These neighborhoods tend to be quieter and more family-oriented, ideal if you're looking for a peaceful environment.

Now, about prices. As you might expect, areas with more amenities and closer to the city center, like Kingston and Manuka, tend to be pricier, especially for properties with more space.

Griffith and Yarralumla, while still on the higher end, might offer more value for money if you're looking for larger properties or homes with a bit more character.

In terms of up-and-coming areas, keep an eye on places like Narrabundah and Red Hill. These areas have been gaining popularity thanks to their blend of quiet residential streets and proximity to amenities. They offer a good balance of lifestyle and value, with potential for growth in the future.

If you’re considering where to buy, areas like Kingston and Manuka are great for a more urban, lively lifestyle, while Griffith and Yarralumla are excellent for a quieter, more family-friendly setting. Narrabundah and Red Hill are worth considering for their growth potential and balance of features.

On the flip side, it's wise to be cautious about areas that might not align with your preferences or future plans.

For example, if you're not a fan of the hustle and bustle, the heart of Kingston might not be for you. Or, if you're looking for a more modern feel, some parts of older neighborhoods with heritage restrictions might not suit your taste.

Here is a summary table to help you visualize better. If you need more detailed data and information, please check our property pack for Australia.

Area	Atmosphere	Property Types	Price Range
Kingston	Vibrant, Urban	Apartments, Townhouses	Higher
Manuka	Bustling, Urban	Apartments, Townhouses	Higher
Griffith	Tranquil, Family-Oriented	Older Homes, Modern Residences	Moderate to High
Yarralumla	Peaceful, Leafy	Larger Blocks, Varied Homes	Moderate to High
Narrabundah	Quiet, Residential	Mix of Homes	Moderate
Red Hill	Quiet, Growing Popularity	Mix of Homes	Moderate

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Is there a strong rental demand in South Canberra?

Inner South is indeed a hotspot when it comes to rental demand, and understanding this demand can be crucial if you're considering an investment in the area.

Firstly, let's talk about the nature of this demand. Both short-term and long-term rentals have their place here, but the demand leans more towards long-term rentals.

Because Inner South attracts a demographic that often seeks stability and community, such as professionals working in the city, diplomats, and families.

The profiles of potential tenants are quite diverse. Professionals, often working in the government or corporate sectors, are a significant group. They typically look for properties that are close to the city center, well-connected by public transport, and offer a balance of comfort and convenience.

Then there are diplomats and international workers, drawn by the proximity to embassies and international institutions. They usually seek high-quality, well-maintained properties that offer privacy and security.

Families, attracted by the area's reputable schools and community atmosphere, often look for larger homes with gardens and are likely to be long-term renters.

In terms of property types, there's a varied demand. Apartments, especially in areas like Kingston and Manuka, are popular among young professionals and diplomats due to their location and ease of maintenance.

Houses, particularly in suburbs like Griffith and Yarralumla, are sought after by families looking for more space and a peaceful environment.

Amenities play a big role in reducing vacancy. Properties close to amenities like shops, cafes, and public transport are always in demand.

Additionally, features like secure parking, modern appliances, and internet connectivity can be significant drawcards. These amenities not only make life more convenient but also add to the appeal of a rental property.

Now, regarding returns on investment, Inner South Canberra presents a promising picture. Although specific numbers vary, you can expect a healthy return, especially given the area's consistent rental demand.

The exact yield depends on the property type, location, and the amenities offered. Generally, well-located and well-maintained properties yield better returns.

The types of properties that are seeing increasing demand – and hence potentially better yields – include modern apartments in areas close to the city center and spacious family homes in quieter suburbs.

These properties cater to the significant groups within the rental market; professionals seeking convenience and families looking for a community-oriented lifestyle.

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Is it easy to buy a property as foreigner in South Canberra?

Before we answer the question, please know that we have an article dedicated to the experience of buying real estate as a foreigner in Australia.

Buying property as a foreigner in Inner South, Canberra or anywhere in Australia, comes with specific regulations and considerations that you need to be aware of.

First and foremost, foreign buyers are subject to certain regulations in Australia. The Foreign Investment Review Board (FIRB) is the key body overseeing these regulations.

As a foreigner, you're typically required to get FIRB approval before purchasing property. This approval process is to ensure that foreign investment is beneficial to the local community and economy.

Generally, the FIRB allows foreigners to purchase new properties or vacant land for development, but buying established dwellings can be more challenging and is often restricted.

The purchasing process in Inner South follows the standard Australian property buying procedure. This includes property inspection, making an offer, exchanging contracts, and finally, settlement.

One of the primary risks associated with property investment here is the fluctuating real estate market, which can impact property values. Additionally, being unfamiliar with local market trends and legal requirements can pose a risk.

There are several classic pitfalls or common mistakes to be aware of. These include underestimating additional costs like stamp duty, legal fees, and ongoing maintenance costs.

Another unique aspect to Australian property buying is the concept of 'bidding at auction', which is quite common. Foreign buyers unfamiliar with this process might find themselves either overbidding or missing out on potential properties.

Working with a local real estate agent or lawyer is highly advisable. They can provide invaluable guidance on the local market, help navigate the complexities of Australian property law, and ensure compliance with FIRB regulations.

They can also assist in understanding the nuances of the local real estate market, such as typical pricing, negotiation practices, and the auction process.

As for exit strategies, property investors in Inner South typically consider either selling the property for capital gain or holding it to earn rental income.

Timing is crucial in both scenarios, understanding the local market conditions to sell at a peak, or maintaining the property well to ensure consistent rental income.

Another strategy could involve renovating or developing the property to add value before selling or renting it out.