Braddon tops Canberra unit hotspots

Last week's Domain State of the Market Rental Reportshowed Canberra as an investors' goldmine, particularly in the unit market, where the nation's capital recorded the highest gross rental yields for the December quarter in the country.

Canberra's gross unit rental yield sat at 5.8 per cent, representing a year-on-year growth of 4.7 per cent.

For those looking to take advantage of this, a recent PRDnationwide report titled Canberra Property Hotspots labelled Braddon as Canberra's top affordable unit hotspot, followed closely by O'Connor and Dickson.

PRDnationwide national research manager Dr Diaswati Mardiasmo said a ''hotspot'' is determined by a combination of affordability, median price growth, proposed future developments, rental yields and vacancy rates.

The report analysed all suburbs within a 10-kilometre radius of Canberra's CBD.

"The way we define a hotspot is that it has had growth but there is more to come," said Mardiasmo.

"These three suburbs are the creme de la creme from an affordability and positive growth perspective. There are also a number of new developments coming from 2017 onwards, alongside positive rental yields."

Affordability was measured in the report by comparing the median price to the average loan amount for the ACT, which was based on the Real Estate Institute of Australia's June 2017 figure of $377,441.

"If banks are lending at that rate then it indicates they are comfortable in people being able to service that mortgage without being too out of pocket. That is why we use it is an affordable benchmark," said Mardiasmo.

Low rental yields and vacancy rates add to a suburb's standing. According to the report, O'Connor and Dickson's vacancy rates are sitting at 0.4 per cent and Braddon's is sitting at 1.4 per cent.

O'Connor recorded the highest rental yield at 5.4 per cent, followed by Braddon at 5.2 per cent and Dickson at 4.3 per cent.

The number of new commercial developments were also considered in the report. For this reason, Braddon was crowned the No.1 affordable unit hotspot.

"One way to ensure there is more growth to come to a particular area is through commercial developments such as restaurants," said Mardiasmo.

The report stated that Braddon's market was supported by up to $97.7 million in new projects in the second half of 2017.

Founders Lane, Braddon

Founders Lane, Braddon. Photo: FloodSlicer Pty Ltd

There are a number of both residential and mixed-use developments scheduled to enter the Braddon landscape including Midnight, Artisan, Lumiere, The Kew and Founders Lane.

JWLand head of marketing, public relations and research Kate Hulm said Braddon is very attractive for investors. JWLand manages Founders Lane.

"Braddon is a popular choice for renters, particularly those in their mid-20s to mid-30s because of its unbeatable location," she said.

"Investors have been attracted to Founders Lane because of the high rental returns and strong rental yields in Braddon. Also because of Canberra's overall unit rental vacancy rate."

The report estimated there was more than $15.6 million worth of new projects that commenced in the second half of 2017 in Dickson. Nova and Malabar are two developments currently listed on the market.

Nova, Dickson.

Nova, Dickson. Photo: Supplied

In O'Connor, the report calculated more than $8.8 million of new investments on the horizon.

"As an investor the strategy is to get in before anyone else gets to know the area," said Mardiasmo.

"O'Connor is definitely an area you want to get into before it takes off because everybody will start to know about it soon."

This story Braddon tops Canberra unit hotspots first appeared on The Sydney Morning Herald.