Why Canberra? Why now? MARKET OVERVIEW
There has never been a better time to live, work or invest in Canberra. Australia’s youngest capital city is undergoing an unprecedented transformation, with more than $2.9 billion worth of infrastructure projects under way and town centres evolving into vibrant, urban precincts. As a Canberra-based business, Geocon has unrivaled market knowledge, allowing it to move quickly and strategically to realise exciting new opportunities in growth areas. Our fully integrated business structure allows us to deliver the best apartments, hotels and commercial spaces at an unmatched price, while providing excellent customer service. We are integral to the transformation of Canberra into a world-class city.
at a glance
Proven High-level Canberra’s track record government & delivering over property $600 private-sector State-of- powerhouse million partnerships 2000 annual turnover the-art apartments technologies and systems
Continually High-rise and Fully breaking 50% integrated share of ACT precinct-living STRONG new ground apartment market specialists solution growth pipeline WHY INVEST IN CANBERRA?
DEMOGRAPHICS ECONOMY EMPLOYMENT EDUCATION ENVIRONMENT 50+ 4.0% Federal Government 1 million+ Fastest economic Agencies in the capital region growth and most secure 70% economies in Australia Pure open space & parkland in the ACT 65,000 5 universities 3.7% Tertiary students with world ranking 0.6% unemployment in Canberra in the top 150 RENT Lowest rental 2.1% vacancy rate 246 days Population growth of crisp clear (fastest growth $85,000 sunshine per year in Australia) Avg Salary per annum AAA Home to S&P Global Rating 17,000 1 in 9 Mt.Stromlo Canberra is $1,835 25% 5.6% 1 of 3 Australian International Canberrans mountain Canberran residents Average apartment Jurisdictions with Avg household university students study or work born overseas gross rental yield AAA credit rating weekly income in Canberra in Education bike track
CONNECTIVITY FOOD & DRINK ENTERTAINMENT TOURISM INDUSTRY
National Sporting Canberra boasts an Canberra Teams entrepreneurship 7 culture with the largest Light Rail Canberra Raiders, Brumbies, GWS Giants, Canberra Cavalry, 4.99m number of patents and Stage 1 complete 140 Canberra Capitals, trademarks per capita in early 2019 Vineyards Canberra United, CBR Brave- Visitors per year in Australia within 35mins drive from CBD Award- UNSW Winning Manuka Oval 30 min Baristas 25,000 From anywhere in Home of including world International Private companies Canberra to the #1 Baristas operate in Canberra International Airport Cricket & AFL rd 84.4 12 3 thousand 800 Canberra 35+ Best City Flights per week Restaurants Museums & in the World to visit International 18,000+ to Australian cities, Chef-Hat Award Galleries in (Lonely Planet’s passengers Jobs in the private Singapore and Doha Winners the region Best in Travel 2018) annually health sector
LABOUR FORCE 46.4% MANAGERS/PROFESSIONALS 163,500 FULL-TIME WORKERS 16.9% CLERICAL & ADMINISTRATIVE 10.5% COMMUNITY SERVICES 3.7% UNEMPLOYMENT RATE 9.6% TECHNICAL & TRADES BUSINESS & INDUSTRY
TOP 5 EMPLOYING SECTORS • Central Government Admin IN PUBLIC SECTOR • Defence • Hospitals . • State Government Admin 35 5% • Higher Education SNAPSHOT
POPULATION HOUSING DEMAND The ACT population grew by 2.1% in the year to June 2018, Demand, driven by population growth, has been strong driven largely by natural increase (49.3%) and net overseas with vacancy rates of 0.8% - their lowest point in the last migration (41.0%). five years. The ACT Treasury projects the ACT population to grow by Demand has also been shifting towards higher density 11.5% to 2022. dwellings with apartments now making up 54.8% of all new dwelling approvals while separate houses now make up just
ECONOMY WAGES The economy has been growing strongly with GSP growth Wages growth has turned the corner and is now increasing increasing consecutively over the last four years, the latest with growth in the wage price index at 1.7% and Treasury data indicating economic growth of 4.1% in the 12 months forecasts expect it to reach 3.0% by 2020.separate houses to June 2018. now make up just 20.4%. Treasury forecasts expect growth to slow gradually to 2.5% by 2021.
EMPLOYMENT DWELLING PRICES Employment has grown by 3.7% in the year to February 2018. House prices have increased from a low of $620,000 in The public sector makes up 35.5% of total employment. More 2013 to a median house price of $800,000 in June 2018. than 80% of high value jobs are located in central Canberra as Apartment prices are currently around $410,000 up from well as 66% of all jobs. around $400,000 in 2013. Weekly rents for houses are currently around $620, up from $500 in 2009 and for apartments is around $440, up from $370 in 2009. High rental yields of 5.8% for apartments are likely to increase in the short term due to high deman and a low vacancy rate. SNAPSHOT
INFRASTRUCTURE CULTURE
The ACT government is investing $3.0 billion in physical and The National Gallery of Australia hosts the largest collection digital infrastructure in the ACT over the four years to 2020-21. of Aboriginal and Torres Strait Islander artworks in the world. The Federal Government Budget 2017-18 outlines its The Canberra Museum is home to the Foundation Collection commitment to spending $440 million in infrastructure in the of Sir Sidney Nolan’s paintings and a Standing legacy to ACT through its Infrastructure Investment Program. The Light Canberra’s earliest settlers at Blundell’s Cottage. Rail Network is currently under construction and is a catalyst for urban renewal of Canberra’s town centres.
EDUCATION COMPETITIVE ADVANTAGE Canberra is a university city and it has five universities across six Stamp duty in the ACT is barrier free and tax deductible campuses. North Canberra has the third highest number of inner- within the first year of purchase. A typical stamp duty bill city student residents in Australia behind Sydney Inner City and in the ACT is significantly lower than in New South Wales or Melbourne City. Victoria at $18,000 vs. $32,000 andw $25,000 respectively. The Australian National University (ANU) is the nation’s flagship Apartment yield in Canberra at 5.8% and is the third highest in educational instituition. ANU is ranked first in Australia and in the the country, behind Darwin and Hobart. world top twenty (QS World University Ranking 17/18); has six Nobel Laureats among staff and alumni. Ranked first in Australia for graduate employability (Times Higher Education Global University Employability Ranking 2017)
INTERNATIONAL FLIGHTS LEISURE Canberra has three direct international routes. Weekly there Canberra is home to around 60 sport clubs for a variety of are seven flights to Doha by Qatar Airways and four to both different sports from, soccer, football and cricket to Dragonboat Singapore and Wellington by Singapore Airlines . racing, orienteering and fencing. In 2017 the airport serviced around 84.4 thousand The ACT has some of the best mountain bike trails in Australia. All international passengers, up from just 23.8 thousand in 2016. mountain bike park trails are over 20km long and well maintained. Canberra boasts some of Australia’s premier restaurants and cafes, such as Chairman & Yip, Pomegranate, Aubergine, Akiba, Bar Rochford and Benchmark Wine Bar. POPULATION GROWTH
Migration patterns
The figure below illustrates the components of population change each year over the last 25 years. Between 1992 and 2006 the main and in some years only contributor to population growth was natural increase, while net interstate and overseas migration was negative.Since 2006 net overseas migration Macroeconomic Indicators has been a strongPopulation drivergrowth of the State’s growth while net interstate migration increased moderately between 2006 Migrationand 2012patterns before again falling below zero over up until 2016. Increasing net interstate migration indicates confidence in the State The figure below illustrates the components of population change each economy is strong and should have a positive effect on wages and Increasing net interstateyear over the last 25 yearsmigration. indicates confidenceemployment in. the ACT economy is strong and should have a positive effect on wages and employment. Between 1992 and 2006 the main and in some years only contributor to population growth was natural increase, while net interstate and overseas migration was negative.
Since 2006 net overseas migration has been a strong driver of the State’s growth while net interstate migration increased moderately between 2006 and 2012 before again falling below zero over up until 2016. ANNUAL CHANGE IN THE ACT POPULATION, 1992 - 2017 Annual change in the ACT population, 1992 - 2017
8,000
6,000
4,000
2,000
0 Annual population change (persons)
-2,000
-4,000 Jun 92 Jun 93 Jun 94 Jun 95 Jun 96 Jun 97 Jun 98 Jun 99 Jun 00 Jun 01 Jun 02 Jun 03 Jun 04 Jun 05 Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Jun 17 Jun
Net interstate migration Natural increase Net overseas migration
Source: Australian Bureau of Statistics, Cat. no. 3101 – Australian Demographic Statistics 7 Canberra Market Assessment Source: Australian Bureau of Statistics, Cat. no. 3101 - Australian Demographic Statistics Geocon Group 03 April 2018 POPULATION GROWTH
Population Growth by State
The figure below illustrates the annual population growth of NSW, VIC, QLD, WA, ACT and Australia. Population growth in the ACT was below Australia for most of the period between 1994 and 2006, however over the last 10 years growth in the State’s population has been higher than Australia. Macroeconomic Indicators The ACT has been at growing t t e faster than… NSW since 2001. Since December 2014 the ACT’s population Population growth by state S e e e e t e ACT’s at t as ee e t a growth has been higher than every other state/territory,e e t e State with t t e thee e t exception t a of Victoria. e e e st ates t e a a at t S a st a a
at t t e as e st a a st t e e et ee a e e e t e ast ea s t t e State’s at as ee e t a st a a
e e t e e t e as at a s e a e t a a t as ee aste t a S s e ANNUAL GROWTH IN POPULATION IN AUSTRALIA, BY STATE, 1992 - 2017 a t at st a a state
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0% annum (%) per rate growth Population
-0.5% Jun 1992 Jun 1993 Jun 1994 Jun 1995 Jun 1996 Jun 1997 Jun 1998 Jun 1999 Jun 2000Jun 2001 Jun 2002Jun 2003 Jun 2004Jun 2005 Jun 2006 Jun 2007 Jun 2008 Jun 2009 Jun 2010 Jun 2011 Jun 2012 Jun 2013 Jun 2014 Jun 2015 Jun 2016 Jun 2017 Jun
New South Wales Victoria Queensland Western Australia Australian Capital Territory AUSTRALIA
S e st a a ea Stat st s at – st a a e a Stat st s 8 a e a a et ssess e t Source: Australian Bureau of Statistics, Cat. no. 3101 - Australian Demographic Statistics e POPULATION GROWTH
Population Projections
The figure below illustrates projected population growth rates produced by the ACT Treasury for selected precincts: North Canberra, Belconnen, South Canberra and Woden. The ACT is projected to grow by an average annual rate of between 1.50 per cent and 1.62 per cent over the period. These forecast growth rates for the ACT are higher than the projections for the nation. The Australian Treasury has forecast the national population growth to slowly gradually from a current rate of 1.3 per cent.
ACT POPULATION PROJECTIONS, 2016-2022
500,000 1.64%
450,000 1.62%
400,000 1.60%
350,000 1.58%
300,000 1.56%
250,000 1.54%
Population 200,000 1.52% Population growth 150,000 1.50%
100,000 1.48%
50,000 1.46%
0 1.44% 2016 2017 2018 2019 2020 2021 2022
Population Annual growth (%)
Source: Australian Bureau of Statistics - Census 2016, Australia Capital Territories Treasury Department - ACT Population Projections (published March 2017) EDUCATION
University Town
Besides being the city with the highest educated residents in first in Australia and in the world top twenty universities (QS Australia, Canberra is also ranked as the 22nd best student city World University Rankings 2017/18). It is also first in Australia for in the world, and thirdEducation best in Australia behind Melbourne and graduate employabilitiy (Times Higher Education Global University Sydney in the latest QS Best Student Cities Rankings. Home to six Employability Ranking 2017). University town university campuses with 64,000 teritary students from around The 2017 Savills Student Accommodation Market Report indicated the world; there were 27,928 university students living in Canberra in 2015 • Australia National University (ANU), Acton and 28.2 per cent of these students were living in non-private • University of Canberra,• Belconnen dwellings (student accommodation, hotels State’s etc.) while 71.8 per cent • University of New• South Wales, Campbell were living in private dwellings (renting or living at home). • • Charles Sturt University, Barton • The education and training sector contributed $2.1 billion to the • Australian Catholic• University, Watson State’s economy in 2016-17, 6.2 per cent of total GSP. • Australia National• University Medical School, Garran The figure below illustrates the CBD student population in each Of these, the ANU is the nation’s flagship university and it has six capital city in Australia. Despite being a relatively small city North Nobel Laureates among the staff and alumni. ANU was ranked Canberra hosts the third largest student population in Australia.
RELATIVE SIZE OF STUDENT POPULATIONS IN INNER CITY AREAS, 2016
Source: Australian Bureau of Statistics, 2016 Census of Population and Housing (based on data for Statistical Area 3 boundaries for inner cities as at 2016)
25 CULTURE & LEISURE
Culture
Canberra is a wonderfully green city, ENLIGHTEN NIGHT NOODLE MARKETS with a lively and sophisticated dining and bar scene, interesting architecture and a smorgasbord of major institutions to keep even the most avid culture vulture engrossed for days on end. Canberra houses a remarkable collection of art, history and culture in our more than 50 Museums and Galleries, including the National Gallery of Australia, National Museum of Australia, National Portrait Gallery, Australian War Memorial, Museum of Australian Democracy, Questacon (National Science & Technology Centre), National Library, National Film and Sound Archive, and National Arboretum. Culture and leisure CULTURE se s & LEISUREa a e es a a a e a
NATIONAL GALLERY OF AUSTRALIA MUSEUMS & GALLERIES IN AND AROUND CANBERRA Culture a e a s e t a a a e t e a a t t ts se s a a e es a e e t s at a a te at a a a as e as a s
e at a a e st a a sts t e a est e t a a es St a t s a e a t s t e e a e a se s e t t e at e t S S e Nolan’s a t s a a Sta e a t Canberra’s ea est sett e s at Blundell’s tta e
t e t a s a t est at s e t e st a a a e a at a t a t a e st a a at a ta a e s a t e se st a a e a
at a a e st a a NATIONAL MUSEUM OF AUSTRALIA
Source: visitcanberra.com.au
S e s t a e a a
a e a a et ssess e t 26 e Culture and leisure CULTURE & LEISURE Leisure Canberra s o e o around s or lubs or a ar e o d eren s or s ro so er oo ball and r e Leisure o ra onboa ra n or en eer n and en n Canberra as s or n enues a an a o oda e bas e ball oo ball ru b baseball Canberraso er is home e to o e around and60 sporta le s clubs Canberra oun a n b e ar s for a variety of different sports from, soccer, football and cricket to Dragonboat racing, e C as so e o e bes orienteering oun a n and b efencing. ra ls Canberra n us ral a has 10 ll CANBERRA MOUNTAIN BIKE PARKS sporting venues that can accommodate oun a n b e ar ra ls are o er lon and ell a n a ned o e basketball, football, rugby, baseball, soccer, o e os o ular ra ls n ludeice hockey and athletics. • ro lo The ACT has some of the best mountain bike trails in Australia. All mountain bike park trails Bru e d e • are over 20km long and well maintained. Some • arro ll of the most popular trails include: • Mt. Stromlo. • db nb lla • Bruce Ridge. • a ura nes • Sparrow Hill. • Tidbinbilla. • urreranon nes • Majura Pines. • ne ree ll • Tuggeranong Pines. • One Tree Hill. • urru b d ee er • Murrumbidgee River. • Canberra Cen enar ra l • Canberra Centenary Trail. Canberra boasts some of the best restaurants our e ra l or s o and cafes in Australia, such as Chairman & Yip, Canberra boas s so e o e bes Pomegranate,res auran s Aubergine,and a es Akiba, n us ral a Bar Rochfordsu as C a r an o e rana e and Benchmark uer ne Wine ba Bar. Bar o ord and Ben ar ne Bar
Canberra ar e ssess en 27 eo on rou r l Infrastructure LIGHT RAIL a or ro e s
ACT budget 2017-18 LIGHT RAIL MASTER PLAN e o ern en s n es n b ll on n s al and d al n ras ru ure n e C o er e our ears o
e C Government’s n ras ru ure n es en ro ra as ree a n o onen s • e Ca al or s ro ra b ll on n ras ru ure ro s ons Stage 1 o all n ll on o er e our ears o • Ca al ro s ons ll on • ro e s under a en as ubl r a e ar ners s ll on o al o ll on ll be n es ed o er e ree ears o n e ne C a Cour s a l es and a l – a e s ll br n e o al n es en n ese ro e s o ll on Stage 2
ur er ore e C o ern en as nd a ed ll s end ll on n des n and ro ure en or a e o e a l ro e onne n e C o oden see ure on e r
Federal budget 2017-18 e ederal o ern en as o ed o s end n ll on n n ras ru ure n e C rou s n ras ru ure n es en ro ra e o onen s o e ro ra are l s ed belo • Bla or s ro e s • Br d es ene al ro ra • ea e le a e and rodu ro ra • oad Co onen • oads o e o er • sse e l n n a e • n ers a e oad rans or our e rans or Canberra
Canberra ar e ssess en 21 eo on rou r l GLOBAL CITY
Infrastructure r ort movements
Flight movements e re on t e r t str tes t e n m er o ee ts to est n t ons t t ve re t ts rom n err r ort
n err s t ree re t ntern t on t ro tes ee t ere re seven to o t r r s n o r to ot n ore n e n ton n ore r nes
n t e r ort serv e ro n t o s n ntern t on ssen ers rom st t o s n n
omest t e r ort serv e ro n m on ssen ers n rom m on n
e re on t e r t str tes t e est n t ons ssen ers re e to onne t to v t e o n n ore ts rom n err r ort
n err r et ssessment 22 Geo on Gro r HOW DOES IT COMPARE
ACT NSW VIC SA QLD
Vacancy Rate (Capital City) 0.8% 2.5% 1.4% 1.3% 2.9%
Unit Gross Rental Yield (Capital City) 5.8% 3.8% 4.4% 5.1% 5.0%
Foreign ownership 0% 8% 7% 7% 7% surcharge on stamp duty
Estimated stamp duty on $500,000 $12,800 $17,990 $25,070 $21,330 $15,925 residential property (no concession)
At the time of Within 30 lodgment of the days after the Within 90 days Within 30 days documentation agreement date When stamp duty is payable At settlement of exchanging of settlement. for registration or the date that contracts at the Lands the last person Titles Office. signs the transfer.
Is stamp duty claimable? Yes No No No No
Population growth 1.7% 1.6% 2.3% 0.6% 1.6%
Employment growth 3.4% 3.6% 2.5% 2.1% 4.3%
Average unemployment rate 4.1% 4.8% 5.7% 6.3% 6.2%
Average wage (weeky) $1,835 $1,645 $1,581 $1,508 $1,589 COMPETITIVE ADVANTAGE
Yields - Yield Comparison
Rental yields in Canberra are the third highest in the country, higher than Sydney, Melbourne and Brisbane.
Competitive advantage
RESIDENTIAL YIELDS, DECEMBER QUARTER 2017
Yield comparison 6% 5% 4% 3% 2% Rental yields 1% 0%
Yields Source: Core Logic
24 Canberra has an established wine growing region, with more than 30 wineries within 35 minutes’ drive of the city. Canberra is only 2 hour drive to the Snowy Mountains. The South Coast NSW is within 2 hours from Canberra. ACT LEASEHOLD SYSTEM OVERVIEW
Leasehold System What happens when the Crown Benefits of Owning Property Lease expires? in the ACT The Australian Capital Territory (ACT) has adopted a leasehold system of land tenure On the expiry of the Crown Lease the There are a number of tax benefits including which is widely accepted in Australia. landowner is entitled to renew the Crown stamp duty concessions and tax deductions Canberra is a planned city and the inner-city Lease (provided that the Territory does not available when purchasing property in the area was originally designed by Walter require the land). While it is an uncommon ACT (please speaks to your accountant in Burley Griffin. practise, it is rural leases/land that the relation to the deductions available). Territory will on rare occasion not renew The leasehold system is considered as an and acquire for specific purposes. If the rural Canberra is a growing city and has five alternative system of urban development to crown lease is not renewed, the government Universities, including the world-class the usual system which is based on freehold offer made to the landowner will take into Australian National University ranked in the land and statutory planning. It empowers account the market value of the land, top 10 in the world. Investors are taking the ACT Government to control the use, value to the former owner and loss from advantage of the ongoing demand for rental development and subdivision of land not only acquisition and legal costs (this process is and student accommodation. as Australia’s seat of Government, but to serve set out in legislation. the interests of the local Canberra community The new Canberra international airport is now by ensuring orderly development of land. In most instances, especially in respect to directly linked with Singapore and Wellington residential property, an owner simply needs with Doha follow in 2018. The standard form of title in the ACT is the to supply to Environment and Planning 99 year Crown Lease. Typically a buyer of land Directorate (ACT) (the “EPD”) for a grant of buys the right to use the land under a Crown a further 99 year lease upon the expiry of the Lease for a term 99 years. In every practical current Crown Lease together with payment way, the crown lessee “owns the land” just of an administration fee and the lease is like anywhere else in Australia. On the renewed for a further 99 year. expiry of the Crown Lease the landowner is entitled to renew the Crown Lease under the Planning and Development Act 2007 (‘Act’). NEWS NEWS AMBASSADOR
I’ve been an advocate for Canberra in terms of real estate but also for the place since the 1980s. As a businessman, I like “the fundamentals of the city – the rapid population growth that is taking place, the demographics of the people who live and work here and the evolving yet steady employment opportunities and innovation in the public as well as the private sector.
Canberra is a well-planned city but it is under-supplied. It’s never been an out-performer but that’s important. Canberra is “steady as she goes” and always gives good yields on rentals compared to the rest of the country. Mark Bouris AM