High auction clearance rates show that this “Bermuda triangle” of suburbs has what it takes and will continue to be a magnet for entry-level buyers
In our more populated cities $500,000 is entry-level buying, where at best your option will be living on the outer fringes if you want a house or townhouse with land. If you opt for something a little closer in, you may have to reside in a medium- or high-density unit complex. In some of our larger regional cities, having $500,000 could get you into a middle-market or even an upmarket suburb.
Latham, ACT 2615 – houses
Latham is a suburb to the north-west of Canberra. It’s a 20-minute drive into Canberra central.
Prices for houses are typically between $500,000 and $550,000. They’ve risen by about 5% over the past 12 months and were pretty flat for the couple of years before that. But we don’t expect this lacklustre performance to continue.
The housing market in Latham topped the LocationScore charts for June with a whopping 85. Over the past four months the LocationScore has reached a three-year high.
One of the startling statistics contributing to this score is a very high auction clearance rate of 97%. That’s one of the highest in the country for a market that has a decent number of auctions.
And supply is extremely tight. The percentage of properties for sale at the end of June was only 0.28%. The Australian average was 1.33%. Half a per cent is considered very tight.
Vacancy rates are very low too at around 0.3%, which is a tenth of what is considered normal. The past two years have been particularly difficult for renters.
Combine this with a vendor discount of 1.2% and you can see why sellers are licking their lips while buyers scramble for scraps.
One minor concern would be that the online search interest is not that flash. It’s been around 50 recently but off a low base of only 30. For a market like this we’d expect it to be at least 100.
Charnwood, ACT 2615 – houses
Charnwood is the next best suburb in the $500,000 bracket and it’s right next door to Latham. The price range is a little lower but the recent growth is similar.
The metrics are pretty much the same as for Latham. This makes sense. We wouldn’t expect the nature of the market to vary dramatically when the housing stock and demographics are so similar across this area. The LocationScore was 82.
Auctions are clearing at around 86%. Discounting is just over 1%. Vacancy rates are ridiculously low, as is the stock on market. Even the movement in the Charnwood metrics is consistent with what has been happening in Latham.
Again, the metric of concern is the online search interest, which is only in the 50s. But admittedly it has risen significantly in the past year.
Macgregor, ACT 2615 – houses
Macgregor is adjacent to both Latham and Charnwood. The three suburbs form what could be called a “Bermuda triangle” for buyers.
There’s no escaping the high demand and low supply in this area. All three property markets have very similar metrics. Macgregor’s LocationScore was 81 for June. The recent history of changes to the key metrics is another ditto.
We often credit markets in a cluster like this with more potential for growth than suburbs that are on their own. Isolated suburbs are effectively pioneering growth for an area. That demand may be diluted as buyers look nearby for easier alternatives. But when the neighbouring suburb is just as bad, buyers have nowhere else to go. Quite often they simply dig deep and pay more.