Coombs ACT Property Investment

## 1. Investment Verdict We rate Coombs, ACT as a Buy, with the single most important number justifying this verdict being the 3yr growth forecast of 13.5%. This indicates a strong potential for capital appreciation in the medium term.

## 2. Market Overview The median house price in Coombs ranges from $751,148 to $1,100,000, with a median unit price of $570,917. The market is currently experiencing a cooling cycle, with a 1yr price growth of -1.4%. However, the 5yr CAGR of 3.2%/yr suggests a stable long-term growth trend. The vacancy rate is 2.0%, indicating a relatively tight rental market. For buyers, this means that they may face competition for properties, while sellers can expect a relatively quick sale. The owner-occupier rate of 76% suggests a strong sense of community, which can be attractive to buyers.

## 3. Rental Market The rental market in Coombs is characterized by a median weekly rent of $775/wk and a gross rental yield of 5.5%. The vacancy rate of 2.0% and rental demand rating of high suggest that investors can expect to find tenants relatively quickly. The unemployment rate of 3.4% is also relatively low, which can contribute to a stable rental income stream. For investors, this means that Coombs offers a relatively attractive rental yield and a low risk of vacancy.

## 4. Short-Term Rental Opportunity The median nightly rate for short-term rentals in Coombs is $380/night, with an occupancy rate of 52%. This translates to an estimated annual revenue of $69,696 (assuming 365 nights per year). Compared to the long-term rental market, short-term rentals may offer higher potential revenue, but also come with higher management costs and more variable occupancy rates. In Coombs, the long-term rental market appears to be more stable, with a higher yield and lower vacancy risk.

## 5. Infrastructure & Growth Drivers Coombs is well-connected to the inner city, with announced and under-construction light rail stages (2B and 2A) set to improve transport links. The suburb's population is growing, with a current population of 4,851, and a moderate supply pipeline is expected to meet this demand. The lack of significant risk factors and a low flood and bushfire risk (according to the state planning portal overlay) make Coombs an attractive investment opportunity.

## 6. Bull Case If the current growth forecast holds, Coombs could experience significant capital appreciation over the next three years, with a potential increase in median house price of up to 13.5% per annum. This, combined with a stable rental yield and low vacancy risk, makes Coombs an attractive investment opportunity. The announced infrastructure projects and growing population are likely to drive demand for housing, supporting the bull case.

## 7. Risks While no significant risk factors have been identified for Coombs, the suburb is not without risks. The moderate supply pipeline could lead to an increase in housing supply, potentially putting downward pressure on prices. Additionally, the current cooling market cycle may continue, leading to further price declines in the short term. However, the low vacancy rate and high rental demand suggest that the rental market is relatively stable, mitigating some of these risks.

## 8. The Play For investors looking to enter the Coombs market, we recommend targeting properties in the range of $751,148 to $1,100,000 for houses, and $570,917 for units. A minimum yield of 5.5% should be targeted, with a focus on properties that can achieve this yield through a combination of rental income and potential capital appreciation. Investors should watch for signs of improving market conditions, such as increasing prices and rental yields, and be prepared to act quickly when opportunities arise. A long-term investment strategy is recommended, with a focus on holding properties through market cycles to achieve the potential capital appreciation forecast.

This analysis is for informational purposes only and does not constitute financial, legal, or investment advice. Seek professional advice before making investment decisions.