Farrer ACT Property Investment

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## 2. Market Overview - Median house price: $1,440,000 - Median unit price: $603,287 - 1‑yr price growth: ‑5.9 % (price dip) - 5‑yr CAGR: 5.2 % / yr (steady long‑term growth) - 3‑yr forecast growth: 13.5 % (strong upside expectation) - Days on market: N/A

Signal: The recent 5.9 % decline gives buyers short‑term leverage, while the 5‑year CAGR and 13.5 % three‑year forecast indicate a market that favours sellers over the longer horizon.

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## 3. Rental Market - Median weekly rent: $820 / wk - Gross rental yield: 3.0 % - Vacancy rate: N/A - Demand rating: N/A

Implication: A 3.0 % yield is modest but stable; without vacancy data we cannot gauge pressure on rents, but the yield suggests a reasonable cash‑flow base for investors.

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## 4. Short‑Term Rental Opportunity - STR nightly rate: N/A - STR occupancy: N/A - Estimated annual STR revenue: N/A

Conclusion: With no STR data available, we cannot quantify the short‑term rental upside. The known 3.0 % long‑term yield currently offers the clearer income path, so LTR is the preferred strategy until STR metrics emerge.

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## 5. Infrastructure & Growth Drivers - Known projects / transport / employment base: N/A

Drivers: The suburb’s positive 5‑year CAGR and 13.5 % three‑year forecast imply underlying demand, likely linked to its proximity to Canberra’s employment precincts and existing amenities, even though specific projects are not listed.

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## 6. Bull Case Assume the 13.5 % three‑year growth materialises for the median house price:

• Projected price after 3 years: $1,440,000 × 1.135 ≈ $1,634,400
• Capital gain: ≈ $194,400 per median house

If rental yields hold at 3.0 % and rents rise in line with inflation (≈2–3 % p.a.), the investor could see combined capital and income returns north of 6–7 % p.a.

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## 7. Risks | Risk | Quantified element | Impact | |------|--------------------|--------| | Short‑term price dip | 1‑yr growth ‑5.9 % | May depress cash‑flow if owners rely on equity extraction. | | Vacancy uncertainty | Vacancy rate N/A | Lack of data makes it hard to gauge rental income stability. | | Interest‑rate sensitivity | Market‑wide factor (no suburb‑specific number) | Higher rates could reduce buyer demand and pressure prices. | | Data gaps | Days on market, STR metrics, infrastructure details N/A | Limits precision of timing and demand assessments. |

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## 8. The Play - Entry price range: Target properties around the median – $1.44 m for houses or $603k for units. - Minimum yield target: ≥ 3.0 % gross (the current suburb average). - Watch signals: 1. Release of vacancy data or days‑on‑market figures. 2. Confirmation of any new infrastructure or transport projects. 3. Shifts in the 1‑yr price trend back into positive growth. - Strategy: Acquire at or below median price, hold for 3–5 years to capture the forecast 13.5 % capital appreciation, and collect steady 3.0 % rental income. Re‑assess annually against the watch signals to decide on hold versus exit.