Latham ACT Property Investment

## 1. Investment Verdict We recommend a Buy for Latham, ACT, with the single most important number justifying this being the 3-year 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 Latham, ACT, is $851,000, while the median unit price is $743,690. The market has experienced a 1-year price growth of 2.4% and a 5-year compound annual growth rate (CAGR) of 3.2%. Although the days on market are not available, the owner-occupier rate of 76% suggests a strong demand for properties in this suburb. With a gross rental yield of 4.1%, investors can expect a reasonable return on their investment. The market cycle is currently cooling, but the vacancy trend is improving, which signals a balanced market for buyers and sellers.

## 3. Rental Market The vacancy rate in Latham, ACT, is 2.0%, indicating a tight rental market. The median weekly rent is $670, which translates to a gross rental yield of 4.1%. The rental demand is high, with an unemployment rate of 4.0%, suggesting a stable tenant base. For investors, this means that they can expect to find tenants relatively quickly and enjoy a stable rental income stream.

## 4. Short-Term Rental Opportunity The median nightly rate for short-term rentals in Latham, ACT, is $424, with an occupancy rate of 52%. This translates to an estimated annual revenue of $78,336 (assuming 365 nights per year). However, considering the gross rental yield of 4.1% for traditional rentals, it appears that long-term rentals may be a better option in this suburb. The occupancy rate for short-term rentals is relatively low, which may result in higher vacancy periods and lower overall returns.

## 5. Infrastructure & Growth Drivers Latham, ACT, is benefiting from the construction of the ACT Light Rail Stage 2A and the announced Stage 2B (Woden). Although the Swinden Street station is 9.8km away, the light rail project is expected to drive growth and demand in the area. The suburb's population of 3,767 and low supply pipeline, with price growth outpacing new supply, suggest a strong potential for capital appreciation.

## 6. Bull Case If the current market conditions hold or improve, the upside scenario for Latham, ACT, is promising. With a 3-year growth forecast of 13.5%, investors can expect significant capital appreciation. Assuming the median house price of $851,000 grows at this rate, the potential price in 3 years could be around $1,043,919. This represents a potential gain of $192,919, or 22.7% per annum.

## 7. Risks The key risks for Latham, ACT, are relatively low, with no significant risk factors identified. The vacancy rate of 2.0% and rental demand rating of high suggest a low vacancy risk. The suburb's diverse employment base, with an unemployment rate of 4.0%, reduces the risk of single-employer dependency. The supply pipeline is also low, which reduces the risk of oversupply. However, investors should be aware of the potential impact of interest rate changes on the market, as the current gross rental yield of 4.1% may be affected by changes in borrowing costs.

## 8. The Play For investors looking to enter the Latham, ACT, market, we recommend targeting properties in the $700,000 to $900,000 range. A minimum gross rental yield of 4.0% should be targeted to ensure a reasonable return on investment. Investors should watch for signals such as changes in the vacancy rate, rental demand, and interest rates, which may impact the market. The recommended strategy is to hold for the medium term, taking advantage of the potential capital appreciation and rental income stream.

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