Throsby ACT Property Investment

## 1. Investment Verdict We rate Throsby, 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 Throsby ranges from $976,935 to $1,200,000, while the median unit price is $728,108. The market has experienced a 1yr price growth of -1.1%, but the 5yr CAGR is 3.2%/yr, indicating a stable long-term growth trend. With a gross rental yield of 3.6% and median weekly rent of $800/wk, the rental market appears relatively stable. The high owner-occupier rate of 67% suggests a strong demand for properties in the area. For buyers, the current market presents an opportunity to invest in a suburb with potential for growth, while sellers may need to be patient due to the current market cycle being above trend.

## 3. Rental Market The vacancy rate in Throsby is 2.0%, indicating a tight rental market. The median weekly rent is $800/wk, and the gross rental yield is 3.6%. With a rental demand rating of high, investors can expect strong competition for rentals, making it an attractive market for investment. The low vacancy rate and high rental demand suggest that investors can expect relatively low vacancy risk and stable rental income.

## 4. Short-Term Rental Opportunity The median nightly rate for short-term rentals in Throsby is $436/night, with an occupancy rate of 52%. This translates to an estimated annual revenue of approximately $86,000 (assuming 365 nights per year and 52% occupancy). Compared to the long-term rental market, short-term rentals may offer higher potential revenue, but also come with higher management costs and potential regulatory risks. In this case, long-term rentals may be a more stable and lower-risk option, given the high demand and low vacancy rate.

## 5. Infrastructure & Growth Drivers Throsby is located near the Mapleton Avenue station, 1.3km away, providing easy access to public transport. The ACT Light Rail Stage 2A is currently under construction, and Stage 2B (Woden) has been announced, which is expected to drive growth and increase demand for properties in the area. The suburb's strong population growth and moderate supply pipeline also contribute to its potential for growth. With an unemployment rate of 3.8%, the local economy appears stable, further supporting the investment case.

## 6. Bull Case If the current market conditions hold or improve, the upside scenario for Throsby is promising. With a 3yr growth forecast of 13.5%, investors can expect significant capital appreciation. The strong demand for rentals, driven by the low vacancy rate and high owner-occupier rate, is likely to continue, supporting rental yields. The investment scorecard rating of 75.0/100 also suggests that Throsby is a relatively attractive investment opportunity compared to other suburbs.

## 7. Risks While no significant risk factors have been identified for Throsby, investors should be aware of the potential risks associated with any property investment. The moderate supply pipeline may lead to increased competition and potential downward pressure on prices if not managed carefully. Additionally, the current market cycle being above trend may indicate a potential correction in the market. However, with a low vacancy rate and high rental demand, the risk of vacancy is relatively low. The suburb's low flood and bushfire risk, as indicated by the state planning portal overlay, also reduce the potential for environmental-related risks.

## 8. The Play For investors looking to enter the Throsby market, we recommend targeting properties in the range of $976,935 to $1,200,000 for houses and $728,108 for units. A minimum yield of 3.6% should be targeted to ensure a stable rental income. Investors should monitor the market closely for signs of changes in the supply pipeline, vacancy rates, and rental demand. A recommended strategy would be to focus on long-term rentals, given the stable demand and low vacancy rate, and consider short-term rentals as a potential alternative, but with careful consideration of the associated risks and management costs.

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