Budget cuts spell bad news for Canberra property
The Canberra market may be threatened by public service job losses, a national property expert has warned in the wake of last night’s Budget announcement.
Treasurer Joe Hockey told parliament that over 16,500 public sector staff would be made redundant in the next three years.
“A smaller, less interfering government won't need as many public servants,” he said.
wHeregroup director Todd Hunter predicted these cutbacks could stifle growth in Canberra property values.
“I wouldn't like to be a property owner in Canberra right now,” he said.
“I think you're going to see a huge correction in prices and rental yields.”
According to the Australian Bureau of Statistics, over 21.2 per cent of Canberrans work in central government administration, compared to 1.3 per cent of people Australia-wide.
Typically, the Canberra market tends to have quite high rental yields due to the large proportion of high-income earners living in the capital, Mr Hunter said.
However, large-scale job cuts could cause the rental market to weaken.
“Because of that correction in rent, you'll also see a correction in house prices,” Mr Hunter said.
“It'll be a ‘watch this space’ scenario but it's not good news, that's for sure.”