Canberra's individual economic statistics show it's in a reasonably good position. By looking at them collectively it becomes apparent Canberra is an economic powerhouse, operating with a level of anonymity while the media focuses their attention on cities with larger populations.

1. From goodto great.
Canberra’seconomyisn’trequiredtobe national leadertoproduce significantbenefitsforresidents.
Reviewingstatistical datacoveringemployment,wagesgrowth,grossstate product,population
growthor housingaffordability inisolationshows Canberraappearstobe doing well.By collatingit,
the resultisunquestionably,thatCanberra’seconomyis ingreatshape.It’ssimilartohow elite
cyclistsdraftoff otherrider’swheelstoconserve energy,Canberra issettledinata pace to deliver
sustainedlong-termperformance ratherthansprintingtothe finish.
PopulationgrowthhasbeenabigcontributortowardsCanberra’seconomicposition.InMarch 2011
Canberrahad a populationof 366,737 people,whichhasincreasedby13.85% to 425,706 people in
March 2019. Addinganaverage of 7,371 new Canberranseachyear,at an average growthrate of
1.73%, equatingto58,969 newresidents overan8-yearperiod.
Employmentisasignificantreason why people frominterstate andoverseasmigrate toCanberra.
The medianweeklyhouseholdincomeinCanberrais$2,754 whichisthe highestnationallyby$572.
The national medianweeklyhouseholdincomeis$1,783, givingCanberrahouseholdsastaggering
$971 additional income perweek.
Compositionof public/private sectoremploymentshows36.1% of residentswithajobare employed
by the publicsector.The remaining63.9% or overtwo thirdsof residentswithajobare employedin
the private sector.A long-termshifttowardsprivate sectoremploymenthasenabledCanberratobe
lessreliantonthe publicsectortodrive the economy.
Canberrais a national frontrunnerwhenitcomestoemployment.Recordingthe highestannual
employmentgrowthnationallyof 3.4%,followedbyVICwith2.9% growthand NSWat 2.3%.
Canberrahas the lowestunemploymentrate nationallyof 3.3%,followedbyNSWandVICwith4.7%
and 4.8% respectively.
Source:AustralianBureauof Statistics(ABS)
A growingpopulation,lowunemploymentandgrowthtrendinemploymentare all good,buthow is
thisgreat forthe economy?Itputspressure onwagesgrowth.
Both Tasmaniaand ACTrecorded a 2.7% annual increase intotal hourlyratesof payexcluding
bonusesforprivate sector.The same measure appliedtopublicsectorsaw VIChave the highest
increase of 3.6%, followedbyNTand NSWat 2.4%, and ACT and QLD at 2.3%. Canberra’spublic

2. sectorwagesare growingat a slightlyslowerrate thanprivate sectorhoweverthe private sector
representsasignificantlylargerportionof the workingpopulation.
TAS hasthe lowestamedianweeklyhouseholdincome nationallyat$1,473 whichisonly53.49% of
Canberra’smedianweeklyhouseholdincome.
Source:ABS
Tasmaniarecordeda 3.6% increase in grossstate productfor 2018-19 whichwasthe highest
nationally.Rankingequal secondat 3.0% growth,Canberrarecordedexpansionin 18out of 19
industries.
Source:ABS
Service industriessupportingthe AustralianPublicService throughcomputerservicesandbusiness
consultingcontinuedtodrive growth. ConstructioninCanberraremainedstrong,reflecting
continuedgrowthindwellinginvestment,rental,hiringandreal estate.Grossvalue addedcontinued
to rise reflectinghousingmarket strength.

3. Source:ABS
Housingaffordabilityisdefinedasthe percentage of householdincomerequiredservice amortgage
or pay the medianrent.Mortgage repaymentsare determinedby borrowing80% of the median
house price.The Real Estate Institute of Australia,intheirJune HousingAffordabilityReport,
determinedthe ACTisthe most affordable national housingmarket,requiring20.6% of weekly
householdincometoservice amortgage.ForhomeownersthisissignificantlylowerthanSydney
and Melbourne whichhave bothrecentlyrecordedsharpgrowth,currentlyrequiring37.1% and
32.5% of householdincome respectively.
Canberrais the secondmostaffordable rental market,requiring18.9% of medianhouseholdincome
to pay the medianrent.The medianhouse rentis$550 per weekwhichthe highestnationally,units
rank secondhighestwithamedianweeklyrentof $470.
The Reserve Bankdeliveredthree interestrate cutsin2019, being0.25% in June,0.25% inJulyand
0.25% inOctoberto halve the cash rate in 2019 from1.5% to 0.75%. APRA superchargedinterest
rate cuts byremovingthe floorrate usedtoassessserviceability,commonlyappliedat7.25%. This
has beenreplacedwithaddinga bufferof 2.5% above currentinterestrates.Thishassignificantly
increasedanapplicant’sborrowingcapacitybyallowinghigherdebtlevelswithoutthe costof
servicingthe debtincreasing.
HousingaffordabilityideallypositionsCanberrapropertyownerstobenefitfrominflationtovalues.
The uptickin auctionclearance ratesisdue to buyerstakingadvantage of the currentlending
climate.Asmoneyhasbecomescheaperandborrowingcapacityincreased,applicantscantake on
biggermortgageswithout increasingmonthlycommitments.

4. APRA has beenkeepinganeye onnational propertymarketsandhashad nohesitationsteppingin
to cool themas required.ThisstartedinDecember2014 whenmacroprudential controlswere
implementedtocurbinterestonlylending.Thiswasfollowedbycappinghow fastlenderscould
grow the investorportionof theirloanbookandrequiringlenderstorestrictcreditto,orexit,higher
risklending.
The significance of APRA’sinterventionisshownbychangestoconsumerbehaviour.InJune 2015,
45.5% of all mortgagesoriginatedoninterestonlytermsandbyJune 2019 thishad reducedto
15.8%. Anothersignificantchange inborrower’sbehaviourisareductioninLoanto Value Ratios
(LVR).InJune 2009, 35% of all mortgageswere settledwithanLVRabove 80%, in June 2019 thishad
reducedto22.4%.
Borrowersmakingprincipal andinterestrepaymentswill overtime createsequityregardlessof
marketconditionsasthe debtreducesovertime until eventuallyowningthe asset.LowerLVR’s
showborrowersare stumpinguplargerdepositsandborrowinglessasa percentage of property
value.The significantreductionininterestonlylendingcombinedlowerLVR’sactto insulate market
participantsfromadverse shockwhenthe cycle changes.
Canberra’spopulationhasgrownforeightconsecutiveyearsatan average rate of 1.73%. People
whomigrate to Canberrafindemployment,andalongwithotherresidents,enjoythe highest
medianweeklyhouseholdincomesnationally.Populationgrowthandlow levelsof unemployment
are inflatingwages,whichpresentsanincentive toattractmore people.Housingisaffordable,
requiringthe lowestpercentage of householdincometomeetmortgage commitments.Borrowers
are benefittingfromlowerinterestratesandpolicychangestoincrease theirborrowingcapacity.In
my opinionthisgivespropertyvaluessignificantroomforsustainedgrowthwithoutcompromising
Canberra’shistoricresilience toadverse marketforces.
Understandingwhichunderlyingforcessupportthe economyandpropertymarketisimportantfor
people investedin,orconsideringenteringthe market.Inisolation,eachfactorisgood,howeveras
a collective theybecomeevenstronger.