Dex - I'm not knowledgeable but a couple of observations.
You need to be vigilant about the quality of build and products used in Canberra unit developments. I know a bloke who is the handyman for a large rental agency in Canberra and he reckons that the products and workmanship in numerous new development are very low. There was one infamous development where the recommendation was that it would be cheaper to demolish the entire development than fix the problems. Another development in the suburb of Bruce has a quote of $20m to fix the structural problems. The top floor of a new development along Northbourne Ave totally flooded with the first decent rainfall. Someone I know owns a couple of units in the ACT and they say the body corporate fees are killing them.
Canberra will have an massive oversupply of units in coming years. A couple of suburbs in the new town of Molonglo have something like 80% units and 20% houses. The new suburb of Lawson in the town of Belconnen appears to have thousands of units with another 3500 units planned next door in the Uni of Canberra campus and thousands more built and more planned in the next door suburb of Bruce. There are a number of high rise unit developments built or under construction in Belconnen town centre. Will people pay a premium to live next to the tramline on Northbourne Ave? Maybe to begin with, but it is likely just as fast to get to Civic by bus from Bruce and Belconnen as it will be by tram from Dickson (and the tram will only benefit offices in Civic whereas most Canberra workers do not work in Civic). A single tram line was never the answer for the problem in the ACT (but that is another discussion). The ACT government is addicted to land sales and taxes for revenue. They get a bigger bang per square metre of land with units than with detached houses so they are not motivated to address the growing imbalance.
Regarding houses in the inner north of Canberra. I am constantly amazed with the lack of house-pride shown by many Canberra residents. I've looked at a number of rentals and also been to open houses for properties for sale, particularly in the inner north and many of these "houses" are actually workers'cottages built 50 or 60 years ago and not updated at all in the intermim. Very small rooms, dilapidated fixtures and fittings. However much you pay for one of these cotttages, $750k, $800k (?) you are basically buying a vacant block of land plus the cost of demolition. Sure you can buy and rent it out until a developer comes along wanting to build units. There are some reasonable to good quality houses in those suburbs but of course you pay a hefty premium. And yeah, fantastic tree-lined streets.
As you can gather, I'm not convinced that the ACT housing market is an investment buy at this point in time (different of course if you want accommodation rather than an investment).
