Why Canberra Renters Are Buying in Bathurst to Get a Foot on the Ladder

The maths is brutal. At $835,000 for a median house in the ACT, a buyer putting down a 20 percent deposit needs to front $167,000 before they've paid a cent in stamp duty or legal fees. For many Canberra renters, particularly those who moved here for government work and want to stay close to the Parliamentary Triangle, that number is simply not reachable on a single income, or even two modest ones. So they're trying a different equation entirely.

Rent-vesting is the strategy of renting your primary residence while simultaneously buying an investment property in a cheaper market. It has existed in theory for decades, but a combination of high ACT prices, stubbornly low vacancy rates and rising rents in inner Canberra has pushed it from niche financial planning territory into something much closer to mainstream for buyers in this city.

What the Canberra Market Is Actually Doing to Buyers

Auction clearance rates in the ACT are running at roughly 65 percent, not the frenzied 80-plus percent of 2021, but strong enough that competitive properties in Gungahlin and Belconnen are still attracting multiple registered bidders. Rental vacancy sits below one percent across much of inner Canberra, a figure that property managers in suburbs like Braddon and Dickson say has kept advertised weekly rents elevated well above pre-pandemic levels.

A three-bedroom house in Belconnen's Macquarie Street corridor is routinely asking $650 to $700 per week. The same household renting at $680 per week and simultaneously holding a $420,000 investment property in, say, Bathurst or Orange in regional New South Wales is effectively building equity elsewhere while staying in a suburb that suits their lifestyle and commute to agencies like the Australian Public Service Commission or the Department of Finance in Barton.

The approach does require careful structuring. Mortgage interest on an investment property is generally tax-deductible against rental income, which changes the cash-flow picture compared to owner-occupier borrowing. A property investor renting in Canberra at $680 per week and receiving $380 per week from a tenant in a regional town is still writing a cheque each week, but the net cost, once tax treatment of the investment loan is factored in, can compare favourably with servicing an $835,000 owner-occupier mortgage in the ACT at current rates.

Gungahlin vs Goulburn: Where the Numbers Pencil Out

The growth corridors that planners keep pointing to, Gungahlin in the north, the Molonglo Valley to the west, have not delivered the affordability relief once promised. New three-bedroom homes in Kenny and Whitlam are still listing above $750,000. That price point, combined with the ACT government's land rent scheme, which allows buyers to lease land from the ACT government rather than purchase the freehold, offers one local alternative. But Land Rent Scheme properties carry their own restrictions and are not always available at the volume or location buyers want.

That's why some buyers are looking to Goulburn, just 90 minutes up the Hume Highway, where houses under $500,000 remain findable. Others are targeting Queanbeyan on the NSW border, technically outside the ACT but close enough that a tenant can be found among the overflow of Canberra workers priced out of the territory itself. Queanbeyan's proximity to the ACT border and Canberra Airport makes it a realistic rental market, which is half the equation for any rent-vest strategy to work.

The practical checklist for anyone considering this path starts with three questions: Can you service two sets of costs, your rent plus your investment mortgage, if the investment sits vacant for six to eight weeks? Have you spoken to a tax adviser about negative gearing in the current rate environment? And is the regional market you're targeting driven by genuine tenant demand, not speculative hope? Those answers matter more than any clever framing of the strategy.

The ACT property market is not about to become affordable. Anyone waiting for a significant price correction before buying in Canberra has been waiting for a long time already. Rent-vesting does not solve the housing affordability problem, but for public servants locked into working near Civic, Barton or Woden, it offers one way to build equity while that larger problem remains unsolved.

This article is general information only and is not personal financial or investment advice. Consider your own circumstances and seek licensed professional advice before making financial decisions.