Investors will be squeezed out of the ACT's property market because of rising rates and land taxes, the ACT Owners Corporation Network has warned.
Subscribe now for unlimited access.
or signup to continue reading
However the ACT government maintains the territory is still an "attractive" place to invest.
Owners of high- and medium-density housing have been hit with higher rates bills this year because of a change in the way the charge is calculated.
But those who rent their units or townhouses out also face a hefty hike to their land tax.
Already, some are looking to sell their investment properties in Canberra, unable to cover the rising costs due to an oversupply of units in the ACT market.
However Gary Petherbridge of the Owners' Corporation Network said these cost pressures would inevitably affect housing affordability down the line.
"60 per cent of units and townhouses in the ACT are owned by investors. It'll increase pressure on renters, including people who can't afford it," Mr Petherbridge said.
Richard Hay owns investment properties in other states but says he is seriously considering selling his two ACT homes.
A self-funded retiree, Mr Hay said if he knew then what he knows now, he would have invested his money in the stock market or in properties in other states.
The rates for his unit in Forrest are $2358 this year and the land tax is $3540.
That's an increase of $644 for the rates and $1312 for the land tax.
On top of that, Mr Hay is paying about $12,800 in body corporate fees per year.
He charges $670 per week in rent but the unit is costing him $400 a week.
He said that was just the fixed costs, not including any loans on top of it.
Mr Hay said Canberra was becoming a bad investment.
"People like Mr Barr think we're taking wheelbarrows of money to the bank," Mr Hay said.
"I don't want to become a burden on the taxpayer, I don't want a pension. I have investment properties to fund my retirement but the ACT is ripping me apart.
"I can't put my super and investment money back into Canberra with these sorts of rules."
Property manager Thomas Hathaway said some of his landlords were looking to sell as soon as their properties became vacant, because of the combined rate hike and land tax hit.
He said landlords are likely to be willing to wear some of the rises for now if it means keeping their tenants.
But as their own costs mount, Mr Hathaway said landlords would inevitably pass that onto tenants or sell up.
"A lot of people think owners have pot of golds they sit on. They're real working people as well, they have fees, charges, bills and it's adding to the cost," Mr Hathaway said.
"Lots of people own only one investment property. Murphy's law says as soon they rent out their property, the hot water system goes and that's another $2000 they have to budget for.
"Astute investors with multiple properties are really feeling the pressure too.
"I don't think [raising the land tax] is a smart thing to do when affordability [is an] issue in Canberra."
An ACT government spokeswoman said rents were determined by market factors and were unlikely to be "greatly affected" by the increases in land tax.
She said if landlords chose to exist the ACT market, it would free the properties up for owner-occupiers to buy.
