The Real Estate Institute of the ACT (REIACT) president Michael Kumm has played down concerns about the impact of public sector job cuts on the Canberra property market.
Kunn, a 34 year veteran of the Canberra real estate market, expects that whoever wins power on September 14 will shrink the size of the civil service, but says this will be more than compensated by the large numbers of servants due to retire in the next five years.
“Around 20% of those working in the public service are due to retire over the next five years," he tells Property Observer.
“The Liberals are talking about a 12% reduction in the public service - and through natural attrition - meaning they will have to hire an additional 8% to make up the shortfall.
“The reality is that it’s not as bad as people think.”
Another positive factor he says is that whereas in years past, those that retired from the public sector would move out of Canberra, now those that retire are choosing to stay in the federal capital.Kumm has been involved in selling Canberra real estate through more than a dozen federal elections and says that John Howard’s election win in 1996 and subsequent culling of public sector jobs, had the biggest impact on the property market over these years.
“House prices went back to 1992 prices and only started recovering when we got the Sydney Olympics and money was being thrown everywhere.
“Then between 2000 and 2010 Canberra property prices boomed; there was double digit growth every year.”
Since 2010 prices have been trending downwards.
However, according to Kumm, the public servants that John Howard sacked in 1996 that had the last laugh, using their redundancy packages to pay off their mortgages before later returning to the public service as consultants and earning bigger salaries.
This year, he says its “business as usual” for the property market.
“This year it’s very price competitive, there is plenty of interest around, and things are looking pretty good.”
Property analysts expect the Canberra housing market to tread water in the election year.