Hi, I live in Perth and do not like the idea of investing interstate or too far away from my own backyard as I feel I would be at a distinct disadvantage in any place where I am not a “local”. I am open to purchasing properties with a view to capital growth or good cash flows from day one. I would be interested to learn of other peoples’ views on which suburbs to invest in and in particular their reasons – whether because of capital growth or good cash flows. I know that land generates a very negative cash flow but some of you might have some ideas as to where some rapid gains might be made. Best Regards –
Hi Yarwood,
Recommend you do a search on ‘Perth’ and see what comes up – there would have been a few discussions in the past.
But in answer to your question – there is no definitive answer – your gem can be found in many localities – you just have to find it.
But if you are growth focussed look along the coast, river, major transport routes (without being on top of) and consider some of suburbs close to the satellite city areas being redeveloped. For mine get as close to the city as you and your cashflow can afford.
Don’t be hamstrung by your need to be close either – sometimes the better opportunities can be further afield. However, if the fundamental sof your local area stand the test then go for it.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Thanks Derek
For those of you who have not read much of Derek’s contributions I would like to say that he is quite clued up.
I had been hoping to receive a few other contributions but then beggars can’t be choosers.
Anyhow, most of you would be well aware that capital growth in the Perth metro area is never ever uniform.
You might recall that in the late-mid 80’s the new suburb of Winthrop emerged. It was close to Murdoch University and land prices there just took off like a rocket. A decade or so earlier Bullcreek had been a boom suburb for prices as the Kwinana freeway crept closer then once the freeway arived the price surge stopped.
In years when the economy is booming the suburbs on the river tend to do well but sometimes in a downturn they fall in price more than other suburbs.
Some inner city suburbs like Leederville became trendy a while back whereas in prevous decades they had seemed quite unattractive.
The suburbs on the beaches have been very popular lately from Mandurah to Quinns Rocks and beyond.
The tunnel has certainly had a positive effect on some suburbs.
The examples go on and on…(Sometimes of course headlines can be deceiving because the median price in a given suburb might become distorted when for example the sales evidence is a reflection of new houses having been built and sold rather than older houses being sold)
There is normally a fairly good reason why one suburb does well in a given year while others – even those close by – are put to shame. I don’t know about the rest of you but I am not that good at predicting the next boom suburb.
Derek has given some general advice on buying close to the city, the river or the ocean. I have an invitation to you to try to predict the suburb that will perform well over the next one to two years. You might also wish to explain why you think your chosen suburb will perform well. Let’s see who has the best crystal ball!
Maybe I can dream up a good prize for the winner. Bragging rights are always good but wealth is probably better.
Best Regards
YarwoodYarwood, it sounds like you have a pretty good idea yourself about what areas have performed well and the reasons why. Why don’t you use these examples and look for areas (not just in Perth) that fit the mould of some of these suburbs before they took off.
If Perth does continue to expand, North may still be the way to go. I personally have an IP in the Bunbury area. I still see that some areas of the South West are growing dramatically.
‘Eat rich food, barbeque a yuppie’ [greedy]
Yarwood,
Echoing Rugbyfans comments, you sound as if you’re a pretty switched-on individual and have a reasonable grasp of the Perth Market.Reading the ‘West’ of late Perth is now experiencing a ‘glut’ of properties on the market and price reductions in some cases. However, many projects North and South of Perth are still on the table.
The freeway extension behind Welshpool and towards Armadale will undoubtibly increase pricing in some areas with access being improved, the next “Hot” spot ? Dunno..[blink]
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorThanks Rugbyfan and Redwing …
I don’t know that I deserve any flattery though. My crystal ball has never been all that good although like anyone I have been able to look back with the greatest of ease.
I have never even picked the winner of the Melbourne Cup! ..so does anyone have any hot tips for the next hot spot?? please?
It can be hard work buying a property putting in a tenant, organising the finance, paying the mortgage etc etc. If one buys in the wrong area the hard work seems to be applied unwisely.
So…anyone with a good crystal ball?
Yarwood,
I’m assuming you are looking for capital gains rather then cashflow if you are looking in the suburbs?
Well, I don’t mind throwing a few ideas in the wind as long as noone is going to follow it through and then blame me if it goes the opposite way, everyone must do their own due diligence.
Anyway, here’s my thoughts:
a) Armadale – They currently have a “multi million dollar” city plan upgrade open for public comment. Armadale has already had significant growth over the last year, whether it’s because this has been in the pipeline or whether it was part of the boom I don’t know. My guess is, it may increase further OR the surrounding areas will start to benefit from this and increase. Vacancies rates are low, last time I checked 1%.
b) Rockingham/Waikiki – Some of the suburbs around these areas are still below median price but reasonably close to the beach. I believe the water factor will help prices increase. The train line from Perth to Mandurah will stop in Rockingham too.
c) Ashfield – Close to the river and the city. Has public transport (bus and train), schools and some blocks are big enough to develop into unit sites. Some very old homes here though that aren’t in good condition, depends of whether you’re into developing.
Well, there are my thoughts. We’ll know if a couple of years if any were correct. Hindsight is a wonderful thing.
Regards
PKThanks PK!
You get full marks for bravery! No less than 3 specific suburbs chosen!
Your guess is that I am looking for capital growth. Well, I consider it to be very important. One can make a number of mistakes such as finding a tenant from hell, maybe paying too high a rate of interest etc etc but if the suburb chosen was one that performed well in the first year or two or 5 then those other mistakes are so much easier to live with!
For what it’s worth here is my unsolicited views of the 3 suburbs chosen by you:
Waikiki/Rockingham would be my preference of the 3 for the reasons you mentioned – the rail line and also by the sea.
Ashfield – I don’t know much about other than it’s inland and probably an older working class suburb.
Armadale – I can’t say that I’m crazy about it. (Having said that it might be the next big winner) I have always thought that places like Armadale get so very hot in summer. It’s a long way from the beach and also a fair drive from the city. I tend to think that suburbs in the hills get hot (temperature wise) but those at the foot of the hills get even hotter because they receive so little breeze.
Thanks again for committing your thoughts to this forum. I like to pick other people’s brains as much as possible. I hope you didn’t mind my comments about Armadale – and I’m sure that many people live in Armadale very happily
Regards
YarwoodYarwood,
Don’t mind your comments about Armadale at all, in fact had quite a laugh, this was where we were putting up a fence on a 41 degree day and yes, it was very hot. No Breeze you said, yes I can vouch for that! LOL
Personally I wouldn’t live in Armadale myself (no offence to those that do), but then only 1 of my IP’s is in a place I would like to live, the rest are places I probably wouldn’t live and well, they are the ones that have had better cashflow, rent out easier etc.
Yes, I believe capital gain is important (so I have equity for investing), but only on half my properties, on the other half I want cashflow so that it’s paying for the shortfall on the capital gain ones otherwise our investing will come to a grinding stop.
Well, that’s my plan anyway.
So, is anyone else out there brave enough to put their thoughts in print!
Regards
PKHello Yarwood,
I have a few suggestions that you may be interested depending on budget, strategy etc.
I believe Midland will continue to perform well due to redevelopment. (Contact Midland Redevelopment Authority to find out more info if you are interested).
Midland has many attractive features, historical buildings, village atmosphere, cafes etc. Nearby Wineries and restaurants of the Swan Valley. Still relatively cheap area, I think median price is still under $200,000.
Also possibility of development potential, some large blocks still available.The constant media hype surrounding Mandurah, and the commencement of railway project will keep prices soaring for a while yet… I think/I hope?
I would try Singleton, Golden Bay, these two areas are still very cheap for coastal location. Madora Bay is also excellent but a little too pricey now.
If you dont like Armadale you wont like my suggestion of WESTMINSTER AND BALGA. These are two great areas, close to city, great infrastructure, large blocks and you could purchase under $200,000 rent now, and develop later.
You could also look industrial factory units. We purchased a factory unit in Malaga 2 years ago paid $110,000 and rents at $900 per month. Relatively STRESS Free compared to residential.
Good luck
Thanks for your thoughts Marissa and PK
I understand that Westminster/Balga has been reinventing itself but it’s not an area I know well.
I think a factory unit would certainly be less stressful than a residential property. I have found townhouses or units to be relatively stress free compared to a house and land where the land has a garden that need sto be maintained. I’d never want to rent out a place with a nice garden.
Regards
YarwoodHi Yarwood,
Hmmmmmm – gets out the crystal ball, starts rubbing and rubbing and rubbing. Gets it up to full glaze and presto………………………..
Developable blocks are the way to go and I would phone the water authority to see if there are any plans to roll out sewerage connections in the near future, then ring some of the city councils to see if there are plans to rezone areas within their locality and wherever possible suitably zoned larger blocks within these areas.
Get some plans done and then either sell them with development approval or develop them yourself.
For what it is worth I suspect the Westminster, Rockingham and Midland trains have largely already left the station – of course that goes with saying that there aren’t little gems left behind waiting for an astute investor to come along.
I consider Morley a little more exspensive but still slightly undervalued relatively speaking for developmental opportunities.
For simple buy and holds I consider the Warwick, & Greenwood area to be sound propositions.
Eastish of Perth – the suburbs extending out from Belmont, Redcliffe and Carlisle. These three have had their little boom and are now ‘too expensive’ . The suburbs out from them will be the next developmental zone and as such large block will attract a premium – Polly’ pipe is still having an effect on these suburbs.
The next tier of property growth zones will be along the southern railway line but moreso in the areas well served by planned stations. The rail line as such has largey had it’s effect – the more focussed investors will look for developmental opportunities closer to the planned stations – which takes me back to where I started – the water authority and city councils.
But wait ……………………..is that a flaw in the crystal ball? Hmmmmmmm I guess time will tell.
PS I got into Rockingham sometime ago and before a lot of others.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Thanks Derek
Quite detailed. Much appreciated.
Regards
YarwoodYes, I agree with Marissa, Armadale and Balga are similar in many ways (Yarwood, the difference is that you do sometimes get a breeze in Balga).
Balga has doubled in value over the last 4 years due to it being “re-invented”.
Hi Yarwood,
I am currently looking at Yangebup and Southlake (some areas are better than others). I am checking out properties in Ferndale and Lynwood too. what about Queens Park or Mandurah? All for +CF.
Regards
Tracey[biggrin]I agree with Derek on the eastern strip but on the other side of the polly farmer freeway. Rivervale, Kewdale (and I quite like Queens park too).
Rivervale and Kewdale are characterised by large flat blocks. Downside for the immediate future is unfriendly zoning and an anal council when it comes to development. Any further east and your into Belmont, Redcliffe and Cloverdale, and the airport frightens me off for those suburbs..
EZ-Rent. The free tax and cashflow simulator for Australian property investors.
http://www.ez-rent.comHere are some of my picks-
Queens Park, Kenwick – basically the next step on from Cannington
Mandurah and suburbs between e.g. Singleton – cant fight the flight to the ocean
Scarborough – redevelopment slated
Subiaco, Bicton – looking undervaluedHow about in and around Coogee where all this development is happning? I know nothing of this area though
Extensive list of new Perth property available for sale.
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Ok here we go. I love this website cause i can (as some would call it) crap on as much as I like about property and no doubt, someone will be interested!! haha
Perth is a great place to invest. Long term I think you could shut your eyes point on the map, buy a house there and do well.
If you dont believe me, fly to Sydney for a week and check out what you get for 500k. Not a lot!
I live in a 1950s house, 9km west of the city, which sold last August 03 for 1.6 mill. No comparison.
My predictions for the best growth in the next 2 years (if that is what youre looking for) are:
Wembley: Close to city, freeway, Osborne Park, Herdsman Lake, Train Stations, new Subi Development, close to the beach also! I just bought a 2 bed apartment with parking for 115k. Ready for renovation when tenant moves out next April! Theres not much left at this price but still undervalued if you ask me.[strum]
Quinns Rocks: Quinns is an Awesome spot, seen a lot of growth in the past 12 months, but I dont think this will slow down any time soon. Mindarie and Brighton on either side will pull the price up further, and the new Clarkson Train Station will help too. The freeway will be up there by (2007?) I think?[party]
Thornlie: Not a bad distance from the city, nice location, train station coming, new Roe Highway just been completed past front door to reduce travel time, can still get well priced homes and some on big blocks for future redevelopment. I saw recently a triplex block with older style house for 170k to 190k. This one was also walking distance from the new train station. Would have been good to buy. [rambo2]
Langford:Not a huge favourite of mine, but still close to Thornlie and relatively cheap still. Similar to Balga with “rebranding” going on and cleaning up a lot of the trash in the area. (no comment). [upsidedown]
Other areas i still think will do well are Greenwood, Merriwa, Clarkson, Osborne Park, Cloverdale, Belmont, & Armadale.[medieval]
Hope this helps. I love Perth. After being in Sydney for 7 months I now realise how great Perth really is both to live and to invest! *sigh*
Luke [cap]
Hi Devil,
Some interesting suburbs in that lot.
Comparing Sydney and Perth is not terribly valid – sure entry level prices are more affordable in Perth than they are in Sydney.
But on a question of growth Sydney wins hands down – 20 year average (83-02) around 7.9% compared to Perth 5.1%. That, almost 3%, makes a considerable difference.
Or put it another way Sydney’s growth over 20 years was 461% whereas Perth’s grew by 330%
In 1983 Perth median prices were 59% of Sydney’s median and in 2002 they had dropped to 47%.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Given those figures, and considering Perth is maybe 10-15 years behind Sydneys prices now, Sydney is a market im staying well away from… Well, while Perth exists anyway. Not to say I wont invest here in the future, but for now, I cant afford it!
Not saying Perth is the best from every angle, but for a beginner like me, and anyone who knows Perth, its a perfect place to buy and learn in. [cap]
*I just woke up so I hope this makes sense. Ill read it again when I get to the office and had a coffee just to check hehe[laughing]*
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