Hi I am in the a market for my first IP. I have $250k to spend and was looking at purchasing in Ballarat North or East where the average annual capital gains are higher than 6%. I have found out that some of the towns just out of Ballarat are getting 14 – 19% and there are better properties in my price range with more land.
I was wondering if I should trust these statistics and purchase it the towns with high CG's or stick to buying right in town like Ballarat North? Are the stats realistic for all properties? What would cause one house to go up in value more than its neighbouring properties?
I would appreciate your help.
Past CG are not an indication of future growth. Maybe the suburb next door has been experiencing good growth and now it's time for your suburb to get the flow on effect.
I've bought in areas where people said "that area has had no growth for years". AHH music to my ears. It was overdue for growth as neighbouring areas had growth.
It's more that just numbers.Do some more research on why the other areas have grown more. Therein lies your answer.
Hi Katri84,
Real estate data needs to be taken with a grain of salt, I would be surprised if these towns outside of Ballarat were getting 14-19% growth (I am assuming per annum).
It could be a case of more high end properties were sold in that year than is usual, therefore the median house price for those areas might look as if it has gone up 19%.
A more reliable method I think would be to look at comparative sales of similar dwellings in the area you are interested in over the last couple of years, I believe you will get a more realistic idea of what prices are doing & how much they have risen.
I would personally stick to where more people are going to want to live, I assume in your case its probably Ballarat over smaller towns outside it..
Thanks for the info guys.
Ten- burner – I'm not really sure how to get hold of past sales reports, what website do you use?
I agree that people would want to live in town but thought that there would be lots of people like myself who want to get out of town at the end of the day and have a bit of room around them. A PM I know said most people wanting to rent properties like that are trades who need room for their tools and equipment.
I guess I would be limiting myself.
Catalyist – how could you be sure that a suburb will have a boom at all? Is it inevitable if all the surrounding suburbs have had their turn?
Hi Katri84,
I use RP data professional which is an online subscription, it cost money, they also have retail arm which sells reports on an individual basis. http://www.rpdata.com
I only have a subscription to Sydney metro, so I can't help with Ballarat.
The cheaper alternative would be to ask any agents you know in your area, they might give you access or get you the reports you need.
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