Now that the dust from the residential property boom has cleared specialist Terry Ryder says it’s become equally clear investors looking for sustainable growth should target areas with a track record of consistent performance over time.
Ryder quotes Tim Lawless of PRDnationwide: “The best investments are those that can’t be easily replicated or those in appealing suburbs where stock is tightly held but significant demand exists.”
These tend to be suburbs close to the city centre or those on water or with other quality views. They are the areas that perform well in bad times as well as good.
As well as proximity to desirable features, these areas will have character housing, good shopping and restaurant precincts, good transport links and attractive streetscapes. They are often older suburbs with historic dwellings and larger blocks with sub-division potential.
Brisbane’s best long-term performers have been in the inner suburbs, along the Brisbane River or on Moreton Bay. In Melbourne the established blue-chip areas are doing well despite the slump because they have many of the aforementioned qualities.
Sydney’s eastern suburbs have achieved the highest dollar value growth for any region of NSW over the past five years.
But city suburbs with “stayer” qualities don’t need to be a Double Bay or Noosa Sound. In Melbourne, Richmond is a consistently solid performer as is Rockingham in Perth.
Ryder writes that regional centres can also provide sustained capital growth if they are under-pinned by key factors. Margaret Lomas, who has written several books on property investment, says the regional centre of Dubbo in NSW is a good example.
The city has a population of 40,000 and services a region of 132,000. It sits at the intersection of five highways and has multiple industries including a university, airforce base and the Western Plains Zoo. It doesn’t break any property price records but consistently performs well and rents rise accordingly.
Albury-Wodonga is another centre with potential and so is Mildura in Victoria.
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorRedwing,
Happy to share some of the VGO data I purchased. These two, both in WA, are not residential and therefore probably not of any interest to most people – but it caught my eye ;
Both are for 4,000 sqm industrial blocks (bare land values only)
1. Welshpool
1976 – $ 4.80 / sqm
2004 – $ 100.00 / sqm
Compound CG rate of 11.45 % p.a.2. Ozzy Park
1976 – $ 10.00 / sqm
2004 – $ 300.00 / sqm
Compound CG rate of 12.91 % p.a.It’s a bit scary to think what it’ll be in another 28 years…even with inflation taken into account.
This was enough for me to jump in boots and all. I found the CG rates to be above most – not all – ressy suburbs – but the best bit was you received the growth whilst the ind. tenants paid outrageously high rents to you, plus all of your outgoings and insurances…so you received it for free.
I’m sure there are better CG rates out there than what I’ve jumped on, just wonder what time frame they are over…I was happy with the 28 yr time frame as it took in alot of ‘ups and downs’.
P.S. Happy now for everyone else to jump in and push the value up….[biggrin]
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
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