Hi everyone,
Can anyone shed some light on this with some real case observations?
Say you have 2 neighbouring suburbs, and one is more sought after than the other, say with a $50K diff in median values. You can either afford to buy a certain quality property in the best street of the lesser suburb, or you can buy that same quality property in the more pricey suburb, but in its lousier streets/pocket.
Which is the better proposal? I’m keen to hear what people say, as I’m starting to develop an idea that I would want to buy only into the best street of each suburb, yet at that price point it often gets you into the higher value neighbouring suburbs at its lower ends.
Also, happy to hear what smarter strategies other people have come up with?
Scarecrow7
“In times of crisis, both danger and opportunity are present”I’d bet on the cheaper one because of the ripple effect. People that want to live in the expensive suburb will tend to drift over to the cheaper one pushing up prices – hopefully.
Terryw
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I reckon this one depends a bit on what is happening to the broader economy in the state at the time.
One thing I’ve learnt in Perth during the past 20 years I’ve been observing the broader market……and that is no matter what is happening nationally, at any point in time there is always one or two local industries that are absolutely booming.
This spawns the execs (or more usually their partners…) in those particular industries to be on the lookout for houses in the pricier suburbs. Normally they’ve got a pocketful of cash and prefer the upmarket suburbs and are quite prepared to stretch that little bit extra.
Also, going down a level of detail, a major defining feature within a suburb can have a big impact on prices and “exclusivity”. Anyone who is familiar with the suburb of Nedlands in WA will know what I mean. South of Stirling Hwy is way pricier and much preferred by nearly all buyers (same suburb but about 180K difference) due mainly to all the schools being south of the highway, and mothers not needing to cross the busy highway with kids in tow on their way to and from school.
Depends on your cashflow limitations at the time of purchase of course, but we’ve always tried to stretch that little bit further to get into the worst street but better suburb.
Indeed, the best combination we’ve found is what we scored with our PPoR…..worst house / top street / top suburb….essentially rubbish bricks and mortar, combined with top land component.
In conclusion, our priority has always been ;
1. Suburb first
2. Street second
3. House lastN.B. : This only works for residential stock. We’ve found this criteria does not hold true for other forms of R/E.
Thanks for both these insightful and contrasting views. I think they both have merits. I’m familiar with Nedlands so it was a helpful analogy.
Scarecrow7
“In times of crisis, both danger and opportunity are present”
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