I have found a regional town which I am hoping to investing in. I have done plenty of research and the town ticks all the boxes, with the following exception:
– Population growth of approximately 130 people per year (1.4%)
– Based on an average of 2.5 people per house hold, this will equate to a requirement for 52 new dwellings each year.
– The council is currently approving 120 new dwellings per year. (More than twice the requirement)Is it fair to say the council is approving twice the required dwellings which will subsequently result in a oversupply of properties (and subsequent reduction in rental increases and capital gains?).
Is this alone enough to run in the other direction? How much emphasis should I give this negative?
Is it a good idea to compare population growth with development approvals, or is my method flawed?
Thanks in advance! These forums have been an invaluable resource!
What is driving the population growth? What industries
Jimmy
Remember just because 120 DA approvals are being issued each year it does not mean that 120 new homes are being constructed.
The DA will have a limited lifespan and you will be suprised how many expire with nothing being done due to lack of funds, change of mind etc etc.
As long as the township has a suitable population for lending purposes then if it meets you other criteria I wouldnt have a concern about this.
Richard Taylor | Australia's leading private lender
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