Hot Spots in Western Australia, Perth

Why do you want a hot spot? I would be looking for areas with evidence of historical high growth.

Hotspotting for me means speculative areas, typically regional and mining towns not a capital city area.

Having said that I think the areas of Perth that will experience continued growth are inner north (North Perth, Leederville, Mount Lawley), inner east (Lathlain, Victoria Park) and the western suburbs (Nedlands, Claremont, Cottesloe). Particularly larger blocks of land where it is possiible to build 3-4 units/townhouses or a duplex.

Cheers,
Luke

Luke86
Hotspotting does not necessarily mean speculative to me.

For example look at areas where rezoning is on the agenda.
Craigie is looking good, older homes, good infrastructure where you can pick up properties under $400K.  Check out realestate com, you will note that houses appear to be snapped relatively quickly, good sign in this market.
Mirrabooka, Koondoola these are areas which Council is currently re-zoning, close to city, good infrastructure, ticks many boxes.

Try purchasing an old run down home on duplex block in Mt Lawley will set you back $1.1M at least, as an investor you will need deep pockets to hold this type of property. However, in saying this, I believe the blue chip areas do represent great buying at the moment as most have dropped backed. Good time perhaps to upgrade your principal property.

heers, WI

Hi Luke

I agree  Mt Lawley and inner city areas will always do well.

As far as the property you posted it may have taken 5 minutes to find, however it may take many properties to find a suitable development site where the figures stack up.  R50 does not mean you will achieve even 3 on the site, perhaps only 1.

A 4/3 unit site in Mt Lawley at this price would not have hit the market. I live in the area I can tell you there are cashed up builders just waiting for suitable sites.

Ninder, I like Areas close to the city which do not have the same price tag as blue chip area, but provide great opportunties to add value, Koondoola is another area I think with great potential.

I purchased a couple of properties in Westminister when it was really on the nose about 8 years ago, no one would touch the area, turned out to be one of the best investments I made as I was able to develop the properties. 

Cheers, WI
 

Lot of land in those areas and in many parts you'll be surrounded by homes under construction.

I tend to agree with the others get into some of those near city suburbs where development opportunities are available.

Have a look at places where densification is planned and try and ride those coat tails.

But key question is what are you trying to achieve? Your goal will determine the area.

Think Midland as well – huge government investment in infrastructure and planning. Formerly pretty low SES, but is still close to Perth and likely to grow over next 3 years

Seems to be something of a panic on as those nearing their desired retiring age look to make up shortfalls in retirement funding. You guys often see property as an easy answer to topping up.

I think we’ll see a lot of ppl like yourself jump into asset classes with little to no knowledge or experience and consequently do their doe.

Property prices are under downward pressure. Mining states especially WA have property sectors that are almost entirely reliant on resource sector performance. Personally I see resources pulling back especially expansion as the world deleverages. Resources are likely to decline and settle into a long term steady state pattern over the next 5 years. I believe that will see cities like Perth trapped in an over built lower demand cycle for several years.

As always it will be your typical boom bust scenario. WA at the moment is being driven by 3 of the worlds largest miners all trying to expand output capacity simultaneously. When that build out phase is mostly completed over the next 2 years you can expect to see construction driven demand drop by at least 70%.

My personal feeling is that Perth could be one of the hardest hit cities in Australia over the next few years as the global downturn starts to bite. There is still the potential to make money in property in any market but few have the skills and knowledge to manage that successfully in recession/depression environments.

Without skill and experience do you feel lucky!

The Freckle

Hi Ninder

As Freckle mentioned people nearing retirement age might get into a bit of a panic and rush into property investment.
And yet as that link posted by Derek shows … Australia is a nation of loss-making Landlords.

“The Age”
“The Australian Taxation Office (ATO) has released its Taxation Statistics for the 2009-10 financial year,
which once again revealed that Australia is a nation of loss-making landlords.”

http://www.theage.com.au/business/property/nation-of-lossmaking-landlords-20120430-1xuh4.html#ixzz1tm3wEhjI

As mentioned above, capital growth and negative gearing may not be the right strategy for you, maybe better to go for a cheaper property with a good rental yield.

A few years back a work colleague aged 58, mentioned that he did not have enough savings for his retirement age.
He went to a Buyers Agent here in Perth who suggested that he buy in a blue chip suburb with good growth prospects. Maybe a good idea if he was in his 20’s or 30’s and didn’t mind being negative geared for the next decade (+).

He did not follow the B.Agents’s advice … and instead ended up buying a cheaply priced villa in Armadale (27 kms from Perth CBD) a “non blue chip area” … but … at his age a low cost villa with high rental yield made more sense than being stuck with an over priced, negatively geared blue-chip property.

Also you may be able to salary sacrifice more money into super.

Whatever you decide run your ideas through with a qualified accountant and/or financial planner.

Sorry I should correct- bonds can provide growth so that is probably not a good example.

Luke.

Hi Mattsta,

Not sure where you live so some of my comments may be redundant.

Regional cities in WA are considerably smaller than those in other states and in many cases, with a few exceptions, land is availability is still at a reasonable level. In some cases land availability cannot meet demand in these instance you are paying overs for the land.

Regional towns are even smaller with populations often less than 5000.

Tread warily if looking at regional WA.

Couldn't have described Mandurah better myself.