All Topics / General Property / Hot Spots in Western Australia, Perth

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  • Profile photo of NinderNinder
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    @ninder
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    Any advice on which are the hot spots in Perth?

    Profile photo of luke86luke86
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    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

    Profile photo of moneystreammoneystream
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    Hi Ninder

    What's your goal ultimately — to achieve income or capital growth?

    With the mining boom in WA, families would prefer "lock-and leave" apartments in the city, or some may choose lifestyle properties in the traditional coastal strip in the western suburbs, and up north like Jindalee and Brighton.

    Cheers

    Profile photo of worldinvestorworldinvestor
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    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

    Profile photo of luke86luke86
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    worldinvestor wrote:

    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

    Hotspotting is a term generally thrown around for looking for the next big thing so that is speculative for me.

    Anyway, I still think developabl blocks in those inner areas will be the best performers over the next 5-10 years.

    E.g: House in Mount Lawley, 874m2 corner block zoned R50 which you would build 4 units/townhouses (3 at worst), listed for $1.05m – $1.1m:

    http://www.realestate.com.au/property-house-wa-mount+lawley-110186849

    This took me less than 5 minutes to find on realestate.com.au so am not sure if it is in the best area of Mount Lawley, but I think with more research and searching you could find better houses.

    Cheers,
    Luke

    Profile photo of worldinvestorworldinvestor
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    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
     

    Profile photo of NinderNinder
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    Thank you all – I'm very new to this site.

    I'm looking at buying an investment property.  I seem to be looking in every direction.  I was hoping to  get some experienced wisdom before jumping into an area. 

    Cheers, Ninder

    Profile photo of DerekDerek
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    moneystream wrote:
    Jindalee and Brighton.

    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.

    Profile photo of NinderNinder
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    Thanks Derek.  Jindalee and Brighton seem too far away for any capital growth.  I've got only 10 years to retire and am hoping to get into somethng with capital growth.

    Profile photo of merrycmerryc
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    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

    Profile photo of DerekDerek
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    Ninder wrote:
    Thanks Derek.  Jindalee and Brighton seem too far away for any capital growth.  I've got only 10 years to retire and am hoping to get into somethng with capital growth.

    Without knowing the ins and outs of your situation it may be that an unhealthy focus on capital growth and negative gearing may not be the right strategy for you. 10 yrs could be one property cycle but I suspect there is still a big hangover from 2006/07.

    Caught this article on today's online edition of "The Age" that may be of interest to you.

    Click here

    Profile photo of FreckleFreckle
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    Ninder wrote:
    I've got only 10 years to retire and am hoping to get into somethng with capital growth.

    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

    Profile photo of mattstamattsta
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    Is there any reason why you are only looking in the Perth area? If you broaden your search you may find some better luck, and find exactly what you are looking for.

    Profile photo of AlasdairAlasdair
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    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.

    Profile photo of luke86luke86
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    If you are looking for yield then Australian Residential Property is probably no the asset class to be investing in. Residential property is traditionally a growth asset class and only delivers net yields of between 2.5 – 4%, but has a history of growth.

    If you were looking for yield perhaps you would be better off investing in commercial property. Even bonds or term deposits- these give higher yields than residential property although with zero growth, they are uinlikely to make you wealthy.

    Cheers,
    Luke

    Profile photo of luke86luke86
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    Sorry I should correct- bonds can provide growth so that is probably not a good example.

    Luke.

    Profile photo of mattstamattsta
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    I checked out realestate.com.au looking for properties in perth. They seem to be quite expensive compared to regional parts. well it does make sense, but i've been trying to look just outside of perth, and keeping my eye on it. i've been reading that perth is set to continuously grow

    Profile photo of DerekDerek
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    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.

    Profile photo of FreckleFreckle
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    mattsta wrote:
    i've been reading that perth is set to continuously grow

    Wouldn’t bank on that too much. Heading down to Mandurah in a few weeks to set up shop. Strange kinda place from a PI point of view. More places for sale than you can poke a stick but jeez is it pain trying to rent down there yet plenty of rentals.

    Profile photo of DerekDerek
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    Freckle wrote:
    Strange kinda place from a PI point of view. 

    Couldn't have described Mandurah better myself.

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