All Topics / General Property / The changing suburb theory

Viewing 8 posts - 1 through 8 (of 8 total)
  • Profile photo of RonulasRonulas
    Member
    @ronulas
    Join Date: 2003
    Post Count: 96

    Hi all. My wife and I have noticed a trend in the places we have looked at and I was wondering what the knowledgable people on this forum could add.

    Poor suburbs mostly end up becoming sought after suburbs.

    We have noticed that low income/housing commission style suburbs have mostly good solid houses with plenty of infrastructure. We have purchsed our PPOR in a low income area of SA. We have major shopping centeres and stores like Harvey Norman ect. Fast food outlooks. Schools and train lines all within 1 KM of our house.Regular bus services ect.

    These things have all been built to support the large number of low income residents. While the thought of buying a house where the next door neighbour has his stripped car up on blocks in his front yard is very unapealing, these things are the very causes of low property prices.

    Eventualy these places will be bought out by private ownership because of the infrastrucure available and the relativly cheap housing. There are nice 3 br brick homes in crappy neighourhoods selling for $115 000 – $120 000 returing $160pw.

    I predict that at these prices people who can’t afford major city prices will eventually start picking up these sort of places for PPOP or rentals and the local economic basis will shift and eventually become more affluent and sought after.

    This is a very simple explanation of what I mean but if you get my drift then please add your comments.

    You will always miss 100% of the shots you don’t take!

    Profile photo of MonopolyMonopoly
    Member
    @monopoly
    Join Date: 2004
    Post Count: 1,612

    Ronulas,

    There is some truth in what you are saying, and in 24 years of investing I have seen many areas that were once considered “undesirable” become highly sought after.

    Off the top of my head I can think of two distinct Melbourne suburbs in which this has occurred; these being Ashburton, Ashwood and Preston. However, there are certain areas that regardless of good infrastructure have remained relatively low in terms of growth for various reasons. One such example is Springvale.

    The key for me is infrastructure, not trends. You need to keep an eye on trends certainly, but bear in mind these change; children grow up and move out of areas, the aged move out and into nursing home, areas become fashionable or fall from grace at a whim. But as long as there is good infrastructure; plenty of parkland, schools, medical centres/hospitals, shopping complexes etc etc., sooner or later, people will move there. It may take many many years, but as long as there are amenities available poeple will make use of them and communities will grow.

    Cheers,

    Jo

    Profile photo of aussierogueaussierogue
    Participant
    @aussierogue
    Join Date: 2003
    Post Count: 983

    i would also add that the bad suburbs done good are usually ones within 1-15 km of the city center.

    Profile photo of RonulasRonulas
    Member
    @ronulas
    Join Date: 2003
    Post Count: 96

    I know what you are saying aussierouge but most people in low income areas don’t have much to do with the cities. They have jobs out in the burbs or industrial sites that arn’t particulary close to the city. They can be 30-40km away from any major city. The shopping centers ect grow up around the population centres and become the hub of the local area.

    You will always miss 100% of the shots you don’t take!

    Profile photo of MTRMTR
    Participant
    @marisa
    Join Date: 2004
    Post Count: 663

    Hi there, also here in WA some of the state housing areas have been upgraded by State Gvt. Many of these undesirable areas have been given a facelift and young families moving in.
    Areas with excellent transport, facilities and still affordable. I would look at a trend over last 10 years (10% overall).
    Cheers.

    Profile photo of aussierogueaussierogue
    Participant
    @aussierogue
    Join Date: 2003
    Post Count: 983

    ronlulas – i hear what you’re saying howvevr i cant think of 1 suburb in Melbourne 30-40 km from the city that started out bad and is now great. too my knowledge they have all stayed about the same in terms of comparison to other suburbs. the only exception recently is frankston but that is due to its proximity to the beach. Lilydale, coldstream, Boronia, cranbourne, weribee, seaford etc all the same….they are nice places but still remain the same in the pecking order.

    Profile photo of RonulasRonulas
    Member
    @ronulas
    Join Date: 2003
    Post Count: 96

    Maybe not now AussieRpuge but I bet you that befor our time there whould have been poor areas surrounding Melbourne that are now affluent.

    Anyway Melbourne is a large city indeed and I guess 30-40 Km away is not far in comparison to say Adelaide where 30 – 40 KM is a long way. We ar in the poor quater here and Adelaide is only 38km away. You see what I mean. Eventually this area has got to becoume sought after.
    Where else can you buy that close to the city for $120 000 or less.

    You will always miss 100% of the shots you don’t take!

    Profile photo of MonopolyMonopoly
    Member
    @monopoly
    Join Date: 2004
    Post Count: 1,612
    Originally posted by aussierogue:
    i would also add that the bad suburbs done good are usually ones within 1-15 km of the city center.

    Yep, I have to agree with you Aussie; as much as some of the more distant areas may pick up in popularity given their affordability, unless (as you stated in another post here) unless it is near water, the chances of them going from bad to good is possible, but to blue chip is not likely (well probably not in my life time).

    Cheers,

    Jo

Viewing 8 posts - 1 through 8 (of 8 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.