Hi all,
In my neck of the woods there is a suburb which has performed well over the last few years. Let's call it 'X'
'X' is located on the coast (500m to 1Km) and close to a major town centre. Quality schools and public transport (buses) are nearby. Average house prices match quality houses close to the CBD(10Km circle).
There are a number of suburbs between it and the town centre where average house prices are about 70 – 80% that of 'X' and with many land parcels that can be subdivided. They are closer to the town centre, just as close to the coast and the same schools and transport.
Would it be fair to say these suburbs are primed to increase in value given they enjoy the same benefits in location as 'X'?
Would there not be a domino effect as avaliability in suburb 'X' because scarce and expensive?
The only reason I can see they may not, is the high level of state housing currently present.
Any thoughts?
PJ
Hi PJ,
I have found there is a bit of a domino effect. But you will still get die hards who will not live in suburb 'y' just because.
Check the actual school zone. Just because a house is across the road doesn't mean it is in the zone. Some schools have particular zones and if you do not live in the zone you cannot get in no matter what. People will be more likely to buy in that area as the school zone is there.
As far as the public housing goes can you see if those houses are recent acquisitions or if they are planning on selling them off soon, that may help with whether the area will improve.
If the suburbs have a similar feel then I would probably be inclined to go with it, especially the sub-dividable block. This is pretty much exactly what we did we picked the suburb next to the nice suburb. Sure we got some flow on (and made a bucket) but if I could go back, I would have bought in the 'x' suburb as the capital gain that happened was huge (Melbourne tho)
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email Methe price is & always will be related to those surrounding suburbs. Unless something changes dramatically, it will remain @ 70-80 % of the adjoining areas.
Now I am puzzled?
In my scenario above (which is based on actual suburbs) suburb 'X' is further away from infrastructure than suburb 'Y'. That is. schools,shops,transport. They both enjoy coastal proximity (within 1km). Suburb 'Y' offers larger blocks and excellent opportunities to value add.
What we are saying is, location and structure of your rare piece of land is not the driving force of its value! It is the occupants who live there.
They determine whether the streets are well kept, no anti-social behaviour occurs and their homes are maintained. Or not!
Who cares if the suburb ticks all the boxes regarding location, valur add opportunities. If undesirables inhabit the suburb descent rent paying families will not what want to be amongst them. This will kill your investment short and long term.
Sorry if I sound a little harsh, but that is reality right?
PJ
The customer is always right.
It is peoples perception that will rule how much they pay. If they perceive that they are living in an exclusive suburb then that is how it is. Doesn't matter that there are still office of housing people dotted in every area and they live in suburbs that are not really any nicer than the next one along.
The buyer will pay for the idea and the dream.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email Mepropertyjockey wrote:Who cares if the suburb ticks all the boxes regarding location, valur add opportunities. If undesirables inhabit the suburb descent rent paying families will not what want to be amongst them. This will kill your investment short and long term.
Sorry if I sound a little harsh, but that is reality right?
PJ
Well, it may not be as simple as that. The suburb may be inhabited by the 'undesirable' sort today and nobody has a crystal ball. But what if the place polishes up?
Essentially, if you can see that houses in the area are undergoing significant development, with demolition or renovation occurring and very nice, newer-style luxury houses springing up, or quaint period homes in excellent state of repair, then you may be on to something.
On the other hand if all you see are one overgrown lawn after another and with an old bomb or wannabe sports car parked on the said lawns, houses are messy in general etc then it might be a better idea to keep an eye on the area first rather than buy into it immediately.
There's hope for Frankston & Umina yet fword.
It's a hard one!
I am looking for B&H properties I can value add to (mainly subdivide to reduce -ve gearing) and retain a portion for long term growth and eventually +ve cashflow as rents develop.
Suburb 'X' I mention above is mainly high end housing (PPOR) that have been designed to maximise their blocks of land. Suburb 'Y' which flanks it (acually closer to infrastructure) has larger blocks with older houses (20yrs +). The only difference is the current inhabitants.
I think I need to look a little more closely and see if (as 'fword' has suggested above) there are currently any developments happening in the area and in particular whether subdivision is happening and whether these blocks of land are selling.
I am willing to bet that these types of areas will change purely as a natural progression of population in and around infrastructure. What is fringe today will be inner-circle tommorrow.
PJ
propertyjockey wrote:I am willing to bet that these types of areas will change purely as a natural progression of population in and around infrastructure. What is fringe today will be inner-circle tommorrow.My thoughts… your 100% spot on.
Look at Redfern in Sydney's CBD. It's taken a long time, and change is still occurring, but it is slowly becoming a very 'trendy' suburb.
Scott No Mates wrote:There's hope for Frankston & Umina yet fword.Haha, that's right! Frankston has potential. A workmate used to stay in Bentleigh East. He then bought a place in Frankston, uprooted his whole family there and sold the Bentleigh property. He believes Frankston has plenty of room to move upwards. The guy must either be very sure of his research or completely deluded to actually uproot from an old home near Melbourne CBD and move further away.
I'm not familiar with Umina, but would you be referring to Umina Beach? Some weeks ago my uncle made a broad comment about the almost certain ginormous gains of buying stuff that's near the water. That's an extremely sweeping statement. A newspaper article I remember reading some time ago however, suggested looking for the three Cs when buying property. These might have been 'coast', 'coffee' and 'cake'. That is, buy a place near water and near trendy cafes. But the hidden C is 'cost'. Such property would be pricey indeed.
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