Professionals Real Estate First home buyers and investors should be targeting suburbs where established house prices are under $350,000 according to David Hobbs, CEO of Professionals Real Estate Group.
Mr Hobbs said that there were currently more than 20 Perth suburbs which had a median price of $350,000 or lower.
“These suburbs offer fantastic value for money when you consider that the median price of a block of land in Perth is now around $250,000. For an extra $100,000 or even less, first home buyers can own an established home, in an established area with no additional expenses such as fitting out the home with carpets or window treatments as well as external landscaping costs. First home buyers of established homes also avoid the cost of renting a home while their new home is being constructed. A number of these suburbs such as Warnbro and Armadale also have rail links to the city centre which can be a major attraction for first home buyers who are operating on tight budgets. For property investors, these lower priced suburbs offer a sound investment based on long term capital growth trends. A good example, is the Rockingham suburb of Cooloongup which has a median house price of $300,000 and the annual capital growth of properties over the last decade here has averaged 12.5%. The land content of many of these properties is more than 70% which means that they have the capacity for even higher rates of capital growth once the real estate market rebounds. Land prices are a key determining factor in property values and there are renewed warnings that Perth will soon experience a major shortage in building land due to our surging population rates and the supply of new building lots. With the latest figures produced by the UDIA showing 6.5% in land sales during the June 2010 quarter following a 6.1% increase in sales during the previous quarter, the risks of a price breakout in land prices are increasing especially if the supply of new building lots does not meet rising demand. A price break out in land prices will have an immediate impact on lower priced properties in established areas as they will be viewed by property buyers as substantially undervalued,” he said.
Mr Hobbs nominated the following 10 suburbs which have a median house price of $350,000 or lower as having the greatest potential for strong capital growth once the property market rebounded:
- Armadale
- Calista
- Cooloongup
- Girrawheen
- Gosnells
- Kelmscott
- Maddington
- Midvale
- Seville Grove
- Warnbro
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