Property investors target 'turbo charged' suburbs

With the start of a new financial year fast approaching, a growing number of investors will consider purchasing a rental property according to David Hobbs, CEO of Professionals Real Estate Group.
Mr Hobbs said more property buyers should consider purchasing a home in lower priced ‘turbo charged’ suburbs when looking at their investment choices.
“These ‘turbo charged’ suburbs have a median house price of $450,000 or under and have achieved an average annual capital growth rates in excess of 13.9% over the last 10 years. This compares to the suburb of Dalkeith, which has a median house price of $2.65 million and the median price rose annually by 13.5% during the last decade. In addition to Craigie, other ‘turbo charged’ lower priced suburbs which have achieved an annual average capital growth rate of more than 13% during the last decade include Bertram (13.3%), Calista (14.4%), Clarkson (13.3%), Ferndale (13.2%), Girrawheen (14.1%), Golden Bay (13.4%), Koondoola (13.9%), Lynwood (13.3%), Medina (15.3%), Middle Swan (15%), Queens Park (13.6%), Rockingham (13.6%), Seville Grove (13.3%) and the Mandurah suburb of Coodanup (13.4%).”
“Astute property buyers should take a 10 year approach to buying an investment property to absorb the fluctuations of the real estate market. Buying and holding an investment property for 10 years allows the investor to capitalise on the high capital growth which real estate can deliver over the long term. Many of these lower priced suburbs have older style homes where properties can effectively be purchased at near land value. The lot sizes in these older suburbs are generally over 700 sqm which means that in future years there could be subdivision opportunities due to the government’s commitment to encourage more infill residential development to curb urban sprawl. Property prices in these lower priced suburbs are now at rock bottom with a large number of homes currently listed for sale. However, it is only a question of time before property prices in these areas return to their long term average growth rates meaning that investors who purchase now can quickly turbo charge their personal wealth.”
“Another major incentive for investors to purchase now is that weekly rents are now rising in these lower priced suburbs due to falling vacancy rates. Professionals offices are now recording rental vacancy rates of less than 2% in a number of lower priced areas of Perth and as a result, rents are now beginning to increase after several years of stagnation. This trend of rising rents should continue during the coming year as the economy continues to gain traction placing further pressure on the rental market,” he said.
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