Six suburbs in one state will deliver solid returns this year and beyond if investors get in before prices keep rising, say the experts.
Despite continuing focus on Perth’s depressed property market and the woes of mining towns, there are six areas within Western Australia that are primed for imminent capital growth. Here, the experts offer their predictions:
Glen Iris / Eaton
wHeregroup’s Todd Hunter told Residential Property Manager's sister publication, Smart Property Investment, that following price cuts across Western Australia, investors can grab cash flow-positive properties in this region for less than $330,000.
Glen Iris has cleaned up considerably, which has enabled investors to charge higher rents and attract quality, long-term tenants, Mr Hunter said. But investors still need to be wary of the property they buy.
“In 2000 to 2006 there were house and land packages for four-bedroom houses, but bedrooms two, three and four were tiny. Tenants and owner-occupiers avoid these, and so should you – it will be reflected in your sale price in the future.”
This area, in Perth’s outer southern suburbs, is benefiting from the “extremely well-serviced Rockingham”, according to Destiny’s Margaret Lomas.
It remains an affordable alternative to surrounding suburbs, according to Ms Lomas, and investors should target properties in the mid-$300,000s to see the best results.
Seville Grove / Brookdale
These two suburbs sit within the local government area of the City of Armadale, which is experiencing a population growth rate of more than 5 per cent, according to Mr Hunter. This, he said, is putting significant pressure on quality rental stock.
Mr Hunter said the release of commercial and industrial land is boosting local employment.
He told Smart Property Investment investors who get in quickly before prices start to rise should get a good deal for under $350,000. He said the best returns would likely be generated from freestanding houses that are “neat and tidy”, and properties with subdivision potential.
Baywater’s affordable entry price, strong auction clearance rates and low level of stock indicate it could be primed for continuing capital growth, according to Hotspotcentral’s Michael Fuller.
The suburb has strong yield potential for investors who purchase well, Mr Fuller said.
Medina is an affordable alternative to neighbouring Kwinana, but could still benefit from state government projects, job creation and population increases, according to Ms Lomas.
She said the suburb's prospects are bolstered by the fact that it is “well-serviced and near a major arterial freeway and the coast”.
This area of Mandurah is starting to recover from a downturn in prices that began at the end of 2007, Mr Hunter said.
Astute investors can still find good buys in the suburb, according to Mr Hunter, who recommended investors target four-bedroom, two-bathroom houses on good-sized blocks with renovation potential.
Mr Hunter said investors shouldn’t pay more than $360,000 and should avoid Coodanup, a suburb to the south with “too many tenant issues”.