WA Perth market 2019

Traditionally when Perth booms, Armadale and Mandurah don't boom or don't boom nearly as much. Next time could be different. Who knows? But IMO you are rolling the dice.

Personally, I think Gosnells has more potential upside because it's much closer to the City.

 

Perth isn't like Sydney. Those areas are undesirable and very far out (more applicable to Armadale). Would be tough renting them out as you'd likely have difficult tenants.

 

It's a lot of hope and pray on that.
I would certainly pick Gosnells over Armidale though if I had to chose.
They are the equivalent of Mt Druitt type areas so you'd be upping the risk category in terms of damage, not paying rent etc etc and would need landlord insurance for sure!
In terms of development you want to pick a location that isn't already over run with development product.

 

Some ares of Armadale are very quiet (dead) and unloved to drive around. Also lots of new land releases on southern edge. Widely known in Perth as a problem suburb crime/drugs unemployed etc.

Gosnells another varies by area within the suburb.

Search for Thornlie on here some positive comments. This one was closer to $300k
This one within walking to a train station and close to Roe Highway for access
13 Partridge Way, Thornlie, WA 6108

 

Cheap doesnt always represent good value...

 

The capital gains wave moves from the inner out, so you're probably waiting longer in the cycle for stigmatised areas like Gosnells to really appreciate well in a cycle, if the boom cycle even lasts long enough to catch it. Personally I think Armadale will need 10+ years and another million population in Perth to see it perform well, I would avoid.

If I was thinking Gosnells, I'd be looking one or two suburbs closer in to the CBD. Suburbs like Thornlie, Langford, Kenwick etc that are a bit closer and adjacent some higher price suburbs. Marginally more expensive (though still dirt cheap at this point) but they will generally have sightly higher rents and quality of tenant plus will perform better and sooner in terms of CG.

 

Hi, any thoughts regarding the strategy of land banking?

There are lands rezoned to residential in Byford and Mundijong area of at least 5 acres each. Most of them have dwelling on it, providing a rental income while holding it. And many are sold at a relatively low price..

I understand it might take a long time for such lands to be developed due to the availability of lands here still. But if Perth is to add another million to it, areas like Mundijong, Serpentine etc will have to be developed and used to house the increasing people?

 

What time frame, 100 years?

If you look at maps of Perth there are still large areas in better locations that can be developed. Plus still a long way from "developing" every 600+m2 block with a single dwelling on it in Perth greater area.

The only reason I would live out there is for the rural lifestyle of a 5 acre block.

 

You would have to check government long term strategic planning.

 

Thanks for that. Fair call, considering the price disparity is only a few ten's of thousands! Do you think it doesn't boom as much because the city is so spread out up and down?

 

Yes they would have to be not as desirable, I actually went on the ground to have a look myself... Armadale kinda reminds me of the outer West 20 yrs ago (from vague childhood memories)... Gosnells is very much like the outer West now.

 

So true! I've realized that a LOT of Perth has blanket zoning or proposed rezoning for 1 into 2 or 1 into 3 type blocks... so would be a while before infill spreads out, but then the yields aren't attractive for areas closer in! Decisions, decisions...

 

Ah ok - best to have local, local, local knowledge for those areas then eh... thanks for the suggestions for Thornlie, I did have that one on my shortlist but it's gone under offer. Do you think transport (train) links are as important now? Think most locals just drive everywhere? Of course in 20 years time it'd be a different story...

 

Thanks for your insights, hmm suburbs closer in - Cannington perhaps?

 

I honestly don't know. I held in Mandurah during the last boom and prices just didn't move up much. That said, it could have been my product (2x1 unit), because the market was flooded with them. I think the stigma of Armadale affects prices there. It's also very far from the city. If you have a look a Butler, Bullsbrook and Baldivis, they are all lower priced and all far from the city. Who knows what will happen in 20 years but I would rate them all as a gamble.

 

Like all cities, you can;t just look on google maps and make a decision.

If you're serious, fly here and one of us will take you around.

 

Pockets within Beckenham is probably a better investment choice to take advantage of the next cycle. At 20kms, it is closer to the city with better road links than Thornlie, Langford and doesn't quite suffer the same crime publicity as Gosnells. It has very good links to Albany Highway, Carousel shopping centre, airport and the Beckenham train station has the bonus of being express to the city.

 

Beckenham's only 13km drive/train from the CBD actually. I agree, probably better CG potential here if you have the budget compared to the adjacent suburbs to the east & south. However, sub dividable blocks in Beckenham are comparatively more expensive and lower yield, so land banking here is more expensive in the short term. All depends on your budget I guess.

 

As someone who previously made money from both Gosnells and Armadale, I say they have their place and you REALLY need to know what you are buying. Buying anything, anywhere and expecting a good outcome is a no go.

Both suburbs have generalized stigma. They also have good streets and nightmare streets. Without going into a whole lot of detail, I can say for certain money can be made in suburbs like these - just have to be very picky and know the area well.

Not that long ago, I helped a friend close a deal in Gosnells. Low $200k's 6+% something yield with long term tenants on a block with subdivision options. Works for his circumstances and he'll do well. Buying a livable house in good parts of the suburb is crucial and that kind of knowledge doesn't come without being on the ground and knowing the area well.

Stock in Armadale was routinely selling for $330k+ in the last mini-boom. The same stuff can be had for $160k now, nearly 50% drop in value but when it eventually goes back to previous medians, that is 100% growth. Very temping but no rush to jump in just yet.

Having said all that, I know that some investors will just buy anything there because it is cheap - a terrible mistake. There are some parts of Armadale that never went past $250k even in boom times, while land in new estates very close from there was selling for $200k+. Go figure.

 

When Beckenham comes off its high horse we can talk. It is a bit inflated at the moment. A shopping center is not going to magically change everything. Buy-in price, demographics and transport links have more say. The train station in Beckenham is a joke, split across two sides of William st. All the commercial shops on William St don't add squat to Beckenham's value.

Both Thornlie and Gosnells did quite well in the last boom - goes without saying - past performance is not an indicator for future performance.