WA Perth WA growth areas / suburbs

Hi all

I'm looking for growth areas / suburbs in Perth WA and after lots of research I think some suitable areas may be:
- In the east - Rivervale, Carlisle, Lathlain, Victoria Park, East Victoria Park, St James, Bentley, Karawara
- In the north - Joondanna, Glendalough
- In the south - Hilton, Hamilton Hill, White Gum Valley, Spearwood, Beaconsfield

What do you think?

 

Kinda looks like you just brought up a list of cheapish suburbs that are closeish to the city and near other more expensive suburbs.

Which actually are some decent criteria I would say. But just be mindful they often have reasons for being cheaper and you should make sure you know what they are before buying in.

 

These look pretty good, but I'd encourage you to dig a bit deeper than just the area. For example property type + value add potential. I'd consider:

• How much land can you get in each of these areas within your budget?
• The % of land value to purchase price in these areas (value of block / total purchase price)
• Consider rezoning (you might not develop it, but it drives value)
• Aim to stay at or just below the median house/unit price in each area (as determined by your budget)
• Eliminate pockets / properties with too many detracting characteristics
• Find something you can polish in some way (without too much expense)
• Buy well as there are a lot of buyers looking and you can feel pressured into paying more

Best of luck

 

Whats your price point??

 

I have often thought some of the southern suburbs like Armadale,Brookdale and Kelmscott were very cheap and could grow well proportionally. It's a low socioeconomic area for sure but way below replacement value from what I see. I haven't been down there for over 30 years though.

 

Thank you! You're right it can be difficult not to feel pressured at the moment with the increase in buyer activity and low levels of stock. After reading many threads I think the take home message is that 'bargains' (% land value to purchase price) can be found in all areas.

If only there was a search platform that could filter or sort by $/m2 !

I've read a few of your other posts and I've combined it into an easy 17-step process:

1) Jump on the REIWA map: http://maps.reiwa.com.au/#/marketView?location=-31.95285360,115.85733890&zoom=11
2) Find the closest areas into the city with a median price within 5%-10% of your budget (under and over).
3) Go to: SQM Research - Property - Residential Vacancy Rates - Perth
4) Type in ALL the suburbs you have identified and work out which suburbs had an OKAY vacancy rate through 2016 - 2018 (when the rental market in Perth was bad)
5) Knock out the suburbs which had a higher vacancy rate in the period and shortlist the suburbs that had a lower vacancy - this screen will give you a more steady rental area.
6) Dig a bit deeper than just the area. For example property type + value add potential:
7) Focus on properties 1990s and older, with land areas over 700m2 where the house is a little tired.
8) How much land can you get in each of these areas within your budget?
9) The % of land value to purchase price in these areas (value of block / total purchase price)
10) Aim to stay at or just below the median house/unit price in each area (as determined by your budget)
11) Eliminate pockets / properties with too many detracting characteristics
12) Find something you can polish in some way (without too much expense)
13) Extra Pro Tip: Go to google and type in "{suburb} WA rezoning" - this will help you identify any areas with rezoning upside.
14) Within each of these suburbs understand the micro markets (school catchments, rat race roads, etc)
15) Start creating a shortlist of properties in the 5 - 8 suburbs you shortlisted.
16) Go to AT LEAST 20+ home opens and see what each one sells for to benchmark value in the area.
17) Then after this 4 - 8 weeks' process, start making offers on properties subject to build pest electrical. Make sure you miss out on the first couple (because if you get the first one, you have possibly paid too much)

 

My price point is 600s

 

Very comprehensive list!
I agree with all of it but 17. You may well offer the exact right amount and get a great one on your first go

So maybe I would add 16 a. talk to every REA, network, find out upcoming properties, find out what motivations the Seller may have (is there anything in particular that would make the offer more attractive besides price - long settlement, short settlement, rent back etc etc)
16 b. totally understand the nuances of the standard building.pest.electrical annexures and who they might favour and how they work.

 

Would Admin please put this into the sticky post!? Brilliant summary for newbies. Well done!

 

Hi KayHems,

I have also been extensively researching areas, here is my methodology perhaps you may find value
1. Create a map and pinpoint where all infrastructure and future spending is planned, together with employment hubs (train stations, freeways upgrades, hospitals, shopping centers)
2. Download a list of all Perth suburbs with median price (google)
3. Filter the list to remove suburbs based on their price point to eliminate too expensive / too cheap. Staying near the Perth median is a good rule of thumb.
4. List how many houses&town houses are currently for sale and compare that as a ratio to the 12 month sales to give a feel for how swiftly stock is being consumed.
5. List the average days on market and compare that to the Perth average.
6. Look at the school catchment zones and how the schools perform.
7. Research the zoning and any changes - see council websites.
8. Buy as much land as possible.

The above 17 steps above are great as well.

Following these will help you gain an feeling of how each of the shortlisted properties perform and provides clarity through using numbers to do the talking.

 

The property investors 60 second crash course .
Well done mate.

 

The most important thing I believe here, is to narrow down your search to 1 or 2 areas. Otherwise if you are looking at too many, you won't know a good deal when you see one.
Go to all the home opens in your target area, see what you can buy for your budget. When you see the right opportunity, it will be pretty obvious.
In the current market, you need to be a step ahead.

 

This is all @Kent Cliffe 's work, he deserves all the credit! I'm just good at summarising (and over analysing).

 

Hey Tigress..
When you say understand the nuances of the standard building, pest and electrical annexures and who they might favour and how they work... could you provide me with a 30 second summary of what you mean? Cheers.. looking to make an offer on my first property and want to do it well!

 

Firstly you need to get a copy of them, don't just wait until it's contract signing time and the REA waves them under your nose and said "oh these are the REIWA ones, everyone uses them, just sign here". They are legal documents and there are nuances in them that you might not like.

For example - the standard building and pest is quite nice in that is clearly sets out that you can use it to terminate the agreement, get a discount or get the issue fixed BUT it only covers major structural issues. What if you want to be able to terminate/discount if there is lots of minor structural issues that will cost a lot to fix.

So you need to understand what is covered vs what you want covered. Do you want a get out of jail "subject to B&P to buyer's satisfaction" or do you want to use it as it is and just be covered for major structural issues.

Note that the form says “Structural defects do not include any non-structural element, e.g., roof plumbing and roof covering, general gas, water and sanitary plumbing, electrical wiring, partition walls, cabinetry, windows, doors, trims, fencing, minor structures, non-structural damp issues, ceiling linings, floor coverings, decorative finishes such as plastering, painting, tiling, etc.”. So if you don't read it and assume that the roof is covered and find the tin roof is all rusted out and needs replacing you will be crying in your weetbix.

Then you need to understand how to notify and when you need to notify of issues. There are set times and if you fail them then you don't get the issue fixed.