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Small-scale developments, big returns: Where smart investors are looking
Investors targeting small property developments with strong capital growth and cash flow potential should consider these five locations to maximise their returns.
New data from Propell Property has revealed the top regions for constructing future small property developments, as investors see potential for strong capital growth.
According to the report, the Moreton Bay, Ipswich, and Gold Coast regions in South-East Queensland, as well as northern NSW and Geelong in regional Victoria, were considered ideal for small developments.
Propell Property managing director Michael Pell said the regions shared similarities, including low housing supply, and opportunities for investors to build duplexes to secure strong future capital growth.
He said the duplexes both add to rental stock and increase the overall supply of housing in the area.
“Depending on the location, investors with budgets of between $800,000 and $2 million can successfully undertake this strategy.
“But it’s important for them to understand that it isn’t for novices – unless they work with people who have plenty of experience under their belts,” he said.
Geelong, regional Victoria
Pell said that investors with budgets exceeding $600,000 for either a property investment or a future small-scale property development should consider Geelong.
“Not only is Geelong currently at the bottom of its market cycle, but the region is right on the doorstep of desirable coastal locations such as Torquay, Bells Beach and Lorne,” he said.
Additionally, Geelong is just an hour from Melbourne, with strong demand from both home buyers and investors.
“Geelong offers the possibility of significant capital growth and strong cash flow well into the future,” Pell said.
Gold Coast, Queensland
The Gold Coast has been a hotspot for investors with budgets over $1.2 million, with the region experiencing strong market conditions in recent years.
Pell said the Gold Coast has much to offer, with a strong projected population growth over the next decade.
“When it comes to strategic property development, though, you couldn’t ask for a better location given the coast is so land-locked, with the hinterland on one side and the ocean on the other,” he said.
“There is talk of lowering the minimum lot sizes, too, with investors currently buying good-sized lots of land, including corner blocks, for future duplex development.”
Ipswich, Queensland
Forecast to change in the coming years, Pell said Ipswich in Greater Brisbane is optimal for investors with budgets around $850,000.
“Ipswich is to Brisbane what Parramatta was to Sydney in 2000, and we all know how much Western Sydney has skyrocketed since those times,” he said.
He added that the region was projected to be the top location for population growth over the next 10 years, with a range of major infrastructure projects underway.
The projects include a new train line to Ripley and an upgraded highway in Brisbane.
“Western Brisbane is set to fundamentally change in the years ahead, with the smartest property buyers making their moves now,” Pell said.
Moreton Bay, Queensland
Pell said Moreton Bay has been a prime location for investors, with budgets of $800,000 for standalone houses and up to $1.3 million for small property developments.
He said that, similarly to Ipswich, Moreton Bay has a strong population growth forecast for the years ahead, which will continue putting upward pressure on the property market.
“We have been active in the Moreton Bay region for some time and have helped many clients build duplexes on blocks of land from about 500 square metres to 600 square metres,” he said.
“Opportunities still exist in a number of pockets in the region, including Morayfield and Narangba.”
Northern NSW
Northern NSW has been a focus of investors with budgets above $1 million, with key areas being locations north of Yamba to Kingscliff and Cabarita Beach.
He said that while the price points are higher in the region, new dwelling supply has been mostly underwhelming for many years.
“These coastal communities are also benefiting from more people moving out of Sydney for property price considerations, but also because they can work from home,” he said.
“They are prioritising lifestyle and family time, and these pristine coastal areas give them the opportunity to achieve both.”