The Perth market will continue to perform in the new financial year if you know where to buy.
Blogger: Rory O'Rourke, O’Rourke Realty Investments
Spending on new infrastructure will drive property prices in's hotspots over the coming financial year.
While the overall market is expected to remain subdued, I believe there are several areas that will achieve double-digit capital growth as has been the case over the current financial year.
One way of identifying hotspots is to follow where highly successful property development companies are investing or planning to invest. These companies historically have the resources to undertake detailed research to determine future areas of strong housing demand.
For example, the highly regarded FINBAR property development company is now investing very heavily in the South Perth foreshore area. They have just gained approval for a $380 million apartment tower, just one of several developments in the area around Mends Street.
A similar trend is happening in the Scarborough foreshore area, with leading developers taking advantage of more than $50 million in new government investment to upgrade the area as well as taking advantage of more relaxed higher-density zoning.
Developers have also been active in the central-Midland area and this is expected to accelerate with the federal government just announcing funding for a new medical school for doctors as part of the local Curtin University.
Forrestfield is also likely to be targeted by developers, with the government still planning to proceed with the $2 billion Forrestfield-Airport rail link. It is expected that the 250 hectares around the proposed Forrestfield terminus will become a development hotspot, with high-density residential and commercial projects as well as a new shopping centre.
The central business area of Clarkson surrounding the train station is also being targeted by apartment developers and this in turn will have a positive impact on surrounding property values.
Astute investors should focus on areas where highly successful developers plan to invest, then get in early by purchasing older stock in the areas that have the potential for price rises once new developments are completed.
For example, in Scarborough there is still a good range of investment properties in the area priced below $500,000 that offer investors good rates of rental return.
Similarly, in South Perth you can also buy older one- and two-bedroom apartments for under $500,000.
The central Midland area has also a wide range of affordable housing opportunities, as has Forrestfield.