Annual Recommended Suburb Performance Report 2014

Nyko Property’s  recommended suburbs  outperformed the Melbourne market by 63% and the Australian market by 54% in the 5 years from March 2008.

Nyko Property vs. Melbourne

 

 

 

 

 

 

 

 

 

This was due to careful selection of up-and-coming suburbs in undervalued regions of the inner north and   west  of Melbourne  that  were   poised   for growth. Four of the six suburbs Nyko Property selected in 2008 and 2009 had a lower socio-economic demographic  at the time of sale. However due to their close proximity to the CBD and large Government infrastructure programs we identified they would experience rapid gentrification and capital growth.

The best performing of these suburbs was Thornbury, growing at an average  of 8.99% per annum during that time, an improvement of just under 100% on the Melbourne Median.

One  of the key factors considered  when selecting suburbs, and  indeed  locations within suburbs, was the areas  relevance to Plan Melbourne –  the Governments plan for a more efficient city.  With the fastest growing  population  in Australia, 106,800 people  in 2012-2013, and  the demographic  changes occurring, selecting the correct property types was also vital.

There is now an average of just 2.6  people  living in each  Australian household according  to the latest Sensis. This indicates the properties that performed well in the past are not necessarily the properties that will perform well into the future. Along with the population growth and demographic  change, the ‘new normal’ market which will consist of shorter property cycles (dropping from the 7-8 year cycles we are used to down  to 3-4 year cycles driven by consumer confidence  and the merry-go-round of reporting which affects it) will provide opportunities for continued growth within Melbourne.

However, the days of purchasing the ‘one next door’ and making strong capital growth are behind us. For property investors to realize those returns in the future they will need  to be much more strategic in selecting locations and the properties they buy within those locations.

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