As markets change, so does the type of property that gives you the best opportunity for growth.
Today’s market is extremely contradictory, some properties are selling at record prices with fantastic competition, while others are being passed in at levels that would have been good value a year ago.
What we are seeing is properties with a distinct point of difference recording the strongest growth. The problem is, these same positives create strong competition. If your in it for the long haul than thats ok, but keeping these properties for at least 10 years to realise the growth becomes a must, not an option. For the well healed it is no problem, but if there is a chance you will have to sell before that 10 year time frame, you may not see the gains you where hoping.
There is another type of location that can see solid growth, yet not demand that premium. Melbourne is still experiencing population growth of over 1500 people per week, suburbs that are absorbing that growth and are still very reasonably priced are another attractive option.
Buyer beware though, there are many of these areas but only a few that have the other non negotiable factors that go into purchasing in this type of area. There are certain suburbs, in fact specific regions within suburbs, that have been earmarked for redevelopment. Be it a renewal of the parklands, new/updated train stations, roads etc.
These suburbs may currently be undervalued and usually have a certain stigma about them, the most obvious examples are places like Footscray, Preston, Ascot Vale etc. The reason why they are undervalued is usually because of a lower socio economic group residing in the area which some people do not relate to or find as desirable.
Why will this change?
Simple, as population and competition increases so do the prices in those areas. This makes it desirable for the residence to cash in and move onto other suburbs, or may make it unaffordable for them to continue to live in that suburb. Over time, the socio economic diversity of the area increases and it becomes more desirable for a larger portion of the population.
Take a look at the people that lived in Port Melbourne, Northcote or Brunswick 15 years ago and look at those suburbs now…
Research is the key to finding out what areas will be the new Northcote’s, speaking to councilors and familiarising yourself with the Melbourne 2030 Plan are a start but seeking advise from professionals in the field is a must before investing in this type of real estate.
To find out more call Nyko Property and speak to our experience Key Account Managers.