08 Feb 2007 10:04 PM
|saw this in the WA newspaper this morning and thought it might be of interest to some
Snapshot picks the next top performing suburbs
8th February 2007, 6:00 WST
Carramar, Ellenbrook and Port Kennedy will be among the top performing Perth suburbs during the next five years, a new snapshot of the housing market has predicted.
The annual report by Hegney Property Group, to be launched at a breakfast function today, includes a list of 21 hot suburbs expected to be top market picks in the medium term.
Hegney managing director Stewart Kestel used data from national analyst Residex to select the top three suburbs for price growth in seven regions across the metropolitan area.
He predicted house prices in these suburbs would increase at least 9 per cent per year on average and some would increase 12 per cent or more.
The top picks are Mindarie, Carramar and Iluka in the north-west, Landsdale, Ellenbrook and Pearsall in the north, Redcliffe, Southern River and Wattle Grove in the southeast, Ridgewood, Stratton and Kiara in the east, Atwell, Canning Vale and Beeliar in the Fremantle region and Port Kennedy, Secret Harbour and Erskine in the south.
In the near-city area, Gwelup, Mt Claremont and Cottesloe would stand out from the pack.
Mr Kestel said the list reflected the strength of suburbs that were well located and well established.
09 Feb 2007 2:29 AM
|I hate to be a party pooper, especially since I live in one of these suburbs, but this is pretty typical from the West Australian. Not a week ago they were running stories from equally high and mighty forecasters saying why several of these suburbs were likely to tank.
Similarly a few weeks ago they were talking about the market as a whole collapsing. Then it was why it was only going to be a mild correction. A couple of weeks before it was stories on why real-estate would continue to boom and it wouldn't be the usual cycle of boom and bust. Guess what - they don't really know but it generates a few column inches for the Authority pronouncing ex cathedra on market performance and sells papers to people looking for guidance in an uncertain time.
Similar stories will appear periodically about a) the mining boom is about to collapse b) the mining boom will continue for the foreseable future at rates of 100000000% pa (I exagerate slightly for effect).
The moral of the story #1 - newspapers run whatever story or angle they think will get most attention/readers. That generally means whatever is tacking against the prevailing wind.
The moral of the story #2 - journalists aren't necesssarily better informed than the rest of us. But they do have blank paper to fill regardless of whether there is any real news.
The moral of the story #3 - Most of us look for positive reinforcement. I.e. we'll clutch at stories or items that confirm we made the right choice (where we are uncertain) or that pander to our prejudices and place less store by those that contradict our preference. So try to consider the impact on you of both situations being true.
And my final thought. Property goes in cycles. Sometimes it is a buyer's market; sometimes it is a seller's market. We've had a very large increase in prices, history suggests they probably will/have overshot a little and will fall back a bit. History also suggests if you don;t panic and can tough it out and avoid selling for a year or two (normal end of cycle) or five (big overshoot) you will avoid losing much/any money even if you bought at the peak (well short of a major economic depression).
In my humble opinion, pick somewhere you like to live in. Generally pick the nicest area you can still afford if interest rates were to rise a bit. That way should the worst happen you've somewhere nice to stay and hopefully someone else will think so too if you need to sell.
My own observations on the property market as an investment follow. I am not a property professional and I reserve the right to be as wrong as the average story in the West.
1 Try to pick somewhere with decent infrastructure or that is pretty or where the average quality of house seems to be going up through lots of new builds (of a high quality) or lots of renovation.
2 If people with nice cars, that care about their house and gardens are settling there it is probably on the way up or won't tank too badly.
3 Avoid areas that are becoming full of poor minorities (unfair I know but despite what they _say_ most people still avoid such areas if they can and white flight is a real phenomena - I'm talking sound investment not sound morals).
4 Avoid areas that are subdividing existing properties en masse (they are generally going downhill) ubless you are a hard-nosed investor doing some of the subdividing or really know your location.
5 Ok suburbs next to good suburbs that have priced up recently are a good investment since people that would like to live in the good suburb and can't afford it might pick the cheaper one next to it providing it is OK.
6 By the time 'everyone' notices something you've missed the boat. As an investor once said 'when the bell boy says it is time to buy, it's time to sell.' And vice versa.
On maxims 1 and 5 then some of the areas mentioned may well do well (I certainly hope Ellenbrook is one and several of these areas are those I meant in an earlier post when I suggested there are still some nice houses in reasonable outer suburbs at not too silly prices) but I wouldn't rush in to buy unless you like the area. ||