Today's ugly ducling suburbs are tomorrow's real-estate swans, says Aussie property expert.
Real estate investors, in particular first home buyers, are being urged to target Australia’s cheap ‘Ugly Duckling’ locations, poised to evolve into future ‘real estate swans’. Brits who are relocating and able to capitalise on the favourable exchange rate, could benefit even more than most from investing in property in up-and-coming locations at this point in time.
National property researcher Terry Ryder of www.hotspotting.com.au has said that Ugly Duckling suburbs offer the best growth prospects in the current property market – and has compiled a list of the locations he perceives as having the best potential for future growth.Mr Ryder said such area are usually undervalued and stigmatised as ‘down market’, but can present significant potential for future property price growth.
“Now, more than ever, the affordable ‘Ugly Duckling’ suburbs – which are considered unattractive by those looking through uneducated eyes, but have the potential to transform into something completely different and highly appealing – ¬are the ones with the best prospects”.
“With ongoing interest rate reductions and big increases in the First Home Owners Grant, buyers need to focus even more intensely on the cheaper areas of our major cities as they will deliver the best future price growth.”
Mr Ryder has recently completed a new National Top 12 Ugly Duckling Hotspots report that highlights his leading independent recommendations for real estate investors.
He said all locations in the report have typical property prices below or around I hav ea A$300,000 (approx £130,000), but stressed they must be more than just cheap to qualify.
“The first feature of an ‘Ugly Duckling’ is affordability, but not all cheap locations have strong growth prospects. To be worth a look, an area also needs to have clear reasons for it to evolve into a future swan,” he said.
“Successful investors need to identify those locations that have underlying contributing factors or ‘big kickers’ to out-perform the market in coming years. These include major projects and government initiatives which generate economic activity, jobs, improved lifestyle and community appeal and, most importantly, convenient transport links.
“Public transport, especially train connections to cities, is now arguably the biggest driver of price growth in Australian real estate and plays an important role in the future prospects of all Ugly Ducklings.”
The National Top 12 Ugly Duckling Hotspots are (in alphabetical order):
Cabramatta, NSW
Centre of an economic/population growth area; emerging as a popular precinct for Asian cuisine and cultural festivals; AA$500m revamp of Liverpool hospital; reduced unemployment and crime
Typical price: AA$350,000 (approx £151,000)
Dandenong, VIC
Transit Cities program; A$290m in State Government spending; A$1b rail upgrade, EastLink tollway; A$250m Metro Village; multiple economic and jobs generators
Typical price: A$280,000 (approx £121,000)
Elizabeth, SA
Expansion of Edinburgh Defence Base; A$550m Northern Expressway; A$300m hospital redevelopment; rail links; multiple housing programs, employment nodes
Typical price: A$170,000 - A$200,000 (approx £74,000 - £130,000)
Epping, VIC
Transit Cities program; A$500m Craigieburn Bypass; A$600m Plenty Valley Town Centre; major retail, residential and industrial projects
Typical price: A$290,000 (approx £125,000)
Frankston, VIC
Transit Cities program; A$700m Frankston Bypass; Frankston Foreshore development; 300-berth marina; Frankston CBD project; various retail expansions and new projects
Typical price: A$290,000 (approx £125,000)
Gawler, SA
Upgrade of rail links to Adelaide; A$550m Northern Expressway; new residential development; strong tourism industry; proximity to Barossa Valley wine precinct
Typical price: A$220,000 (approx £95,000)
Hobart, TAS
Greatest concentration of affordable suburbs within reach of first home buyers of any capital city in Australia
Typical price: A$200,000 - A$300,000 (£86,000 - £130,000)
Ipswich, QLD
A$1b Ipswich Motorway upgrade; duplication of Centenary Highway; upgrade of rail links; A$5b government infrastructure projects; A$12b Springfield community; RAAF base expansion; new retail, industrial and residential projects
Typical price: A$250,000 - A$320,000 (£108,000 - £138,000)
Melton, VIC
A$15b Melton growth plan; A$330m Deer Park Bypass; upgrade of Western Freeway; integrated Toolem development; strong population growth
Typical prices: A$190,000 - A$230,000 (approx £82,000 - £99.000)
Port Noarlunga, SA
Overlooking Gulf St Vincent; solid long-term growth; good rail and road connections to central Adelaide; planned rail extension further south; retail, sporting and community facilities
Typical price: A$300,000 (approx £130,000)
Rockingham City, WA
Seaside location; employment nodes nearby; new Perth-Mandurah rail link; A$160m expansion of Rockingham City shopping centre
Typical price: A$330,000 (approx £143,000)
St Mary’s/St Clair, NSW
Redevelopment of 1,545 hectare ADI site; M4 Motorway; WestLink M7; retail distribution facilities; industrial and business development
Typical price: A$260,000 - A$330,000 (approx. £112,000 - £143,000)
As well as identifying future growth drivers, Mr Ryder said property buyers in Ugly Duckling locations need to extract emotion from their investment decision-making.
“There’s a barrier that investors have to get over before seeing the potential in Ugly Ducklings. They need to avoid the emotion that sometimes clouds decisions about real estate,” he said.
“Rather than focusing on the perceived reputation of an area as ‘down market’, investors need to take notice of the activity that is underway or planned, which will impact on the decisions taken by people to live there.
“There are many examples of transformed ‘Ugly Ducklings’ throughout Australian cities – such as Richmond in Melbourne, Balmain in Sydney and Bulimba in Brisbane, which have evolved into trendy, highly sought-after residential locations.
“For property buyers, the challenge is to get into these areas before they are ‘discovered’ and prices take off.”
Source: www.hotspotting.com.au