Investors seeking to generate quick returns and double their investment within 12 months can target two vastly different suburbs.
Buyers looking to purchase and then extract equity quickly should look to suburbs surrounded by strong-performing markets set to benefit from new infrastructure, based on the suggestions of two prominent buyer's agents.
Deborah West, principal of SydneySlice, believes that the inner-Sydney suburb of Randwick is set to grow on the back of buyers being pushed out of neighbouring Surry Hills and the confirmation of a new light rail service.
“Other surrounding suburbs have experienced very strong growth, for example Surry Hills, Coogee and Clovelly. So purchasers who have been priced out of surrounding suburbs are moving towards Randwick as a suburb. There’s good potential growth there because of its close proximity to the CBD, it also picks up the lifestyle advantages of the beaches and Centennial Park, with close proximity to both,” Ms West explained.
Ms West believes that the establishment of a light rail line into Randwick will give the suburb’s culture greater publicity and increase its appeal to city commuters.
“The light rail coming through that area is definitely going to give it a very big boost in terms of growth and access to the city direct from Randwick. It offers a great lifestyle,” Ms West said. "It’s just been under-appreciated, it’s been a little pocket that’s sat there and has been under-recognised and the light rail will open it up."
SydneySlice has already assisted several clients to make purchases in the area, with Ms West recommending a one-bedroom apartment as an ideal entry to the market.
“We’ve bought several properties there for investors over the past 12 months and we’re seeing growth in yields and capital growth. In terms of a good investment in the suburb, we think you can still get a one-bedroom apartment for around that $500,000 mark – a good investment option in the current market,” she said.
With this style of investment, buyers can expect to make solid returns in terms of capital growth and yield, she said.
“From a yield point of view, in addition to capital growth, there’s good rent in Randwick because of the University of New South Wales and from the Prince of Wales Hospital,” Ms West explained.
Zana van de Graaf, of Perth-based Property Buyers Services, nominated the suburb of Wilson as a market set to capitalise on its close proximity to new infrastructure projects and changes to rezoning laws.
The suburb is just south of the Canning River and is in close proximity to suburbs which are already performing in the higher echelons of the Perth market, she said.
“Wilson is a small suburb down by the river side. It is proximal to some very expensive suburbs such as Shelley, Manning and Rossmoyne. The ripple off effect that is already happening in Wilson will help its performance next year."
Despite this, prices in Wilson, particularly land values, are yet to catch up with its affluent neighbours.
“The blocks of land in Wilson are some 30 per cent to 50 per cent cheaper than in Shelley and Manning,” Ms van de Graaf explained.
Along with surrounding suburbs, Wilson is also set to benefit from the completion of state government infrastructure projects in the south, she said.
“Perth suburbs south of the Canning River are to experience further growth due to the relocation of the footy stadium and the completion of the Fiona Stanley Hospital."
New rezoning laws will give buyers the potential to further capitalise on the suburb's appeal with families and CBD commuters, according to Ms van de Graaf.
“Wilson is around 15 to 20 minutes’ drive to the Perth CBD, has very easy access to the airport and new hospital plus an abundance of old houses on big blocks very close to the river,” she explained. "It is also close to Curtin University. There are very good primary schools in its vicinity and two excellent secondary schools to choose from. Rezoning will only help its future growth as more people are now buying three or two bedroom properties on smaller size blocks."
In light of these rezoning laws, the key to solid capital growth in Wilson is giving greater weight to the land aspect of any potential purchase.
“Rezoning in Wilson is offering great opportunities for development of these properties and they are built according to some very good urban planning lines. Land is still under-appreciated in this riverside locale so any property with a strong land component in Wilson, be it a big block with an old house or a survey strata property will have a chance to double up the deposit.”