Where to invest in the next 12 months

Two property experts have shared their suburb recommendations for investors looking for quick capital gains, with buyers wishing to capitalise on shifting population demographics warned that they should be prepared to get their hands dirty. 

Buyers seeking a quick return on investment have been told to target properties primed for renovation in up-and-coming suburbs, according to the recommendations of two property experts.

Peter Koulizos, property lecturer and author, believes that investors should target older housing stock in Adelaide’s inner west if they are looking for quick gains.

“I’d say [people should look at] the inner suburbs of Adelaide, in particular Torrensville, Croydon and West Croydon. They’re all undergoing gentrification. People are moving in, paying good money for the period homes in the area and then paying good money again to renovate the properties or extend the properties,” he explained.

The development of a thriving retail precinct in these suburbs is likely to underpin their growing popularity with buyers and renters, according to Mr Koulizos.

“You’ll see that Queen Street and Elizabeth Street in Croydon have certainly come up in recent times; it’s like a mini King Street in (Sydney’s) Newtown, with a lot of little quirky shops and cafes and the same with Henley Beach Road in Torrensville,” he said.

Investors should seek older houses in these suburbs – many of which remain in an unrenovated state.

“If you want to buy there I’d say stick to the older style homes, the period or character homes. It doesn’t have to be a better quality, it just has to be an older house, because the investor themselves can fix it up as far as quality is concerned.

“The median house price is probably around $500,000 for a typical period-style home on about 700 square metres of land, and you’re only three or four or five kilometres from the city,” he explained. 

Matt Knight is the director of buyer’s agency Precium, which is based on the New South Wales south coast.

Mr Knight believes that savvy investors can still jump on to the growth being experienced in Shellharbour and surrounding suburbs, so long as they choose their property wisely.

“The best value is probably offered by some of the ex-housing commission homes in the streets that are experiencing gentrification. These are generally closer to the water. Investors need to be cautious of the high-density public housing areas,” he said.

Investors buying this type of stock need to be prepared to make further investments on upgrading the property, and may need to look beyond initial appearances. 

“It depends on your tolerance for renovations or street-lifts, because there are some housing commission areas and investors do need to be careful. If you buy ex-housing commission stock you should be prepared to do significant renovations straightaway to improve the rental return that you’re going to get, and also the quality of the tenant,” he explained.

Mr Knight believes that the Shellharbour area has already benefited significantly from the influx of families pushed out of the expensive Sydney market, and warns investors to be careful not to pay inflated prices.

“People commute to Sydney, and Wollongong has a diverse service sector and retail and CBD, and people commute to Wollongong.

“There have been considerable gains already, so the market is well off the bottom, which means you need to be very careful not to overpay,” he said.

Where to invest in the next 12 months
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