Key Drivers Which Identify Future Capital Growth


As an Estate Agent, I’m often asked what is a good suburb or area in which to invest for good capital growth over the long term, so I’d like to share with you, the Key Drivers which I believe help identify suburbs which represent good future capital growth over the medium to long term.

 

Government Spending On Infrastructure:

Wherever you see new roadworks, hospitals or train stations being constructed, this is in preparation for future growth in population in that area. The government has always been on the front foot when it comes to providing good infrastructure for new communities. The government is currently constructing the railway line out to Wollert as at August, 2017, to cater for the influx of rail commuters planning to call Wollert home in the coming years.

 

Construction Of Fast Food Chain Stores:

Another sure sign of future growth. A good example of this is the McDonalds outlet opening up in Wollert. Nothing much is happening there at the moment, but the Northern suburbs will be home to the future transport hub, servicing the Melbourne/Sydney transport route. This will bring many jobs and huge population growth in that area.

 

Proximity to transport services:

AS mentioned earlier, The government is currently constructing the railway line out to Wollert as at August, 2017, to cater for the influx of rail commuters planning to call Wollert home in the coming years. Land developers look for land which is close to major rail networks leading into Southern Cross Station, as well as major freeways and arterial roads. This can be seen by current developments in Diggers Rest, Rockbank and Wollert which are close to the Hume, Western and Calder Freeways respectively. The government recently totally rebuilt the Diggers Rest railway station, electrifying thee line right through to Sunbury, with complete refurbishment planned for the Rockbank station as well as a new station planned for Atherstone on the edge of Melton.

 

Shopping Centre Upgrades:

This can be clearly seen in the $150,000,000 upgrade and expansion of Woodgrove Shopping Centre in Melton 3 years ago. The owners of thee complex saw the population expansion coming and have prepared for it. Since then, new land estates such as Exford Waters and Seventh Bend have been developed, adding to Waterford, Atherstone and Arnold’s Creek.

 

Next Suburb Out:

It’s a good tip to look at the next suburb out from suburbs that have risen substantially in price over the previous 3 to 5 years. These “sleeping Suburbs” ideally should have established infrastructure such as shopping and public transport, as well as being in close proximity to freeways or arterial roads,

Good  examples of these “sleeping suburbs” are Braybrook, Brunswick, Strathmore, Sunshine, Deer Park, Fawkner and Campbellfeild. In Geelong, my pick would be Norlane, North Shore, Corio and Rippleside.

Try to look for large corner blocks with evidence of subdivision precedent. Corner blocks  are very attractive to townhouse developers and command a higher asking price.

 

History Never Repeats:

This is never more true than in real estate. Just because a suburb has stagnated and not risen in price over the last 30 years, doesn’t mean that it won’t. I can remember 30 years ago when no one wanted to live in Williamstown because of the fuel storage tanks, army rifle range and public housing highrise apartments on the waterfront. Today, public housing tenants enjoy harbour views and a renovators nightmare on a small block sells for over $800,000.

I can also take you to Birregurra near Colac where, 35 years ago you could shoot a gun from one end of town to the other and you could buy a three bedroom home for $20,000. Today, $20,000 would be a small deposit on a property there, there is more traffic there on a Sunday than during the week and quite a few ex Melbournians call it home, and all because of the duplication of the Princes Highway to Colac and because they couldn’t afford to buy in Lorne, which is only 25 minutes drive away. It also helps that the Melbourne to Warnambool train stops in Birregurra as well.

It always pays to do your homework and, before making any real estate purchase, please read the Due Diligence Checklist

Well, that’s it in a nutshell. If I can be of any assistance with your real estate needs, please feel free to email me.

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