I'd been thinking about what an investing colleague said about investing in the assets that provide the highest return (growth + yield) and decided to conduct some more research.
I'm looking to purchase my next IP and I'm trying to figure out where to buy.
I grabbed the Feb 09 copy of API (the latest issue I had) and compiled the following spreadsheet from some suburbs. I picked them almost purely at random (well I included areas I knew well and had property in). As you know I have property in a variety of locations and I did not 'cherry pick' the suburbs to prove a point. In fact, I prefer to live in the inner suburbs myself and am biased towards owning more inner property for this reason.
This is the last 10 years from Feb-Feb from APM. As you can imagine that's being extra kind to the upper end locations which have taken a fair hit between then and now.
Whilst I understand and agree with the high demand / capped supply theory for prime inner suburbs I just can't see the data support the claim that they have better growth. I think the demand is limited by affordability. One thing the data doesn't show is that some of those inner suburbs are really volatile, although that may be because of the wide variety of properties (in terms of price). These areas seem to mimic the stockmarket (and they probably are related as those who purchase in these areas have significant exposure to shares).
Interested in your thoughts. I'd like to do more research on this with different time periods. Obviously median values has it limitations however I think over a 10 year average across the range of suburbs is sufficient to tell me that there isn't really much in it between inner and outer suburbs.
If you know of any data that tells a different story I'd be very interested.
Does anyone know Residex's thoughts on inner vs outer?
I'm looking to purchase my next IP and I'm trying to figure out where to buy.
I grabbed the Feb 09 copy of API (the latest issue I had) and compiled the following spreadsheet from some suburbs. I picked them almost purely at random (well I included areas I knew well and had property in). As you know I have property in a variety of locations and I did not 'cherry pick' the suburbs to prove a point. In fact, I prefer to live in the inner suburbs myself and am biased towards owning more inner property for this reason.
This is the last 10 years from Feb-Feb from APM. As you can imagine that's being extra kind to the upper end locations which have taken a fair hit between then and now.
Whilst I understand and agree with the high demand / capped supply theory for prime inner suburbs I just can't see the data support the claim that they have better growth. I think the demand is limited by affordability. One thing the data doesn't show is that some of those inner suburbs are really volatile, although that may be because of the wide variety of properties (in terms of price). These areas seem to mimic the stockmarket (and they probably are related as those who purchase in these areas have significant exposure to shares).
Interested in your thoughts. I'd like to do more research on this with different time periods. Obviously median values has it limitations however I think over a 10 year average across the range of suburbs is sufficient to tell me that there isn't really much in it between inner and outer suburbs.
If you know of any data that tells a different story I'd be very interested.
Does anyone know Residex's thoughts on inner vs outer?