Convenient buying for reno, Northam WA

Hi All,

What are the thoughts on buying in a location that is convenient? I understand its all about the numbers and the plan, but if there is some compromise is it worth a go? (Its not a total gamble!)

We are in Northam for around 6 months and starting to suss the area out. For those that dont know its about 100km north east of Perth and start of the wheatbelt. Population is 6500 and "it is the largest inland town in the state not founded on mining" (thanks wikipedia!) It is a business hub for the surrounding towns. York and Toodyay nearby are your city slicker hot spots for weekend trips, they are pretty funky but are a lot smaller towns. a lot of the the locals there come to northam to work (20-30min drive).

The perth/WA locals will have the inside info on the town as I know it has colourful side to it, with history at the hospital and crazy locals. And I am interested to hear their thoughts of future growth, I dont know perth so steering clear of the pandoras box down there atm

There is talk of a Super town or some BS from the pollies which I found old posts here in 2011 and pretty much its a hub for the region, but it does have a big expansion of the hospital planned for later this year, depending where you read its $20-50mil to help service the area. Plus the government website is pushing tourism in the regional WA plus it states the estimated population is to grow to 20,000 in 2031. Seems high!

Anyway While were here we can buy and do a reno, thinking paint, new kitchen and minor stuff in bathroom ideally, plus a pot plant or two. Otherwise id be looking to buy interstate and managing renos over the phone. Plus there are few larger blocks around so there is possibly an option later down the track for granny flat etc or maybe an all out development

So the numbers (from re.com.au)
House median $250k Yield 6.7%
2x1 house $170k 8.6%
3x1 house $245k 6.6%

YIP mag
$220k Yield 7.56%
vacancy rate 2.9%
The numbers look good but the future growth of the area (and WA) and future CG is where im unsure if i can tick the box, pretty important one!
 
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I remember Hegney mentioning Northam as a place to buy some years ago. Interesting to see they've set up an office there. http://www.hegney.com.au/contact-us/offices/
Maybe you could dig up some articles googling Hegney and Northam or worth paying for some one on one advice.

I was speaking to a local yrs back and one of the negatives was the hospital so that sounds like a huge driver for the area. How does northam prices compare with York and Toodyay prices?
 
There is talk of a Super town or some BS from the pollies which I found old posts here in 2011 and pretty much its a hub for the region

Yea that was the same for Boddington. Still the same.

I would be looking into time on market stats to see what kind of turnover could be expected. It is really quite a different market out there.
 
Ok, excellent I'll look into that. Is hegney a larger reputable real estate? I'll google them too

Toodyay median 280
York 350
 
Yea that was the same for Boddington. Still the same.

I would be looking into time on market stats to see what kind of turnover could be expected. It is really quite a different market out there.

Days on market around 200 days. Vendor discount 8%

There may be done interest with the hospital but that's only 2-3 years so after that it's a bit unknown. Plus will also rely on government grants etc for money pumped into the area
 
Northam's one of those places that just sits there.

Neither big population decline as seen most places east, nor huge growth as seen in Perth. Road maps of 30+ years ago used to list the population of the main towns. Back then Bunbury, Kalgoorlie and Geraldton were all around 20 000 with Albany a bit lower - say 15 000. The likes of Northam and Collie were around 7 000. Doesn't look like much has changed.

Though coming off a very small base, Boddington has had extraordinary recent population growth - largely due to mining.

Population growth isn't everything as housing supply is also important. There may well be opportunities there with local knowledge. But I can't see it as a place where one can buy anything and get above-average capital growth and yield.
 
Thats what I was thinking spiderman, its just going to exist. there are 200 odd properties for sale and they arent selling in hurry 200days on market
But median is lower than 2007 so perhaps theres room to grow soon. By the looks things are happening though, the info centre has been done up recently with a cafe built next to it plus the Dukes Inn is a heritage listed pub that has been reno'd (over capitalised there if you ask me!) and drawing in the big spenders with flash accomadation and dining. So perhaps things are looking up. Ill see a few real estates next week and see what they can spruik me!;)

Is this sensible thinking...
2 bedrooms houses are getting good yields, saw a couple today at 8%. Buy reno hold. In the short term with a reno and increase of value I can get the equity (maybe 10-20k) but with the hospital works perhaps there could be more buyers coming in and boosting median which i can then re-value when high and still enjoying the decent yields. Then say in 5 years it continues to exist being in good condition, the median may drop again. But if the hospital doesnt help boost median ill still be sitting alright with the equity from the reno plus good cash flow.

...Or am i trying to polish a turd?
 

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Yeah, really not much good going on at Northam.
Was there on Friday and was glad to see it in my rear view mirror as I left.
 
I had thought about investing in Northam in the past, mainly because I possibly could have rented to a long term renter related to hubby. I am glad I didn't do it now. I'm not sure if it will change in the future.
I think Midland area has a much higher prospect of growth. How does this compare to properties in Northam? https://www.realestate.com.au/property-house-wa-koongamia-119566703

Midland is largely a low socio-economic area so comments for suburbs around Armadale, Kwinana, etc also apply for Midland. Koongamia, like Coobellup, Orelia, etc is a postwar ex housing commission suburb. Public transport is limited. It is next to higher status Greenmount but the housing stock is completely different.

There may have been some benefit through redevelopment of the Midland CBD, but Perth people almost all wish to settle near the beach or river and Koongamia is remote from either. That is apart from a few eccentrics in the hills - but they want nice houses, views and/or acreages - so different market.

Forget north or south of the river, the main split in Perth in the future will be east or west of (say) Bassendean or Tonkin Hwy. Ellenbrook, being so far from water, jobs and transport will go backwards, even if the houses look new now. And the likes of Midland and Armadale will always be the cheaper areas.

If you're going to buy a cheap housing commission type area, I can't see any reason why you'd pick Koongamia over other similarly priced areas which offer better location and infrastructure.
 
I had thought about investing in Northam in the past, mainly because I possibly could have rented to a long term renter related to hubby. I am glad I didn't do it now. I'm not sure if it will change in the future.
I think Midland area has a much higher prospect of growth. How does this compare to properties in Northam? https://www.realestate.com.au/property-house-wa-koongamia-119566703

The median in midland is up at 410, not really knowing Perth but from your comments and driving through, that sounds very generous. Surely that has hit it's peak and on the decline in the current market.
Mundaring would be the nicer pick id think for tree change life style and still close to the city but the median is much higher again, larger blocks out there boosting that id think??
 
The median in midland is up at 410, not really knowing Perth but from your comments and driving through, that sounds very generous. Surely that has hit it's peak and on the decline in the current market.
Mundaring would be the nicer pick id think for tree change life style and still close to the city but the median is much higher again, larger blocks out there boosting that id think??

yes, I wouldn't invest in Midland but may be some decent buys in suburbs near Midland
 
I've made a motza in Midland..

To date its tripled in value & yield since purchase.

I did ID the area via my 4 sector Macro purchasing criteria check list.
 
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Id like to stick <350k. so id be limited to out skirts of Perth metro id say.
Thanks for the links, i need to get more familiar with Perth but sounds like great buys at land value!!
 
Driven through midland now a few times. It has everything and looks like a strong place to buy. Is it to early to buy or perfect time for bargain hunting?
Liking the satelite cbd targets!
 
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