Driving Factors of Capital Growth

[Badger]

Hello All,

I'm seeking some advice regarding Demographics

Firstly ,

Does Population Growth play a part of any of your research strategies ?

What makes up good occupation Demographics for a suburb? does this depend on what types of industries and work are available in the area?

Demographics to do with age - Is a higher percentage of young people a plus for a suburb?

What Makes a good Renter / Owner Occupier ratio within a suburb?

are there any other Factors i should be Considering?

I am currently researching a few different locations and plan to eventually purchase, however i am trying to figure out what types of properties suite that certain demographic before i rush in and buy. Also, like many other investors am hoping for substation growth in the long term.

i Understand that Demographics are only one element to property investment, but they seem like a good place to start.

i do realize some of these questions are pretty general, however anything i may get out of this thread will be a plus.

ta

 

[stumpie]

Hello All,

I'm seeking some advice regarding Demographics

Firstly ,

Does Population Growth play a part of any of your research strategies ?

absolutely any nett increase in population fuels demand

What makes up good occupation Demographics for a suburb? does this depend on what types of industries and work are available in the area?

Demographics to do with age - Is a higher percentage of young people a plus for a suburb?

What Makes a good Renter / Owner Occupier ratio within a suburb?

are there any other Factors i should be Considering?

i look at the median income within the suburb as opposed to what type of occupation they are grouped in. the higher the income the more they can afford to pay a higher rent.

there are proponents that recommend a lower percentage of rentals are preferable in a given suburb. for example where more owner occupiers in a street exist you'll find that the yards are better maintained.

I am currently researching a few different locations and plan to eventually purchase, however i am trying to figure out what types of properties suite that certain demographic before i rush in and buy. Also, like many other investors am hoping for substation growth in the long term.

i Understand that Demographics are only one element to property investment, but they seem like a good place to start.

i do realize some of these questions are pretty general, however anything i may get out of this thread will be a plus.

ta

a SS member who goes by the name of rixter is very much of the opinion that your strategy determines the type of properties you acquire. search his posts and have a read. there is also a book i recently finished reading by john lindeman the title is 'Mastering the Australian Housing Market' he goes into quite detail about demographics and how it affects the growth of properties.

 

[Badger]

absolutely any nett increase in population fuels demand

i look at the median income within the suburb as opposed to what type of occupation they are grouped in. the higher the income the more they can afford to pay a higher rent.

there are proponents that recommend a lower percentage of rentals are preferable in a given suburb. for example where more owner occupiers in a street exist you'll find that the yards are better maintained.

a SS member who goes by the name of rixter is very much of the opinion that your strategy determines the type of properties you acquire. search his posts and have a read. there is also a book i recently finished reading by john lindeman the title is 'Mastering the Australian Housing Market' he goes into quite detail about demographics and how it affects the growth of properties.

Thanks for the response,

Im also Seeking a reliable source to my data.

so many different websites have different figures.. its frustrating

 

[MightyWill]

As a Sydney resident for the past 30 plus years and having ventured through the North, East, South & West every so often, I'm just speaking from my observations and from word of mouth:

CG driver one - within 30 mins drive to CBD
CG driver two - within 30 min train ride to CBD off-peak
CG driver three - suburb has a Westfield or equivalent size shopping mall. A clean shopping mall.
CG driver four - suburb looks clean and newish - Council cleaned up or new units/houses going up/renovated
CG driver five - close to schools but does not have to be in the same suburb

Yes it?s obvious on all of the drivers I mentioned.

However, due to a hot market or should I say the hot market that may have now cooled in certain areas, the five CG drivers somewhat don?t come into play half the time. Let?s take those who can afford or want a house, they love the idea of land, no strata and wanting to start or bring up a family, they don?t care about the five drivers. They will even pay top dollar even if the house next door looks like it hasn?t had its lawn cut in months. The top dollar he/she paid has now set a new bench mark for all real estate agents in the area for the next sale. Sometimes we have a market and there is only a minority who pay top dollar and set the price guide way above what most can?t afford or unwilling to pay. Just like the auctions, a bidding war when one party ruins for all.

With rates at historic low and everyone racing around liking the idea of having an IP. You got the serious investors (know what there?re doing) and the ones who like the idea of showing off to others about having an IP. Having an IP is the new ?I drive a luxury car?.

How about our shi# super fund accounts; we are being charged record high rates compared to other countries. A lot of people want a backup plan. Super isn?t going to cut the cake for the average or medium class person. They rather save a bit and buy some unit and that will hopefully pay itself off by the time they retire.

More investors competing with first home buyers and people wanting to upsize or downsize would suggest a lot more demand than 10 years ago despite immigration. More investors in particular.

 

[FelixL]

Demographics is a huge topic and have way too much data usually

Over the years I have filtered down the the criteria and keep it simple

- increase in population -> stick to capital cities only
- good transport -> train/bus within 1 hour of CBD
- shops -> walking distance to Coles/Woolies
- limited supply -> no new massive house/land package available in suburb
- reasonably priced -> 7% rental yield

 

[MTR]

We have seen massive growth over the last 2 years in Perth and other States around Oz. The properties which have had the most growth have been areas which have been earmarked for rezoning where a buyer can add value. Generally these areas are in well located pockets with good infrastructure etc. Not necessarily expensive areas to buy into.

A strategy to look at is to find out what various councils are doing and whether there is potential rezoning occurring. Some of these areas may be State housing areas, government selling off land to FHB where the area changes from undesirable to desirable. If you can get into these areas on ground level before the herd gets in you will without a doubt achieve above average CG.

The bonus is if you decide to add value your purchase of 1 property could become a 3 unit development where you can build and hold additional property which will very likely be cash flow position on completion.