Effects of infrastructure

Hey guys - I'm looking for a bit of feedback about this approach. I have been trying to identify areas with capital growth potential (surprise surprise) and one of my current ideas is to look for new developments like new shopping centres, train lines, highways etc and buy as construction starts.

Lets take an example of Marrickville in Sydney's inner west. I read somewhere that AMP Capital own the Marrickville Metro shopping centre and have applied to double its size. Let's assume this goes ahead. I am guessing there are probably 3 stages of growth around a big project like this;
1) Growth as soon as the project is announced
2) Growth during construction as investors start to buy in the area
3) Growth after construction is finished when the area becomes more popular, rents increase, prices continue going up.

I think getting the growth when it's announced is basically luck from you coincidentally owning a property in the area unless you know someone on the council or someone who can tell you where a project is definitely going ahead.

So I am thinking of finding areas with announced projects and getting in to pick up the phase 2 and 3 growth.

One thing that worries me a little though is that Marrickville has already seen solid growth over the last 10 years so I'm not sure if it would change that much anyway.

What do you think? Can you get in on big capital growth by buying into an area after the development is announced?? There are lots of other suburbs around Australia with similar developments or even bigger projects like transportation infrastructure......

Cheers,
James
 
Yep, big projects can improve values in a suburb - as long as you're not too close to them. The area around the marrickville Metro gets a bit conjested as it is.
I think Marrickville is a safe bet for growth anyway.
 
I think you have the right approach there. Infrastructure is generally good for growth as it brings in people and increases demand.

This doesnt happen as often as your example but whenever an airport is built, you can expect solid growth in the town and its surrounds.
 
You just need to catch it at the right time.

The town I moved to last year we were visiting for a while, thought it was nice. Was still reasonably cheap 2 or 3 years ago. Since then it has sprouted several new housing estates, a new industrial estate, the biggest supermarket for quite some distance around that is hugely popular, hospital extension, major upgrade to the local nursing home etc etc etc, and all of this backed up by massive infrastructure that AGL/Suzlon is building a moderate distance away but are putting the maintainence HQ in this town.

Of course, it is now comparatively quite expensive here. I'm not sure exactly when all these projects were announced, but by the time they are built, the prices have already been pushed way up. You'd have to be pretty keen to keep an eye on projects in the extremely early stages, before they get out into the public eye.

I find it quite fascinating living in such a growth town. There's always something being built to stickybeak at :D
 
Hey RumpledElf - sounds like Mt Barker to me! Might not be but if so, I grew up just down the road in Hahndorf. Mt Barker would have been a great buy any time in the last 10 or so years.

I was even still considering it as it seems like the Govt wants to triple its size, the only thing holding me back is they can keep prices reasonable by expanding the borders, there is land around for miles. Probably still a good buy but I think I'll look elsewhere for now.

I was talking to the old man yesterday - I have been very keen on Seaford, SA (lots of infrastructure just starting up) - but he is talking me out of it. I only have my PPoR at the moment and he reckons I should look for something more local to me (I live in Sydney) so it's easier for maintenance etc. I think it's because some good family friends of ours own a lot of property but have always had HUGE issues with tenants and maintenance. Not sure if they've been unlucky, picked bad locations or what. He has got some good points, he also reckons I could try looking in areas near popular public schools which should ensure low vacancy rates.

We both agree that property right now is not guaranteed to keep going up. We don't think it is about to crash horrifically but there is a chance it might not move anywhere for a while. Actually, one thing putting me off property a little is that with the FHOG and stuff EVERYONE has been getting into property. From a contrarian point of view, that means it is probably the last place I should be looking to put my money right now. But at least if I buy somewhere with good yields and low vacancy, a flat market for a few years won't do me too much damage........

Long post - sorry!!!!!!!!!!!!!!! :D
 
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