First IP - looking at Forrestfield WA

Hi guys,

I've just turned 22 and looking at purchasing my first IP in Perth as I've lived here my whole life and despite potential better opportunities interstate I'm willing to look into it as my first purchase. I Have really set potential CG as my priority as my cash flow is flexible since I still live at home(obviously want a reasonable yield).

I've honed in on Forrestfield as what I think to be an ideal location and a particular type of property as a 3x1x1 on 700+sqm for me to enter the market personally as investment property for the following reasons;
  • The median price is $453k which is spot on what I've set for my budget
  • The median price of neighboring suburb High Wycombe is $479k without I feel being superior enough to justify the difference
  • Proposed Forrestfield airport rail link - connecting it to Bayswater train junction which is then connected to the CBD
  • Proposed r20, r25 and r30 rezoning
  • A very reasonable 15kms from CBD
  • Existing infrastructure such as bordering main arteries of Roe and Tonkin Highway, local shops and schools.

I'm well aware the Majority of the Perth market is slowing down as it's deep into a the current cycle but it seems the properties I'm targgetting in Forrestfield are being snapped up quickly with the average days on market rate at 30.34 days.

Any other locations I should be looking at which would suit my personal position?
Any feedback, insight and input is much appreciated.

Ta
 
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Yep! I concur. I'm slightly biased because I live there.

But here are my reasons

- Kewdale / Welshpool is touted as 2nd biggest employment hub in Perth behind the CBD, and Forrestfield is close by for those employees to live
- A lot of road widening going on in the area around Tonkin Highway, Roe Highway, Berkshire Rd, etc. This is because of the area's predicted popuation growth
- Proposed zoning is no longer proposed, it's been accepted
- All the area around the airport is being redeveloped into Commercial precinct and Forrestfield is close by for employees
- Train station coming soon
- Its not as far as away as some people will have you believe. It's fairly quick & simple to get to other hubs such as Cannington, Belmont, Midland, Vic Park, CBD, up Roe Hwy or Orrong Rd.
- The 2 shopping centres with Coles and Woolworths will look to amalgamate in the future
 
I caught up with an old school friend last week she made similar comments to you DT she lives in Forrestfield and on 5 acres of land, I hope she can develop, if so sitting on some serious $

MTR
 
I caught up with an old school friend last week she made similar comments to you DT she lives in Forrestfield and on 5 acres of land, I hope she can develop, if so sitting on some serious $

MTR

Where my 300sqm house block now sits was once a 5 acre farm only a 3 years ago.
 
Any other locations I should be looking at which would suit my personal position?
I would suggest running the same level of analysis on Midland and Thornlie. They'll either stack up or not.

Any feedback, insight and input is much appreciated.
Personally, I think your analysis is really thorough. If you follow the price increases through, they started in Rivervale and rippled out to Belmont and Cloverdale. Wattle Grove has also seem some fairly significant capital growth. For a long term hold, I think Forrestfield may still be undervalued. Of course you will still need to find a good deal within the area but selecting the right area is a great start!
 
Well done on getting started at such a young age - all credit to you! :) Even just having a deposit at your age shows a lot of commitment.
 
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Firstly, thanks for all of the input guys - it really does make a difference.

D.T. - Always good to here from a local - do you hold any investment properties in the area besides your o/o?


Well done on getting started at such a young age - all credit to you! :) Even just having a deposit at your age shows a lot of commitment.
Thanks Jess, If I see your face at a PD day or something of the like - I'll be sure to say hi :)


I would suggest running the same level of analysis on Midland and Thornlie. They'll either stack up or not.
Midland - I just see more of the potential factor in Forrestfield. A lot of the infrastructure is there already and therefor the growth that goes with that. Also as of right now there's only 1 listing @$450k land over 650sqm.
Thornlie - I see the similar but with a much more reasonable entry then Midland.
What do you think of the 2 areas?


Amazing, to think this much land this close to city
Yeah, there's a couple of acreage listings on the East fringes


Do you Perth locals think Forrestfield will outperform the median for 2015? I'm being very cautious regarding the market and probably looking to wait until at least the end of the March Quarter to see what the real trend is but at the same time in the lower price bracket where I'm aiming seems to be hot.
 
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Looks like you are doing good due diligence.

Try and talk to local REA, PMs, locals about which are the better parts of the suburbs, what is attractive to tenants (bus stops, shops, schools etc) and what is the most popular product

There is a big increase in variety coming into Forrestfield from brand new one bed villas to 3 x 2 townhouses. Statistics from now on for the suburb are likely to be quite skewed - ie both are 'units' but one is $500k and the other is $270k so the median and average for 'units' may go down or up the wrong way.
 
Looks like you are doing good due diligence.

Try and talk to local REA, PMs, locals about which are the better parts of the suburbs, what is attractive to tenants (bus stops, shops, schools etc) and what is the most popular product

There is a big increase in variety coming into Forrestfield from brand new one bed villas to 3 x 2 townhouses. Statistics from now on for the suburb are likely to be quite skewed - ie both are 'units' but one is $500k and the other is $270k so the median and average for 'units' may go down or up the wrong way.

Yeah, I'm going to head into the area on the weekend to actually see what it's like.

D.T. - could you shed some light on on some of the points?
 
Yeah, I'm going to head into the area on the weekend to actually see what it's like.

D.T. - could you shed some light on on some of the points?

It depends on what you're actually looking to buy. What are you trying to achieve from this purchase? There's a few different sections.
 
Then I'd probably look in the area pocketed between the highschool on Berkshire Rd and the Woolies/Coles shopping centres. That pocket is mostly 70s/80's houses with recently increased zoning. This will give families good access to amenities including future train station.
 
Then I'd probably look in the area pocketed between the highschool on Berkshire Rd and the Woolies/Coles shopping centres. That pocket is mostly 70s/80's houses with recently increased zoning. This will give families good access to amenities including future train station.

Thanks D.T. - I was already putting that North-west side of Hale road as the preference.
 
Midland - I just see more of the potential factor in Forrestfield. A lot of the infrastructure is there already and therefor the growth that goes with that. Also as of right now there's only 1 listing @$450k land over 650sqm.
Thornlie - I see the similar but with a much more reasonable entry then Midland.
What do you think of the 2 areas?
Midland is supposed to perform well in 2015 but I don't know anything about it, so I can't comment.
Thornlie has potential but it has its bad pockets and better pockets so you need to know the area. I know there have been some amazing deals in the last couple of years but it may be peaking in terms of price. At a guess I would say that (provided you buy well) out of the three I would most likely go with Thornlie or Forrestfield.

Do you Perth locals think Forrestfield will outperform the median for 2015? I'm being very cautious regarding the market and probably looking to wait until at least the end of the March Quarter to see what the real trend is but at the same time in the lower price bracket where I'm aiming seems to be hot.
I?m expecting a fairly flat market for a couple of years in Perth, even Forrestfield. Saying that Forrestfield might outperform the Perth median won?t guarantee great capital growth in the short term. It might take a couple of years.
 
I would suggest to stay on a lot over 450sqm so you can either attach an ancillary dwelling later, or subdivide @ R40.

There will be lots of rental potential in FF / HW over the coming years.
 
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I?m expecting a fairly flat market for a couple of years in Perth, even Forrestfield. Saying that Forrestfield might outperform the Perth median won?t guarantee great capital growth in the short term. It might take a couple of years.
Thanks Perthguy, I think most of us share the same view. I personally wasn't questioning if it would outperform the majority of Perth for some short term CG. More to the point of me sitting in the stands and being too cautious I guess.

I would suggest to stay on a lot over 450sqm so you can either attach an ancillary dwelling later, or subdivide @ R40.

There will be lots of rental potential in FF / HW over the coming years.
Thanks for the reply Aaron.
When you say stay over 450sqm are you talking 450+ something else? I'm already looking at at least 700sqm total.
In regards to the rental potential do you just mean an increase in demand for rentals in the area?
 
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