% Growth Factors?

[ocean view]

I'm interested in how many choose the area based on the predicted Growth %.

And how one came across that choice? Was it through residex? Home Price guide.com?
or Maybe it was your own research that clinched the deal & not the above?
What was that research ie: new uni going in? Bus load of Greenies moving out?


I have purchased numerous through differrent methods.I would be interested in some of your ideas.

But this question is solely about Growth % not net returns!
Look forward to responses.



cheers Ocean View

 

[brains]

gday Ocean view,

Sometimes you cant separate 'em. Or at least i dont.

I look for minimum 20% IRR (dumb term that), for those that dont know (not many on here) it means combined gross yield plus cap. growth per year.

Its getting harder to find but i havnt bought a property and wont if it cant achieve it.

And yes, use Residex, Homeprice guide, RP data if you can get access to it, even www.ABR.com.au for QLD.

And to reply to your pm on Ningi and surrounding areas, early this year it was on the top of the Residex list for cap. growth in the Brisbane and surrounding areas, its probably getting ripple effect from expensive Bribie Island. I havnt looked at it since then, as im finished looking in QLD for now. (land tax issues)

Good luck and ho ho ho

 

[ocean view]

growth, resi & ningi

Thanks Brains

I must of missed ningi on residex this year. But yes I agree ! About the ripple. But was the resi factor the reason for you taking interest in that market or did you have a feeling yourself??

I Won a bet with Mr Residex about that area in FEB. The bet ... that in some cases you will pick up 50% growth this next 10 mths to xmas. He said no chance (14% at most) So we are lunching on him next week.

I argued the point with him based on my research & not the market!. I agree however the market does reflect balance, & resi is just about the best firm I have come across for predicting growth.(esp SYD). John Edwards has the runs on the board & he caters for the whole market not just investors like u & me. Resi base the results on history. I base it on people & reasons why they will buy there next year, not last year! And get in there before they do!

Does anyone share this view or have others?

Cheers Ocean view

 

[manny]

Ocean View,

I think the way you do... I don't only look at past growth figures, I look at areas that have seen some major improvements (or will be), suburbs that are next to suburbs that are currently booming OR experienced great growth (which have all the necessary facilities & have easy access to the CBD &/or close to water) & even suburbs that are being transformed due to new types of residents moving in (ie. yuppies doing up their homes, etc...)

Just my 2cents worth...

Cheers,

MannyB.

 

[GoAnna!]

I tend to look for one of three things based on my own research when seeking out growth properties.

1. A "sleeper" suburb that has been ignored for no good reason.

2. A suburb next in line for growth

3. Some infastructure change that will make the area more attractive (usually transport)

Within those areas I would then look for a property that was unique in some way and therefore would appeal to renters as well as home owners. This hopefully would mean that it will move faster than the average property within the same area.

I would read various predictions etc as well as past history however no one report would be enough to make me buy. Soemtimes it is good to read them to know where others are being sent off to buy!

 

[investor]

Hi everybody

I think alot of u are speculating as to the future growth of a suburb. I look at the last 10-15years and if it has continually grown by 10-15% every year then I will consider that suburb for growth, no speculation or gambling just past performance.

Regards

 

[brains]

Investor,

Thats exactly what Residex does, except they use a much larger sample and time frame than an individual can for accuracy.
And they use conservative figurs so your returns are usually better than they list. Hardly speculating.

And apparently they have won Australian & international awards for the accuracy of their reports.



Ocean, no its not the only thing i use to compare an area but one of the most important.

 

[ocean view]

Growth %

Yes U would agree with John edwards.. Resi top lists,,

The RESI factor does not over speculate!! And where they predict a top sPOT,,, say at 15% it may get to 25% with help from the market..

But what about if you are a hard nut like myself & refuse to invest unless I can personally see at least 25 - 30% growth min a year for a 3 year period... Does any one share this feeling!
I have been sucsessful over the last 6 years on every purchase.
But I will be out of areas come mid next year & need some help.

I am not after that area you are sleeping on for next year or 2006.

I guess I am asking people to share reasons on why?

Why THAT Street OR HOME..

I use a few, MAYBE ABOUT 20.. eg.. Is the school rated in the top 100.. Does my suburb have limited building limits? eg, no high rise unit developements,, 5 minute drive to the beach? Capped population ect ect,,, What features give that town more reason to buy there than others!!
Not the obvious ones like Transport ect,, But some out of the ordinary,,,

I would be interested in adding to my list any worth while ideas to keep the Train on the BEST tracks..

cheers ocean

 

[investor]

Re: Growth %

Originally posted by ocean view

But what about if you are a hard nut like myself & refuse to invest unless I can personally see at least 25 - 30% growth min a year for a 3 year period... Does any one share this feeling!

Hi Ocean

I'm afraid you're gonna have trouble getting those growth percentages for the next say 7-8 years.

Here in Sydney anyway.

Regards

 

[brains]

Ocean view, Im not exactly sure what youre after, but heres how i look at it.

If you know the difference between technical & fundamental analysis when buying shares. In technical analysis we use charts or graphs, the way chartists (or technical analysits) see it the reasons why the price is where it is are already built in to it, so you dont have to research the fundamentals of the company, i see an analogy with property.


What im saying is if the historical growth of a suburb or an area is shown to be high (with your own research or Residex or whatever) then thats enough for me to consider that all the things you are asking are already built into that growth. So you dont have to worry about doing the research on schools in the top 100, transport, beaches, shopping centres ...etc.. ..because if all this stuff wasnt ok the cap. growth wouldnt be what it has been historically. (ie: its already built in to the cap. growth figures)

Im not sure if im explaining myself well and a lot of people will disagree with this approach as being too risky but its worked for me.

Also im the type of person that tends to look at the bigger picture of things rather than a multitude of fine detail.

 

[ocean view]

% gwowth

Think u underestimate yourself! Investor,,, we did not get we r today without some skills.. I agree re sydney.. ! It will be tough!!!But I think at least one or two may get tp those heights...pushing 20's%.. But our job is to find them!!

Plenty interstate! Again we need to use our heads & identify them! """"If we seek we will find!!!"""

WE hope any way!!!

Try the top 10 towns in the Book " Best 100 towns to retire to!"
It hasn't missed a beat for me for laST 6 YEARS. It comes out every 2 - 3 years..
Cheers

Ocean

 

[ocean view]

HISTORICAL..

Brians

I agee with that term when buying in already developed areas.. Mosman ,,Liverpool ,, Newtown SYD & so on .. Areas which will do well,,, due to work ,,Transport ,, ego's.

Those are the foundation towns I guess where u just seeM to just keep adding to the book.

It is hard explaining myself !!! But hows this scenario.. I look for rare but extremely sort after places..
Examples,,,(ALL EXAMPLES are when u get in with the first 30% of buyers to these developements..

The Toaster at Circular quay!!,,,
The water estate's at noosa now Bribie Island! QLD,,,
Wattle Grove Liverpool NSW
Shell Cove -- Shellharbour Wollongong NSW
City Beach apartments wollonggong! NSW
Northies Tower cronulla NSW..
Port Maquarie nsw
Ettalong Beach NSW

These areas WERE to some,,, easy to pick the growth! Due to their ability to draw in buyers & alot of them.. They be either asset rich or just plan retirees..

Those R the areas which I continue to buy as they are rare! But did not share the same Historical % as per the sourrounding estates or suburbs.. They have been created out of nothing! But instantly get respect & %..

Thats why I ask questions to help identify the next High % gain.

Does this make any more sense???

CHEERS OCEAN

 

[brains]

Ocean,

I see what u mean (i think)

Im familiar with most of the places you mentioned ( i live at the next beach along from Ettalong Beach, Umina Beach)

Are you concentrating on one market? Retirees? You could do a lot worse huh, they are cashed up, mobile and theres a lot of baby boomers so its a strong market.

btw...i predict Ettalong Beach to be a bit of a hotspot in the near future, they are building a huge resort/casino thing there and also the fast ferry to Circular Quay (45 min) will be running late next year, im casting my eye over the area now.

Its difficult to get decent rent there tho.

 

[ocean view]

% growth

That's it!! It only took 4 attemps for me to get it right!!!

Yeh I know about ettalong.. I purchased last year.. couple on water at booker bay & at ettalong!! Rent no good at all Disaster!!! But lets wait for that ferry!!!
.. But to hell with that! I can pay the rent myself & still come out on top more then most! Due to growth! Getting 40% there for past 13 mths.. But then again retire & water is going well!!! & should depending on infalstructure!!!!!!

Jetty & those other things u mentioned add up as well..
That's my market & I agree with the concept. 100%.. It saves me worry.It just seems to be the easiest way to secure your growth & make the most of the $dollar you invest..

AS u mentioned area has gone up !!! but there is still a little say 30% to go 14mths?. But I would prefer 40% over next 18 mths

What about ur view on that???

If not???

Now to find the next area!

cheers
ocean

 

[investor]

Hi oceanview

I understand your point. However shouldn't you be abit more cautious in buying holiday houses and units at the moment ?

I know these areas have exhibited great cap growth however the price historically of holiday suburbs fluctuates greatly. When times get tough these properties are the first to go and prices fall.

Wouldn't it be smarter to wait 2-3 years before u purchase in these areas ?
For instance would it not have been cheaper to buy a house in Ettalong between 92 - 96 rather than in 88-89 ?

Regards

 

[GoAnna!]

I think with growth we would be looking at different things depending upon whether we are trying to "catch a wave" of growth over the short term or are after long term consistant growth.

What you are looking for would depend upon your strategy.

Just a thought

 

[ocean view]

% GROWTH

Investor has put down a fair point..
I would agree with it back in 1988 - 1996.. "Holiday areas" have now beome prime sought after PPOR (NOT SO MUCH Towns ) but estates..

For instance two of the estates mentioned previous are in Historicly Holiday towns! But with an average build/ construction cost of $500k,,now! these area's are now PPOR towns ( And sought after like no others).(And these homes being constructed are not rentals!..

That's what I look for,, when a town is about to change due to infullstructure or PEOPLE.

Ettalong has changed say in the last 3 yrs so much! That you need 6 figures on water! 4 years ago u could pick something up for $400k. It was a sleepy school holiday town for the kids to put a line in the water after dropping the suit cases off at granpa's.
But sadly no more!! Not just a holiday Town! But a Prime PPOR AREA! & Prime is an understatement.

Noosa the same! And dozens of others going through that change right now!

It has opened the doors for the investors as well of course.. we are able to snap up that old unit or home which can be rented out yesterday! as there is 1% tennacy surplus at any one time.

Most towns on the Southern side of the sunshine coast have major rental shortages. Retirees need to rent out a place while they are building & they have no option but to either rent out inland or pay top dollar! due to no homes available.

cheers
ocean

 

[Macca]

valid point ocean,

look at Port Stephens, old fishing shacks on water are now $1.75mil in the best spots. Waterfront , but looking the wrong way are only $1 mill. Houses being built are costing $500k . Hard to find something the average retiree can afford now. Fingal Bay 400mtr from water but with average water views (over house roof tops, around the tree, type views) $485k for 600m2 of land only, no house!!
Difficult to beat someone who is buying and building their retirement home for use in 10 years. They don't seem to care what they pay or what rent they will get in the meantime for the old house. Paying $500k for existing house , renting for $160 p/wk.

Time to find a new patch I think

Macca

 

[bbruham]

G'day all,

Ettalong could well be ready to jump, New fast catamarans servicing the central coast. Dropping passengers at Palm Beach
where Gov't bendy(articulated) express buses take them to the city and central.
It seems that the central coast is coming together at last.
Definately a place to investigate in the very near future.

Bruce G.

 

[Pele]

Gday

If you think the Loser90 from Palm Beach to the city is an express bus then i ask you have you ever travelled on it? A ferry service from the central coast to Circular Quay would be fantastic news for investors up there, a ferry to Palm Beach not as good in my opinion.

Pele.