Hi Guys,
I'm looking to purchase an IP for capital growth.
Much of the literature i've been reading suggests I look for a major CBD inner-city / inner-suburban property with proven record of CG, which the figures suggest will double in value every 7-10 yrs.
Many of these areas already have median prices in the $300-$450K. In 7-10 yrs, they'll be worth $600,000-$900,000.
In 7-10 yrs, boomers will be focused on the cost of living, stretching out their funds with many residing in lower-valued areas; The X-gen appear to be terrible savers; Wages and rents don't seem to keep pace with property prices - reducing the affordability and potential yield of inner-city / suburb purchases and reducing the potential buyer-pool should I intend to sell the property.
Is it reasonable to assume that a doubling in value is feasible and that there will still be a good buyer pool at these doubled prices? Or is the alternative a likely scenario - that the market won't support such a rise and therefore the likelihood of experiencing a doubling in value in 7-10 yrs simply won't happen to these properties ie. they will show much lower capital growth.
Given all of this, will the above investment strategy still be valid for the future, or should I look to modify this strategy by focusing more on those areas where a doubling in value appears more feasible - such as nice, undervalued outer areas in the $150-$175K range, which will, in 7-10 yrs, still be affordable to a large buyer pool; still be affordable in terms of rent; still offer reasonable yield etc and because of this demand, experience excellent capital growth?
Thanks for your thoughts.
Fish
I'm looking to purchase an IP for capital growth.
Much of the literature i've been reading suggests I look for a major CBD inner-city / inner-suburban property with proven record of CG, which the figures suggest will double in value every 7-10 yrs.
Many of these areas already have median prices in the $300-$450K. In 7-10 yrs, they'll be worth $600,000-$900,000.
In 7-10 yrs, boomers will be focused on the cost of living, stretching out their funds with many residing in lower-valued areas; The X-gen appear to be terrible savers; Wages and rents don't seem to keep pace with property prices - reducing the affordability and potential yield of inner-city / suburb purchases and reducing the potential buyer-pool should I intend to sell the property.
Is it reasonable to assume that a doubling in value is feasible and that there will still be a good buyer pool at these doubled prices? Or is the alternative a likely scenario - that the market won't support such a rise and therefore the likelihood of experiencing a doubling in value in 7-10 yrs simply won't happen to these properties ie. they will show much lower capital growth.
Given all of this, will the above investment strategy still be valid for the future, or should I look to modify this strategy by focusing more on those areas where a doubling in value appears more feasible - such as nice, undervalued outer areas in the $150-$175K range, which will, in 7-10 yrs, still be affordable to a large buyer pool; still be affordable in terms of rent; still offer reasonable yield etc and because of this demand, experience excellent capital growth?
Thanks for your thoughts.
Fish
