Didn't imply that at all CJ. If the price of houses in Elizabeth were 100k then I would say go for it. However as they are up to 200k and you can still get places for 300k in areas which i think will have median values which are multiples of Elizabeth in the long term then why would I choose Elizabeth?
You real estate guys are always looking backwards, " I got 9.3% return for the last 5 years"
That's pretty good but it won't go on forever so I'm looking for the next opportunity, just as you got yours in Elizabeth back whenever you bought.
It's not necessarily looking backwards strongy, I'm just trying to understand you're argument. You're suggesting that growth in lower CF suburbs will outperform high CF areas (such as Elizabeth). I can understand that in many cases, e.g Toorak Gardens, Unley, Parkside etc having exceptional growth. None of these properties which have boomed are at 300k.. Generally the high CG properties are in areas where inter-generational wealth, and where incomes far beyond national averages play a large role. This allows them to grow at a rate beyond wage growth near indefinitely.
Houses in Elizabeth are generally being bought for a lot less than 200k btw.
My argument however is that 300k properties within rents only marginally higher than properties which can be bought at 150k, leave a huge cash flow burden for the
potential of capital gains. And when these CF properties are val'd at nearly a third of the State average, whilst being contained in areas which are receiving the
largest State and Federal infrastructure spending in SA, the
highest concentration of jobs outside of the CBD and the most
extensive urban renewal being pushed by government and private investors, I think there is an argument for a closing of the median gap.
I'm always aware of the story a family member told me when he was growing up in the 50's in a housing trust home. His parents scrimped and saved and eventually bought themselves a modest home in the suburb. Both sides of the family told the young parents that they were foolish for buying in the 'sticks' and nothing good would come from the suburb and that it was 'so far away'. The suburb? Rostrevor. Downsized from their home recently, selling it for 600k.
But there are all different kinds of investors with different strategies, which makes for a diverse and interesting market.