Old state housing area

[dook]

Hello all,
Have another question if you dont mind.
We have in our large country town here in the southwest of W.A. an old state housing suburb that has heaps of 30 and 40 year old homes that have been reno'ed new houses scattered here and their and an awfull lot of old houses on huge blocks that have been done up or knocked down and the land subdivided and units or houses placed out the back. It seems some streets are going to be full of these type of developments and really the whole suburb.
It really is an investors area, a lot subdividing going on. The suburb is heaps better than it ever was aesthetically. But my queston is isint the area just going to be more populated in the long run and maybe turn back to what it once was, an area densley populated with low income earners. Only now more densley populated.
Im'e aware that weve probally been sheltered from this type of development and arent used to this type of housing.
In youre opinion(s) are people in the long run going to be put off by all this or does history show it to be a good investment. Hope this all makes some sense. 'Dook'

 

[Sim]

If you're worried about the long term demographics of the area, why not take a short to medium term approach to it ? Buy now with a view to adding value, or subdividing, and sell after 12 months - or hold until you see the demographics changing and sell then.

The thing with low income areas is that they tend to be renters - a lot of people can't afford the deposit a bank would require to get finance. Can you see an opportunity in that ? Perhaps you could start wrapping your properties in the area once the demographic changes ?

There's always ways you can make money. But, if you are only after premium rental properties in blue chip suburbs which you will hold forever, then maybe you should look elsewhere.

 

[Kevmeister]

I think a consideration is the demographic in terms of renters versus buyers. If the number of home owners is slowly increasing in the area, the possibility is that previously rented properties will get owned by purchasers and the area will get "better", based on the assumption that owners are more likely to be house-proud and make improvements.

The problem is that these kinds of transitions can take decades to happen, because the potential "stigma" of living in ex housing commission areas can presumably affect the number of potential buyers buying in. It may not even happen.

Kevin.

 

[Sim]

An interesting phenomenon which I have observed recently in one suburb of Adelaide is where a development company bought a some large slices of land from the government - complete with "yucky" housing trust houses on them - which they then proceeded to bulldoze.

They completely redeveloped the area - new houses (the typical medium density single dwelling style where each house is spitting distance from the next and no-one has much yard space) - and they even put in new streets !

So what we have now is a suburb where the median value has skyrocketted (because the newer houses are worth more), and people are buying up the remaining older houses and renovating them, experiencing some significant gains given the new status of the suburb. A lot of the stigma surrounding the suburb is starting to dissipate with so many higher quality homes appearing there suddenly.

Where gentrification is a process that often takes a few years to really get underway, in this case it was really fast-tracked because of the new development.

*sigh* another case of seeing what the possibilities are after it's all over - oh well... I know what to look for next time

 

[Peter_Tersteeg]

The local council might have a long term plan for the area, which may contain predictions for growth. This may be able to answer your questions for you.

I recently looked at the council development plans for a suburb near Melbourne. They had plans to rezone several farms over the next few years and grant subdivision and building permits. Outside of this area, the specifically stated they intended not to rezone any more land for 30 years, thus limiting the supply to a select few areas. These plans were available to anyone who asked.

 

[dook]

Thankyou i appreciate youre replies very much.