Perth - Calista, Medina, Orelia, Parmelia -no long term growth?

[Keen]

Hi all,

Calista, Medina, Parmelia, Orelia are all cheap suburbs in the Perth Metro that have had lots of interest from investors during this boom.

I'm looking at these area's from a close to, if not positive cash flow scenerio - but recently read that a common error by investors is to buy IP's in cheap suburbs during a boom that have initial capital growth, but over a long term fail to produce good capital growth.

I wonder if these suburbs will fall into this catergory and would like to know why forumites beleive these suburbs should be any different?

I know of the Perth to Mandurah train line going in, and this is often associated with the potential for growth - but suburbs along the Perth to Armadale line have shown low long term growth. Why should these be any different?

The Kwinina Refinery stigma can't be a plus for capital growth.
Whether people know there is or there isn't much "interferance to joys of living" in such suburbs may be irrelevant as the Refinery looms large on the road map.

However I refuse to cross these suburbs of my list just yet as they offer better rental yields.

I welcome comments that may sway my initial perceptions. Perhaps the suburb Cooloongup should also be considered?

Regards and Thanks

Keen

 

[Keen]

Sorry all.

Had much trouble with PC getting this posted - only to find I posted it on the "Adding Value" Forum instead of "Where to buy".

Doh

Keen

 

[Peter Parker]

Hi Keen

I suppose the difference is that the Perth - Armadale line was built in the 1880s-1890s whereas the Mandurah one hasn't yet.

I would research if the expectation of the new line has been built into property prices or not.

Note that due to fewer stations and faster trains, the train trip will be quicker from Kwinana than Armadale despite Kwinana's longer distance. Also with this line through-routing to the northern suburbs and intersecting numerous bus routes, public transport travel to just about anywhere in Perth from Kwinana will be very easy.

Kwinana is much nearer the beach than Armadale, which is a plus.

I would look at plans for the refinery and heavy industry. Expand, stay the same or close?

As Perth grows, Kwinana will no longer be thought of as an urban fringe suburb. Indeed the infrastructure and servicices there is already better than newer outer areas (note the uni & tafe at Rockingham).

Other suburbs (eg Karawara) that were formerly bad are now very expensive. Though Kwinana is further out, I think it's got a lot going for it.

And refineries did not stop Altona in Melbourne going through the roof!

Regards, Peter

 

[Glenn]

Hi Keen,

Demand for the dirt that the property sits on will detirmine the growth in value of the property.

Guess what happens if the demand goes up a little in areas where there is thousands of acres of undeveloped land.......

You are right in suggesting that the bunnies will cop it in the kyber pass by buying these suburbs during a boom and then expecting capital gains during lulls in the broader market......I should know as I was one of these bunnies in 1994!

Glenn

 

[Hetch]

I too have looked at these areas for the same reasons - rail, Mandurah growth etc -

The drive with the new freeway was only 20 min from Perth - which makes it a lot closer than it used to be.

I believe they are good value for money but I don't think the cg will set any records - Don't get me wrong, there will be growth over the next few years and the rail line will certainly help with that - but I can't seem Medina etc hitting the top 10 growth suburbs if you know what I mean.

Failry cheap and good rent makes them attractive though - you will be competing with first home buyers too of course.

Hetch

 

[ellie]

Lancelin - north of Perth

sorry, this is off the subject a little onto the coast north of Perth. Have any of you WAers bought or looked at a place called Lancelin? I used to go there for holidays as a kiddie. I always thought it was extremely beautiful and prices there seem reasonable. The Perth people I talk to though haven't heard of Lancelin.

eg 3br villa with ocean views at $215K
http://www.lancelinrealestate.com/13hill.html

or this one - a 2br house for $189K
http://www.lancelinrealestate.com/19newby.html

 

[Peter Parker]

Re: Lancelin - north of Perth

Originally posted by ellie
The Perth people I talk to though haven't heard of Lancelin.

They all must be rusted-on suburbanites! I'd have though most West Australians would have heard of the place.

Will it become the Dunsborough of the north (Dunsborough being a top growth area)? Maybe in the very long term as Perth expands, but at the moment there's not much shopping or services there (whereas Dunsborough at least had Busselton nearby so its small size wasn't a problem).
I don't know if Lancelin even has a senior high school.

eg 3br villa with ocean views at $215K
http://www.lancelinrealestate.com/13hill.html

or this one - a 2br house for $189K
http://www.lancelinrealestate.com/19newby.html

Somehow this doesn't strike me as being super-cheap especially in a place so small with so little.

Regards, Peter

 

[Hetch]

I can tell you Lancelin does not have a senior high school - The kids travel to Gingin for their schooling - I am a teacher in Gingin so I know this.

Lancelin does have a small primary school though.


Hetch

 

[Hetch]

BTW Ellie

Be careful with posting specific addresses and houses etc on the forum - because if it is a good deal someone may snap it up before you get to -

They are a helpful lot here - but they are also trying to become wealthy and are ALWAYS on the look out for bargains.

Just a warning

Hetch

 

[Glenn]

Hi Ellie,

Lancelin is an interesting one, I have spent many weekends up there and have had a great time as both a single bloke and a married man.

I can't ever see it becoming the Dunsborough or Magaret River of the north though.....there are no trees, wineries or attractions (apart from the beaches and fresh air). Being a fishing villiage, you would think that the seafood would be fantastic and maybe sold at rates lower than that in Perth....but this is not the case.

One thing I did notice though.....there are no Asian food restuarants in town. Personally, I reckon a restuaranter could make enough money in the summer, late spring and early autumn so that they could close the doors for the other 6 months of the year.

Glenn

 

[Keen]

Glen,

I am always eager to learn from those who have been in IP's before the current boom.

Can you tell me a bit more about your 1994 IP?

What suburb was it? What attracted you to this suburb and how did things pan out as things went pear shaped?

From your comments can I assume you believe in not buying in an area where housing stocks can be increased through further land development?

Regards

Keen

 

[ellie]

thanks everyone. that is all very helpful to me.
btw the links weren't houses I wanted to buy, although I am often naive in this sense but not this time!! I won't be buying one yet, but am looking so I should be comfortabley researched when the times comes.

I noticed there was a lack of Asian restaurants and lack of non-American/English restaurants aswell. It is not really touristy but maybe the lack of restaurant variety speaks about the backgrounds of people who live there? The people I knew there were all English and had only been out here in Australia up to 10 years, but that was maybe 10 years ago.

Interesting that you notice the lack of trees as a possible reason for Lancelin not prospering like Margret River etc has. I had always liked that it was a bit bare and plain. I suppose if you are from WA I can see the appeal of more heavily sceneried places.

I wonder what the top holiday spots are in WA?