Hot spots vs Not spots

July 21, 2014 Sam Saggers

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Hot spots versus not spots

Nobody purposely looks to lose money when investing in property.

Perhaps that explains why property investors target areas promising financial gain and spend little to no time studying that locations that don’t.

While there’s absolutely nothing wrong with only considering profitable opportunities, much can be learned by studying the features of a market which is either stagnant or in decline.

The following is a synopsis of markets across the country. As a comparison you’ll see those areas that Positive Real Estate has determined offer potential as well as locations that offer more risk than we recommend.

Hot spots

Seville Grove, WA

Population Supply/Demand Demographics Economics
Grew approx 30% from 2006 – 2011 Demand increasing

Predominant age group – 0 to 14

Majority of households couples with children

Owner occupied – 73.9% owning homes in 2006 and 74.3% as of 2011

Diverse employer base

Infrastructure spending in nearby Armadale

 

Armadale, WA

Population Supply/Demand Demographics Economics
Predicted increase of more than 20,000 over next ten years Demand increasing Couples with children make up the majority

Diverse employer base

Infrastructure spending

 

West End, QLD

Population Supply/Demand Demographics Economics
Forecast to grow by nearly 35,000 individuals by 2031 Rentals account for 62% of market

Young professionals

Gen Y make up 40% of the population

53% professional or managers

22% have income above $1,500pw

Retail growth

2km from Brisbane CBD

$5B+ Infrastructure planned and underway

115,000 new jobs forecast by 2031

 

Richlands, QLD

Population Supply/Demand Demographics Economics

Per RP Data the population increased 151% from 2006-2011

Nearby Brisbane pop. 2.2m

Increasing demand in line with affordability and increased access via infrastructure projects. Gradually increasing supply to outer areas of Brisbane metro.

Tight vacancy rate 1% (RP Data)

Per RP Data, Couples with children are the majority

Median weekly income $1,200

Ages 20-34 = 30%

38% are married

50% born in Australia

Townsville, QLD
Population Supply/Demand Demographics Economics

Population forecast to grow by 61% to more than 290,000 people by 2031

Increasing population is pushing demand.

A number of housing projects are underway in an effort to stem the tide.

High average income per capita

Median age 40yrs

48% renters

Major industries: manufacturing, public administration and defence

Toowoomba, QLD
Population Supply/Demand Demographics Economics

The Toowoomba regional population has been projected to grow to 230,000 by 2031 – a rate of approx. 2.5% per year

Increase in population and job opportunities are pushing prices and rents upward

Low entry price point.

26% of the population are
couples with children.

Majority work in mining services or agriculture

Townsville, QLD
Population Supply/Demand Demographics Economics

Population forecast to grow by 61% to more than 290,000 people by 2031

Increasing population is pushing demand.

A number of housing projects are underway in an effort to stem the tide.

High average income per capita

Median age 40yrs

48% renters

Major industries: manufacturing, public administration and defence

Narribri, NSW
Population Supply/Demand Demographics Economics

Population grew by 21.25% between 2006 and 2012

As of February 2014, new approvals totalled on 3.

Less than 20 homes were listed for rent at the same time

89% of population live in
Houses.

Major industries include agricultural, retail and trade

Newcastle, NSW
Population Supply/Demand Demographics Economics

Australia’s 7th largest population base

High percentage of residents are renters.

As of July 2013, 2.2% vacancy rate

Annual shortfall of approx. 3000 houses per annum

University students

Blue-collar working families

Not Spots

Canberra, ACT

Population Supply/Demand Demographics Economics
Slow capital growth

Reduced demand

Falling demand/oversupplied market

Reduced migration

Aging population

Rising unemployment, falling consumer confidence

Limited employment

 

Hobart, TAS

Population Supply/Demand Demographics Economics

Flat population growth

Job losses spur population decline

10% increase in sales over last 12 months

Slow capital growth

Aging population

Rising unemployment, falling consumer confidence

Limited employment

Weak economy

 

Darwin, NT

Population Supply/Demand Demographics Economics

Second fastest growing capital city

The market has peaked as property values have slowed

Slowing demand

Increasing rental vacancies

Majority age as of 2011 is 25 to 29, the majority never married

Approximately 60% of citizens work for the government

 

Melbourne, VIC

Population Supply/Demand Demographics Economics

Fastest growing area in the country

Oversupply

Slow growth rates

Majority age as of 2011 is 25 to 29, the are married

63% are Australian born

Highest unemployment rate of all capital cities

 

Geelong, VIC

Population Supply/Demand Demographics Economics

Growth of 5.8% per annum

Short supply

As of 2011, a large proportion are 25 to 34 years old. Nearly half are married.

Job losses

Education, IT and medical account for a majority of employers

High infrastructure spending plus rail links

 

Ballarat, VIC

Population Supply/Demand Demographics Economics

Projection of 130,000 people by 2031

High rental, low vacancy rates

As of 2011, the majority of residents are aged 35 to 49


Single person households make up 27%, couples with children make up 26.4%.

Diversified employers, large economic base

 

Portland, VIC

Population Supply/Demand Demographics Economics

Growth of 1.4% from 2011 to 2031

Vacancy rate at .18%

Majority of population are married

67.3% of population are of working age

Manufacturing base is solid

Unemployment rate is above average

 

How does Positive Real Estate choose which markets will perform?

Unfortunately, there is no single market driver we can point to and say, “That’s what will tell you if a market will deliver growth.” The rise and fall of a marketplace is based on a myriad number of variables, each of them acting in accordance with the other.

Now learning how to read a market takes time but it is certainly something you can learn to do. The best way, in my honest opinion, is to copy what successful property investors are doing.

How do you know what they do? Ask. We are excited to help others achieve financial freedom through property investing like we have.

The sharing of ideas and information which can help ordinary people – just like our clients – create opportunities for themselves and their families is at the heart of our education programme.

We have helped thousands of investors change their life stories. Are you next? Click the button below for your FREE membership! You’ll gain access to the information you need to understand where to find the best and most profitable markets to grow your wealth.

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