Housing affordability opens doors!

I attended an interesting UDIA lunch where the topic of housing affordability was the key point of discussion.

What I thought was most interesting, was that Housing Minister Colin Holt showed a map of Perth and in 2001, most suburbs, other than those within 10kms of the City were deemed affordable. In 2011, the only suburb regarded as affordable was in fact Kwinana.

Certainly home ownership is still a romantic ideal for most West Australians, but for some – it could take 11 years to save for the deposit, if your income is just $60,000/annum.

I remember my first home, which was a duplex in Carlisle and cost $95,000. We bought it with a $5000 deposit and now some 20 years on we own close to $1 million in property, with very little residual debt. It is certainly a blessing that we invested when we did, but we also were realistic about where to get started.

I had a quick look at properties below $300,000 on realestate.com and was pleasantly surprised to find that there were 205 properties in this price range, with a large portion in Maylands and surrounds.

Yes they were one or two bedroom and yes they were older buildings, but the fact is, affordable properties are still out there.

Is it therefore that we just need to be more realistic about our desires and goals?

I am currently in Hawaii on a family vacation and was discussing with some of the locals about housing affordability. And if we think Perth is expensive, we really need to re-examine other cities. In Hawaii a one bedroom, 1970’s timber home (as pictured) is rented out between $1600-$2000 per month and that does not even include parking!

And while the WA State Government is making inroads with providing initiatives such as Key Start, there are other Cities in the world, whereby Governments provide cash incentives and rebates to developers in order to build and provide affordable housing.

Yes housing affordability is a growing concern, but with all due respect, if the relevant parties were to actually think outside the box, then this discussion could actually evolve into reality.

Perth suburbs continue to perform

So PropertyESP has been developing some suburb profiles for clients, which outline capital growth, rental vacancies and rental yields plus other interesting data.

We have only just started but already Maylands and West Leederville are looking like promising inner suburbs for investors.

West Leederville has experienced 9.3% capital growth per annum for the last ten years and provides a 5.5% rental yield. This is above Perth’s average of 7.3%.

On the other hand Maylands has also experienced above average growth at 11.7% per annum over the last decade and furthermore 51% of residents in the area rent an apartment (Source ABS). The Maylands culture therefore appears to be very much in love with apartment living!

Both these locations are also undergoing a redevelopment process with the City of Cambridge in particular looking to bolster the commercial as well as residential components to create a very active West Leederville. They are also both centrally located to train and bus services.

These are locations that offer great promise – they will essentially evolve from low key areas into locations that offer a range of amenities and services, due to significant investment and the Cities propensity to trigger change.

It is these locations that offer good, above average growth and which retain their character that PropertyESP believe are the gems within Perth and hence are worth a look.

Let us know what you think! Share your favourite suburb with us!

We will continue to unearth key locations, including East Perth over the coming weeks – so stay tuned.

PropertyESP loves to research sales and property trends and then share the news with their clients. We drill down into the data to understand the why and how. We basically make sense of property!