4 tips to help you find an area with high growth potential
Finding a property that will offer a good return on investment could be easier than you think.
Ultimately renters and buyers are looking for places that are close to work or university, have a great retail precinct and a strong local economy, according to realestate.com.au chief economist Nerida Conisbee.
Here are Conisbee’s top tips for finding an area with high growth potential.
1. Proximity to the city
It is no secret that good public transport boosts jobs and the local economy, which then leads to a rise in property prices and rental demand.
Highline Westmead is at the centre of Westmead’s boom. Picture: Supplied
“Generally public transport would be in demand not just for buyers, but for renters,” says Conisbee.
“So, either suburbs offer really good value and are close to the city, or offer good access to the city – those things can make a difference.”
Around $38 billion will be spent on transport and infrastructure over the next decade in Westmead in Sydney’s west, making the area far more attractive to buyers and renters who work in the city.
Residents of Deicorp’s latest project, Highline Westmead, will be able to travel to the CBD in just 20 minutes once the new Western Sydney Metro stations in Parramatta and Westmead are up and running.
In addition, a new stop on the Parramatta Light Rail – which connects Westmead Hospital to Carlingford via Parramatta – will be located at the edge of the Highline precinct.
1. Growing population and gentrification
Investors who purchase a property and then ride the wave of population growth and gentrification tend to see the largest increase in capital growth.
Conisbee says these properties also see the strongest price growth over the long term.
Strong rental demand is driven by the suburb and building’s amenities. Picture: Artist’s impression of the pool at Highline Westmead.
“If you buy long term in terms of gentrification, you will probably get better capital and rental growth.
“You do get a lot of young people move in and they improve the housing stock. They have high demand for better retail precincts, so they start to change. You also see schools change as well.”
Western Sydney is a major hub for education, and according to a report from Deloitte, thanks to new investment for Western Sydney University (WSU) and the University of Sydney, the campuses are expected to see more than 10,000 students studying in the area by 2036, at a growth rate of 5.6% per annum.
This growing population will drive improved retail offerings, including the proposed Eat Street and Civic Centre, which will be located on the doorstep of Highline.
3. Strong rental demand
The higher the rental demand, the less likely it is that an investment property will be vacant. So what creates this demand?
“Most renters tend to be young. Universities can lead to strong rental demand or a precinct like a hospital, that has a high employment base, can also lead to high rental demand,” Conisbee says.
Around 50,000 specialised jobs will be created in Westmead by 2036. This is due to the $5.8 billion upgrade to both the private and public hospital plus the expansion of Western Sydney University, which is already underway.
The Westmead Health Precinct is undergoing a massive transformation. Picture: Westmead Redevelopment
Houses and units in Westmead currently have a median rental price of $450 per week. Houses have an annual rental yield of 2.6%, but units are even better, with a rental yield of 4.6% – higher than many parts of Sydney.
4. Quality projects
Investors need to look for properties and projects that put quality first. In the long run, these properties offer the best return on investment and shouldn’t need a lot of maintenance or repairs.
Deicorp is both the builder and developer of Highline apartments at Westmead, which means buyers can have confidence in the standard of the build. The project team is further strengthened by the partnership with award-winning architects, Turner Studio – who have ensured the design complements the surrounds.
The quality design of Highline Westmead has been integral to its success. Picture: Supplied
Peter Neale, sales and marketing director at Deicorp says the design of Highline Westmead has been integral to the success of the project.
“We have our own interior designer. We use stone benchtops, high-quality finishes within our bathrooms and kitchens and lots of storage, which is very important. All of our one, two and three bedroom apartments have secure underground carparks.”
The addition of resort-style amenities within the precinct, including a pool, sundeck and BBQ facilities is a major attraction for many tenants.
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