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These Perth Suburbs Experienced Major Capital Growth in a “Flat” Market. Why?

Announcement posted by Smartline Rockingham 05 Nov 2014

Mortgage Broker from Rockingham reveals what really drives capital growth for small property investors.
Perth, WA, 5 November 2014 - A recent list of Perth suburbs that experienced the most capital growth from the June 2013 quarter to the June 2014 quarter was surprising to many. Not for the locations, but for the amount of capital growth.

By the Numbers


The median price of a unit in Sorrento rose 48.5% from $517,065 to $767,821. In Shoalwater, located within the City of Rockingham, the median price for a unit rose 40.9% from $246,147 to $346,727. The median price for a unit in Kardinya rose 37.9% from $409,297 to $564,615. In Kallaroo, the median price for a unit rose 37.3% from $324,229 to $445,298. The price of a unit in Eden Hill rose 33.0% from $311,525 to $414,378.

A “Flat” Market?

The Perth area has been a “flat” market, with prices for Perth and its suburbs rising 9.3% in the September 2014 quarter compared to one year earlier, but Perth prices went down 0.6% from the June quarter to the September quarter.

These statistics raise a question: why are certain suburbs attaining such high capital growth?”

Capital Growth: Can it Be Predicted?

Justin Smith, Principal Mortgage Broker at Smartline Rockingham, recently addressed the growth of selected suburbs in his company’s blog. As a mortgage broker serving the Rockingham area including Baldivis, which currently has the most housing activity of any Perth suburb, Mr Smith is in a unique position to assess what makes a “hot” suburb.

According to Mr Smith, “I have watched Rockingham go from a fishing town into a sea change destination. I have watched Baldivis go from a small suburb to the busiest Perth suburb for housing transactions. It is no accident that the Rockingham area has experienced the amount of capital growth that it has.”

Mr Smith continued, “We work with a lot of small property investors. For most, their strategies are the same: purchase single family rental properties in family-friendly suburbs that are positioned for future long-term capital growth. Areas that produce capital growth all have some basic characteristics. There are no guarantees, but one can reasonably predict what suburbs are going to show capital growth by paying attention to the property cycle and choosing areas that are desirable to live in.”

Mr Smith concluded: “The one overriding factor that determines capital growth in a suburb is whether or not people want to live there. The long-term property cycle dictates that the city fills up first, then the inner ring, then the middle ring, then the outer ring. In Perth, we are now at the point where outer suburbs are beginning to show the highest demand. The Rockingham area is a perfect place for capital growth. It has easy transport to Perth and all of the amenities of a sea change destination.”

Smartline Rockingham is a firm consisting of mortgage brokers serving Rockingham, Kwinana and Baldivis. Formerly known as The Mortgage Gallery Rockingham, they now offer a full range of financial services through the Smartline network. To learn more, call 1300 958 730 or visit their website: http://www.mortgagebrokersrockingham.com.au/.