SNAPPING UP CINDERELLA SUBURBS
7 December 2004
Looking to so-called 'Cinderella
suburbs' that neighbour high performing areas can help buyers
snap up a prime real estate investment, but not without doing
their homework, according to a Subiaco property buyer's agency.
Liz Sterzel, Managing Director
of Property Wizards said suburbs like Swanbourne, Wembley Downs,
Mt Claremont, Jolimont and Daglish which respectively neighbour
Cottesloe, City Beach, Claremont and Subiaco could provide a
perfect place for investors to start their search for a new
property.
"Seeking out the Cinderella suburbs
often does make sense, as many of the reasons driving growth
in the leading area may also apply in the suburb next door,"
Ms Sterzel said.
"But the trick to buying a gem
and not a lemon is to pinpoint with watertight data what the
growth factors are and if the reasons that have so far been
holding back the lesser suburb will change in the near future."
Cottesloe and its 'Cinderella'
Swanbourne provided a good example.
Both suburbs were situated about
the same distance from the beach and city, were close to lifestyle
facilities and had beach access, but Cottesloe had until recently
outperformed Swanbourne.
Despite starting off in the same
price bracket thirty years ago, five years ago median house
prices in Cottesloe were more than $100,000 higher than Swanbourne.
In the past two years though,
growth in Swanbourne had 'taken off' at over 20% both years,
exceeding Cottesloe this year.
"This could be just a one-off
readjustment with the price difference warranted due to factors
like the amount of beach access and use of surrounding land,"
Ms Sterzel said.
"Or it may be the result of the
market realising there was never any sound reason for the initial
trend towards the higher performing suburb being hotter than
the Cinderella."
"It's crucial buyers find out
the real reason for the growth to analyse if the Cinderella
had been given a new lease of life or if the trend would fade
out."
Ms Sterzel said it wasn't possible
to say across the board if the five Cinderella suburbs were
about to 'take off'; each case had to be carefully critiqued.
And she said investors agonising
over whether to buy in the best street of the Cinderella suburb
or the worst street of the preferred suburb would also do well
to crunch the numbers.
"It's a question that always
nags at buyers, but there's not one blanket answer," Ms Sterzel
said.
"What we know though is that
often the Cinderella might always remain the slightly poorer
cousin, but achieve long term growth that's just as good. That
can be a great advantage to those with less cash to play with."
Ms Sterzel said a great way to
find a Cinderella opportunity was to look for an underperforming
suburb which was nestled amongst better growth areas and was
soon to undergo changes.
"Claremont is a good example
of this right now. The proposed redevelopment of the shopping
precinct is likely to add value making certain parts of Claremont
an attractive buy and hold area," she said.
For more
information, please contact
Mr Trevor Dunkley
Director
Property Wizards
trevor@propertywizards.com.au
Tel: (08) 9381 7450
