VICTORIA PARK FERTILE GROUND FOR INVESTORS

June 23rd, 2005

Victoria Park and East Victoria Park offer many of the attractions of sought-after Subiaco, with a more affordable price tag, according to Liz Sterzel, Managing Director of Perth property buyer's consultancy Property Wizards.

"These two suburbs really have a lot of appeal - they are both very close to the CBD, with easy access to the city, boast lots of pretty parkland and are right near the river," Sterzel says.

"On top of all of that, the area also offers great lifestyle attractions, with a vibrant restaurant, café and shopping strip as well as nightspots, including Burswood Casino, just minutes away.

"Victoria Park and East Victoria Park have a similar feel to Subiaco, but without the expensive price tag and with a more relaxed atmosphere, so they're a great option for investors or homebuyers.

"In terms of comparing the area to the East Coast, you'd have to say they're fairly similar to Sydney's popular inner west."

RECENT HISTORY

In Victoria Park, properties sold in the 12 months to the end of the 2005 March quarter were held for an average period of 4.2 years and the median annual growth rate was 11.3%. In East Vic Park, properties sold in the 12 months to the end of the 2005 March quarter were held for an average period of 5.3 years the and median annual growth rate was 11.7%.

Sterzel says while capital growth had already been good in the two suburbs in the past five years, they still offered fertile ground for investors.

OPPORTUNITIES FOR INVESTORS

"There is still room for buy and hold strategies," Sterzel says. "Growth is likely to continue because of the lifestyle attractions the suburbs boast, the convenience they offer and the mix of quality properties that are developing.

"The construction of the new Victoria Park train station will also further improve public transport facilities into the shopping and business hub. "And of course, there is the fact that they border prestigious South Perth and Kensington and popular Como - and all five suburbs offer charming homes and quaint streetscapes."

WHAT TO BUY

According to Sterzel, some of the best opportunities are for more active investors who are keen to renovate or subdivide, as well as for those pursuing development opportunities.

"There are older houses ripe for refurbishments that could prove lucrative for buyers and many even have the opportunity to subdivide the block too," she says. "The local Council has planned for higher density living and has zoned many areas accordingly, particularly in Victoria Park, so that represents another future growth area for investors.

"Council has even set aside so-called 'weatherboard precincts' to preserve some of the highly valued old character homes. "If the owner commits to retaining the weatherboard home instead of knocking it down, the Council will consider giving development concessions."

WHAT TO KNOW

But Sterzel warns buyers not to believe everything they touch in the two suburbs will turn to gold. "It's absolutely critical investors have done their sums before buying older properties for refurbishment and/or development," she says.

"All too often the seller wants to incorporate into the selling price the profit they would have made had they kept the property and developed it. "If investors don't know this, they may get caught out.

"With no development profit, they're forced to rely on capital growth for their "profit" - and if that happens they may as well have not gone to the risk of developing it."

WHAT TO PAY

Victoria Park In the 12 months to the end of the March quarter 2005 the median house sale price in Victoria Park was $335,500.* Sterzel says older houses on smaller blocks can still be picked up for around $300,000 to $350,000. The same house on a lot large enough to subdivide would fetch anywhere between $400,000 to $500,000, depending on the size of the block and home.

Over the same time period, the median strata unit price was $212,500**. "Nearly 80% of these properties are more than 15 years old," says Sterzel. "They're older style duplexes, flats and home units that, depending on the size, will typically cost around $200,000.

"Newer townhouses can go for anything between $300,000 to $500,000." * this includes houses only, not townhouses or other strata properties. ** this includes townhouses, villas, group houses, home units, villas, flats and other strata-titled properties

WHAT TO PAY

East Victoria Park In the 12 months to the end of the March quarter 2005 the median house sale price in East Victoria Park was $272,000*. "East Vic Park has far fewer lots zoned for development potential," Sterzel says. "In terms of newer homes, they can cost in the vicinity of $400,000, while the typical older 3 bedroom, 1 bathroom will be around the low $300,000 mark.

"Older style villas can be snapped up for about $200,000; new ones you can pay up to $400,000 for." * this includes houses only, not townhouses or other strata properties.

ADDITIONAL INFORMATION VICTORIA PARK & EAST VICTORIA PARK

Pros Close to city - 5 and 6 kms to Perth GPO respectively
Prestigious neighbouring suburbs of Kensington and Como Easy access to city, southern suburbs Ample parkland and gardens
Proximity to the Swan River Burswood Casino & Resort minutes away Cons Distance from the ocean
Many older properties in poor condition requiring significant refurbishment

SNAPSHOT: VICTORIA PARK

Properties sold in the 12 months to the end of the March quarter 2005 were held for an average period of 4.2 years and the median annual growth rate was 11.3%
The median house sale price was $335,500. *
The median strata unit price $212,500.**
The median block of vacant land was $198,623 and was 252 sqm Houses made up 14% of properties sold; the majority (77%) were strata

SNAPSHOT: EAST VICTORIA PARK

Properties sold in the 12 months to the end of the March quarter 2005 were held for an average period of 5.3 years and the median annual growth rate was 11.7%
The median house sale price was $272,000. *
Median strata unit price $226,000. **
The median block of vacant land was $195,000 and was 404 sqm Houses made up 47% of properties sold, about the same as strata.

*this includes houses only, not townhouses or other strata properties.
** this includes townhouses, villas, group houses, home units, villas, flats and other strata-titled properties

Source: " Department of Land information data via RPData.
Sales from 1/4/04 to 31/3/05 as recorded at 17/6/05. "
Home Open 18/6/05 " REIWA " Victoria Park Council

For more information, please contact
Mr Trevor Dunkley
Director
Property Wizards
trevor@propertywizards.com.au
Tel: (08) 9381 7450