SOUTH PERTH & COMO SUPERIOR
HUNTING GROUNDS
8th November, 2005
Cashed up buyers can snap up quality investments by seeking
out well-placed homes in the picturesque hunting grounds of
South Perth and Como, according to Perth property buyer's agents
Property Wizards.
Managing Director Liz Sterzel says the two suburbs
are sought-after for their fabulous scenery and lifestyle facilities.
"South Perth is situated along the Swan River
and so as well as boasting beautiful parks and charming streetscapes,
it offers stunning views of the city skyline and an expansive
foreshore perfect for walking, running and picnicking,"
she says.
"Of course, the fact it hugs the river means
there's also easy access to the water for those who love boating,
fishing and other outdoor activities."
Ms Sterzel says as well as this, South Perth and
parts of Como offer locals an array of restaurants and cafes,
as well as boutique shopping.
"Add to those the fact that they're both
within a few kilometres of the city and provide easy freeway
access to all areas, these are suburbs that have the potential
to deliver investors with great returns," she says.
"South Perth and Como are reliable suburbs,
which consistently achieve annual growth of more than 10%".
Ms Sterzel says South Perth can be likened to
Mosman on Sydney's lower North Shore.
"Mosman probably has less of the apartment
and subdivision developments of South Perth, but they both have
the same leafy green feel, character streets with federation
homes, lifestyle facilities, city proximity and views,"
she says.
The median sale price of properties in South Perth
to June 2005 was $620,000 - an average annual increase of 12.7%
over the past 12 months.
In Como, the median property price to June 2005
was $447,500 - up 14.7% on the previous year.
INTERSTATE DEMAND
Ms Sterzel says despite the areas offering quality
investment opportunities, because they were not widely touted
as real estate "hotspots" few interstate investors
were specifically focused on buying in South Perth or Como.
"There is also the fact that even for many
interstate investors, the prices in South Perth or Como are
a little high and therefore out of reach," she says.
"For those that can afford it though, there
is some treasure around - and there are still some pockets in
South Perth that are undervalued, despite prices rising considerably
in recent years."
KEY OPPORTUNITIES
Ms Sterzel says three main opportunities remain
in South Perth.
"Where there is potential to add value to
some of the gorgeous character homes in the suburb, or where
it's possible to undertake battleaxe subdivisions and build
on the rear of the property, there will likely be chances to
make good returns," she says.
"As well, solid older houses in good locations
can deliver good capital growth over the long term in return
for a reasonable holding cost.
"The other key area to look at is units and
apartments that offer views of the water. North facing water
view apartments with balconies on the higher floors are the
most in demand.
"Because there is no more room to build any
more of these properties, prices are driven up faster.
"These sorts of properties generally involve
quite a high holding cost for investors, but for those who can
cope, the potential gains make it well worth it."
Ms Sterzel says furnished executive apartments
in South Perth enjoy better cash flow, but investors need to
remember they were often subject to higher vacancies, property
management and maintenance costs in order to guarantee optimum
rental.
RECENT CHANGES
Ms Sterzel says in recent years, South Perth has
seen a flurry of development along the foreshore, with many
riverfront units being refurbished.
"There has also been a trend towards the
knocking down of older houses to make way for new apartments
- both changes have seen prices pushed higher," she says.
"In Como, a number of townhouse developments
have taken place."
WHAT TO PAY: South Perth
As at November 7, 2005 there were 134 properties for sale in
South Perth.
The median sale price of properties to June 2005
was $620,000 - an average annual increase of 12.7% over the
past 12 months.
Ms Sterzel says older houses on reasonable sized
blocks range in price from around $600,000 to $800,000 - while
prices could exceed more than $4 million.
Units/apartments began in the $200,000's for a
single bedroom, with 2-bedders around $250,000 to $350,000,
reaching $5.5million for a 4 bedroom, 3 bathroom apartment with
river views.
Blocks ranged from around $530,000 for 438 sqm,
to more than $1 million for 569sqm with river views.
WHAT TO PAY: Como
As at November 7, 2005 there were 83 properties on the market
in Como.
Current asking prices range from $176,000 for
a 1 bedroom apartment to $1.8 million for a 3 bedroom, 1 bathroom
home with 180 degree river views and potential to divide the
block into two lots.
RENT RETURNS
In South Perth, average 3 bedroom houses rent for $400 to $600
a week, giving gross yields of around 3.9% and historical long
term capital growth of around 10% a year.
Ms Sterzel says that provides a very good combination
for a passive, low-risk, "set and forget" property
investment.
Investment in unfurnished 2 bedroom units will
return a rental of $180 to $200 a week, giving gross yields
of 3 to 3.9% or higher when furnished and equipped.
In Como a typical 3 bedroom house will rent for
$250 to $280 a week and a 2 bed unit for $140 to $180 per week.
QUALITY OPTIONS
As a good alternative, Ms Sterzel suggests investors who do
not have the funds to pick up superior properties in South Perth
or Como, should look to neighbouring Kensington.
"Kensington has much of the character and
charm of South Perth and Como, but currently has more options
in the cheaper end of the market and so really could be a winner
for those with less cash to play with," she explains.
The median sale price of properties in Kensington
to June 2005 was $439,000 - an average annual increase of 12.7%
over the past 12 months.
SOUTH PERTH PROFILE (Source RP Data)
The size of South Perth is approximately 6 km²
It has 9 parks covering nearly 19% of the total
area
There are 4 schools and 2 childcare centres located
in South Perth
The population of South Perth in 1996 was 10,598
people. By 2001 the population was 19,187 showing a population
growth of 81% in the area during that time
The predominant age group in South Perth is 20
- 29 years
Households in South Perth are primarily couples
with children and are likely to be repaying over $2000.00 per
month on mortgage repayments
In general, people in South Perth work in a professional
occupation
In 1996, 39% of the homes in South Perth were
owner-occupied compared with 48% in 2001
COMO PROFILE (Source RP Data)
The suburb of Como is approximately 7 km²
It has 10 parks covering nearly 18% of the total
area
There are 3 schools and 1 childcare centre located
in Como
The population of Como in 1996 was 11,688 people.
By 2001 the population was 22,319 showing a population growth
of 91% in the area during that time
The predominant age group in Como is 20 - 29 years
Households in Como are primarily couples without
children and are likely to be repaying between $800.00 - $1000.00
per month on mortgage repayments
In general, people in Como work in a professional
occupation
In 1996, 43% of the homes in Como were owner-occupied
compared with 51% in 2001
