PADBURY SHINES AS NORTHERN LIGHT IN PERTH

20th January, 2006

The northern Perth suburb of Padbury shines as a solid investment option in 2006, according to property buyer's agent Trevor Dunkley from Property Wizards.

"The areas of Kingsley, Greenwood and Padbury are certainly attracting a fair bit of attention from investors as they are all relatively close to the ocean, within less than 20 kilometres of the Perth CBD, have great access to public transport hubs and freeways, as well as boasting parks, schools and quality shopping centres," says Dunkley.

"Of the three suburbs, Padbury is the pick of the bunch - it is less than five kilometres from the coast, lies west of the freeway and is mostly made up of older homes on good sized blocks, which have exciting growth potential.

"The main consideration in this market is to select the right property within the suburb, and to only pay what it is worth - given the boom period still exists in Perth, competition for quality investments is fierce and there are many uninformed buyers ready to overpay."

Dunkley says the three areas mostly consist of older houses on blocks around 700sqm.

In Greenwood and Padbury, the typical property is a 3 bedroom 1 bathroom brick and tile property built around in the mid-1970's.

Kingsley's housing is typically made up of a 4 bedroom 2 bathroom home established around 1984, which accounts for the suburb's slightly higher median price.

"The three suburbs are dominated by families with children and more than three quarters are owner occupied," says Dunkley.

"The average household income is likely to be around $900 to $1000 a week."*

INVESTOR OPPORTUNITIES

Dunkley says investors keen to snap up a quality buy-and-hold property in Padbury should set their sights on the older, more affordable homes.

"Many of these properties are around 30 years old, so many sales are close to the land value, as the value of the bricks and mortar falls away," he says.

"Padbury is really in an exciting location that has all the hallmarks of a suburb set for superior capital growth.

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"It neighbours the prime beachside suburb of Hillarys, which, in the 12 months to September last year, had a median house price of $500,000 - almost double Padbury's of $270,000.

"We certainly predict Padbury will enjoy double digit growth in the short and medium term, because Hillarys is out of reach for many home buyers, yet neighbouring Padbury has most of its benefits, such as proximity to the ocean, the local marina, and the freeway and train line."

Dunkley says the key success strategy for selecting investments in Padbury, Kingsley or Greenwood was to snap up the biggest and best located piece of land, containing a home still suitable for rental.

"This strategy will ensure investors optimize their capital growth in these areas, while also generating a good rental return," he says.

RENTALS

In Padbury and Greenwood, a typical 3 bedroom 1 bathroom older-style home will rent for around $250 to $260 a week.

In Kingsley, rent for a typical 1980's 4 bedroom 2 bathroom home is around $280 to $290 a week.

"Rents in these areas provide a better yield than in the lower budget growth investment areas in the Southern coastal strip from Spearwood to Mandurah," says Dunkley.

"Another factor influencing rental prices is that vacancy rates are low, so rents are being pushed upwards.

FUTURE PLANS

Dunkley says the opening of a new train station at Greenwood last year was a positive for the areas - and future plans were also tipped to increase property values.

The Mitchell Freeway and the northern train line are the main travel routes through to the coastal northern suburbs.

The proposed train line extension will take the railway to Burns Beach in 2008 and the Mitchell Freeway extension has now been completed up to Clarkson, which is about 20 kilometres further north from Padbury.

"These extensions should positively impact house prices as the outlying areas become more populated, the relative closer areas such as Padbury start to be considered as even more convenient 'urban' areas," Dunkley says.

WHAT TO PAY

In all three areas, a basic 3 bedroom 1 bathroom home on a 700sqm block will fetch in the low $300,000's.

Better quality 4 bedroom 2 bathroom houses cost in the upper $400,000 range.

Many of these will also have a pool, air-conditioning and sometimes a granny flat.

SUPPLY

"The shortage of stock is most apparent in Padbury, where there are very few properties available for sale and demand is high because of its convenient location and affordability," says Dunkley.

"There are generally more properties available in Greenwood and a good selection to choose from in Kingsley, with almost three times as many houses on the market in Kingsley as in Padbury.

"In Kingsley, the majority of homes for sale are 4 bedroom 2 bathroom, while in Padbury most are 3 bedroom 1 bathroom properties."

*Source RP Data