COOGEE AND SURROUNDS A CLEVER CHOICE IN 2006

15th February, 2006

Evidence of high growth and a raft of planned changes suggest the southern Perth suburbs of Coogee, Hamilton Hill and Spearwood, are clever investment choices in 2006, according to Liz Sterzel of Perth property buyer's consultancy Property Wizards.

REIWA figures revealed growth in Coogee last year was 16.5 per cent, Spearwood experienced 12.3 per cent growth and Hamilton Hill enjoyed a 10 per cent rise.

Sterzel says planned investment and government-sponsored upgrades in the Coogee area were likely to see above-average growth continue, resulting in good gains for investors.

"There is a huge amount of excitement linked to the planned Port Coogee marina which is attracting many people keen to enjoy the lifestyle benefits of such a development," she says.

"In the northern Perth coastal strip, house prices in areas surrounding the Hillarys marina escalated in the years following its arrival and the same thing is already occurring in the southern strip due to the forthcoming marina in Coogee.

"On top of this development, South Beach in nearby South Fremantle is being upgraded to million dollar properties, which is also making the area more sought after.

"Another reason many people want to get into these suburbs are that they are very close to the fashionable Fremantle café strip, and of course the ocean."

"And in Hamilton Hill, a government-sponsored New Living upgrade is occurring and the experience of similar programs in other parts of Perth, such as Coolbellup and Balga, is that they've led to substantial gains for owners."

Sterzel says the coming southern railway line from Perth to Mandurah, which would fasten travel times from the southern suburbs to the CBD would also contribute to increased growth south of Perth city this year.

"We certainly expect each of these suburbs to boom and experience double digit growth in the year ahead - they are simply fantastic options for investors," she says.

COOGEE

"Coogee is situated on the water, close to the city, with hills and views and features many new, bigger homes priced over half a million dollars, so it has many of the lifestyle attractions sought by homeowners," she says.

"Up until about five years ago, there was a slight stigma associated with being situated near an industrial area, but this has changed and is no longer holding back the suburb - and it is still very much cheaper than an equivalent suburb in the northern corridor."

Coogee has a very high rate of owner occupiers - around 85 per cent and over 90 per cent of residents are families i.e. couples with or without children * (Source RP data)

SPEARWOOD AND HAMILTON HILL

Neighbouring Spearwood and Hamilton Hill are cheaper options, littered with older houses priced around $350,000.

"Both Spearwood and Hamilton Hill have many character homes and those built in the late 1960's, with many on big blocks," Sterzel says.

"The houses are much more affordable at just over half the price of Coogee.

"The suburbs are mostly made up of families who are owner-occupiers, but with a higher rental component than Coogee."

In Spearwood, more than 22 per cent of residents are renters - and in Hamilton Hill 35 per cent are renters.

Homes with development potential could cost in the high $300,000's.

PORT COOGEE DEVELOPMENT

Sterzel says the planned Port Coogee marina will have a huge impact on house prices in the area.

"More tourists and residents of local suburbs will be drawn to visit the marina, as happens in the northern suburbs with Hillarys marina and so it is the benefits of such a lifestyle attraction which will increase demand and force up prices," she says.

"Locals will have a new entertainment, shopping and dining option right on their doorstep which is tipped to inject around a billion dollars into the local communities in the next 20 years.

"Because the marina has been widely publicised, it is even attracting interest from interstate buyers."

INVESTOR POTENTIAL

"If you consider the proximity of Hamilton Hill and Spearwood to the ocean, the prime lifestyle facilities being introduced and the upgrades occurring in the areas, it's clear homes there are still at incredibly low prices," Sterzel says.

"With median prices around half of that seen in Coogee and South Fremantle, these suburbs promise great growth potential.

"Comparing these suburbs to similar areas in the northern coastal strip, they are much more underdeveloped, with moves afoot to redevelop some of the industrial areas into residential properties.

"Because of this, these areas are much more affordable than comparable ones to the north, and that means there is more room for prices to move up."

Sterzel says while Coogee's prices would be out of the reach of many investors, Spearwood or Hamilton Hill are more likely to fit with most people's budgets.

WHAT TO BUY

Sterzel suggests there are certain types of properties that will outperform in these areas.

"A superior strategy is to select older-style homes on good sized blocks and if your budget allows, look for those that have the potential to subdivide," she says.

"It will not be long before most of these properties will be too expensive for most investors, but those who can afford them will do well."

She also suggests purchasing properties as close to the ocean as your budget will allow.

"A recent land release in nearby Munster sold out in an hour, and the blocks were selling for between $250,000 to $280,000 each," she says.

SUPPLY

Sterzel says like the rest of Perth, there are few properties on the market in these areas.

"Residents are aware that prices are on the way up, so they're holding on to reap the rewards," she says.

On Saturday February 10th, there were just 28 homes listed in Hamilton Hill, 14 in Coogee and 30 in Spearwood.

RENTALS

Sterzel says the rental vacancy rates for the areas are very low, at below 2 per cent and rental yields are around 3.5 percent.