BROOKDALE

January 2007

Brookdale is serving up solid opportunities to find properties with add-value potential as cash flows into the area from developers, Government and investors, according to Perth based buyers' agent, Liz Sterzel.

Sterzel, of Property Wizards Buyer's Agency, says new development and land sub-divisions will continue to raise property standards and value in Brookdale, but the challenge for investors lies in picking out the winning buys.

"While Brookdale has an impressive supply of properties at the moment, successful investors will have to be very choosy and refine their search to homes with add-value or re-zoning potential," she says.

"This area offers some golden short-term buys, boosted by re-development and improvements now underway, but given its location its potential for long-term investment is not as rosy."

THE AREA

"Even though Brookdale is close to Tonkin Highway, its distance from the city is a factor which may limit the area's long-term potential," Sterzel says.

Brookdale is 26 kilometres south-east of the CBD with some views to the hills.

"In the year ending September 2006, the median house price in Brookdale was $252, 000 - however, through our recent observations, it would be much higher in today's market," she says.

Sterzel says in the past few years, the development trend has been a key driving force across the area that has opened up good short-term investment opportunities.

"Growth in Brookdale has increased in line with the upward trend in WA, and in the year ending September 2006, growth was sitting at an average of 43.2 per cent," she says.

"In terms of future growth, one challenge Brookdale faces is addressing the stigma attached to the local waste treatment plant, which has been dogged by claims that it may be linked to health and environmental problems," she says.

Sterzel says the focus on re-development in Brookdale has also seen a slow demographic shift as newer homes attract residents in a higher socio-economic bracket. The median age of residents in September 2006 was 25 years of age.

INVESTMENT OPPORTUNITIES

Sterzel says opportunity can be found in the right properties with add-value potential, but warns investors to take caution.

"Although there are a lot of homes on offer, only a few hold solid growth potential, and they are those properties with development possibilities," she says.

"The average home may not provide maximum return on investment, so we believe investors should look for the properties they can add value to.

"Properties with add-value potential can still be snapped up for around $320,000 to $400,000 in Brookdale and we would estimate the average rental return for a three bedroom, one bathroom home to be between $200 and $230 per week.

"Developments and investments in the area mean demand for housing is set to grow, so the right add-value property could set investors up for short term gain as standards in the area continue to rise.

"Developments like the Armadale Redevelopment Authority's Brookdale master plan will help to lift standards through beautification and also lead to an overall boost in land value."

Sterzel says areas that have been rezoned could provide another golden opportunity for those investors interested in development.

"Certain properties that have been rezoned are prime add-value investments, and in Brookdale these homes offer investors scope to maximise returns," she says.

WHAT TO WATCH OUT FOR

Sterzel says although Brookdale's investment outlook is good for the short term, investors in search of long-term growth properties in the area will need to be careful.

"The amount of Government and investor spending in the area is giving it a new image and means short term investment looks promising, but the long-term outlook may be limited by Brookdale's location," she says.

"Investors should make sure they look for stand alone growth drivers to avoid properties which may not perform as well when the area's peak growth period slows down.

"With the relatively high number of homes on the market, making poor decisions is not uncommon, so investors should be extra careful with their selection in Brookdale."

She says the re-development process will eventually lift the standard across the whole area, but until then many parts will still be left in need of a facelift.

PRO'S & CON'S: BROOKDALE

CON'S

Distance from Perth city - although the access is not easy, Tonkin Highway has helped

Changing demographic profile will take time

Rental increases have pushed many people away from the area

PRO'S

Some properties have views to the Perth hills

Brookdale is located near an industrial area, providing employment opportunities

Demand for housing will rise as investment into the area continues

 

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