Is Armadale hot or not?
As Smart Property Investor Magazine note in their June 2014 issue, Armadale has a controversial reputation, but the property sector is delivering impressive returns. Property Wizards managing director Liz Sterzel contributed to the conversation.
Could Armadale become an investment hotspot?
When looking at the fastest growing areas to invest in Perth, you need to be cautious about jumping into the Armadale housing market. While there had been a marked increase in Armadale property prices in the past year, the growth has not been proven over time and is not guaranteed to continue.
First homebuyers are taking advantage of record low interest rates to snap up homes in Armadale due to its affordability. This, along with the higher standard of homes being offering in new housing estates like Harrisdale and Piara Waters, has helped drive the growth the area has seen.
But these price increases haven’t yet been shown to continue over the long term and we aren’t confident the area has what it takes to deliver lasting capital growth.
We don’t normally put Armadale high on the investment priority list for a number of reasons. Because Armadale is 30 kilometres from the city and key business districts, most residents spend a lot of time commuting, making it a less attractive area for many tenants and buyers.
It doesn’t have the draw of the river or ocean either and the perception of an elevated risk of crime can make the area less appealing.
If you are determined to invest in Armadale, focus on properties with development potential.
Because Armadale is an area where you are not assured of organic capital growth, prioritise a property that has some add-value potential and look for sites where multiple dwelling developments are set to become possible thanks to proposed changes to the local Town Planning Scheme.
These properties can be found in pockets around Armadale city centre, and at present can be developed into groups of single storied villas or double storied townhouses. The proposed changes will give you the opportunity to build low-rise apartments later.
However, while there may be increased development opportunities, we still believe that for buy and hold investors there are better opportunities in Perth than Armadale.
If you have an interest in building your wealth through property, then call us on (08) 9381-7450, or request a FREE Starter Pack.
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