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January 15, 2015 | Media Statement
If you are looking for an affordable investment in a great location, look to the suburb of St James. Only 6km south of Perth CBD, close to both the shopping centre Bentley Plaza and to Curtin University, and 5 minutes to Welshpool train station, it is little wonder this area is popular with professionals and students alike.
As St James moves to shake off echoes of a less attractive reputation, its location and affordability have translated to increased competition and development as investors and families alike seek reasonably priced homes within 20 minutes of the CBD. There is also optimism that the coming changes to Perth’s Local Government Areas causing St James to sit entirely in the new City of South Park rather than being spread across two City Councils will accelerate the gentrification of the area.
The housing stock has a wide variety, from 1920’s character homes to 1950’s brick and tile houses with a smattering of villas, townhouses and units; there is something for everyone. The median house price of $567,500* sits slightly above the median for the wider Perth metropolitan area, but below that of the suburbs that surround it, making it a pocket of affordability in a great location.
St James has experienced steady growth, outperforming many of its neighbours over the last 5 years, which can partially be attributed to its convenient location, but has also been influenced by the increase in development in the area. Large blocks are giving way to new groups of two or three villas, but so far St James does not seem to be experiencing the oversupply evident in nearby Belmont and Cloverdale.
Investors have their choice of strategy in St James. There are still subdivisible properties available in the area, though these command a higher price as they are becoming scarce and would demand a higher overall budget if the plan is to develop straight away.
Investors may also be interested in purchasing an older home as a buy-and-hold investment, where a cosmetic renovation could lift the rental return while they wait for the natural capital growth in the area, driven by the location and desirability of the surrounding suburbs, to boost the value.
Even those whose strategy is a focus on rental yield will find suitable opportunities in St James, with REIWA’s data showing almost half of the resident population are renting. As of the September 2014 quarter, St James’ median rent was equal with the wider Perth Metropolitan area at $450 per week. The careful investor could be able to find one of the new or existing villas at an affordable price to maximise their yield.