Location will do 80 % of the heavy
lifting for your property’s performance and that’s why I only invest in select
suburbs of our three major capital cities.
Now I know there will always be people
telling you to invest in regional Australia, but why fight Gorillas - why fight
the big trends?
Most jobs, most wages growth, most
population growth and most of our economy happens in Australia’s capital cities
and in particular in our big 3 capital cities.
The inner and middle-ring suburbs will
always outperform with regard to capital growth and have done so over the last
40 years.
Interestingly it wasn’t always this way
– at federation regional land was as valuable as capital city property, then we
became an industrialised country and people moved to the city.
Now we no longer manufacture goods –
it’s all about services – that’s where the higher-paying jobs are and these
people have more disposable income.
By the way…I’ve always recommended
investing in locations where people have higher disposable incomes and are able
to and prepared to pay a premium to live there.
These tend to be the more established
suburbs in our big capital cities, and the surrounding gentrifying suburbs.
I can hear some people thinking "Isn’t
all the good land taken – isn’t it unaffordable to invest in the 3 big capital
cities?”
The fact is, the way people are living is
different today…
We’re trading space for a place – trading
backyards for balconies and courtyards to live in the inner and middle-ring
suburbs of our big capital cities, which means you don’t have to own a house.
Townhouses, villa units, and low-rise "family-friendly" established
apartments in the right location make great investments.
I know there are people out there
coming to invest in the new outer suburbs, but I’m not really convinced that
land in Penrith or Point Cook, or Toowoomba will ever be more valuable than land
near the harbour.
Think about it - where would you live
if money was no object?
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Jason Gwerder
Saturday, 20 May 2023
