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 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
Wednesday, 12 July 2023
