Tick, tick… boom!

24th October 2006

The surest way to make money in real estate investment is to pinpoint a hotspot before it becomes one. The October issue of Australian Property Investor magazine researches a technique for doing just that - giving investors the edge of foresight instead of the 'if onlys' that come with hindsight

To identify future property hotspots, investors need only learn from the past, says API editor Eynas Brodie, by looking at areas that have already boomed and identifying other locations with similar traits.

"Sea change, hill change, the ripple effect, transport infrastructure, and urban renewal and government decisions are just some of the things that make property go boom," Brodie says.

"Our research looks at how differing combinations of these factors have led to property booms in areas such as Mandurah in Western Australia, Chinchilla in Queensland and Honeysuckle in New South Wales. Learning from those examples, we also examine locations likely to follow in those boom towns' footsteps."

Some of the potential boom towns and the factors driving them towards a boom are:

Surf Coast, Victoria

The surf coast has the same combination of factors going for it as Mandurah - sea change, lifestyle features and new transport infrastructure. Already a popular sea change and holiday destination, the Surf Coast shapes as a good investment now because of the $380 million western ring road around Geelong, which will bring the coastal area 30 minutes closer to Melbourne.

Ballina to Yamba, New South Wales

This stretch of the northern NSW coast is also already incredibly popular with holiday-makers and sea-changers. However, improvements to the Tugun Bypass on the Gold Coast and the Pacific Highway south of the border are about to make it a lot more accessible for southeast Queenslanders, meaning more people - and more money - will cascade further south.KPMG demographer Bernard Salt says "There are a lot of towns with potential down that way."

Ravensthorpe, Western Australia

Chinchilla in Queensland is undergoing a property renaissance thanks to a flurry of exploration and mining in the region - million-dollar projects tend to bring well-paid workers with them. Ravensthorpe has similar factors in its favour. Sitting 600 km southeast of Perth, it's remote and is only home to 1400 people. But BHP Billiton's $2.3 billion Ravensthorpe Nickel Project will add 350 workers plus their families to the mix, creating a greater demand for housing.

Sarina, Queensland

Sarina, outside Mackay, is not just another sea change location. Like Karratha in WA before it, Sarina combines the powerful appeal of the ocean with a location close to an industrial nerve centre. The wealth pouring from coal and other industries in the Bowen Basin is feeding into Mackay and then flowing on to Sarina, thanks largely to blue-collar workers making very good money in the mining industry.

Frankston, Victoria

Frankston, a bayside area in Melbourne's south, is a classic ugly duckling, with a reputation for lower socio-economic residents and higher crime rates. But it's undergoing a transformation - the EastLink motorway will end there and urban renewal in the shape of boardwalks, playgrounds, parklands and the like is under way. It's still affordable, though homebuyers and investors are now starting to wake up to its potential.

 

© Australian Property Investor magazine - www.apimagazine.com.au. Reproduced with permission. To subscribe to API, go to www.apimagazine.com.au or pick up a copy from your local newsagent.

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