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Transcript of Ugly Duckling Hotspots
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 1
National Top 12
Ugly Duckling
Hotspots
November 2008 to February 2009
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 2
In a nutshell:
I believe these Ugly Duckling locations are worthy of consideration by investors because of their long-
term potential to evolve and grow:-
Market Major Influences
Cabramatta,
New South Wales
Emerging as a popular precinct for Asian cuisine; centre of an
economic/population growth precinct
Dandenong,
Victoria
Transit Cities program, $290m State Govt spending, $1 bil rail
upgrade, Metro Village, jobs generators
Elizabeth,
South Australia
Expansion of Edinburgh Defence Precinct, $550m Northern
Expressway, major jobs generators
Epping,
Victoria
Craigieburn Bypass, Fruit & Vegetable Markets, Coles Myers
facility, intermodal port, Aurora estate
Frankston,
Victoria
Bayside, Transit Cities projects, EastLink tollway, foreshore
upgrade, CBD developments, 300-berth marina
Gawler,
South Australia
Affordable precinct north of Adelaide, with improved road and
rail connections in planning, strong tourism industry
Hobart,
Tasmania
Greatest concentration of affordable suburbs of any Australian
capital city market
Ipswich region,
Queensland
Motorway & rail upgrades, RAAF base expansion, $12 bil
Springfield development, $5 billion in govt projects
Melton,
Victoria
Key growth region, $330 mil Deer Park Bypass, Western
Highway upgrade, 1900ha Toolern project
Port Noarlunga,
South Australia
Seaside, under-valued homes, good road/rail links, excellent
facilities at Noarlunga Centre
Rockingham City,
Western Australia
A cluster of affordable seaside suburbs, with major jobs nodes
and improved rail links to central Perth
St Mary‟s / St Clair,
New South Wales
Re-devt of ADI site, Westlink M7, Erskine Park Employment
Area, Eastern Creek industrial zone, good amenities
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 3
Contents:
Part One: The Background
1. What are Ugly Ducklings? p 05
2. Typical Ugly Ducklings: a case study p 06
3. How do Ugly Ducklings compare on capital growth? p 08
4. Selecting the right locations p 11
5. Extracting emotions from decision-making p 14
6. Explanations of the Hotspots “Creator Categories” p 15
Part Two: Potential Hotspots
o Cabramatta p 17
o Dandenong p 21
o Elizabeth/Salisbury p 27
o Epping p 31
o Frankston p 35
o Gawler precinct p 38
o Hobart p 41
o Ipswich/Redbank p 44
o Melton p 51
o Port Noarlunga p 55
o Rockingham City p 58
o St Mary‟s/St Clair p 61
Disclaimer:
The locations I nominate result from analysis of the property market, based on my 26
years as a real estate researcher, writer and investor.
I do not, however, have a crystal ball. There are no guarantees in real estate
investment, particularly in turbulent economic times.
I urge consumers to do their own research before buying property
- and to seek advice from independent valuers and solicitors before signing contracts.
Terry Ryder, Director, hotspotting.com.au
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 4
Part One:
The Background
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 5
Chapter 1: What are Ugly Ducklings?
Ugly Duckling is an odd term for something you would recommend to real estate investors.
But the term is apt. The Ugly Duckling of the fairy tale was considered unappealing because those
around it didn‟t understand what it was. It evolved into a graceful swan.
There are suburbs and towns with similar qualities. They are places considered unattractive by those
looking through uneducated eyes – but they have the potential to transform into real estate swans.
Every major city has suburbs which were once considered “down market” or “on the nose” – but which
have evolved into trendy areas. Richmond in Melbourne, Balmain in Sydney and Bulimba in Brisbane
are examples.
There are suburbs once considered primarily industrial in nature which have changed into thriving
residential areas with steady price growth. There are outlying areas of major capital cities – like the
Redcliffe Peninsula in Brisbane – which have been “discovered”, transforming their appeal and their
property values.
The significance of Ugly Ducklings in the residential market has grown because affordability has
become the headline issue in the industry. An international survey published in January 2008 found
Australia and New Zealand had the most severe affordability problems in the English-speaking world.
This is one reason why the cheaper areas of our capital cities have recorded the highest capital growth
over the past five years. First-home buyers and investors have targeted areas with affordable prices.
Brisbane research analyst Michael Matusik predicted in a 2006 report: “The biggest increase in sales
volumes is likely to occur in the more affordable suburbs. This demand is mostly going to be driven by
first-home buyers. The big winners here will be the outer suburbs of Brisbane and the northern suburbs
of the Gold Coast.” The results from 2007 show Matusik was right. High demand in the cheaper suburbs
of the major cities and key regional centres meant that the Ugly Duckling areas showed the highest price
growth consistently.
Now, more than ever, the Ugly Duckling suburbs are the ones with the best prospects. Three interest rate
cuts in September, October and November and the big increase in the First Home Owners Grant have
place the focus even more intensely on the cheaper areas of the major cities.
Not all of the cheaper areas have the potential to evolve into real estate swans. But some of them do. The
task for property investors is to identify the ones which have reasons to out-perform over the next few
years.
The objective of this report is to make that task easier.
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 6
Chapter 2: Typical Ugly Ducklings: a case study
Armadale in Western Australia was an Ugly Duckling. Some would say it still is.
Armadale, 25km south-east of the Perth CBD, is a place many have rejected as down-market. As
investment adviser and author Margaret Lomas puts it, it‟s been considered to be “on the nose”.
It‟s had a reputation for being a lower socio-economic area with a high content of renters. It‟s an area
many investors have rejected as a “no-go zone”. But in recent years Armadale has had a transformation.
Five years ago, while most people denigrated the area, Lomas saw it as a place of potential. She bought
a property there, well ahead of the pack which more recently has descended on Armadale and
neighbouring suburbs such as Brookdale and Forrestdale.
In 2003, Lomas paid $120,000 for a four-bedroom, two-bathroom house on a large block. She believed
there would be benefits from the improvements in roads south of Perth and from money (both public and
private) being spent in the area on schools and shopping precincts. The area had solid housing stock and
a strong content of working class people wanting to buy and renovate homes.
“We knew all these things before we bought there,” Lomas says. “We knew this area would get a better
profile over time.”
The $120,000 home was valued in 2005 at $190,000 – a 58% increase in two years – and was fetching
$175 in weekly rent (a 7.6% gross return). Lomas says: “Everyone turned up their nose at me when I
bought at Armadale. Now the same people say how clever I was. But it was just common sense.”
More recently, because of the land size, Lomas was able to build a second dwelling for an extra
$115,000 – and now has a property worth around $570,000, according to a recent valuation. “That‟s
140% growth in three years,” she says.
Armadale property values grew 55% in 2006 but the suburb today still has a median house price of only
$290,000. In 2001 you could have bought the typical Armadale home for $87,000. Values grew an
average 23% per year from 2001 to 2007.
Armadale has a population around 20,000, with about 70% home ownership. There are numerous
schools and colleges through the area. A train station provides rail connections to central Perth and there
is a Bus Port at Armadale Train Station. Retail facilities include three major shopping centres, some of
which have been undergoing expansion recently.
Stewart Kestel of Hegney Property Advisers says: “Armadale has had significant growth due to its
affordability and the infrastructure developments in the area. The re-development of the town centre has
improved its services and amenities, and the re-zoning of some pockets of land has seen the construction
of more modern villas and townhouses throughout the area. The surrounding suburbs have also
benefited from the increased infrastructure in the area.”
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 7
The suburb is being revitalised by the Armadale Redevelopment Authority, appointed by the WA State
Government in 2002. Plans included expansion of two Armadale shopping centres at a cost of $115
million, an international rowing course and a 180-hectare business park at nearby Forrestdale (where the
median house price, at $420,000 in FY2008, is much higher than Armadale‟s).
The $80 million re-development of Armadale Shopping City increases its size from 19,000m2 to
31,000m2 and injects Target, a food court, and 50 more specialty shops. It has created 150 construction
jobs and 450 permanent jobs in the completed centre.
The WA State Government has announced that a master-planned housing estate covering 1,500 hectares
will be built near Armadale, eventually to be home to 40,000 people. The Wungong Urban Water
project is to be the largest master-planned residential development in WA, providing around 12,000
home sites.
Buyers‟ agent Liz Sterzel of Property Wizards is less enthusiastic about the area. She says Armadale is
attractive to buyers looking for an affordable house but suggests it is not likely to deliver “superior long-
term growth” for investors. She says she tends to buy there for clients only when the target property
offers potential for re-development.
“A major re-development plan is tipped to transform Armadale into a regional hub that, together with
transport upgrades, shopping area refurbishments and interest in new estates, could push up prices in the
short term,” Sterzel says. “There is little doubt the suburb is becoming more attractive – but, in the long
haul, Armadale is unlikely to perform overly-well for investors, as it lacks some of the key growth
drivers, such as proximity to the ocean or the City.”
I tend towards Lomas‟ view of Ugly Ducklings (and disagree with Sterzel’s attitude that prime near-
city areas show better growth than Ugly Duckling areas – the research supports the Lomas view).
I believe this type of area has big potential for investors who buy in the right places for the right reasons.
Armadale exhibits the qualities needed: affordable housing, public transport including rail links to the
City, improved road infrastructure, big spending on services and infrastructure and a clear commitment
from government to lift the area to better things.
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 8
Chapter 3: How Do Ugly Ducklings Compare For Growth?
The greatest myth in real estate is that “prime” suburbs always out-perform. Industry professionals
claim the “good suburbs” close to the city are the best and safest investments. Research proves them
wrong. But they persist with their attitude.
I call it The Myth of Prime Out-performance. It‟s a mantra for property professionals. They have
repeated it so often it‟s come to be accepted as truth by media and many investors.
But there‟s no truth in it. And this is good news for investors. Most buyers can‟t afford the expensive
inner-city or bayside areas, but who cares. The less favoured suburbs are cheaper, have higher income
yields and provide higher capital growth. It‟s a win-win-win situation.
The key thing about the claim that the “prime” suburbs are the best investments is this: those who make
the claim never support it with figures. They have an attitude but they don‟t have an argument. The
reason they don‟t back it with data is that the data contradicts them.
Here‟s an exercise I did to disprove the myth of prime out-performance. I used figures from the Real
Estate Institute of Queensland on median prices over the five years to mid-2008 for the Brisbane City
Council area. Of 130 suburbs, 29 had experienced growth above 100% in the median house price – i.e.
values had doubled over five years in those suburbs.
Of the 29 high-growth suburbs, 20 had median prices below the Brisbane average. Most were areas with
median prices somewhere in the $300,000s, with a couple below $300,000. The top three suburbs for
capital growth over five years were:-
1. Darra median price $325,000 201% growth over five years
2. Carole Park median price $236,000 195% growth over five years
3. Inala median price $279,000 175% growth over five years
The most expensive Brisbane suburbs were poor performers by comparison. There were a dozen suburbs
with median house prices above $800,000 and only four had growth of 100% or more. Prime suburbs
like Ascot, Clayfield and Pullensvale delivered growth between 50% and 90% over five years.
To further the argument, I looked at Ipswich City. This is a cluster of suburbs in the south-western
corridor of the Brisbane metropolitan area. It‟s long been considered the poor cousin of Brisbane City
and the butt of many jokes.
Of the 31 Ipswich City suburbs for which the REIQ provided data, 30 of them delivered median price
growth above 100%. These are all suburbs with median house prices below $350,000 (most of them
have typical prices in the $200,000s). Most of them (24 of the 31) had median price growth above 150%
over five years, which is outstanding performance. Five of these suburbs experienced a trebling in prices
in five years.
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 9
Ipswich City, in other words, totally out-performed Brisbane City. So much for the poor relations tag.
I‟ve done exercises like this many times in recent years – and always with the same result. In the middle
of 2007, I researched a feature article which a national magazine used as its Cover Story. It totally
debunked the myth of prime out-performance. Here‟s part of what I wrote:-
Prime-located real estate does not always out-perform on capital growth.
The “experts” keep saying it, but the facts keep contradicting them.
Indeed, most data shows the top performers in our major cities are dominated by “ugly duckling” outer suburbs or mid-priced areas. Whether examined over one, five, 10 or 15 years, it’s difficult to find any examples of
top end locations which have led the market.
Nothing demonstrates the point better than the top 10 list for price growth over the past five years in Brisbane. Downmarket areas best known for their social problems or their industrial property, such as Acacia Ridge, Rocklea and Inala, have out-
performed the city’s swanky suburbs such as Hamilton and Ascot.
Or the top 20 suburbs over 15 years in Perth, where most of the star capital growth areas have median prices below the city average.
Many market professionals overlook inconvenient figures that contradict the myth of prime out-performance and carry on
regardless. I acquainted one adviser with the research that showed the millionaire suburbs had been out-flanked over time by the mortgage belt and he agreed with the figures and the conclusions – but said: “I would still stick to what I’ve always said. I think the prime suburbs are the places to invest. My advice always is to stay in the prime suburbs. If you have a downturn, in
a premium suburb you can still get a premium price.”
But the statistics don’t agree with that basic premise, particularly in Sydney.
Let‟s look at the areas property professionals consider to be prime. I picked these at random and found
the expensive suburbs to be poor long-term performers on capital growth. Above all, these locations are
volatile. Contrary to the claim they always hold value, these places often have years of price decline.
Glenelg in Adelaide had price peaks in 2004 and 2007 but either side of those peaks values fell. There
was a substantial drop in the median house price in 2006 and again this year. Long-term, Glenelg‟s
capital growth average is 9%, well below average for Adelaide.
The millionaire suburb of Medindie, where the average home costs above $1.5 million, had price surges
in 2003 and in 2006, but falling median prices in both 2004 and 2007. The price graph for this inner-city
Adelaide suburb is a roller-coaster. It‟s the same pattern in near-city Unley, where the median price
plunged in 2002 and 2006, with price peaks in 2004 and 2007.
Take a look at Darling Point in Sydney, where you pay somewhere between $2.5 million and $3 million
for the average house (and above $1 million for the average unit). The long-term capital growth record is
just 7.5% because median prices dropped in 2001, 2006 and 2008.
In neighbouring Point Point, where you pay over $1.5 million for the average apartment, the median
price rose in 2001, 2003 and 2005, but fell in 2002, 2004 and 2006. Another roller-coaster ride. There‟s
a pattern in these locations: a good year is followed by a bad one. It‟s a far cry from the industry mantra
that these “good” suburbs always hold their value.
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 10
Slightly less in the stratosphere, but still pricey, is Edgecliff, a neighbour of Darling Point. The average
house fetches over $1 million, but the long-term capital growth record is only 8.5%. The median price
rose strongly in 2005, but fell hugely in 2006.
There are countless examples like this in the swanky “prime”
suburbs of Sydney. Mosman, Hunters Hill, Bellevue Hill,
Vaucluse, Palm Beach. If you like steady growth and solid
long-term performance you would never buy in these
suburbs, even if you could afford it.
Hunters Hill is the place where well-heeled home owners
with big water views discovered an uranium dump had been
buried – both literally and in terms of a government cover-up
about its existence and long-term effects. Hunters Hill was a
spasmodic market even before that news broke – with a price
spike in 2003 after which growth evaporated and went into
negative territory in 2006 and 2007. The long-term capital growth record is a dismal 7.5%.
Anyone who paid $900,000 to $1 million to buy a house in one of the leafy North Shore suburbs will be
equally disappointed. Research from PRDnationwide earlier this year showed the average annual growth
over five years ranged from 2.4% to 6.8%. That‟s not a poor performance, that‟s a pathetic performance.
Melbourne has a similar story. Portsea, down on the Mornington Peninsula, is considered one of the
swankier places to live in Victoria. The average home is $1 million or so. But again, volatile. Price
peaks in 2004 and 2007, but price declines in 2002, 2006 and 2008.
I could go on and on, but I won‟t. These kinds of volatile patterns don‟t happen in the boring working
class suburbs or regional cities I tend to recommend to people. They just keep on growing steadily and
never lose value. And most of us can afford to buy in them.
If you live in Hunters Hill in Sydney, you can have
views like these. But you’ll get better capital growth
if you buy in Cabramatta.
Deception Bay in Brisbane’s north is downmarket – but it
shows solid performance every year and has averaged
14% a year capital growth for the past decade.
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 11
Chapter 4: Selecting the right locations
The first feature of an Ugly Duckling location is affordability. But to be worth a look, an area needs to
be more than cheap. There must be clear reasons for it to evolve into a strong venue for property
investment.
All the locations profiled in this report have major events under way or in planning: government
initiatives and/or master-planned residential estates and/or significant retail developments and/or
industrial projects which generate economic activity and jobs.
Public transport is a feature of most of the nominated hotspots, notably train connections to the City,
because high petrol prices have bitten in areas where families on limited incomes are struggling with
their mortgages or rising rents. PRDnationwide Research noted in a report on rental growth: “For the
outer areas of capital cities, transport such as rail access plays a large role in driving rental growth.”
In most cases, the nominated areas in this report have a major “kicker” – a feature or event that will
make a big difference to the appeal of the area. Often this is new transport infrastructure, such as the
Westlink M7 which has made the St Clair/Erskine Park precinct strategic in western Sydney, or the
EastLink tollway which has boosted the appeal of Frankston and Dandenong in Melbourne.
Author Margaret Lomas, a frequent buyer of property in
Ugly Duckling areas, says it‟s important to distinguish
between those with prospects and those to avoid.
“Just because an area is cheap doesn‟t mean you should
go and buy there,” says Lomas. “I wouldn‟t want to
create a stampede of people buying in bad areas. Cheap
is not the only parameter. Ugly maybe, but potentially
better is what you‟re after. Yes, you‟re looking for
lower-priced property but never in isolated areas and
never areas based on only one industry. Before you
choose an area, you need to do some projection into the future to ascertain whether there are factors
about that area that are likely to make it a bit different.”
- Places to avoid
There are many cheap areas in major cities which lack the necessary qualities and should be avoided.
They have no definable reason to improve. One Lomas knows well is Macquarie Fields in Sydney‟s
south-west, which featured on many news bulletins in February 2005 because of riots by teenagers angry
about police actions.
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 12
Lomas says: “I used to live in Macquarie Fields. That has got worse, not better. It was never going to get
any better, because there was nothing redeeming about the place. There was no opportunity to develop a
nice shopping centre or new community services because it was built out. It was an area that the council
forgot, more and more welfare came in and it got worse and worse.”
Sydney buyers agent Patrick Bright of EPS Property Search says he would avoid some of the areas of
western and south-western Sydney, such as Campbelltown and Marylands.
“Those areas have nothing unique going for them, they don‟t have any lack-of-supply issues, there‟s no
beach, there‟s no harbour, there‟s no uniqueness. Supply and demand drives prices and out there there‟s
no shortage of land to build new houses. I worry about people who have bought McMansions out in the
western suburbs.”
- Places that fit the bill
The reasons Lomas chose Armadale in Perth as a place to buy (refer Chapter 2) can serve as a guide.
She says: “I used other areas as benchmarks. I looked at other areas in Perth which had previously been
Ugly Ducklings. I could see that having the freeway close by was important, that new schools were
being built, that shopping centres were being built or expanded.
“Armadale had good solid housing. It had been a welfare
area but was changing. It had the basic demographics to have
a good turnover of people wanting to buy homes and do
them up.
“I knew they were extending the freeway further to
Mandurah which would go past the arterial road leading
straight to Armadale. No longer did you have to go the long
way around to get there. Suddenly there was a direct road
which cut the time to the city tremendously. We also knew
the council was building big infrastructure there.”
Lomas says she‟s expecting similar things from Elizabeth in Adelaide‟s north. She bought two
maisonettes (a form of duplex) there, paying $185,000. A year later staff in her Destiny Financial
Solutions office paid $230,000 for similar properties. In FY2008, many of the eight Elizabeth suburbs
delivered price growth above 20%.
“You need to look at Ugly Duckling suburbs close to the major cities, not Ugly Duckling towns sitting
out there on their own,” she says. “You need to be looking for areas that have some kind of sense of
community. When people are trying to build community in an area, that‟s a positive sign.”
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 13
- Public transport is important
Good public transport is a key factor. Most of the affordable areas of our capital cities are in the outer
suburbs, where first-home buyers and others seek homes that don‟t break their budgets. The current era
of high petrol prices and rising interest rates makes access to train and bus services critical for families
on tight budgets.
This is one reason why it is difficult to find worthy Ugly Duckling candidates in metropolitan Sydney:
the absence of good public transport in so many areas.
A 2006 article in the Sydney Morning Herald said: “Sydney‟s public transport system is failing a third of
the city‟s population and some of its most needy residents, prompting calls for money spent on
motorways to be diverted to local services.
“In the first study of its kind in Sydney, a researcher at the University of Western Sydney, Anne Hurni,
looked at the transport system‟s ability to move people to key services such as hospitals, schools and
shops. She found that half of Sydney‟s geographical area was further than 800 metres from a medium-
frequency transport service and just over a third of the population – 1.2 million people – lived in a
„transport disadvantaged‟ area.
“Western Sydney was the most disadvantaged region, but there were problems even in areas serviced by
rail, such as Granville, Bankstown and Villawood. Campbelltown, South Penrith and some parts of
Blacktown were among the worst served.”
All the recent statistics show a sharp rise in patronage of public transport, particularly rail, in all our
larger cities. It‟s not just petrol prices, but also road tolls and the cost of inner-city parking (Sydney and
Brisbane rank among the five most expensive cities in the world for CBD parking).
And recent research by Colliers International shows that suburbs close to rail stations have generally
shown better capital growth than those without rail services.
This presents a useful formula for investors: affordable Ugly Duckling suburbs with rail links are the
ones most likely to do well.
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 14
Chapter 5: Extracting Emotion From Investing
There‟s a barrier investors have to get over before seeing the potential in Ugly Duckling areas. They
need to avoid the emotion that sometimes clouds decisions about real estate.
The biggest mistake is applying to property investment the same criteria you would use in choosing a
home for yourself.
Margaret Lomas, author of many good books about real estate investment (including The Truth about
Positive Cash Flow Property), has bought real estate in some of the Ugly Duckling locations profiled in
this report. She says: “One of the biggest problems people have is allowing their emotions to interfere
with property investing. People do this because buying houses is quite an emotional thing to do. People
tend to use the parameters they have in place for buying a home for themselves. Often people are first-
time investors and have only ever bought property for themselves.”
Lomas suggests investors put aside such feelings and focus on economics. She suggests people can learn
from the history of areas in major cities which once were considered poor areas, but which have evolved
into strong real estate performers. These include areas such as Redfern in Sydney, Redcliffe in Brisbane
(pictured), Henley Beach in Adelaide and Armadale in Perth.
“If you‟d looked there 5-10 years ago people would have said No Way. They would have complained
about lower socio-economic groups - a bad crowd. But as the property prices rose in the more desirable
areas closer to the City, people could no longer afford those areas and they looked further out to the
Redcliffes and the Armadales.
“When that happens, the demographics of the Ugly Duckling areas change. The welfare element tends to
move out. New people come in and buy old properties to renovate or pull them down and re-develop –
and so you get better quality homes there. Councils also spend money on beautification and better
services, trying to lift the standard of what‟s there. Over time that will impact on the kind of people who
live there.”
Lomas says investors can speak to local councils and business groups to learn about an area‟s prospects.
“The local council knows everything that‟s happening. They know about all the planned developments
for the next 5-10 years, including their own wish list. Most councils will give you that information.
“I‟m on the board of Business Central Coast, which is a regional economic development organisation.
We always know when a large company is thinking of relocating into the Central Coast of NSW. We
know if a major supermarket is looking to establish something.” That kind of information is more
relevant than the reputation of an area or the outward appearance of an individual property.
Lomas says investors should beware of being “too personal” or “too picky” about property purchases.
She says friends and colleagues criticized her decision to buy in Armadale in 2004: “A year later people
said: Margaret was so clever. But it was just basic common sense.”
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 15
Chapter 6: Hotspot Creator Categories
Many of the real estate Hotspots to emerge around Australia in recent years have been strongly
influenced by one or more of the Hotspot Creator Categories – events or influences which create capital
growth for property.
Sea Change One of the most influential of all factors impacting on real estate markets. Australians are
(arguably) more drawn to live by the ocean than any other people on the planet. Sea Change is less
in the news today but migration to the beach remains a big factor.
Hill Change The property boom at the start of this decade made inner-city and coastal locations too dear for
many buyers. They looked elsewhere – and found good pickings inland, but within striking
distance of the city and/or beach. The Blue Mountains near Sydney and the Adelaide Hills are
classic Hill Change destinations.
The Stayers Some city suburbs always seem to perform. They‟re the ones with character, café culture, quality
shopping, schools and good public transport. They tend to be close to the inner-city and provide
steady growth over time, rather than spectacular one-off growth spurts.
Ripple Effect Property booms begin with the prime suburbs, often those in the inner-city. As prices rise, they
become unaffordable for many buyers – who seek less expensive property nearby. The growth,
therefore, ripples out – and continues to do so until it reaches the outskirts of the city.
Transport
Infrastructure
New roads and train lines can create value growth. Industrial property benefits the most from new
motorways, but residential is also boosted. A major new road can open up previously inaccessible
areas or provide faster connections to the CBD for commuters. Rail links and bridges can have
similar impacts on real estate.
Blue Sky The truly exclusive areas have their own dynamic. “Blue Sky” suburbs are always prime-located,
either on the edge of the City, beside the river or at the beach. They have quality retail/café culture
and exclusive schools nearby. Melbourne‟s inner south-east, including Toorak, is an example. For
price growth, the sky‟s the limit.
Lifestyle Features
The greatest wealth creator in real estate is water. The nearest thing to a recession-proof investment
is property fronting water. The ocean rates highest, although rivers, canals and lakes aren‟t bad
either. Homes fronting golf courses command price premiums too, but not as high as water.
Increasingly buyers pay premiums to live near lifestyle precincts with café culture and shops.
Ugly Ducklings Some suburbs were once shunned as downmarket but now are regarded as trendy. “Ugly
Ducklings” can be transformed into real estate swans. Richmond in inner Melbourne has made that
change, as has Bulimba in Brisbane. With affordability a key issue, Ugly Ducklings with potential
to change are expected to do well, especially with interest rates falling and the FHOG rising.
Boom areas Sometimes areas take off for specific one-off reasons. Some towns in Western Australia and
Queensland have had real estate booms because of mining operations nearby. Development of a
major industrial project can have a similar impact. Sometimes a town can boom because a TV
mini-series is made there.
Urban Renewal
and
Government
Decisions
State Governments or Local Authorities can transform areas through policy decisions or targeted
action. Urban renewal programs have changed the character of suburbs, turning industrial areas
into prestige residential. Regional policy decisions – such as long-term growth management plans –
can also have an impact. The South East Queensland Regional Plan is a good example.
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Part Two:
Potential Hotspots
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Cabramatta Sydney
Other key Influences: Lifestyle Features, The Stayers
Clean-up of crime and social problems; promotion as the exotic cuisine capital of
Sydney; success of cultural festivals; drop in unemployment; plans for population and
jobs growth; $500 million revamp of Liverpool hospital.
Typical houses: $350,000
While Cabramatta‟s darkest days seem to be behind it, it still wears a number of unflattering tags such
as “drug capital of Australia” and home of migrant organised crime. But according to local police and
community leaders, that‟s old news.
There has been a major drive to clean-up the crime problems and the area is now being successfully
promoted as “the genuine taste of South East Asia in Australia”. There are plentiful restaurants, a vibrant
Chinatown and events such as the annual Asian Seafood Festival and The Moon Festival (which
celebrates the summer harvest in countries like Vietnam, Korea and China over a thousand years and has
15 days of activities). Cabramatta is also the focus of the Chinese New Year celebrations in February.
Business is expanding, unemployment is declining and the area is earmarked to major growth in
population and jobs in the future.
Location
Cabramatta is in the Fairfield local government area (LGA)
in the south-west of Sydney, near Liverpool. It‟s about 40
minutes from the Sydney CBD.
Population and demographics
Cabramatta, with about 20,000 residents, is the most
populated suburb in the Fairfield LGA.
It has the largest number of school-aged children and youths
of any suburb in the LGA (21% of residents are aged 5-19,
compared with the Sydney average of 14%). It also has large
numbers of one-parent families and lone-person households.
Cabramatta was the site of a migrant hostel in the post-war
period, which was decisive in shaping the suburb. Migrants
who passed through the hotel later settled in the area. In the
Nineties the hostel was removed and the site re-developed.
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Only a third of the population of postcode 2166, which includes Cabramatta, Cabramatta West, Canley
Heights and Canley Vale, was born in Australia. Around 35% of residents were born in Vietnam and
China, with smaller numbers of migrants from Italy, the UK and Yugoslavia. Nearly half the resident
population claim to be Buddhist.
Economy and amenities
The Daily Telegraph reported in March 2008: “Once it was known as the drug capital of Sydney, but
Cabramatta has reinvented itself as the exotic cuisine capital of the city – boasting Asian fare, thriving
fresh food and retail stores.
“The suburb‟s massive overhaul is credited to the hard work of police and local government and
community members, who are now reaping the benefits, with thousands of people travelling to
Cabramatta for a slice of Asia.
“Superintendent Ray King said he has seen a huge improvement in the area since he worked the streets
of Cabramatta as a detective in the latter half of the 1990s. Much of the improvement was built on
cleaning up the suburb‟s drug activity. „Cabramatta is really a unique place in Sydney to visit and enjoy
and has turned around completely,‟ he said.
“The restaurants, cheap fresh food and vegetable
markets, and fabric stores are the biggest
drawcards. And having the Australian movie Little
Fish, starring Cate Blanchett, filmed in the suburb
has only added to Cabramatta‟s appeal.
“Chamber of Commerce president John Medich
said: „You can‟t get a shop in Cabramatta on
ground floor retail space. All businesses are busy.
We‟re proud of Cabramatta. All the name-calling
and stigma has gone‟.”
There has also been a boom in jobs growth in this
area recently. In the year to March 2008, the unemployment rate in Fairfield dropped from 10.4% to
7.7%, while in neighbouring Liverpool it fell from 6.8% to 5.1%. Liverpool is a developing regional
centre for the south-west and includes Liverpool Hospital, a major TAFE campus, Liverpool Bus
Terminus and employment nodes like M Five Industrial Park and the Moorebank Distribution Centre.
The area is benefiting from a trend by businesses to relocate from the CBD to Sydney‟s west and south-
west. The Daily Telegraph reports: “A line-up of pharmaceutical, food, engineering and financial
businesses have triggered a 40% boom in developments in Liverpool along over the past two years (to
$750 million). Global exporter ResMed, Broens Industries, American Express, Cadbury Schweppes,
Coles Myer Logistics, TNT, LG, Coca-Cola Amatil, Wyeth Pharmaceuticals and IBM have all taken up
cheap office space close to where their workers live. Government is shifting services to the west,
including a $500 million project that will make Liverpool Hospital the largest in NSW by 2016.”
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Cabramatta railway station is a junction station on the CityRail network, where the South Line and the
Inner West Line merge. The neighbouring suburb of Canley Vale also has a train station.
Amenities in the area include the Cabramatta Golf Club, the Cumberland Grove Country Club,
Cabramatta Sportsground and Warwick Farm Racecourse.
The area‟s migrant population is reflected in regular festivals such as Chinese New Year, the Asian
Seafood Festival and the Moon Festival, which attract visitors from all over Sydney.
Property profile
The housing makeup of the area is in line with Sydney
averages: two-thirds are standalone houses and the rest
are flats and units.
Cabramatta has pockets of solid housing of good quality
and other parts where homes are fair to reasonable. It‟s
definitely not what you would call a leafy suburb. It
evolved in the Sixties through a major state housing
project that started in Liverpool and spilled over into
Cabramatta – and that is reflected, to a certain extent, in the
standard of housing in some pockets.
There are large numbers of small-to-medium sized blocks
of brick units - not palatial but tidy and in better condition
that you find in precincts around Blacktown or Parramatta.
Cabramatta recorded a median price of $355,000 for
houses and $173,000 for units in FY2008, according to
Australian Property Monitors. Like most Sydney suburbs,
it had big price growth in the early part of the decade,
peaking around 2004, with growth falling away after that
and prices declining in 2005 and 2006. However, price growth resumed last year.
Overall, Cabramatta has a healthy long-term growth average around 10%, which distinguishes it from
many suburbs in Sydney‟s west and south-west.
Cabramatta West has a slightly lower median house price ($345,000) but a similar healthy growth
average of 10% over the past 10 years.
Vacancy rates in the area are low at 0.8%.
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Future Prospects
Cabramatta‟s rough past appears behind it and its present is based on its contributions in culture and
cuisine. It‟s clearly an area on the improve.
Its future is likely to involve major growth in population and employment. The Fairfield region, and
Cabramatta in particular, has been earmarked for growth under the NSW Government‟s draft sub-
regional strategy and could share up to 95,000 new homes, 61,000 extra jobs and a regional centre by
2031.
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Dandenong Melbourne’s south-eastern suburbs
------------------------------------------------------------------------------------------------------------------------------
Other key influences: Govt Decisions, Urban Renewal, Transport Infrastructure
------------------------------------------------------------------------------------------------------------------------------
$290mil State Govt infrastructure package, $450mil State Govt industrial estate, $250mil
Metro Village, $2.5bil EastLink tollway, $1bil upgrade to rail links, 600,000m2 inland
port, Australand‟s $150 million industrial estate ------------------------------------------------------------------------------------------------------------
Typical houses: $280,000
The hallmark of an Ugly Duckling hotspot is (1) plenty of reasons to deter investors, and (2) clear
drivers of future change, converting the area into a good investment prospect. The City of Greater
Dandenong fits the bill better than most locations in Australia.
It‟s an area known for its high content of migrants, above-average unemployment and high crime rate
(the rate of offences in postcode 3175, which includes Dandenong, Dandenong North and Dandenong
South, is nearly double the overall Melbourne rate).
All this sounds like a good reason for property buyers to
shy away. But in seeking Ugly Duckling hotspots, we‟re
looking for areas undergoing evolution, with identifiable
reasons to change for the better. Dandenong has plenty.
Demographer Bernard Salt says the State Government is
investing “hugely” there, making it a Transit Cities hub
targeted for renewal of infrastructure and services.
“Urban renewal is very important,” Salt says.
“Dandenong has an industrial background. But that is
being replaced by quite significant development in clean
industry – distribution warehousing, for example.
“I think it will certainly benefit from this. It will consolidate Dandenong as the outer east CBD of
Melbourne. It‟s like the Chatswood or Parramatta of Melbourne. It has the linkages to Melbourne via the
Princes Highway. EastLink adds another dimension. It will focus business activities and opportunities
into Dandenong.
“There‟s a lot of employment generation there. There‟s a taxation office out there, office work as well,
which brings another feature to the demographic profile.”
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Location
The suburb of Dandenong is 32km south-east of the Melbourne CBD. It sits at the heart of the Greater
Dandenong Local Government Area (LGA), which provides a major share of Melbourne‟s jobs-
generating industry. Other suburbs in Greater Dandenong include Springvale, Noble Park and
Keysborough. The EastLink tollway bisects Greater Dandenong.
Population & Demographics
Greater Dandenong has a population of 133,000 and is expected to rise to 170,000 by 2030. It is the
most culturally-diverse locality in Victoria – and the second most culturally-diverse in Australia, with
residents from 151 different birthplaces. Around 54% of its population was born overseas (48% in
nations where English is not the main language).
Major overseas sources of residents of the City are Vietnam, Cambodia, China, Italy, Greece, India, Sri
Lanka and Bosnia. The statistics show that people from these origins have above-average home
ownership rates.
According to State Government figures, 2,300 new migrants
settle in Greater Dandenong in a typical year. There are
emerging communities from Sudan, Somalia, Iraq, Afghanistan,
Bangladesh and the Cook Islands. Refugees in this area access
support through a $1 billion State Government social justice
package which aims to assist in seamless relocation to a new
and positive way of life.
Young people are more likely to leave school early and are less
likely to attend university. Unemployment rates historically have been higher than Melbourne averages.
A 2006 government report said: “According to the measures of social disadvantage based on income,
housing, employment, occupations and English fluency, the community of Dandenong is among the
most disadvantaged 6% in Victoria.
The State Government says in another report on the Greater Dandenong area: “Though higher than the
metropolitan average, the crime rate has declined substantially in recent years.”
Residents of South Dandenong‟s Trewin Street infamously took the law into their own hands by
installing home-made speed bumps to deter the hoons that plagued their neighbourhood. Later the
council voted to install speed cushions to address the anti-social behaviour.
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Economy & Amenities
Manufacturing and retail trades are major sectors of employment, together accounting for almost half of
all jobs in the Greater Dandenong area. Manufacturing‟s share of employment in this area is double the
Melbourne average.
Research indicates that close to 70,000 people work in Greater Dandenong each day, of which 22% live
in the immediate area and 24% live in the Casey LGA nearby. Around 21% live in the municipalities of
Frankston, Kingston and Monash.
The VicUrban website says Dandenong is “the heart of Victoria‟s economic engine room”. It says: “The
Greater Dandenong region produces almost half of the state‟s manufacturing output and is home to more
than half a million people. One in every three jobs in Melbourne is located in the south-east corridor.”
Property Profile
The Greater Dandenong area is generally in line with the rest of Melbourne in terms of home ownership,
with a slightly higher percentage of renters. Around 70% of households own their homes (or are paying
them off) and 30% are renters. The level of government-supplied housing (4.2%) is a little higher than
the Melbourne average (3.1%).
Three-quarters of dwellings in the Greater Dandenong area are houses, with the rest comprising units
and townhouses. But the suburb of Dandenong is different, with almost half of households renting – and
61% of dwellings are houses and 39% units and townhouses.
Dandenong‟s median house price rose from $135,000 in 2001 to $250,000 in 2006, growing an average
13% a year. According to Australian Property Monitors, the median house price in 2007 was $257,000,
rising to $280,000 for the year to June 2008. By October 2008 it had risen further to $310,000
Dandenong has a solid long-term track record, with prices growing an average 12.5% a year over the
past 10 years, according to Australian Property Monitors. Its median price for units is $210,000, having
grown an average 12% over the past decade.
The suburb of Dandenong North has around 24,000 people, half of which were born overseas. No major
changes in population are forecast for the next decade, unlike the suburb of Dandenong. Only 5% of
dwellings are flats or units and only a quarter are rented.
The median house price for Dandenong North grew quickly between 2001 and 2004 when it settled at
$245,000. Australian Property Monitors records a median house price of $262,000 for 2007, an annual
rise of about 7%, but rising further to $290,000 for the year to June 2008. Units in Dandenong North
typically cost around $240,000. Both houses and units have averaged 11-12% a year value growth over
10 years.
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The suburb of Dandenong South has around 5,000 residents, with two-thirds born overseas (countries of
origin are headed by Macedonia, China and Sri Lanka). Only small rises in population numbers are
predicted over the next decade. Employment, income levels and educational levels are “much less than
the average for Melbourne”. Around 36% of households are renting, well above the Melbourne average
of 24%.
Future Prospects
The State Government announced in April 2006 it would spend $290 million on an infrastructure
package for Dandenong. This includes improvements to roads and transport in the Dandenong CBD,
plus changes to improve the precinct‟s amenity. A City Walk to link Dandenong Station to the CBD
heart is part of the Revitalising Central Dandenong package.
The program, managed by government agency VicUrban, aims to create 5,000 jobs and attract $1 billion
in private investment over the next 15-20 years. It also seeks to create an extra 4,000 households in
central Dandenong in the next 25 years.
The Victorian government announced in May the construction of a key building in the urban renewal
project– a $73 million government services building in the centre of Dandenong, 300m from Dandenong
Station with the proposed City Walk project at its rear.
The 10-storey building will be the first new office
building built in Dandenong in 20 years and gives
substance to claims that Dandenong will eventually
become the business hub of Melbourne‟s south-east.
The urban renewal project also includes a new George
Street Bridge that will provide pedestrian and traffic
access from the city‟s CBD to the City Walk and
residential projects such as the new Metro Village 3175
project.
With high levels of government infrastructure funding,
the private sector has come to the party to support
population growth. In March 2008 a new waste facility
was approved by councillors and will be built by Veolia
Environmental Services. The facility will take up to
92,000 tonnes of waste in its first year with an ultimate
capacity of 200,000 tonnes.
The Dandenong Hospital is slated to share $350 million allocated in the State Government budget for
capital works.
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The Dandenong area now benefits from improved access via the new $2.5 billion EastLink and has the
advantage of rail links to central Melbourne. The $65 million Dandenong Bypass was opened in
December 2007 – the 4.75km road provides an alternative for heavy freight traffic in Dandenong‟s
industrial area.
Another government boost to Dandenong was provided in the State Government‟s “Meeting our
Transport Challenges” policy announcement in May 2006, which included $2 billion in improvements to
Melbourne‟s rail network, notably a third track on the Dandenong line (at a cost of $1 billion). Plans
were announced in August 2007 to place the Dandenong train line underground in Springvale as part of
the first stage of the line upgrade.
The Dandenong Council also recently announced a new bus service linking Ringwood to Frankston and
passing through Greater Dandenong. The SmartBus Route 901 was launched in March as part of the
State Government‟s 2006 commitment of $10.5 billion to address long-term transport planning.
The Revitalising Central Dandenong program includes re-configured roads, open spaces, new
infrastructure and services. It aims to increase population and housing in the central Dandenong area by
an extra 4,000 households over the next 25 years. It aims also to increase the attractiveness of the city
centre and encourage people to use it, while reducing the number of vacant shops and promoting retail
diversity.
The Dandenong Council supports residential growth and recently rezoned Keysborough South from
rural to residential. It‟s expected that the amendment will pave the way for new residential development
and community support infrastructure in the area.
The $250 million Metro Village 3175 project – the biggest residential development in Dandenong in
three decades - is creating 1,000 new homes on the site of the former saleyards, eventually
accommodating up to 3,500 people. Residents of the Metro Village 3175 project will also benefit from
the new George Street Bridge.
Under the State Government‟s 2030 strategy, the Noble Park Activity Centre (in the suburb of Noble
Park, immediately west of central Dandenong) will be re-developed, with the injection of town squares
or public plazas alongside a proposed new retail development.
The Greater Dandenong area is attracting increasing investment from businesses also. The Deal
Corporation has announced a $30 million re-development of the Arkana hardware site, to include two
buildings with shops, conference rooms, offices and apartments. Glass maker Pilkington will spend $133
million rebuilding and modernising its Dandenong factory, creating 300 jobs; the upgraded plant will
produce environmentally-friendly glass products.
In October 2006 the Salta Properties group paid $55 million to buy a 112-hectare farm at Lyndhurst near
Dandenong South to construct a $100 million inland port, comprising 600,000m2 of industrial buildings.
According to The Australian, the land is part of 1,000 hectares earmarked for rezoning from rural to
industrial “to allow further growth of Melbourne‟s premier south-eastern industrial belt”.
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The site has a direct rail link to the Port of Melbourne and it is planned to move shipping containers
from the port to Lyndhurst by rail rather than trucking them along congested roadways. The inland port,
expected to be operating in 2-3 years, will be the second built in Melbourne, with one already
operational at Somerton in the city‟s outer northern suburbs.
Another significant industrial development is the State Government‟s $150 million Logis project. A
joint venture between VicUrban and Melbourne Water, it will be built on 154 hectares at the former
Dandenong sewerage treatment plant and generate around 3,000 jobs. The site, 3km south of the
Dandenong CBD, borders the new EastLink roadway. The first stage of 23 lots ranging from 2,500m2 to
8850m2
is now being marketed (expressions of interest closing 12 November 2008)
In November 2007 Australand announced the purchase of 31 hectares at Dandenong for $30 million.
The land, which has a 2km frontage to EastLink, is near Australand‟s existing 70-hectare South Park
precinct and will yield industrial developments worth $150 million.
In Springvale, another suburb of Greater Dandenong, GLG Developments has received council approval
for a 10,000m2 development of shops, offices and apartments in the suburb‟s business centre. Also in
Springvale, Ikea is building its largest Australia store in a 70,000m2 retail project which will also include
Harvey Norman and 15 other retailers.
Dandenong Plaza will benefit from a multi-million dollar cinema project from GPT Group and Reading
Cinema. Local Councillors have praised the development as providing an “entertainment hub” for the
city.
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Elizabeth precinct Northern suburbs of Adelaide
------------------------------------------------------------------------------------------------------------------------------
Key influences: Ugly Ducklings, Government Decisions, Transport Infrastructure
------------------------------------------------------------------------------------------------------------------------------
Expansion of Edinburgh Defence Base; $550 million Northern Expressway; $330
million hospital re-development; Playford North and Salisbury North housing programs;
employment nodes such as Edinburgh Park industrial estate; rail links to the City; the
most affordable housing in any mainland capital city.
Typical houses: $170,000-$200,000
The Elizabeth precinct is one of my enduring favourites in South Australia. It‟s a classic Ugly
Duckling, one many investors would shun because it‟s down-market.
But buyers are targeting this area because it‟s affordable, offers good returns and has tangible drivers of
capital growth. And the recent increase in the First Home Owners Grant will generate further attention
to this precinct where, despite high value growth, most suburbs have median prices below $200,000.
The area is one of the few in South Australia with strong population growth. It‟s on the city outskirts
where there‟s scope for urban expansion and suburbs such as Davoren Park are the centre of new
housing development, as well as refurbishment of older stock.
Not only are houses cheap, but the area can deliver good yields: 5.5% returns are standard on houses and
maisonettes, while close to 6% is available on units
To cement the appeal of the area, some major economic boosts are in the pipeline.
Population and demographics
While population growth in Adelaide has been poor by national standards, the standout growth region is
the municipality of Salisbury and its neighbour Playford in the northern corridor - which includes
Elizabeth and Davoren Park.
Census data confirms Salisbury had the largest growth in South Australia since 2001, with its population
growing 7,600 to 122,200.
The Australian Population Institute says the precinct covering the Salisbury, Playford and Port Adelaide
Enfield LGAs had the greatest population growth in SA last year. The three northern councils combined
have seen their combined population grow 18,200 in the five years to 2007.
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Economy and amenities
These suburbs are situated near major employment
nodes, such as the General Motors Holdens car plant, the
Edinburgh Defence Precinct, the Bridgestone factory, the
Playford Evolution high-tech precinct and major
industrial estates, including the 650-hectare Edinburgh
Parks industrial estate (pictured) which so far is about
30% developed.
The Defence Department announced in 2006 it would
relocate units to expanded facilities in the Edinburgh Defence Precinct.
The Edinburgh precinct is already huge. Clearly it‟s been earmarked for even bigger things, with the
plan to relocate a major Defence Force unit of 1,200 troops there from interstate. This has been reported
as a $500 million undertaking.
In October 2008 contractor Baulderstone moved on site to start $410 million in construction projects in
connection with the expansion. The new army facilities will include accommodation, training facilities,
civil works and mess facilities. At the construction peak, Baulderstone will have 450 people on site.
The new army battalion is expected to arrive in Adelaide early in 2011.
The expansions planned at the base are likely to lead to 500 homes being built in the northern suburbs –
according to an agreement between Defence Housing Australia and the Land Management Corporation.
In September 2007 the State Government signed a deal with Fairmont Homes to develop 350 homes in
the northern suburbs, some of which will house members of the 1,200-strong battalion from 2011.
Another boost to the area‟s real estate market is the Playford North re-development program, which
involves an overhaul of the large number of properties owned by Housing SA. Many older homes are
being replaced, while others are being refurbished. This 10-year program will raise the standard of
housing in suburbs such as Davoren Park.
The $550 million Northern Expressway, extending 23km from Port Wakefield Road to Gawler, will run
past the northern suburbs of Penfield, MacDonald Park, Andrews Farm and Munno Para Downs, all
neighbours of the Elizabeth precinct. The 4-lane freeway is designed to improve links between Port
Adelaide and the Sturt Highway but will improve access for the Elizabeth precinct. The project has two
parts: the upgrade of Port Wakefield Road and construction of 23km of new road. The Port Wakefield
Road section is under construction, with the total project to be completed in 2011, creating 2,600 jobs.
The area also has rail links to the Adelaide CBD.
A high-technology precinct is being established in the Elizabeth precinct. The Playford Evolution site
will unite over 20 companies in a $50 million project spearheaded by Priority Engineering Services with
the support of Playford City Council. In March 2007 it was announced that major engine components
for Australia‟s new F-35 joint strike fighters would be supplied by Elizabeth-based Levett Engineering
in a $20 million deal.
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The State Government announced a major upgrade of the Lyell
McEwin Hospital at Elizabeth Vale in July 2007. A total of
$336 million is being spent (including the current $200 million
stage 3 re-development) to make this facility the major referral
centre for Adelaide‟s northern suburbs and one of the four major
tertiary hospitals in South Australia.
At the 650-hectare Edinburgh Parks development, major new
projects include a $125 million distribution centre for Coles
Myer (opened late in 2007 with a 67,000m2 warehouse and 120
loading docks) and a $105 million Inghams Enterprises chicken
processing facility. Inghams is undertaking a $250 million expansion of its SA businesses, creating 600
extra jobs.
In March 2007 came the news that Holden‟s was cutting 600 jobs at its car-making plant in Elizabeth -
reducing its workforce to around 3,500 people. But in September 2007 Holden‟s announced it was
returning to full production after a significant restructuring and would soon be building 147,000 vehicles
a year.
Author and investment adviser Margaret Lomas, who owns properties in this precinct, says the job
reductions have not reduced the area‟s appeal for investors. “It would be different if Elizabeth was a
remote town with an economy dependent on the Holden‟s plant,” she says. “But Elizabeth is a suburb of
Adelaide and Adelaide is a capital city. I don‟t think the growth I see in the Elizabeth area is linked to
the Holden‟s plant. It‟s linked to a lot of other things. It‟s not about what‟s happening today – it‟s the
potential of that precinct for tomorrow.”
Salisbury major Tony Zappia has said that workers taking separation packages from the plant “should be
able to find work easily in a range of growth industries in the northern suburbs”. The Advertiser
reported: “Mr Zappia says opportunities are available in construction, transport, storage, food
processing, defence and other sectors.”
Property profile
The Elizabeth precinct (there are nine suburbs with “Elizabeth” in the name, plus neighbours such as
Davoren Park and Smithfield) has lots of solid but older housing stock, with plenty of homes built in the
Sixties and Seventies. There are also newer areas.
According to Australian Property Monitors, median house prices for the year ending August 2008
included $186,000 at Elizabeth Downs, $205,000 at Elizabeth East, $175,000 at Elizabeth North and
$210,000 at Elizabeth Vale. Prices have grown strongly recently in virtually all of the suburbs, with
most showing price growth in the 15% to 20% range in FY2008.
These suburbs have strong track records for value growth: all have averaged 13% to 15% a year in
capital growth over 10 years. They‟re popular, too: the various Elizabeth suburbs jointly achieved 750
houses sales over 12 months. Investors who look around can find houses yielding better than 6%. Units
in the Elizabeth suburbs typically cost in the $120,000 to $135,000 range and 6.5% returns can be found.
The Lyell McEwin Hospital at Elizabeth Vale
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Future Prospects
Demand for housing in Adelaide‟s north is expected to accelerate. It is the destination many buyers head
for when seeking affordable housing. The doubling of the FHOG for buyers of existing homes and
trebling to $21,000 for new homes will generate activity in this region because (a) houses are cheap; and
(b) it‟s the most active area in Adelaide for new home construction.
Lomas believes investors need to put aside their personal feelings about areas like Elizabeth and look at
the fundamentals. She says Elizabeth is a growth area, not only for residential but also for business. “It
has a lot of welfare recipients but Housing SA is selling down its holdings there,” Lomas says. “In time
there will be more home owners in the area.”
One example of the urban renewal focus is the $180 million
Salisbury North Urban Improvement Project, a 10-year scheme to
create 800 allotments for new housing as well as renovating 500
Housing SA homes for sale.
This is a separate project from the Playford North Urban Renewal
Project mentioned earlier, which involves the regeneration of the
Peachey Belt suburbs of Smithfield Plains and Davoren Park, plus
creation of new communities on 314ha of government land.
Lomas bought a property with two 3-bedroom maisonettes (duplexes) in Elizabeth and a similar
property in Davoren Park in 2005. Each cost $185,000 and provided a rental return of $280-290 –
around 8%. The sites have potential for dual dwellings in the future.
Lomas bought another Elizabeth property early in 2006 – half a duplex, sold by the Housing Trust after
upgrading it, for $112,000. It rented at the time for $165 a week, a return of 7.7%, and has good
depreciation benefits from the refurbishment. “The property has everything I look for in an investment,
including the area‟s future potential,” Lomas says.
Valuer Herron Todd White summarised the appeal of the precinct with these comments on Elizabeth
South in the May 2008 edition of The Month in Review: “Employment would probably be the biggest
drawcard to the location. There is also pretty good access to public transport and there are two large
shopping precinct in adjoining suburbs.”
0
50000
100000
150000
200000
250000
Elizabeth E Downs E East E Grove E North E Park E South E Vale
Source: Australian Property Monitors
Median Prices: yr to August 08
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Epping Melbourne’s northern suburbs
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Other key influences: Transport Infrastructure, Government Decisions
------------------------------------------------------------------------------------------------------------------------------
$500mil Craigieburn Bypass, $360mil fruit/vege markets, $1.8bil Aurora estate, Transit
Cities projects, 120ha Austrak intermodal terminal, 75,000m2 Coles distribution centre,
major retail projects, $600mil Plenty Valley Town Centre. ------------------------------------------------------------------------------------------------------------------------------
Typical houses: $290,000
Locations with three “Creator Categories” working in their favour have the best chance of becoming
real estate hotspots. The Epping precinct, apart from being an affordable Ugly Duckling area, has strong
drivers from Transport Infrastructure and Government Decisions. (For a full explanation of Creator
Categories, refer to Chapter 3 of this report).
The Epping region has plenty of good reasons to move forward and therefore be worthy of consideration
by property investors, particularly in a climate of falling interest rates and the increased First Home
Owners Grant. In a nutshell, they include:-
o The Craigieburn Bypass, which has improved access and eased congestion in the northern
suburbs of Melbourne (Transport Infrastructure).
o The plan to relocate Melbourne‟s fruit & vegetable markets to Epping (Government Decisions).
o The identification of Epping as a “Transit Cities” location, with associated new development
(Government Decisions).
o Jobs generators such as the Austrak intermodal terminal at
Somerton, next to Epping (Transport Infrastructure).
o The relocation of Coles Myer‟s major distribution facility
from Melbourne‟s south-east to Somerton.
o Significant new housing developments.
o Major retail developments.
These and other projects in Epping and neighbouring suburbs
involve major corporate entities such as Westfield, Australand,
Stockland, VicUrban, MAB Corporation and GPT.
The impact of such projects means the Epping precinct has
improved access, new employment nodes, improved shopping
facilities and the injection of modern housing in an area which has
lots of 1970s brick veneer homes. All of this helps make the area
more attractive to both residents and property investors.
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Location
Epping is in the City of Whittlesea which also includes Mill Park, South Morang, Lalor and
Thomastown. Whittlesea is 20km north of the Melbourne CBD and is described as “a mixture of city
lifestyle and country comfort”. Oliver Hume Real Estate says: “The southern parts are established urban
areas, but the city also takes in the hills and natural features of the Plenty Valley and Ranges.”
Population & Demographics
Epping has a population of around 20,000 and 73% are Australian-born (compared with the Melbourne
average of 65%). The area has a young population with above-average numbers of children and
teenagers, and below-average numbers of retirement age people. You‟re more likely to find trades
people and blue collar workers there than professionals.
It‟s mortgage belt territory, with 45% of households being owners with mortgages (compared with the
Melbourne average of 27%). It‟s the kind of area first-time buyers will target, armed with the expanded
FHOG and encouraged by falling interest rates.
Government forecasts to 2021 suggest the Whittlesea LGA will experience the fourth largest net
increase in population in metropolitan Melbourne. The Melbourne newspaper The Age reports: “New
housing estates just north of Epping are like spring crops timed to take advantage of the Craigieburn
Bypass … The bypass cuts travel time into the city and also reduces traffic volume on Epping Road.”
Economy & Amenities
Epping has been named a Transit Cities location under the Melbourne
2030 initiative. This is a State Government program designed to create
opportunities for people to live and work in the same area, reducing the
need to commute. It seeks to revitalise centres to make them
economically stronger, improve public transport and provide easier access
to shops, services and job opportunities.
The Department of Sustainability notes Epping has the Northern
Melbourne Institute of TAFE, the Northern Hospital (being expanded),
Epping Plaza shopping centre (also being expanded), the Craigieburn
Bypass and (soon) the Wholesale Fruit and Vegetable Market.
The Plenty Valley Town Centre in South Morang is a joint venture
between the Westfield Group and Deutsche Diversified Trust. Whittlesea Council plans for the Town
Centre include retail, office, leisure and residential uses, serviced by rail, tram and bus transport.
Construction of a new rail station is part of the plans. Westfield‟s $200 million extension of Plenty
Valley Town Centre opened in May 2008, increasing the centre from 6,200m2 to 49,000m
2 - with
Target, K Mart, Best & Less, fresh food precincts, a 600-seat food court, 125 extra specialty stores, three
play areas, 1800 extra car parks and more cafes and restaurants. Myer will open a new department store
in the development.
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Oliver Hume Real Estate‟s website comments: “It is considered that the Epping Plaza development and
the South Morang activity centre will provide the municipality with a future employment focus – not to
mention the relocation of the Melbourne Fruit and Vegetable market (which could deliver 20,000 new
jobs over time).”
Property Profile
Epping and neighbouring suburbs have a solid residential property market. The Oliver Hume website
says: “In terms of capital growth, analysis highlights a trend upwards across all product types within the
City of Whittlesea, with percentage growth in many instances stronger than that experienced by
metropolitan Melbourne.”
Median price data from Australian Property Monitors shows homes are affordable in the area and that
prices showed solid growth in FY2008, with virtually all suburbs delivering double-digit price growth.
Median house prices for FY2008 were $290,000 in Epping (up 11%), $330,000 in South Morang (up
3%), $285,000 in Lalor (up 13%), $290,000 in Thomastown (up 12%) and $320,000 in Mill Park (up
10%). Home units in the precinct typically cost around $260,000.
Most of these suburbs have long-term growth records averaging 9% to 11% a year over 10 years.
Prospects
Demographics expert Bernard Salt of KPMG says he is more bullish about the Epping area than other
downmarket areas of Melbourne. He says it‟s similar to Sunshine (in Melbourne‟s west) in that it has a
manufacturing base - but Epping has less heavy industrial.
Salt says the new transport infrastructure is playing a key role in revitalising the area. “There‟s another
driver there and it‟s very much the Craigieburn Bypass,” Salt says. “Since the completion of the bypass,
that whole area will become a focal point for transportation and logistics.”
Property analyst Peter Hay of Hay Property Consultants says one of the key features of this area is good
transport access, including its train connection to the city. And he says: “Since the Craigieburn bypass
was completed, it‟s become closer to Melbourne.”
The $500 million bypass – between the Hume Highway at Craigieburn and the Metropolitan Ring Road
– opened in December 2005. Motorists using the Hume Highway can avoid 13 sets of traffic lights and
save 30 minutes. Vehicles can travel from Beaconsfield in Melbourne‟s south-east to Albury-Wodonga
without a single traffic light.
The bypass links with the Western Ring Road, which provides a key road transport link to Melbourne
Airport and the Port of Melbourne. It has brought increased focus to the area from investors in industrial
real estate – which translates into more jobs in the precinct. Further upgrades to the Western Ring Road
have been promised by the new Federal Government.
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The Transit Cities plans for Epping include developing the land around Epping‟s railway station “so that
it becomes a vibrant mixed-use community hub”.
The Age says: “The good thing about the budding north is public transport. Trains on the Epping line
take about 40 minutes to travel to and from the city.”
Salt says that with transport comes key infrastructure to support clean industry. “Modern clean industry
like distribution warehousing is moving into that area. I see it every time I drive up there – new factories
going up, not dirty factories but clean high-tech ones. Coles Myer has relocated its distribution facility
from Hampton Park in the south-east to Somerton, one or two suburbs from Epping.”
The $100 million Coles Myer distribution centre covers 75,000m2 and is part of the Austrak‟s 120ha
business park and intermodal terminal. Stevedoring and shipping giant P&O Ports has a 10+10+10 years
lease to operate the 20ha rail terminal within the business park, linked to the Port of Melbourne by a
20km rail line. Around this, 280,000m2 of development is expected to occur over 5-7 years.
The planned relocation of Melbourne‟s wholesale fruit and vegetable market from Footscray to a $360
million facility at Epping is in planning. Construction is scheduled to begin in 2009 and the new market
is expected to open in 2011. This is to be a joint venture between the Melbourne Markets‟ Strategic
Alliance and developer Mirvac.
However, in October 2008 Mirvac said it was withdrawing from the project, placing some doubt on its
future. Premier John Brumby says $300 million in funds is already committed to the Epping proposal
and insists it will proceed. The markets have an annual turnover of $1.5 billion and the plans for Epping
include a trading floor area double the size of the current Footscray facility.
In March 2008 Lend Lease bought a 65ha site in nearby Craigieburn for $73.5 million. Plans include a
shopping centre and bulk retail development of about 50,000m2 and 400 residential lots. Work is
expected to begin in 2009 with the first stage released by 2010.
Lend Lease has launched new land in Laurimar master-planned community at Whittlesea. Five hundred
homes have been built on the 324ha site which will ultimately have 2,300 homes and a town centre.
Dwarfing this development is the $1.8 billion Aurora in Epping North by VicUrban which will
ultimately provide 8,500 lots on 660ha as “a model for environmentally sustainable development”. The
master plan includes two town centres, five schools, five ovals, six sporting pavilions, eight tennis courts
and 20km of bike/walking paths.
Also in the Whittlesea LGA is the 1,850-lot Mernda Villages project (including two schools and a
community centre) by Stockland, the Hillcroft Estate at South Morang by Australand and the 1400-lot
Lyndarum project by AV Jennings north of Epping Plaza.
It‟s not only residential development but expansions to the Northern Hospital, the Epping Plaza
shopping centre and Plenty Valley Town Centre. The $80 million stage three extensions to Epping Plaza
include more parking and a linking mall to a new discount department store.
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Frankston Southern bayside suburbs of Melbourne
Other key influences: Transport Infrastructure, Govt Decisions, Lifestyle Features
________________________________________________________________________
$2.5bil EastLink tollway, $700 million Frankston Bypass plan, Frankston Foreshore
Development, Frankston CBD projects, $150mil shopping centre expansion, $100mil
bulky goods complex, 300-berth marina, State Govt‟s “Transit Cities” program
Typical houses: $290,000
Frankston in Melbourne‟s south is bayside, the new EastLink motorway ends there and there is
considerable government money being spent on renewal. But its median price remains below $300,000.
The Frankston area is a classic Ugly Duckling. It has a reputation for lower socio-economic residents
and higher crime rates. But it‟s an area undergoing change towards better things.
Investors are just starting to wake up to the potential of this area and the impact the $2.5 billion EastLink
will have – with strong value growth in the past year. According to the Housing Industry Association,
postcode 3199 (which includes Frankston and Frankston South) has become one of Melbourne‟s most
favoured spots for first-home buyers.
The area has million-dollar homes along the beachfront but a
little back from the water houses are affordable.
One of the keys to Frankston‟s appeal is the amount of
money being spent, both by government and private
enterprise.
Location
The suburb of Frankston sits on the eastern shore of Port
Phillip Bay, 40km south of the Melbourne CBD. It is often referred to as “the gateway to the
Mornington Peninsula”.
Population & Demographics
The area has a young population, with 26% under the age of 19. The City of Frankston population has
risen steadily from 114,000 in 2001 to 123,000 in 2006 and is projected to reach 133,000 within ten
years.
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Postcode 3199 has a population of 50,000, of which three-quarters are Australian-born (well above
Melbourne averages) and a further 12% were born in the UK. It is above average both for children and
for retirement age people. It is slightly below average for numbers who fully own homes and slightly
above average for those paying off mortgages.
Economy & Amenities
The Frankston Central Activities District (CAD) includes retail, office and entertainment facilities and is
the only regional metropolitan activity centre adjoining Port Phillip.
The suburb‟s proximity to the beach is the key to its attraction with considerable investment in
infrastructure designed to maximise the potential of waterfront real estate. The City of Frankston has
7km of beaches and coastal habitat.
There are several golf courses and a number of flora and fauna reserves in the immediate area.
Frankston is connected to the Melbourne CBD by rail, an important feature for Ugly Duckling areas in
times of high petrol prices.
Property Profile
A typical Frankston purchase is a three-bedroom two-bathroom brick home for $290,000. Older brick
homes can be found considerably cheaper and three-bedroom weatherboard cottages can be as low as
$230,000. Frankston North is cheaper still, with a median house price around $230,000. Around 23% of
households rent, in line with Melbourne averages.
Frankston recorded a median house price of $265,000 in 2007, according to Australian Property
Monitors. Frankston prices showed growth of 10% or better every year from 1997 through to 2004,
peaking with 20% growth in 2003. The growth fell away after 2004 but showed a return to good growth
in 2007, with prices rising about 10%.
The growth has continued in 2008, with the median house price rising to $290,000 for FY2008. Longer-
term, the average annual growth over the past ten years is 12%, which is a solid effort.
Next to the suburb of Frankston are Frankston South, which is more expensive, and Frankston North,
which is cheaper. Frankston South has a median price around $400,000 and showed growth between
10% and 25% each year from 1997 to 2004. Growth fell away for a couple of years but resumed quite
strongly in 2006. Price growth in FY2008 was a moderate 5% and there appears plenty of scope for
higher growth in the near future.
Frankston North is an area where incomes are well below average, where a quarter of households are
single-parent households and a third of households are renting. The median house price is only
$230,000, despite 24% growth in FY2008 and growth averaging 12.5% a year over the past decade.
hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 37
Prospects
One of the keys to Frankston‟s appeal is the amount of money being spent, both by government and
private enterprise.
One of the most exciting initiatives for Frankston is the Frankston Safe Boat Harbour as part of the
Melbourne 2030 and Victorian Coastal Strategy. It will feature more than 300 permanent wet berths and
five boat ramps. Accompanying this development will be more council spending on foreshore
promenade development to include cafes, playgrounds and other attractions designed to capture more
day trippers.
The Bayside Shopping Centre has undergone a $150 million expansion by CFS Gandel Retail Trust,
adding cinemas, more retail space and more carparks. A $40 million re-development of an ageing office
tower in the centre of Frankston is another of the projects changing the area‟s image. $12 million is
allocated under the Melbourne 2030 Transit Cities initiative to be spent on Frankston‟s commercial
centre.
A $100 million bulky goods centre on a 10-hectare site by a consortium led by Spotlight was officially
opened in October 2008. The 45,000m2 Frankston Power Centre includes Harvey Norman, Spotlight,
Dick Smith and Anaconda. The development has created 1,400 jobs.
Frankston is a key part of the Victoria State Government‟s Transit Cities program. The Department of
Sustainability and Environment says: “Frankston is an important urban Principal Activity Centre
because it has a major civic, commercial and retail hub – and has the Chisholm Institute of TAFE and
renowned recreational facilities such as bay beaches, arts and cultural centres.”
The department notes recent major developments in Frankston, including:-
o Business Enterprise Centre at the Chisholm Institute of TAFE
o Construction of the Bayside Entertainment Cinema complex
o Wells Street pedestrian improvements
o Improvements to the transit interchange at Frankston Railway Station
o Pedestrian bridge and plans to revitalise the Kananook Creek precinct
The Frankston Foreshore Development has to date included boardwalks, playgrounds, parklands,
lifesaving club, kiosk-restaurant and the Frankston Pier development.
Improvements to Kananook Creek will reconnect Frankston‟s town centre with the bay and create a new
space for shops, services and recreation. High-density residential development will also be a feature. A
consortium led by Land Design Partnership has been appointed to design a Transit City project at
Kananook Creek.
The $2.5 billion EastLink tollway enhances Frankston‟s appeal by shaving 15 minutes off travel time to
Melbourne‟s CBD and travel to the airport should only take about 50 minutes. Now the State
Government is proposing a $700 million Frankston Bypass, which it says will start construction in 2009.
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Gawler precinct North of Adelaide at the gateway to the Barossa Valley
------------------------------------------------------------------------------------------------------------------------------
Key influences: Govt Decisions, Transport Infrastructure, Hill Change
------------------------------------------------------------------------------------------------------------------------------
Upgrade of rail links to Adelaide; $550 million Northern Expressway;
220ha Delfin project; flood mitigation dam; strong tourism industry;
proximity to Barossa Valley wine district; affordable housing.
Typical houses: $220,000
Areas immediately north of Adelaide, around Gawler, didn‟t have the growth seen across Adelaide in
2007. Most have seen median prices contract a little in the past 12 months or grow only 5%.
But Gawler and environs (which include the Barossa Valley) have
plenty to recommend them and due for good growth. There‟s
historic charm, affordable prices and low vacancies. Links to
Adelaide will soon be upgraded through the Northern Expressway
road project and electrification of the train line to central Adelaide.
The region had a major surge in prices between 2002 and 2004,
but nothing of note since then. While Adelaide suburbs averaged
20% growth last year, the up-cycle didn‟t ripple as far north as
Gawler.
But the long-term growth rate is good, with most locations in this precinct averaging 11% or 12% over
10 years. And prices in areas such as Gawler West (median $170,000), Evanston ($220,000) and
Freeling ($200,000) remain very affordable.
Location
Gawler is 40km north of Adelaide, beside the Barossa Valley. The town sits at the junction of the North
Para and South Para rivers. It‟s about an hour by train to the City (this will improve with the planned
electrification of the rail line).
Population and Demographics
Gawler is home to 15,000 people. It‟s experiencing consistent population growth (including 3% growth
in 2006, which is very high for SA). Much of Adelaide‟s growth is happening in the northern suburbs
and is spreading to Gawler, where a major 220ha estate was announced recently.
Gawler‟s population includes 80% who were born in Australia (above average for SA). A further 15%
were born in the UK. It‟s a family kind of place and is above average in married couples with kids. A
third of households have mortgages, which is also above average.
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Economy and Amenities
Gawler has the benefits of country living, town services and
easy access to large city facilities, as well as the wine district.
Reputedly the oldest town in regional South Australia, Gawler
is blessed with fine historical architecture, including houses
ripe for restoration while the Murray Street heritage retail strip
is having a streetscape upgrade. Early urban design has left a
legacy of riverfront parklands and Victorian-era village
squares.
University lecturer Peter Koulizos, author of The Property Professor’s Top Australian Suburbs, says:
“Gawler is very picturesque. There‟s a river running through it and lots of character buildings. It has a
hospital and a private school with a good name (Trinity College).”
The Gawler district has a solid economy based on wheat, wine and tourism. The popular TV series
McLeod's Daughters is shot at "Kingsford", a working property outside Gawler, which draws
considerable tourism to the area. Unemployment is low in Gawler at 3.7%.
The Bruce Eastick Flood Mitigation project, which was officially
launched in August 2008, has major benefits for Gawler. The new
dam on the North Para River has created a flood control feature
30m high and 225m long to reduce flooding further downstream
towards Gawler.
According to the Barossa & Light Herald, the damages bill from
agricultural losses in the last major flood in the Gawler area
(pictured) was $40 million in 2005.
Property Profile
Close to 80% of dwellings in the Gawler area are houses; less than 20% are flats or townhouses. Four
out of ten own their homes outright, a third have mortgages and 22% rent.
Median prices include $245,000 for Gawler, $170,000 for Gawler West, $265,000 for Gawler South and
$280,000 for Gawler East. Units typically cost around $185,000.
Discounts of about 6% are common in the current market, according to Australian Property Monitors.
Some parts of the Gawler precinct have had price declines around 5% in the past year, unlike Adelaide
which has seen strong price growth since the start of 2007. But the long-term growth rates are healthy,
generally in the 10-12% range.
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There‟s demand for rental accommodation in the area and, according to sqmresearch.com.au, vacancies
are low. In postcode 5118 (Gawler and Willaston), vacancies are 0.7% while in neighbouring postcode
5116 (Evanston) they‟re about 1%.
Future Prospects
The State Government has announced several initiatives to address the affordable housing problem,
including a 219ha land release in Gawler East which will increase the local population 25%. The land
has been rezoned to allow developer Delfin Lend Lease to progressively build 2,500 homes.
Construction is expected to begin in 12 months with the first homes completed late in 2009.
An extension of the Gawler-Adelaide rail service to Barossa will relieve traffic/parking congestion when
3,500 people no longer have to drive daily to Gawler to commute to Adelaide. The rail link to Adelaide
is soon to be electrified.
Meanwhile, early work is under way on the $550 million Northern Expressway which will improve road
links from Gawler into Adelaide.
Work is well under way on Gawler‟s new $30 million, 6500m2 shopping precinct. The Phoenix Plaza
development by Daycorp, which will feature Target and 19 specialty stores, is due for completion early
in 2009.
There is also a $12 million upgrade of the Gawler racecourse in planning.
Gawler has plenty of appealing characteristics and strong future prospects because of planned
improvements to road and rail infrastructure.
And recent falls in house prices suggests the
buying is good at present.
With the major influx of population pending,
existing character housing might be the go for
investors. Gawler has a long-term future
because of proximity to both Adelaide and the
Barossa Valley wine district, its historic fabric
and its affordable housing.
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Hobart Capital of Tasmania
------------------------------------------------------------------------------------------------------------------------------
Other key influences: Lifestyle Features
Greatest concentration of locations within reach of first-home buyers
of any capital city in Australia;
half of Hobart‟s suburbs have median prices under $300,000. ------------------------------------------------------------------------------------------------------------------------------
Typical houses: $200,000 to $300,000
This is a departure from the normal process of this report. Rather than nominating a specific suburb or
precinct within a major city, I‟m suggesting Hobart generally. The reasoning goes like this:-
The one sector of the residential market likely to do well in the next 6-9 months, amid difficult
economic circumstances, is the lower end of the market.
While the upper end will see values falling (because of falling business confidence, sharemarket
upheavals and the tightening of credit), the lower end will be relatively active because of falling
interest rates and the increase to the First Home Owners Grant.
Cities with the greatest concentration of suburbs with median prices under $400,000 will benefit
the most from the changed circumstances.
83% of Hobart suburbs have median prices under $400,000.
The FHOG may be the saviour of the Tasmanian property market at a time when it looked to be
struggling. Tasmania is a small state and quite fragile. Its economy has done quite well in recent years
but never brilliantly, it has managed some population
growth but not much (it‟s the only state with less than
1% growth) and its property market has stayed solid
since 2004 without ever excelling.
But it‟s had some reversals lately. It‟s had a change of
Premier and the new one has been staggering from
one controversy to another. Internal division and
Cabinet re-shuffles are routine. The State Government
is developing a trend not dissimilar to NSW – and we
know from the NSW experience that this can be bad
news for the economy and real estate.
Economically, Tasmania could use a major boost - such as a $2 billion pulp mill. But the one planned by
Gunns Limited has encountered a series of setbacks – and looks increasingly unlikely to proceed.
And Hobart property values have struggled since the start of 2008. The ABS says the House Price Index
for Hobart dropped 2% in the June Quarter, while the Real Estate Institute of Australia reports a 3% fall
in the same period.
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In the September Quarter, according to the ABS, prices stagnated overall but, according to the REIA,
some sectors of the market have seen price declines, notably the outer suburbs.
Another emerging negative is the trend with rents: the REIA reports that rents fell in many sections of
the Tasmanian market in the June Quarter, with the inner-city Hobart suburbs the main exception. This
is reflected in the latest data from Australian Property Monitors, which shows Hobart house rents rose
only 4% in the year to September, while unit rents
rose 5% - but declined in the September quarter.
Hobart was highly appealing to investors in 2003
because it was easy to get 7%-plus yields on houses.
Now typical gross rental yields in the Tasmanian
capital are around 5% - still not bad, but no longer so
enticing to mainland investors.
Valuer Andrew Peck of Herron Todd White says
sales volumes are down this year and while property
values have generally held up quite well, we were
starting to see sales below 2006 price levels,
particularly when distressed vendors need a fast sale.
The ANZ Property Outlook has a generally optimistic assessment of the Tasmanian economy,
particularly with the State Government spending big on new infrastructure. But it also says: “Building
approvals have remained solid and, as a result, a significant amount of new stock has recently come on
to the market. This, combined with weak sentiment, has seen median house prices ease marginally in
recent quarters.”
FHOG to the rescue
The Tasmania market needs a lift – and the First Home Owners Grant is providing it. Tasmania has lots
of suburbs and towns with median prices below $300,000, the sorts of locations that will benefit from
the FHOG.
Hobart has 15 suburbs with median prices under $250,000, including six with medians under $200,000.
Almost half the city‟s suburbs have medians under $300,000 and eight out of ten suburbs have medians
under $400,000. No other capital city in Australia offers such appeal to first-home buyers (in terms of
affordability) and to investors on a budget.
Agents report increased activity at open homes at the lower end of the market. Lenders also are reporting
significant inquiry. “Appointments with lenders are back to boom levels, mainly with first-home buyers
wanting to get pre-approval of finance,” Peck says. “We‟re expecting this to put a floor under the
bottom end of the market until June next year.”
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Pecks says he expects suburbs at the lower end of the market, where values took a hit recently, to come
back to previous price levels in terms of house prices. He expects Launceston suburbs like Ravenswood
(median price $160,000), Mayfield ($150,000), Waverley ($165,000) and Rocherlea ($140,000) to be
targeted. These are primarily Housing Commission suburbs with the cheapest prices in the city.
In Hobart, cheap suburbs north of the CBD, such as Goodwood ($220,000) and Moonah ($245,000),
will also be popular.
He suggests it won‟t only be first-home buyers who are active. “It‟s not a bad time for investors to buy,”
he says. “Vacancy rates are tight, so while interest rates are coming down, yields are heading in the
other direction.”
Valuer Charles Brothers of Brothers Newton says builders are getting strong inquiries from first-time
buyers armed with the $21,000 from the FHOG. He says suburbs with a good supply of land at the lower
end of the market, including Brighton (median house price $235,000), Margate ($320,000) and
Oakdowns ($320,000), should benefit.
Established suburbs at the cheaper end of the market include Glenorchy ($230,000), Moonah
($245,000), Goodwood ($220,000), Lutanna ($245,000), Claremont ($240,000) and Kingston
($300,000). The precinct including Mornington ($240,000) and Warrane ($240,000), out near Hobart
Airport where there is major development of new bulky goods retail, should also attract attention.
Classic Ugly Duckling suburb
Goodwood is a classic Ugly Duckling suburb of Hobart. It‟s
a former Housing Commission suburb where former tenants
eventually became owners. Although the houses are modest,
there‟s a lot of pride of ownership on display in Goodwood.
When I bought a house there in 2003, typical houses cost
$80,000. Since then values have trebled but the suburb
remains affordable.
It‟s less than 10 minutes north of the Hobart CBD via the Brooker Highway and it fronts Price of Wales
Bay on the Derwent River. It has good access to the other side of the river because it‟s beside the Bowen
Bridge. There are plenty of schools and sports facilities in the immediate area and one of Hobart‟s major
shopping centres is in neighbouring Glenorchy.
No Go Zones
There are one or two areas investors should avoid. At the cheap end of the market, Gagebrook (median
price $145,000) and Bridgewater ($175,000) have attracted investors because of the low prices, but
they‟re low for good reason: this is a highly undesirable area with huge problems.
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Ipswich region South-west of Brisbane
------------------------------------------------------------------------------------------------------------------------------
Other key influences: Government Decisions, Transport Infrastructure, Urban Renewal
$1 billion Ipswich Motorway upgrade; duplication of Centenary Highway; $5 billion in
govt infrastructure projects; $12 billion Springfield community; upgrade of rail links;
170,000m2 Orion shopping centre; big industrial estates including $1 billion Citiswich;
major new residential estates; RAAF Base expansion ------------------------------------------------------------------------------------------------------------------------------
Typical houses: $250,000 to $320,000
The Ipswich corridor is now well-known as a growth region and real estate hotspot. Prices rose 15%-
plus in most suburbs in the Ipswich local government area in FY2008, with many suburbs growing 25%
of more. It‟s almost a candidate for removal from the report because it‟s no longer a future hotspot. But
it remains because I believe it‟s evolution into a headline hotspot of national standing is only beginning.
Many of the big infrastructure and property developments have only just begun or haven‟t yet started.
They include the most important of them, the $1 billion upgrade of the Ipswich Motorway. Research
analyst Michael Matusik says: “This vital piece of infrastructure is the only impediment stopping
Ipswich from reaching its full potential.”
Ipswich City is a likely beneficiary of recent significant changes of market fundamentals, namely the
sharp decline in interest rates and big increase to the First Home Owners Grant.
Population and demographics
Ipswich City, on the Bremer River south-west of Brisbane, ranks in the top six Queensland
municipalities for population increase. It adds 4,000 to 5,000 people each year, at a growth rate almost
three times the national average.
The city is projected to reach 200,000 people in 10 years and 318,000 in 20 years. It‟s identified in the
South East Queensland Regional Plan as one of the key
areas to absorb growth in the next 20 years.
Its potential for expansion is evident in this statistic from
PRDnationwide: the Brisbane LGA has a density of 721
people per square kilometre, while the Ipswich LGA has
only 113 people.
The two LGAs cover a similar area but while Brisbane
has almost one million residents, the Ipswich LGA has
140,000.
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The number of people living in Ipswich is forecast to increase substantially over the next two decades.
Matusik Property Insights says the area will need about 4,000 new dwellings each year for the next
decade to accommodate an extra 9,000 people per year. It says demand will be driven by relative
affordability, land availability and increasing employment opportunities.
Matusik says: “The western region of Brisbane is gaining in population and new projects are occurring
at an increasing rate. Ipswich City is at the epicentre of this growth.”
Economy and amenities
A massive chunk of the Queensland Government‟s South East Queensland Infrastructure Plan is
directed towards the western corridor linking central Brisbane to Ipswich. Transport infrastructure
projects planned for this corridor total about $5 billion.
These projects include upgrades to the rail connection to Ipswich, a rail line to the rapidly-growing
Springfield master-planned community, the upgrade to the Ipswich Motorway, a Western Ipswich
Bypass and other motorway/highway projects.
Economic and infrastructure activity targeted on this region include the following:
There is $5 billion in government infrastructure projects targeted for the Ipswich region,
including several highway upgrades and bypass projects, new rail connections, hospital
developments and a series of new schools.
The Ipswich Motorway connecting the area to central Brisbane is undergoing a major upgrade,
after years of Federal-State arguments. The motorway is notorious for traffic snarls. Prime
Minister Kevin Rudd formally launched a $1.1 billion upgrade in March 2008.
The $40 million upgrade of Boundary Rd-Kelliher Rd, to create a motorway linking the
Centenary Highway at Darra to the expanding areas
of Forest Lake and Springfield, was completed in
August 2007. The upgraded road has four lanes and
provides for a rail line from Darra to Springfield.
The State Government is planning further
improvements to the Centenary Highway from
Richlands to Springfield, while work has started on a
$370 million Centenary Highway extension between
Springfield and the Cunningham Highway at
Yamanto – due to open by the end of 2009.
The $12 billion master-planned community of
Springfield, under development since 1992, covers
2,860ha and is projected to be home to 60,000 people
in 15 years.
Springfield‟s Education City became reality in
February 2006 with the first students starting classes
in the new University of Southern Queensland
campus. It is expected to have 10,000 students within ten years.
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Mirvac is building the Orion Greater Springfield Shopping and Entertainment Complex at
Springfield. It will have 170,000m2 of retail space and parking for 6,500 cars on a 40-hectare
site. Stage one opened in March 2007.
Suncorp is building the $212 million Polaris Data Centre at Springfield and has secured a 10-
year State Government lease. The 10-storey Springfield Tower building also has major pre-
commitments. The $70 million Spring Lake Metro, including a boutique hotel and shops, opened
in October 2007. Site works have started on the $200 million first stage of the 52ha Springfield
Health City, which will include general practice and community health facilities, day surgery, a
128-bed aged care facility and 100 independent retirement units. National developer Australand
paid $19 million for 22ha at Springfield early in 2008 to develop 280 home sites.
Ipswich‟s historic post office will become office and retail space in a $30 million re-development
known as Tower Central announced in January 2008.
A major extension of Ipswich Hospital is in planning, with about 90 beds to be added to the
current 350-bed hospital.
The Ripley Valley area, 5km south of the Ipswich CBD, is projected to have a population of
120,000 in 20 years, compared with 2,000 currently. Developers are planning a master-planned
community, expected to ultimately create 40,000 homes. In September 2008 Wingate Properties
became the first developer to seek approval to build a section of the master plan – it owns 200ha,
one of 17 sites totalling 5,200ha in the Ripley Valley precinct. In October a private syndicate
paid $7.4 million for a 58ha site within the Ripley Valley precinct.
Investa‟s Brentwood estate at Bellbird Park will create 1,500 homes over eight years on 226
hectares, next to the Brookwater community which will have 1,200 homes around a Greg
Norman-designed golf course.
Ingles Group recently launched stage two of its $150 million residential estate Macquarie Downs
at Redbank Plains, releasing a further 50 lots to the market.
An 85-hectare parcel of land at Redbank Plains was purchased by developers in December 2006
for $16.5 million, with plans for an 800-lot subdivision.
Developer Devine announced in September 2008 plans for the $500 million Mountview estate ar
Redbank Plains, which will eventually have 1,400 dwellings. The first release of 800 home sites
was targeted for November 2008. Devine amalgamated the 124ha site in 2006 and 2007.
The $800 million Corymbia Woods project, to deliver 1,970 new dwellings, was approved in
October 2008. It will have a mix of apartment buildings,
terrace houses, duplexes and standard home sites around a
town centre. There will be an integrated open space system
covering 32ha.
An $800 million expansion of facilities at the Amberley
RAAF Base is under way. Stage two of the re-development
was completed in December 2007 and there is a third stage.
The base population will rise from 2,500 now to 3,200 in
2009 and 4,000 in 2015. It was announced in October 2008
that $120 million would be spent on new housing in
connection with the new Super Hornet squadron, which will
arrive in 2010.
Ipswich locations Bremer, Swanbank and Redbank are tipped as future industrial property
hotspots by commercial agency Colliers International.
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Major generators of business and jobs are expected to be the Swanbank Enterprise Park, Bremer
Business Park, Ebenezer Industrial Park and the aerospace industry at Amberley RAAF base
(Australia‟s largest operational base). In 2006, Investa Property Group paid $21 million for
500ha of industrial land at Swanbank Enterprise Park (which covers 2,200ha).
Walker Corporation announced in December 2007 its plans for the $1 billion Citiswich industrial
park. The 335 hectares, previously known as Bremer Business Park, sits beside the junction of
three highways in the Riverview area. The Reject Shops signed up in September 2008 for a 10-
year lease over a 25,000m2 distribution centre.
PRDnationwide Research says: “Ipswich is popular for household formation as it is relatively
affordable. However, infrastructure inadequacies have made a daily commute from Ipswich to Brisbane
difficult. The focus by the State Government on the western corridor is likely to have a dramatic impact
on the demographic profile of Ipswich.”
PRDnationwide says the State Government‟s infrastructure plan released in 2005 highlights three
regional infrastructure priorities, including a focus on infrastructure in the western corridor. “This is of
significant benefit to investors and residents of Ipswich City,” it says. “It emphasises the potential of the
western corridor for major industrial uses, employment growth and the availability of affordable land.”
As well as $5 billion committed to transport infrastructure in this area, there is a $315 million
commitment to 13 new schools in this region and close to $300 million on health facilities, including re-
development of Ipswich Hospital.
Property profile
PRDnationwide‟s report says Ipswich traditionally has been seen as Brisbane‟s poor cousin, but its
demographic profile is expected to change in the next decade as a result of the State Government‟s focus
on the western corridor.
The Ipswich LGA is dominated by “couples with children” households. It also has an above-average
proportion of single-parent households. Its average age, at 33, is younger than the Brisbane average and
its average income is much lower. But there are more home owners and fewer renters in Ipswich
(reflecting relative affordability). PRDnationwide says 27% own their homes outright, 37% have
mortgages and 30% rent.
The Ipswich market has been growing strongly. Median house prices in Greater Ipswich rose an average
20% a year in the five years to June 2008. Growth levelled off in 2005 and 2006 but the latest data from
both Australian Property Monitors and the Real Estate Institute of Queensland indicates many suburbs
showed strong price growth in FY2008. Most did 15%-plus and some managed around 25% to 30%.
Investors have been the big catalyst. Valuation firm Herron Todd White says in the March 2008 edition
of The Month in Review: “Residential property investment has been rife in Ipswich over the past 3-4
years following the release of the South East Queensland Regional Plan. On average, 50% of sales have
been to property investors.” Typical houses across Greater Ipswich cost around $300,000, but many
suburbs have lower prices so the region remains affordable despite the recent price growth.
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There are few units or townhouses in the area, with houses making up 92% of dwellings in the Ipswich
Local Government Area (compared with 75% in the Brisbane LGA). But this is changing, with more
apartments being added to the Ipswich affordability mix. This is a potential area of opportunity for
investors, given that prices are affordable and Ipswich units have a solid track record for long-term
growth in rentals.
Matusik says: “More townhouses will start to pop up in suburbia and houses around transport nodes will
start to be re-developed into duplexes and small-lot homes. This is good news for both future owner-
residents and investors, as gross yields are often better for alternative housing when compared to a
detached house. The attached housing market is under-supplied with a vacancy rate of just 1.3%,
compared to around 3% for detached houses across Ipswich.
“Ipswich is not only likely to keep growing (and at an accelerating pace) but it is also going to change.
Expect the range of new housing products coming Ipswich‟s way.”
This view is supported by PRDnationwide which notes an expanding unit market. “An increase in new
unit supply has contributed to a rise in unit sales over the past five years, a trend that coincided with
increasing rates of median unit price growth – over the past five years, the median unit price has average
growth of 22% a year.”
Two or three years ago Ipswich became popular with investors because 6%-plus yields were available.
Price rises since then have pushed down rental returns; today 4.5% to 5.5% is the typical yield range.
According to the September 2008 edition of The Month in Review from valuation firm Herron Todd
White, recent events in the residential market have made Ipswich more attractive to buyers. “Property
values have levelled off and the region still provides affordability for investors and first-home buyers,” it
said.
The Redbank precinct
The Ipswich region‟s potential is reflected in
the Redbank precinct, an area which is busy
with new residential, retail and industrial
development. It has major road and rail links
to central Brisbane, extensive shopping
facilities and affordable homes.
The area embraces Redbank, Redbank Plains,
Collingwood Park, Goodna and Bellbird Park.
Look at a street directory for this area and you
will see vast networks of proposed new
streets and cul-de-sacs as developers plan new
estates. The precinct borders other high-development growth areas such as Springfield and Brookwater.
0 100 200 300 400
Redbank
Redbank Plains
Collingwood Park
Goodna
Bellbird Park
Median price $'000
Median prices FY2008: Redbank precinct
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Redbank has a station on the commuter train line linking Ipswich to central Brisbane and the (highly-
congested) Ipswich Motorway is the main road link to the Brisbane CBD.
There are plans (included in the State Government‟s South East Queensland Infrastructure Plan and
Program) for a $290 million upgrade of the Corinda-Redbank section of the Ipswich-Brisbane rail line.
Employment options in the precinct are being boosted by the ongoing development of the Redbank
Peninsula industrial area (the peninsula being formed by a loop in the Brisbane River, which is the
northern boundary of the precinct) and the nearby Citiswich industrial estate, a $1 billion development
by Walker Corporation (referred to earlier in this report).
Residents of the area have a choice of major shopping centres:-
o the established Redbank Plaza, including Coles, Target, Supa IGA, Kmart, an eight-screen
cinema and 110 specialty stores in a complex which abuts the Ipswich Motorway;
o the newly-expanded Redbank Plains Shopping Village, which now has 6000m2 of convenience
retailing, with plans for 22,000m2 of bulky good retail space in a second stage;
o Redbank Tavern Plaza Shopping Centre,
including Bi-Lo, Subway, a tavern and other
specialty stores, which sold for $10 million in
November 2006; and
o the new Orion Greater Springfield Shopping
and Entertainment Complex at Springfield,
which will have 170,000m2 of retail and
entertainment space (stage one, which opened
in March 2007, is pictured on the right).
Australian Property Monitors records the median
house prices for the suburbs of the precinct for
FY2008, as follows: Redbank $245,000 (up 9%),
Redbank Plains $300,000 (21%), Collingwood Park $330,000 (18%), Goodna $300,000 (22%) and
Bellbird Park $315,000 (15%). It‟s clear from these figures that the precinct has plenty of affordable
housing – despite strong growth in median prices in FY2008 in all of these suburbs.
Redbank Plains and Collingwood Park have shown similar patterns – exceptional annual growth over 5-
6 years but still affordable. In Redbank Plains, values have risen 175% in the past five years but the
median house price has only just reached $300,000.
Devine Ltd, developer of house-and-land packages, has previously developed residential estates in this
precinct, including The Parks at Collingwood Park, where the 180 lots sold inside 18 months. “Redbank
Plains is a key growth corridor for business, with major employers Ipswich Aerospace Industry and
Swanbank Paper Plant nearby,” says Devine‟s National Acquisition Manager Luke Hartman. “This is
helping to drive demand for residential accommodation. Redbank Plaza is just minutes from the site and
the massive Orion shopping centre is being built 5km to the east. There are good schooling options,
including the Springfield campus of the University of Southern Queensland.”
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The statistical precinct covering the Redbank area is a high-growth location, with population rising well
above average rates. It‟s an area of young families, with a low average age (29), above-average for
couples with kids and below-average for retirees.
It‟s mortgage belt country: a below-average share of households own their home outright and an above-
average share are paying off a mortgage. A third of households are renting.
Ipswich’s inner eastern suburbs
I expect Ipswich City to attract more attention now in the wake of the increase in the First Home Owners
Grant and the downward trend in interest rates. The bottom end of the market will be the most active,
amid difficult economic times, and Ipswich City is well-positioned to do well.
Half of the suburbs within the Ipswich LGA have
median house prices under $300,000, despite
exceptional price growth over the past five years.
Recent years have shown that the highest capital
growth in South East Queensland has been seen in
the cheaper suburbs, with the Ipswich corridor
particularly prominent. I expect first-home buyers
and investors to target the cheaper areas, even more
so because of the FHOG and lower interest rates.
A cluster of suburbs immediately east of the Ipswich
CBD stand out: here there are eight suburbs with median prices under $300,000, including East Ipswich,
Booval, Eastern Heights and Silkstone. I think East Ipswich, which has many character houses begging
to be renovated, is one of the most under-rated precincts in the Ipswich LGA.
Median house prices and FY2008 growth rates include: Booval $285,000 (up 24%), Bundamba
$275,000 (up 24%), East Ipswich $265,000 (up 15%), Eastern Heights $265,000 (up 19%), Newtown
$285,000 (up 30%), North Booval $270,000 (up 26%), Silkstone $270,000 (up 23%) and Tivoli
$260,000 (up 31%).
A word of warning
Ipswich attracted national media attention in April 2008 when homes built over disused coal mines in
Collingwood Park began to suffer serious damage through subsidence. Cracks appeared in 20 homes in
several streets above 19th
Century coal mines.
This cast a shadow over the region as Ipswich has a history of coal mining and underground workings
dot the area. Ipswich Greens spokesman Andrew Luxton said: “The district is riddled with old mine
shafts that make development risky. It‟s not just Collingwood Park. There are plenty of places at risk.”
The Ipswich City Council has been at pains to emphasise that only 1% of homes in the city have been
built over coal mines. Investors, however, would be wise to check before buying in the Ipswich area.
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Melton North-western suburbs of Melbourne
------------------------------------------------------------------------------------------------------------
Other key influences: Government Decisions, Transport Infrastructure
$15 billion Melton growth plan; $330 million Deer Park Bypass; upgrade of Western
Freeway; exceptional population growth; 1900-hectare Toolern development including a
760-hectare business park. ------------------------------------------------------------------------------------------------------------
Typical houses: $190,000 to $230,000
The qualities that make an “ugly duckling” area worth considering include affordable housing, public
transport links, good access to the central city, government initiatives to improve the area, economic
drivers to create jobs and a significant kicker – something to help the area rise above itself.
The Melton precinct in Melbourne‟s north-west has all those features on its resume. You can buy houses
for less than $200,000, it‟s on the Melbourne-to-Ballarat train line, it‟s 35 minutes from the Melbourne
CBD, it‟s one of Australia‟s leading population growth areas, Melton Council is working to lift the
area‟s economy and liveability, and the big kicker is the Deer Park Bypass and Western Freeway
upgrade, which will speed up road journeys to the City.
Melton is easy to disregard – it‟s on the city
outskirts, presents as mortgage-laden battler
country and suffers from a bad reputation.
“Melton got a name in the Seventies and Eighties
as an area with social problems – and that stigma
is hard to shake,” demographer Bernard Salt says.
“In the Seventies it was probably legitimate, but
30 years later the area has a more mature
demographic profile and the social problems have
been somewhat diluted.”
And the more you investigate, the more you see it‟s potential.
The Melton/Toolern area is projected, under State Government planning, to accommodate a further
33,000 to 37,000 households by 2030, spread over 2,200ha of new urban land, including 220ha at
Caroline Springs, 90ha in North Melton and close to 1,900ha at Toolern/Melton South.
Location
Melton Shire is 20km from the Melbourne CBD on the Western Freeway heading out to places like
Ballarat. The nerve centre of the shire is a precinct of suburbs including Melton, Melton South, Melton
West and Kurunjang.
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This report focuses on postcode 3337, which includes Melton, Melton West and Kurunjang. It‟s a place
where you‟ll find lots of kids and not many retirees, plenty of people with below-average incomes and
more households paying off their homes than actually own their homes outright.
Population and Demographics In the Population Growth Report 2007 by Salt, Melton Shire ranked No.5 in Australia, having added
6,200 to its population over 12 months. Salt says the shire is now adding ten times as many new people
each year as in the Nineties – and the difference has been the Western Ring Road, opened in 1998. “It
changed Melbournians‟ perception of the west,” Salt says. “The next thing that will help Melton is the
Deer Park Bypass. That will generally unlock that whole western corridor.
“Yes, it‟s ugly, but there‟s the prospect that improved
access to the job market in the western suburbs of
Melbourne will unlock Melton by an order of
magnitude.”
Its population is projected to virtually double within
15 years to reach 160,000 people by 2021, requiring
the number of dwellings to rise from 29,000 in 2006 to
56,000 in 2021. The projected growth rate is three
times the national average.
While the area is below average for the percentage of
families which fully own their homes, there are
relatively few renters compared to Melbourne averages, because there are above-average numbers
paying off their homes (45% of households in postcode 3337, compared to the city average of 27%).
Amenities
The shire has 11 pre-schools, 19 primary schools, nine secondary colleges (including two private
colleges) and the Melton Campus of Victoria University.
Melton Township has Coburns Shopping Centre and Woodgrove Shopping Centre, and is the site of
Australia‟s first indoor wave pool, as well as the Melton Weir water-skiing facility.
The semi-rural nature of the shire is reflected in its proximity to forest and national parks. Melton Shire
also claims to be “the heart of thoroughbred country” and to have some of Australia‟s best equestrian
facilities.
The shire has two commercial hubs: High Street and Woodgrove Shopping Centre.
Expanding residential areas like Caroline Springs are the
reason Melton Shire is one of Australia’s leading hotspots
for population growth.
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Property Profile
There are few places in Melbourne where you can buy houses for less than $200,000. Suburbs like
Melton and Melton South have median house prices around $190,000 – with income returns above 5.5%
on houses.
Median house prices for FY2008 (Australian Property Monitors) included $191,000 for Melton,
$190,000 for Melton South, $230,000 for Melton West and $225,000 for Kurunjang. The more-
upmarket Caroline Springs area had a median house price of $315,000.
Most of these suburbs delivered price growth in the 5% to 10% range in FY2008.
Units in the Melton suburbs have median prices in the $170,000 to $190,000 range.
Prospects
Melton Shire Council has launched a $15 billion initiative
to establish the area as a major growth centre for Victoria.
It includes a strategy to develop 32,000 homes for 90,000
people by 2030 – and to attract $6 billion in business
investment. The expansion of the urban growth boundary
has added 2,200ha that will be subject to one of Victoria‟s
biggest ever regional investment programs.
Melton Shire Council says: “This is a visionary program to create a major new investment location in
Victoria. Backed by the State Government‟s 2030 strategy, Melton will be the focus for Melbourne‟s
north-west development – a commitment that will create an entirely new city, home to up to 100,000
people in the next two decades.
“Central to the vision is Toolern, a major new concept of integrated living that will make Melton a
showpiece for 21st Century urban design. Toolern was conceived late in 2005 when the State
Government selected Melton to be one of five designated locations for Melbourne‟s expansion.
“With 2,200ha released for development, Melton has
designated 1,900ha of broad-acre land to Toolern,
including the 760ha Toolern Business Park.” (The rest of
the 2,200ha of new urban land is at Caroline Springs and
North Melton.)
Toolern sits south of Melton township and is bordered in
the north by the Western Highway. The master plan
includes elements of residential, commercial, industrial
and retail.
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Given the partly-rural nature of the shire, the Council is especially promoting strategies to develop
agribusiness and equine industries. The Sunbury-Melton Recycled Water Project (which includes a
30km pipeline which pumps recycled waste water for irrigating vineyards, olive groves, plant nurseries,
golf courses and council reserves) has assisted in developing businesses such as the Witchmount and
Galli Vineyard Estates.
Melton claims to be “The Heart of Thoroughbred Country”, offering some of Australia‟s best equestrian
facilities. The shire is home to nine thoroughbred studs, a number of equestrian centres, around 140
registered trainers and 1,200 horses.
A major new investment for the Toolern Business Park
will be the new home for harness racing in Victoria at
Ferris Road. The $32 million training and entertainment
facility is be on the edge of Toolern Business Park on
the south side of the Western Freeway.
The Oliver Hume Real Estate Group comments on its
website: “Melton is an innovative shire with a number of
initiatives aimed to benefit new residents. It is considered that the shire‟s relative affordability and high
levels of new infrastructure and amenity will offer further potential for price growth.”
Melton seems quite well served by public transport. It has bus services and it‟s on the train line between
Melbourne and Ballarat. This is important in times of high petrol prices.
Its main road link to central Melbourne is the Western Freeway, which hooks into the Western Ring
Road. If you‟re lucky, the journey takes 35-40 minutes. The problem is a traffic bottleneck around Deer
Park, where the Western Highway carries over 70,000 vehicles a day, of which 10% are heavy vehicles.
The solution, and a big boost to Melton Shire, is the $330 million Deer Park Bypass project, which
began construction in February 2007. The 9.3km bypass will be a four-lane freeway from the Western
Ring Road at Sunshine West to the Western Highway at
Caroline Springs - and will remove six sets of traffic
lights and make journeys through that area 15 minutes
quicker at peak times
The project will be completed late in 2009. Provision
has been included for adding additional lanes in the
future. There are also plans to upgrade the Western
Freeway between Deer Park and Melton.
Bernard Salt says: “Melton is one of those places beyond the edge of Melbourne, linked to the city by
Ballarat Road (Western Freeway). There‟s a problem in that road around Deer Park but the bypass will
eventually make the trip into Melbourne much quicker. Once that bypass is completed and the
bottleneck is cleared I think Melton will move to another level.”
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Port Noarlunga Southern seaside suburb of Adelaide
Key Influences: Lifestyle Features, The Stayers, Ripple Effect
Suburb overlooking Gulf St Vincent; affordable real estate; solid long-term growth; good
road/rail connections to central Adelaide; plan to extend rail links further south; retail,
sporting, community services at Noarlunga Centre.
Typical houses: $300,000
In earlier editions of this report, we have profiled Port Noarlunga and Christies Beach as one precinct –
which 12 months ago was relatively undiscovered and under-valued. There was been huge price growth
in Christies Beach and neighbouring Christie Downs in FY2008 (median prices growing between 25%
and 30%) – but Port Noarlunga and Noarlunga Downs did not have the same level of growth.
I believe this is the Ripple Effect working through the southern seaside suburbs of Adelaide. The first of
these appealing and affordable areas we recommended was Hallett Cove, an impressive suburb of solid
homes with wonderful views. This area grew first, then the growth rippled further south to another of
our recommendations, Christies Beach, a place of similar qualities but cheaper.
Next in line is Port Noarlunga, a little further south again.
Location
Port Noarlunga sits beside Gulf St Vincent, about 40km south of the
Adelaide CBD. It‟s connected to the central city by the Southern
Expressway and a rail link which terminates at nearby Noarlunga Centre.
Population and Demographics
This precinct is part of the municipality of Onkaparinga, which is
consistently in the top two or three regions in South Australia for
population growth.
Christies Beach has attracted lots of UK migrants, with 25% of residents born in the UK. Around 30%
of residents are retirees (the Adelaide average is 20%), 83% of dwellings are standalone houses and
home ownership rates are high, with half of households owning their homes without mortgages.
Port Noarlunga, too, has attracted a large contingent of migrants from the UK (22% of residents).
Almost 90% of dwellings are houses, home ownership rates are above-average and only 17% of
households rent (Adelaide average is 27%).
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Economy and Amenities
Port Noarlunga and Christies Beach have much in common with Hallett Cove in that they are elevated,
so that many homes have sea views. The area has good beaches and a tree-lined foreshore, with great
outlooks to the south. The housing is more downmarket than the solid brick homes of Hallett Cove, but
there are nevertheless some fine character houses.
The high streets of these suburbs are reminiscent of budget seaside resorts of a former generation – with
small shops with names like “Yorky‟s Pork & Gourmet Food” and “Christopher‟s Martial Arts and
Pawnbroker”.
Adelaide property analyst and lecturer Peter Koulizos, of TAFE South Australia‟s Faculty of Business,
says this precinct was a regular day trip for his family when he was growing up in Adelaide. Today he
has Christies Beach/Port Noarlunga on his list of Top Ten suburbs for investors. Despite its strong
recent growth, he sees ample potential for further capital gains in the area.
“I like it because of its proximity to the sea, because it has a lovely beach and beautiful clear blue water,
because it‟s close to good surf beaches and it‟s 10 minutes from the wine areas around McLaren Vale,”
Koulizos says. “The local council is putting money into the road systems down there and is working to
beautify the area.”
Port Noarlunga has lots of old-style small-town seaside character and a pier popular with people who
like to fish. It is described this way on the travelmate.com.au website: “Historic Port Noarlunga, once a
haven for sailing ships at the mouth of the Onkaparinga River, today attracts day trippers and travellers
to a safe beach and an underwater trail for snorkelers and scuba divers. The town also boasts great cafes
and sunsets romantics would die for.”
The suburb is evolving as a café culture precinct, with restaurants, cafes
and antique stores adding to the atmosphere.
This precinct generally has excellent services and shopping amenities
because of the facilities concentrated in Noarlunga Centre directly inland
from Christies Beach and Port Noarlunga. The facilities include major
retail (including the Centro Colonnades Shopping Centre, recently the
subject of a $120 million expansion which added 25,000m2 to the centre‟s
floor space, plus an additional 1,000 carparking spaces), sporting
complexes, cinemas, bowling alley, ice-skating rink, swimming complex,
theatres, a TAFE campus, council offices, library and extensive medical
services.
Noarlunga Centre and Christie Downs immediately to the north both have stations on the rail line
connecting the area to central Adelaide. Noarlunga Centre includes a Transport Interchange
incorporating the train station and bus links. The Southern Expressway has on/off ramps here.
This is also an area with many schools and plenty of parkland.
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Property Profile
There has been strong movement in property prices in both Christies Beach and nearby Christie Down
recently. According to Australian Property Monitors, the median house for Christies Beach for FY2008
was $297,000, a rise of 25%. Christie Downs rose 29% to $235,000. Figures from APM and RP Data
indicate this suburb has averaged price growth of 15% to 16% a year over the past decade, which
suggests it‟s a very solid performer. These median prices, however, are still a long way below the
Adelaide average, so the area remains affordable.
At Port Noarlunga, the median house price rose about 8% to
around $310,000. This suburb also has a strong long-term
average, with APM and RP Data suggesting values have
grown an average 12% or 13% a year over the past decade. So
the suburb has a strong track record but recent price growth
has been considerably less than Christies Beach.
One step further down the coastline, Port Noarlunga South has
a median house price around $305,000, after steep price
growth in FY2008.
Another opportunity may be units in Christies Beach and Port Noarlunga, which tend to cost in the
$170,000 to $190,000 range. This is a small part of the local market and there are relatively few sales, so
median prices can be misleading.
Future Prospects
This general area has been targeted by Land Management Corporation as a growth area. LMC and
Housing SA are developing a $500 million master-planned residential community over 130 hectares at
Seaford Meadows, which adjoins Port Noarlunga South.
This kind of activity explains why the municipality of Onkaparinga is one of the top two population
growth areas in South Australia.
The State Government is seeking a slice of the Federal Government‟s infrastructure fund to extend the
Noarlunga train line further south. This would provide rail links from Seaford and Port Noarlunga South
to the Adelaide CBD.
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Rockingham City Southern seaside region of Perth
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Other key influences: Transport Infrastructure, Lifestyle Features
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Seaside location, affordable prices relative to Perth, employment nodes nearby,
new Perth-to-Mandurah rail link, $160 million expansion of
Rockingham City Shopping Centre. ------------------------------------------------------------------------------------------------------------------------------
Typical houses: $330,000
Many parts of the Perth metropolitan area have seen prices go backwards since the market peak in
2006. An area which stands out with a cluster of suburbs in negative growth territory lately is the City of
Rockingham, which abuts the Indian Ocean about 50km south of central Perth, heading towards
Mandurah.
This is an area with relatively affordable house prices, very low residential vacancies and improved links
to central Perth following completion of the Perth-to-
Mandurah rail link, which passes alongside many of the
suburbs mentioned here.
Location
The City of Rockingham LGA is about 50km south of the
Perth CBD. It‟s a seaside municipality, with many suburbs
fronting the Indian Ocean. The city includes the suburbs of
Baldivis, Cooloongup, Port Kennedy, Safety Bay, Waikiki
and Warnbro.
Population and Demographics
The City of Rockinhgam has 90,000 residents.
Postcode 6168, which includes the suburbs of Rockingham, East Rockingham, Hillman, Peron and
Cooloongup, is home to many UK migrants, who make up a quarter of the population.
It‟s well-above average for retirees (23% of the population, compared with the Perth average of 16%).
Its home ownership statistics are generally in line with Perth averages: 36% own outright, 31% have
mortgages and 29% rent.
Postcode 6169 (Warnbro, Safety Bay and Waikiki) is more mortgage-belt, with 25% of the population
kids and teenagers, and 41% of households have mortages (compared with the Perth average of 32%).
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Rockingham City residents are (slightly) above-average in terms of the number of people who earn
between $1,000 and $2,000, compared with Perth averages.
According to the Index of Relative Socio-Economic Disadvantage, Rockingham City ranks 10th
out of
30 LGAs in the Perth area.
Economy and Amenities
There are numerous local industries, including a nickel refinery, large
grain silos, crayfishing, aquaculture, horticulture, viticulture, forestry
and various form of light industry.
There is also a healthy tourism industry, with attractions including
dolphin watching, Penguin Island, the Shoalwater Islands, wineries, Pt Peron Lookout, WA Water Ski
Park and Marapana Deer & Wildlife Park.
Just outside the city boundary, at Kwinana Beach, is a major industrial precinct/jobs node, including an
oil refinery, a container terminal and a fertilizer factory.
The jobless rate in the Kwinana-Rockingham area is around 5%. The stats show that 14,000 of
Rockingham‟s employed residents work within the city boundaries while 18,000 work outside the City
of Rockingham. A good percentage of those who travel outside Rockingham to work do so next door in
Kwinana City, where there is a major industrial precinct.
The City consistently approves 1,300 or more new dwellings each year, with approvals peaking at 2,250
new dwellings in FY2006.
Rockingham City Shopping Centre is expanding, with a $160
million re-development under way. The multi-stage renovation
program is scheduled for completion in mid-2009.
Additions include a fresh food mall, a Kmart mall area, an
entertainment precinct and an extra 50 specialty shops.
The completed centre with have an eight-screen cinema complex,
entertainment and leisure precinct, food court, 220 specialty shops
and expanded car parking (3,300 spaces in total).
Recent or current projects include Cape Peron Marina, Baldivis Town Centre, the Gary Holland
Community Centre, the Waterfront Village Project (a joint venture between the Council and LandCorp)
and Lark Hill Sports Complex.
Rockingham City Centre Transit System provides a link between Rockingham‟s new train station, the
CBD and the foreshore.
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Property Profile
The median house prices for suburbs of Rockingham City for FY2008 included: Rockingham $340,000
(down 11% over 12 months), Baldivis $435,000 (down 6% over 12 months), Port Kennedy $380,000
(down 5% over 12 months), Safety Bay $395,000 (down 4% over 12 months) and Warnbro
$340,000 (down 4% over 12 months).
Since June 2008 there has been a further decline in median prices. According to Australian Property
Monitors, the median house price for Rockingham for the 12 months to October 2008 was $332,000.
Warnbro was down to $335,000 and Safety Bay $385,000.
Cheaper areas in this precinct include Hillman ($287,000) and Cooloongup ($300,000)
Like most sections of the Perth market, prices in this area peaked in 2006 and values have been in
decline for the past 18 months or so.
Most locations in the Rockingham area have averaged 15-17% median price growth over 10 years.
It‟s an area where new housing construction increased for five consecutive years up to FY2006, before
tapering off in FY2007 as the heat evaporated from the property market.
The pattern for the suburb of Rockingham is typical of the region: value growth peaked in 2006 after
three years in which annual growth was usually above 20%; since then growth has dissipated and values
have gone backwards in the past 12 months; houses now typically sell in the mid-to-high $300,000s; but
the long-term capital growth rate is 16% a year over 10 years, reflecting the strength of the recent boom.
Home ownership rates are in line with Perth averages, with 25-3% of households renting; according to
sqmresearch.com.au, residential vacancies are well below 1%.
Some parts of the City are more mortgage-belt areas and Baldivis is more upmarket, with higher
ownership rates and fewer renters.
Future Prospects
The Rockingham area, like many parts of the WA market, has experienced a decline in property values
since the boom peaked in 2006. This has brought values down to an affordable level in a number of
suburbs, an event which coincides with a sharp drop in interest rates and introduction of the expanded
First Home Owners Grant by the Federal Government.
I believe the next 12 months belong to affordable suburbs with rail links to the CBD of a capital city –
and the Rockingham City precincts fits the criteria.
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St Clair / St Marys Sydney’s western suburbs, 10km east of Penrith
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Key influences: Ugly Ducklings, Urban Renewal, Transport Infrastructure.
Re-development of 1,545-hectare ADI site by Delfin Lend Lease,
M4 Motorway, WestLink M7, Coles Myer & Woolworths distribution facilities,
500-hectare Erskine Park Employment Area, Eastern Creek industrial area. ------------------------------------------------------------------------------------------------------------------------------
Typical houses: $260,000 (St Marys) and $330,000 (St Clair)
There‟s been plenty of negative press about the western Sydney property market. Many reports have
focused on high crime rates, social disadvantage and home repossessions.
But it‟s not all bad news out west. There are pockets of suburbs with good prospects for future growth,
as well as affordable homes. They include the cluster of suburbs focused on St Clair and St Marys.
While much of the media coverage has described mortgagee auctions and falling property values,
suburbs like St Clair have been behaving pretty much like the overall Sydney market. House prices rose
swiftly between 2000 and 2004 – and then declined. Over the five years to 2006, they averaged 9-10%
annual growth, despite a fall in values after 2004 - a performance as good as, or better than, many prime
suburbs closer to the City.
St Clair experienced only a small decline in its median house price in 2005 and 2006 before recovering
last year.
There are good reasons to consider this precinct between Parramatta and Penrith ...
o affordability;
o being on the train line and the M4 Western
Motorway;
o better access via WestLink M7;
o re-development of the 1,545ha ADI site at St
Mary‟s;
o employment generators such as Erskine Park
Employment Area and the Coles distribution
facility.
The suburbs of postcode 2759 and 2760 are places where
you can buy solid family homes for under $350,000. It‟s an area with good transport links, both road and
train; a number of major shopping centres; plenty of schools; and lots of parkland.
Demographer Bernard Salt believes there is scope for growth in the area, but you are most likely to find
it in “quiet, well-defined pockets” such as St Clair.
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Population and demographics
Salt says these suburbs are a 90-minute commute from the Sydney CBD but residents are more likely to
commute to Penrith or to Parramatta for work. “So you can do it, but you couldn‟t live the lifestyle that
you and I think of when we think of Sydney,” Salt says.
Postcode 2759 (St Clair and Erskine Park) has a population of 30,000, of which 73% is Australian-born
(well above the Sydney average of 61%) and it‟s primarily an area of young families (38% of its
population are kids and teenagers, compared to the Sydney average of 21%). Three-quarters of
households are couples with kids. It has very few retirement age people. You‟re more likely to find
trades people and clerical workers there than professionals.
Its market is 97% houses (few units/townhouses) and it‟s standard mortgage belt – 27% own their home
outright (below average for Sydney) while 56% have a mortgage (well above average). Only 13% are
renters, compared with the Sydney average of 30%.
Postcode 2760 includes St Mary‟s and Colyton, and has a population of 25,000 which is in line with
Sydney norms in terms of the average age, the percentage of young people and the content of retirees.
But incomes are below average and there are above-average numbers of single-parent households.
About 30% of the population is kids/teenagers, compared with the Sydney average of 21%.
Economy and amenities St Clair was created as a new housing estate in the 1980s. The answers.com website says: “St Clair is a
very family-orientated area with newish-style houses in a clean environment, good-sized blocks and
easy-to-use roads.”
It‟s an outstanding place for facilities and amenities.
There are many parks and playgrounds, modern
schools and an impressive array of child care centres.
The Cook Parade Centre includes a neighbourhood
centre, child care facilities and tennis courts. It‟s a
suburb of wide landscaped streets, solid brick-and-tile
homes and well-tended gardens. You can imagine
people enjoy living there.
The St Clair Shopping Centre recently underwent an
upgrade and extensions, adding 25 specialty shops,
relocating a major supermarket and enclosing the 9,000m2 mall area.
There are high schools at St Clair and Erskine Park as well as private secondary schools such as
Emmaus Catholic College and Mamre Christian College. St Clair has five primary schools and around
10 child care facilities.
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Salt, who studied St Clair in association with the upgrade to the St Clair Shopping Centre, says the
suburb is an “urban island” which stands apart from the mass of suburbia around it.
“It‟s not on the road to anywhere, it‟s very quiet and it‟s perfect for family life,” Salt says. “St Mary‟s
has the Housing Commission areas and has crime areas. But you don‟t tend to get that in an island
community like St Clair.”
He says St Clair was developed in the 1980s for first-home families and now the children of those
families are growing up. “Over the next decade, as those kids leave home, you could argue that we‟ll see
a new demographic coming in with better capacity to push up property values,” he says.
The answers.com website says: “Erskine Park isn‟t as big as St
Clair in housing and population but will be bringing an
economic boom to the area with a new industrial area in the
process of being developed.” (This refers to the Erskine Park
Employment Area, which I describe in detail later.)
St Marys doesn‟t have the feel-good qualities of neighbouring
St Clair but it does have plenty of amenities and facilities,
including the St Marys Rugby League Club, the Kingsway
Playing Fields, St Marys Leisure Centre and the St Marys
Village Shopping Centre.
But the big driver of change in this overall precinct is the
development of 1,545 hectares as a master-planned community by Delfin Lend Lease. The re-
development of the former ADI site will raise the tone of the
area. The first village in this project, Ropes Crossing, is under
way on 132 hectares in the Eastern Precinct and will have 1,800
homes and 5,000 residents. It borders 900ha of regional park
which will include 25km of walking and cycling paths.
The Village Centre, known as Ropes Central, will have a Coles
supermarket and specialty shops (now under construction), a
primary school and childcare facilities (opening 2008), a private
primary & secondary school (opening 2009), a Community
Resource Centre, sports fields and a medical centre. Ropes
Crossing is expected to generate 8,600 jobs during construction and 5,300 ongoing jobs. Longer-term
the St Mary‟s development is expected to create 5,000 homes with an ultimate population of 12,000
people.
Property profile
Median prices for suburbs in this precinct for FY2008 were $260,000 at St Marys, $330,000 at St Clair,
$385,000 at Erskine Park and $280,000 at Colyton (Australian Property Monitors data). All these
suburbs showed small increases in their median prices in FY2008.
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House prices in St Clair rose more than 15% in each of 2000, 2001 and 2002 (with 2002-03 showing
better than 20% growth). Since 2003 price growth has dissipated and values declined slightly in 2005
and 2006. The median price rose about 2% in FY2008.
In Erskine Park, house prices rose steadily from the late 1990s, when the typical house cost less than
$200,000, until 2004 when the median reached almost $400,000. Since then values have declined and
then levelled off to a median around $370,000 – with a return to price growth in 2007. The median price
has now risen to $385,000, following 6.5% growth in
FY2008, according to APM.
Over the past 10 years, Erskine Park has averaged 9%
a year growth in values, a solid effort in a region
where values generally have dropped since 2003.
The median price for St Marys arises from strong
increases from 2000 to 2004, when the median topped
$300,000, after which prices fell then levelled off. The
story in neighbouring Colyton is very similar: its
median price touched $300,000 in 2004 but declined
thereafter and has levelled off at about $280,000.
Both St Marys and Colyton have long-term growth averages of 9-10% a year over the past 10 years, a
performance that defies common perceptions about investing in these areas.
The vacancy rates for postcodes 2759 and 2760 are hovering between 2.5% and 3%, according to
sqmresearch.com.au.
Prospects
This area has also become a target for developers of light industrial facilities since road transport access
to the area was vastly improved by the opening of the Westlink M7, which crosses the M4 about 4km
east of Erskine Park.
A report by commercial property consultants CB Richard Ellis highlights “the economic importance of
the Westlink M7 in bringing investment and jobs to western Sydney”. It examined industrial land
alongside the M7 between the M4 and the M5, which includes major areas in Erskine Park and
neighbouring Eastern Creek - and found the amount of industrial floor space in this catchment area was
almost doubling with the addition of 518,000m2 of new space from 2006 to 2008.
The general manager of Westlink M7, Flan Cleary, says the findings show the area has become an
investment hotspot. Cleary says: “This report highlights the fact that the Westlink M7 has increased the
attractiveness of western Sydney as a place to do business. New developments at Erskine Park and
Eastern Creek will provide thousands of jobs.”
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Large amounts of new floorspace are projected for Minchinbury and Eastern Creek (totalling
200,000m2), immediate neighbours to the St Mary‟s/St Clair precinct. The report found that in the M7
catchment there had been industrial land sales totalling $150 million in 2004 and $180 million in 2005.
Half of the 2005 sales occurred in Erkine Park, with Eastern Creek also a major target for land buyers.
This continued into 2006 and 2007, with a property trust group paying $57 million for a 24ha site at
Erskine Park.
Amid all this activity, the 500ha Erskine Park Employment Area is a key precinct for the Penrith
Council. It says: “The area will soon become one of the premier new employment zones for Greater
Western Sydney with the potential for as many as 10,000 jobs within the site upon full capacity.”
A current project which gives an indication of the scope of development and jobs creation is a 45,000m2
warehousing & distribution facility by joint developers Macquarie Goodman and Brickworks Limited
for Kimberley-Clark, a manufacturer of household and health-care products. It has been built on an 8.6-
hectare site at the Interlink Distribution Centre, with 100 car spaces at a cost of $42 million.
The Erskine Park Employment Area was
considered a good location for the firm because
its road links make it “an important regional hub
for logistics, distribution and warehousing”.
Macquarie Goodman is also the developer of a
$160 million distribution centre at Eastern Creek
for Coles Myer, as part of a $500 million
investment in four new facilities in NSW and
Victoria. The development includes two massive
buildings, one the National Distribution Centre and the other the
Chilled Distribution Centre. Together they employ 1,000 people.
In September Brickworks reported it had completed a 53,000m2
distribution centre for Woolworths at Interlink Distribution Centre at
Erskine Park. The $70 million facility was developed on an11ha site.
At the same time, Brickworks said it had completed 36,000m2 facility
for Linfox, while a 10,800m2 building for Ubeeco Packaging
Solutions would be completed by the end of 2008.
GPT Group has paid $95 million for 38ha within the former CSR
quarry site at Erskine Park for industrial development, while
Corporate Express is centralising logistics operations into a new $55 million facility of 43,000m2 at
Erskine Park. CSR is planning a complex of warehouses and distribution centres totalling over
190,000m2 in the precinct.
These and other major developments suggest there are going to be plenty of jobs in this general area,
which must translate into demand for local housing.