During our time as mortgage brokers in Rockingham, we have seen a lot of capital growth in the area. We saw Baldivis become the Perth suburb most referred to as having a “hot market.” We have seen the Rockingham area become a haven for the small investor who wants to slowly build a portfolio of rental properties in a family-friendly market that is poised for long-term capital growth.
But what are the factors that determine capital growth? There are a lot of factors that can be cited, but to us it has always boiled down to one question: “Do people want to live there?”
If people want to live in a suburb, there will be high demand. High demand raises property prices, producing capital growth for homeowners. There are a lot of factors in what makes a person want to live in a particular suburb. We are going to take a look at a few top suburbs for capital growth in a twelve month period ending June 2014.
We realise that a year is not “long term,” but we feel this metric is important due to what we see as a major shift in the market: the rise of suburbs further away from the Perth CBD. Some of the top rises were in unit prices and some were for homes. We see each as equally important.
Sorrento
Sorrento is described as an “affluent suburb.” It is on the Indian Ocean and is 19 km northwest of the Perth CBD. The median price for a unit in Sorrento rose from $517,065 in the quarter ending June 2013 to $767,821 for the June quarter of 2014. That is an increase of 48.5%.
Shoalwater
Shoalwater, as local residents here know, is located within the City of Rockingham. We are an outer suburb located on the ocean. We are 15 km SSW of the Perth CBD. The median price for a unit for the June 2013 quarter was $246,147. For the June quarter of 2014, it was $346,727 for an increase of 40.9%.
Kardinya
Kardinya is located 12 km south of Perth and is within the City of Melville. The median unit price rose from $409,297 in the June 2013 quarter to $564,615 in the June 2014 quarter for an increase of 37.9%.
Kallaroo
Kallaroo is located 26 km NNW of Perth and is also on the ocean. In June 2013, the median price for a unit was $324,229. It rose to $445,298 for an increase of 37.3%.
Eden Hill
Eden Hill is located within the Town of Bassendean, 13 km NE of Perth. In the quarter ending June 2013, the median price for a unit was $311,525. In the June 2014 quarter, it rose to $414,378 for an increase of 33.0%.
What This Means to You
Anyone who has read our blog over the years knows how much we love the Rockingham area. We enjoy living here and are unabashed fans of Rockingham and all of the nearby suburbs such as Baldivis and Kwinana. In the midst of a Perth housing market that is experiencing a temporary lull, we are proud to hear that Shoalwater has done so well this year.
The bottom line is that if you are in the right suburb, you can experience capital growth even when the overall Perth market is flat.
So, what makes a suburb desirable? The reason for living in a suburb is to have access to city amenities but with lower prices and a more relaxed lifestyle. Rockingham isn’t the small town it was thirty years ago, but it is still the sea change community that others model themselves after.
The Rockingham area has everything a person could want. Rockingham also represents a convergence of two trends: sea change and the population growth of outer suburbs. Our mortgage brokers are seeing a lot more action centred around Rockingham, Baldivis and Kwinana.
Call (08) 9527 1800 to learn more.
