oc | Wednesday 26th February

The Truth about BOOM! Suburbs

There is always a great deal of talk about “Boom” !

The media love it, some so-called property experts love it, and it is a hot topic at dinner parties.

“Where are property prices going to BOOM next? ”

The word “boom” creates a buzz and gets everyone’s attention

Unfortunately, a ” boom suburb ” can be like a fashion trend and, in most cases, it is just hype.

Can you make money investing in so -called “BOOM” suburbs? Of course you can.

However, is it really the best long-term ? In many cases – maybe not.

The best suburbs to buy in are the suburbs with the strongest fundamentals: close proximity to with excellent transport linkages, and close to parks, shops, cafes, restaurants, bars, schools, and hospitals.

Heard it all before? If the answer is no, then you need to get up to speed on property investing.

So, let’s get back to the point – after the above fundamentals are checked , there is one criteria , which not many people talk about , that is one of the MOST critical factors for good capital growth and that is .

Has this suburb and its surrounds reached capacity?

No potential for additional supply may = constantly increasing demand.

This has a affect as the population gets bigger and urban gets wider.

It is important to remember that, when there is a boom, the most impact is felt at the epicentre. So to achieve the best capital growth rates per year every year, my advice is to be as close to this epicentre as possible.

So, where is the epicentre, you ask?

Which have had the best growth rates since 1980 ?

Albert and Middle Park are ranked number one as the fastest appreciating suburbs in Melbourne since 1980.

So let’s take an investment of $50,000 and place it in in 1980 and do the same with such as Preston, Burwood, Seaford and Werribee.

Refer to the graph below for today’s : Werribee 340K, Seaford 500K, Burwood 750K, Preston 750K and Albert Park $1.2m.

Screen shot 2010-03-25 at 10.28.31 AM

With property, have a long – term strategy. Concentrate on the solid fundamentals and don’t get distracted by the hype! Running around trying to find the next ‘Boom’ suburb in order to make fast money is, in most cases , more trouble than it is worth.

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