INFRASTRUCTURE upgrades could be big property price growth drivers but investors must follow the golden rule of “buy and hold” for success, warn industry experts.
Major redevelopments planned for the northern suburbs include multi-million-dollar expansions to Karrinyup and Innaloo shopping centres, while the Scarborough foreshore redevelopment is underway.
Momentum Wealth managing director Damian Collins said the projects had triggered an increase in interest for established houses in the area, especially those on large blocks with sufficient development potential.
“The area features a predominant zoning of R40 in Innaloo, Doubleview and Scarborough and these properties are specifically sought after by investors wanting to develop, as well as the properties in the MRA rezoning area near Scarborough Beach,” he said.
In Karrinyup, Davey Real Estate partner Phil Pope said he had just sold a development site under 1700sq m for above the sellers’ expectations after it attracted massive buyer interest.
Mr Collins told Residential Karrinyup, Innaloo and Stirling would benefit from the shopping centre upgrades, which were coupled with the City of Stirling’s plans for a new town centre, while it was likely the foreshore redevelopment would positively impact Scarborough and Doubleview.
“We expect house price growth to be above the Perth market rate in the short and long term due to the added amenity,” he said.
“These suburbs are also well placed, being nearby public transport, schooling and major access ways, which are also drivers of price rises.
“Scarborough is likely to experience the greatest uplift as the aim of the redevelopment is to create the ‘Bondi of the west,’ which will add greater amenity.”
Focusing on the shopping centres’ reinvention, property analyst Gavin Hegney agreed Innaloo and Karrinyup would outperform the rest of Perth.
“You’ll probably see the same impact again as when the centres originally went into those locations, which was significant rub-off to surrounding areas and significant improvement in amenity to surrounding areas,” he said.
“Innaloo has the added benefit of improved traffic planning as that’s probably somewhat of a problem for Innaloo and by solving that problem, you will improve values accordingly.
“You still need to take a long-term view as these projects will take a while to be done and then have a knock-on effect to values.
“Values start rising when projects are announced, as people start to buy into the vision and they usually continue rising for a year or two after the developments are completed, in the case of shopping centres particularly but Scarborough tends to have a longer term growth curve.
“The best opportunities for buyers are in walking distance to the new facilities, mainly the beachfront.”
Mr Collins said Scarborough had the most upside potential for investors because it incorporated a major change of land use, including some rezoning to higher density housing. It was important to select the “correct” properties as there could be an oversupply in some pockets.Mr Pope said while the improvement in Scarborough’s beachfront was well overdue and being positively received, buyers and sellers were concerned the increased zoning density could further worsen congestion.
For potential investors, he advised: “Find out what suits your needs – potential for higher capital return but only low rent return, higher rent return now but less chance of development capital growth later, do you have development experience?
“Do as much due diligence as possible prior to making any decisions.”