Anyone buying property for investment in Perth during 2010 can be assured of long term capital growth based on surging population growth over the next 35 years, according to David Hobbs, CEO of Professionals Real Estate Group.
Mr Hobbs said that population growth was a key driver in property value and the latest projections by the Department of Planning indicated that Perth was poised for significant population growth rates over the coming three decades.
“The latest projections by the Department of Planning indicate that Perth’s population will double over the next 35 years from currently 1.7 million to 3.5 million. That is basically adding another city with the current population of Perth to our current population in just one generation. These latest population projections have been released at the same time as the Housing Industry Association (WA) predicting that Western Australia could have a housing shortfall of more than 72,000 homes in Western Australia by 2020 because not enough new homes are being constructed. This surging population rate and shortage of new home construction will put upward pressure on property and land value over the coming years. Based on these figures, the demand for both owner occupier and rental properties is set to remain strong in Perth over a long period of time. Property investors should consider the excellent long term returns in Western Australia rather than just short term interest rate movements and rental returns. In particular, younger investors aged in their twenties and thirties should focus on the long term benefits of buying property now. In thirty to forty years time when they decide to retire, the properties they purchased now could easily help fund their retirement,” he said.
Mr Hobbs said that first time property investors should focus on older suburbs that where relatively close to the city centre which had homes constructed on large blocks of land.
“Land appreciates in value over the long term and homes with a large land content nearer the city have the potential to significantly increase in value over the coming decades,” he said.
Mr Hobbs nominated the following 10 suburbs as offering first time investors the potential for strong capital growth:
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