• Calculating Investment Properties

Investment Properties

Investment Properties – To begin, it is important to state that this is an opinion piece and should not be taken as fact or legal advice. We strongly recommend you consult the relevant professionals to make informed decisions when buying property.

Buying investment properties is perhaps more of an art than a science. However, if you look at all the angles and take all of the variables into account, you might spot something others don’t. Or you can just be lucky!

Marketown / Spire Apartments

Sometimes the best and clearest way to illustrate a point is with a real life example. One such example would be the story of the Spire Apartments above Marketown, Newcastle West. Firstly, consider the location – the shopping center at Marketown has been around for years and is a well-established destination for local shoppers. This is due to the fact that it is in a convenient location, has lots of parking, and a good selection of eateries and shops – the two big players being Coles and Woolworths, which both have large stores there.

The Marketown complex has been surrounded by houses, apartments, schools and local businesses for years, but now it is smack-bang in the middle of the largest apartment boom in the city’s history. With the extension of Honeysuckle and the development surrounding the Newcastle Interchange all within a few blocks, Marketown is going to go from strength to strength – and we have heard and seen some of the plans for the future which are going to take the site to another level.

Spire Apartments above Marketown

Arnold Property Marketown

Arnold Property Marketown

You might be wondering what all of this has to do with investment properties. Well, a few years back a developer saw the potential of the site and built the Eastern side of the complex (known by many as the Woolies side) with the capacity to have apartments above. If the long-term vision comes to be, the Western side (known by many as the Coles side) and car park between will undergo a similar transformation. We’re imagining something along the lines of Westfield at Kotara, but on a scale that fits the site.

So far this might all just sound like stories and predictions, but when you look at the figures it all comes into sharp focus. When we spoke to some owners a few months back they told us that some of the apartments (above Woolworths) in the Spire complex were bought off the plans a few years back for around $400,000 – $500,000 and they are now worth around $5000,000 – $600,000 respectively. Now that’s an impressive return on the original investment!

An apartment went on sale this weekend for just under one million dollars, which shows the trend has continued. Now, the doom-mongers might say, there are too many apartments being built in Newcastle, and they might be right. Though when you take into account the location of Spire and the plans for Marketown and the surrounding area, the prices of the existing apartments is only going to increase. For those who bought investment properties in Spire, they should be able to look back and say that they made a good investment. Those who have yet to invest may want to keep their eyes and ears open for news of future opportunities in this area.

Newcastle Interchange

The impact of the newly opened Newcastle Interchange is another good example. The houses and apartments surrounding the site have gone through a massive increase in value over the past few years, as the CBD of Newcastle is said to be moving in this direction.

Photo of Newcastle Interchange

It’s an old saying, but a sound one – buying near a train station tends to be a good investment. And the next level from that is to buy where a train station is going to be. As there can always be an outside chance of the station not being built, you need to always keep in mind that buying investment properties can be more of an art than a science.

Newcastle Beach

This is another area that has undergone large-scale development over the past few years. In the past it has been because it is a fantastic location, and more recently because of the V8 Supercars. Plans for the redevelopment of the waterfront were published in the local press last week, so investment in the area is set to continue. Just down the road, there are also grand plans for regeneration of the Hunter St Mall, so you may want to keep an eye out for possible investment opportunities here too.

Housing

When it comes to housing in Newcastle, it is a pretty standard scene. The houses in the desirable areas (be them old, new or very old) are very desirable and therefore pricey. This doesn’t mean to say that there aren’t good investments to be made. You just need to really do your homework, be well aware of the risks, and try to see all the angles and variables.

New Build Houses

There are estates of new houses being built outside the city centre. Houses built off the plan have proven to be good investments, and for some they offer a realistic way into the housing market or the opportunity to buy a home for the family.

The Sydney Effect

The fact that property prices in Sydney are sky high, and that the competition is fierce, has meant a large number of Sydney-siders are now looking at Newcastle and the surrounding areas as a better option. This has been a factor in property prices going up over the years, and will continue to be. And interestingly, we’ve been told that a drop in property prices in Sydney doesn’t follow in Newcastle for at least a few years, and may even result in an increase in property prices in Newcastle. This can be mixed news for those looking to buy their first home or an investment property.

Investment Properties Conclusion

We’re only just scratching the surface here of a very complex topic. You might get more insight if you read our Why Newcastle blog post, and our Buying A Home and The Suburbs Around The Junction articles. Newcastle is definitely a city on the up, and it looks as though its population is set to swell. Will the job and housing market be able to meet this demand? This will probably be the deciding factor when it comes to investment properties in the city and surrounding areas.