I have republished it without alteration because it is spot on. I hope you all get something out it.
·
Michael Yardney
·
Michael Yardney's Commentary,
Property Investment, Where to buy
investment property· September 25, 2014
Everyone knows that location is critical when
selecting an investment property that will outperform.
But what makes a good location and why are some
locations better prospects than others?
When I started investing around 40 years ago the
emphasis for homebuyers was largely affordability and proximity to
infrastructure.
The outer fringes of our capital cities were
developed in the wake of freeway extensions on all sides and commuting from
vast, newly born suburbs into the CBD became commonplace.
As far as amenities went, as long as you had a
relatively easy drive to your place of employment, as well as nearby shops,
healthcare services and schools, life was pretty good.
Nowadays the property choices Australians make are
still driven by lifestyle, but how we think and function in today’s world has
changed.
With more than half Australian households having
only one or two people in them, more of us are:
·
Choosing to
start a family later in life.
·
Enjoying the
opportunity to work flexible hours and from home offices.
·
Seeking
better work-life balance and prioritizing downtime before overtime.
·
Opting to
live within walking distance from not only infrastructure necessary for daily
living, but also cafes, restaurants and recreational facilities, as lifestyle
moves to the top of the owner-occupier and tenant wish list, alongside
affordability.
·
Downsizing to
easily maintainable and cost effective apartments and townhouses, with smaller
gardens and more efficient, compact design.
This means that “walkability” has become the new
buzzword on the property investment block.
Of course proximity to amenities such as shops,
parks and public transit that allows local residents to either walk or take a
short train, bus or tram ride, has long underpinned property values in inner
city neighborhoods throughout the developed world.
But now we are witnessing a similar trend across an
increasingly cosmopolitan Australia.
In fact it is common for a considerable premium to
be paid for properties that are a short walk to the beach or café strips and
long term capital growth figures show that in Sydney the city’s most “walkable”
suburbs have outperformed the averages by up to 20%.
It should come as no surprise that as our lives
become busier and time is in increasingly short supply, cafés have become a
kind of transition point where we meet up with friends, family and often
business associates for a “catch up”.
Many city dwellers have their favored haunts, where
they’re on a first name basis with the local barista and have a “regular”
order.
The serving and consumption of coffee has become
somewhat of a ritual and many of us fancy ourselves as coffee connoisseurs.
Given that more of us are living alone or in
smaller households, it’s not surprising that the relaxed, “home away from home”
vibe of inner city cafes is becoming an increasingly popular draw card for
those seeking a familiar social outlet.
Yes…lifestyle has undeniably become the fundamental
force in today’s residential real estate market.
Culturally, we have become a nation that enjoys
strolling to the local corner eatery to catch up with friends or just enjoy
some time out with a latte.
But it’s not only suburbs close to beach and bay
that command premium. Proximity to schools with a good reputation is a must for
many family buyers, with some purchasers prepared to pay extra to be within a
particular school catchment zone so their children can either walk, bus or
“train it” to school.
In fact in my experience, parents are more willing
to spend half an hour or more driving to work if it means their children can
safely walk to an esteemed, local school.
As our population grows and our major cities
increase in population by an estimated 10% over the next five years the
walkability of an area will be become an even more important consideration for
property investors seeking locations that will outperform into the future.
Well…now you can find out how “walkable” your
suburb is. Walkscore.com, which measures the number of typical consumer
destinations within walking distance of a dwelling, with scores ranging from 0
(car dependent) to 100 (most walkable) has recently ranked more than 100
Australian cities and 3,000 suburbs.
And the good news is that walkable neighborhoods
were recently recognized for their health and economic benefits afforded to
residents by the University of Melbourne, where a ten year study found good
access to local infrastructure encouraged more people to ditch the drive and
adopt “health-enhancing behaviors”.
For property punters, the cultural transition that
Australians are currently undergoing is important to note.
It signals an end to the suburban Mc. Mansion “fad”
and demonstrates just how crucial demographic waves of change can be to
planning and executing a successful, long term property portfolio.
While affordability will always be a factor in our
property decisions, lifestyle is the fundamental key in our marketplace today.
Inner city, bayside apartments filled with
character and complemented by flowing, commonsense floor plans, with excellent
nearby lifestyle amenity have become the “new black” in residential real estate
for many buyers – young and old.
This is where investors would do well to focus
their property investment activity in years to come.
