Powered by MOMENTUM MEDIA
subscribe to our newsletter sign up

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Sweet spots for capital growth tipped in ‘middle-ring’ suburbs

Suburban houses

Investors have been encouraged to snap up land in “middle-ring” suburbs, as the slowdown in construction, together with future constraints on infrastructure, will see population growth diverted from outer suburbs.

According to Ashley Wain and Adam Murchie, directors at private investment firm Forza Capital, investors should look towards suburbs just outside Australia’s city centres as opportunities for future growth.

The pair advised investors to seek out land holdings in such “middle-ring” suburbs, as the curtailing of credit to residential developers along with reduced government spending on infrastructure will see the current growth of fringe areas come to a halt and force new residents to settle elsewhere.

“Developers are unable to finance and develop sites, and yet we have very strong long-term population growth,” said Mr Murchie.

Advertisement
Advertisement

“In Melbourne alone, we have witnessed an average of 145,000 new residents per annum over the last two years.”

“Looking forward, we see a real need for future supply. Over the last 20 years, 53 per cent of this growth has been accommodated on the fringe. However, infrastructure constraints will become an impediment to future significant growth on the fringe.”

Mr Wain said governments will likely attempt to alleviate this demand pressure by promoting population growth in areas closer to the city centre with good public transport and social amenities nearby.  

“There are only so many new train lines, hospitals and schools that governments can build on the fringe. As such, governments will look to locate people where this infrastructure already exists,” he said.

Mr Wain highlighted that this likely shifting of population presents an opportunity to investors, as land holdings in these areas may be purchased and sold to future developers at a profit.

“With time, the investment performance of such sites can often be exponential and generally with reduced risk as you always have a fallback position – they are very hard to find but are worth the wait,” he said.

Sweet spots for capital growth tipped in ‘middle-ring’ suburbs
Suburban houses
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Cynic - Do you think this wasn't considered when Mr Morrison took 4 months to set the election date? It is out of our control to deliver this year. Ha!....
Anonymous - Bulldust. This sounds like leftist badmouthing the government as the ASTO has already said that even if the legislation is passed after 1 July 2019 it.......
Anonymous - Happy days are here again for all the aspirational battlers and retirees who will not be ripped off by Labor's Tax grab.....
MelbMan - We dodged a real bullet with Saturday nights Federal election result. ....