Investors need to be readers and surfers

Anyone hoping to achieve the best growth results from real estate needs to be a reader and a surfer.

Investors making the biggest gains are those who buy early in areas poised to out-perform the overall market.

Out-performance in real estate is never an accident. It always happens for reasons which are easy to identify in hindsight. Real estate investors need to get good at doing it in advance.

Being well-informed is the key. That means being a regular reader of reliable information sources and a surfer of the Internet.

Here are some examples of events likely to influence real estate values. They all emerged in various forms of media on Friday 14 July 2006.

Developer Daycorp will build a $50 million homemaker centre at Mt Barker in the Adelaide Hills. This confirms the area’s status as a growth area. Mt Barker has above-average population growth and its connections to Adelaide City have been revolutionized by transport infrastructure improvements, including the Heysen Tunnels. There are consistent reports that residential rental vacancies in the Hills are virtually zero, which suggests it might not be a bad time to buy a property investment there. Adding further impetus to the general area are plans for a major mining venture at Kanmantoo, not far from Mt Barker.

A major gas discovery has been made off the Western Australia coast. US energy company Chevron regards the discovery 260km offshore from Dampier and Karratha as significant, potentially worth billions of dollars in export earnings. It’s not far from a massive new liquefied natural gas project planned for Barrow Island, involving Chevron in a joint venture with ExxonMobil and Shell. The $11 billion Barrow Island project is expected to generate 6,000 jobs (if it can overcome current environmental concerns). These projects are likely to add further pressure to the real estate market in the Karratha area, already nationally-ranked for growth in property values.

Coles Myer is building two new distribution centres in Melbourne. One of these will be at Somerton in the city’s north and reportedly will be “four times the size of the MCG”, making it one of the largest buildings in the southern hemisphere. Another big distribution centre will be built at Laverton in Melbourne’s west. They will employ around 800 people, an event that obviously will boost employment in those areas and create demand for residential real estate. Coles Myer has chosen the new locations because of superior transport infrastructure, one of the biggest influences in creating real estate hotspots. It will join other major companies with big warehousing complexes in those areas, all thanks for improvements in road networks.

A $1 billion gas-fired power station in Victoria’s south-west looks likely to proceed. Origin Energy plans to build the facility near Mortlake and the project, having now met environmental criteria, is awaiting final State Government approval. It would increase Victoria’s electricity capacity by about 12%. Employment in Mortlake – a town of 1,000 souls about 230km west of Melbourne on the Hamilton Highway, not far from Warrnambool – would be boosted by hundreds of new jobs, if the project proceeds as expected. Houses in the town commonly sell for less than $150,000 and sometimes for under $100,000.

News items such as these emerge daily. People hoping to be successful real estate investors need to be among the first to know about them.