What are Cheapies with Prospects - And Why Do They Matter?
The Cheapies with Prospects are the Ugly Ducklings of city real estate. They’re places with strong potential for capital growth.
Ugly Duckling is an odd term for something you would recommend to real estate investors. But the term is apt.
The Ugly Duckling of the fairy tale was considered unappealing because those around it didn’t understand what it was. It evolved into a graceful swan.
There are suburbs with similar qualities. They are places considered unattractive by those looking through uneducated eyes – but they have the potential to transform into real estate swans.
Every major city has suburbs which were once considered “down market” or “on the nose” – but which have evolved into trendy areas. Richmond in Melbourne, Balmain in Sydney and Bulimba in Brisbane are examples.
There are suburbs, once considered primarily industrial in nature, which have changed through urban renewal into thriving residential areas with steady price growth.
There are outlying areas of major cities – like the Redcliffe Peninsula in Brisbane – which have been “discovered”, transforming their appeal and their property values.
The significance of these areas in the residential market has grown because affordability has become the headline issue in the housing industry.
This is one reason why the cheaper areas of our capital cities have recorded good capital growth over time. First-home buyers, investors and others have targeted areas with affordable prices. And right now, first-time buyers are more active than at any time in the past eight years.
Recent research has shown the cheaper areas undergoing gentrification are among the strongest perfomers on price growth in our major cities.
Not all of the cheaper areas have the potential to evolve into real estate swans. But some of them do. The task for property investors is to identify the ones which have reasons to out-perform.
The objective of this report is to make that task easier.
The locations highlighted in this report all have important factors in common:-
- Highly active real estate markets with growing sales activity;
- Plenty of houses at affordable prices;
- Strong infrastructure, both existing and planned; and
- Proximity to major jobs nodes.
- Hotspotting regards the combination of affordability, infrastructure and jobs nodes as “the power combination” of real estate investment.
- The locations featured in this report all have that power combination.