The month in review: Regional Vic
By Herron Todd White
July, 2010
LEETON/GRIFFITH
How do you best invest $500,000 large in residential
property in the Murrumbidgee Irrigation Area? In Griffith,
a relatively quiet market at the moment, my suggestion
would be instead of waiting for growth to occur, chase
the yields! For $500,000 I would suggest purchasing two
properties in north or east Griffith as investments which
could potentially rent from $260-$280 per week with an
annual net return of between 4% and 5% each.
In Leeton my advice would be three dwellings in the town
circle for around $170,000, with an estimated annual net
return of 5% and 6%, and in Narrandera four dwellings
for around $125,000 each with a net annual return of 6%
and 7%.
Spend your money in the lower to middle end of the
market as this has the greatest potential for growth.
Investing $500,000 with the bank, returning 6% pa is
attractive, but as we bottom out in the current cycle there
is potential for growth on the horizon, but not in the short
term.
MILDURA
Last year we started our commentary by saying that the
good news was that ‘half a mill’ would buy more than it
would of a few years earlier. Twelve months on and prices
seem to have remained stable and subdued, noting
however that this upper end section of the Mildura
market is still thinly traded.
In Mildura, $500,000 will buy a 30-square new house with
good external improvements on a rural residential style
lot within 7km of the City. While this will hopefully bring
the owner enjoyment, it is difficult to see much capital
growth in this sector in the coming 12 months, due to the
generally subdued local economy. Buyers at this price
point can afford to be selective, and selling periods of
over three months are not uncommon.
Those chasing maximum yields will most likely look at
buying a block of four units, and could expect a gross
yield of slightly over 6%. Agents are reporting that the
rental market has been tight for the past 12 months, and
this has helped keep rents at levels equal to or slightly
higher than levels applying 12 months ago.
For the best capital gain prospects, we would recommend
buying two dated 1980s style brick homes in a favourable
area – which can generally be purchased for around
$225,000, and then spending $25,000 on renovation and
upgrading.
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