South West WA July 2017

The month in review: South West WA

By Herron Todd White
July 2017

As we draw into the middle of the year it provides us with an opportunity to step back and ask the question, where would you park a lazy half million in the south-west of Western Australia?

A good option for medium to long term capital growth in the south-west is along the coastal strip located on the northern side of Bussell Highway traversing the suburbs of Busselton, West Busselton, Broadwater and Abbey. This coastal strip is approximately 500 metres in width and runs for approximately ten kilometres along the Geographe Bay.

As the city of Busselton continues to grow at a strong rate, this well located section of land will continue to grow in desirability and affluence as the urban sprawl continues to be pushed further away from the coast line. This consequently will result in good capital growth over the medium to long term as an increase in population will lead to stronger demand of a product that has limited scope to increase in supply. As such this well positioned and limited coastal strip would represent a good option for a prospective purchaser looking to invest $500,000.

$500,000 is an entry point into this market and would secure a very basic residence with the vast majority of the value being in the underlying land. While the rental return of the investment would be weak, purchasing within this coastal strip would provide a strong opportunity for capital growth over the medium to long term.

A second option would be to invest in Dunsborough which is a very well sought after and renowned costal town. Dunsborough is located within Geographe Bay and attracts a higher number of tourists given its beaches and proximity to the world renowned Margaret River vineyard region. More specifically we see the coastal strip that runs from north of Caves Road to the beach as being a good area to invest. Generally residential dwellings in this pocket are positioned on good size lots of 800 square metres and above and are located in very close proximity to the ocean stimulating demand. $500,000 is an entry point into this market and would secure a very basic residence with the vast majority of the value being in the underlying land. If these properties were to be purchased with a view to being held for the long term, good capital growth could be expected as it historically has performed well.

Over the past year both of these regions have outperformed surrounding localities. The coastal strip in Busselton and the Dunsborough township have remained relatively level with reduced selling periods while we have seen values in the outlying regions of Busselton and Dunsborough weaken.

The coastal strip in the City of Busselton and the well located township of Dunsborough are just a number of options among many opportunities within the South West to invest $500,000.