Ugly Duckling Hotspots

hotspotting.com.au – Ugly Duckling Hotspots ___________________________________ 1

National Top 12

Ugly Duckling

Hotspots

November 2008 to February 2009


In a nutshell:

I believe these Ugly Duckling locations are worthy of consideration by investors because of their long-

term potential to evolve and grow:-

Market Major Influences

Cabramatta,

New South Wales

Emerging as a popular precinct for Asian cuisine; centre of an

economic/population growth precinct

Dandenong,

Victoria

Transit Cities program, $290m State Govt spending, $1 bil rail

upgrade, Metro Village, jobs generators

Elizabeth,

South Australia

Expansion of Edinburgh Defence Precinct, $550m Northern

Expressway, major jobs generators

Epping,

Victoria

Craigieburn Bypass, Fruit & Vegetable Markets, Coles Myers

facility, intermodal port, Aurora estate

Frankston,

Victoria

Bayside, Transit Cities projects, EastLink tollway, foreshore

upgrade, CBD developments, 300-berth marina

Gawler,

South Australia

Affordable precinct north of Adelaide, with improved road and

rail connections in planning, strong tourism industry

Hobart,

Tasmania

Greatest concentration of affordable suburbs of any Australian

capital city market

Ipswich region,

Queensland

Motorway & rail upgrades, RAAF base expansion, $12 bil

Springfield development, $5 billion in govt projects

Melton,

Victoria

Key growth region, $330 mil Deer Park Bypass, Western

Highway upgrade, 1900ha Toolern project

Port Noarlunga,

South Australia

Seaside, under-valued homes, good road/rail links, excellent

facilities at Noarlunga Centre

Rockingham City,

Western Australia

A cluster of affordable seaside suburbs, with major jobs nodes

and improved rail links to central Perth

St Mary‟s / St Clair,

New South Wales

Re-devt of ADI site, Westlink M7, Erskine Park Employment

Area, Eastern Creek industrial zone, good amenities


Contents:

Part One: The Background

1. What are Ugly Ducklings? p 05

2. Typical Ugly Ducklings: a case study p 06

3. How do Ugly Ducklings compare on capital growth? p 08

4. Selecting the right locations p 11

5. Extracting emotions from decision-making p 14

6. Explanations of the Hotspots “Creator Categories” p 15

Part Two: Potential Hotspots

o Cabramatta p 17

o Dandenong p 21

o Elizabeth/Salisbury p 27

o Epping p 31

o Frankston p 35

o Gawler precinct p 38

o Hobart p 41

o Ipswich/Redbank p 44

o Melton p 51

o Port Noarlunga p 55

o Rockingham City p 58

o St Mary‟s/St Clair p 61

Disclaimer:

The locations I nominate result from analysis of the property market, based on my 26

years as a real estate researcher, writer and investor.

I do not, however, have a crystal ball. There are no guarantees in real estate

investment, particularly in turbulent economic times.

I urge consumers to do their own research before buying property

- and to seek advice from independent valuers and solicitors before signing contracts.

Terry Ryder, Director, hotspotting.com.au


Part One:

The Background


Chapter 1: What are Ugly Ducklings?

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 and towns 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 into thriving

residential areas with steady price growth. There are outlying areas of major capital cities – like the

Redcliffe Peninsula in Brisbane – which have been “discovered”, transforming their appeal and their

property values.

The significance of Ugly Ducklings in the residential market has grown because affordability has

become the headline issue in the industry. An international survey published in January 2008 found

Australia and New Zealand had the most severe affordability problems in the English-speaking world.

This is one reason why the cheaper areas of our capital cities have recorded the highest capital growth

over the past five years. First-home buyers and investors have targeted areas with affordable prices.

Brisbane research analyst Michael Matusik predicted in a 2006 report: “The biggest increase in sales

volumes is likely to occur in the more affordable suburbs. This demand is mostly going to be driven by

first-home buyers. The big winners here will be the outer suburbs of Brisbane and the northern suburbs

of the Gold Coast.” The results from 2007 show Matusik was right. High demand in the cheaper suburbs

of the major cities and key regional centres meant that the Ugly Duckling areas showed the highest price

growth consistently.

Now, more than ever, the Ugly Duckling suburbs are the ones with the best prospects. Three interest rate

cuts in September, October and November and the big increase in the First Home Owners Grant have

place the focus even more intensely on the cheaper areas of the 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 over the next few

years.

The objective of this report is to make that task easier.


Chapter 2: Typical Ugly Ducklings: a case study

Armadale in Western Australia was an Ugly Duckling. Some would say it still is.

Armadale, 25km south-east of the Perth CBD, is a place many have rejected as down-market. As

investment adviser and author Margaret Lomas puts it, it‟s been considered to be “on the nose”.

It‟s had a reputation for being a lower socio-economic area with a high content of renters. It‟s an area

many investors have rejected as a “no-go zone”. But in recent years Armadale has had a transformation.

Five years ago, while most people denigrated the area, Lomas saw it as a place of potential. She bought

a property there, well ahead of the pack which more recently has descended on Armadale and

neighbouring suburbs such as Brookdale and Forrestdale.

In 2003, Lomas paid $120,000 for a four-bedroom, two-bathroom house on a large block. She believed

there would be benefits from the improvements in roads south of Perth and from money (both public and

private) being spent in the area on schools and shopping precincts. The area had solid housing stock and

a strong content of working class people wanting to buy and renovate homes.

“We knew all these things before we bought there,” Lomas says. “We knew this area would get a better

profile over time.”

The $120,000 home was valued in 2005 at $190,000 – a 58% increase in two years – and was fetching

$175 in weekly rent (a 7.6% gross return). Lomas says: “Everyone turned up their nose at me when I

bought at Armadale. Now the same people say how clever I was. But it was just common sense.”

More recently, because of the land size, Lomas was able to build a second dwelling for an extra

$115,000 – and now has a property worth around $570,000, according to a recent valuation. “That‟s

140% growth in three years,” she says.

Armadale property values grew 55% in 2006 but the suburb today still has a median house price of only

$290,000. In 2001 you could have bought the typical Armadale home for $87,000. Values grew an

average 23% per year from 2001 to 2007.

Armadale has a population around 20,000, with about 70% home ownership. There are numerous

schools and colleges through the area. A train station provides rail connections to central Perth and there

is a Bus Port at Armadale Train Station. Retail facilities include three major shopping centres, some of

which have been undergoing expansion recently.

Stewart Kestel of Hegney Property Advisers says: “Armadale has had significant growth due to its

affordability and the infrastructure developments in the area. The re-development of the town centre has

improved its services and amenities, and the re-zoning of some pockets of land has seen the construction

of more modern villas and townhouses throughout the area. The surrounding suburbs have also

benefited from the increased infrastructure in the area.”


The suburb is being revitalised by the Armadale Redevelopment Authority, appointed by the WA State

Government in 2002. Plans included expansion of two Armadale shopping centres at a cost of $115

million, an international rowing course and a 180-hectare business park at nearby Forrestdale (where the

median house price, at $420,000 in FY2008, is much higher than Armadale‟s).

The $80 million re-development of Armadale Shopping City increases its size from 19,000m2 to

31,000m2 and injects Target, a food court, and 50 more specialty shops. It has created 150 construction

jobs and 450 permanent jobs in the completed centre.

The WA State Government has announced that a master-planned housing estate covering 1,500 hectares

will be built near Armadale, eventually to be home to 40,000 people. The Wungong Urban Water

project is to be the largest master-planned residential development in WA, providing around 12,000

home sites.

Buyers‟ agent Liz Sterzel of Property Wizards is less enthusiastic about the area. She says Armadale is

attractive to buyers looking for an affordable house but suggests it is not likely to deliver “superior long-

term growth” for investors. She says she tends to buy there for clients only when the target property

offers potential for re-development.

“A major re-development plan is tipped to transform Armadale into a regional hub that, together with

transport upgrades, shopping area refurbishments and interest in new estates, could push up prices in the

short term,” Sterzel says. “There is little doubt the suburb is becoming more attractive – but, in the long

haul, Armadale is unlikely to perform overly-well for investors, as it lacks some of the key growth

drivers, such as proximity to the ocean or the City.”

I tend towards Lomas‟ view of Ugly Ducklings (and disagree with Sterzel’s attitude that prime near-

city areas show better growth than Ugly Duckling areas – the research supports the Lomas view).

I believe this type of area has big potential for investors who buy in the right places for the right reasons.

Armadale exhibits the qualities needed: affordable housing, public transport including rail links to the

City, improved road infrastructure, big spending on services and infrastructure and a clear commitment

from government to lift the area to better things.


Chapter 3: How Do Ugly Ducklings Compare For Growth?

The greatest myth in real estate is that “prime” suburbs always out-perform. Industry professionals

claim the “good suburbs” close to the city are the best and safest investments. Research proves them

wrong. But they persist with their attitude.

I call it The Myth of Prime Out-performance. It‟s a mantra for property professionals. They have

repeated it so often it‟s come to be accepted as truth by media and many investors.

But there‟s no truth in it. And this is good news for investors. Most buyers can‟t afford the expensive

inner-city or bayside areas, but who cares. The less favoured suburbs are cheaper, have higher income

yields and provide higher capital growth. It‟s a win-win-win situation.

The key thing about the claim that the “prime” suburbs are the best investments is this: those who make

the claim never support it with figures. They have an attitude but they don‟t have an argument. The

reason they don‟t back it with data is that the data contradicts them.

Here‟s an exercise I did to disprove the myth of prime out-performance. I used figures from the Real

Estate Institute of Queensland on median prices over the five years to mid-2008 for the Brisbane City

Council area. Of 130 suburbs, 29 had experienced growth above 100% in the median house price – i.e.

values had doubled over five years in those suburbs.

Of the 29 high-growth suburbs, 20 had median prices below the Brisbane average. Most were areas with

median prices somewhere in the $300,000s, with a couple below $300,000. The top three suburbs for

capital growth over five years were:-

1. Darra median price $325,000 201% growth over five years

2. Carole Park median price $236,000 195% growth over five years

3. Inala median price $279,000 175% growth over five years

The most expensive Brisbane suburbs were poor performers by comparison. There were a dozen suburbs

with median house prices above $800,000 and only four had growth of 100% or more. Prime suburbs

like Ascot, Clayfield and Pullensvale delivered growth between 50% and 90% over five years.

To further the argument, I looked at Ipswich City. This is a cluster of suburbs in the south-western

corridor of the Brisbane metropolitan area. It‟s long been considered the poor cousin of Brisbane City

and the butt of many jokes.

Of the 31 Ipswich City suburbs for which the REIQ provided data, 30 of them delivered median price

growth above 100%. These are all suburbs with median house prices below $350,000 (most of them

have typical prices in the $200,000s). Most of them (24 of the 31) had median price growth above 150%

over five years, which is outstanding performance. Five of these suburbs experienced a trebling in prices

in five years.


Ipswich City, in other words, totally out-performed Brisbane City. So much for the poor relations tag.

I‟ve done exercises like this many times in recent years – and always with the same result. In the middle

of 2007, I researched a feature article which a national magazine used as its Cover Story. It totally

debunked the myth of prime out-performance. Here‟s part of what I wrote:-

Prime-located real estate does not always out-perform on capital growth.

The “experts” keep saying it, but the facts keep contradicting them.

Indeed, most data shows the top performers in our major cities are dominated by “ugly duckling” outer suburbs or mid-priced areas. Whether examined over one, five, 10 or 15 years, it’s difficult to find any examples of

top end locations which have led the market.

Nothing demonstrates the point better than the top 10 list for price growth over the past five years in Brisbane. Downmarket areas best known for their social problems or their industrial property, such as Acacia Ridge, Rocklea and Inala, have out-

performed the city’s swanky suburbs such as Hamilton and Ascot.

Or the top 20 suburbs over 15 years in Perth, where most of the star capital growth areas have median prices below the city average.

Many market professionals overlook inconvenient figures that contradict the myth of prime out-performance and carry on

regardless. I acquainted one adviser with the research that showed the millionaire suburbs had been out-flanked over time by the mortgage belt and he agreed with the figures and the conclusions – but said: “I would still stick to what I’ve always said. I think the prime suburbs are the places to invest. My advice always is to stay in the prime suburbs. If you have a downturn, in

a premium suburb you can still get a premium price.”

But the statistics don’t agree with that basic premise, particularly in Sydney.

Let‟s look at the areas property professionals consider to be prime. I picked these at random and found

the expensive suburbs to be poor long-term performers on capital growth. Above all, these locations are

volatile. Contrary to the claim they always hold value, these places often have years of price decline.

Glenelg in Adelaide had price peaks in 2004 and 2007 but either side of those peaks values fell. There

was a substantial drop in the median house price in 2006 and again this year. Long-term, Glenelg‟s

capital growth average is 9%, well below average for Adelaide.

The millionaire suburb of Medindie, where the average home costs above $1.5 million, had price surges

in 2003 and in 2006, but falling median prices in both 2004 and 2007. The price graph for this inner-city

Adelaide suburb is a roller-coaster. It‟s the same pattern in near-city Unley, where the median price

plunged in 2002 and 2006, with price peaks in 2004 and 2007.

Take a look at Darling Point in Sydney, where you pay somewhere between $2.5 million and $3 million

for the average house (and above $1 million for the average unit). The long-term capital growth record is

just 7.5% because median prices dropped in 2001, 2006 and 2008.

In neighbouring Point Point, where you pay over $1.5 million for the average apartment, the median

price rose in 2001, 2003 and 2005, but fell in 2002, 2004 and 2006. Another roller-coaster ride. There‟s

a pattern in these locations: a good year is followed by a bad one. It‟s a far cry from the industry mantra

that these “good” suburbs always hold their value.


Slightly less in the stratosphere, but still pricey, is Edgecliff, a neighbour of Darling Point. The average

house fetches over $1 million, but the long-term capital growth record is only 8.5%. The median price

rose strongly in 2005, but fell hugely in 2006.

There are countless examples like this in the swanky “prime”

suburbs of Sydney. Mosman, Hunters Hill, Bellevue Hill,

Vaucluse, Palm Beach. If you like steady growth and solid

long-term performance you would never buy in these

suburbs, even if you could afford it.

Hunters Hill is the place where well-heeled home owners

with big water views discovered an uranium dump had been

buried – both literally and in terms of a government cover-up

about its existence and long-term effects. Hunters Hill was a

spasmodic market even before that news broke – with a price

spike in 2003 after which growth evaporated and went into

negative territory in 2006 and 2007. The long-term capital growth record is a dismal 7.5%.

Anyone who paid $900,000 to $1 million to buy a house in one of the leafy North Shore suburbs will be

equally disappointed. Research from PRDnationwide earlier this year showed the average annual growth

over five years ranged from 2.4% to 6.8%. That‟s not a poor performance, that‟s a pathetic performance.

Melbourne has a similar story. Portsea, down on the Mornington Peninsula, is considered one of the

swankier places to live in Victoria. The average home is $1 million or so. But again, volatile. Price

peaks in 2004 and 2007, but price declines in 2002, 2006 and 2008.

I could go on and on, but I won‟t. These kinds of volatile patterns don‟t happen in the boring working

class suburbs or regional cities I tend to recommend to people. They just keep on growing steadily and

never lose value. And most of us can afford to buy in them.

If you live in Hunters Hill in Sydney, you can have

views like these. But you’ll get better capital growth

if you buy in Cabramatta.

Deception Bay in Brisbane’s north is downmarket – but it

shows solid performance every year and has averaged

14% a year capital growth for the past decade.


Chapter 4: Selecting the right locations

The first feature of an Ugly Duckling location is affordability. But to be worth a look, an area needs to

be more than cheap. There must be clear reasons for it to evolve into a strong venue for property

investment.

All the locations profiled in this report have major events under way or in planning: government

initiatives and/or master-planned residential estates and/or significant retail developments and/or

industrial projects which generate economic activity and jobs.

Public transport is a feature of most of the nominated hotspots, notably train connections to the City,

because high petrol prices have bitten in areas where families on limited incomes are struggling with

their mortgages or rising rents. PRDnationwide Research noted in a report on rental growth: “For the

outer areas of capital cities, transport such as rail access plays a large role in driving rental growth.”

In most cases, the nominated areas in this report have a major “kicker” – a feature or event that will

make a big difference to the appeal of the area. Often this is new transport infrastructure, such as the

Westlink M7 which has made the St Clair/Erskine Park precinct strategic in western Sydney, or the

EastLink tollway which has boosted the appeal of Frankston and Dandenong in Melbourne.

Author Margaret Lomas, a frequent buyer of property in

Ugly Duckling areas, says it‟s important to distinguish

between those with prospects and those to avoid.

“Just because an area is cheap doesn‟t mean you should

go and buy there,” says Lomas. “I wouldn‟t want to

create a stampede of people buying in bad areas. Cheap

is not the only parameter. Ugly maybe, but potentially

better is what you‟re after. Yes, you‟re looking for

lower-priced property but never in isolated areas and

never areas based on only one industry. Before you

choose an area, you need to do some projection into the future to ascertain whether there are factors

about that area that are likely to make it a bit different.”

- Places to avoid

There are many cheap areas in major cities which lack the necessary qualities and should be avoided.

They have no definable reason to improve. One Lomas knows well is Macquarie Fields in Sydney‟s

south-west, which featured on many news bulletins in February 2005 because of riots by teenagers angry

about police actions.


Lomas says: “I used to live in Macquarie Fields. That has got worse, not better. It was never going to get

any better, because there was nothing redeeming about the place. There was no opportunity to develop a

nice shopping centre or new community services because it was built out. It was an area that the council

forgot, more and more welfare came in and it got worse and worse.”

Sydney buyers agent Patrick Bright of EPS Property Search says he would avoid some of the areas of

western and south-western Sydney, such as Campbelltown and Marylands.

“Those areas have nothing unique going for them, they don‟t have any lack-of-supply issues, there‟s no

beach, there‟s no harbour, there‟s no uniqueness. Supply and demand drives prices and out there there‟s

no shortage of land to build new houses. I worry about people who have bought McMansions out in the

western suburbs.”

- Places that fit the bill

The reasons Lomas chose Armadale in Perth as a place to buy (refer Chapter 2) can serve as a guide.

She says: “I used other areas as benchmarks. I looked at other areas in Perth which had previously been

Ugly Ducklings. I could see that having the freeway close by was important, that new schools were

being built, that shopping centres were being built or expanded.

“Armadale had good solid housing. It had been a welfare

area but was changing. It had the basic demographics to have

a good turnover of people wanting to buy homes and do

them up.

“I knew they were extending the freeway further to

Mandurah which would go past the arterial road leading

straight to Armadale. No longer did you have to go the long

way around to get there. Suddenly there was a direct road

which cut the time to the city tremendously. We also knew

the council was building big infrastructure there.”

Lomas says she‟s expecting similar things from Elizabeth in Adelaide‟s north. She bought two

maisonettes (a form of duplex) there, paying $185,000. A year later staff in her Destiny Financial

Solutions office paid $230,000 for similar properties. In FY2008, many of the eight Elizabeth suburbs

delivered price growth above 20%.

“You need to look at Ugly Duckling suburbs close to the major cities, not Ugly Duckling towns sitting

out there on their own,” she says. “You need to be looking for areas that have some kind of sense of

community. When people are trying to build community in an area, that‟s a positive sign.”


- Public transport is important

Good public transport is a key factor. Most of the affordable areas of our capital cities are in the outer

suburbs, where first-home buyers and others seek homes that don‟t break their budgets. The current era

of high petrol prices and rising interest rates makes access to train and bus services critical for families

on tight budgets.

This is one reason why it is difficult to find worthy Ugly Duckling candidates in metropolitan Sydney:

the absence of good public transport in so many areas.

A 2006 article in the Sydney Morning Herald said: “Sydney‟s public transport system is failing a third of

the city‟s population and some of its most needy residents, prompting calls for money spent on

motorways to be diverted to local services.

“In the first study of its kind in Sydney, a researcher at the University of Western Sydney, Anne Hurni,

looked at the transport system‟s ability to move people to key services such as hospitals, schools and

shops. She found that half of Sydney‟s geographical area was further than 800 metres from a medium-

frequency transport service and just over a third of the population – 1.2 million people – lived in a

„transport disadvantaged‟ area.

“Western Sydney was the most disadvantaged region, but there were problems even in areas serviced by

rail, such as Granville, Bankstown and Villawood. Campbelltown, South Penrith and some parts of

Blacktown were among the worst served.”

All the recent statistics show a sharp rise in patronage of public transport, particularly rail, in all our

larger cities. It‟s not just petrol prices, but also road tolls and the cost of inner-city parking (Sydney and

Brisbane rank among the five most expensive cities in the world for CBD parking).

And recent research by Colliers International shows that suburbs close to rail stations have generally

shown better capital growth than those without rail services.

This presents a useful formula for investors: affordable Ugly Duckling suburbs with rail links are the

ones most likely to do well.


Chapter 5: Extracting Emotion From Investing

There‟s a barrier investors have to get over before seeing the potential in Ugly Duckling areas. They

need to avoid the emotion that sometimes clouds decisions about real estate.

The biggest mistake is applying to property investment the same criteria you would use in choosing a

home for yourself.

Margaret Lomas, author of many good books about real estate investment (including The Truth about

Positive Cash Flow Property), has bought real estate in some of the Ugly Duckling locations profiled in

this report. She says: “One of the biggest problems people have is allowing their emotions to interfere

with property investing. People do this because buying houses is quite an emotional thing to do. People

tend to use the parameters they have in place for buying a home for themselves. Often people are first-

time investors and have only ever bought property for themselves.”

Lomas suggests investors put aside such feelings and focus on economics. She suggests people can learn

from the history of areas in major cities which once were considered poor areas, but which have evolved

into strong real estate performers. These include areas such as Redfern in Sydney, Redcliffe in Brisbane

(pictured), Henley Beach in Adelaide and Armadale in Perth.

“If you‟d looked there 5-10 years ago people would have said No Way. They would have complained

about lower socio-economic groups - a bad crowd. But as the property prices rose in the more desirable

areas closer to the City, people could no longer afford those areas and they looked further out to the

Redcliffes and the Armadales.

“When that happens, the demographics of the Ugly Duckling areas change. The welfare element tends to

move out. New people come in and buy old properties to renovate or pull them down and re-develop –

and so you get better quality homes there. Councils also spend money on beautification and better

services, trying to lift the standard of what‟s there. Over time that will impact on the kind of people who

live there.”

Lomas says investors can speak to local councils and business groups to learn about an area‟s prospects.

“The local council knows everything that‟s happening. They know about all the planned developments

for the next 5-10 years, including their own wish list. Most councils will give you that information.

“I‟m on the board of Business Central Coast, which is a regional economic development organisation.

We always know when a large company is thinking of relocating into the Central Coast of NSW. We

know if a major supermarket is looking to establish something.” That kind of information is more

relevant than the reputation of an area or the outward appearance of an individual property.

Lomas says investors should beware of being “too personal” or “too picky” about property purchases.

She says friends and colleagues criticized her decision to buy in Armadale in 2004: “A year later people

said: Margaret was so clever. But it was just basic common sense.”


Chapter 6: Hotspot Creator Categories

Many of the real estate Hotspots to emerge around Australia in recent years have been strongly

influenced by one or more of the Hotspot Creator Categories – events or influences which create capital

growth for property.

Sea Change One of the most influential of all factors impacting on real estate markets. Australians are

(arguably) more drawn to live by the ocean than any other people on the planet. Sea Change is less

in the news today but migration to the beach remains a big factor.

Hill Change The property boom at the start of this decade made inner-city and coastal locations too dear for

many buyers. They looked elsewhere – and found good pickings inland, but within striking

distance of the city and/or beach. The Blue Mountains near Sydney and the Adelaide Hills are

classic Hill Change destinations.

The Stayers Some city suburbs always seem to perform. They‟re the ones with character, café culture, quality

shopping, schools and good public transport. They tend to be close to the inner-city and provide

steady growth over time, rather than spectacular one-off growth spurts.

Ripple Effect Property booms begin with the prime suburbs, often those in the inner-city. As prices rise, they

become unaffordable for many buyers – who seek less expensive property nearby. The growth,

therefore, ripples out – and continues to do so until it reaches the outskirts of the city.

Transport

Infrastructure

New roads and train lines can create value growth. Industrial property benefits the most from new

motorways, but residential is also boosted. A major new road can open up previously inaccessible

areas or provide faster connections to the CBD for commuters. Rail links and bridges can have

similar impacts on real estate.

Blue Sky The truly exclusive areas have their own dynamic. “Blue Sky” suburbs are always prime-located,

either on the edge of the City, beside the river or at the beach. They have quality retail/café culture

and exclusive schools nearby. Melbourne‟s inner south-east, including Toorak, is an example. For

price growth, the sky‟s the limit.

Lifestyle Features

The greatest wealth creator in real estate is water. The nearest thing to a recession-proof investment

is property fronting water. The ocean rates highest, although rivers, canals and lakes aren‟t bad

either. Homes fronting golf courses command price premiums too, but not as high as water.

Increasingly buyers pay premiums to live near lifestyle precincts with café culture and shops.

Ugly Ducklings Some suburbs were once shunned as downmarket but now are regarded as trendy. “Ugly

Ducklings” can be transformed into real estate swans. Richmond in inner Melbourne has made that

change, as has Bulimba in Brisbane. With affordability a key issue, Ugly Ducklings with potential

to change are expected to do well, especially with interest rates falling and the FHOG rising.

Boom areas Sometimes areas take off for specific one-off reasons. Some towns in Western Australia and

Queensland have had real estate booms because of mining operations nearby. Development of a

major industrial project can have a similar impact. Sometimes a town can boom because a TV

mini-series is made there.

Urban Renewal

and

Government

Decisions

State Governments or Local Authorities can transform areas through policy decisions or targeted

action. Urban renewal programs have changed the character of suburbs, turning industrial areas

into prestige residential. Regional policy decisions – such as long-term growth management plans –

can also have an impact. The South East Queensland Regional Plan is a good example.


Part Two:

Potential Hotspots


Cabramatta Sydney

Other key Influences: Lifestyle Features, The Stayers

Clean-up of crime and social problems; promotion as the exotic cuisine capital of

Sydney; success of cultural festivals; drop in unemployment; plans for population and

jobs growth; $500 million revamp of Liverpool hospital.

Typical houses: $350,000

While Cabramatta‟s darkest days seem to be behind it, it still wears a number of unflattering tags such

as “drug capital of Australia” and home of migrant organised crime. But according to local police and

community leaders, that‟s old news.

There has been a major drive to clean-up the crime problems and the area is now being successfully

promoted as “the genuine taste of South East Asia in Australia”. There are plentiful restaurants, a vibrant

Chinatown and events such as the annual Asian Seafood Festival and The Moon Festival (which

celebrates the summer harvest in countries like Vietnam, Korea and China over a thousand years and has

15 days of activities). Cabramatta is also the focus of the Chinese New Year celebrations in February.

Business is expanding, unemployment is declining and the area is earmarked to major growth in

population and jobs in the future.

Location

Cabramatta is in the Fairfield local government area (LGA)

in the south-west of Sydney, near Liverpool. It‟s about 40

minutes from the Sydney CBD.

Population and demographics

Cabramatta, with about 20,000 residents, is the most

populated suburb in the Fairfield LGA.

It has the largest number of school-aged children and youths

of any suburb in the LGA (21% of residents are aged 5-19,

compared with the Sydney average of 14%). It also has large

numbers of one-parent families and lone-person households.

Cabramatta was the site of a migrant hostel in the post-war

period, which was decisive in shaping the suburb. Migrants

who passed through the hotel later settled in the area. In the

Nineties the hostel was removed and the site re-developed.


Only a third of the population of postcode 2166, which includes Cabramatta, Cabramatta West, Canley

Heights and Canley Vale, was born in Australia. Around 35% of residents were born in Vietnam and

China, with smaller numbers of migrants from Italy, the UK and Yugoslavia. Nearly half the resident

population claim to be Buddhist.

Economy and amenities

The Daily Telegraph reported in March 2008: “Once it was known as the drug capital of Sydney, but

Cabramatta has reinvented itself as the exotic cuisine capital of the city – boasting Asian fare, thriving

fresh food and retail stores.

“The suburb‟s massive overhaul is credited to the hard work of police and local government and

community members, who are now reaping the benefits, with thousands of people travelling to

Cabramatta for a slice of Asia.

“Superintendent Ray King said he has seen a huge improvement in the area since he worked the streets

of Cabramatta as a detective in the latter half of the 1990s. Much of the improvement was built on

cleaning up the suburb‟s drug activity. „Cabramatta is really a unique place in Sydney to visit and enjoy

and has turned around completely,‟ he said.

“The restaurants, cheap fresh food and vegetable

markets, and fabric stores are the biggest

drawcards. And having the Australian movie Little

Fish, starring Cate Blanchett, filmed in the suburb

has only added to Cabramatta‟s appeal.

“Chamber of Commerce president John Medich

said: „You can‟t get a shop in Cabramatta on

ground floor retail space. All businesses are busy.

We‟re proud of Cabramatta. All the name-calling

and stigma has gone‟.”

There has also been a boom in jobs growth in this

area recently. In the year to March 2008, the unemployment rate in Fairfield dropped from 10.4% to

7.7%, while in neighbouring Liverpool it fell from 6.8% to 5.1%. Liverpool is a developing regional

centre for the south-west and includes Liverpool Hospital, a major TAFE campus, Liverpool Bus

Terminus and employment nodes like M Five Industrial Park and the Moorebank Distribution Centre.

The area is benefiting from a trend by businesses to relocate from the CBD to Sydney‟s west and south-

west. The Daily Telegraph reports: “A line-up of pharmaceutical, food, engineering and financial

businesses have triggered a 40% boom in developments in Liverpool along over the past two years (to

$750 million). Global exporter ResMed, Broens Industries, American Express, Cadbury Schweppes,

Coles Myer Logistics, TNT, LG, Coca-Cola Amatil, Wyeth Pharmaceuticals and IBM have all taken up

cheap office space close to where their workers live. Government is shifting services to the west,

including a $500 million project that will make Liverpool Hospital the largest in NSW by 2016.”


Cabramatta railway station is a junction station on the CityRail network, where the South Line and the

Inner West Line merge. The neighbouring suburb of Canley Vale also has a train station.

Amenities in the area include the Cabramatta Golf Club, the Cumberland Grove Country Club,

Cabramatta Sportsground and Warwick Farm Racecourse.

The area‟s migrant population is reflected in regular festivals such as Chinese New Year, the Asian

Seafood Festival and the Moon Festival, which attract visitors from all over Sydney.

Property profile

The housing makeup of the area is in line with Sydney

averages: two-thirds are standalone houses and the rest

are flats and units.

Cabramatta has pockets of solid housing of good quality

and other parts where homes are fair to reasonable. It‟s

definitely not what you would call a leafy suburb. It

evolved in the Sixties through a major state housing

project that started in Liverpool and spilled over into

Cabramatta – and that is reflected, to a certain extent, in the

standard of housing in some pockets.

There are large numbers of small-to-medium sized blocks

of brick units - not palatial but tidy and in better condition

that you find in precincts around Blacktown or Parramatta.

Cabramatta recorded a median price of $355,000 for

houses and $173,000 for units in FY2008, according to

Australian Property Monitors. Like most Sydney suburbs,

it had big price growth in the early part of the decade,

peaking around 2004, with growth falling away after that

and prices declining in 2005 and 2006. However, price growth resumed last year.

Overall, Cabramatta has a healthy long-term growth average around 10%, which distinguishes it from

many suburbs in Sydney‟s west and south-west.

Cabramatta West has a slightly lower median house price ($345,000) but a similar healthy growth

average of 10% over the past 10 years.

Vacancy rates in the area are low at 0.8%.


Future Prospects

Cabramatta‟s rough past appears behind it and its present is based on its contributions in culture and

cuisine. It‟s clearly an area on the improve.

Its future is likely to involve major growth in population and employment. The Fairfield region, and

Cabramatta in particular, has been earmarked for growth under the NSW Government‟s draft sub-

regional strategy and could share up to 95,000 new homes, 61,000 extra jobs and a regional centre by

2031.


Dandenong Melbourne’s south-eastern suburbs

------------------------------------------------------------------------------------------------------------------------------

Other key influences: Govt Decisions, Urban Renewal, Transport Infrastructure

------------------------------------------------------------------------------------------------------------------------------

$290mil State Govt infrastructure package, $450mil State Govt industrial estate, $250mil

Metro Village, $2.5bil EastLink tollway, $1bil upgrade to rail links, 600,000m2 inland

port, Australand‟s $150 million industrial estate ------------------------------------------------------------------------------------------------------------


The hallmark of an Ugly Duckling hotspot is (1) plenty of reasons to deter investors, and (2) clear

drivers of future change, converting the area into a good investment prospect. The City of Greater

Dandenong fits the bill better than most locations in Australia.

It‟s an area known for its high content of migrants, above-average unemployment and high crime rate

(the rate of offences in postcode 3175, which includes Dandenong, Dandenong North and Dandenong

South, is nearly double the overall Melbourne rate).

All this sounds like a good reason for property buyers to

shy away. But in seeking Ugly Duckling hotspots, we‟re

looking for areas undergoing evolution, with identifiable

reasons to change for the better. Dandenong has plenty.

Demographer Bernard Salt says the State Government is

investing “hugely” there, making it a Transit Cities hub

targeted for renewal of infrastructure and services.

“Urban renewal is very important,” Salt says.

“Dandenong has an industrial background. But that is

being replaced by quite significant development in clean

industry – distribution warehousing, for example.

“I think it will certainly benefit from this. It will consolidate Dandenong as the outer east CBD of

Melbourne. It‟s like the Chatswood or Parramatta of Melbourne. It has the linkages to Melbourne via the

Princes Highway. EastLink adds another dimension. It will focus business activities and opportunities

into Dandenong.

“There‟s a lot of employment generation there. There‟s a taxation office out there, office work as well,

which brings another feature to the demographic profile.”


Location

The suburb of Dandenong is 32km south-east of the Melbourne CBD. It sits at the heart of the Greater

Dandenong Local Government Area (LGA), which provides a major share of Melbourne‟s jobs-

generating industry. Other suburbs in Greater Dandenong include Springvale, Noble Park and

Keysborough. The EastLink tollway bisects Greater Dandenong.

Population & Demographics

Greater Dandenong has a population of 133,000 and is expected to rise to 170,000 by 2030. It is the

most culturally-diverse locality in Victoria – and the second most culturally-diverse in Australia, with

residents from 151 different birthplaces. Around 54% of its population was born overseas (48% in

nations where English is not the main language).

Major overseas sources of residents of the City are Vietnam, Cambodia, China, Italy, Greece, India, Sri

Lanka and Bosnia. The statistics show that people from these origins have above-average home

ownership rates.

According to State Government figures, 2,300 new migrants

settle in Greater Dandenong in a typical year. There are

emerging communities from Sudan, Somalia, Iraq, Afghanistan,

Bangladesh and the Cook Islands. Refugees in this area access

support through a $1 billion State Government social justice

package which aims to assist in seamless relocation to a new

and positive way of life.

Young people are more likely to leave school early and are less

likely to attend university. Unemployment rates historically have been higher than Melbourne averages.

A 2006 government report said: “According to the measures of social disadvantage based on income,

housing, employment, occupations and English fluency, the community of Dandenong is among the

most disadvantaged 6% in Victoria.

The State Government says in another report on the Greater Dandenong area: “Though higher than the

metropolitan average, the crime rate has declined substantially in recent years.”

Residents of South Dandenong‟s Trewin Street infamously took the law into their own hands by

installing home-made speed bumps to deter the hoons that plagued their neighbourhood. Later the

council voted to install speed cushions to address the anti-social behaviour.


Economy & Amenities

Manufacturing and retail trades are major sectors of employment, together accounting for almost half of

all jobs in the Greater Dandenong area. Manufacturing‟s share of employment in this area is double the

Melbourne average.

Research indicates that close to 70,000 people work in Greater Dandenong each day, of which 22% live

in the immediate area and 24% live in the Casey LGA nearby. Around 21% live in the municipalities of

Frankston, Kingston and Monash.

The VicUrban website says Dandenong is “the heart of Victoria‟s economic engine room”. It says: “The

Greater Dandenong region produces almost half of the state‟s manufacturing output and is home to more

than half a million people. One in every three jobs in Melbourne is located in the south-east corridor.”

Property Profile

The Greater Dandenong area is generally in line with the rest of Melbourne in terms of home ownership,

with a slightly higher percentage of renters. Around 70% of households own their homes (or are paying

them off) and 30% are renters. The level of government-supplied housing (4.2%) is a little higher than

the Melbourne average (3.1%).

Three-quarters of dwellings in the Greater Dandenong area are houses, with the rest comprising units

and townhouses. But the suburb of Dandenong is different, with almost half of households renting – and

61% of dwellings are houses and 39% units and townhouses.

Dandenong‟s median house price rose from $135,000 in 2001 to $250,000 in 2006, growing an average

13% a year. According to Australian Property Monitors, the median house price in 2007 was $257,000,

rising to $280,000 for the year to June 2008. By October 2008 it had risen further to $310,000

Dandenong has a solid long-term track record, with prices growing an average 12.5% a year over the

past 10 years, according to Australian Property Monitors. Its median price for units is $210,000, having

grown an average 12% over the past decade.

The suburb of Dandenong North has around 24,000 people, half of which were born overseas. No major

changes in population are forecast for the next decade, unlike the suburb of Dandenong. Only 5% of

dwellings are flats or units and only a quarter are rented.

The median house price for Dandenong North grew quickly between 2001 and 2004 when it settled at

$245,000. Australian Property Monitors records a median house price of $262,000 for 2007, an annual

rise of about 7%, but rising further to $290,000 for the year to June 2008. Units in Dandenong North

typically cost around $240,000. Both houses and units have averaged 11-12% a year value growth over

10 years.


The suburb of Dandenong South has around 5,000 residents, with two-thirds born overseas (countries of

origin are headed by Macedonia, China and Sri Lanka). Only small rises in population numbers are

predicted over the next decade. Employment, income levels and educational levels are “much less than

the average for Melbourne”. Around 36% of households are renting, well above the Melbourne average

of 24%.

Future Prospects

The State Government announced in April 2006 it would spend $290 million on an infrastructure

package for Dandenong. This includes improvements to roads and transport in the Dandenong CBD,

plus changes to improve the precinct‟s amenity. A City Walk to link Dandenong Station to the CBD

heart is part of the Revitalising Central Dandenong package.

The program, managed by government agency VicUrban, aims to create 5,000 jobs and attract $1 billion

in private investment over the next 15-20 years. It also seeks to create an extra 4,000 households in

central Dandenong in the next 25 years.

The Victorian government announced in May the construction of a key building in the urban renewal

project– a $73 million government services building in the centre of Dandenong, 300m from Dandenong

Station with the proposed City Walk project at its rear.

The 10-storey building will be the first new office

building built in Dandenong in 20 years and gives

substance to claims that Dandenong will eventually

become the business hub of Melbourne‟s south-east.

The urban renewal project also includes a new George

Street Bridge that will provide pedestrian and traffic

access from the city‟s CBD to the City Walk and

residential projects such as the new Metro Village 3175

project.

With high levels of government infrastructure funding,

the private sector has come to the party to support

population growth. In March 2008 a new waste facility

was approved by councillors and will be built by Veolia

Environmental Services. The facility will take up to

92,000 tonnes of waste in its first year with an ultimate

capacity of 200,000 tonnes.

The Dandenong Hospital is slated to share $350 million allocated in the State Government budget for

capital works.


The Dandenong area now benefits from improved access via the new $2.5 billion EastLink and has the

advantage of rail links to central Melbourne. The $65 million Dandenong Bypass was opened in

December 2007 – the 4.75km road provides an alternative for heavy freight traffic in Dandenong‟s

industrial area.

Another government boost to Dandenong was provided in the State Government‟s “Meeting our

Transport Challenges” policy announcement in May 2006, which included $2 billion in improvements to

Melbourne‟s rail network, notably a third track on the Dandenong line (at a cost of $1 billion). Plans

were announced in August 2007 to place the Dandenong train line underground in Springvale as part of

the first stage of the line upgrade.

The Dandenong Council also recently announced a new bus service linking Ringwood to Frankston and

passing through Greater Dandenong. The SmartBus Route 901 was launched in March as part of the

State Government‟s 2006 commitment of $10.5 billion to address long-term transport planning.

The Revitalising Central Dandenong program includes re-configured roads, open spaces, new

infrastructure and services. It aims to increase population and housing in the central Dandenong area by

an extra 4,000 households over the next 25 years. It aims also to increase the attractiveness of the city

centre and encourage people to use it, while reducing the number of vacant shops and promoting retail

diversity.

The Dandenong Council supports residential growth and recently rezoned Keysborough South from

rural to residential. It‟s expected that the amendment will pave the way for new residential development

and community support infrastructure in the area.

The $250 million Metro Village 3175 project – the biggest residential development in Dandenong in

three decades - is creating 1,000 new homes on the site of the former saleyards, eventually

accommodating up to 3,500 people. Residents of the Metro Village 3175 project will also benefit from

the new George Street Bridge.

Under the State Government‟s 2030 strategy, the Noble Park Activity Centre (in the suburb of Noble

Park, immediately west of central Dandenong) will be re-developed, with the injection of town squares

or public plazas alongside a proposed new retail development.

The Greater Dandenong area is attracting increasing investment from businesses also. The Deal

Corporation has announced a $30 million re-development of the Arkana hardware site, to include two

buildings with shops, conference rooms, offices and apartments. Glass maker Pilkington will spend $133

million rebuilding and modernising its Dandenong factory, creating 300 jobs; the upgraded plant will

produce environmentally-friendly glass products.

In October 2006 the Salta Properties group paid $55 million to buy a 112-hectare farm at Lyndhurst near

Dandenong South to construct a $100 million inland port, comprising 600,000m2 of industrial buildings.

According to The Australian, the land is part of 1,000 hectares earmarked for rezoning from rural to

industrial “to allow further growth of Melbourne‟s premier south-eastern industrial belt”.


The site has a direct rail link to the Port of Melbourne and it is planned to move shipping containers

from the port to Lyndhurst by rail rather than trucking them along congested roadways. The inland port,

expected to be operating in 2-3 years, will be the second built in Melbourne, with one already

operational at Somerton in the city‟s outer northern suburbs.

Another significant industrial development is the State Government‟s $150 million Logis project. A

joint venture between VicUrban and Melbourne Water, it will be built on 154 hectares at the former

Dandenong sewerage treatment plant and generate around 3,000 jobs. The site, 3km south of the

Dandenong CBD, borders the new EastLink roadway. The first stage of 23 lots ranging from 2,500m2 to

8850m2

is now being marketed (expressions of interest closing 12 November 2008)

In November 2007 Australand announced the purchase of 31 hectares at Dandenong for $30 million.

The land, which has a 2km frontage to EastLink, is near Australand‟s existing 70-hectare South Park

precinct and will yield industrial developments worth $150 million.

In Springvale, another suburb of Greater Dandenong, GLG Developments has received council approval

for a 10,000m2 development of shops, offices and apartments in the suburb‟s business centre. Also in

Springvale, Ikea is building its largest Australia store in a 70,000m2 retail project which will also include

Harvey Norman and 15 other retailers.

Dandenong Plaza will benefit from a multi-million dollar cinema project from GPT Group and Reading

Cinema. Local Councillors have praised the development as providing an “entertainment hub” for the

city.


Elizabeth precinct Northern suburbs of Adelaide

------------------------------------------------------------------------------------------------------------------------------

Key influences: Ugly Ducklings, Government Decisions, Transport Infrastructure

------------------------------------------------------------------------------------------------------------------------------

Expansion of Edinburgh Defence Base; $550 million Northern Expressway; $330

million hospital re-development; Playford North and Salisbury North housing programs;

employment nodes such as Edinburgh Park industrial estate; rail links to the City; the

most affordable housing in any mainland capital city.

Typical houses: $170,000-$200,000

The Elizabeth precinct is one of my enduring favourites in South Australia. It‟s a classic Ugly

Duckling, one many investors would shun because it‟s down-market.

But buyers are targeting this area because it‟s affordable, offers good returns and has tangible drivers of

capital growth. And the recent increase in the First Home Owners Grant will generate further attention

to this precinct where, despite high value growth, most suburbs have median prices below $200,000.

The area is one of the few in South Australia with strong population growth. It‟s on the city outskirts

where there‟s scope for urban expansion and suburbs such as Davoren Park are the centre of new

housing development, as well as refurbishment of older stock.

Not only are houses cheap, but the area can deliver good yields: 5.5% returns are standard on houses and

maisonettes, while close to 6% is available on units

To cement the appeal of the area, some major economic boosts are in the pipeline.


While population growth in Adelaide has been poor by national standards, the standout growth region is

the municipality of Salisbury and its neighbour Playford in the northern corridor - which includes

Elizabeth and Davoren Park.

Census data confirms Salisbury had the largest growth in South Australia since 2001, with its population

growing 7,600 to 122,200.

The Australian Population Institute says the precinct covering the Salisbury, Playford and Port Adelaide

Enfield LGAs had the greatest population growth in SA last year. The three northern councils combined

have seen their combined population grow 18,200 in the five years to 2007.



These suburbs are situated near major employment

nodes, such as the General Motors Holdens car plant, the

Edinburgh Defence Precinct, the Bridgestone factory, the

Playford Evolution high-tech precinct and major

industrial estates, including the 650-hectare Edinburgh

Parks industrial estate (pictured) which so far is about

30% developed.

The Defence Department announced in 2006 it would

relocate units to expanded facilities in the Edinburgh Defence Precinct.

The Edinburgh precinct is already huge. Clearly it‟s been earmarked for even bigger things, with the

plan to relocate a major Defence Force unit of 1,200 troops there from interstate. This has been reported

as a $500 million undertaking.

In October 2008 contractor Baulderstone moved on site to start $410 million in construction projects in

connection with the expansion. The new army facilities will include accommodation, training facilities,

civil works and mess facilities. At the construction peak, Baulderstone will have 450 people on site.

The new army battalion is expected to arrive in Adelaide early in 2011.

The expansions planned at the base are likely to lead to 500 homes being built in the northern suburbs –

according to an agreement between Defence Housing Australia and the Land Management Corporation.

In September 2007 the State Government signed a deal with Fairmont Homes to develop 350 homes in

the northern suburbs, some of which will house members of the 1,200-strong battalion from 2011.

Another boost to the area‟s real estate market is the Playford North re-development program, which

involves an overhaul of the large number of properties owned by Housing SA. Many older homes are

being replaced, while others are being refurbished. This 10-year program will raise the standard of

housing in suburbs such as Davoren Park.

The $550 million Northern Expressway, extending 23km from Port Wakefield Road to Gawler, will run

past the northern suburbs of Penfield, MacDonald Park, Andrews Farm and Munno Para Downs, all

neighbours of the Elizabeth precinct. The 4-lane freeway is designed to improve links between Port

Adelaide and the Sturt Highway but will improve access for the Elizabeth precinct. The project has two

parts: the upgrade of Port Wakefield Road and construction of 23km of new road. The Port Wakefield

Road section is under construction, with the total project to be completed in 2011, creating 2,600 jobs.

The area also has rail links to the Adelaide CBD.

A high-technology precinct is being established in the Elizabeth precinct. The Playford Evolution site

will unite over 20 companies in a $50 million project spearheaded by Priority Engineering Services with

the support of Playford City Council. In March 2007 it was announced that major engine components

for Australia‟s new F-35 joint strike fighters would be supplied by Elizabeth-based Levett Engineering

in a $20 million deal.


The State Government announced a major upgrade of the Lyell

McEwin Hospital at Elizabeth Vale in July 2007. A total of

$336 million is being spent (including the current $200 million

stage 3 re-development) to make this facility the major referral

centre for Adelaide‟s northern suburbs and one of the four major

tertiary hospitals in South Australia.

At the 650-hectare Edinburgh Parks development, major new

projects include a $125 million distribution centre for Coles

Myer (opened late in 2007 with a 67,000m2 warehouse and 120

loading docks) and a $105 million Inghams Enterprises chicken

processing facility. Inghams is undertaking a $250 million expansion of its SA businesses, creating 600

extra jobs.

In March 2007 came the news that Holden‟s was cutting 600 jobs at its car-making plant in Elizabeth -

reducing its workforce to around 3,500 people. But in September 2007 Holden‟s announced it was

returning to full production after a significant restructuring and would soon be building 147,000 vehicles

a year.

Author and investment adviser Margaret Lomas, who owns properties in this precinct, says the job

reductions have not reduced the area‟s appeal for investors. “It would be different if Elizabeth was a

remote town with an economy dependent on the Holden‟s plant,” she says. “But Elizabeth is a suburb of

Adelaide and Adelaide is a capital city. I don‟t think the growth I see in the Elizabeth area is linked to

the Holden‟s plant. It‟s linked to a lot of other things. It‟s not about what‟s happening today – it‟s the

potential of that precinct for tomorrow.”

Salisbury major Tony Zappia has said that workers taking separation packages from the plant “should be

able to find work easily in a range of growth industries in the northern suburbs”. The Advertiser

reported: “Mr Zappia says opportunities are available in construction, transport, storage, food

processing, defence and other sectors.”

Property profile

The Elizabeth precinct (there are nine suburbs with “Elizabeth” in the name, plus neighbours such as

Davoren Park and Smithfield) has lots of solid but older housing stock, with plenty of homes built in the

Sixties and Seventies. There are also newer areas.

According to Australian Property Monitors, median house prices for the year ending August 2008

included $186,000 at Elizabeth Downs, $205,000 at Elizabeth East, $175,000 at Elizabeth North and

$210,000 at Elizabeth Vale. Prices have grown strongly recently in virtually all of the suburbs, with

most showing price growth in the 15% to 20% range in FY2008.

These suburbs have strong track records for value growth: all have averaged 13% to 15% a year in

capital growth over 10 years. They‟re popular, too: the various Elizabeth suburbs jointly achieved 750

houses sales over 12 months. Investors who look around can find houses yielding better than 6%. Units

in the Elizabeth suburbs typically cost in the $120,000 to $135,000 range and 6.5% returns can be found.

The Lyell McEwin Hospital at Elizabeth Vale


Future Prospects

Demand for housing in Adelaide‟s north is expected to accelerate. It is the destination many buyers head

for when seeking affordable housing. The doubling of the FHOG for buyers of existing homes and

trebling to $21,000 for new homes will generate activity in this region because (a) houses are cheap; and

(b) it‟s the most active area in Adelaide for new home construction.

Lomas believes investors need to put aside their personal feelings about areas like Elizabeth and look at

the fundamentals. She says Elizabeth is a growth area, not only for residential but also for business. “It

has a lot of welfare recipients but Housing SA is selling down its holdings there,” Lomas says. “In time

there will be more home owners in the area.”

One example of the urban renewal focus is the $180 million

Salisbury North Urban Improvement Project, a 10-year scheme to

create 800 allotments for new housing as well as renovating 500

Housing SA homes for sale.

This is a separate project from the Playford North Urban Renewal

Project mentioned earlier, which involves the regeneration of the

Peachey Belt suburbs of Smithfield Plains and Davoren Park, plus

creation of new communities on 314ha of government land.

Lomas bought a property with two 3-bedroom maisonettes (duplexes) in Elizabeth and a similar

property in Davoren Park in 2005. Each cost $185,000 and provided a rental return of $280-290 –

around 8%. The sites have potential for dual dwellings in the future.

Lomas bought another Elizabeth property early in 2006 – half a duplex, sold by the Housing Trust after

upgrading it, for $112,000. It rented at the time for $165 a week, a return of 7.7%, and has good

depreciation benefits from the refurbishment. “The property has everything I look for in an investment,

including the area‟s future potential,” Lomas says.

Valuer Herron Todd White summarised the appeal of the precinct with these comments on Elizabeth

South in the May 2008 edition of The Month in Review: “Employment would probably be the biggest

drawcard to the location. There is also pretty good access to public transport and there are two large

shopping precinct in adjoining suburbs.”

0

50000

100000

150000

200000

250000

Elizabeth E Downs E East E Grove E North E Park E South E Vale

Source: Australian Property Monitors

Median Prices: yr to August 08


Epping Melbourne’s northern suburbs

------------------------------------------------------------------------------------------------------------------------------

Other key influences: Transport Infrastructure, Government Decisions

------------------------------------------------------------------------------------------------------------------------------

$500mil Craigieburn Bypass, $360mil fruit/vege markets, $1.8bil Aurora estate, Transit

Cities projects, 120ha Austrak intermodal terminal, 75,000m2 Coles distribution centre,

major retail projects, $600mil Plenty Valley Town Centre. ------------------------------------------------------------------------------------------------------------------------------


Locations with three “Creator Categories” working in their favour have the best chance of becoming

real estate hotspots. The Epping precinct, apart from being an affordable Ugly Duckling area, has strong

drivers from Transport Infrastructure and Government Decisions. (For a full explanation of Creator

Categories, refer to Chapter 3 of this report).

The Epping region has plenty of good reasons to move forward and therefore be worthy of consideration

by property investors, particularly in a climate of falling interest rates and the increased First Home

Owners Grant. In a nutshell, they include:-

o The Craigieburn Bypass, which has improved access and eased congestion in the northern

suburbs of Melbourne (Transport Infrastructure).

o The plan to relocate Melbourne‟s fruit & vegetable markets to Epping (Government Decisions).

o The identification of Epping as a “Transit Cities” location, with associated new development

(Government Decisions).

o Jobs generators such as the Austrak intermodal terminal at

Somerton, next to Epping (Transport Infrastructure).

o The relocation of Coles Myer‟s major distribution facility

from Melbourne‟s south-east to Somerton.

o Significant new housing developments.

o Major retail developments.

These and other projects in Epping and neighbouring suburbs

involve major corporate entities such as Westfield, Australand,

Stockland, VicUrban, MAB Corporation and GPT.

The impact of such projects means the Epping precinct has

improved access, new employment nodes, improved shopping

facilities and the injection of modern housing in an area which has

lots of 1970s brick veneer homes. All of this helps make the area

more attractive to both residents and property investors.


Location

Epping is in the City of Whittlesea which also includes Mill Park, South Morang, Lalor and

Thomastown. Whittlesea is 20km north of the Melbourne CBD and is described as “a mixture of city

lifestyle and country comfort”. Oliver Hume Real Estate says: “The southern parts are established urban

areas, but the city also takes in the hills and natural features of the Plenty Valley and Ranges.”


Epping has a population of around 20,000 and 73% are Australian-born (compared with the Melbourne

average of 65%). The area has a young population with above-average numbers of children and

teenagers, and below-average numbers of retirement age people. You‟re more likely to find trades

people and blue collar workers there than professionals.

It‟s mortgage belt territory, with 45% of households being owners with mortgages (compared with the

Melbourne average of 27%). It‟s the kind of area first-time buyers will target, armed with the expanded

FHOG and encouraged by falling interest rates.

Government forecasts to 2021 suggest the Whittlesea LGA will experience the fourth largest net

increase in population in metropolitan Melbourne. The Melbourne newspaper The Age reports: “New

housing estates just north of Epping are like spring crops timed to take advantage of the Craigieburn

Bypass … The bypass cuts travel time into the city and also reduces traffic volume on Epping Road.”

Economy & Amenities

Epping has been named a Transit Cities location under the Melbourne

2030 initiative. This is a State Government program designed to create

opportunities for people to live and work in the same area, reducing the

need to commute. It seeks to revitalise centres to make them

economically stronger, improve public transport and provide easier access

to shops, services and job opportunities.

The Department of Sustainability notes Epping has the Northern

Melbourne Institute of TAFE, the Northern Hospital (being expanded),

Epping Plaza shopping centre (also being expanded), the Craigieburn

Bypass and (soon) the Wholesale Fruit and Vegetable Market.

The Plenty Valley Town Centre in South Morang is a joint venture

between the Westfield Group and Deutsche Diversified Trust. Whittlesea Council plans for the Town

Centre include retail, office, leisure and residential uses, serviced by rail, tram and bus transport.

Construction of a new rail station is part of the plans. Westfield‟s $200 million extension of Plenty

Valley Town Centre opened in May 2008, increasing the centre from 6,200m2 to 49,000m

2 - with

Target, K Mart, Best & Less, fresh food precincts, a 600-seat food court, 125 extra specialty stores, three

play areas, 1800 extra car parks and more cafes and restaurants. Myer will open a new department store

in the development.


Oliver Hume Real Estate‟s website comments: “It is considered that the Epping Plaza development and

the South Morang activity centre will provide the municipality with a future employment focus – not to

mention the relocation of the Melbourne Fruit and Vegetable market (which could deliver 20,000 new

jobs over time).”

Property Profile

Epping and neighbouring suburbs have a solid residential property market. The Oliver Hume website

says: “In terms of capital growth, analysis highlights a trend upwards across all product types within the

City of Whittlesea, with percentage growth in many instances stronger than that experienced by

metropolitan Melbourne.”

Median price data from Australian Property Monitors shows homes are affordable in the area and that

prices showed solid growth in FY2008, with virtually all suburbs delivering double-digit price growth.

Median house prices for FY2008 were $290,000 in Epping (up 11%), $330,000 in South Morang (up

3%), $285,000 in Lalor (up 13%), $290,000 in Thomastown (up 12%) and $320,000 in Mill Park (up

10%). Home units in the precinct typically cost around $260,000.

Most of these suburbs have long-term growth records averaging 9% to 11% a year over 10 years.

Prospects

Demographics expert Bernard Salt of KPMG says he is more bullish about the Epping area than other

downmarket areas of Melbourne. He says it‟s similar to Sunshine (in Melbourne‟s west) in that it has a

manufacturing base - but Epping has less heavy industrial.

Salt says the new transport infrastructure is playing a key role in revitalising the area. “There‟s another

driver there and it‟s very much the Craigieburn Bypass,” Salt says. “Since the completion of the bypass,

that whole area will become a focal point for transportation and logistics.”

Property analyst Peter Hay of Hay Property Consultants says one of the key features of this area is good

transport access, including its train connection to the city. And he says: “Since the Craigieburn bypass

was completed, it‟s become closer to Melbourne.”

The $500 million bypass – between the Hume Highway at Craigieburn and the Metropolitan Ring Road

– opened in December 2005. Motorists using the Hume Highway can avoid 13 sets of traffic lights and

save 30 minutes. Vehicles can travel from Beaconsfield in Melbourne‟s south-east to Albury-Wodonga

without a single traffic light.

The bypass links with the Western Ring Road, which provides a key road transport link to Melbourne

Airport and the Port of Melbourne. It has brought increased focus to the area from investors in industrial

real estate – which translates into more jobs in the precinct. Further upgrades to the Western Ring Road

have been promised by the new Federal Government.


The Transit Cities plans for Epping include developing the land around Epping‟s railway station “so that

it becomes a vibrant mixed-use community hub”.

The Age says: “The good thing about the budding north is public transport. Trains on the Epping line

take about 40 minutes to travel to and from the city.”

Salt says that with transport comes key infrastructure to support clean industry. “Modern clean industry

like distribution warehousing is moving into that area. I see it every time I drive up there – new factories

going up, not dirty factories but clean high-tech ones. Coles Myer has relocated its distribution facility

from Hampton Park in the south-east to Somerton, one or two suburbs from Epping.”

The $100 million Coles Myer distribution centre covers 75,000m2 and is part of the Austrak‟s 120ha

business park and intermodal terminal. Stevedoring and shipping giant P&O Ports has a 10+10+10 years

lease to operate the 20ha rail terminal within the business park, linked to the Port of Melbourne by a

20km rail line. Around this, 280,000m2 of development is expected to occur over 5-7 years.

The planned relocation of Melbourne‟s wholesale fruit and vegetable market from Footscray to a $360

million facility at Epping is in planning. Construction is scheduled to begin in 2009 and the new market

is expected to open in 2011. This is to be a joint venture between the Melbourne Markets‟ Strategic

Alliance and developer Mirvac.

However, in October 2008 Mirvac said it was withdrawing from the project, placing some doubt on its

future. Premier John Brumby says $300 million in funds is already committed to the Epping proposal

and insists it will proceed. The markets have an annual turnover of $1.5 billion and the plans for Epping

include a trading floor area double the size of the current Footscray facility.

In March 2008 Lend Lease bought a 65ha site in nearby Craigieburn for $73.5 million. Plans include a

shopping centre and bulk retail development of about 50,000m2 and 400 residential lots. Work is

expected to begin in 2009 with the first stage released by 2010.

Lend Lease has launched new land in Laurimar master-planned community at Whittlesea. Five hundred

homes have been built on the 324ha site which will ultimately have 2,300 homes and a town centre.

Dwarfing this development is the $1.8 billion Aurora in Epping North by VicUrban which will

ultimately provide 8,500 lots on 660ha as “a model for environmentally sustainable development”. The

master plan includes two town centres, five schools, five ovals, six sporting pavilions, eight tennis courts

and 20km of bike/walking paths.

Also in the Whittlesea LGA is the 1,850-lot Mernda Villages project (including two schools and a

community centre) by Stockland, the Hillcroft Estate at South Morang by Australand and the 1400-lot

Lyndarum project by AV Jennings north of Epping Plaza.

It‟s not only residential development but expansions to the Northern Hospital, the Epping Plaza

shopping centre and Plenty Valley Town Centre. The $80 million stage three extensions to Epping Plaza

include more parking and a linking mall to a new discount department store.


Frankston Southern bayside suburbs of Melbourne

Other key influences: Transport Infrastructure, Govt Decisions, Lifestyle Features

________________________________________________________________________

$2.5bil EastLink tollway, $700 million Frankston Bypass plan, Frankston Foreshore

Development, Frankston CBD projects, $150mil shopping centre expansion, $100mil

bulky goods complex, 300-berth marina, State Govt‟s “Transit Cities” program


Frankston in Melbourne‟s south is bayside, the new EastLink motorway ends there and there is

considerable government money being spent on renewal. But its median price remains below $300,000.

The Frankston area is a classic Ugly Duckling. It has a reputation for lower socio-economic residents

and higher crime rates. But it‟s an area undergoing change towards better things.

Investors are just starting to wake up to the potential of this area and the impact the $2.5 billion EastLink

will have – with strong value growth in the past year. According to the Housing Industry Association,

postcode 3199 (which includes Frankston and Frankston South) has become one of Melbourne‟s most

favoured spots for first-home buyers.

The area has million-dollar homes along the beachfront but a

little back from the water houses are affordable.

One of the keys to Frankston‟s appeal is the amount of

money being spent, both by government and private

enterprise.

Location

The suburb of Frankston sits on the eastern shore of Port

Phillip Bay, 40km south of the Melbourne CBD. It is often referred to as “the gateway to the

Mornington Peninsula”.


The area has a young population, with 26% under the age of 19. The City of Frankston population has

risen steadily from 114,000 in 2001 to 123,000 in 2006 and is projected to reach 133,000 within ten

years.


Postcode 3199 has a population of 50,000, of which three-quarters are Australian-born (well above

Melbourne averages) and a further 12% were born in the UK. It is above average both for children and

for retirement age people. It is slightly below average for numbers who fully own homes and slightly

above average for those paying off mortgages.

Economy & Amenities

The Frankston Central Activities District (CAD) includes retail, office and entertainment facilities and is

the only regional metropolitan activity centre adjoining Port Phillip.

The suburb‟s proximity to the beach is the key to its attraction with considerable investment in

infrastructure designed to maximise the potential of waterfront real estate. The City of Frankston has

7km of beaches and coastal habitat.

There are several golf courses and a number of flora and fauna reserves in the immediate area.

Frankston is connected to the Melbourne CBD by rail, an important feature for Ugly Duckling areas in

times of high petrol prices.

Property Profile

A typical Frankston purchase is a three-bedroom two-bathroom brick home for $290,000. Older brick

homes can be found considerably cheaper and three-bedroom weatherboard cottages can be as low as

$230,000. Frankston North is cheaper still, with a median house price around $230,000. Around 23% of

households rent, in line with Melbourne averages.

Frankston recorded a median house price of $265,000 in 2007, according to Australian Property

Monitors. Frankston prices showed growth of 10% or better every year from 1997 through to 2004,

peaking with 20% growth in 2003. The growth fell away after 2004 but showed a return to good growth

in 2007, with prices rising about 10%.

The growth has continued in 2008, with the median house price rising to $290,000 for FY2008. Longer-

term, the average annual growth over the past ten years is 12%, which is a solid effort.

Next to the suburb of Frankston are Frankston South, which is more expensive, and Frankston North,

which is cheaper. Frankston South has a median price around $400,000 and showed growth between

10% and 25% each year from 1997 to 2004. Growth fell away for a couple of years but resumed quite

strongly in 2006. Price growth in FY2008 was a moderate 5% and there appears plenty of scope for

higher growth in the near future.

Frankston North is an area where incomes are well below average, where a quarter of households are

single-parent households and a third of households are renting. The median house price is only

$230,000, despite 24% growth in FY2008 and growth averaging 12.5% a year over the past decade.


Prospects

One of the keys to Frankston‟s appeal is the amount of money being spent, both by government and

private enterprise.

One of the most exciting initiatives for Frankston is the Frankston Safe Boat Harbour as part of the

Melbourne 2030 and Victorian Coastal Strategy. It will feature more than 300 permanent wet berths and

five boat ramps. Accompanying this development will be more council spending on foreshore

promenade development to include cafes, playgrounds and other attractions designed to capture more

day trippers.

The Bayside Shopping Centre has undergone a $150 million expansion by CFS Gandel Retail Trust,

adding cinemas, more retail space and more carparks. A $40 million re-development of an ageing office

tower in the centre of Frankston is another of the projects changing the area‟s image. $12 million is

allocated under the Melbourne 2030 Transit Cities initiative to be spent on Frankston‟s commercial

centre.

A $100 million bulky goods centre on a 10-hectare site by a consortium led by Spotlight was officially

opened in October 2008. The 45,000m2 Frankston Power Centre includes Harvey Norman, Spotlight,

Dick Smith and Anaconda. The development has created 1,400 jobs.

Frankston is a key part of the Victoria State Government‟s Transit Cities program. The Department of

Sustainability and Environment says: “Frankston is an important urban Principal Activity Centre

because it has a major civic, commercial and retail hub – and has the Chisholm Institute of TAFE and

renowned recreational facilities such as bay beaches, arts and cultural centres.”

The department notes recent major developments in Frankston, including:-

o Business Enterprise Centre at the Chisholm Institute of TAFE

o Construction of the Bayside Entertainment Cinema complex

o Wells Street pedestrian improvements

o Improvements to the transit interchange at Frankston Railway Station

o Pedestrian bridge and plans to revitalise the Kananook Creek precinct

The Frankston Foreshore Development has to date included boardwalks, playgrounds, parklands,

lifesaving club, kiosk-restaurant and the Frankston Pier development.

Improvements to Kananook Creek will reconnect Frankston‟s town centre with the bay and create a new

space for shops, services and recreation. High-density residential development will also be a feature. A

consortium led by Land Design Partnership has been appointed to design a Transit City project at

Kananook Creek.

The $2.5 billion EastLink tollway enhances Frankston‟s appeal by shaving 15 minutes off travel time to

Melbourne‟s CBD and travel to the airport should only take about 50 minutes. Now the State

Government is proposing a $700 million Frankston Bypass, which it says will start construction in 2009.


Gawler precinct North of Adelaide at the gateway to the Barossa Valley

------------------------------------------------------------------------------------------------------------------------------

Key influences: Govt Decisions, Transport Infrastructure, Hill Change

------------------------------------------------------------------------------------------------------------------------------

Upgrade of rail links to Adelaide; $550 million Northern Expressway;

220ha Delfin project; flood mitigation dam; strong tourism industry;

proximity to Barossa Valley wine district; affordable housing.


Areas immediately north of Adelaide, around Gawler, didn‟t have the growth seen across Adelaide in

2007. Most have seen median prices contract a little in the past 12 months or grow only 5%.

But Gawler and environs (which include the Barossa Valley) have

plenty to recommend them and due for good growth. There‟s

historic charm, affordable prices and low vacancies. Links to

Adelaide will soon be upgraded through the Northern Expressway

road project and electrification of the train line to central Adelaide.

The region had a major surge in prices between 2002 and 2004,

but nothing of note since then. While Adelaide suburbs averaged

20% growth last year, the up-cycle didn‟t ripple as far north as

Gawler.

But the long-term growth rate is good, with most locations in this precinct averaging 11% or 12% over

10 years. And prices in areas such as Gawler West (median $170,000), Evanston ($220,000) and

Freeling ($200,000) remain very affordable.

Location

Gawler is 40km north of Adelaide, beside the Barossa Valley. The town sits at the junction of the North

Para and South Para rivers. It‟s about an hour by train to the City (this will improve with the planned

electrification of the rail line).

Population and Demographics

Gawler is home to 15,000 people. It‟s experiencing consistent population growth (including 3% growth

in 2006, which is very high for SA). Much of Adelaide‟s growth is happening in the northern suburbs

and is spreading to Gawler, where a major 220ha estate was announced recently.

Gawler‟s population includes 80% who were born in Australia (above average for SA). A further 15%

were born in the UK. It‟s a family kind of place and is above average in married couples with kids. A

third of households have mortgages, which is also above average.


Economy and Amenities

Gawler has the benefits of country living, town services and

easy access to large city facilities, as well as the wine district.

Reputedly the oldest town in regional South Australia, Gawler

is blessed with fine historical architecture, including houses

ripe for restoration while the Murray Street heritage retail strip

is having a streetscape upgrade. Early urban design has left a

legacy of riverfront parklands and Victorian-era village

squares.

University lecturer Peter Koulizos, author of The Property Professor’s Top Australian Suburbs, says:

“Gawler is very picturesque. There‟s a river running through it and lots of character buildings. It has a

hospital and a private school with a good name (Trinity College).”

The Gawler district has a solid economy based on wheat, wine and tourism. The popular TV series

McLeod's Daughters is shot at "Kingsford", a working property outside Gawler, which draws

considerable tourism to the area. Unemployment is low in Gawler at 3.7%.

The Bruce Eastick Flood Mitigation project, which was officially

launched in August 2008, has major benefits for Gawler. The new

dam on the North Para River has created a flood control feature

30m high and 225m long to reduce flooding further downstream

towards Gawler.

According to the Barossa & Light Herald, the damages bill from

agricultural losses in the last major flood in the Gawler area

(pictured) was $40 million in 2005.

Property Profile

Close to 80% of dwellings in the Gawler area are houses; less than 20% are flats or townhouses. Four

out of ten own their homes outright, a third have mortgages and 22% rent.

Median prices include $245,000 for Gawler, $170,000 for Gawler West, $265,000 for Gawler South and

$280,000 for Gawler East. Units typically cost around $185,000.

Discounts of about 6% are common in the current market, according to Australian Property Monitors.

Some parts of the Gawler precinct have had price declines around 5% in the past year, unlike Adelaide

which has seen strong price growth since the start of 2007. But the long-term growth rates are healthy,

generally in the 10-12% range.

http://en.wikipedia.org/wiki/McLeod%27s_Daughters


There‟s demand for rental accommodation in the area and, according to sqmresearch.com.au, vacancies

are low. In postcode 5118 (Gawler and Willaston), vacancies are 0.7% while in neighbouring postcode

5116 (Evanston) they‟re about 1%.

Future Prospects

The State Government has announced several initiatives to address the affordable housing problem,

including a 219ha land release in Gawler East which will increase the local population 25%. The land

has been rezoned to allow developer Delfin Lend Lease to progressively build 2,500 homes.

Construction is expected to begin in 12 months with the first homes completed late in 2009.

An extension of the Gawler-Adelaide rail service to Barossa will relieve traffic/parking congestion when

3,500 people no longer have to drive daily to Gawler to commute to Adelaide. The rail link to Adelaide

is soon to be electrified.

Meanwhile, early work is under way on the $550 million Northern Expressway which will improve road

links from Gawler into Adelaide.

Work is well under way on Gawler‟s new $30 million, 6500m2 shopping precinct. The Phoenix Plaza

development by Daycorp, which will feature Target and 19 specialty stores, is due for completion early

in 2009.

There is also a $12 million upgrade of the Gawler racecourse in planning.

Gawler has plenty of appealing characteristics and strong future prospects because of planned

improvements to road and rail infrastructure.

And recent falls in house prices suggests the

buying is good at present.

With the major influx of population pending,

existing character housing might be the go for

investors. Gawler has a long-term future

because of proximity to both Adelaide and the

Barossa Valley wine district, its historic fabric

and its affordable housing.


Hobart Capital of Tasmania

------------------------------------------------------------------------------------------------------------------------------

Other key influences: Lifestyle Features

Greatest concentration of locations within reach of first-home buyers

of any capital city in Australia;

half of Hobart‟s suburbs have median prices under $300,000. ------------------------------------------------------------------------------------------------------------------------------

Typical houses: $200,000 to $300,000

This is a departure from the normal process of this report. Rather than nominating a specific suburb or

precinct within a major city, I‟m suggesting Hobart generally. The reasoning goes like this:-

The one sector of the residential market likely to do well in the next 6-9 months, amid difficult

economic circumstances, is the lower end of the market.

While the upper end will see values falling (because of falling business confidence, sharemarket

upheavals and the tightening of credit), the lower end will be relatively active because of falling

interest rates and the increase to the First Home Owners Grant.

Cities with the greatest concentration of suburbs with median prices under $400,000 will benefit

the most from the changed circumstances.

83% of Hobart suburbs have median prices under $400,000.

The FHOG may be the saviour of the Tasmanian property market at a time when it looked to be

struggling. Tasmania is a small state and quite fragile. Its economy has done quite well in recent years

but never brilliantly, it has managed some population

growth but not much (it‟s the only state with less than

1% growth) and its property market has stayed solid

since 2004 without ever excelling.

But it‟s had some reversals lately. It‟s had a change of

Premier and the new one has been staggering from

one controversy to another. Internal division and

Cabinet re-shuffles are routine. The State Government

is developing a trend not dissimilar to NSW – and we

know from the NSW experience that this can be bad

news for the economy and real estate.

Economically, Tasmania could use a major boost - such as a $2 billion pulp mill. But the one planned by

Gunns Limited has encountered a series of setbacks – and looks increasingly unlikely to proceed.

And Hobart property values have struggled since the start of 2008. The ABS says the House Price Index

for Hobart dropped 2% in the June Quarter, while the Real Estate Institute of Australia reports a 3% fall

in the same period.


In the September Quarter, according to the ABS, prices stagnated overall but, according to the REIA,

some sectors of the market have seen price declines, notably the outer suburbs.

Another emerging negative is the trend with rents: the REIA reports that rents fell in many sections of

the Tasmanian market in the June Quarter, with the inner-city Hobart suburbs the main exception. This

is reflected in the latest data from Australian Property Monitors, which shows Hobart house rents rose

only 4% in the year to September, while unit rents

rose 5% - but declined in the September quarter.

Hobart was highly appealing to investors in 2003

because it was easy to get 7%-plus yields on houses.

Now typical gross rental yields in the Tasmanian

capital are around 5% - still not bad, but no longer so

enticing to mainland investors.

Valuer Andrew Peck of Herron Todd White says

sales volumes are down this year and while property

values have generally held up quite well, we were

starting to see sales below 2006 price levels,

particularly when distressed vendors need a fast sale.

The ANZ Property Outlook has a generally optimistic assessment of the Tasmanian economy,

particularly with the State Government spending big on new infrastructure. But it also says: “Building

approvals have remained solid and, as a result, a significant amount of new stock has recently come on

to the market. This, combined with weak sentiment, has seen median house prices ease marginally in

recent quarters.”

FHOG to the rescue

The Tasmania market needs a lift – and the First Home Owners Grant is providing it. Tasmania has lots

of suburbs and towns with median prices below $300,000, the sorts of locations that will benefit from

the FHOG.

Hobart has 15 suburbs with median prices under $250,000, including six with medians under $200,000.

Almost half the city‟s suburbs have medians under $300,000 and eight out of ten suburbs have medians

under $400,000. No other capital city in Australia offers such appeal to first-home buyers (in terms of

affordability) and to investors on a budget.

Agents report increased activity at open homes at the lower end of the market. Lenders also are reporting

significant inquiry. “Appointments with lenders are back to boom levels, mainly with first-home buyers

wanting to get pre-approval of finance,” Peck says. “We‟re expecting this to put a floor under the

bottom end of the market until June next year.”

http://upload.wikimedia.org/wikipedia/commons/c/c2/Constitution_Dock_-_Hobart_-_Australia.jpg


Pecks says he expects suburbs at the lower end of the market, where values took a hit recently, to come

back to previous price levels in terms of house prices. He expects Launceston suburbs like Ravenswood

(median price $160,000), Mayfield ($150,000), Waverley ($165,000) and Rocherlea ($140,000) to be

targeted. These are primarily Housing Commission suburbs with the cheapest prices in the city.

In Hobart, cheap suburbs north of the CBD, such as Goodwood ($220,000) and Moonah ($245,000),

will also be popular.

He suggests it won‟t only be first-home buyers who are active. “It‟s not a bad time for investors to buy,”

he says. “Vacancy rates are tight, so while interest rates are coming down, yields are heading in the

other direction.”

Valuer Charles Brothers of Brothers Newton says builders are getting strong inquiries from first-time

buyers armed with the $21,000 from the FHOG. He says suburbs with a good supply of land at the lower

end of the market, including Brighton (median house price $235,000), Margate ($320,000) and

Oakdowns ($320,000), should benefit.

Established suburbs at the cheaper end of the market include Glenorchy ($230,000), Moonah

($245,000), Goodwood ($220,000), Lutanna ($245,000), Claremont ($240,000) and Kingston

($300,000). The precinct including Mornington ($240,000) and Warrane ($240,000), out near Hobart

Airport where there is major development of new bulky goods retail, should also attract attention.

Classic Ugly Duckling suburb

Goodwood is a classic Ugly Duckling suburb of Hobart. It‟s

a former Housing Commission suburb where former tenants

eventually became owners. Although the houses are modest,

there‟s a lot of pride of ownership on display in Goodwood.

When I bought a house there in 2003, typical houses cost

$80,000. Since then values have trebled but the suburb

remains affordable.

It‟s less than 10 minutes north of the Hobart CBD via the Brooker Highway and it fronts Price of Wales

Bay on the Derwent River. It has good access to the other side of the river because it‟s beside the Bowen

Bridge. There are plenty of schools and sports facilities in the immediate area and one of Hobart‟s major

shopping centres is in neighbouring Glenorchy.

No Go Zones

There are one or two areas investors should avoid. At the cheap end of the market, Gagebrook (median

price $145,000) and Bridgewater ($175,000) have attracted investors because of the low prices, but

they‟re low for good reason: this is a highly undesirable area with huge problems.


Ipswich region South-west of Brisbane

------------------------------------------------------------------------------------------------------------------------------

Other key influences: Government Decisions, Transport Infrastructure, Urban Renewal

$1 billion Ipswich Motorway upgrade; duplication of Centenary Highway; $5 billion in

govt infrastructure projects; $12 billion Springfield community; upgrade of rail links;

170,000m2 Orion shopping centre; big industrial estates including $1 billion Citiswich;

major new residential estates; RAAF Base expansion ------------------------------------------------------------------------------------------------------------------------------


The Ipswich corridor is now well-known as a growth region and real estate hotspot. Prices rose 15%-

plus in most suburbs in the Ipswich local government area in FY2008, with many suburbs growing 25%

of more. It‟s almost a candidate for removal from the report because it‟s no longer a future hotspot. But

it remains because I believe it‟s evolution into a headline hotspot of national standing is only beginning.

Many of the big infrastructure and property developments have only just begun or haven‟t yet started.

They include the most important of them, the $1 billion upgrade of the Ipswich Motorway. Research

analyst Michael Matusik says: “This vital piece of infrastructure is the only impediment stopping

Ipswich from reaching its full potential.”

Ipswich City is a likely beneficiary of recent significant changes of market fundamentals, namely the

sharp decline in interest rates and big increase to the First Home Owners Grant.


Ipswich City, on the Bremer River south-west of Brisbane, ranks in the top six Queensland

municipalities for population increase. It adds 4,000 to 5,000 people each year, at a growth rate almost

three times the national average.

The city is projected to reach 200,000 people in 10 years and 318,000 in 20 years. It‟s identified in the

South East Queensland Regional Plan as one of the key

areas to absorb growth in the next 20 years.

Its potential for expansion is evident in this statistic from

PRDnationwide: the Brisbane LGA has a density of 721

people per square kilometre, while the Ipswich LGA has

only 113 people.

The two LGAs cover a similar area but while Brisbane

has almost one million residents, the Ipswich LGA has

140,000.


The number of people living in Ipswich is forecast to increase substantially over the next two decades.

Matusik Property Insights says the area will need about 4,000 new dwellings each year for the next

decade to accommodate an extra 9,000 people per year. It says demand will be driven by relative

affordability, land availability and increasing employment opportunities.

Matusik says: “The western region of Brisbane is gaining in population and new projects are occurring

at an increasing rate. Ipswich City is at the epicentre of this growth.”


A massive chunk of the Queensland Government‟s South East Queensland Infrastructure Plan is

directed towards the western corridor linking central Brisbane to Ipswich. Transport infrastructure

projects planned for this corridor total about $5 billion.

These projects include upgrades to the rail connection to Ipswich, a rail line to the rapidly-growing

Springfield master-planned community, the upgrade to the Ipswich Motorway, a Western Ipswich

Bypass and other motorway/highway projects.

Economic and infrastructure activity targeted on this region include the following:

There is $5 billion in government infrastructure projects targeted for the Ipswich region,

including several highway upgrades and bypass projects, new rail connections, hospital

developments and a series of new schools.

The Ipswich Motorway connecting the area to central Brisbane is undergoing a major upgrade,

after years of Federal-State arguments. The motorway is notorious for traffic snarls. Prime

Minister Kevin Rudd formally launched a $1.1 billion upgrade in March 2008.

The $40 million upgrade of Boundary Rd-Kelliher Rd, to create a motorway linking the

Centenary Highway at Darra to the expanding areas

of Forest Lake and Springfield, was completed in

August 2007. The upgraded road has four lanes and

provides for a rail line from Darra to Springfield.

The State Government is planning further

improvements to the Centenary Highway from

Richlands to Springfield, while work has started on a

$370 million Centenary Highway extension between

Springfield and the Cunningham Highway at

Yamanto – due to open by the end of 2009.

The $12 billion master-planned community of

Springfield, under development since 1992, covers

2,860ha and is projected to be home to 60,000 people

in 15 years.

Springfield‟s Education City became reality in

February 2006 with the first students starting classes

in the new University of Southern Queensland

campus. It is expected to have 10,000 students within ten years.


Mirvac is building the Orion Greater Springfield Shopping and Entertainment Complex at

Springfield. It will have 170,000m2 of retail space and parking for 6,500 cars on a 40-hectare

site. Stage one opened in March 2007.

Suncorp is building the $212 million Polaris Data Centre at Springfield and has secured a 10-

year State Government lease. The 10-storey Springfield Tower building also has major pre-

commitments. The $70 million Spring Lake Metro, including a boutique hotel and shops, opened

in October 2007. Site works have started on the $200 million first stage of the 52ha Springfield

Health City, which will include general practice and community health facilities, day surgery, a

128-bed aged care facility and 100 independent retirement units. National developer Australand

paid $19 million for 22ha at Springfield early in 2008 to develop 280 home sites.

Ipswich‟s historic post office will become office and retail space in a $30 million re-development

known as Tower Central announced in January 2008.

A major extension of Ipswich Hospital is in planning, with about 90 beds to be added to the

current 350-bed hospital.

The Ripley Valley area, 5km south of the Ipswich CBD, is projected to have a population of

120,000 in 20 years, compared with 2,000 currently. Developers are planning a master-planned

community, expected to ultimately create 40,000 homes. In September 2008 Wingate Properties

became the first developer to seek approval to build a section of the master plan – it owns 200ha,

one of 17 sites totalling 5,200ha in the Ripley Valley precinct. In October a private syndicate

paid $7.4 million for a 58ha site within the Ripley Valley precinct.

Investa‟s Brentwood estate at Bellbird Park will create 1,500 homes over eight years on 226

hectares, next to the Brookwater community which will have 1,200 homes around a Greg

Norman-designed golf course.

Ingles Group recently launched stage two of its $150 million residential estate Macquarie Downs

at Redbank Plains, releasing a further 50 lots to the market.

An 85-hectare parcel of land at Redbank Plains was purchased by developers in December 2006

for $16.5 million, with plans for an 800-lot subdivision.

Developer Devine announced in September 2008 plans for the $500 million Mountview estate ar

Redbank Plains, which will eventually have 1,400 dwellings. The first release of 800 home sites

was targeted for November 2008. Devine amalgamated the 124ha site in 2006 and 2007.

The $800 million Corymbia Woods project, to deliver 1,970 new dwellings, was approved in

October 2008. It will have a mix of apartment buildings,

terrace houses, duplexes and standard home sites around a

town centre. There will be an integrated open space system

covering 32ha.

An $800 million expansion of facilities at the Amberley

RAAF Base is under way. Stage two of the re-development

was completed in December 2007 and there is a third stage.

The base population will rise from 2,500 now to 3,200 in

2009 and 4,000 in 2015. It was announced in October 2008

that $120 million would be spent on new housing in

connection with the new Super Hornet squadron, which will

arrive in 2010.

Ipswich locations Bremer, Swanbank and Redbank are tipped as future industrial property

hotspots by commercial agency Colliers International.


Major generators of business and jobs are expected to be the Swanbank Enterprise Park, Bremer

Business Park, Ebenezer Industrial Park and the aerospace industry at Amberley RAAF base

(Australia‟s largest operational base). In 2006, Investa Property Group paid $21 million for

500ha of industrial land at Swanbank Enterprise Park (which covers 2,200ha).

Walker Corporation announced in December 2007 its plans for the $1 billion Citiswich industrial

park. The 335 hectares, previously known as Bremer Business Park, sits beside the junction of

three highways in the Riverview area. The Reject Shops signed up in September 2008 for a 10-

year lease over a 25,000m2 distribution centre.

PRDnationwide Research says: “Ipswich is popular for household formation as it is relatively

affordable. However, infrastructure inadequacies have made a daily commute from Ipswich to Brisbane

difficult. The focus by the State Government on the western corridor is likely to have a dramatic impact

on the demographic profile of Ipswich.”

PRDnationwide says the State Government‟s infrastructure plan released in 2005 highlights three

regional infrastructure priorities, including a focus on infrastructure in the western corridor. “This is of

significant benefit to investors and residents of Ipswich City,” it says. “It emphasises the potential of the

western corridor for major industrial uses, employment growth and the availability of affordable land.”

As well as $5 billion committed to transport infrastructure in this area, there is a $315 million

commitment to 13 new schools in this region and close to $300 million on health facilities, including re-

development of Ipswich Hospital.

Property profile

PRDnationwide‟s report says Ipswich traditionally has been seen as Brisbane‟s poor cousin, but its

demographic profile is expected to change in the next decade as a result of the State Government‟s focus

on the western corridor.

The Ipswich LGA is dominated by “couples with children” households. It also has an above-average

proportion of single-parent households. Its average age, at 33, is younger than the Brisbane average and

its average income is much lower. But there are more home owners and fewer renters in Ipswich

(reflecting relative affordability). PRDnationwide says 27% own their homes outright, 37% have

mortgages and 30% rent.

The Ipswich market has been growing strongly. Median house prices in Greater Ipswich rose an average

20% a year in the five years to June 2008. Growth levelled off in 2005 and 2006 but the latest data from

both Australian Property Monitors and the Real Estate Institute of Queensland indicates many suburbs

showed strong price growth in FY2008. Most did 15%-plus and some managed around 25% to 30%.

Investors have been the big catalyst. Valuation firm Herron Todd White says in the March 2008 edition

of The Month in Review: “Residential property investment has been rife in Ipswich over the past 3-4

years following the release of the South East Queensland Regional Plan. On average, 50% of sales have

been to property investors.” Typical houses across Greater Ipswich cost around $300,000, but many

suburbs have lower prices so the region remains affordable despite the recent price growth.


There are few units or townhouses in the area, with houses making up 92% of dwellings in the Ipswich

Local Government Area (compared with 75% in the Brisbane LGA). But this is changing, with more

apartments being added to the Ipswich affordability mix. This is a potential area of opportunity for

investors, given that prices are affordable and Ipswich units have a solid track record for long-term

growth in rentals.

Matusik says: “More townhouses will start to pop up in suburbia and houses around transport nodes will

start to be re-developed into duplexes and small-lot homes. This is good news for both future owner-

residents and investors, as gross yields are often better for alternative housing when compared to a

detached house. The attached housing market is under-supplied with a vacancy rate of just 1.3%,

compared to around 3% for detached houses across Ipswich.

“Ipswich is not only likely to keep growing (and at an accelerating pace) but it is also going to change.

Expect the range of new housing products coming Ipswich‟s way.”

This view is supported by PRDnationwide which notes an expanding unit market. “An increase in new

unit supply has contributed to a rise in unit sales over the past five years, a trend that coincided with

increasing rates of median unit price growth – over the past five years, the median unit price has average

growth of 22% a year.”

Two or three years ago Ipswich became popular with investors because 6%-plus yields were available.

Price rises since then have pushed down rental returns; today 4.5% to 5.5% is the typical yield range.

According to the September 2008 edition of The Month in Review from valuation firm Herron Todd

White, recent events in the residential market have made Ipswich more attractive to buyers. “Property

values have levelled off and the region still provides affordability for investors and first-home buyers,” it

said.

The Redbank precinct

The Ipswich region‟s potential is reflected in

the Redbank precinct, an area which is busy

with new residential, retail and industrial

development. It has major road and rail links

to central Brisbane, extensive shopping

facilities and affordable homes.

The area embraces Redbank, Redbank Plains,

Collingwood Park, Goodna and Bellbird Park.

Look at a street directory for this area and you

will see vast networks of proposed new

streets and cul-de-sacs as developers plan new

estates. The precinct borders other high-development growth areas such as Springfield and Brookwater.

0 100 200 300 400

Redbank

Redbank Plains

Collingwood Park

Goodna

Bellbird Park

Median price $'000

Median prices FY2008: Redbank precinct


Redbank has a station on the commuter train line linking Ipswich to central Brisbane and the (highly-

congested) Ipswich Motorway is the main road link to the Brisbane CBD.

There are plans (included in the State Government‟s South East Queensland Infrastructure Plan and

Program) for a $290 million upgrade of the Corinda-Redbank section of the Ipswich-Brisbane rail line.

Employment options in the precinct are being boosted by the ongoing development of the Redbank

Peninsula industrial area (the peninsula being formed by a loop in the Brisbane River, which is the

northern boundary of the precinct) and the nearby Citiswich industrial estate, a $1 billion development

by Walker Corporation (referred to earlier in this report).

Residents of the area have a choice of major shopping centres:-

o the established Redbank Plaza, including Coles, Target, Supa IGA, Kmart, an eight-screen

cinema and 110 specialty stores in a complex which abuts the Ipswich Motorway;

o the newly-expanded Redbank Plains Shopping Village, which now has 6000m2 of convenience

retailing, with plans for 22,000m2 of bulky good retail space in a second stage;

o Redbank Tavern Plaza Shopping Centre,

including Bi-Lo, Subway, a tavern and other

specialty stores, which sold for $10 million in

November 2006; and

o the new Orion Greater Springfield Shopping

and Entertainment Complex at Springfield,

which will have 170,000m2 of retail and

entertainment space (stage one, which opened

in March 2007, is pictured on the right).

Australian Property Monitors records the median

house prices for the suburbs of the precinct for

FY2008, as follows: Redbank $245,000 (up 9%),

Redbank Plains $300,000 (21%), Collingwood Park $330,000 (18%), Goodna $300,000 (22%) and

Bellbird Park $315,000 (15%). It‟s clear from these figures that the precinct has plenty of affordable

housing – despite strong growth in median prices in FY2008 in all of these suburbs.

Redbank Plains and Collingwood Park have shown similar patterns – exceptional annual growth over 5-

6 years but still affordable. In Redbank Plains, values have risen 175% in the past five years but the

median house price has only just reached $300,000.

Devine Ltd, developer of house-and-land packages, has previously developed residential estates in this

precinct, including The Parks at Collingwood Park, where the 180 lots sold inside 18 months. “Redbank

Plains is a key growth corridor for business, with major employers Ipswich Aerospace Industry and

Swanbank Paper Plant nearby,” says Devine‟s National Acquisition Manager Luke Hartman. “This is

helping to drive demand for residential accommodation. Redbank Plaza is just minutes from the site and

the massive Orion shopping centre is being built 5km to the east. There are good schooling options,

including the Springfield campus of the University of Southern Queensland.”


The statistical precinct covering the Redbank area is a high-growth location, with population rising well

above average rates. It‟s an area of young families, with a low average age (29), above-average for

couples with kids and below-average for retirees.

It‟s mortgage belt country: a below-average share of households own their home outright and an above-

average share are paying off a mortgage. A third of households are renting.

Ipswich’s inner eastern suburbs

I expect Ipswich City to attract more attention now in the wake of the increase in the First Home Owners

Grant and the downward trend in interest rates. The bottom end of the market will be the most active,

amid difficult economic times, and Ipswich City is well-positioned to do well.

Half of the suburbs within the Ipswich LGA have

median house prices under $300,000, despite

exceptional price growth over the past five years.

Recent years have shown that the highest capital

growth in South East Queensland has been seen in

the cheaper suburbs, with the Ipswich corridor

particularly prominent. I expect first-home buyers

and investors to target the cheaper areas, even more

so because of the FHOG and lower interest rates.

A cluster of suburbs immediately east of the Ipswich

CBD stand out: here there are eight suburbs with median prices under $300,000, including East Ipswich,

Booval, Eastern Heights and Silkstone. I think East Ipswich, which has many character houses begging

to be renovated, is one of the most under-rated precincts in the Ipswich LGA.

Median house prices and FY2008 growth rates include: Booval $285,000 (up 24%), Bundamba

$275,000 (up 24%), East Ipswich $265,000 (up 15%), Eastern Heights $265,000 (up 19%), Newtown

$285,000 (up 30%), North Booval $270,000 (up 26%), Silkstone $270,000 (up 23%) and Tivoli

$260,000 (up 31%).

A word of warning

Ipswich attracted national media attention in April 2008 when homes built over disused coal mines in

Collingwood Park began to suffer serious damage through subsidence. Cracks appeared in 20 homes in

several streets above 19th

Century coal mines.

This cast a shadow over the region as Ipswich has a history of coal mining and underground workings

dot the area. Ipswich Greens spokesman Andrew Luxton said: “The district is riddled with old mine

shafts that make development risky. It‟s not just Collingwood Park. There are plenty of places at risk.”

The Ipswich City Council has been at pains to emphasise that only 1% of homes in the city have been

built over coal mines. Investors, however, would be wise to check before buying in the Ipswich area.

http://www.domain.com.au/Public/PropertyDetails.aspx?adid=5819917


Melton North-western suburbs of Melbourne

------------------------------------------------------------------------------------------------------------

Other key influences: Government Decisions, Transport Infrastructure

$15 billion Melton growth plan; $330 million Deer Park Bypass; upgrade of Western

Freeway; exceptional population growth; 1900-hectare Toolern development including a

760-hectare business park. ------------------------------------------------------------------------------------------------------------


The qualities that make an “ugly duckling” area worth considering include affordable housing, public

transport links, good access to the central city, government initiatives to improve the area, economic

drivers to create jobs and a significant kicker – something to help the area rise above itself.

The Melton precinct in Melbourne‟s north-west has all those features on its resume. You can buy houses

for less than $200,000, it‟s on the Melbourne-to-Ballarat train line, it‟s 35 minutes from the Melbourne

CBD, it‟s one of Australia‟s leading population growth areas, Melton Council is working to lift the

area‟s economy and liveability, and the big kicker is the Deer Park Bypass and Western Freeway

upgrade, which will speed up road journeys to the City.

Melton is easy to disregard – it‟s on the city

outskirts, presents as mortgage-laden battler

country and suffers from a bad reputation.

“Melton got a name in the Seventies and Eighties

as an area with social problems – and that stigma

is hard to shake,” demographer Bernard Salt says.

“In the Seventies it was probably legitimate, but

30 years later the area has a more mature

demographic profile and the social problems have

been somewhat diluted.”

And the more you investigate, the more you see it‟s potential.

The Melton/Toolern area is projected, under State Government planning, to accommodate a further

33,000 to 37,000 households by 2030, spread over 2,200ha of new urban land, including 220ha at

Caroline Springs, 90ha in North Melton and close to 1,900ha at Toolern/Melton South.

Location

Melton Shire is 20km from the Melbourne CBD on the Western Freeway heading out to places like

Ballarat. The nerve centre of the shire is a precinct of suburbs including Melton, Melton South, Melton

West and Kurunjang.


This report focuses on postcode 3337, which includes Melton, Melton West and Kurunjang. It‟s a place

where you‟ll find lots of kids and not many retirees, plenty of people with below-average incomes and

more households paying off their homes than actually own their homes outright.

Population and Demographics In the Population Growth Report 2007 by Salt, Melton Shire ranked No.5 in Australia, having added

6,200 to its population over 12 months. Salt says the shire is now adding ten times as many new people

each year as in the Nineties – and the difference has been the Western Ring Road, opened in 1998. “It

changed Melbournians‟ perception of the west,” Salt says. “The next thing that will help Melton is the

Deer Park Bypass. That will generally unlock that whole western corridor.

“Yes, it‟s ugly, but there‟s the prospect that improved

access to the job market in the western suburbs of

Melbourne will unlock Melton by an order of

magnitude.”

Its population is projected to virtually double within

15 years to reach 160,000 people by 2021, requiring

the number of dwellings to rise from 29,000 in 2006 to

56,000 in 2021. The projected growth rate is three

times the national average.

While the area is below average for the percentage of

families which fully own their homes, there are

relatively few renters compared to Melbourne averages, because there are above-average numbers

paying off their homes (45% of households in postcode 3337, compared to the city average of 27%).

Amenities

The shire has 11 pre-schools, 19 primary schools, nine secondary colleges (including two private

colleges) and the Melton Campus of Victoria University.

Melton Township has Coburns Shopping Centre and Woodgrove Shopping Centre, and is the site of

Australia‟s first indoor wave pool, as well as the Melton Weir water-skiing facility.

The semi-rural nature of the shire is reflected in its proximity to forest and national parks. Melton Shire

also claims to be “the heart of thoroughbred country” and to have some of Australia‟s best equestrian

facilities.

The shire has two commercial hubs: High Street and Woodgrove Shopping Centre.

Expanding residential areas like Caroline Springs are the

reason Melton Shire is one of Australia’s leading hotspots

for population growth.


Property Profile

There are few places in Melbourne where you can buy houses for less than $200,000. Suburbs like

Melton and Melton South have median house prices around $190,000 – with income returns above 5.5%

on houses.

Median house prices for FY2008 (Australian Property Monitors) included $191,000 for Melton,

$190,000 for Melton South, $230,000 for Melton West and $225,000 for Kurunjang. The more-

upmarket Caroline Springs area had a median house price of $315,000.

Most of these suburbs delivered price growth in the 5% to 10% range in FY2008.

Units in the Melton suburbs have median prices in the $170,000 to $190,000 range.

Prospects

Melton Shire Council has launched a $15 billion initiative

to establish the area as a major growth centre for Victoria.

It includes a strategy to develop 32,000 homes for 90,000

people by 2030 – and to attract $6 billion in business

investment. The expansion of the urban growth boundary

has added 2,200ha that will be subject to one of Victoria‟s

biggest ever regional investment programs.

Melton Shire Council says: “This is a visionary program to create a major new investment location in

Victoria. Backed by the State Government‟s 2030 strategy, Melton will be the focus for Melbourne‟s

north-west development – a commitment that will create an entirely new city, home to up to 100,000

people in the next two decades.

“Central to the vision is Toolern, a major new concept of integrated living that will make Melton a

showpiece for 21st Century urban design. Toolern was conceived late in 2005 when the State

Government selected Melton to be one of five designated locations for Melbourne‟s expansion.

“With 2,200ha released for development, Melton has

designated 1,900ha of broad-acre land to Toolern,

including the 760ha Toolern Business Park.” (The rest of

the 2,200ha of new urban land is at Caroline Springs and

North Melton.)

Toolern sits south of Melton township and is bordered in

the north by the Western Highway. The master plan

includes elements of residential, commercial, industrial

and retail.


Given the partly-rural nature of the shire, the Council is especially promoting strategies to develop

agribusiness and equine industries. The Sunbury-Melton Recycled Water Project (which includes a

30km pipeline which pumps recycled waste water for irrigating vineyards, olive groves, plant nurseries,

golf courses and council reserves) has assisted in developing businesses such as the Witchmount and

Galli Vineyard Estates.

Melton claims to be “The Heart of Thoroughbred Country”, offering some of Australia‟s best equestrian

facilities. The shire is home to nine thoroughbred studs, a number of equestrian centres, around 140

registered trainers and 1,200 horses.

A major new investment for the Toolern Business Park

will be the new home for harness racing in Victoria at

Ferris Road. The $32 million training and entertainment

facility is be on the edge of Toolern Business Park on

the south side of the Western Freeway.

The Oliver Hume Real Estate Group comments on its

website: “Melton is an innovative shire with a number of

initiatives aimed to benefit new residents. It is considered that the shire‟s relative affordability and high

levels of new infrastructure and amenity will offer further potential for price growth.”

Melton seems quite well served by public transport. It has bus services and it‟s on the train line between

Melbourne and Ballarat. This is important in times of high petrol prices.

Its main road link to central Melbourne is the Western Freeway, which hooks into the Western Ring

Road. If you‟re lucky, the journey takes 35-40 minutes. The problem is a traffic bottleneck around Deer

Park, where the Western Highway carries over 70,000 vehicles a day, of which 10% are heavy vehicles.

The solution, and a big boost to Melton Shire, is the $330 million Deer Park Bypass project, which

began construction in February 2007. The 9.3km bypass will be a four-lane freeway from the Western

Ring Road at Sunshine West to the Western Highway at

Caroline Springs - and will remove six sets of traffic

lights and make journeys through that area 15 minutes

quicker at peak times

The project will be completed late in 2009. Provision

has been included for adding additional lanes in the

future. There are also plans to upgrade the Western

Freeway between Deer Park and Melton.

Bernard Salt says: “Melton is one of those places beyond the edge of Melbourne, linked to the city by

Ballarat Road (Western Freeway). There‟s a problem in that road around Deer Park but the bypass will

eventually make the trip into Melbourne much quicker. Once that bypass is completed and the

bottleneck is cleared I think Melton will move to another level.”


Port Noarlunga Southern seaside suburb of Adelaide

Key Influences: Lifestyle Features, The Stayers, Ripple Effect

Suburb overlooking Gulf St Vincent; affordable real estate; solid long-term growth; good

road/rail connections to central Adelaide; plan to extend rail links further south; retail,

sporting, community services at Noarlunga Centre.


In earlier editions of this report, we have profiled Port Noarlunga and Christies Beach as one precinct –

which 12 months ago was relatively undiscovered and under-valued. There was been huge price growth

in Christies Beach and neighbouring Christie Downs in FY2008 (median prices growing between 25%

and 30%) – but Port Noarlunga and Noarlunga Downs did not have the same level of growth.

I believe this is the Ripple Effect working through the southern seaside suburbs of Adelaide. The first of

these appealing and affordable areas we recommended was Hallett Cove, an impressive suburb of solid

homes with wonderful views. This area grew first, then the growth rippled further south to another of

our recommendations, Christies Beach, a place of similar qualities but cheaper.

Next in line is Port Noarlunga, a little further south again.

Location

Port Noarlunga sits beside Gulf St Vincent, about 40km south of the

Adelaide CBD. It‟s connected to the central city by the Southern

Expressway and a rail link which terminates at nearby Noarlunga Centre.


This precinct is part of the municipality of Onkaparinga, which is

consistently in the top two or three regions in South Australia for

population growth.

Christies Beach has attracted lots of UK migrants, with 25% of residents born in the UK. Around 30%

of residents are retirees (the Adelaide average is 20%), 83% of dwellings are standalone houses and

home ownership rates are high, with half of households owning their homes without mortgages.

Port Noarlunga, too, has attracted a large contingent of migrants from the UK (22% of residents).

Almost 90% of dwellings are houses, home ownership rates are above-average and only 17% of

households rent (Adelaide average is 27%).



Port Noarlunga and Christies Beach have much in common with Hallett Cove in that they are elevated,

so that many homes have sea views. The area has good beaches and a tree-lined foreshore, with great

outlooks to the south. The housing is more downmarket than the solid brick homes of Hallett Cove, but

there are nevertheless some fine character houses.

The high streets of these suburbs are reminiscent of budget seaside resorts of a former generation – with

small shops with names like “Yorky‟s Pork & Gourmet Food” and “Christopher‟s Martial Arts and

Pawnbroker”.

Adelaide property analyst and lecturer Peter Koulizos, of TAFE South Australia‟s Faculty of Business,

says this precinct was a regular day trip for his family when he was growing up in Adelaide. Today he

has Christies Beach/Port Noarlunga on his list of Top Ten suburbs for investors. Despite its strong

recent growth, he sees ample potential for further capital gains in the area.

“I like it because of its proximity to the sea, because it has a lovely beach and beautiful clear blue water,

because it‟s close to good surf beaches and it‟s 10 minutes from the wine areas around McLaren Vale,”

Koulizos says. “The local council is putting money into the road systems down there and is working to

beautify the area.”

Port Noarlunga has lots of old-style small-town seaside character and a pier popular with people who

like to fish. It is described this way on the travelmate.com.au website: “Historic Port Noarlunga, once a

haven for sailing ships at the mouth of the Onkaparinga River, today attracts day trippers and travellers

to a safe beach and an underwater trail for snorkelers and scuba divers. The town also boasts great cafes

and sunsets romantics would die for.”

The suburb is evolving as a café culture precinct, with restaurants, cafes

and antique stores adding to the atmosphere.

This precinct generally has excellent services and shopping amenities

because of the facilities concentrated in Noarlunga Centre directly inland

from Christies Beach and Port Noarlunga. The facilities include major

retail (including the Centro Colonnades Shopping Centre, recently the

subject of a $120 million expansion which added 25,000m2 to the centre‟s

floor space, plus an additional 1,000 carparking spaces), sporting

complexes, cinemas, bowling alley, ice-skating rink, swimming complex,

theatres, a TAFE campus, council offices, library and extensive medical

services.

Noarlunga Centre and Christie Downs immediately to the north both have stations on the rail line

connecting the area to central Adelaide. Noarlunga Centre includes a Transport Interchange

incorporating the train station and bus links. The Southern Expressway has on/off ramps here.

This is also an area with many schools and plenty of parkland.


Property Profile

There has been strong movement in property prices in both Christies Beach and nearby Christie Down

recently. According to Australian Property Monitors, the median house for Christies Beach for FY2008

was $297,000, a rise of 25%. Christie Downs rose 29% to $235,000. Figures from APM and RP Data

indicate this suburb has averaged price growth of 15% to 16% a year over the past decade, which

suggests it‟s a very solid performer. These median prices, however, are still a long way below the

Adelaide average, so the area remains affordable.

At Port Noarlunga, the median house price rose about 8% to

around $310,000. This suburb also has a strong long-term

average, with APM and RP Data suggesting values have

grown an average 12% or 13% a year over the past decade. So

the suburb has a strong track record but recent price growth

has been considerably less than Christies Beach.

One step further down the coastline, Port Noarlunga South has

a median house price around $305,000, after steep price

growth in FY2008.

Another opportunity may be units in Christies Beach and Port Noarlunga, which tend to cost in the

$170,000 to $190,000 range. This is a small part of the local market and there are relatively few sales, so

median prices can be misleading.

Future Prospects

This general area has been targeted by Land Management Corporation as a growth area. LMC and

Housing SA are developing a $500 million master-planned residential community over 130 hectares at

Seaford Meadows, which adjoins Port Noarlunga South.

This kind of activity explains why the municipality of Onkaparinga is one of the top two population

growth areas in South Australia.

The State Government is seeking a slice of the Federal Government‟s infrastructure fund to extend the

Noarlunga train line further south. This would provide rail links from Seaford and Port Noarlunga South

to the Adelaide CBD.


Rockingham City Southern seaside region of Perth

------------------------------------------------------------------------------------------------------------------------------

Other key influences: Transport Infrastructure, Lifestyle Features

------------------------------------------------------------------------------------------------------------------------------

Seaside location, affordable prices relative to Perth, employment nodes nearby,

new Perth-to-Mandurah rail link, $160 million expansion of

Rockingham City Shopping Centre. ------------------------------------------------------------------------------------------------------------------------------


Many parts of the Perth metropolitan area have seen prices go backwards since the market peak in

2006. An area which stands out with a cluster of suburbs in negative growth territory lately is the City of

Rockingham, which abuts the Indian Ocean about 50km south of central Perth, heading towards

Mandurah.

This is an area with relatively affordable house prices, very low residential vacancies and improved links

to central Perth following completion of the Perth-to-

Mandurah rail link, which passes alongside many of the

suburbs mentioned here.

Location

The City of Rockingham LGA is about 50km south of the

Perth CBD. It‟s a seaside municipality, with many suburbs

fronting the Indian Ocean. The city includes the suburbs of

Baldivis, Cooloongup, Port Kennedy, Safety Bay, Waikiki

and Warnbro.


The City of Rockinhgam has 90,000 residents.

Postcode 6168, which includes the suburbs of Rockingham, East Rockingham, Hillman, Peron and

Cooloongup, is home to many UK migrants, who make up a quarter of the population.

It‟s well-above average for retirees (23% of the population, compared with the Perth average of 16%).

Its home ownership statistics are generally in line with Perth averages: 36% own outright, 31% have

mortgages and 29% rent.

Postcode 6169 (Warnbro, Safety Bay and Waikiki) is more mortgage-belt, with 25% of the population

kids and teenagers, and 41% of households have mortages (compared with the Perth average of 32%).


Rockingham City residents are (slightly) above-average in terms of the number of people who earn

between $1,000 and $2,000, compared with Perth averages.

According to the Index of Relative Socio-Economic Disadvantage, Rockingham City ranks 10th

out of

30 LGAs in the Perth area.


There are numerous local industries, including a nickel refinery, large

grain silos, crayfishing, aquaculture, horticulture, viticulture, forestry

and various form of light industry.

There is also a healthy tourism industry, with attractions including

dolphin watching, Penguin Island, the Shoalwater Islands, wineries, Pt Peron Lookout, WA Water Ski

Park and Marapana Deer & Wildlife Park.

Just outside the city boundary, at Kwinana Beach, is a major industrial precinct/jobs node, including an

oil refinery, a container terminal and a fertilizer factory.

The jobless rate in the Kwinana-Rockingham area is around 5%. The stats show that 14,000 of

Rockingham‟s employed residents work within the city boundaries while 18,000 work outside the City

of Rockingham. A good percentage of those who travel outside Rockingham to work do so next door in

Kwinana City, where there is a major industrial precinct.

The City consistently approves 1,300 or more new dwellings each year, with approvals peaking at 2,250

new dwellings in FY2006.

Rockingham City Shopping Centre is expanding, with a $160

million re-development under way. The multi-stage renovation

program is scheduled for completion in mid-2009.

Additions include a fresh food mall, a Kmart mall area, an

entertainment precinct and an extra 50 specialty shops.

The completed centre with have an eight-screen cinema complex,

entertainment and leisure precinct, food court, 220 specialty shops

and expanded car parking (3,300 spaces in total).

Recent or current projects include Cape Peron Marina, Baldivis Town Centre, the Gary Holland

Community Centre, the Waterfront Village Project (a joint venture between the Council and LandCorp)

and Lark Hill Sports Complex.

Rockingham City Centre Transit System provides a link between Rockingham‟s new train station, the

CBD and the foreshore.


Property Profile

The median house prices for suburbs of Rockingham City for FY2008 included: Rockingham $340,000

(down 11% over 12 months), Baldivis $435,000 (down 6% over 12 months), Port Kennedy $380,000

(down 5% over 12 months), Safety Bay $395,000 (down 4% over 12 months) and Warnbro

$340,000 (down 4% over 12 months).

Since June 2008 there has been a further decline in median prices. According to Australian Property

Monitors, the median house price for Rockingham for the 12 months to October 2008 was $332,000.

Warnbro was down to $335,000 and Safety Bay $385,000.

Cheaper areas in this precinct include Hillman ($287,000) and Cooloongup ($300,000)

Like most sections of the Perth market, prices in this area peaked in 2006 and values have been in

decline for the past 18 months or so.

Most locations in the Rockingham area have averaged 15-17% median price growth over 10 years.

It‟s an area where new housing construction increased for five consecutive years up to FY2006, before

tapering off in FY2007 as the heat evaporated from the property market.

The pattern for the suburb of Rockingham is typical of the region: value growth peaked in 2006 after

three years in which annual growth was usually above 20%; since then growth has dissipated and values

have gone backwards in the past 12 months; houses now typically sell in the mid-to-high $300,000s; but

the long-term capital growth rate is 16% a year over 10 years, reflecting the strength of the recent boom.

Home ownership rates are in line with Perth averages, with 25-3% of households renting; according to

sqmresearch.com.au, residential vacancies are well below 1%.

Some parts of the City are more mortgage-belt areas and Baldivis is more upmarket, with higher

ownership rates and fewer renters.

Future Prospects

The Rockingham area, like many parts of the WA market, has experienced a decline in property values

since the boom peaked in 2006. This has brought values down to an affordable level in a number of

suburbs, an event which coincides with a sharp drop in interest rates and introduction of the expanded

First Home Owners Grant by the Federal Government.

I believe the next 12 months belong to affordable suburbs with rail links to the CBD of a capital city –

and the Rockingham City precincts fits the criteria.


St Clair / St Marys Sydney’s western suburbs, 10km east of Penrith

------------------------------------------------------------------------------------------------------------------------------

Key influences: Ugly Ducklings, Urban Renewal, Transport Infrastructure.

Re-development of 1,545-hectare ADI site by Delfin Lend Lease,

M4 Motorway, WestLink M7, Coles Myer & Woolworths distribution facilities,

500-hectare Erskine Park Employment Area, Eastern Creek industrial area. ------------------------------------------------------------------------------------------------------------------------------

Typical houses: $260,000 (St Marys) and $330,000 (St Clair)

There‟s been plenty of negative press about the western Sydney property market. Many reports have

focused on high crime rates, social disadvantage and home repossessions.

But it‟s not all bad news out west. There are pockets of suburbs with good prospects for future growth,

as well as affordable homes. They include the cluster of suburbs focused on St Clair and St Marys.

While much of the media coverage has described mortgagee auctions and falling property values,

suburbs like St Clair have been behaving pretty much like the overall Sydney market. House prices rose

swiftly between 2000 and 2004 – and then declined. Over the five years to 2006, they averaged 9-10%

annual growth, despite a fall in values after 2004 - a performance as good as, or better than, many prime

suburbs closer to the City.

St Clair experienced only a small decline in its median house price in 2005 and 2006 before recovering

last year.

There are good reasons to consider this precinct between Parramatta and Penrith ...

o affordability;

o being on the train line and the M4 Western

Motorway;

o better access via WestLink M7;

o re-development of the 1,545ha ADI site at St

Mary‟s;

o employment generators such as Erskine Park

Employment Area and the Coles distribution

facility.

The suburbs of postcode 2759 and 2760 are places where

you can buy solid family homes for under $350,000. It‟s an area with good transport links, both road and

train; a number of major shopping centres; plenty of schools; and lots of parkland.

Demographer Bernard Salt believes there is scope for growth in the area, but you are most likely to find

it in “quiet, well-defined pockets” such as St Clair.



Salt says these suburbs are a 90-minute commute from the Sydney CBD but residents are more likely to

commute to Penrith or to Parramatta for work. “So you can do it, but you couldn‟t live the lifestyle that

you and I think of when we think of Sydney,” Salt says.

Postcode 2759 (St Clair and Erskine Park) has a population of 30,000, of which 73% is Australian-born

(well above the Sydney average of 61%) and it‟s primarily an area of young families (38% of its

population are kids and teenagers, compared to the Sydney average of 21%). Three-quarters of

households are couples with kids. It has very few retirement age people. You‟re more likely to find

trades people and clerical workers there than professionals.

Its market is 97% houses (few units/townhouses) and it‟s standard mortgage belt – 27% own their home

outright (below average for Sydney) while 56% have a mortgage (well above average). Only 13% are

renters, compared with the Sydney average of 30%.

Postcode 2760 includes St Mary‟s and Colyton, and has a population of 25,000 which is in line with

Sydney norms in terms of the average age, the percentage of young people and the content of retirees.

But incomes are below average and there are above-average numbers of single-parent households.

About 30% of the population is kids/teenagers, compared with the Sydney average of 21%.

Economy and amenities St Clair was created as a new housing estate in the 1980s. The answers.com website says: “St Clair is a

very family-orientated area with newish-style houses in a clean environment, good-sized blocks and

easy-to-use roads.”

It‟s an outstanding place for facilities and amenities.

There are many parks and playgrounds, modern

schools and an impressive array of child care centres.

The Cook Parade Centre includes a neighbourhood

centre, child care facilities and tennis courts. It‟s a

suburb of wide landscaped streets, solid brick-and-tile

homes and well-tended gardens. You can imagine

people enjoy living there.

The St Clair Shopping Centre recently underwent an

upgrade and extensions, adding 25 specialty shops,

relocating a major supermarket and enclosing the 9,000m2 mall area.

There are high schools at St Clair and Erskine Park as well as private secondary schools such as

Emmaus Catholic College and Mamre Christian College. St Clair has five primary schools and around

10 child care facilities.


Salt, who studied St Clair in association with the upgrade to the St Clair Shopping Centre, says the

suburb is an “urban island” which stands apart from the mass of suburbia around it.

“It‟s not on the road to anywhere, it‟s very quiet and it‟s perfect for family life,” Salt says. “St Mary‟s

has the Housing Commission areas and has crime areas. But you don‟t tend to get that in an island

community like St Clair.”

He says St Clair was developed in the 1980s for first-home families and now the children of those

families are growing up. “Over the next decade, as those kids leave home, you could argue that we‟ll see

a new demographic coming in with better capacity to push up property values,” he says.

The answers.com website says: “Erskine Park isn‟t as big as St

Clair in housing and population but will be bringing an

economic boom to the area with a new industrial area in the

process of being developed.” (This refers to the Erskine Park

Employment Area, which I describe in detail later.)

St Marys doesn‟t have the feel-good qualities of neighbouring

St Clair but it does have plenty of amenities and facilities,

including the St Marys Rugby League Club, the Kingsway

Playing Fields, St Marys Leisure Centre and the St Marys

Village Shopping Centre.

But the big driver of change in this overall precinct is the

development of 1,545 hectares as a master-planned community by Delfin Lend Lease. The re-

development of the former ADI site will raise the tone of the

area. The first village in this project, Ropes Crossing, is under

way on 132 hectares in the Eastern Precinct and will have 1,800

homes and 5,000 residents. It borders 900ha of regional park

which will include 25km of walking and cycling paths.

The Village Centre, known as Ropes Central, will have a Coles

supermarket and specialty shops (now under construction), a

primary school and childcare facilities (opening 2008), a private

primary & secondary school (opening 2009), a Community

Resource Centre, sports fields and a medical centre. Ropes

Crossing is expected to generate 8,600 jobs during construction and 5,300 ongoing jobs. Longer-term

the St Mary‟s development is expected to create 5,000 homes with an ultimate population of 12,000

people.

Property profile

Median prices for suburbs in this precinct for FY2008 were $260,000 at St Marys, $330,000 at St Clair,

$385,000 at Erskine Park and $280,000 at Colyton (Australian Property Monitors data). All these

suburbs showed small increases in their median prices in FY2008.


House prices in St Clair rose more than 15% in each of 2000, 2001 and 2002 (with 2002-03 showing

better than 20% growth). Since 2003 price growth has dissipated and values declined slightly in 2005

and 2006. The median price rose about 2% in FY2008.

In Erskine Park, house prices rose steadily from the late 1990s, when the typical house cost less than

$200,000, until 2004 when the median reached almost $400,000. Since then values have declined and

then levelled off to a median around $370,000 – with a return to price growth in 2007. The median price

has now risen to $385,000, following 6.5% growth in

FY2008, according to APM.

Over the past 10 years, Erskine Park has averaged 9%

a year growth in values, a solid effort in a region

where values generally have dropped since 2003.

The median price for St Marys arises from strong

increases from 2000 to 2004, when the median topped

$300,000, after which prices fell then levelled off. The

story in neighbouring Colyton is very similar: its

median price touched $300,000 in 2004 but declined

thereafter and has levelled off at about $280,000.

Both St Marys and Colyton have long-term growth averages of 9-10% a year over the past 10 years, a

performance that defies common perceptions about investing in these areas.

The vacancy rates for postcodes 2759 and 2760 are hovering between 2.5% and 3%, according to

sqmresearch.com.au.

Prospects

This area has also become a target for developers of light industrial facilities since road transport access

to the area was vastly improved by the opening of the Westlink M7, which crosses the M4 about 4km

east of Erskine Park.

A report by commercial property consultants CB Richard Ellis highlights “the economic importance of

the Westlink M7 in bringing investment and jobs to western Sydney”. It examined industrial land

alongside the M7 between the M4 and the M5, which includes major areas in Erskine Park and

neighbouring Eastern Creek - and found the amount of industrial floor space in this catchment area was

almost doubling with the addition of 518,000m2 of new space from 2006 to 2008.

The general manager of Westlink M7, Flan Cleary, says the findings show the area has become an

investment hotspot. Cleary says: “This report highlights the fact that the Westlink M7 has increased the

attractiveness of western Sydney as a place to do business. New developments at Erskine Park and

Eastern Creek will provide thousands of jobs.”


Large amounts of new floorspace are projected for Minchinbury and Eastern Creek (totalling

200,000m2), immediate neighbours to the St Mary‟s/St Clair precinct. The report found that in the M7

catchment there had been industrial land sales totalling $150 million in 2004 and $180 million in 2005.

Half of the 2005 sales occurred in Erkine Park, with Eastern Creek also a major target for land buyers.

This continued into 2006 and 2007, with a property trust group paying $57 million for a 24ha site at

Erskine Park.

Amid all this activity, the 500ha Erskine Park Employment Area is a key precinct for the Penrith

Council. It says: “The area will soon become one of the premier new employment zones for Greater

Western Sydney with the potential for as many as 10,000 jobs within the site upon full capacity.”

A current project which gives an indication of the scope of development and jobs creation is a 45,000m2

warehousing & distribution facility by joint developers Macquarie Goodman and Brickworks Limited

for Kimberley-Clark, a manufacturer of household and health-care products. It has been built on an 8.6-

hectare site at the Interlink Distribution Centre, with 100 car spaces at a cost of $42 million.

The Erskine Park Employment Area was

considered a good location for the firm because

its road links make it “an important regional hub

for logistics, distribution and warehousing”.

Macquarie Goodman is also the developer of a

$160 million distribution centre at Eastern Creek

for Coles Myer, as part of a $500 million

investment in four new facilities in NSW and

Victoria. The development includes two massive

buildings, one the National Distribution Centre and the other the

Chilled Distribution Centre. Together they employ 1,000 people.

In September Brickworks reported it had completed a 53,000m2

distribution centre for Woolworths at Interlink Distribution Centre at

Erskine Park. The $70 million facility was developed on an11ha site.

At the same time, Brickworks said it had completed 36,000m2 facility

for Linfox, while a 10,800m2 building for Ubeeco Packaging

Solutions would be completed by the end of 2008.

GPT Group has paid $95 million for 38ha within the former CSR

quarry site at Erskine Park for industrial development, while

Corporate Express is centralising logistics operations into a new $55 million facility of 43,000m2 at

Erskine Park. CSR is planning a complex of warehouses and distribution centres totalling over

190,000m2 in the precinct.

These and other major developments suggest there are going to be plenty of jobs in this general area,

which must translate into demand for local housing.

Ugly Duckling Hotspots

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