Home' API Magazine : November 2014 Contents 96 n APIMAGAZINE.COM.AU n NOVEMBER 2014
“If you’re looking at two-bedroom homes,
the median house price at the minute in
Cottesloe is $1.57 million. A three-bedroom
is $1.482 million and then a four-bedroom
jumps up to $2.1 million.”
Brady says recent sales for the very best
waterfront stock have exceeded $10 million.
As with most great ‘location location location’
dream spots, the value lies in the dirt.
“In fact, the built environment sometimes
isn’t as sophisticated as it might be in
other suburbs. It’s just the lifestyle, so
people will spend more on the land than
Brady says cash flow investors might
struggle. Sure, all these great drivers result in
strong tenant demand and good rents can be
achieved, but with gross yields well below five
per cent, you’ll need to tip some dollars in to
service the debt.
“For an average three-bedroom home in
Cottesloe, the average rental price is around
$900 per week. For a four-bed home, that
will go to $1250 per week. For the executive
homes, where you can look at locking in a
long-term lease with CEOs of companies
and those sorts of people, then some of those
rentals can be $2500 to $3000 per week,”
Rent demand is also quiet seasonal with
those migrating from the east affecting the
market. As such, the strongest demand is
usually around the start of school year.
nWHAT TO BUY
Sterzel says investors with plenty of cash can
do well in Cottesloe.
“ The most common opportunity available
in Cottesloe is buying an existing older house
on its own block. These properties will be
priced around the median of $1.7 million
and there’s some scope to add value with
renovation, however rental yield is likely
to be low,” she says.
“Less experienced investors may benefit
from finding an old house on a normal
residential block, however they will need the
capacity to manage with a low rental yield
and negative cash flow.”
Entrepreneurial types might look towards
subdividable blocks, although they’re rare.
If you’d like a cheaper value-adding option,
then the established unit market might fit the
bill, according to Sterzel.
“With a property that can be bought,
refurbished and held, investors should see
some growth as a result of the other upward
price pressures in Cottesloe.”
Brady says unit investment is accessible for
a certain sector, but like housing, buyers need
to hold long term in order to reap rewards.
Older units in less desirable positions, such
as near the highway, and of basic fit out, can
still be found in the high $400,000s, but this
would be your bottom rung two-bedroom,
Phil Collins is a local property investor
who’s a testament to Cottesloe’s long-term
potential, even at the price accessible end of
the market. He purchased a two-bedroom
investment unit in 2007 for $400,000.
While his most recent assessment of around
$475,000 may not seem like a startling gain
over seven years, he’s done well relative to
other property owners in Perth.
“Some of my friends who bought a bit
further from the CBD in slightly riskier
areas, have really suffered and gone
backwards, whereas I’ve stayed solid across
that sort of (GFC) turmoil, and now have
gained value as the market has picked up.”
Collins says buying at the affordable end in
a desirable address means all the benefits
of a million-dollar lifestyle without the
over-the-top price tag.
The call of the sea
Michael Wilson is a 34-year-old builder
who’s already fulfilled one life ambition.
“For a long, long time I’ve wanted to get
into Cottesloe. I just think it’s the best spot
Michael says it’s the perfect lifestyle
location, but it hasn’t been an overnight
success moving into his dream postcode.
“Obviously it’s not the cheapest place in
Perth, so I’ve had to work my way up into it,
but I’ll never leave here. It just feels different
when you drive into Cottesloe with all the
pine trees, the golf course, good cafés and
coastline. It’s so close to Freo (Fremantle)
and the city as well.
“I love the beach – I always take my kelpie
down there and I just love it.”
He has an entrepreneurial bent and
strong work ethic, which has landed him a
lucrative piece of property. Michael bought
a 1927 old-school beach shack with knock
down potential in November 2013 for
“My partner Samantha and I moved into it
for three months while I designed it (the new
house). Then I knocked it down while we
rented in Swanbourne and it probably took
me about eight months to build,” he says.
“It has a basement/undercroft,
two-storeys and an above-ground infinity
pool. It’s built using raw materials, such as
rammed earth and concrete panels and old
jetty timbers leading up to the entrance over
a Koi pond – it’s a ‘contemporary factory’
style – so it’s a bit
Michael says the
great too. He tested
them out by having
a 150-tonne crane
parked in the street
concrete panels for
a couple of days
“The whole street
They finished the build in February this
year and a recent bank valuation of $3.3
million has him grinning, particularly as he
was able to keep his build costs very low by
doing most of the work himself.
Michael is now on the lookout for more
projects so he can take a step further up
the property ladder, and towards his dream
“I will flick it on – it’ll depend on how life
changes. I really want to get on the water.
That’s my goal – to get on the water and
just live there forever.”
Michael says he can’t predict the future
but he’s certainly forging ahead in the local
property market with an expectation it’ll
continue to improve.
“There’s nothing wrong with Cottesloe.
It’ll always be home to the most famous and
beautiful beach in Perth.”
Michael’s newly built home
Michael’s contemporary design and finish
THE STATES n Western Australia
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