Home' API Magazine : January 2014 Contents DASH OF SALT // BERNARD SALT
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JANUARY 2014 API
You know the drill. I’m on the lookout for suburbs that
have shifted up over recent years. These are places
where there’s a rising capacity to pay for an even larger
mortgage. Such places are the stuff of a real estate investor’s
dreams. Imagine picking and investing in a suburb ‘before it
took off’. Well, that’s where I think I can help out.
Over the past six months I’ve been methodically canvassing
all suburbs in the main capital cities to identify those places
where there’s a rising capacity to pay a mortgage. I started with
Sydney; last month it was Adelaide. This month I’m looking at
regional areas within each state. Of course the mining regions
feature, but I can’t help that; there are some lifestyle regions too
that fit the bill.
The data used in the analysis is the Australian Bureau of
Statistics Censuses for 2006 and 2011. The figures I’m looking at
are a ranking of the percentage change in income per capita by
household between Census years.
At the Australian level the median weekly income per person
per household jumped by 20 per cent from $394 in 2006 to $475
in 2011. My logic is that places where the percentage increase
in income per capita over the five years to 2011 exceeded 20 per
cent must represent places on the up.
Excluding suburbs that I’ve already canvassed in Sydney,
Melbourne, Brisbane, Perth and Adelaide, the leading postcodes
on the up in Australia are a mixed bag. Which only proves my
point that you need to do the research.
At a time when the income per capita over five years increased
by 20 per cent, what do you suppose was the percentage uplift
in the leading postcodes by this measure? The answer is in
excess of 50 per cent.
The top regional place where incomes were on the rise, and
where there’s a critical mass of population (meaning in excess
of 1000 households in 2011), is the Victorian mountain retreat
of Bright and Mount Hotham (postcode 3741). The number of
occupied private dwellings in this postcode jumped by 11 per
cent to 1622 over the five years to 2011.
The net addition of 160 households had the effect of increasing
median weekly earnings per person by 53 per cent over this
period. Lifestylers, ski enthusiasts and traditional tree-changers
are the likely drivers of this trend.
The second most uplifting non-metropolitan postcode by this
measure is more predictable: postcode 6722 which is South
Hedland on the Pilbara coast. The edges of Port Hedland is
where you’ll find per capita income levels in 2011 that were 52
per cent up on the level just five years earlier. Put that one down
to the mining boom. Should have bought something in Port
Hedland about a decade ago.
In the Northern Territory the leading upshifting postcode is the
outer edges of Darwin in postcode 0822. The uplift here was 50
per cent. I put that down to the impact of the military and the
broader ‘wealthification’ of the Top End.
Next is the Top End’s Gove where income levels jumped 48
per cent. Down in Victoria there was an uplift of 48 per cent in
income levels in the sea change community of Inverloch. Not too
far from Melbourne; commutable at a pinch; and pretty. Inverloch
has all the ingredients.
There are two places in Queensland outside Brisbane where
income levels have jumped by more than 45 per cent between
the Census years. These places are postcode 4751 Greenmount
on the edge of Mackay and postcode 4680 Barney Point adjacent
to Gladstone. Huh, Mackay and Gladstone. Of course. It’s all so
logical in hindsight.
In regional New South Wales the income uplifters are
postcodes 2335 and 2852: the former is located near coal mines
in the upper Hunter; the latter is the foodie haven of Gulgong
north of Mudgee. There’s a twist to the tree-change theme and
that is the cool food factor, and Mudgee and surrounds has it.
In rural South Australia look at Coober Pedy and Jamestown
because both have gone through income transformations.
In Tasmania try postcode 7252 which is a beach community
Regional towns where income levels have suddenly and
substantially uplifted over recent years have common themes:
resources and industrial might (Gladstone, Mackay, Port
Hedland, Gove, Coober Pedy), tree change (Bright), food factor
(Gulgong), sea change (Inverloch, Georgetown), and perhaps
also a town whose time has simply come (Jamestown).
Bear in mind that because income levels have increased in the
past is no guarantee they’ll continue to rise in the future. But you
lot are adults; you understand the risks. Equally, analysis like this
does open your mind to a range of investing opportunities. API
Author of Decent Obsessions, published by MUP;
on the up
æImagine picking and investing
in a suburb ‘before it took off’.
Well, that’s where I think
I can help out.Æ
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