Suburbs undervalued

PERTH’S southern suburbs are undervalued by as much as 20 per cent compared to equivalent suburbs in the north metropolitan area, says Hegney Property Valuations managing director Gavin Hegney.

However, Mr Hegney expects a correction as a result of the new rail extension to Rockingham which will be funded by the sale of AlintaGas.

“Transport links to the city centre have been a key factor in determining residential values in Perth over the last three decades,” he said.

Mr Hegney said, as the city grew, transport links would become more important in determining how much homebuyers would pay for a property.

“The new rail link will boost real estate values in the outer southern suburbs where real estate prices have lagged behind equivalent suburbs in the northern metropolitan area because of inferior transport links to the city centre,” he said.

The Mitchell Freeway extension and the northern rail link has placed northern suburbs in greater demand.

This was reflected in real estate prices, Mr Hegney said.

“People who bought a home north of the river over the past fifteen years have generally achieved a stronger return on their investment than people buying south of the river,” he said.

“For example, in competitively priced areas such as Craigie, Heathridge and Beldon the medium price of a home has increased from 139 per cent to 145 per cent over the past fifteen years.

“In areas such as South Lake, Parmelia and Safety Bay the medium price of a home has increased by between 119 and 121 per cent.

“In effect, outer southern suburbs are undervalued by as much as 20 per cent.

“We should now see a correction in this trend with outer southern suburbs catching up in value as the new rail line is built and the extension of the southern freeway is completed.

“There will not be a sudden jump in house values but a gradual upward trend over the next three to four years.

“Investing in real estate is a long term proposition and the new rail and road links should be viewed in this context,” he said.

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