$500,000 in South West WA buys you a three-bedroom place, long-term growth: HTW

Where would you park a lazy half million dollars in the South West of Western Australia? Property valuation firm Herron Todd White explores the options in its July 2016 residential market report. 

A good option for medium to long-term capital growth in the south west is along the coastal strip on the northern side of Bussell Highway traversing the suburbs of Busselton, West Busselton, Broadwater and Abbey. This coastal strip is nearly 500 metres in width and runs for approximately 10 kilometres along the Geographe Bay. 

“As the City of Busselton continues to grow at a strong rate, this well located section of land will continue to grow in desirability and affluence as the urban sprawl continues to be pushed further away from the coast line,” says the HTW report. 

“This consequently will result in good capital growth over the medium to long term as an increase in population will lead to stronger demand for product that has limited scope to increase in supply. As such this well positioned and limited coastal strip would represent a good option for a prospective purchaser looking to invest $500,000.”

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

Moving 50 kilometres north from the City of Busselton lands the prospective purchaser in Bunbury. Throughout South Bunbury and East Bunbury there have recently been some zoning changes which are encouraging higher development within these areas. Properties of 700 to 900 square metres which were previously single residential now have duplex or triplex potential. As these zoning changes are introduced, now would be a good opportunity to invest $500,000 for medium to long-term capital growth. 

A third option would be to invest in Dunsborough which is a very well sought after and renowned coastal town positioned in the south west. Dunsborough is located within Geographe Bay and attracts a higher number of tourists given its beaches and proximity to the world renowned Margaret River wine region. 

More specifically we see the coastal strip that runs from north of Caves Road to the beach as being a good area to invest. Generally this pocket has residential dwellings positioned on good sized lots of 800 square metres and above and located in very close proximity of the ocean, stimulating demand. Entry point for this market is $500,000 which would secure a very basic residence with the vast majority of the value being in the underlying land. 

“If these properties were to be purchased with a view to being held for the long term, good capital growth could be expected as the area historically has performed well,” say HTW.

The costal strip in the City of Busselton, Dunsborough and development sites within South and East Bunbury are just a number of options among many opportunities within the south west to invest $500,000. 

As a case in point, Property Observer found a three-bedroom house at 41 Brown Street, Busselton, WA 6280 that recently sold for $440,000.