Welcome to Newstead. If it’s gentrification and renewal you seek, then Newstead is the place for you. Many of you reading this now, as well as a number of Blue Wealth staff, have invested in the suburb over the last 24 months, and for good reason.
The figure below shows the growth in the median price of an apartment in Newstead over the ten years to August 2015. From the time that Blue Wealth approved the Newstead market the median price of an apartment increased by 23 per cent, or $150,000. In fact, since 2012, the median price has increased on average 8.5 per cent per annum! Although price growth is lower in 2015 than it was in 2014, it should be noted that the median price is still up 8 per cent since January.
Why we like Newstead:
- The area’s population is set to grow by 170 per cent to 22,238 residents over the twenty years from 2011-2031
- The median age of residents is 33.2 years, younger than both the Greater Brisbane and Australian figures (35.1 and 37.3 years respectively), indicating a high proportion of working aged residents
- More than 85 per cent of residents live in apartments
- Almost 60 per cent of residents rent their dwelling
Now, now, hold your applause. I know what you’re all thinking: ‘That Blue Wealth research team is amazing, rock stars if you will.’ True as it may be, the accolade isn’t necessary. Our mission is to ensure that the risks of property investment are mitigated to the greatest extent possible.
So, what if our growth rate wasn’t as high? Assume the following:
- Purchase price : $500,000
- Capital growth rate: 4 per cent
- Yearly holding costs: $5,000
After ten years, that same property is worth just over $740,000; that’s $240,000 in equity or a $190,000 gain after you deduct total holding costs. What’s the moral? An investment in property with a growth rate a fraction of that achieved in Newstead, combined with the power of leverage, is still one of the best (and least risky) ways to create wealth.
