Armadale Offers Surprisingly Strong Growth
By Cate Bakos on 4 Feb 2014
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Coin Laundry Cafe on Armadale Street does great coffee.
Photo: Coin Laundry Cafe
On Saturday I had the pleasure of meeting two new delightful clients who had been referred to me by their friends.
Their property story was interesting and gripped me to write this article about their purchase strategy and how well it had worked out for them.
My client’s father had prompted him to purchase an investment property back in 2008 and he identified an exciting one in Denbigh Road Armadale. Little did he know that his father’s judgement on this property would be so fortuitous for him and his wife.
Convenient Location, Large Floor Plan
Back in September 2008, when it was arguably a time of buyer apprehension and doubt over the looming effects of the Global Financial Crisis outbreak, my client bought his investment property for $471,000.
“The surprise though was the growth that this apartment has enjoyed.“
It’s a generously sized 2 bedroom ground floor unit with a fabulous layout that boasts a separate large dining area and overlooks the garden.
Despite the fact that there are quite a few units in these convenient streets off High Street, this unit is rare because of its large floor plan.
Stunning Capital Growth Triggered by the Suburb, the Street and Size of the Unit
It’s no surprise that buyers’ agents and investors flock to these leafy streets off High Street in Armadale.
The magic of the local cafes, antique shops, boutiques and easy access to train and tram make Denbigh Road, Armadale Street, Sutherland Road, Auburn Grove, Hampden Road and many more so delightful for occupants in the neighbourhood.
The surprise though was the growth that this apartment has enjoyed.
A recent valuation trending around $700,000 highlighted to me just how strong the growth performance of this asset (and many other similar assets) could be for an investor.
“If the current market value is indeed $700,000, then these buyers experienced 48.6 per cent growth in a four-years-and-five-months time frame.”
I went back to the office and plotted the growth for this asset – and it is an exciting opportunity to plot specific growth data points because in our world of property, we often deal with many general pieces of data, median figures and averages.
So what is it about this specific apartment that triggered such strong and consistent growth? It is mainly the suburb, specifically the street, enhanced significantly by the scarcity of the size of the unit.
Armadale Boasts Strong Growth Prospects For Property Investors
Tenants who are attracted to these special streets tend to be young professionals, young couples, city commuters and those who enjoy their leafy south eastern surrounds.
Being just a tiny stroll to fabulous cafes and shops (not to mention Coin Laundry Cafe around the corner who do a great coffee), with easy access into the city via arterial or public transport, as well as being in the heart of a fabulous pocket which boasts pretty period homes, it’s easy to see why it’s an area to aspire to.
“The trajectory for an investor doesn’t look too bad at all.“
If the current market value is indeed $700,000, then these buyers experienced 48.6 per cent growth in a four-years-and-five-months time frame. This is in spite of the GFC and a subsequent market slowdown during 2011-2012 in Melbourne.
One data point does not make a trend however – and I researched other sales in the block over the last twenty years to gain a better understanding of the shape of the historical growth chart.
Back in 2000, the average price in the block loomed around $200,000. Further back in 1994 there were a few sales around $165,000 and in the early to mid-eighties, sales were recorded at $60,000.
The trajectory for an investor doesn’t look too bad at all. Obviously the key to property investing must be for the longer term. But who would have known back in 1983 that their $60,000 property in Armadale could be worth more than ten times its value thirty years later?
For more information about Armadale, read our suburb profile here
Source: PriceFinder
Points of Interest in Armadale, Postcode 3143
Armadale Primary School
The King David School – Southwick Campus
Armadale Railway Station
City of Stonnington
