Survival Strategy #1

by | Jan 22, 2018

Have we been saying there will be zero capital growth over the next few years? Not at all… we are saying the growth will be highly localised. We call this Micro-pocket Growth because as we have established, the big citywide booms in pricing are dead for 5 to potentially 10 more years.

We now need to look towards certain suburbs that have their own unique set of drivers that will drive prices up faster than anything around them.

It’s not just suburb-wide either. These micro-pockets of growth can be just a few streets in a suburb, and sometimes even an individual building.

As an example, we had clients recently buy into a building in Redfern, Sydney that was $5,000 per square meter under the price of anything surrounding it. On a 100m apartment that’s a significant discount to comparable market prices. Upon completion, when these apartments are valued against surrounding buildings, that will represent a massive micro-pocket of growth.

Notice that this micro-pocket is a specific building. You couldn’t by anything in Redfern and expect a gain like this. Yes, Redfern will do well, but nothing compared to the opportunity in this particular building. Knowing about deals like these and getting in on them early is a highly valuable growth opportunity.

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