John Lindeman has been closely watching the market in Western Australia and has noticed a major transport project by the State Government that is about to begin construction which will have a big impact on property prices there. This will be good news for those who manage to get in early.
Kevin: Well, of all the markets around Australia, the West Australian market is one that we’ve been keeping a very close eye on – many, many people concerned about what’s happening in WA. I’m going to talk now to John Lindeman. John has a website called 7steps2success.com.au – a lot of great information there for you.
John, do you share the concern that’s being expressed about the WA market?
John: I think, yes, we’ve all been concerned for a number of years in the falls that are occurring. It’s largely come about because of the massive over-development of housing, especially for first-home buyers, in the north and the east and the south of Perth. But there is something occurring that I think could radically change the way in which this market is going to perform in the next few years.
Kevin: What’s that, John?
John: That is the fact that we have a state Labor government in Western Australia, and they’re committed to dramatically expanding the Metronet railway networks. That’s the metropolitan passenger railway network in Perth. That’s going to provide a much needed demand impetus to housing markets where the stations are planned.
You can easily find out where they’re planned by just going to Google and putting in “Metronet,” and you’ll see where all these new lines are proposed to be built.
For example there’s a new railway line that is going all the way from Morley to Ellenbrook. There’s an extension of the existing railway line that is going from Joondalup to Yanchep. Now, I realize if you’re not from WA, these probably don’t mean a lot, but if you look on the Metronet site, there’s a map there and it shows you that where these stations are going to be built, it’s going to have quite a percentage of home demand because it will make the journey to the CBD in Perth much quicker and easier to undertake.
Kevin: I’ve been to WA on a number of occasions, into Perth and then travelled north and south, and the thing that’s occurred to me is that it’s all very close to the coast and therefore you have lots of these little centers up and down the coast. I would imagine that this rail network if it’s going to connect some of those is where you’re going to see all this expansion happening, John?
John: That’s exactly right. It’s a very interesting thing. If you look at the north-to-south geographic spread of Perth, it’s about the same as Sydney but it only has a quarter of the population. So, as you say, everybody is clustered along the coast, and even the northernmost suburbs such as Yanchep and Alkimos are built right on the coast.
We went there a few years ago, and there are all the sand dunes and now the housing estates. They’re beautiful occasions for young people to bring up families, and I think the extension of the railway line into these areas will dramatically increase the demand, and of course, prices will rise as well.
Kevin: What’s the timeframe here? Are we looking at five to ten years out, John?
John: The entire railway expansion is over the next eight years, but they’re bringing forward those lines that I mentioned, the ones to Ellenbrook and also the one north to Yanchep. They’re the first ones that are going to be built.
Kevin: Okay. It’ll be interesting to watch that. Are there any other locations around the country you think where this type of transport infrastructure development is happening that is going to impact the property market?
John: Yes, I think there are a number of examples. Another one I can give you is in outer Melbourne. If you go northeast of Melbourne, you’ll come into the end of the railway line at South Morang, and the government has now recently decided to expand that network up to Mernda.
Mernda is located about as far from the CBD as Dandenong is, so it’s quite accessible. It’s not far away. It’s a beautiful part of outer Melbourne, located near the Plenty Valley, so it’s a very desirable place.
It’s still very affordable, but the railway line that is going to be built over the next few years will mean that it’ll be very easy to commute from Mernda and the other two stations that are now being built and have now been located at Hawkstowe and Marymead. These are two areas that have a lot of potential, and you can buy properties – well established houses or new houses – for under $500,000 in those suburbs.
Kevin: That makes it very affordable. There are a number of locations around Australia where this type of infrastructure has happened in the last decade or so where we have seen a huge uptake. If you look just outside of Sydney, even the connection between Brisbane and the Gold Coast as a classic example, John.
John: Yes, they do have an effect, but it’s very important to wait until the construction is actually being undertaken, because as I always say, governments have a habit of changing their mind, so you need to wait until construction is actually underway. And also to ensure that you buy property that is located near one of each proposed stations.
You can do that again by Googling in the case of Victoria the “Mernda railway project,” and you’ll see exactly where those stations are going to be and then get in early and buy a property going from stretch and start and you’re sure to do very well.
Kevin: And the same in WA.
John, it’s great talking to you. Thank you very much for your wonderful insight. John’s website again is 7steps2success.com.au. My guest, John Lindeman. John, thank you for your time.
John: Thanks, Kevin, and thanks everyone else.