Investing in Ardeer…

One of our first purchases of the year was for a young investor-client with a budget of circa $600,000. When we started our journey in late 2016 our strategy focused on well located townhouses whilst concurrently keeping our eye out for opportunities in Sunshine and surrounds for houses on full blocks.

Not surprisingly, the median price for a 3 bedroom house in the most desireable pockets of Sunshine have edged closer to mid $700’s, so  we have had to cast our gaze further out to find great buying opportunities for houses in the sub-$600,000 range.

We have identified a great area nestled to the west of Albion and the north of Sunshine West; Ardeer.

When we first mention Ardeer to people they generally say “Ar-where?”. Unlike Sunshine it’s certainly not a suburb that has had much spotlight in the media. It’s a quiet and relatively small pocket offering a school, a few shops and the beautiful Kororoit Creek meanders through it’s centre. Character post-war weatherboards home are inter-mingled with big old 60’s brick homes and a handful of new townhouses are on offer in just a few of the streets.

One important requirement we look for in any investment-grade suburb  is a train station, and whilst Ardeer has a station within walking dsitance from the every property in the entire suburb, at this stage it’s only serviced by the V-Line service. The introduction of Myki onto V-Line trains has made travel easier but the timetable isn’t something which city commuters get excited about. There are talks of upgrading the station but for now, Ardeer residents still have the option of driving a few kilometres to Albion or Sunshine Stations, (or walking to Albion for those in the southern region of Ardeer) if they wish to catch the train into town.

It is possibly for this reason we think Ardeer may have escaped the imaginations of people moving into the area – or maybe the mere fact that Ardeer is only a tiny patch with just 2,800 residents.

Ardeer may be little known to many, but it’s one pocket we’ve excitedly put a spotlight on.

In the last quarter alone we’ve seen prices for 3 bedroom homes in the middle-ring west jump from mid $500,000’s to mid $600,000’s.

For many buyers scouring the market, this can feel like it happened almost overnight.

Our buyer understandably felt that her chance to secure a house in this gentrifying area was quickly diminishing, but we knew we’d find the right gem in Ardeer. Her patience paid off when we got the call about an off market 50’s cream brick home in Blanche Street. In the agent’s words “it’s not a pretty house, but it’s got good bones”. He was right – it wasn’t going to win any style awards. But it was a sturdy three bedroom house on a  600sqm land allotment and offered spacious rooms typified by the era, lovely floorboards, an updated kitchen and bathroom, and a north-facing yard. We secured the property for $590,000 which gave our client some spare change and the option of moving in initially to take advantage the first home buyer stamp duty reduction.

In a nine month period we have proudly secured over half a dozen properties for clients in Ardeer and our very first first house purchase in this little suburb was of this three bedroom, two bathroom dated brick property for $455,000. The property would most definitely sell for over $600,000 in our current market… not a bad gain for nine months.

Investing in houses on full blocks in gentrifying suburbs is not for everyone. Cashflow shortfalls (negative cashflow) is stronger, maintenance is often higher, the risk can feel too ‘speculative’ for some, and finding a fabulous and reliable property manager is vital.

But for those who have the right cashflows, the appetite for the gentrifying suburbs, and the long term goal for growth, Ardeer is deserving of a second look.