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Jordan Springs | Property Return

September 3, 2012 4:08 pm
posted by James Parnwell

Jordan Springs Property Return

So how is Jordan Springs performing as an investment overall? Here is some data from the case studies I wrote about recently compared with some surrounding suburbs!

Jordan Springs Property Return Breakdown

Property Return is calculated by adding together the Capital Growth with the Rental Return. Since we have two forms of income from property we need to put these together to get the full picture!

The following is a breakdown of the Property Return based on the Jordan Springs Case Studies discussed earlier…

Case Study Purchase Price Weekly Rent Sell Price Months Gross Property Return
#1  $  435,000.00  $  495.00  $  495,000.00 16 16.3%
#2  $  439,000.00  $  510.00  $  500,000.00 11 21.2%
#3  $  435,000.00  $  470.00  $  495,000.00 16 16.0%
#4  $  435,000.00  $  520.00  $  495,000.00 17 16.0%
#5  $  485,000.00  $  540.00  $  555,000.00 16 16.6%
Average 17.2%

 

As you can see the average Gross Property Return is 17.2%.

Here is some data on the Rental Return from Colliers International and RP Data for the surrounding suburbs…

Suburb Median Price Change p.a. Rental Return p.a. Property Return p.a.
Cambridge Gardens 4.0% 5.1% 9.1%
Cambridge Park 2.0% 5.6% 7.6%
Cranebrook 4.0% 5.3% 9.3%
Penrith 0.0% 5.4% 5.4%
Werrington County 3.0% 5.6% 8.6%
Werrington Downs 1.0% 5.8% 6.8%
Average 2.3% 5.5% 7.8%

 

Since the Property Return for Jordan Springs is so much higher than that of the surrounding suburbs, it is worth considering the following reasons why…

  • The capital growth is the primary reason for the difference. Whilst the rental return is slightly higher (0.4%) it is the difference in capital growth (8.9%) that accounts for most of the difference.
  • The clients didn’t purchase through the Lend Lease office which meant they were able to get some discounts on the purchase price.
  • All of the case studies were house and land packages. In this case it is quite possible that the land plus construction cost $439,000 but the end product was worth $495,00o. For this reason the second years capital growth is likely to be lower.
  • The surrounding suburbs are all well-established suburbs, so they sales data is based on existing property sales, not on newly constructed houses.
  • I have only used five case studies, so they aren’t comparing all the sales in a suburb. They are 100% accurate, but only a small sample of the entire suburb. Unfortunately, Jordan Springs is so new there is no data yet to compare it to. It is possible that the whole suburb has performed like this,but we can’t know until the data is available and released.

It is now up to you to do some research for yourself and decide if Jordan Springs is the right area for you to invest in! Please contact me if I can be of any further help!

Article by James Parnwell

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