Location Lie

“The past 12 months has seen huge growth in Sydney’s western suburbs, with the top five local government areas for growth Concord (nearly 26 percent), Camden (23 percent), Fairfield (nearly 21 percent), Blacktown (20 percent) and Burwood (nearly 20 percent).” A Current Affair story.

So is location^3 a lie? Well, mostly yes. Every suburb has good and bad areas. Returns are influenced by relative location factors. Down beside housing commission estates and train lines, up near the beach and on quiet roads.

The median price in an area is the greatest factor in price movement. Sydney’s west has played catchup this year and “close to schools, buses and transport” has nothing to do with it. Lower priced houses appreciate more as the median price moves.

That doesn’t mean buy median and below. Steve Navra advocates buying 30% above median house price with apparent success. Good profits can be made in all market segments if you invest wisely. Just don’t fall for the location, location, location line.

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