Of the many personality types who inhabit the real estate investment, the least enlightened are the ones I call the real estate snobs.
These are the people who won’t consider investing in an area they personally would not choose to live in. Their objections are usually couched in these terms: “What person in their right mind would want to live there?”
This kind of attitude invariably is directed at a downmarket area, perhaps stigmatized by a bad reputation for social issues or above-average crime rates. They’re places with plenty of housing that fits the “ugly real estate” tag.
But I’ve found in my 30-plus years researching and writing about real estate that ugly real estate grows in value quite nicely, so long as it sits in an area that fulfils certain criteria.
We might all aspire to live in Toorak or Woollahra but the reality is that 99 percent of Australians can’t afford those places. People buy where they can afford the house prices and if the area offers basics like shops, schools and public transport, there will be no shortage of demand from home-buyers and tenants.
One of the most enduring formulas for capital growth is affordability + jobs nodes + infrastructure. So ugly or not, downmarket or not, and regardless of the attitude of the real estate snobs, locations with these qualities deliver solid capital growth.
Recently, amid the strong market in Melbourne, few locations have delivered better capital growth than the precinct based around the stigmatized suburb of Sunshine. Right now, the locations with the most active markets in the Melbourne metropolitan area are the outer-ring areas where homes are affordable.
That brings me to the Brisbane suburban area of Inala, which arguably carries more heavy stigma that anywhere else in the Queensland capital. Just the word Inala evokes all kinds of negative thoughts and reactions.
The Inala precinct has long been branded as a downmarket area with lots of problems - but the market right now is busy because its offers affordability. And Inala and neighbours like Durack and Richlands have recorded annual price growth in the 10-13% range recently.
Inala is, in fact, well-placed to be a strong real estate performer. It is well-located, has good transport links and sits in an area with good services, including education, health and shopping facilities.
The billion-dollar evolution of new suburbs in the general vicinity, including two major master-planned communities, is creating infrastructure, services and jobs within striking distance of the Inala precinct.
Inala’s greatest strength is its affordable housing options. It is an established suburban area amid new development, therefore offering cheaper alternatives to the new product. It also offers a good range of amenities - lots of schools, parks, golf course, good road connections, a train station at Richlands and the Inala Town Centre.
The Inala precinct is well located between Ipswich and the Brisbane CBD. It is nestled at the gateway of the new communities of Springfield and Ripley Valley. Inala connects to Springfield via the Centenary Highway and the new Springfield metropolitan train line which has stations at Darra, Richlands, Springfield and Springfield Central stations.
Inala began as a community of affordable housing for ex-servicemen after WWII, evolving into a Housing Commission area. This led to its downmarket image which has been compounded by high unemployment and crime rates. Data from the 2011 Census indicates a low percentage of students completed year 12.
These negatives have not prevented the local property market from rising, partly because the area has good services and amenities.
The Inala Town Centre is made up of a plethora of medical centres, business services and supermarkets catering for a diverse range of residents. Richlands Plaza is relatively new and there are several large shopping centres in nearby Redbank, including Redbank Plaza which houses Coles, Target, Supa IGA, Kmart, Aldi, an 8-screen cinema and 110 specialty stores.
Schools in the immediate area include Richlands East Primary School, Serviceton South Primary School, St Marks Primary School, Inala Primary School, Durack State School, Glenala High School and Western Suburbs Special School. Inala also has a TAFE campus. Springfield’s Education City provides plenty of tertiary options from a variety of providers including the University of Southern Queensland.
The great appeal of the Inala precint is affordability. From 2008–2010, median prices were about $300,000 according to realestate.com.au. In the next three years prices fell before starting a steady rise in 2014.
Data from CoreLogic suggests the median house price in Inala is now $350,000 based on 174 annual sales. This follows a 10% increase in the last 12 months. There have been similar rises in Durack and Richlands.
The long-term growth rate, i.e. the average annual growth in median house prices over the past 10 years, is a steady 6% per year.
Another strength is the low vacancy rate for postcode 4077 (Durack, Inala and Richlands) which is 1.7% and has been below 3% for five years.
Inala has good transport links to employment hubs in Springfield, Ipswich and inner Brisbane. The $200 million Springfield Health City and the $350 million Metroplex Westgate project at Wacol are examples. The 60ha Wacol Army Barracks will be converted into a mixed-use commercial development.
Work on improving connectivity between Ipswich and Brisbane has been ongoing for numerous years. The latest project involves a $400 million upgrade of the Ipswich Motorway.
So there are plenty of reasons for those on a budget to disregard the gossip and consider the Inala precinct as a good place to live.