Long considered one of Perth’s worst suburbs to live in, Balga is now enjoying a meteoric rise to the top after making a national list of the 10 best suburbs to invest in.
The suburb – designed by the State Housing Commission in the 1950s – has been recognised for its high capital growth and strong rental yields, which are being driven by buyers who once shunned the maligned northern suburb.
The Pulse Report, by Hotspotting and property depreciating experts Washington Brown, noted Balga had a 22 per cent jump in both its median house price and median house rent in 12 months and a high median rental yield of 6.4 per cent – driven by a critically low vacancy rate of 0.1 per cent.
“One of the major infrastructure projects in Balga is the $47.9 million upgrade of Balga TAFE, which is due for completion at the end of this year,” Washington Brown Director Tyron Hyde said.
It joins Armadale on the list, another maligned suburb that has become a regular fixture on national investor hotspot lists for the same reasons.
First-homebuyer Ethan Bayliss, who initially avoided Balga because of its notoriously bad reputation, eventually settled on a villa there after being priced out of more desirable suburbs.
“Definitely the price drew me here because it’s close to the city. I started in Nollamara and then I had to move up north a bit as the price made more sense — I kept looking and kept getting outbid,” he said.
Mr Bayliss said the report made him hopeful he made a good decision, despite it not being his initial suburb of choice.
Local selling expert Ronnie Abboud said Balga had endured a bad stigma for a while but the tide was finally turning for the well-located suburb.
“It’s 12 to 13km from the CBD and you can be at Trigg Beach in almost 10 minutes depending on traffic – it’s so central,” he said.
“We’re getting heaps of first-time buyers, young couples, young families just looking to get into the market. A lot of these people are being priced out of Greenwood, Balcatta and Yokine and coming towards Balga because it’s the next best thing.”
Rob Druitt, First National Druitt Saunders principal, said Balga was undergoing a transformation similar to what happened in Innaloo 20 to 30 years ago.
“People have really realised now that it’s such a great strategic location in the city with good transport nodes and very close to all facilities and provides relative affordability,” he said.
“The demographics are changing dramatically with young professionals coming in. They’ve been pushed out from Innaloo and even Balcatta and they’re looking for a similar strategic location and as a result we’ve had over 25 per cent growth in the last 12 months.”
Carey Park in Bunbury and Geraldton also made the list, thanks to double digit price growth and above average yields.
Top 10 locations for capital growth and cash flow
- Dalby, QLD
- Murray Bridge, SA
- Armadale, WA
- Bowen Hills, Qld
- Yorkeys Knob, QLD
- Balga, WA
- Woodridge, QLD
- Carey Park, WA
- Bundaberg South, QLD
- Geraldton, WA
Source: Pulse report, Washington Brown and Hotspotting