What's so good about the Alice Springs property market?
I spoke with a man many years ago and I believe what he told me sums up the Alice Springs property investment market perfectly.
“You know something, Dave, I’ve got investment properties all over, in exotic places like Alaska, Hawaii, Arizona, and Melbourne. But, I’ll tell you what, if I just bought properties right here in Alice Springs, I’d be a wealthy man today.”
His statement says it all. The track record of Alice Springs is a winner. Does that mean everybody wins? Nope. Some people lose. But, those same people probably would have lost wherever they invested.
Let me explain. First, let’s discuss the Alice Springs property market track record. When I first came to town back in early 1998, old commission homes on Bloomfield Street were selling for under $150,000. If you could get one for $130,000 you got yourself a bargain. I wanted no part of it. My thinking went like this, “Who in their right mind would pay that much money for a commission home on Bloomfield?”
My thinking now is different. It goes something like this, “Boy, wish I’d bought ten of those houses back then when they were cheap … “
Those same commission homes on Bloomfield Street fetch a cool $450,000 or more depending on condition and upgrades. They make great rentals. Can you imagine the equity and the cash flow ten of these beauties would be generating today if I only bought back then? Shoulda, woulda, coulda … the mantra of just about every wannabe property investor.
Fortunately, I did invest way back in 1998. I got in the game. I didn’t just watch from the sideline. I bought properties in Brisbane and Adelaide. But, my point is this … I had a great market right in my backyard. I didn’t have to go scratching all over Australia looking for quality investment property … it was right here all along.
And, that brings me to my conclusion … Alice Springs hasn’t changed, at least from a property investment perspective. What makes this town so attractive for property investment? What keeps nudging rents and prices higher? What does Alice Springs have that a lot of other places don’t; the one thing that keeps property investors happy?
One word … JOBS!
You show me a town where there plenty of jobs and I’ll show you a town where rents and house prices are high. It’s the thing that shocks most people who move to Alice Springs – the high housing costs, for both buyers and renters. But, that’s generally what you’ll find in any town where there are tons of jobs waiting to be filled.
Can you lose money on property in Alice Springs? Yes. Anyone can do it. It’s easy. Just buy a property in June and then put it on the market in December and try to get your money back. Recouping your buy costs, including the dreaded stamp duty, will be a challenge. The property market in Alice Springs is like any other in that it goes up and down. So, property prices in December may be lower than they were in June (of any year.) But, I’ll bet you wouldn’t have to travel far in Alice Springs to find someone who made a nice quid doing this ‘buy in June, sell in December’ deal. The market in Alice Springs can move suddenly … both up and down. But, the good news is this; track the Alice Springs property market for the last ten years and you’ll notice an overall trend – does the word “UP” mean anything to you? So, for those who bought ten years ago in the Alice Springs property market, things are looking … that’s right – UP.
I’m glad I have properties in Alice Springs. And, I’m glad I bought them over seven years ago. But, here’s the good news, it’s never too late to get into the Alice Springs property market. Why? Because it appears Alice Springs will continue to have the same nagging problem for many many years to come. I don’t see Alice Springs solving “the JOBS” problem anytime soon. Alice Springs will continue to have too many Jobs and not enough people to fill them for a long long time … maybe forever. And as long as this problem persists, the property investing prospects look great.
Dave Ives is a property investor and author. He lives in Alice Springs. To hear more from Dave, download his Free E-Book, ""How I got Started in Property Investment"".