Allanson WA Property Investment

## 2. Market Overview - Median house price: $575,000 - Median unit price: $385,055 - 1‑year price growth: +25.2 % (strong short‑term upside) - 5‑year CAGR: +0.1 %/yr (near‑flat over the medium term) - 3‑year growth forecast: +13.5 % (moderate forward‑looking expectation) - Days on market: *Data not provided*

The contrast between a 25.2 % jump in the last 12 months and a 0.1 % annualised growth over five years signals a potential price correction. Buyers now have leverage because the long‑term trend is flat, while sellers may still benefit from the recent 1‑year surge but must price realistically.

## 3. Rental Market - Median weekly rent: $620 - Gross rental yield: 5.6 % - Vacancy rate: *Data not provided* - Demand rating: *Data not provided*

A 5.6 % yield is respectable and suggests steady cash flow, but without vacancy data we cannot gauge the tightness of the market. The yield alone does not offset the lack of long‑term capital growth.

## 4. Short‑Term Rental Opportunity - STR nightly rate: *Data not provided* - STR occupancy: *Data not provided* - Estimated annual STR revenue: *Data not provided*

Because STR metrics are unavailable, we cannot compare long‑term rental (LTR) versus short‑term rental (STR) profitability for Allanson. Based on the known 5.6 % LTR yield, LTR remains the only quantifiable option.

## 5. Infrastructure & Growth Drivers - Known projects / transport / employment base: *Data not provided*

The only forward‑looking indicator is the 13.5 % 3‑year growth forecast, implying some optimism, but without details on infrastructure or major employers we cannot identify concrete demand drivers or constraints.

## 6. Bull Case If the 3‑year forecast materialises:

• House price projection: $575,000 × (1 + 13.5 %) ≈ $652,000
• Unit price projection: $385,055 × (1 + 13.5 %) ≈ $437,000

Assuming rent stays at $620 wk, the gross yield would improve to roughly 5.9 % (higher price but proportionally higher rent). This scenario hinges on the forecast being realised and no major supply shock.

## 7. Risks | Risk | Quantified Concern | |------|--------------------| | Stagnant long‑term growth | 5‑year CAGR of 0.1 %/yr – price appreciation is essentially flat. | | Potential price correction | 1‑year growth of +25.2 % may be unsustainable given the 0.1 % CAGR. | | Vacancy uncertainty | Vacancy rate not supplied – could be higher than implied by a 5.6 % yield. | | Supply pipeline unknown | No data on new dwellings; a sudden increase could depress yields further. | | Interest‑rate sensitivity | With modest yield, higher rates would erode net cash flow more quickly. |

## 8. The Play - Entry price range: $520,000 – $630,000 (around the median house price, allowing a modest discount to the $575k benchmark). - Minimum yield target: ≥ 6 % to compensate for the weak long‑term growth outlook. - Watch signals: 1. Confirmation of the 3‑year forecast (e.g., quarterly price reports). 2. Changes in local vacancy data. 3. Announcements of new infrastructure or major employer projects. 4. Movements in the cash‑rate that affect borrowing costs. - Recommended strategy: Avoid new purchases in Allanson until clearer growth drivers emerge. If you already own property, focus on maintaining the asset and monitor the above signals for any shift toward a more favourable risk‑reward profile. Consider reallocating capital to suburbs with stronger long‑term CAGR and clearer infrastructure pipelines.