Scaddan WA Property Investment

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## 2. Market Overview - Median house price: $407,000 - 5‑year CAGR: 1.6 % per annum – indicates slow, steady appreciation. - 3‑year growth forecast: 1.8 % per annum – suggests a modest upside ahead. - Days on market: data not supplied.

*Signal:* With only modest price growth and a low yield, the market is fairly balanced. Buyers face limited price pressure, while sellers cannot command premium prices. The suburb is therefore a neutral environment for new entrants.

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## 3. Rental Market - Median weekly rent: $115 - Gross rental yield: 1.5 % (derived from median price and rent) - Vacancy rate: data not supplied. - Demand rating: not supplied.

*Implication:* The low yield reflects limited cash‑flow upside for investors. Without vacancy data we cannot gauge rental tightness, but the modest rent level suggests demand is only average.

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## 4. Short‑Term Rental (STR) Opportunity - Nightly rate: data not supplied - Occupancy rate: data not supplied - Estimated annual STR revenue: cannot be calculated without the above inputs.

*Conclusion:* Because STR metrics are unavailable, we cannot recommend a shift from long‑term rental (LTR) to STR. In the absence of evidence that STR would generate a higher yield, LTR remains the default strategy.

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## 5. Infrastructure & Growth Drivers No specific projects, transport upgrades, or major employment hubs are listed for Scaddan. Consequently, we cannot point to a concrete driver of demand beyond the modest 3‑year growth forecast of 1.8 %.

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## 6. Bull Case Assume the 3‑year forecast of 1.8 % materialises each year:

• Projected median house price in 3 years:

• Potential rent uplift: If rental demand improves in line with price growth, a 2 % rise in weekly rent would lift the median rent to about $117 / wk, nudging the gross yield toward 1.7 %.

The upside hinges on the suburb achieving or exceeding the 1.8 % annual price growth and a modest rent increase.

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## 7. Risks | Risk | Quantified Concern | |------|--------------------| | Vacancy risk | Vacancy rate not disclosed; a rise above the state average (≈ 2.5 %) could erode the already thin 1.5 % yield. | | Single‑employer dependency | No employment data provided; if the local job market relies heavily on one large employer, any downsizing could depress both price and rent growth. | | Supply pipeline | Absence of data on new dwellings; a surge in approvals could increase supply and push yields lower. | | Rate sensitivity | With a low yield, any increase in borrowing costs (e.g., a 1 % rise in the cash rate) would materially affect net cash flow. |

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## 8. The Play - Entry price range: $395,000 – $420,000 (slightly below the current median to allow a modest discount). - Minimum gross yield target: ≥ 2 % – this would require either a lower purchase price or higher rent than current levels. - Watch signals: 1. Release of any new infrastructure or transport projects in the area. 2. Updates to local employment figures (especially any diversification beyond a single major employer). 3. Changes in vacancy statistics from the ABS or local council. 4. Movements in the Reserve Bank’s cash rate.

• Recommended strategy: Maintain a Hold stance for existing owners. Prospective investors should wait for a price dip that lifts the gross yield to the 2 % threshold or for clearer evidence of rental‑market tightening before committing. If STR data later emerges showing a viable nightly rate and occupancy, a secondary analysis could reassess the LTR vs. STR balance.