Paul Glossop:  Personally, I get the question a lot – how do I find, or how do we find, as a company, the next growth markets or the next growth suburbs, and we get that quite regularly. For us, it comes down to really – what are you looking for? And growth suburbs are everywhere. And bad suburbs, as far as I’m concerned, to invest in are everywhere as well. But, it comes down to – What is your price point? What is your strategy? What is your objective?

Because realistically, we can invest in properties in that 200,000 to 400,000-dollar price point, which have got a very much capital growth orientation, with some decent cash flow, all the way up to a million dollar plus properties, which are maybe more focused predominantly just on capital growth, potentially upside for development, diversification, different things such as subdivisions, etc. 

Sometimes, you look at things like blue-chip suburbs versus green-chip or gentrifying suburbs versus entry-level suburbs. What we look for, in general, is fundamentally five main things, one being population growth. Population growth, and also growth in demand in those markets, is always going to be a long-term indicator to see where the demand will come to that market. 

Second to that, and usually comes hand-in-hand, is infrastructure, and the spend that the local council, state government, federal government are putting into that local government area or that state or that larger city in general, because they’re going to stimulate thing like jobs creations, and in longer term, the ability for people to pay more for property.

And then when we look at those two aspects, we look at a little bit more of the detail-orientation components of things like vacancy rates. So, we want to look at areas, which have probably got on general sub two and half-ish percent vacancy rate, over a long-term period, to make sure that the investments we’re buying are going to be tenanted, so you can make sure you can get things like your cash flow really quite airtight, and understand where your money is coming in and where your money is going out. 

Probably, one of the further details we look at there is how that’s going to reflect in how much people are paying in that market for that property as compared to the actual income they earn, and a percentage of their income versus their total mortgage commitments. Now, it’s a little bit detailed, that aspect, but we try to focus on suburbs, which have probably a maximum of 32-33% of total take-home income versus their mortgage commitment. So, if you think about it that you earn a 1000 dollars take-home a year, you’re going to put a maximum of 320-330 dollars into the mortgage, and the rest is left for living expenses and savings, because what we have found out over a long-term average is that’s about the catalyst where people can continue to pay more for property, but once it starts getting to that 37-40%, then all of a sudden you’re getting a bit of a rebound effect, where people are probably a little bit over-stretched, and things like interest rate hikes start to mean people can’t pay more for property, and you tend to see a bit of a paring back in capital prices. So, that’s another level we look at. 

And then beyond that, we look at the lifestyle factor. How much is that area – and this is probably the fifth fundamental – how much is that area going to retain people who want to live there. There are things that are probably a little bit more unquantifiable from the naked eye, so schools, cafes, restaurants, general lifestyle, things like the climate, and how people actually relate to those areas in general. 

So, they’re probably the five fundamental aspects we look at to find the next growth suburb, once we’ve established how much people can spend, and what they’re looking at achieving as far as their objectives are concerned.