An investment property adviser has recommended potential landlords looking to make money buy a house near Bunnings – amid record immigration numbers.
James Anderson, the Melbourne-based founder and director of Bluestone Property Corporation, argued that the Wesfarmers-owned hardware giant only opened large warehouses when it was sure there would be a population increase.
“Believe it or not, Bunnings is a very smart indicator when deciding which region to invest in,” he told his TikTok followers.
“So if Bunnings is developed in a region there is certainly a good chance that the population in that area will increase significantly, meaning house prices are likely to do the same.”
Mr Anderson said Bunnings would conduct its demographic and economic analysis before creating a business case for opening a new store, based on the theory that new homeowners would buy a lot of paint to renovate or maintain a property.
An investment property adviser has recommended potential landlords looking to make money buy a house near Bunnings (Perth hardware store, pictured) as immigration hits record levels
“Bunnings has a really strong in-house real estate team that carries out extensive research before opening a store in any area,” he said.
With more than 300 stores in Australia, it is by far the largest hardware store chain in Australia.
However, there are some limitations to this theory as Bunnings has 52 stores in Greater Melbourne compared to 48 in Greater Sydney.
Both large cities, each with more than five million inhabitants, are home to a larger proportion of the more than 400,000 migrants who move to Australia every year.
The record annual intake for this financial year is expected to exceed the Treasury’s forecast of 315,000 new arrivals for 2023-24 in the May Budget.
However, rapid population growth benefited Sydney more than Melbourne, at least in terms of property values, CoreLogic data for October showed.
Sydney’s median house price has risen 12.1 per cent since January to $1.397 million, compared to a more modest 4.1 per cent rise in Melbourne, leaving the median house price at $937,736.
In Brisbane, the beneficiary of interstate migration, average house prices have risen 10.3 per cent to $860,465 since the start of January, in a city with 23 Bunnings stores.
The average house price in Perth has risen 11.1 per cent this year to $660,069 – Bunnings has 26 stores there.
The Reserve Bank of Australia’s 12 interest rate hikes since May 2022 have pushed the key interest rate to an 11-year high of 4.1 percent and led to a more than 63 percent increase in monthly mortgage repayments.
James Anderson, the Melbourne-based founder and director of Bluestone Property Corporation, argued that the Wesfarmers-owned hardware giant only opened large warehouses when it was sure there would be a population increase
But landlords were undeterred, with the value of investor loans rising by 2.6 percent in the year to September, while funding for new owner-occupier loans fell by 8.4 percent.
All four major Australian banks expect the RBA to raise interest rates again by a quarter of a percentage point on Tuesday, taking the base rate to a 12-year high of 4.35 percent.
The inflation rate of 5.4 percent in September was still well above the Reserve Bank’s target of 2 to 3 percent.