How do we find suburbs and properties due to appreciate in value?
Well, we start by considering all the data to isolate areas statistically more likely to support strong price growth.
So what are the key points investors need to consider to find the next up and coming Australian Postcodes?
1. Understanding the Economy
We need to consider which suburbs have boomed in the past, and why. We need to look at what’s happening in the broader marketplace now and likely to happen during our investment timescale. What drives the economy of the suburb? Where are the jobs and in what sectors in these areas? What are the demographics and forecast of the people and flows to and from the area? Do people travel to work or do they work locally? How many different industries support the local economy, and are they sustainable for my time-frame? You will appreciate that this is just a taste of the detail we want to understand about the local, and broader economy.
To begin, how do you even start to find the right locations in Australia worth investigating?
2. Find suburbs with Investment and Development coming..
What changes are coming that will broaden the appeal of a particular area? Are infrastructure investments on the way? Are these infrastructure developments booked or in the pipeline? Are there upgrades to parks, schools, roads, transport, public services in the pipeline, or are the budgets approved and they are definitely happening? When? What will that mean for the area?
3. Find Suburbs Selling Points
What’s different or especially interesting about this suburb? How and why are its differences attractive to people? Does it stand out when looking at similar suburbs? When I go to sell my investment what are it’s attractive features and benefits?
4. Is it Sustainable?
Will the growth of the area continue – are there clear drivers in place so that demand and desirability for the area will continue to grow for the life of the Investment? We need to find suburbs that will have strong growth indicators for the course of the investment.
5. Understand the Council
Are there development restrictions or are the council pro-development? What are the plans for supply of new housing or developments? Scarcity is good if more people want to live here and there is a limited supply. If there are lots of new developments and high rises planned, will the demand continue to be greater than supply? What is the council’s vision for the area and its effectiveness in delivering these plans?
6. Local Experts
What are the local experts saying about the area? Local real estate agents, property managers, surveyors, the local press and google searches will all help to get a feel for what is really going on. To find suburbs ready to skyrocket, look for credible commentary online and the comments from people that know the area and the region.
7. Keep an Open Mind
A common mistake is to find reasons why a suburb is good because you like the suburb – not because the data and analysis stacks up. Be careful not to make an emotional decision about areas you, ‘know’ or ‘like’ – but rather a commercial decision based on stats and numbers if you are an investor wanting to maximise returns. You don’t have to live next door.
8. Don’t get confused or distracted..
By spruikers, incentives, hype or short term offers. Would the property or area perform on its own merits without these incentives?
9. Remember land grows in value, buildings depreciate..
In a high rise you can share the land with many others – and as a building gets older, it loses value even if the land value is booming – it can be very hard for values to keep heading up for some apartments and areas. Of course we need to consider what type of properties are in demand in any area and postcode.
10. The Importance of Lifestyle!
Lifestyle factors are most important. Getting on the ground and talking with the locals and finding out what they love about the area – how easy it is for them to get around, great facilities (or new ones coming soon) parks, gyms, shops etc. Spacious open areas, or famous niche independent shops can be a draw-card. Are the schools in the area well rated? Are there lifestyle options that will continue to attract people to the area, and push demand for properties there?
11. Look for Unique Data providing more insights
A quick Google search will reveal data on suburbs all over Australia with lots of free information as well as more detailed information from paid reports. It pays to do your research – this is something we thrive on at Adviseable.
If you haven’t seen our latest Free Property Report – it gives a more detailed list of considerations we take into account when sourcing the best investment properties in Australia.
But Most Importantly: Figure out Your Own Unique Strategy with an Expert
Ensure you have a thoroughly researched Property Plan and you work with an independent and qualified expert who knows the industry, and can provide you with insights and information that will put you in the best possible position to make the right decisions.