According to latest Corelogic RP Data, dwellings in Sydney and Melbourne have experienced a capital growth of 9.73% and 11.36% year on year, respectively. In fact, both the cities have been experiencing dizzy capital growth over the past few years, making huge profits for investors who entered the market in time.
Does that mean you have missed the boat?
No, not at all. All you need to do is spot the next booming suburb and invest. Maybe think Queensland (Moreton Bay, Sunshine Coast, Wagga Wagga), thanks to the massive infrastructural improvements being made for the 2018 Commonwealth Games.
Here’s a handy guide to help you pick the next big thing in the Australian property market:
Stats and Reports – It is certainly possible to zero down on the highest growing suburbs right from the comfort of your screen. Many online sites offer paid and free property reports with detailed figures on capital growth, historical growth, rental rates, median price and vacancy rates in an area.
Studying these figures closely can give you valuable insights on how an area is performing. Why not order your free property report from HashChing, now?
Take the research one step further by visiting the area and checking out the infrastructure and council plans in the area, as these can significantly affect the value of your property.
Also, keep an eye out for latest data and articles found in plenty on the internet and investment magazines to stay updated with the market.
Smart neighbourhoods – Looking for a property in a high growth suburb? Keep in mind that markets are sinusoidal and if the houses are priced at their peak, do not expect another capital boom for at least 7-10 years.
A better strategy is to scout neighbourhoods of high-growth suburbs. Chances are these neighbourhoods will soon experience high demand, which will lead to increased capital growth. The logic behind this point lies in the economics of supply and demand. As demand in a high-growth area increases and supply becomes less, savvy investors move towards neighbouring suburbs offering similar infrastructure but low property prices.
It helps to be flexible while buying property. Do not stick to your favourite suburb but scan the neighbourhoods for great returns on your investment.
Infrastructure matters – Family friendly locales always experience better capital growth. Choosing a property that is near a train station, school, shopping mall, parks etc. is always a wise move.
It also pays to find out about council plans for the area. Are there lots of new constructions coming up? Increased supply can lead to lower property values. Alternately, a new road being built can have a positive impact on the property price due to increased connectivity.
Few tips to keep in mind:
1. Don’t restrict yourself to an area you have grown up in. Explore different areas to get a better idea of the market.
2. Choose an area with more of established dwellings. Too many new constructions can lower property prices in the area.
3. Enquire about the council plans before you buy to avoid any nasty surprises in the future.
4. Suburbs neighbouring high-growth areas make for great investments. Get great entry rates and enjoy the amenities in the neighbourhood.
5. Do not buy unless you see the area in person. If you cannot be physically present, consider hiring a buyer’s agent to guide you with properties in an area.
6. Keep your eyes and ears open for new infrastructure projects as these can significantly add to the property value.
7. Keep an eye on the numbers. Is the rental yield increasing? Has the median price grown over the year? What is the dominant age group in the suburb? Younger suburbs usually give greater returns due to more working couples and higher incomes.
Whether you are looking to invest, refinance or buy your first home, HashChing aims to simplify the way you finance your property purchase. Seeks answers to your queries from our expert brokers, absolutely free of cost or compare multiple negotiated mortgage deals from major banks on our website to choose the best.
By Vidhu Bajaj