6 Hints To Identify Undervalued Suburbs

Many investors look at charts & figures about top preforming (usually very expensive suburbs) suburbs by median price and are amazed at what they could have owned, the enticement of the next hot spot. This is very similar to the opinion that a particular side of a city is the only place to own a successful investment property. 

At Wise Real Estate Advice we look at market opportunities across Melbroune, identify the undervalued suburbs for our clients for the purpose of our clients building a strong investment portfolio. 

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For instance, Wyndham Value in the Western Suburbs Of Melbroune is widely regarding as being a poor place to own an investment property due to the long term lack of capital growth. In 20 17 Wyndham Value median house price experienced a 20% growth. Below are 6 of our best tips on spotting this type of opportunity.


1.Consider taking your search interstate.

Wouldn’t it be so convenient if the next diamond in the rough were just around the corner from you? While its not an impossibility, it’s unlikely a reality.

A huge advantage to looking outside of your locality is that it forces you to think sensibly and focus on statistics and growth drivers as opposed to insignificant emotional things, like how much you hate the kitchen. Sourcing a buyer’s agent could be your best bet if you’re worried about venturing into the unknown.


2.Examine the supply and demand.

Its important to know the area you are looking in has a low vacancy rate, so you get a better idea on whether or not you’ll be able to lease your property. Speak to local real estate agents to get an accurate representation on vacancy rates.

The Next Hotspot Growth Areas Info GraphOther great indicators of supply and demand are auction clearance rates, amount of days a property stays on the market before it is sold, amount of property on the market and the owner-occupier to renter ratio.


3.Keep an eye out for warming signs.

Some tell tale signs of an up and coming suburbs are new cafes opening, renovations to existing properties, subdivision projects with a few townhouses going up on one site, increases of prep children being enrolled at local schools, slowly getting rid of service provider shops like Laundromats, to make room for cafes and boutiques.


4. Look into the future infrastructure growth in the area.

Infrastructure like new or improved bus and rail links and roads can add enormous value to a suburb. If the government plans on such developments , it is a great indicator they expect a big growth in the area, which in turn, is a dead giveaway property prices, will increase too with the demand.

Other things to look out for are new schools, medical facilities and shopping centers. All this information on proposed developments is available online, through the councils website.


5.Research the growth.

Think about the ripple effect. Generally, the suburbs that have experienced the highest surge in prices are 10km from the CBD, or along the coastline. Have a look at adjoining suburbs, which have not yet experienced that surge.

Also monitor the next set of suburbs out from there, as the ripple can often be felt further than the immediate neighbours. Identifying the primary growth drivers is crucial to using the ripple effect to your benefit.

6.Consider the clientele.

What is the median age of the population in the area you are looking to purchase? If they are in their 40s, and there are lots of schools in the area, you might be best to purchase a 3-4 bedroom home. If the area has 30 year olds and lots of cafes and bars in the area, a townhouse or apartment might be better investment.

You can find information on median age, and average household income statistics on Australian Bureau Of Statistics site. 



At Wise Real Estate Advice, we ensure all boxes are ticked and that sincere care is taken when providing a buyer with the wise advice and action required throughout the buying process. To speak to one of our friendly buyer’s agents click here to fill out an enquiry form or just simply call us on 1300 00 WISE.

By Mark Ribarsky