The Next Hotspot Growth Areas

The Next Hotspot Growth Areas InfographProperty Investors are always active in their search for the new growth areas that will bring them a property that will be worth double either in four or ten years’ time.

However, it may be extremely difficult to snare a property at the right price, as you are running at the risk that by the time you hear about these areas, you might have bought the property at its peak.

So, what are a few ways to identify the new hotspot growth areas? Senior Buyer Advocate, Mark Ribarsky offers a few tips on what to look out for.

 

  1. Check any surrounding suburbs

If you are searching for a particular suburb, as you see potential for capital growth, but it seems to be beyond your budget, then consider looking at any surrounding suburbs. The problem with this is that it requires you to time it well, because if you purchase a property too late, then your capital gains might not be as high as it could have been 5 months ago. If you do time it well and you catch on to the right phase of the local property market cycle, you could potentially double your investment.

The things that you need to look out for in order to time it well involves:

  • Trying to buy within 15km of the Central Business District
  • Comparing the median house price of each suburb with its surroundings.
  • Finding properties that are within your budget.
  • Identifying if there is a greater variation then five per cent, if there is then there is an opportunity of snatching a grab.
  • Regularly monitoring median house prices (quarterly).

 

  1. Identify areas that are experiencing redevelopment

There are many areas that have had a bad reputation placed on it in the past, that had high levels of burglary’s drug addicts, and domestic violence, but have changed over the recent years in a good way. The recent change of this could be because new homeowners are moving in and are changing the dynamic of the suburb. A perfect example of this is Footscray, in Melbourne’s Western Suburbs, where property prices have sky rocketed over the past 15 years. What you should look for are;

  • Any new bars, restaurants, cafes being opened.
  • Property prices, and how they have moved over three years.
  • Affordable areas.
  • If any new houses are being built or being renovated.
  • The demographics of the area, whether it is younger or older population.

 

  1. Infrastructure Projects

Be sure to look out for any large infrastructure that large businesses or state government are planning to undertake in the next few months. There are a number of reasons why this will drive property price up, and rental yield up. Because workers for the job might need to rent in the local area so that they do not have to travel two hours a day to work or more. In terms of house prices, if they decide to build a new entrance onto the freeway, it could potential save time getting into the city, which will drive house prices through the roof.

 

  1. Figure out the Supply & Demand RatioSearching for the New Hotspot Growth Areas

Supply and Demand is a key economic model that can be used in a number of ways to predict what could happen. In the property market, the supply and demand ratio, can be used to determine the price growth in a particular area. The basics are that if the suburb can no longer build anymore new properties, but demand keeps increasing, then house prices will plummet through the roof. Things to look out for with high demand and low supply areas:

  • Find areas that have a rental yield that is increasing (increases every 12 months)
  • Find out what the demographics is for the area.
  • Find out what the population growth is like in the area. If the population growth is high then demand is likely to be high, and will really drive the price of the properties in that suburb.

 

What Are Hot Spot Locations

Hot spot locations are typically areas that haven’t performed as well as the suburbs surrounding them. When searching for an up and coming hot spot focus on the growth of the areas around it and proximity to cities and major attractions. Expanding infrastructure and improving public transport options is a good indicator a suburb’s profile is expected to grow.

Lifestyle Options

As an area begins to improve you will start to see more lifestyle options popping up. Restaurant, bars and shops are a positive indicator an area is on the rise.

Property Location

Once you have settled on a couple of areas you think will achieve your long-term goals, finding the right property is important. “Whether you’re looking for an actual house or a vacant block, positioning is vital,” explains Mark Ribarsky, senior buyer advocate at Wise Realestate Advice. A quiet street close to facilities infrastructureschools and parks is often the most desirable and increase in value quicker than properties on main roads or away from attractions.

Employment Options

Finding a property within reach of businesses and employment options increases the likelihood it will be desirable for tenants or investors. Knowing that an area has the potential to increase employment options will help make it more marketable to future tenants and improve your sale options down the track.

Stand Out From the Crowd

Finding a property with unique character is a beneficial way to have your place stand out from the crowd. Buying a period home amongst an area full of units and townhouses will often mean a greater return when it comes time to sell.

Buying property is an exciting time and a buyer’s advocate may be just the right person to help clarify your options. For an obligation-free conversation contact Wist Realestate Advice on 1300 009 473 to find out how their services can assist your property needs.

Check out:

 

The wise real estate advice website is a great starting point for gaining some free information on what has happened in Melbroune real estate market.

Growth Suburbs Across Melbourne: Which suburbs have increase the most over 12 months across Melbourne.
Market Report: A snap shot of the real estate figures, from Melbourne’s median house price, interest rate movements to million dollar suburb list.
Melbourne Top 10 Cheapest Suburbs: Getting into the market? Melbroune’s best value suburbs for first home buyers.
Melbourne Auction Results: Weekly results on Melbroune’s auction figures.

 

By Mark Ribarsky

Property Buyers Guide

Download a FREE Home Buyers Guide, an easy to understand booklet designed to help you through the process of buying. Your copy of the property buyer’s guide can be downloaded here.

Summary
The Next Hotspot Growth Areas
Article Name
The Next Hotspot Growth Areas
Description
Property investors are always active in their search for the next capital growth area that will bring them higher than normal returns.
Author
Publisher Name
Wise Real Estate Advice
Publisher Logo