Australia’s largest body of professional buyer’s agents is recommending buying in suburbs with excellent established infrastructure, high demand and attractive amenities if you want to stay ahead of the property game in 2017.
According to Real Estate Buyers Agents Association of Australia (REBAA) president Rich Harvey home buyers and investors should target suburbs primed for strong future growth that avoid the ups and down of the property cycle.
“It could have planned government infrastructure developments, gentrification potential, or if it is already established, have limited scope for mass redevelopment – this means it avoids any potential over-supply,” said Harvey.
“It is typically a suburb that has lots of renovations going on and some focal points around cafes and shops.
“It’s a suburb where the demographics are driving demand – lots of families or professionals or it can be a “hipster” suburb with a cool vibe, plenty of eateries, bars, entertainment precincts, art galleries and parks.”
Harvey recommends buyers do their research into the market dynamics of a particular suburb before jumping in and buying an individual property.
“Find out how many properties sell each year in the suburb, why people move in or move out, the demographics and trends including unemployment, the percentage of owner occupiers vs investors, median price changes and auction clearance rates and most importantly any likely increase in property supply forthcoming,” he said.
“Don’t buy a McMansion with five bedrooms just because it’s on big land and looks good but is stuck out in the sticks and a 40-minute drive to shops.”
Below are REBAA’s tips for good buying in 2017:
Location drives value
The same type of house can be worth a million more in another suburb depending on where it is located and its proximity to amenities. People highly value proximity to shops, schools, transport, entertainment, cafes, restaurants, sporting facilities, parks, bushland, beaches, water, etc.
Don’t catch paralysis of analysis
Some people really are just too clever for their own good and think they can assess everything themselves but it can be a waste of time over-analysing the obvious things. There is no doubt you must complete sufficient due diligence buying a property – it is the most expensive asset you will buy – but when the research is done and the boxes ticked, it’s time to hold your nerve and move forward.
Early bird gets the worm
Searching for property is an arduous process when you have so many other demands on your time, but persistence pays when researching and shortlisting. You need to have a systematic approach to searching the market and be able to quickly assess which properties are worth inspecting and which ones are duds.
Where to buy?
Investors: The best potential for long-term capital growth and stability will be established property with a 15km radius of the Brisbane CBD, specifically those with value adding potential or in blue chip locations. It you’re looking for a ‘bargain’ some investors will choose to off-load units and apartments possibly at a slight loss in some situations so that could be also considered a ‘best buy’ but this strategy comes with caution as the unit and apartment market will stay soft of a little while yet.
Home buyers: Blue chip Brisbane suburbs will continue to attract interest but it is the gentrifying 9-13km radius where home buyers should keep an eye on in 2017. I would encourage home owners to wear their Investment hat when looking to purchase as well. Even buying a home should really also be considered an investment as well and if you invest correctly in the right area today, the future growth could yield Tax Free dividends in the future, given your principle place of residence is Capital Gains tax exempt. Consider the renovator as opposed to moving further away from the CBD for the newer home. It is these inner and middle ring areas that will have strong capital growth and provide good value adding potential in the long term.
Investors: The best places for investors to seek capital growth are those suburbs adjacent to new transport infrastructure that will benefit from reduced travel time and suburbs undergoing gentrification. Investors should also look to seek apartments and houses that can be renovated to boost equity.
Home buyers: Home buyers priced out of Eastern suburbs, North Shore or Inner West, could head to the Hills or the North West sector where the new North-West rail link will be completed around 2018/19. Similarly the South West sector is a beacon for first home buyers seeking a slice of land for their first house and should see some uplift in value with the future development of Badgery’s Creek airport. As always investors and home buyers need to research specific suburbs carefully.
Investors: The best places to invest in the WA market are within the Perth metropolitan area, ideally within a 25km radius of the CBD. It’s important when investing to stick close to existing or planned infrastructure. If it is possible to buy larger land holdings with development or re-zoning possibilities in these areas they are almost always a sure investment at the right price.
Home buyers: The best investments for home buyers in Perth in 2017 will be in the $450,000 – $550,000 price band and in suburbs where supply is most limited and demand is at its highest. Some of the better suburbs include; Beldon, Heathridge, Padbury, South Lake, Samson, High Wycombe and some parts of Forrestfield. It’s always good to gain as much land investment as you can when looking at a long-term hold.
Investors: Inner North corridor to tap into the light rail project along Northbourne Ave, I would recommend freestanding homes on 600-800m2 blocks in Downer, Dickson, Lyneham and surrounds, with a budget of around $750-850k.
Home buyers: Established homes in blue chip suburbs for those with the budget to spend $1.5-2.5m (Inner South: Deakin, Griffith, Narrabundah) and Inner North for those in the sub-$1m price range. Canberra is expanding in all directions with greenfield estates, making the innermost properties increasingly desirable.
Investors: For units, Reservoir has excellent opportunities, but only in certain pockets. Being one of the largest suburbs geographically in the city, buyers need to be discerning as some areas are better than others. Heidelberg is a gentrifying suburb attracting buyers priced out of Ivanhoe. With good infrastructure including shops, schools, parks, hospitals and train station, expect Heidelberg to perform well in 2017.
Homebuyers: While we are not expecting overall 2017 growth to match that of 2016, we do expect this trend to continue in the first quarter of 2017 and prices to stabilise in the second quarter. Ardeer was a suburb that surprised us this year in terms of the growth that was achieved, and we anticipate that it will be one to watch in the next twelve months. The suburb provides a lot bang for buyers buck with larger block sizes for very affordable prices compared to other suburbs while still being close to the CBD.