One of the main reasons a property’s location is so important can be captured neatly in the old adage ‘you can change a house, but you can’t change its location’.
BY CATHERINE CASHMORE
However, searching for the perfect location involves more than simply looking for the worst house in the best street. It’s owner occupiers that underpin property values, so choosing the right property, in the right suburb, is important from both a lifestyle perspective, as well as an investment perspective.
It’s essentially ‘community spirit’ that makes a suburb a thriving hub of activity attractive to homebuyers. Therefore suburbs that have been established for a period of time – usually evident in the architectural landscape – will offer the widest range of amenities and attract a diverse demographic which increases buyer demand, fuelling capital growth.
If you’re purchasing a family home, look for suburbs with good schools, neatly maintained homes and abundant parkland that are well suited to a family lifestyle. Bear in mind future buyers or renters of your property will be looking at homes with the potential to provide accommodation for at least the years their children are at school. Therefore properties that have room to expand, or offer at least three bedrooms, two living areas, and two bathrooms, will be the most desired. Purchasing a two-bedroom villa unit in a popular school zone for example somewhat misses the point!
If purchasing an apartment, concentrate on suburbs that are close to the city where they’re more popular due to scarcity of land.
Make sure they’re located near to shopping strips and restaurants, offering lifestyle options more suited to the Gen Y demographic. Don’t forget off-street parking is essential, as is enough floor space to provide the level of accommodation needed to make the property a ‘home’, not a hotel room. Renters value their privacy just as much as homeowners, so steer clear of noisy areas and main road locations. The idea is to attract long-term tenants and avoid periods where rent has to be reduced or the apartment stands vacant.
Perception also plays into the aspect of a good suburb and different suburbs will attract different types of people. More affluent areas tend to be populated with trophy style homes and neighbors less likely to mix outside of their small ‘gated’ communities. Buyers in these suburbs are usually older families working in established professions and therefore generally have their social network already in place. On the other hand, newer suburbs further away from the city will attract younger families still working their way up life’s long ladder. They tend to be more open to community style activities such as street carnivals and church fetes, and therefore foster a more socially friendly atmosphere.
There are obviously many shades of grey in between so it’s important to understand the type of buyer each suburb attracts if you want to ensure the home you buy or develop will hold value when it’s time to sell. Familiarise yourself with popular property styles in the locality and spend a day perusing the local shopping to help pinpoint the right suburb for your needs.
Broadly speaking, the closer to the city you look, the higher your budget needs to be. However a high suburb median doesn’t mean the annual capital growth rate will be higher. For example, out of Melbourne’s 320 suburbs, 180 record growth rates in excess of 9 per cent over a 10-year period, therefore there are plenty of options to choose from if this is your main criteria. Concentrate on getting the most suitable property, in the best location, within a suburb that has a median value you can easily afford to service.
Catherine Cashmore is a senior property adviser and buyer advocate for JPP Buyer Advocates – the largest dedicated buyer advocacy in Melbourne. With extensive experience in all matters regarding real estate, JPP successfully purchases and negotiates over $100m worth of property each year for clients. http://www.jpp.com.au