Looking for a property to invest in can be very exciting, but most of the time, it can be overwhelming too. For instance, if you are looking for an up-and-coming neighbourhood, there are various factors you must take into consideration first.
One crucial factor to check is whether the property would likely grow in value shortly or not. And one of the top contenders when it comes to a rapid increase in value is emerging suburbs.
Whether it is your first time buying a home or investing in a property, it is always best to buy a property in an emerging suburb rather than go for those whose prices have already skyrocketed. Today, we will focus on emerging suburbs and the tell-tale signs you need to look out for before buying.
What Is an Emerging Suburb?
An emerging suburb is a property whose value is expected to increase faster than any other location. In other words, it is an up-and-coming area that is currently in transition and whose prices will soon be at a premium.
These emerging suburbs are primarily products of gentrification. Gentrification is when new demographic moves into an already established suburb or when old homes are improved or demolished for new homes or businesses. When there is a hefty pour of people into an area, it can quickly push the site into suburban growth.
Signs Of an Emerging Suburb That Will Soon Grow in Value
Before you buy a property in the suburbs, you must first check if it is emerging and your money will have the potential to grow. Here are some of the tell-tale signs that a suburb or a neighbourhood will soon increase in value:
- DOM (Days on Market)
The first and easy way to determine if a neighbourhood will grow in value is by evaluating how long it takes to sell a property. The DOM of a property can give you an insight if the area is well sought after or not.
If a particular property takes more than 60 days (or two months) to sell, then there is a reason why the buyers are not considering purchasing that property. On the other hand, if a property's DOM is around 3 - 4 weeks, then that means that it is attracting buyers.
Remember that if a neighbourhood's property market is highly desirable and the properties are selling fast, it might be worth looking into.
- Renovations
If any renovations are going around in a neighbourhood, it is an emerging location. Renovations are signals that an area is continuously updating itself to appeal to newer standards, thereby meeting the interest of home buyers and property investors.
So, the next time you are bothered by the non-stop construction in your area, remember that this could be a great sign that your neighbourhood is starting to gain popularity.
- Prices Are Increasing
The property's rental yield means that the tenants are willing to settle there, regardless of the price, which indicates that the neighbourhood is increasing in popularity. Rising rental prices mean that the location of the properties is desirable and, of course, marketable.
It is one instance where a price increase is not seen as a bad thing but as a good sign or indicator that your neighbourhood is headed in the right way.
- Low Vacancy Rates
If a property has been vacant for quite some time, then this means that it is not highly sought after and is not earning. It also means that it would be hard to charge a decent rent or sell the property at a premium when the time comes. Make sure to look for properties in areas with low vacancy rates.
- Check the Demographic
The younger generations (especially the millennials) leave a good mark on the property market. Suburbs with high amounts of young residents tend to create a ripple effect, resulting in a spike in property prices and higher rents.
Neighbourhoods considered "hipster" tend to have a vast artistic community. It means that the access to art galleries, music events, or buzzing nightlife is significantly high.
- Look for Successful Businesses
An emerging neighbourhood tends to be the home of already established or successful businesses. Whether it is a clothing store, wine shop, or the best restaurant in town, the popularity that the company receives is a good indicator of how well the suburb is performing as a whole.
If the various businesses in the area have high success rates, the probability that the neighbourhood is profiting from these gains is high. Please note that popular companies attract buyers from their town and those from other areas.
It makes enormous sense to invest in properties in areas like this. As the businesses attract interest from consumers or buyers from all surrounding areas, the rents increase, and the properties' value increases.
- Public Transportation
Last but not least, consider public transport. Emerging neighbourhoods have easy access to public transportation since residents always look for easy and convenient ways to go around the city. If an area has inadequate public transport, the neighbourhood is left at a disadvantage.
Inadequate public transport will leave the residents scrambling for busses or trains on the way to work, school, or even to essential places like the grocery or church.
Conclusion
Make sure to keep all these in mind when going house hunting. Take note that an up-and-coming neighbourhood has a higher potential of providing you with a good return on rent if you are looking to invest in it, so make sure to look for an emerging neighbourhood based on current market trends before investing your hard-earned money.
To reiterate, the signs of an emerging Australian suburb include:
- Days on Market (DOM)
- Renovations
- Increase in Prices
- Low Vacancy Rates
- Young Demographic
- Successful and Established Businesses
- Accessible Public Transportation
By keeping these tell-tale signs in mind, you will be able to search for and invest in a booming suburb, whether you are a first-time home buyer looking to upgrade their home or an actual property investor searching for a good location.
Thinking of buying a property? Find a trusted buyer’s agent today:
https://buyeragentfinder.com.au/
