While all property values fluctuate in line with the country’s overall economic conditions and with interest rate levels, some areas do consistently experience better growth over time – and generate higher returns for home owners.
Typically, the best performing areas have been those that are closest to centres of economic activity and that also offer good civic amenities, access to good schools, shopping and recreational areas, short commuting times and a high level of security. They include both the heritage suburbs close to the older CBDs, and the suburbs closest to the newer economic hubs that have been established as a result of decentralisation.
However, these top growth suburbs naturally also tend to be the most expensive areas, so most buyers need to try to anticipate high growth in suburbs that are still affordable. It’s a good idea, for example, to look at immediately adjacent suburbs, because these are usually the first to benefit as demand in the top suburbs starts to exceed the supply of homes for sale.
Other good bets are areas with a low rate of new development and a low supply of homes for sale – which indicates that their current residents don’t want to move – and those where many of the existing owners are extending or upgrading their homes and thereby raising the average home value in the area.
Prospective buyers should also not lose sight of other factors that will affect their quality of life such as whether an area has a strong community spirit, an effective local authority and a low crime rate. Experienced, reputable agents familiar with their areas can tell you all about these – and are also an invaluable source of information about development plans for things like new roads, shopping centres and commercial buildings that could have a positive or negative effect on local home values.
They can also, of course, guide you to the ‘best buys’ currently available to meet your requirements with regard to home type, price, size and position.