Choosing a Location: Everything You Need to Know

Choosing a Location

Our Location-Based Property Investment Strategies in Australia

You need to consider much more than the state of the property when buying an investment property in Australia. The location plays just as big of a role in your decision. After all, a property in the wrong location won’t attract any demand. With no demand, you can’t find tenants. This leads to an investment property in Australia failing to generate the income you expected.

So how do you choose the right location? There are several location-based property investment strategies in Australia that you need to keep in mind.

Mapping the Suburb

You should already have a general idea of how much you’re willing to spend on your new property. If you don’t, then organising your budget should be your first step.

However, let’s assume you already know. Now’s the time to start looking at different suburbs. What you’ll find is that the majority of suburbs have what some professionals refer to as “preferred pockets”. These are areas where the demand for properties is at its peak.

If you buy an investment property in Australia in one of these pockets, you should enjoy capital growth almost immediately. However, you can also use preferred pockets as part of a long-term strategy. As preferred pockets become more popular, so do the pockets around them. You could buy in a preferred pocket, while also investing in some of the less popular pockets around it.

As your preferred pocket grows, you’ll reap immediate rewards. However, you’ll also enjoy long-term rewards as the surrounding pockets become preferred pockets in their own right.

Read the Data

It’s not difficult to find organisations that can provide you with the sales data for the area you’re considering. You can use this information to track how much prices have grown or fallen in a location. Many reports even allow you to break this down by month or year, often up to a 10-year limit.Depreciation Calculator

So how can this help you? Firstly, it helps you to identify if the location is in an upswing or downswing. Ideally, you should avoid properties in areas that are about to swing downwards.

However, you could also take advantage of a downswing. If it looks like a location has bottomed out, you could buy a property in preparation for a rebound. The data will show you how likely this rebound is.

Check Infrastructure Trends

One of the best property investment tips for beginners is to track infrastructure trends across several locations. As a general rule, more infrastructure leads to higher house prices. After all, most people want to live in areas that offer easy access to amenities or the city.

The trick here is to look at what’s planned, rather than what’s already in place. Speak to local councils to find out what work may be planned in an area.

You’re looking for the “hot spots”. These are areas for which there are plans for infrastructural improvements that either haven’t started yet or are just beginning. Upon completion of those improvements, you should find that the demand for properties in those areas skyrockets. If you got in early, you can reap the rewards.

Avoid High Population Areas

This is one of the simplest property investment tips for beginners. The more houses there are in a location, the less demand you will experience.

It comes down to the basic concept of supply and demand. Property prices and rents fall whenever housing is in high supply. That’s because buyers and tenants have more room to negotiate because there are always going to be more options.

As a result, you should avoid areas with high populations. These tend to have a lot of supply, which means the demand is already met. Instead, look towards developing areas in desirable locations.

Check the Attractions

Depreciation Quote SchedulePeople buy or rent properties because of what the location offers as well as the property itself. This is where local attractions could shape your decision. A property that has a lot of nearby attractions will generally experience more demand than one that doesn’t.

So what is an attraction? On the basic level, you have things like creeks, beaches, and hiking trails. A lot of people like to have those things on their doorsteps, especially if they have families that they need to entertain.

However, you also need to consider the proximity of these attractions to the property. For example, let’s assume you’re buying a house near a beach. However, a freeway separates one set of properties from another. Those on the beachside of the freeway will command higher prices, often tens of thousands of dollars more than those for properties on the other side. In this example, it’s often best to invest in one of the lower-priced properties. They offer the same attractions, which means they’ll still be in demand. However, you pay less money to benefit from that demand.

 

Conclusion

You have to consider the location whenever you buy an investment property in Australia. After all, the location plays a huge role when it comes to the income you generate from the property.

Speak to professionals and find out as much information as you can. This will ensure you don’t end up buying in an undesirable location.

Where To Buy Your Investment Property

Where should I buy my investment property? 

Investors mostly focus on Australia’s biggest cities, overlooking the smaller capitals such as Hobart, Adelaide and Canberra. However, what is often forgotten, is that some of the best opportunities lie in these areas, if you know where to look.

Experts are increasingly naming Hobart as the place to buy. It has indeed already started to see growth after a long period of relative inactivity.

According to the latest CoreLogic RP Data figures, Hobart has seen more than 6% growth in dwelling prices over the past year.

It is the most affordable capital city in Australia. The median dwelling price is sitting at $335,000, some 25% lower than the next affordable city of Adelaide. It also has the highest rental yields, with returns of greater than five per cent.

While Adelaide’s growth isn’t as impressive, sitting at 3.9% for the year, many experts report that this market is also on the move. Canberra, meanwhile, has seen decent growth of 5.7% over the past year.

So where are the opportunities in these cities? We’ve drilled down to look at each market more closely, and where investors should be looking for the best buys.

Fishing Boat At Dock in Hobart Harbour

Does Hobart offer the best growth potential?

Hobart is one city most investors would never consider, says Hotspotting.com.au founder Terry Ryder, but this could be the year it might “step up”.

“An increasing number of credible reports have identified the fact that it’s no longer a basket case; it’s growing,” he says. “It’s actually starting to lead the nation with certain indicators, which is Depreciation Calculatorsomething that hasn’t happened for 10 years.”

There has been some pretty solid price growth, Ryder says, but there’s still really good buying.

“There are a lot of reasons to look there. Prices are in the $300,000s, so it’s good value for money compared to what you pay in Sydney or Melbourne. In those cities you’ll be paying double or three times as much.”

Ryder says what’s really helping to drive the growth in Tasmania is its proactive State Government. He adds that the economy will be pushed along by tourism. It’s the main industry performing well there. Which is stemming from the low Australian dollar encouraging Australians to holiday at home.

The agricultural sector is also going well, says Ryder, in addition to the manufacturing and construction industries.

“There are a lot of quite significant new projects – there are new hotels, infrastructure and property developments,” he says.

Ryder says Hobart is the place to be buying in Tasmania. While Launceston is also a good, strong city, he says, in the long-term Hobart will be better for investors.

It’s a small city though, he says, suggesting investors buy close to work nodes and the airport.

He specifically names the northern suburbs as being a good spot to consider, particularly the local government area of Glenorchy, where he says there’s plenty of good buying.

Property lecturer and author Peter Koulizos names South Hobart as the place to buy. Pointing to its proximity to town and a campus of the University of Hobart in neighbouring Sandy Bay.

Adelaide City panoramic

The opportunities in Adelaide

Koulizos believes Adelaide is one of the capitals investors should be considering buying in this year. He says growth is likely to be steady rather than huge. But will most likely be better than the other capital cities.

While Adelaide may not have the “economic oomph” of other states, Ryder says it is seeing growth. There is also a surprising amount of money being spent on infrastructure, including the $1.85 billion Royal Adelaide Hospital, due to open this year. As well as extensions to rail links and road upgrades.

“There’s also a major building boom happening with high rises around the city; that’s a massive generator of the economy there,” he says.

Koulizos agrees that there’s a huge amount of infrastructure being built, but he notes that on the downside there is the looming closure of Holden and other manufacturing plants. Depreciation Quote Schedule

Buyers’ agent and CEO of www.propertybuyer.com.au Rich Ha rvey, meanwhile, doesn’t believe strongly in Adelaide’s growth prospects for this year.

He says the city is usually a slow performer and stays somewhat under the radar, with no major impetus on the horizon to drive growth.

However, Ryder says Adelaide has a lot more going on there than it gets credit for and says its property market has “good momentum”.

“It won’t boom but it will have good growth, and investors should target the right areas with double-digit growth.”

What are those areas?

Ryder says it’s the middle market and the cheaper outlying areas that have the greatest momentum.

He specifically names the growing local government area of Onkaparinga, on Adelaide’s southern fringe, which he says has recently had some of the highest sales volumes in the city.

There’s improved transport infrastructure in the form of a rail extension and a duplication of the Southern Expressway in Onkaparinga, he adds, which has improved accessibility to and from the area.

According to Ryder there’s also good buying in Adelaide’s western suburbs.

“The swanky, upmarket areas are clustered around the eastern suburbs, but I think the western suburbs are really underrated,” he says.

“They’re between the CBD and the beach, and in close proximity to the airport.

“The suburbs with character housing for around $400,000 that are five to 10 minutes from the city or the beach are really good buying.”

Ryder says suburbs within the City of Charles Sturt in that general precinct have good momentum, particularly in terms of rising sales volumes.

He also names the City of Holdfast Bay, on the southwestern coast of Adelaide, as being a good area for investors to consider. Noting its affordability in comparison to the equivalent in Sydney and Melbourne.

Meanwhile, Koulizos says investors looking to buy in Adelaide should stick to the fundamentals of buying close to the city.

He names suburbs including Torrensville, Thebarton and Croydon, all just to the west of the CBD, as having potential for growth.

The type of housing that should be purchased in those areas, says Koulizos, is character housing or “period-style homes”.

“Ideally a house is better than units,” he says. Adding that size does matter but the most important thing is to get the location right.

australian parliament house for the federal government in canberra

Where to look in Canberra

The market in Canberra is bubbling along okay, says Koulizos. But he notes that what happens in the latter stages of this year will depend upon which party is victorious at the Federal Election. And whether employment is impacted, which in turn will impact upon the property market.

“Employment is fairly stable at the moment but the tradition is that a Labor Government will employ more public servants and a Liberal Government will shed them,” he says.

Koulizos’ pick for Canberra is the suburb of Braddon. It is close to the city centre, at a distance of just two kilometres north.

Ryder says the Canberra market was hit by the downsizing of the public service a few years ago. It is now showing signs of recovery with a turnaround.

“There was certainly a rise in activity in 2015 and it’s starting to show through in growth in prices,” he says. “Very much the base of the housing market is looking solid again.”

Ryder says investors looking at Canberra should consider the Gungahlin district, around 10 kilometres north of the CBD. He describes it as “solid”, adding that it will benefit from a planned light rail project.

Where To Buy Property – Hobart, Adelaide and Canberra

Where are the opportunities to buy property in these sometimes-forgotten markets?

Investors often focus on Australia’s big cities, overlooking the smaller capitals such as Hobart, Adelaide and Canberra to buy property. But some of the best opportunities could lie in these areas, if you know where to look.

Experts are increasingly naming Hobart as the place to buy. It has indeed already started to see growth after a long period of relative inactivity.

According to the latest CoreLogic RP Data figures Hobart has seen more than 6% growth in dwelling prices over the past year.

Being the most affordable capital city, with the median dwelling price sitting at $335,000, some 25% lower than the next affordable city of Adelaide, it also has the highest rental yields, with returns of greater than five per cent.

While Adelaide’s growth isn’t as impressive, sitting at 3.9% for the year, many experts report that this market is also on the move. Canberra, meanwhile, has seen decent growth of 5.7% over the past year.

So where are the opportunities in these cities? We’ve drilled down to look at each market more closely, and where investors should be looking for the best buys.

 

Does Hobart offer the best growth potential?

Hobart is one city most investors would never consider, says Hotspotting.com.au founder Terry Ryder. But this could be the year it might “step up”.

“An increasing number of credible reports have identified the fact that it’s no longer a basket case; it’s growing,” he says. “It’s actually starting to lead the nation with certain indicators, which is something that hasn’t happened for 10 years.”

There has been some pretty solid price growth, Ryder says, but there’s still really good buying.

buy property hobart“There are a lot of reasons to look there. Prices are in the $300,000s, so it’s good value for money compared to what you pay in Sydney or Melbourne. In those cities you’ll be paying double or three times as much.”

Ryder says what’s really helping to drive the growth in Tasmania is its proactive State Government. He adds that the economy will be pushed along by tourism; it’s the main industry performing well there. It is stemming from the low Australian dollar encouraging Australians to holiday at home.

The agricultural sector is also going well, says Ryder, as well as the manufacturing and construction industries.

“There are a lot of quite significant new projects – there are new hotels, infrastructure and property developments,” he says.

Ryder says Hobart is the place to be buying in Tasmania. While Launceston is also a good, strong city, he says, in the long-term Hobart will be better for investors.

It’s a small city though, he says, suggesting investors buy close to work nodes and the airport.

He specifically names the northern suburbs as being a good spot to consider. Particularly noting the local government area of Glenorchy, where he says there’s plenty of good buying.

Property lecturer and author Peter Koulizos names South Hobart as the place to buy, pointing to its proximity to town and a campus of the University of Hobart in neighbouring Sandy Bay.

 

The opportunities in Adelaide

Depreciation CalculatorKoulizos believes Adelaide is one of the capitals investors should be considering buying in this year. He says growth is likely to be steady rather than huge. It will most likely be better than the other capital cities.

While Adelaide may not have the “economic oomph” of other states, Ryder says it is seeing growth. There’s a surprising amount of money being spent on infrastructure, including the $1.85 billion Royal Adelaide Hospital, due to open this year, as well as extensions to rail links and road upgrades.

“There’s also a major building boom happening with high rises around the city; that’s a massive generator of the economy there,” he says.

Koulizos agrees that there’s a huge amount of infrastructure being built. He also notes that on the downside there is the looming closure of Holden and other manufacturing plants.

Buyers’ agent and CEO of www.propertybuyer.com.au Rich Harvey, meanwhile, doesn’t believe strongly in Adelaide’s growth prospects for this year.

He says the city is usually a slow performer and stays somewhat under the radar, with no major impetus on the horizon to drive growth.

But Ryder says Adelaide has a lot more going on there than it gets credit for and says its property market has “good momentum”.

“It won’t boom but it will have good growth, and investors should target the right areas with double-digit growth.”

What are those areas?

Ryder says it’s the middle market and the cheaper outlying areas that have the greatest momentum.

He specifically names the growing local government area of Onkaparinga, on Adelaide’s southern fringe, which he says has recently had some of the highest sales volumes in the city.

There’s improved transport infrastructure in the form of a rail extension and a duplication of the Southern Expressway in Onkaparinga, he adds, which has improved accessibility to and from the area.

According to Ryder there’s also good buying in Adelaide’s western suburbs. Depreciation Quote Schedule

“The swanky, upmarket areas are clustered around the eastern suburbs, but I think the western suburbs are really underrated,” he says.

“They’re between the CBD and the beach, and in close proximity to the airport.

“The suburbs with character housing for around $400,000 that are five to 10 minutes from the city or the beach are really good buying.”

Ryder says suburbs within the City of Charles Sturt in that general precinct have good momentum, particularly in terms of rising sales volumes.

He also names the City of Holdfast Bay, on the southwestern coast of Adelaide, as being a good area for investors to consider. Noting its affordability in comparison to the equivalent in Sydney and Melbourne.

Meanwhile, Koulizos says investors looking to buy in Adelaide should stick to the fundamentals of buying close to the city.

He names suburbs including Torrensville, Thebarton and Croydon, all just to the west of the CBD, as having potential for growth.

The type of housing that should be purchased in those areas, says Koulizos, is character housing or “period-style homes”.

“Ideally a house is better than units,” he says. Adding that size does matter but the most important thing is to get the location right.

 

Where to look in Canberra

The market in Canberra is bubbling along okay, says Koulizos. He notes that what happens in the later stages of this year will depend upon which party is victorious at the Federal Election. Then whether employment is impacted, which in turn will impact upon the property market.

buy property canberra

“Employment is fairly stable at the moment but the tradition is that a Labor Government will employ more public servants and a Liberal Government will shed them,” he says.

Koulizos’ pick for Canberra is the suburb of Braddon. It is close to the city center, at a distance of just two kilometres north.

Ryder says the Canberra market was hit by the downsizing of the public service a few years ago. But it’s now showing signs of recovery with a turnaround.

“There was certainly a rise in activity in 2015 and it’s starting to show through in growth in prices,” he says. “Very much the base of the housing market is looking solid again.”

Ryder says investors looking at Canberra should consider the Gungahlin district, around 10 kilometres north of the CBD, which he describes as “solid”, adding that it will benefit from a planned light rail project.