With most observers seeing rapid capital growth of investment property across Australia’s capital cities over the past 2 years, many investors may feel the time has passed to secure property that could appreciate in a short space of time.
However, there still are opportunities to achieve capital growth, but it’s a matter of buying clever and buying clever means you need to understand what drives price growth. Simply put, property prices tend to rise in locations experiencing growth across a range of areas and the best returns are usually found in these markets that are poised for growth.
Look for locations with several strong industries rather than any dependent on a single industry, employment is a major indicator of price growth as a strong job market drives population growth, which in turn fuels demand for real estate. Of course, no city or town will do well without quality infrastructure.
Infrastructure drives investment property growth
Strong investment in infrastructure or high quality infrastructure already present is usually a good indicator of potential investment property opportunities. Suburbs earmarked for urban renewal should also be on your radar, target locations with strong infrastructure investment and quality amenities that will bring long-term benefits to the area.
With demand for inner-city living growing exponentially, many suburbs in capital cities, which may once have been undesirable, are now locations of significant redevelopment, thanks to their prime position. Such a transformation can have a huge impact on real estate prices, seek out well-located suburbs which haven’t yet experienced a renaissance but that adjoin one or two that have.
A state or local government’s policies and plans can also be a strong influence on an area’s growth prospects. Keep an eye out for any announcements concerning development and plans for growth. Also keep in mind that one of the biggest drivers of property demand is a growing population and areas experiencing an increase in residents will often see real estate prices rise, monitor announcements made by local councils and governments and visit them to find out their intentions for growth in the area.
Finally, remember that property is a long-term investment, as long as you do your research and buy well, your investment property will rise in value, you’ve just got to be patient and give it time.