Whether you take out a home loan as an owner-occupier or for investment purposes, you’re thinking about capital growth. When you end up selling your property down the line, you want to be sure you’ll get more than what you initially paid for it.
This is why the real estate industry is saturated with talk of supposed “hot spots” — those areas that will become the next major magnets for home buyers. If you can spot these early, you might be able to get an affordable property that you can make a profit on in the future.
So what are some of the nation’s property hot spots? The following are a few options you might wish to investigate.
Hot spots in Sydney
As far as many are concerned, Sydney is still the most important market to watch in New South Wales and the entire country – and for some, the only one. But of course, Sydney also comprises a large geographical area, so we need to be a little more specific than that.
Two areas that could be interesting options are Oran Park and Penrith, which were listed in NAB‘s Residential Property Survey for the final quarter of 2014 as two NSW suburbs tipped to see above average capital growth. Unlike, every other suburb on the list, these two areas have enjoyed a steady uptick in growth over time, while also having asking prices that were well under $1 million. According to data from SQM Research:
Oran Park has seen its asking price for houses hover around $600,000 since April 2009, but has experienced an 18.3 percent increase over the three years to March 10 2015, and an 8.5 percent rise over the 12 months prior to this date
Penrith, meanwhile, has seen its asking price steadily tick up from just under $400,000 in April 2009, to a little less than $600,000 by March 10 this year. This includes a 19.8 percent increase over the year to this date
It could be worth carrying out a home loan comparison for properties in these two areas if you’re wanting to capitalise on rising prices.
Eager buyers may also want to consider areas around Parramatta. Set to become Sydney’s second CBD, the city is tipped to grow in size and importance over the following years, with a number of infrastructure initiatives coming its way, including a light rail project worth $1 billion. According to the RP Data 2014 Best of the Best report, Mays Hill — right next to Parramatta – saw the largest 12-month gain in prices in the country, and its median price is now at a (comparatively) moderate $700,000 according to SQM.
Melbourne and the rest
Of course, it would be a mistake to think it’s the Sydney show when it comes to potential hot spots. Along with the Harbour City, Melbourne has also been giving the Reserve Bank of Australia headaches, having experienced some significant home value growth of its own – 8 percent on the last year, according to RP Data.
A potential Melbourne option to look into could be Ringwood. It was named as one of three Victorian suburbs to enjoy higher capital growth by NAB, but unlike the other two, it has seen its asking price rise relatively steadily since 2009 as shown by SQM Research data. As of March 10, the asking price for a house sits at just over $600,000. Not only that, but Ringwood East was named by RP Data and Aussie as one of the ten suburbs where houses sold for above asking price.
Meanwhile, the Gold and Sunshine Coasts are tipped by many to be an area to watch over the next year or so. The Valuer-General’s 2015 Property Market Movement Report states the two urban centres have seen their land valuations increase significantly, while again, NAB noted the Gold Coast was one of the areas to watch for capital growth in 2015.
Not only is the Gold Coast a popular tourist and vacation area – including for foreign buyers – but it will also be the site of the 2018 Commonwealth Games, sure to drive prices up even further.
According to SQM Research, the Sunshine Coast has seen relatively moderate asking prices, at around $500,000. As for the Gold Coast, it depends on where you look, but prices generally range from just over $500,000 to around $700,000. Additionally, neither area has seen significant peaks and troughs over the last five years. Not only could properties there make a good investment, they also could be easy on the home loan calculator.
If any of these potential hot spots has piqued your interest, start researching into these areas. There are a variety of professionals, experts and advisers who can help you with this task so you can be sure you’re making the right choice.