Whether you\u2019re a home buyer or an investor, when you\u2019re looking for a new property there are so many things to consider.<\/p>\n
Determining the best property to buy isn\u2019t as easy as picking the nicest-looking house in your local area.<\/p>\n
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From location to school zones, demographics, and even the number on the mailbox, there are many factors that affect what a property is worth.<\/p>\n
Here are 11 factors that can push values up, or down.<\/p>\n
1. Location<\/span><\/h2>\nAs I often say, location<\/a> does 80% of the heavy lifting of a property\u2019s capital growth.<\/p>\nAfter all, not all suburbs are created equal.<\/p>\n
It seems that in our new \u201cCovid Normal\u201d world, people love the thought that most of the things needed for a good life are within a 20-minute public transport trip, bike ride or walk from home.<\/p>\n
Things such as shopping, business services, education, community facilities, recreational and sporting resources, and some jobs.<\/p>\n
Now, the ability to work, live and play all within 20 minutes<\/a> reach is the new gold standard desirable lifestyle.<\/p>\nSome suburbs will always be more popular than others, some areas will have more scarcity than others and over time some land will increase in value more than others.<\/p>\n
That\u2019s why it\u2019s important to buy your investment property in a suburb that is dominated by more homeowners, rather than a suburb where tenants predominate.<\/p>\n
And you\u2019ll find suburbs where more affluent owners live will outperform the cheaper outer suburbs where wage growth is likely to stagnate moving forward.<\/p>\n
In general, the more established suburbs with better infrastructure, shopping, and amenities tend to be close to the CBD and the water and that\u2019s where the wealthy want to and can afford to live, and they\u2019re prepared to pay a premium to live there.<\/p>\n
The rich don\u2019t like to commute.<\/p>\n
Overall, by focussing your research on what those often overlooked owner-occupiers are doing, you may just find an investment that outperforms the market and delivers strong value and growth over the long term.<\/p>\n
2. School zones<\/span><\/h2>\nThe location, amenities, and transport are important factors that affect a property’s value.<\/p>\n
But, did you know that state school zoning<\/a> can also have a huge impact on local property prices?<\/p>\nThat\u2019s because some people are willing to pay a significant premium to be located within some well-rated primary and secondary school zones.<\/p>\n
Students who live inside the zone must be accepted into the school, and while parents can apply from outside the boundary on special grounds (such as having siblings at the school, or access to a certain sport, language or program not available at other schools) there\u2019s every chance they\u2019ll be knocked back.<\/p>\n
Competition for places in preferred school zones has pushed property prices sky-high.<\/p>\n
And with elite private schools around the country costing parents up to (or in excess of) $41,000 per year, per child, it\u2019s understandable that top-performing public schools are in high demand<\/a>.<\/p>\nIn fact, recent Domain data shows that property prices in some school catchment areas jumped as much as 45% in 2021 as many parents are willing to fork out hundreds of thousands of dollars to lock down an address that guarantees their child entry to their chosen school.<\/p>\n
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3. Demographics<\/span><\/h2>\nThe population and demographics<\/a> of a suburb have a significant influence on a property\u2019s value.<\/p>\nFor example, if you live in a family-dominated suburb, three and four-bedroom homes will be more expensive.<\/p>\n
While in CBD areas, one and two-bedroom apartments will be more in demand from workers and students.<\/p>\n
4. Street appeal<\/span><\/h2>\nDid you know that street appeal can positively impact the value of your property?<\/p>\n
It\u2019s obvious that streets with extravagant views in high-profile areas create a certain type of premium.<\/p>\n
But properties on streets with low noise, trees, and maintenance also tend to fetch a premium.<\/p>\n
Popular streets are often quiet, away from busy roads, railway lines<\/a>, flight paths, and other negative features.<\/p>\nThey\u2019re tidy, clean, and well-maintained streets with good condition paths and roads also make the street far more sought after.<\/p>\n
In fact, research into the effect of street trees on property value<\/a> found that tree-lined streets increased median property prices by up to $16,889.<\/p>\n\n5. Property size<\/span><\/h2>\nLocation, amenities and the suburb obviously do some of the heavy liftings for a property value, but understandably the property itself makes up the rest.<\/p>\n
One key indicator for market value is the price per square metre \u2013 the total sales price divided by the property\u2019s area.<\/p>\n
So, obviously, the bigger the property, the more valuable the property is.<\/p>\n
But wait, there\u2019s more.<\/p>\n
Not only does size determine a property\u2019s value, but also how much of the space is usable space.<\/p>\n
Equally, having a garage or a dedicated storage cage can also add a premium, particularly for smaller properties.<\/p>\n
Also, things like garages, pools, backyards, air-conditioning, patios, and balconies all also positively influence a property\u2019s value.<\/p>\n
6. Age and condition<\/span><\/h2>\nIt goes without saying that property in good condition would fetch a higher value than one the same size in poor condition and in need of major renovations or repairs.<\/p>\n
Also, buyers would often rather buy a newer house that is well maintained than an older one that needs major renovation.<\/p>\n
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7. Renovation potential<\/span><\/h2>\nTalking about renovation<\/a>, while recently renovated properties will usually sell at a higher price, if there is scope for a buyer to improve a property, it could also increase its value.<\/p>\nThis is especially the case for properties with a larger land size that would allow for additions like a new swimming pool, extension, or deck.<\/p>\n
8. Planning and building regulations<\/span><\/h2>\nProperty construction and (sometimes) renovation or additions require building regulations and planning permission.<\/p>\n
Failure to adhere to these regulations could result in a property being demolished.<\/p>\n
If regulations make it difficult to build in a particular area or if for example, the property is in a heritage-listed area that restricts new development, this can have an impact on the value of the property.<\/p>\n
9. Investment potential<\/span><\/h2>\nIf a home can be renovated to add value and later sell then that becomes attractive to a group of investors.<\/p>\n
Similarly, investors will be drawn to properties that are in an area tipped to gentrify or rise in value, as these will be popular among renters.<\/p>\n
After all, not all suburbs are created equal.<\/p>\n
It seems that in our new \u201cCovid Normal\u201d world, people love the thought that most of the things needed for a good life are within a 20-minute public transport trip, bike ride or walk from home.<\/p>\n
Things such as shopping, business services, education, community facilities, recreational and sporting resources, and some jobs.<\/p>\n
Now, the ability to work, live and play all within 20 minutes<\/a> reach is the new gold standard desirable lifestyle.<\/p>\n Some suburbs will always be more popular than others, some areas will have more scarcity than others and over time some land will increase in value more than others.<\/p>\n That\u2019s why it\u2019s important to buy your investment property in a suburb that is dominated by more homeowners, rather than a suburb where tenants predominate.<\/p>\n And you\u2019ll find suburbs where more affluent owners live will outperform the cheaper outer suburbs where wage growth is likely to stagnate moving forward.<\/p>\n In general, the more established suburbs with better infrastructure, shopping, and amenities tend to be close to the CBD and the water and that\u2019s where the wealthy want to and can afford to live, and they\u2019re prepared to pay a premium to live there.<\/p>\n The rich don\u2019t like to commute.<\/p>\n Overall, by focussing your research on what those often overlooked owner-occupiers are doing, you may just find an investment that outperforms the market and delivers strong value and growth over the long term.<\/p>\n The location, amenities, and transport are important factors that affect a property’s value.<\/p>\n But, did you know that state school zoning<\/a> can also have a huge impact on local property prices?<\/p>\n That\u2019s because some people are willing to pay a significant premium to be located within some well-rated primary and secondary school zones.<\/p>\n Students who live inside the zone must be accepted into the school, and while parents can apply from outside the boundary on special grounds (such as having siblings at the school, or access to a certain sport, language or program not available at other schools) there\u2019s every chance they\u2019ll be knocked back.<\/p>\n Competition for places in preferred school zones has pushed property prices sky-high.<\/p>\n And with elite private schools around the country costing parents up to (or in excess of) $41,000 per year, per child, it\u2019s understandable that top-performing public schools are in high demand<\/a>.<\/p>\n In fact, recent Domain data shows that property prices in some school catchment areas jumped as much as 45% in 2021 as many parents are willing to fork out hundreds of thousands of dollars to lock down an address that guarantees their child entry to their chosen school.<\/p>\n The population and demographics<\/a> of a suburb have a significant influence on a property\u2019s value.<\/p>\n For example, if you live in a family-dominated suburb, three and four-bedroom homes will be more expensive.<\/p>\n While in CBD areas, one and two-bedroom apartments will be more in demand from workers and students.<\/p>\n Did you know that street appeal can positively impact the value of your property?<\/p>\n It\u2019s obvious that streets with extravagant views in high-profile areas create a certain type of premium.<\/p>\n But properties on streets with low noise, trees, and maintenance also tend to fetch a premium.<\/p>\n Popular streets are often quiet, away from busy roads, railway lines<\/a>, flight paths, and other negative features.<\/p>\n They\u2019re tidy, clean, and well-maintained streets with good condition paths and roads also make the street far more sought after.<\/p>\n In fact, research into the effect of street trees on property value<\/a> found that tree-lined streets increased median property prices by up to $16,889.<\/p>\n\n Location, amenities and the suburb obviously do some of the heavy liftings for a property value, but understandably the property itself makes up the rest.<\/p>\n One key indicator for market value is the price per square metre \u2013 the total sales price divided by the property\u2019s area.<\/p>\n So, obviously, the bigger the property, the more valuable the property is.<\/p>\n But wait, there\u2019s more.<\/p>\n Not only does size determine a property\u2019s value, but also how much of the space is usable space.<\/p>\n Equally, having a garage or a dedicated storage cage can also add a premium, particularly for smaller properties.<\/p>\n Also, things like garages, pools, backyards, air-conditioning, patios, and balconies all also positively influence a property\u2019s value.<\/p>\n It goes without saying that property in good condition would fetch a higher value than one the same size in poor condition and in need of major renovations or repairs.<\/p>\n Also, buyers would often rather buy a newer house that is well maintained than an older one that needs major renovation.<\/p>\n Talking about renovation<\/a>, while recently renovated properties will usually sell at a higher price, if there is scope for a buyer to improve a property, it could also increase its value.<\/p>\n This is especially the case for properties with a larger land size that would allow for additions like a new swimming pool, extension, or deck.<\/p>\n Property construction and (sometimes) renovation or additions require building regulations and planning permission.<\/p>\n Failure to adhere to these regulations could result in a property being demolished.<\/p>\n If regulations make it difficult to build in a particular area or if for example, the property is in a heritage-listed area that restricts new development, this can have an impact on the value of the property.<\/p>\n If a home can be renovated to add value and later sell then that becomes attractive to a group of investors.<\/p>\n Similarly, investors will be drawn to properties that are in an area tipped to gentrify or rise in value, as these will be popular among renters.<\/p>\n2. School zones<\/span><\/h2>\n
<\/p>\n3. Demographics<\/span><\/h2>\n
4. Street appeal<\/span><\/h2>\n
5. Property size<\/span><\/h2>\n
6. Age and condition<\/span><\/h2>\n
<\/p>\n7. Renovation potential<\/span><\/h2>\n
8. Planning and building regulations<\/span><\/h2>\n
9. Investment potential<\/span><\/h2>\n
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