The old statement, "if I had a dollar for every time someone has asked me that" comes to mind! I find it fascinating that no matter how many times I offer my advice, people do what they’re going to do anyway. Maybe they are trying to tell me something!
The biggest issue associated with this question is that most people will jump to buy in a suburb or in an area that has been raised by the press as a 'hot spot'. Unfortunately, what most buyers don’t realise is that by the time this information reaches the press, it’s history, and the hot spots should be the last place people should be looking to buy. So by the time you read this article, whatever suburb I recommend will also probably not be the best suburb to buy into.
If you are looking to buy where you want to live for whatever reason, then your decision might already be made, similar to if you are buying for an investment. Whatever the reason for your purchase, let’s look at the how to find the best suburbs to buy in rather than blurt out suburbs which might be good this week but not so great next week.
Infrastructure is one of the key elements, buying with a mix of rental return and capital growth if you are an investor is another, but I have listed below a few points that you generally do and don’t hear property predictors talk about:
1. Often suburbs that receive bad press keep many buyers away and this certainly has an impact on pushing prices down. More often than not, some of these suburbs become gentrified with values progressively increasing. I’m sure you have heard people make comments such as "I should have bought there when I had the chance", so try not to discount these suburbs. Bad reviews could be good news for you.
2. Focus on the suburbs ‘in between’; those that are most popular. As an example, in the past, people looked at Dundas in the Sydney market as somewhere they would like to live and avoided the suburb of Ermington next door. Yet today, Ermington has become a sought-after area and has had substantial price growth, but it was always Dundas that was mentioned as a suburb to buy in if you could afford to.
3. Do not buy real estate anywhere you can afford just to ‘get into the market’. This is a common mistake people make as so often you hear people say "you’ve just got to get into the market" but this is very bad advice. I have seen many instances where people buy for the sake of getting into the market and 10 years later, they are selling the property for the same price they paid for it! You are better off not buying at all and this is big advice coming from a real estate agent! Simply entering the market does not guarantee any real benefits.
4. There is currently a shortage of homes for sale and this will mean that you will be competing with more buyers than there are sellers. This will no doubt mean that fear of missing out will push prices up, however, in many parts of the country, there is still an oversupply (in particular with apartment sales). If you are a first-time buyer (just to get into the market) or an investor, most capital cities up the eastern seaboard are oversupplied. This means that there is no rush and offers are welcomed with open arms. Again, look for negative news and act on it!
5. It is important in today’s market to think differently. The best locations to buy in are generally not the ones being promoted and not necessarily the most popular suburbs. Sometimes the best suburbs to buy in are not even the nicest ones. Accepting this comment alone may very well be your key to finding the best opportunities.
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