Forget the hotspots – the 5 suburb features for long-term property success

For some (inexperienced) property investors, it’s often a burning issue: where is the next property hotspot going to be? It’s also a popular media topic and property spruikers love to claim to know where the next one will be.

Yet despite the hype around hotspots, they’re actually often irrelevant when it comes to property investment.

That’s because property investment is a long-term strategy requiring a 10-plus year view, while so-called hotspots are, more often than not, a short-term phenomenon.

To assess a suburb’s long-term investment potential, it’s crucial to know what factors will affect its value over time. Here are 5 features you can incorporate into your assessment of a suburb’s potential: 

 - Activity centres

Look for smaller local centres or larger shopping complexes that feature food and beverage offerings, retail stores and service providers, which can be utilised by local residents. This type of amenity will be valued by owner-occupiers and renters alike, meaning demand for suburbs that feature good activity centres will be higher. 

 - Close to major employment centres

Given the continued urban sprawl of many Australian capital cities, people want to live closer to the area where they work (such as city CBDs) to reduce their commutes. Suburbs closer to major employment hubs will typically be in higher demand. Furthermore, investing in suburbs on the urban fringe can limit capital growth as there is typically an abundance of land that can be developed, which adds extra housing supply that puts downwards pressure on prices. 

 - Public transport links

Growing capital cities are facing increasingly congested roads.  Public transport is therefore an important benefit to any suburb. Being in walking distance to good public transport links such as a train station or bus interchange is a highly sought-after feature. 

 - Parks and other recreational amenities

Parks, activity centres, playgrounds and other recreational amenities not only make suburbs looks more family friendly, but they also provide locals with some great lifestyle options, making the area more attractive and highly valued.

 - Schools and child care facilities

Many families want to live in specific catchment zones that feature high-performing public schools. Our research has uncovered as much as a 12% difference in prices for similar stock on 2 nearby streets, where the higher-valued street was in a catchment zone for a top-performing school whereas the other was not. You can check the performance of public schools on the NAPLAN website.  

Investors looking to invest in property in the coming years should take a long-term view rather than rely on hot-spotting. By focusing on the fundamentals, such as the above 5 features, you will be better positioned to find an outperforming property.

For more insight into the do’s and don’ts of property research, download your free copy of our latest ebook: ”How to find investment-grade properties using professional research principles”.