There may be hope for those who have been patiently waiting for the right time to finally invest in a piece of property. Weaker buyer sentiment, interest rate hikes and rising inflation has spread to Australia’s auction market, sending clearance rates lower over the 2022 June quarter. With just one month of Winter left for the year, now could be a good time to get serious. According to research from Swinburne University of Technology, Winter can often be least expensive season to buy a property.
If you feel ready to commit to a mortgage and are keen to find the perfect place but you’re overwhelmed about where to start, researching the property market is a great place to start. Visiting auctions and open homes are recommended first steps and will give you insights into the market as well an idea of current prices (asking prices vs selling prices). Observe whether the inspections you attend are crowded or quiet. Are listings in your area of interest being sold in a few weeks or in a few months? These are useful indicators as to how easily you will be able to enter the market. Attending inspections also allows you to check out your competition. Are you up against young families, investors or high flying professionals?
Firstly, you should decide what is important to you. Having a clear idea of what you want to buy will ensure you don’t waste your time, but also allow some flexibility around your property checklist so the task of finding the ideal place doesn’t become impossible.
The type of property
Are you looking to buy an apartment townhouse or apartment? Your budget, lifestyle and age will likely influence this choice.
Desirable features
While these will make the property more desirable to other buyers it also means it will likely be a good investment. Consider investing in property which has some of the following: an attractive outlook, northern aspect (gets plenty of sun), as well as distinctive features or characteristics which make it timeless or classic.
Which suburbs you would like to live in?
Experience the suburbs for yourself. Go out for lunch at a local cafe or pub. Wander through the main shopping precinct, check out the closest supermarket, explore the parks and walk through the streets. Decide if you can see yourself living there. Consider approaching locals to find out more about the area.
Proximity to ammenities
Access to parks, public transport, supermarkets, local retail outlets, cafes and schools will impact a property’s desirability. Easy access to ammenities is important from an investment perspective, but also for your own convenience.
There are many factors which will impact the value of a property and a suburb here are just a few things to consider when looking to invest:
Supply and demand
Is the area you are looking at very popular? Are new high density developments in the works? Too much development can reduce the demand for housing in that region but new or improved infrastructure will help to increase the value of an area.
Potential for price growth
Look for areas with future capital growth. Are people prepared to pay a premium to live here? Is the area undergoing ‘greening’ with landscaping, parks and tree lined nature strips? Is the area being ‘gentrified’ with updated facades or new builds? Over time these factors assist with boosting value in the future. Economic factors to consider include the demographic of the area and whether the area is likely to experience population growth. Is there much disposable income in the area? More disposable income is likely to attract growth and development, such as new shops or other desirable facilities or infrastructure projects. These in turn help to improve property values.
You can also research the relative socio economic profile of a suburb or local government area via the The Index of Relative Socio-economic Advantage and Disadvantage (IRSAD). This helps to give you an idea of the desirability of an area as well as its scope for future growth.
Research median property values
Find out the median property values of your area of interest and ask for property reports of places you like. You can look at pricing trends using residential property market data. Simply type in the postcode you are investigating to get a sense of what the market is doing in that area. It also breaks down the difference between apartments and houses but also provides overall insights. Seek out properties which are likely to outperform averages in capital growth.
At this research stage of the game it’s also a good idea to apply for a pre-approval with your lender so you know how much of a budget you have to play with. This is a topic all on its own, so we’ll go further into how to apply for a home loan in a future article.
Wherever you are in your home buying journey, whether it be saving for a deposit or ready to bid at an auction, Australian Mutual Bank can assist and make the process as straight forward and stress-free as possible. The friendly staff at Australian Mutual Bank can help guide you through the process of applying for a home loan and ensure you are on the right path. To find out more about preparing yourself for purchasing property contact us.
Alison Gallagher is a freelance writer, resourcefulness expert and entrepreneur. She has been featured in various publications including Stellar Magazine, Australian Health and Fitness Magazine, and Cleo Magazine. Alison is particularly passionate about sharing practical tips on how to live simply, sustainably and seasonally.
