Buying a home is a big investment and when you’re investing this much money you want to be confident that your investment will grow in value (not fall!). But how can you predict the future? How can you buy in the suburbs that will go up in value and avoid the suburbs that will fall?
OK, that’s impossible, but there is a way to look at trends and make a reasonable estimate on whether that will continue.
Look at the growth over the past 12 months and the past five years – is it going up or down? This data is readily available from the REIQ. Visit REIQ.com and check out the latest Queensland Market Monitor report.
When you look at data, you need to understand a couple of important points.
Firstly, property is a “pick and stick” investment. Unlike shares that can be traded quickly, property is best bought and held over at least five years, preferably 10 years.
Secondly, be aware that while markets are cyclical, there are often unexpected events that introduce volatility.
In 2008 the GFC triggered non-cyclical patterns in the real estate market, and again in 2011 when the mining downturn took effect and in Brisbane the floods impacted the housing cycle significantly.
But the real estate market in southeast Queensland has largely stabilised and provided the market continues to perform in the steady, sustainable manner it has for the past five years, we may take a stab at forecasting continued growth.
First-home buyers who are looking for value for money in areas where growth has exceeded the state’s average should focus their search on suburbs where infrastructure and public transport are well established.
As the inner city becomes more dense and the local councils and State Government favour density in town planning decisions, the larger blocks of the middle and outer ring suburbs will become more rare and more valuable. Bargain hunters can snap up a house on a decent sized block (at least 600m2) and be confident of capital growth over the next five to 10 years.
Other things to look for when spotting the next suburb to boom include schools and retail. Is the area well serviced by shops? How many schools are in the area? Are there parks and bike paths?
These features all attract young families and first-home buyers.
If you want to learn more, come to the REIQ’s free first home buyer seminar at the Chermside Library, April 24. Tickets through Eventbrite.