Telltale signs a suburb’s house prices are set to jump

Property buyers are always on the lookout for suburbs they think are about to ‘go’.

Capital growth in property is most often what matters when it comes to investment so buyers want to get in just before a suburb surges in value to reap the benefits.

Nila Sweeney in has revealed some of the top signs that a suburb is about to surge in value.

Days on market

If the suburb is heating up and demand for property there is rising, homes will be getting snapped up super-quick and will be spending less and less time on the market. It’s a big sign the suburb’s house prices are about to rise.

Less discounting

In suburbs of high-demand there’s little or next-to-no chance of properties being offered for sale at a discount from original asking price to attract buyers.

More auctions

Real estate agents are more likely to back themselves to get a higher price if they try to sell a property at auction in suburbs where they know demand is high and bidders are willing to outbid each other to snare the in-demand property.

If the suburb has a very high auction rate it’s another big sign prices are heading north.

Falling vacancy rate

Low vacancy rates mean there’s a shortage of rental availability in the suburb compared to renters in the market.

A rate below 3 per cent is considered to be a shortage and will usually lead to rising rents and increased property prices following a surge in investors in the area trying to capitalise on higher rent returns.

Falling stock

If there’s less property for sale in the suburb it usually indicates owners don’t want to sell because it’s a great suburb to own in.

It’s also an indication that any property going up for sale is being snaffled very quickly.

Rising rental yield

A popular suburb will first attract renters who want to live there. Rents will then rise attracting investors and pushing rents up further. Increased owner-occupier buying activity usually then follows and some of the renters also decide to buy.

The first sign that the suburb was heating up was the increase in tenants moving there.

Online interest

If online property searches for a suburb that has limited property for sale are at high levels it’s a clear indication of high demand and future rising prices.

Prolonged underachieving

After a prolonged period of underperforming, a suburb where surrounding areas start doing well might finally be ready to turn things around.

The longer a suburb has underperformed, the quicker its recovery tends to be.


News & Resources