How to find the best location for your first home.
No matter what type of house you decide to buy, I believe finding the ‘best’ location possible, within your budget, should be your top priority. Be aware that the more desirable the location, the higher the price you’ll have to pay. However, you’ll have a house that’s always in demand, protecting your investment in the long term. It will ensure you maximise your gains when house prices are increasing, and minimise your losses when prices are decreasing.
A great place to start is the Neighbourhoods page on realestate.com.au which can provide you with recommendations. The ‘Discover the Suburb that’s Right for You’ section allows you to enter the type of house you want to live in, the number of bedrooms, and your budget. It will then suggest suburbs that meet your criteria. You can also do a targeted search to obtain information on a particular suburb, such as the demographics, supply & demand, and the median house price. You’ll also get to look at photos of the suburb which will give you a feel for the ‘vibe’ of the place.
Where is the next up and coming suburb?
Home buyers, looking to make a sizeable financial gain often ask, “Where are the next up and coming suburbs”. If you’ve thought to ask this question, let me offer a word of caution. This strategy has a high degree of risk, especially for inexperienced first home buyers. As I stated earlier, there’s no guarantee your first home is going to increase in value. The best way for you to reduce this risk is to choose the ‘best’ location.
When considering the location for your first home, the safest option is to search for suburbs with an established reputation, and a track record of consistent growth in house prices. Broadly speaking, you should be looking for suburbs that have a wide variety of transport, amenities and services. However, once you find such a suburb, you need to focus your search to find the best streets and neighbourhoods. You must also ensure your first home has convenient access (preferably walking distance) to public transport, amenities, as well as the best schools.
If you have a higher tolerance for risk, there’s a couple of things to look for when searching for the next ‘up and coming suburb’. If you accept this risk and successfully buy into a suburb before it becomes popular, you should expect to see a significant increase in the value of your property in the long term.
The first thing to look for when trying to find an up and coming suburb is gentrification. Gentrification is the process of renovation of deteriorated urban neighbourhoods through the influx of more affluent residents on higher incomes who can afford to spend more on housing.
According to Michael Yardney, from Metropole, the best way to spot gentrification is to drive around the suburb to see if you can find evidence that people with money are moving in:
They will be spending large amounts of money renovating or extending their homes.
There will be white (the new black) SUV’s parked in the driveways rather than old Ford Falcons and Holden utes.
The nature of the shops will be changing, the gyms will offer Pilates; the cafes sell cold press coffee, and the delis serve goat’s cheese pizza.
What makes a good location?
Everyone has heard the famous property slogan, 'location, location, location', but why do real estate agents and property experts keep repeating it? Because it's potentially the most significant factor that drives house prices. So, let’s look at the four key elements that combine to create a good location.
As Australia's population increases and our major cities continue to grow larger, convenient access to public transport, which including trains, trams and buses, will become critical. If you’re contemplating buying in a capital city, then walking distance is preferable. For your first home to be considered within walking distance, it should be within a 1.5 kilometre radius.
The more public transport alternatives within walking distance, the more desirable the location.
Cars are still Australia’s number one mode of transport, and as a result, they continuously choke our streets. To try and avoid this congestion, you need access to high capacity arterial roads. An arterial road usually has 2 to 4 lanes in each direction, and its primary purpose is to deliver traffic to freeways or to allow easier access between suburbs.
Example: I consider the Melbourne suburb of Brunswick to have convenient access to many transport alternatives. Two tram lines and a train line run north-south through the suburb, and there are several bus services as well. Two arterial roads run east-west through the suburb. Both connect to a freeway and provide easier access to adjoining suburbs.
While it’s essential to be close to a variety of transport options, remember, you don't want to be continually impacted by noise pollution created by being too close!
Amenities include shops, supermarkets, cafes, parks and gyms. Again, if you're considering buying in a capital city, walking distance to a variety of amenities is preferable. The wider the variety and more convenient the access, the more desirable the location.
Example: I consider the Melbourne suburb of Richmond to have reasonable access to a wide variety of amenities, including:
The Victoria Road, Bridge Road and Swan Street shopping strips which feature numerous cafes, restaurants, pubs, bars and fashion outlets.
Victoria Gardens and Richmond Plaza are large shopping centres featuring supermarkets and smaller specialty stores.
Richmond Recreation Centre has an indoor pool and gymnasium.
Numerous parks and sporting grounds Including the MCG and Melbourne Tennis Centre.
Amenities tend to be the focal point for a lot of traffic, so again, you don't want to be so close that the constant traffic diminishes that benefit.
Services include childcare centres, primary and secondary schools, hospitals and doctors. The more highly rated the service and the more convenient the access, the more desirable the location.
Proximity to highly rated schools (especially secondary schools) is an essential consideration for any first home buyer who has kids or whose planning on having them. Kids were not in our immediate plans when my wife and I bought our first home together, so access to schools was something we overlooked.
Luckily for us, there's an excellent primary school just up the road. Several people we've spoken to have recommended it, and we can see lots of development going on to improve the facilities. Unfortunately, we don’t have convenient access to any highly rated secondary school. Luckily this is still a few years away, so we have time to come up with a plan.
If you’re planning on sending your child to a government school, you’ll need to confirm in which catchment area your house falls. The school’s catchment area is the geographical location from which the core intake of students must live. If you live in the catchment area, your child should be guaranteed a spot.
Typically, the more highly rated the government school, the more desirable a house in the catchment area will be. This factor is especially true for secondary schools. Catchment area data is often difficult to obtain, and boundaries can change regularly as the local population increases or decreases. I’d recommend speaking directly to the school your considering confirming whether your potential first home falls in their catchment area.
Another common real estate slogan is, ‘buy the worst house on the best street’. Every suburb has a best street or pocket where well-informed buyers pay a premium to live. There's also typically a ‘dodgy’ area that people try to avoid.
Factors to consider when assessing the neighbourhood include:
How does the street look? Are there wide nature strips with established trees?
Is the road wide enough for cars to travel in both directions with space for parking as well?
What condition and style are the surrounding homes in the street? Is it filled with classic period facades, or is it housing commission?