How to spot an up and coming Australian suburb that could grow in value

House hunting for an investment property can be both exciting and overwhelming. When considering investing in the property market, there are many factors to keep in mind.

Finding up-and-coming neighbourhoods and high-growth suburbs may seem challenging, but with the right strategies, you can identify properties with strong potential for future value growth. These tips can guide you in making smart investment choices.

1. Days on Market (DOM) are Trending Low

One of the easiest ways to spot a high-growth suburb is by analysing the Days on Market (DOM) for properties. This metric reveals how quickly homes are selling and can indicate whether an area is in demand.

If a property takes more than 60 days to sell, there may be underlying reasons why buyers are not interested. However, if a property sells in just 3-4 weeks, it’s likely attracting plenty of buyer attention.

In general, a low DOM suggests that the market in a particular neighbourhood is desirable. If homes are selling quickly, it could be worth considering purchasing in that area. For many buyers, 21-30 days is considered an ideal range for DOM.

2. There Are New Buildings and Renovations

While the sound of construction may be off-putting, renovations and new builds are often indicators of a property growth area. These signs of development suggest that the neighbourhood is evolving to meet the needs of home buyers and investors, which could lead to long-term value increases.

The modernisation of properties signals a positive future for the area, showing that it’s not stagnant but rather improving. While construction noise is a temporary inconvenience, it’s a small price to pay for potential growth and desirability once the work is completed. Keep an eye on ongoing renovations and new builds; they could be a clear sign that you’ve found an ideal investment market.

3. Rental Prices Are Going Up

Looking for an investment property? One key factor to consider is rental yield, which indicates how desirable an area is for tenants. Rising rental prices are a sign that the suburb is growing in popularity, making it a potential hot spot for investors.

When rental prices increase, it shows demand for properties in the area is strong. If the selling price and rent of properties in the area are both rising steadily, it’s a clear indicator that the neighbourhood is becoming more marketable. Multiple properties showing this trend within a suburb signals that you've found a prime location to invest in.

4. There Are Lower Vacancy Rates

A concern for property investors is the risk of extended vacancies, which can affect rental income. To avoid this, look for areas with low vacancy rates, as these are often more desirable to tenants. High vacancy rates indicate a lack of demand, making it harder to find renters or sell properties in the future.

If a neighbourhood has consistently low vacancy rates, it's a strong signal that the area is in high demand and could be an up-and-coming suburb. This could mean more stable rental income and higher property values in the long term.

5. There Are Good Schools in the Area

Proximity to good schools is a major selling point for families looking for a home. Areas within a school’s catchment zone are often highly competitive, and properties in these locations tend to be more valuable. Families are often willing to pay higher property prices and council rates to live near reputable schools.

For investors, properties near good schools are in high demand, making them a great option for rental properties. These areas tend to have higher rental yields and are more likely to retain or increase their value over time. Even in uncertain market conditions, the proximity to quality schools keeps demand high, ensuring your investment remains lucrative.

6. There's a Young, Artsy Demographic

Suburbs with a younger, artsy demographic are becoming increasingly attractive to both homebuyers and investors. Millennials and creative individuals often seek out neighbourhoods that reflect their values and lifestyles, which can drive demand for properties in these areas. As these younger generations move in, the area often sees a surge in property prices and rent.

Young, artsy areas tend to offer unique amenities that resonate with this demographic, such as art galleries, live music events, and vibrant nightlife. These factors make the area highly desirable, especially for those who enjoy cultural experiences and community engagement. Moreover, younger creatives often contribute to the character of a neighbourhood, making it more dynamic and welcoming.

Investing in areas with a young, creative demographic can be highly rewarding, as demand for properties in these suburbs continues to rise.

7. There Are Successful Businesses in the Area

Successful businesses are a strong indicator of an up-and-coming neighbourhood. Independent boutiques, trendy cafes, and local restaurants often signal a thriving local economy, which can positively impact property values. A popular local business not only draws in nearby residents but also attracts visitors from other suburbs, increasing the area's overall appeal.

When businesses thrive, the neighbourhood benefits from the increased foot traffic, which boosts demand for housing. Whether it's a cool cafe, a local gym, or a small boutique, these establishments contribute to the vibrancy of the area. Furthermore, amenities such as schools, parks, supermarkets, and public transport hubs can further elevate property value.

Investing in areas with thriving businesses ensures a stable and lucrative market, as these properties are likely to see higher demand and rental yields.

8. Public Transport is Easily Accessible

One of the key features of up-and-coming neighbourhoods is their access to public transport. Easy and affordable transportation options are highly sought after by both homebuyers and tenants. Whether it’s buses, trains, or ferries, areas with convenient and frequent public transport services tend to attract more people looking to reduce commuting costs and time.

Neighbourhoods with reliable public transport links, such as nearby train stations or bus stops within walking distance, are more likely to see an increase in property demand. These areas offer easy access to central locations, making them appealing for those who work or study in the city. In contrast, suburbs that are isolated and lack public transport options may see stagnant or declining property values.

The growing trend of "30-minute neighbourhoods," which promises shorter commutes to work, school, and other essential services, makes these areas particularly desirable. Fast, efficient transport options also contribute to the overall liveability of a suburb, boosting both property prices and rental yields.

Investing in a location with easy access to public transport can save you money on car costs and increase your property's potential for higher returns. When house hunting or considering an investment property, always take into account the proximity to public transport as a key factor for long-term value.