Location, location, location is probably the most well-known phrase in real estate.
But while some property jargon can be murky, these words on the importance of location couldn’t ring truer.
As the experts explain, finding a well-positioned property is vital not just for lifestyle, but for long-term value too.
BREAKING IT DOWN
While “location, location, location” might be an “old cliche” it holds important meaning, the phrase could break down a great location into three levels — the suburb, the street and the position of the property itself — and each was equally important.
Just because you’ve got the first location right doesn’t mean you’ve made it, location was a golden rule of real estate and mattered because unlike a home’s condition, it was permanent: You can change a property, but not its location.
LOCATION ONE — THE SUBURB
Assessing a suburb and what it offered is the first step to a great location. A thriving local village with shops, cafes and services were becoming essential for many buyers, forget the big shopping centres, people are really being drawn back to their strip shops and villages.
And it doesn’t have to be a prestige suburb for that to occur. Closeness to a village with “lifestyle attributes” was a major factor driving property prices. In the same suburb, the difference in value can be 10-15 per cent, depending on whether or not you can walk down the street to a restaurant and shops and then walk home, as opposed to driving to a restaurant.
A properties “walkability” was a key attraction to buyers, and websites such as walkscore.com could help to gauge how easy it was to get around a suburb by foot or public transport.
“High walk scores and transit scores usually translate to higher capital growth,”
Transport, particularly a train line, was a key requirement, especially in suburbs further from the city, and with townhouse and apartment living on the rise, parks and outdoor spaces were becoming an increasingly important location element.
For families, schools were another location must-have and there was often tough competition. Parents set sights on popular high school zones when their children were young, and homes in some in-demand public catchments attracted competition and a 10-15 per cent premium on prices.
It was imperative buyers did due diligence by looking at proposals and plans for infrastructure or development that were before the local council. Buyers are also advised to also check the area’s zoning and overlays.
LOCATION TWO — THE STREET
Getting the suburb right was one step, but a good street is considered just as important. In South Yarra as an example, there may be only 10 or 12 streets to live in as some stretches were too close to the train line, others were too narrow or one-way, and some were overshadowed by high-density development. There are always certain streets that will outperform other streets. An ideal one might be wide, tree-lined, have a consistent or attractive streetscape, little through traffic and be easy to access.
The position of the house in the street was another consideration. Some buyers saw a corner block as having potential to subdivide down the track, while others viewed two street frontages as a downside. A busy main road, T-intersection, freeway and petrol or train station weren’t ideal neighbours.
LOCATION THREE — THE PROPERTY
The third element of a good location is the position of the dwelling itself. It was important to judge how apartments or units were set in a block. Even though you are in the same block, all of those flats will perform differently. A top-floor front apartment is going to perform better than a ground-floor back apartment that gets headlights shining in or is close to the bins.
Upstairs apartments could also offer better views, light and security, while ground floor options could come with a courtyard, meaning more land value. The way a house was set on a block of land could also make a difference.
WHY IT ALL MATTERS
A great location is key to any property worth investing in. If a property doesn’t meet the location criteria, we don’t call it investment quality.
But buyers seeking a family home should also aim for these fundamentals. Properties that tick those boxes will give you the lifestyle.
On the other hand, a poorly positioned property might be cheap to buy now but would be harder to sell or rent out down the track.
Great location doesn’t have to mean blue-chip inner-city suburbs — many of these principles applied almost anywhere.
And while the inner suburbs had benefited from strong capital gains, there was still growth left in outer areas. Getting to know an unfamiliar area is critical before buying.
Here at Positive Income Properties, we do all the heavy lifting in these areas of research for you and can help offer advice and examples of where is performing well in the key metrics areas.
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