How and where to spot a high-growth property in Canberra
Every buyer likes the idea of price growth, but what are the signs that a suburb is on the path to gentrification?
Brad O’Mara of Ray White Queanbeyan/Jerrabomberra says the best bets are in those older Canberra suburbs with bigger blocks.
“The sure-fire signs are when you start to see knock-downs and rebuilds or extensions starting to take off around a suburb,” he says.
“Usually speaking, the land value content will have increased significantly and that provides a margin to rebuild or renovate without over-capitalising.
“A lower buy-in price increases that flexibility. Do your homework on median prices of suburbs and their immediate neighbours – that can point to an opportunity for growth.”
O’Mara says gentrification is not so evident across the border where Jerrabomberra is still relatively new and Googong even newer.
Mark Larmer of Independent Inner North & City says gentrification is really evident in a suburb like Narrabundah.
“Its proximity to Red Hill and Griffith has seen it enjoy a big surge in land value – and that’s created the ideal environment for rebuilds and renovations,” he says.
Larmer says the supply-demand equation is also a key factor in gentrification.
“If we continue the Narrabundah example, we see that rebuilds tend to be on a like-for-like basis – a new home for an old home,” he says.
“In other suburbs, you may see the infill expressed in units or townhouses. These can dramatically increase the resident population, but the ready supply can dampen price growth.”
Signs of gentrification
Established areas. Older areas tend to feature homes on big blocks. Scarcity of land can push prices upwards and lead to urban renewal. Signs of gentrification include new builds, dual occupancies and renovations/extensions.
Neighbours. Check the price performance of neighbouring suburbs. If any have had an unusual price surge, it could be a sign that your suburb is next in line for renewal.
Infrastructure. Suburbs with solid infrastructure like schools, shops, public transport and proximity to workplaces usually enjoy consistent price growth. Gentrification is more likely as the cost equation tips in favour of the home owner.
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