How population and infrastructure can boost the value of your investment property
Top suburbs with growth potential
Deciding where to buy an investment property may seem daunting for some people.
Whether you want to invest in Sydney, Melbourne, Canberra or other major cities and regional areas, there are some proven criteria that you can use to identify where the best property investments are.
Let’s analyse these time-tested metrics – population, infrastructure and employment – that successful investors use to identify properties with the highest potential for capital growth and returns.
Why population growth matters when investing in property?
Domenic Nesci, Wealthi co-founder, says population is a key demand driver for property prices.
As a property investor, you want to know what’s happening with the people in the area where you want to invest.
Here are some questions that will help you understand the population of a particular area:
Is the population growing (in number)? Are there more people moving into the area?
What is the composition of the population? Are there more students, professionals or young and growing families in the area?
Is the income level among the population growing? This can mean they can pay higher rents or can buy within the area
Is it a well-established area with no room for new developments?
Are the people downsizing or do they need bigger accommodation?
In terms of population growth, here are some suburbs that are experiencing growth and look set for more value appreciation.
Wyndham Vale, a suburb only about 30 kilometres from the Melbourne CBD, is undergoing a strong population growth. With good infrastructure and amenities for growing families plus its proximity to the city, this is an attractive suburb for property investors.
Woden, a district in Canberra, is experiencing gentrification as most people enjoy the proximity to transport and other infrastructure.
What’s the impact of infrastructure on your investment property prices?
Infrastructure is another vital factor to consider which can have a big impact on your investment property.
For many renters/tenants access to transport – e.g. near a train station or a bus line – is a major consideration. People want to have easy access to transport either for work or school or overall mobility.
For some, being near a school, a hospital or a shopping centre is also important. People want the flexibility, accessibility and mobility that come with being near a transport system.
Even if there’s no existing transport infrastructure in the area where you want to invest, if you know that there are planned developments for trains, light rails or bus services, then those can boost the attraction for that area.
When it comes to infrastructure, these are some of the areas already enjoying the benefits.
For example, in Canberra/ACT where the light rail project is being rolled out, the suburb of Gungahlin has become an attractive area for investors. The light rail has connected the area to the city centres, making it more accessible to tenants.
In Sydney/NSW, the ongoing construction of the Western Sydney airport (which is due for completion in 2026) is creating a lot of interest for investors in the Liverpool area.
This is because aside from existing infrastructures like a university, schools and a hospital in the area, the opening of the airport will create massive opportunities. This could mean capital growth and better rental income from investment properties in Liverpool and surrounding areas.
Casula, which is only a few kilometres away from Liverpool is set to benefit from all the planned infrastructure projects in the area.
How can employment influence property prices
As an investor, you also want to know the economic activity of the area you want to invest in. What are the businesses and industries that operate there?
How near or far is the area from the CBD or city centres where most people work?
Are there upcoming employment opportunities there? For example, is there an industrial or commercial centre set for development nearby that can create jobs?
As most people prefer to live near their workplace, investment properties near businesses, commercial centres or CBDs usually provide good investment opportunities.
And coupled with good infrastructure and transport services that make commuting to work easy and accessible, properties in this type of area can deliver good investment returns.
With employment opportunities readily accessible at its doorstep, this Sydney suburb looks attractive to property investors.
Ramsgate – this beach side suburb, which is only about 16 kilometres away from the Sydney CBD is fast becoming an attractive area for property investors. Ramsgate is strategically located – near the train line, near the airport and surrounding businesses with strong employment opportunities.
The fact that it is near the beach is an added attraction to tenants who prefer to work in the city while enjoying the serenity of a beach side unit.
Keeping in mind these top considerations - population, infrastructure and employment - when looking for your next investment property, you’ll be in a better position to pick a property with strong growth potential.
If you think you’ve “missed the boat”, you haven’t. The market will continue to move and there are plenty of boats to catch.
Domenic Nesci, Wealthi co-founder
If you would like to discuss the Australian property market in more detail, please reach out to the team to organise a time to have a conversation about how Wealthi can help you build a successful property portfolio.
Eva Diaz is a communications specialist with focus on the financial markets. Connect with Eva.