With property values rising over 2021, we have been increasingly receiving questions about the best place to buy a house in Australia, the best city or neighbourhood to invest in a home for the first time.
Although it is a good question, it can also be tricky to answer because it depends. It depends on a series of factors, scenarios and situations, which we will cover in this article to help you out.
To begin with, it is important to say that at Capta, we always avoid putting everyone into the same basket because this is not realistic. It is crucial to understand that each family or person has a different profile and financial situation.
While some families may earn less than 100k per year, others might receive much more than that. The financial situation, as well as the goal for that property purchase, and the professional and personal profile of the family or individual, will have a massive impact on the final buying strategy.
This being said, be careful with the general information out there! Now, let’s talk about how to find the perfect place to buy your house in Australia.
What is the best place to buy a house in Australia?
When looking for a place to buy your first property, the first thing you have to have in mind is defining the purpose of the property: is this a property to live in with your family or an investment one?
This question is important because all government grants and concessions, such as Stamp duty and First Home Owner Grant, only apply for owner-occupied properties. This means that if you are buying a property to rent for someone else, you will need to be financially prepared for that.
But this is not the only thing: the searching criteria should also change depending on if you intend to live in the property or not:
Looking for the best place to buy a house to live in:
1 – What is your lifestyle?
The first thing is to think about what location would best fit your lifestyle, for example:
Do you dream of living close to the beach? Are you looking for a place with easy access to the city centre? Or are you looking for a much more quiet neighbourhood close to the bush?
The kind of structure, architecture and design of the properties, as well as price and availability, will completely change according to the area you are looking for.
2 – Is it close to work?
We know it is increasingly common to work from home nowadays. But if your job requires you to go to the office at least some times per week, you better pay attention to that distance when searching for the best place to buy a house.
Is it 10 minutes away from where you work or 1 hour? How easy is it to access public transport to get there? How long will it take to get to work on a peak hour?
3 – Are there schools around?
If you have kids, don’t forget to look at school options in the area you intend to buy the house. Are there public schools around? And what about private ones?
You can search for it all online using google maps or even google street view to have an online walk around. If you have enough time, go there to see the place yourself and get the real feeling of that neighbourhood.
Looking for the best place to buy an investment property:
1 – Understand the market in that area (shortage)
When you look for a place to buy a house as an investment, it is fundamental to understand the market demand in that area once this will impact your capital growth potential.
When there is a shortage on the market – meaning not many properties for sale and a lot of people interested in buying them – the market value of your property is much more likely to increase.
2 – Neighbourhood and its facilities
Looking for places with a good range of facilities is a good strategy to improve renting this house in the future.
Find out if there is a good structure of amenities nearby: Is there easy access to shops, schools, public transport, parks, hospitals? Are they within walking distance or not?
Are there any development plans for that area within the next 5 years or so?
3 – Population of that area
Try to search for Universities, schools or offices around and understand if this is a student neighbourhood or more like a business centre, for example. These factors will directly impact the level of education of people who live in that area.
And why is this important? – you might ask. Because that determines the tenants to whom you will be renting the house in the future. Would you rather rent it for families with kids, a working couple or some students?
4 – Think about the capital gain
When buying an investment property, the two main ways of making money out of it are: rental income and capital growth.
Having a profitable rental income – meaning the amount received is equal to or higher than the property costs – is a good strategy to help you pay down your loan and maintain your property.
While the capital growth corresponds to the property’s value increase on the market, which is when you would really make a profit.
This is what it’s called home equity: a capital gain that happens not only when you own your house for some years and have been paying down the loan but also when your property’s value increases on the Real Estate market.
We have explained that in much more detail in this other post focused solely on equity growth.
If you are planning to buy a house in Australia and need help finding the best place to purchase your property, please talk to us, and we will be happy to assist you in this journey.