Buying a property in one of the hundreds of housing estates across Australia is a no-brainer for many families.
In most cases the land or package is comparatively cheap, allowing them to purchase a home that is significantly larger than anything they could buy close to the city, and for a fraction of the cost.
But with so many estates dotting the landscape, how do you identify the ones that offer good value, as well as excellent potential for growth?
Here’s what to look for in a high-performing estate area.
Buying a property in a housing estate is a no-brainer for many families. Picture: Getty
Access to amenities
It comes as no surprise that many of the best-performing estate areas already have good access to shops, schools and other amenities.
Any advantage in buying a great home in a new estate could quickly be eroded if it takes years for the surrounding infrastructure to catch up.
Parley Property Advisory’s Luke Assigal warns that you should ensure that planned infrastructure projects have already started or have iron clad timelines for when construction will begin.
“You find a lot of places at the moment, they said they’d have a train station five years ago, and they still haven’t got one,” he says.
“In those areas, when they build, you tend to find it’s like the chicken comes before the egg. You’ve got all these houses and you’ve got no train station, no shopping centre. You’ve got to drive 20 minutes to get to anything, which doesn’t seem like much, but with the convenience other areas have, it’s a lot.”
The importance of buying near infrastructure:
Land quality
The cost of building, and subsequently demand and price growth, can be affected significantly by the land itself, according to Max Brown agent Tony Smith.
Smith says estates that are relatively flat or gently sloped, like some currently for sale in Melbourne’s outer south-east, always have greater appeal.
“The land out there is all really nice. It’s all gently sloping, which doesn’t sound very interesting, but when you go to other areas where you’ve got slope, it can add $40,000 or $50,000 to someone’s house costs,” he says.
“People are focusing on affordability, so if they can buy a block for $300,000 and build a house for $200,000, they’re getting themselves a new home for $500,000. But if the area’s got slope and it jumps the price to $540,000, that knocks them out.”
Cultural lure
Finding an estate area with an in-built network of demand is one of the hidden keys to performance and growth.
And Smith says targeting regions with a strong representation from certain cultural demographics can yield big results down the track.
He highlights one such Melbourne region, with a booming Indian population, as an example, saying land prices in one estate have soared from an average of $250,000 a year ago to $350,000 now, due largely to that acute demand.
“It’s been embraced by the Indian community, and that’s the number one reason. They’re moving down there because their community’s down there,” he says.
“It’s a big pull for people. And then what happens is everything in that area starts to adjust to that – the style of schools and shops and restaurants.”
Finding an estate area with a cultural network is one of the hidden keys to performance and growth. Picture: Getty
Proximity to CBD
It’s generally the case that most of the newer housing estates are some distance from the CBD. That’s where all the available land is, after all.
But find one that’s a little closer in and you could strike gold.
Smith says one growth area in Melbourne’s north-east has experienced price increases of 50% in a very short period of time, purely because it’s much closer to the city than others of comparable scale.
“We started off selling at $200,000, now we’re at about $300,000,” he says.
“It’s had more growth than anywhere because it’s 35km from the city, whereas other areas are 55km from the city, and it’s still cheaper than those areas.”
See Australia’s top 10 growth suburbs
Supply just right
Nothing will kill good growth quicker than an oversupply of properties in one area.
Finding a housing estate that is well priced but has a touch of scarcity is a good start, so be sure to investigate the surrounding area, to ensure other developers aren’t about to pour hundreds more properties or lots onto the market just minutes down the road.
“You don’t know that a developer has just bought or is subdividing about 200 lots in that area, and that’s going to flood the market,” Assigal says.
“You look at the areas that are going crazy at the moment, there’s so much demand and not enough supply, and they’re the areas where people will be happy to pay over the market.”
