Signs a Suburb May Be Heating Up

Jacque · 13th Apr, 2016

Chilliblue said: ↑

Here are my thoughts about what signs to look for with regards to a suburb that may be about to surge in no particular order.

1. Falling Stock Availability: Lower numbers of properties could be an indicator that owners are not wanting to sell. Those properties that do go on the market are snapped up by waiting buyers.

2. Discounting Reduces: With more buyers, sellers have no reason to offer attractive discounts so the level of discounting reduces.

3. Falling Average Days on Market: Again, with more buyers in the market and less properties to buy, the amount of time a property spends on the market drops which results in lower average days on market.

4. More Auctions: This is a great indicator for those suburbs where auctions are not the norm as local agents will auction properties when the demand for property is strong. The belief being that buyers will outbid each other and push the final sale price up.

4. Falling Vacancy Rates: Lower vacancy rates results in a shortage of rental accommodation. It is generally accepted in the industry that 2-3% vacancy rate indicates a balanced market. A rate below 2% indicates a shortage of rental properties and this occurs, the result is often higher rents which in turn increases sales prices with investors trying to take advantage of higher returns.

5. Higher Level of Interest: Relating especially to online advertising such as realestate.com.au where buyers can monitor interest in properties. When there are larger numbers of people searching for property in a suburb where stock levels are low, it could be an indication that there is strong demand and values may be about to increase.

Would love to know your thoughts.
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@Chilliblue you missed Rising yields and Prolonged underperformance in this similar list from Nila's re.com.au article last year 8 signs a suburb is about to surge in value - realestate.com.au
All valid points but I think that price surges have a limit, based on demand and affordability. Foreign ownership and activity is another factor that impacts certain suburbs and has certainly done so in the last 3-4 years here in Sydney.

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Signs a Suburb May Be Heating Up

Jacque Jacque Parker Premium Member

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Signs a Suburb May Be Heating Up

Jacque Jacque Parker Premium Member

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