Why Australian Real Estate Location Is A Top Priority

The value, commercial appeal, and long-term potential of a property significantly depend on its location, according to the age-old adage “location, location, location”.

The significance of location in Australian real estate cannot be emphasised enough. Various factors contribute to a location’s appeal, such as its proximity to key attractions, the availability of quality services, and the area’s economic prospects.

All homebuyers can learn a thing or two about why location is one of the cornerstones of real estate decision-making.

This property blog considers homebuyers’ priorities, starting with why it pays to keep an open mind.

Keep An Open Mind

Homebuyers need to know what they value and need in a home before they start their property search. Buying a property takes time. It can rarely be accomplished in a few days. Adjust your mindset now to expect the homebuying process to take at least a few months.

Once you know your budget, create a wish list of your wants and needs in a home and location. Do you need an extra bedroom or more extensive living space? Will you compromise on space or floor plan for a short walk to the local shopping area?

Know your needs and wants so you get the home that works for you.

Intergenerational Living

Do you know properties with granny flats or other self-contained living spaces are in high demand?

According to online searches, there’s been a spike in searches for these properties. It started post-pandemic, and homebuyers don’t want to be stuck in a property that doesn’t deliver more value than just location.

Intergenerational living is more in vogue now due to the crisis in the cost of living. Grandparents are moving in with a child and possibly providing childcare.

Home and Income

Additionally, properties offering income are desired. If the grandparents are not moving in, tenants will pay for the rental income, which can go towards rising rates, insurance, and other property expenses like maintenance.

However, if you’re thinking of selling any time soon, it pays to know location is still a top priority.  Let’s look at why locations choose homebuyers.

Why Location Is A Top Priority

Location still is high on the list of buying priorities for reasons including:

• Job market and economy
• Local shopping and services
• Safety
• Education
• Transport and roading
• Lifestyle

1. Accessibility and Convenience

When looking for a property to rent, buy or invest in, most people prioritise convenience and accessibility. They want essential services, such as schools, medical facilities, shopping centres and nearby transportation hubs, to make their daily lives easier.

It is advantageous to have at least a primary school, childcare facility, supermarket, pharmacy, and general practitioner medical centre within a suburb.

The surrounding road network is another factor that can make an area more appealing.

While a property right next to a highway or freeway may not be the most attractive, one located just out of earshot of arterial roads can be desirable. This is due to the added convenience the occupants experience when accessing other town or city areas.

Rather than slowly winding through a series of suburban streets, they can quickly jump onto a major road and reach their destination.

2. Job Opportunities and Economic Growth

The economic health of a region directly influences the demand for real estate. Locations with thriving job markets and diverse industries tend to attract more residents, increasing property values and sustained growth.

There is a risk in investing in areas that do not support diverse industries. A downturn in the economy that impacts that sector or the announcement of closures among some significant employers can significantly affect the housing market.

A historical example of this is the city of Detroit in the United States. Once a thriving metropolis, the population was employed mainly within the auto manufacturing industry. The closure of factories and the subprime mortgage crisis led to a downturn in the city’s economy and caused Detroit’s significant depreciation in property values.

In Australia, towns primarily supported by the mining industry face a similar risk.

3. Quality of Education

The reputation of local schools and educational institutions is crucial for families. In most countries, schools can generally be divided into public and private.

Public schools usually have pre-determined intake boundaries, with children living within a set area allocated to a particular school. Properties within well-regarded school districts can be in higher demand, which leads to increased prices.

One example is Rossmoyne Senior High School in Western Australia. An independent public school, its students have historically performed well compared to other high schools in the state. Homes within the school district tend to be more desirable, and parents want to move to that area.

Private schools can accept students at their discretion. There aren’t intake boundaries to consider, but parents wanting a private education will look for something nearby to make the school run more conveniently.

The UK is an anomaly in the rule of public and private schools. Free-to-attend schools are either state-funded, religious, charitable or independent. Australians call a private school a public school’. It is fee-paying, but there are no geographical requirements in the UK, with students attending from various locations, many as boarders.

4. Safety and Crime Rates

Safety is a fundamental concern for homeowners and renters alike. A specific location’s crime rate can influence property values, the overall perception of the neighbourhood, and residents’ long-term satisfaction and well-being. Areas with lower crime rates are considered safer, leading to increased demand and higher property values.

While it may not have any bearing on safety, having related services nearby, such as a police station or correctional facility, may impact how potential buyers view the property. Whether that impact is positive or negative largely depends on the context.

5. Infrastructure Development

Ongoing urbanisation and infrastructure development can significantly impact an area’s real estate market. Locations that are part of well-planned urban development projects or those experiencing infrastructural upgrades tend to experience an uptick in property values.

Adding amenities such as parks and recreational facilities, improving the transportation infrastructure, or overhauling local shops can transform a neighbourhood, making it more attractive to potential buyers and investors.

6. Environmental Factors

Environmental factors play a crucial role in determining the suitability and value of a location.

Properties in areas prone to natural disasters, such as floods or cyclones, may experience lower demand and decreased property values. This is especially true after a disaster.

Conversely, proximity to green space and scenic views can enhance a location’s appeal, contributing to higher property values. This is why homes facing a river or park, overlooking the ocean, or having panoramic views are more valuable than surrounding properties.

7. Market Trends and Demand-Supply Dynamics

Real estate markets are dynamic, so understanding current and historical trends is essential for making informed investment decisions.

Location influences market trends; areas experiencing higher demand may see increased property values. Conversely, markets with too many available properties or experiencing declining demand may face a decrease in property values.

Being attuned to a particular location’s supply and demand dynamics is vital for buyers and sellers alike.  Either conduct intensive research for a few months before buying or selling. Or commit to regularly monitoring the areas you’re interested in via the latest property market updates.

8. Cultural and Lifestyle Amenities

Proximity to cultural and lifestyle amenities such as theatres, museums, restaurants, and recreational facilities enhances a location’s overall appeal.

Properties in areas with various high-quality amenities tend to experience sustained demand and higher appreciation.

Understanding the shared lifestyle preferences of potential residents is crucial for real estate investors seeking to capitalise on a particular location’s cultural and recreational facilities.

9. Future Development Plans

Knowledge of future development plans for a region is essential for long-term investment considerations.

Areas slated for infrastructure improvements, commercial development, or urban renewal projects may experience increased property values in the future, meaning a greater return on your investment.

Conversely, areas slated for undesirable projects, such as creating a new highway near the home, may experience a decrease in value.

Another thing to consider is whether the properties have any eminent domain stipulations or similar on the title, which would allow the land to be claimed for future development projects.

In some countries, eminent domain is referred to as compulsory purchase. For example, if a highway or airport extension is planned, the government initiates a forced buy of the property.

Summary

The importance of location when buying or selling real estate cannot be overstated. From accessibility and economic growth to education, safety, and environmental considerations, a property’s location influences its value and long-term potential. This is why it is worth remembering—an area that chooses homebuyers.

Successful real estate investors and homebuyers recognise the significance of thoroughly researching and understanding the nuances of a location before making investment decisions.

However, please don’t get too hung up on location, as it is not the only priority for Australian homebuyers. Properties that offer home and income, or separate living for grandparents, are desired, and the right home will be sold over another with a location in its favour.