5 ways your surroundings can impact the value of your property

Published on November 30th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

At Savvy, our mission is to empower you to make informed financial choices. While we maintain stringent editorial standards, this article may include mentions of products offered by our partners. Here’s how we generate income.

Investing your hard-earned money into a property is no joke. That is why you need to pay your dues by doing adequate research into the various Australian property markets to get the best deal for your money. Booming construction or lack of it can play a role in the value of your property. Here are five ways following the construction trajectory trend can help you invest in a property that will appreciate.

The positive sign of cranes lining the sky

Construction in an area is usually a good sign. The boom in the area could be a significant sign of good things to come. Corelogic Chip index December quarter results for 2017 showed Victoria having a strong housing growth which accelerated by 5% in 2017, which was the highest across Australian states at 4%.

The demand for housing was aided by developers seeking to capitalise on the high capital growth rates. This means that there could be more competition in terms of housing prices that will increase the value of your property. However not all construction is good.

Track the construction market

Researching the property market you wish to invest in is important. Knowing the construction trajectory for the past two years or more can indicate where a neighbourhood is going. Not all construction is good and can have a negative influence on property prices. American estate agency Realtor showed that the top three constructions that can pull the value of your house down are:

  • Bad schools (22.2%)
  • A strip club (14.7%)
  • High renter concentration (13.8%)

Knowing the construction trajectory can also help you see whether the area is improving to see you get a good return on investment, or whether it will be a hell hole that will soak up your finances.

When taking a peek into our own backyard, the high prices that Australians must fork out for a roof over their heads is resulting in people looking for alternative ways. This can result in quick cheap infrastructure popping up, that will result in you having to cough out more than you expected due to high maintenance costs. The chances of being to sell your house could be greatly reduced.

Focus on quality rather than quantity

Construction is a clear indicator of supply and demand. It can reflect a positive interest of people looking to buy a home or a boom of industry in an area. Victoria came out on top of the Corelogic report due to its quality construction that boasts good house median prices. This is a good indicator for a solid investment. When viewing the area, it’s best to keep in mind the quality of construction. This can affect the selling of your own property in future. If things are falling apart at the seams despite the construction boom, run!

What is your residential home located next to?

Before you purchase your home ask questions and research. Find out if there is any construction scheduled in the next few months or years, and what type it is. The last thing you want is to buy a house where high commercial use is being planned. This could be restaurants, gas stations, or public transport construction that will leave literally you tossing and turning at night.

The median sale price range can be an indicator

When looking to understand the future of the value of your house when it’s time to sell, looking at the median sale price range can be a saving grace. Although there is much sweating, and possibly weeping, at how unaffordable prices are in regions like Sydney it can be a clear indicator of the quality you are investing in.

According to Corelogic, Sydney had a share of suburbs with a value of above $2 million which had increased to 18.7% in terms of its houses. While other major cities may not hit the $1 million mark, the price will still be a good reflector. If you find a cheap deal that is just too good to be true in an area with lots of for sale signs, it is usually not a good indicator of the neighbourhood.

Did you find this page helpful?

Thanks for your feedback!

This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Approval for home loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.

The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

In this article

Share this article

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on pinterest

Looking for a home loan?

Compare Australia’s reputed home loan lenders with us and save.

* Terms and conditions and lending criteria apply.

Smart money saving tips

Subscribe to our newsletter.

By subscribing you agree to our privacy policy

Related articles

Easily compare home loan options today

We compare home loan options for you so you can be assured you’re seeing the most competitive interest rates available in Australia.

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy broker and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.