Catch the sleeping giant: Tell-tale signs of a suburb about to boom
The one word any home buyer or investor loves to hear: growth. An “up and coming” suburb conjures up ideas of snatching a bargain and reaping the rewards of your investment in years to come when house prices soar. So how exactly can you spot a suburb about the boom?
There are some fundamentals in trying to pick if an area has potential for growth. Infrastructure upgrades by government or private enterprise can give a whole suburb a lift in value. For example, Footscray has and will continue to have significant money spent on it’s CBD and the zoning has changed allowing high density housing. The millions of dollars spent on infrastructure has pushed up land values not only for development sites, but for family homes that are benefiting from the upgrade in amenities.
Good coffee is one of the signs for me. If you take a suburb like West Footscray for example, not so long ago it was passed over by many buyers. Coffee shops have opened and houses are getting renovated. Bigger prices will push out the riff raff over time. Some houses have sold recently for over $1,000,000 in West Footscray.
Speak to locals like shop owners and ask what living in the area is like. They will tell you. They will sometimes give great tips on where to avoid.
Attend auctions but speak to the neighbours. Days on market (DOM) tends to have a negative correlation with up and coming areas i.e their time on market continues to shorten. The neighbours will watch from their front yard and are a captive audience for you to bombard them with questions! It also gives you a chance to judge market strength by the numbers of bidders and also you can see what type of bidders and buyers are moving to the area. Shop keepers and teachers/principles will also give you some valuable intel.
Some other factors to consider…
- Period homes in period streets if possible in the area you are looking for
- Close to public transport, preferably train or tram
- Within a school zone
- Close to a local village or coffee shops
- Subdivision potential down the track
What kinds of buyers do up and coming suburbs attract?
Pre-boom, we tend to see those with affordability and difference as a priority. Therefore, it is common for students, ethnic communities with migrant populations and creative groups to flock to suburbs of potential. As the saying goes: “artists are the first agents of gentrification”. Because they have the vision to create homes in neighbourhoods don’t be put off by run down properties and buildings. This is certainly true for booming west Melbourne suburb, Footscray, which hosts a number of leading art and community events like Big West festival.
Case in point: Seddon
A suburb like Seddon was a sleeping giant. It was arguably a “second cousin” to Yarraville but you can find it between Footscray and Yarraville. It had a sleepy village on two streets (shops- tick) and is only 6kms from the CBD (city proximity- tick). It also has some beautiful period homes ripe for renovation (development- tick) is in between two train lines with access to multiple train stations (transport- tick). Many Seddon homes also have direct city views over the docks.
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As neighbours, Footscray and Yarraville have risen in prices dramatically over the past few years. As such, the signs for Seddon became evident. As a result, some of the old garages and boating shops were knocked down to make way for mixed use (coffee shops down stairs and apartments above) and then the restaurants came. The strip along Buckley Street will change dramatically over the next couple of years. Watch this space!
Seddon currently has a higher median price than Yarraville and Footscray and I think it will continue to grow faster than both of these suburbs. All of the fundamentals were there. I wish I had bought a whole street 10 years ago!
About the author: Marty Rankin is the Managing Director of Village Real Estate, Melbourne. Combining a genuine passion for people, an unmatched commitment to helping his community and an uncompromising work ethic, there’s a reason why Marty is recognised as a top performer in the Inner West Melbourne and an “all round nice guy”!