Things To Look Out for When Investing in a New Suburb

New suburbs are emerging, pushing the boundaries of metro areas and offering new investment opportunities. While this growth is exciting, buying in these new areas can be a pricey gamble.

The appearance of new suburbs 

An emerging suburb is one being developed to accommodate a growing population. They are usually on the outskirts of metro areas where properties are lower in cost than those closer to the CBD. Population in these areas often grows significantly over a short period of time, something seen in Caroline Springs in Melbourne’s outer west and Rouse Hill in Sydney’s outer northwest.  

However, there’s more that goes into creating a thriving new suburb than finding an open field, dividing up the land, and putting up some street signs. For investors, here are some points to be mindful of before signing that contract. 

What to look for  

Education – school drop-off shouldn’t be a treacherous journey. Check the suburb’s catchment zone to see if there are existing schools close to the property. A school with a strong reputation might even increase the value of your investment. 

Public transport – is there enough public transport, like buses or trains, that connects to nearby regions? Also, think about how long it takes to commute to the CBD. Easy access to the CBD will help future-proof your investment.  

Parks and amenities – many residents make the move to the outskirts to be closer to nature. Are there existing parks in the suburb, or natural points of interest such as national or state parks, nature trails, or lakes? 

Retail precincts – consider how far residents will need to travel to carry out the weekly grocery shop, or the distance to a larger shopping precinct.  

Medical facilities – local medical facilities such as pharmacies, GP clinics, and hospitals give residents peace of mind knowing they won’t need to travel far to receive medical care.   

Benefits of investing in new suburbs 

Affordability – because of their emerging nature, building in these suburbs often works out to be more affordable. 

House and land packages – these packages are generally offered in new estates. You can select a design from a catalogue or display village, pay the deposit, and then the builder takes over. 

Property value – If the suburb booms, the value of your property likely will, too. Therefore, if you decide to sell the property down the line, you could fetch a higher price. 

The potential downfalls 

Expectations not met – some developers may over-promise and under-deliver, leaving you with an investment in an estate with little in the way of amenity and convenience. However, keep in mind that it can take time for new estates to fully develop and flourish. Therefore, there is a possibility that the suburb may just take some time to gain the appeal you anticipate. 

Low tenancy – tenants may not be interested in renting in a new suburb, meaning your investment property runs the risk of sitting vacant. 

Investing in a new suburb certainly has a list of benefits for the investor and the tenant alike. While you can’t predict the future of the suburb, assessing the location, existing amenities, and future infrastructure plans will help you make an informed decision.