Timely Updates

How to Research a Suburb Before You Buy

Magnifying glass over a suburb map with cards showing price growth, days on market, clearance rate, rental yield and vacancy rate

To research a suburb, compare five numbers: median price growth, days on market, auction clearance rates, rental yields and vacancy rates. Together they show demand, how quickly homes sell and how investors are faring. Then check local factors like flood maps, schools, transport and planned development before you make an offer.

While you’re getting your head around the macro, don’t lose sight of the micro. Median house prices can vary greatly from suburb to suburb. Here’s the local data house-hunters should have to help make an informed decision.

How fast are prices growing?

While property is a long-term proposition, it’s worth comparing the last five years of price growth from suburb to suburb. If one suburb has moved beyond your reach, check out the performance of neighbouring postcodes. Neighbouring suburbs can sometimes offer similar features at a lower price point.

How quickly do homes sell?

If most homes are selling in 30 days or fewer, the suburb is probably in high demand. In many markets homes take one to four months to sell, so if a suburb is moving most of its properties in 40 or fewer days, it may be worth closer inspection.

What do auction clearance rates tell me?

A clearance rate is the percentage of properties sold at auction over a week or a month. Interest rates, the time of year and competing events can all affect clearance rates. In major cities, a suburban clearance rate of 70 per cent or more is generally seen as a positive indicator. A high auction rate can also be a sign that agents and sellers are confident demand in the suburb is strong.

What rental yield can I expect?

It can help to compare rental yields across suburbs. Gross rental yield is the median rental income over a year as a proportion of the median property value. Rental yields can remain high even in stagnant property markets, especially if there is little rental stock, so it is one factor to be considered with a range of others.

How easy is it to find a tenant?

The lower the vacancy rate, the higher the demand for rental properties, which is often a sign of market health. However, a glut of apartments might have no effect on house prices in the same suburb, so be careful not to make assumptions on vacancy rates alone.

What else should I check?

No single metric can sum up a suburb’s prospects. Beyond the data there are a range of other factors that can influence local property markets, including existing and planned transport and roads, the quality of local schools, restaurants, cafes and community spaces such as parks.

Do your homework. Once you have homed in on a suburb, talk to me about finding a loan that suits your circumstances.

This article contains general information only and does not take into account the objectives, financial situation or needs of any particular person. Before making any decision, you should consider whether the information is appropriate to your circumstances. Information in this article is correct as of the date of publication and is subject to change.

Frequently asked questions

Real estate portals publish median prices and days on market, councils publish flood and zoning maps and the Australian Bureau of Statistics publishes census data. Your broker can also request a complimentary property report with recent sales.

Gross rental yield is the yearly rent divided by the property price. What counts as good depends on the area and property type, so compare a suburb’s yield with nearby suburbs rather than a single benchmark.

Search the address in Brisbane City Council’s FloodWise Property Report. It shows the flood likelihood for the property and is worth checking before you sign a contract.

Johnathon Reeves - Time home Loans
About the author

Johnathon has spent 17 years in finance: six as a business and agribusiness banker at NAB, and since 2015 as a mortgage broker. He runs Time Home Loans in Brisbane and helps clients right across Australia, comparing 50+ lenders to find the loan that fits and explaining why in plain English. He is an FBAA member and the author of The Great Australian Mortgage Guide. Johnathon Reeves is Credit Representative 478570 of outsource Financial Pty Ltd, Australian Credit Licence 384324.

Important information

This article is general information only. It doesn’t take into account your objectives, financial situation or needs, so consider whether it’s appropriate for you and speak with us before making a decision. Interest rates, lender policies and government schemes change, so check the current position with us before you act. Lending criteria, fees and charges apply. Time Home Loans Pty Ltd ABN 53 161 695 012 is Credit Representative 529395 of outsource Financial Pty Ltd, Australian Credit Licence 384324.

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