One of the key skills in property investing is the ability to pick a winning option. Understanding the triggers of price growth will help you secure a great property at the perfect time. Capital growth should be your main focus and will have the greatest impact. If you are new to property investing, look for markets that are on the verge of surging in value so that you can ride the upswing! Here are some early signs of a suburb or neighbourhood that is about to rise in value.
Properties don’t stay in the market for long
This is a clear sign of demand being greater than the supply. If the properties advertised tend to get quickly snapped by buyers, it results in a low average days on market for the neighbourhood in question. In addition to the average days on market, keep an eye on property advertisements for discounts. If the demand exceeds supply, sellers don’t have to offer discounts with the hopes of attracting buyers.
The number of auctioned properties rises
If properties tend to have a lot of demand from buyers, then real estate agents will host auctions. This allows the seller to pick the highest bidders while the buyer has to outbid each other to grab the property. If you are noticing more property auctions along with high auction clearance rates, it is a clear sign that the market is getting hot!
Declining vacancy rate
When the number of tenants exceeds the available number of rental accommodation, it is referred to as a low vacancy rate. In general, a vacancy rate of 3% is an indication of a balanced market. If the rate exceeds 3% it is a surplus while a rate lower than 3% means a shortage of rental properties. Needless to say, when rental properties are high in demand, the prices increase and investors take home the profits.
According to real estate experts, a rising yield is a sign of impending capital growth. As a neighborhood or suburb grows in popularity, tenants will move in faster and will push the rental prices up with high demand. This attracts investors who seek higher yields before owner-occupiers start moving in. At this stage, some renters may choose to buy and raise buying activity to increase property prices.
Increasing online interest
If large numbers of people start doing online searches for properties in areas where they are not widely available, it may be an indication of growing demand and a clear sign for rising property values.
Bear in mind that assessing locations is an important part of the property investing process. In order to spot these up-and-coming suburbs and neighbourhoods at the perfect time, you may need the assistance of an experienced real estate expert. Capital Wealth Property is your trusted property investing partner with its wide and developed network of real estate professionals who are always on the hunt for new locations on the rise. Contact us today for more information.