Sometimes, it can feel like property prices change with the wind. Areas that were a sound investment a year ago are now falling. But, annoyingly, that area that no one wanted to invest in is suddenly seeing a spike in property prices. It can all seem a little mystifying.
However, by taking into account certain factors and changes in an area, it can become clearer to see which neighbourhoods are primed for an uptick. With that in mind, let’s look over some of the best ways to identify potential property hotspots.
From Undesirable to Gentrified
Every city has those areas that were once no-go zones, but are now the hippest, most expensive part of town. There are a few key indicators to look out for trying to scope out a gentrified, up-and-coming hotspot.
Go through the property prices of the area you’re looking and track the trends they show. Undesirable areas that have showed rising house prices for two or three years are primed for gentrification and, thus, further rises in property values. Team this with any information on demographics you can find. What is the average age of people buying and renting homes in the area? If there is a prevalence of young people, the area is most likely due for an uptick in trend. And that means higher property prices to come.
Also take note of the treatment of current housing stock in the area. If many properties are undergoing refurbishment or if there are new builds going up, this is another very encouraging sign.
The Wider Effect
It may be that you noticed an area getting better and house prices rising, but just missed the boat. If that’s the case, look at the areas surrounding this. Gentrification and rises in house prices are very organic and areas nearby may be due the same rise in hipness and attendant house price increases.
Take an almost scientific approach to this. Look at how much house prices have gone up in a specific area and come up with an average. The apply that to surrounding areas and see how much their properties have increased in value – if it’s over the 5 percent mark, the chances are you’re looking at a future hotspot.
Look for Infrastructure and Transport Links
Finding out where new and future infrastructure and transport projects are going to be is a great way to diagnose future hotspots. This has two benefits. The area itself will become more prized because of better infrastructure and, resultingly, house prices will rise. On the second count, these types of big-scale projects will bring more workers and families to the area, increasing demand for housing and, again, pushing up house prices.
There’s no one-size-fits-all approach to sizing up property hotspots, but there are a number of key indicators to use as a guide, as we’ve seen. Work by these rules of thumb, and you should develop a keen eye for the next booming property area.
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