Looking for opportunity for a suburb to outperform with capital growth?
One of the figures we track at Allen Real Estate is to look at a suburbs density ratio (The percentage of strata properties such as townhouses, apartments and villas, as a total of all the housing supply). Suburbs with a very high density ratio, such as Kangaroo Point marked as red in the graphic below, are flashing a warning signal in terms of buying a strata property in these areas. Reasons for this are that you are competing against a lot of similar properties and often buying in large complexes with very high body corporate costs, somewhat similar issues faced by the Gold Coast high-rise market for example.
Suburbs that are neighbouring these high density strata suburbs, which are usually near CBD or key transport hubs, present as excellent targets to go looking for property as they tend to be both more affordable and have few issues concerning over development. They also stand to benefit from the spillover in development such as future council rezonings of the land use.