Finding the next property hotspot is important for many property investors and especially for those entering the investment market for the first time and/or hoping to get a capital gain on their investment. Of course, finding that hotspot is like finding the golden egg, it requires a keen eye and an expert team on your side. Besides finding the right neighbourhood, you also need to find the right street and the right house. Read some tips below on what to look for when searching for a new property investment in Tauranga and then give Chris a call to get things started.
Tauranga Real Estate Trends & The ‘Ripple Effect’
While it is not always easy to predict the next property hotspot, often the latest high growth area creates what is called the ‘ripple effect’, where buyer demand and capital growth ‘ripples’ outwards from one suburb to the next. Simply, as prices increase in the ‘hot’ suburb buyers tend to look for ‘the next best thing’ that falls within their budget; in adjoining, lower-priced suburbs. This ‘ripple effect’ in capital growth most commonly moves from the inner suburbs outwards, and along or away from the coastline.
For example, Papamoa has seen a huge increase in new housing stock and house prices over the last few years, as well as new roads, new schools and new shops. Due to this growth, there has been a huge increase in demand for housing and rentals in Papamoa which has resulted in many families having to look further afield for a home to surrounding suburbs. As a result, areas such as Welcome Bay and Te Puke have also started to see signs of growth in both population, house prices and rental prices.
So take a look at websites such as interest.co.nz and see what trends are taking place in Tauranga this year. Take note of how the surrounding areas of these growth suburbs are performing, is there infrastructure spend happening, new roads, proposed new schools, etc?
In general, New Zealand town planning has a sprawl mentality rather than a build-up focus, so look at fringe areas that have good access to key roading routes and land where possible new subdivisions could happen. Also, take a look at Council long-term plans. These documents outline future growth areas and where new development will take place. You may find that an existing neighbourhood borders on a new subdivision, which will then benefit from new infrastructure.
Go To The Streets
It may sound fairly obvious but it really is important that you get a feel for the streets within a suburb. By walking/driving around the neighbourhood, you can rule out those streets that are just too run-down or too far away from schools, bus routes etc. Also, there can be sunny sides of the street or reserves and walkways that could add or detract from properties. Don’t rely on Google Maps to do the walking, get out there and get a feel for the place.
Our team at Connect can also provide you with a market analysis of the area and give you some feedback from our real estate knowledge of different Tauranga neighbourhoods.
What Type Of House
For some areas in the Bay, building a new home may have better returns and long-term capital gain than older housing stock. Look at house and land packages in new subdivisions and consider solidly built insulated homes that are close to schools, have a garage, are fenced etc. These homes are generally easier to maintain, attract quality tenants and have good capital gains.
If you are buying an older home, look for one that you can easily add value to. Changes we recommend are insulating, updating bathrooms and kitchen, new carpet and curtains, and a fresh paint job. Tenants also prefer a garage or off-street parking, fenced properties and warm, dry homes.
We are happy to provide a free rental appraisal for any home you purchase or are considering purchasing.
Good luck with your hunt and when you are ready, call Chris and the Connect Realty team for some professional, experienced property investment advice.