Some of New Zealand’s most popular suburbs were once unfashionable and underpriced – looking back, you’re kicking yourself that you didn’t move in when you had the chance. But pinpointing those up-and-coming areas isn’t easy while they’re still filled with dollar stores and run-down houses. Can you identify a hot spot before you’re priced out of the market?
REDnews talked to Stephen Hart, who is the author of the Where to Live series and runs Hometopia.co.nz, about what you should look for when you want to beat the crowds. He says that it’s not an exact science, because “some suburbs just will surprise you and come from nowhere,” but there are certain hallmarks to look for in order to spot a soon-to-be-sought-after suburb:
It's accessible to the centre of town
There are two types of suburbs to look for here: The first is a suburb that is close to town but underpriced compared to its neighbours. Auckland's Glen Innes is a good example of this type of suburb, says Hart; while it still seems expensive, it's far more affordable than other suburbs that are the same distance from the CBD.
Christchurch has its own set of special circumstances, but areas that are near the centre of the city are likely to see a jump in house prices once the rebuild of the CBD is complete – could now be the time to buy in Linwood?
The second type of suburb to watch out for is one with improved transport links that suddenly make it easier to get around the city. It could be a new motorway, train station, or roading upgrade. The new four-lane state highway in Christchurch, for instance, will cut commuting times and make suburbs from Addington to Hornby more attractive to both buyers and tenants.
It's a 'bridesmaid' suburb
What do buyers do when they can't afford their first-choice area? They look at the neighbouring suburbs and find the next best location. Hart cites Meadowbank in Auckland as a prime example – it has gone from affordable to expensive over the past ten years, elevating it from Remuera's bridesmaid suburb to a desirable location in its own right.
Smart buyers should perhaps look to Meadowbank's own bridesmaid suburb, St Johns, as a likely candidate for big price rises in the future.
In Wellington, Newtown is Mt Victoria's bridesmaid suburb, and what was once a cheap area has seen substantial price increases over the last ten years. Could one of Newtown’s neighbours be the next hot suburb for Wellington buyers?
A mall is being built, or renovated
It takes many years and hundreds of millions of dollars to build a major shopping centre, and developers choose their locations carefully. Hart says developers use state-of-the-art research to identify places where land is affordable, yet accessible, and where people with disposable incomes will be keen to spend money. The resulting developments increase employment and tend to pull up the prices in surrounding suburbs.
"Think about Albany and Mt Wellington [in Auckland]," he says. "The shopping malls have transformed those suburbs.”
Places where new shopping centres are currently underway include Massey and Flat Bush (Auckland), Tauriko (Tauranga), Brackenfields (Amberley), and Frankton Flats and Remarkables Park (Queenstown).
Look too for major reinvestment, says Hart – in Auckland's New Lynn, $50 million is being spent to overhaul the 50-year-old LynnMall. Add to that New Lynn's improving transport links, and this looks like a definite hot spot for future gains.
New boutique shops are opening
It's not only 'big box' retail centres that indicate retailer confidence in a suburb. Look too for the kind of boutique retail stores that cater to those with a high disposable income. That means high-end cafes, fashion outlets, food stores and art galleries.
Otahuhu, for instance, is currently one of the most affordable suburbs in Auckland, but its boutique shops could be an indicator that prices there will rise fast.
In Lower Hutt, Petone’s high-quality stores were an early indicator of that suburb’s lift in values.
If you spot a high-end retail outlet opening in an unlikely suburb, Hart says it could be “one of those little flags going up” to show you’re looking a future property hot spot.
The trendsetters are moving there
Artists and musicians are often cash-strapped but influential, and the places they choose to live can set the trend for other buyers. It may seem like an inexact way to identify such a big investment, but all over the world the same pattern emerges, says Hart. From London’s Chelsea to New York’s Soho, artists are the first to find the hot new suburbs.
"Artists look for somewhere that is accessible for clients, but cheap, says Hart. "The next people to follow are creative types like art directors and photographers, who benefit by associating with genuinely artistic people. Then come the next-level television professionals, then the cafes go in, then the boutique fashion and organic food stores."
But remember, you still have to live there
Most suburbs, even some of the highest-priced, have their good and bad parts, says Hart – choosing the right street is just as important as choosing the right suburb.
And remember, a suburb that is currently unfashionable may well take off in years to come, but in the meantime, you need to live there while it goes through what could be a lengthy transformation period, says Hart: “so choose somewhere you feel safe.”
Navigate the house hunting process with handy tools and info from Westpac: