If you’re looking to buy your next home, chances are you’ve unwittingly found yourself looking at ‘upgrader markets’.
Logically, an upgrader market is a real estate market that is popular among those buying their second, third or fourth home. They offer the space, amenities and lifestyle that are in-demand with families.
Former The Block winner Shannon Voss recently renovated his home in Port Hacking, a market ripe for home upgraders. A small and picturesque suburb, Port Hacking is home to large waterfront homes flanking the southern boundary of Sydney.
But how can you spot the next upgrader hotspot before young couples, their kids and dog snap up the best buys first?
We spoke to REA Group executive manager of economic research, Cameron Kusher, to find out what defines an upgrader market truly and how we can spot them before the prices rise.
Demographically speaking, upgrader markets tend to attract families; either established families or couples looking to grow their family.
“Generally, you would categorise an upgrader market as a more expensive area of a city,” Kusher says.
“By the time people are on their third or fourth home, they could be in their late 30s at least. They’ve got a larger family and are likely looking for bigger homes – four or five bedrooms – to cater to a family size of three or more kids.”
Planning and budgeting is key to ensuring you can afford to move to an upgrader market, NAB Mobile Home Loan Specialist, Thomas Yuen says.
“Ensuring your account hygiene is up-to-date will help paint a strong picture to the banks for your loan assessment,” Yuen adds.
While upgrader markets tend to be close to major cities, new upgrader markets could be anywhere desirable that has a steady supply of larger homes, giving them more of a suburban feel. In the age of working from home, proximity to the city in not as important as it once was for the new upgrader.
Gentrification can also go hand in hand with a new upgrader market rising up. A gentrified suburb is one that started out catering to a working class demographic but has since experienced a rise in value owing to the middle classes moving in.
These suburbs can become cultural hubs that provide residents the very best lifestyle perks.
“Look at areas with growing levels of amenity, (such as) if there’s an old rundown shopping centre that’s been done up, new transport infrastructure or better schools,” Kusher starts.
“Gentrification is usually a sign that governments and developers are putting more money into an area. Along with that come cafes and restaurants, which can be appealing to families.”
If you have kids and are looking to upgrade your home, you may be drawn to areas that offer child-friendly amenities. You might be keen to have parks or green spaces nearby, good shops and easy access to good schools.
In fact, many parents are likely to have a hard line on the suburbs they’re willing to move to if it means getting their kid into the school of their choice. Sound familiar?
“People are increasingly focused on getting their kids into good school zones,” Kusher notes. “This is particularly evident in Sydney and Melbourne, but I know it has also become more prevalent in Queensland too.”
A good way to spot a new upgrader market is by looking at the suburbs around an established upgrader market. NAB’s property valuation reports give you insights about a suburb or specific property, such as estimated values and sales and rental history.
“As people are being priced out of some of the more sought-after spots, they move out to the next suburb over,” Kusher explains.
In the case of Shannon Vos, this statement rings true. Vos was looking at the entire Sutherland Shire area and ended up finding more value in the lesser known Port Hacking than the area’s main hotspots, like Cronulla, or the more expensive neighbouring suburb, Dolans Bay.
The best way to tell is to do your research and keep track of house prices in these potential areas.
“If you’re keeping an eye on the market, you’ll see prices (in some suburbs) go up,” Kusher says. “If they’ve become out of reach in one area, the next logical thing is for people to creep a little further out and start looking in places that haven’t seen the same level of price growth.”
If you can’t afford the existing upgrader market, look to the future and consider the potential of a neighbouring suburb in the years to come.
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