Six ways to find the suburb to ride the property recovery

After a rate cut and two positive months of nationwide price growth, property purchasers should focus on these six signs.

There are ways to ‘time the market’ in property if you know what lifts prices in a particular suburb. Picture: Sarah Matray

As home buyers and investors tune into a changing market, most property investors would love to know when to enter the market to ride those gains before others catch on. Fortunately, if you look at the data on a suburb level, you can see when an area is starting to see growing demand, which indicates price growth is just around the corner.

Contrary to popular belief, you can “time the market” if you know the signs to look out for. Here are six key signs to watch for.

Vacancy rates are falling

One of the most reliable early signs of an emerging suburb is a consistently declining vacancy rate. When more people are moving into a suburb and renting properties faster, it points to increasing demand. A vacancy rate below 2 per cent is generally considered healthy. But if the rate drops below 1 per cent, it suggests very strong demand and likely upward pressure on rents. This kind of demand can come from population growth, new jobs or improved lifestyle offerings. Rising rents are a leading indicator of price growth.

Infrastructure investment

Nothing drives growth like infrastructure. When governments or private companies invest heavily in transport, health, education or retail infrastructure, it usually signals that the area is expected to grow. Major projects, such as highways, rail links, hospitals, shopping precincts or education hubs can improve connectivity, create jobs and make an area more attractive to new residents. Look for infrastructure that is already under construction or has funding secured, not just projects in the planning phase, as this is signals a suburb is about to benefit from increased demand.

Jobs are being created

Employment growth is a powerful driver of population growth and housing demand. Suburbs with low unemployment rates and high job vacancy numbers tend to attract skilled workers and families looking for stability. When businesses are hiring and local job ads are increasing, it usually means the economy is expanding. People follow jobs, and property demand follows people. Areas with growth in sectors such as healthcare, construction, logistics and technology often see the strongest migration.

Job vacancies are higher than usual

If you’re noticing an uptick in job listings for a particular suburb or region, it’s a good sign that the local economy is gaining momentum. Growth in job ads often precedes an increase in population, especially when it comes on the back of long-term industry expansion.

An increase in roles across sectors such as education, retail and manufacturing also signals that demand for housing may soon rise. More workers mean more renters and buyers looking for homes close to their jobs.

Limited supply constraints

Property markets ultimately are ruled by supply and demand. Suburbs with limited land for future development tend to experience stronger capital growth, simply because there’s less room to build. If zoning or geographical barriers prevent large-scale developments, the supply of new homes will remain constrained. And when demand increases, this constraint can lead to significant price growth. Equally, suburbs without a large pipeline of incoming housing supply tend to be more resilient.

Inventory levels are tightening

Another key indicator of an emerging suburb is a declining level of housing inventory, which is basically the number of properties listed for sale at any given time. If homes that once sat on the market for months are now selling within weeks, and transactions are rising, demand is clearly heating up. Shorter days on market and fewer available listings signal a shift in buyer sentiment. These are often early signs that the market is entering a new growth phase.

Spotting an emerging suburb is about identifying a number of trends that are all telling you the same story. Demand is rising and supply is tight. When those factors line up, you can be confident that prices can really only go one direction.

Abdullah Nouh is the founder of
Mecca Property Group.