Finding Property Development Hotspots in 2022
Finding a property development hotspot is one of your best chances at making a significant profit. Property hotspots are low-cost or underperforming areas on their way to becoming the next big thing. Hotspots have the potential to provide a good return on investment in the near future. Some property developers rely on speculation but finding a property development hotspot in 2022 is more complex than speculation alone. Besides, speculation is risky. By understanding local market trends and knowing the driving force behind the changes in property hotspots, you can minimise the risk that comes with property development.
Understanding the Property Market
Investors and property developers must have an intimate understanding of the property market to make educated decisions. The property market doesn’t exist in a vacuum, though. Your decisions will be based on a broader understanding of geopolitics, national politics, the Australian economy, the local economy, and the needs of the local population. For example, global recessions impact each country differently; and potentially affect whether people are buying property or renting instead. Local economies will thrive, adapt, or suffer as a result of the greater Australian economy. As a property developer, it’s your job to understand how and where people are investing and what types of properties they are investing in.
How Investors Identify Property Development Hotspots
With a broader understanding of the Australian property market and that of your state or territory, you can drill down into more specific aspects of the process. Finding property hotspots isn’t a one-size-fits-all approach; many factors influence potential hotspots.
Look for Areas With the Potential for Growth
Growth relies on several factors. Beyond the search for appropriate land, you want to look for areas where sales volumes are consistent, but property prices are starting to pick up. Areas in which properties do not stay on the market for long, vacancy rates are low, and rental prices are growing, are typically good areas to invest in. Although you want to spot these trends in their early stages, you will be looking at factors such as population growth and the migration of people to particular areas.
When local governments invest in infrastructure in less densely populated areas, it might be your cue to invest. If you notice roads, schools, hospitals, and malls being built, you’ll know that there are many factors drawing people to the growing area. These people need homes, offices, and other amenities, so it stands to reason that if people are steadily taking up residence in these areas, the area may be worth investing in.
Some areas may have stagnated, but they already have the infrastructure and the population; they just need to be noticed. Opportunity lies in suburbs and areas which are relatively central in location and nestled between other good areas. Here the property and land prices may be lower initially, but as the surrounding areas become too expensive, people will look to these suburbs for property.
There are many more ways to find property development hotspots in 2022; it just takes a lot of research, patience, and an eye for trends. Something that the Archistar property development platform is designed to simplify. Most notably, don’t base your decisions on speculation; speculation alone rarely offers the capital growth you are hoping for.