Location is important in real estate for two reasons.  First, location plays a big part in determining a home’s price and its resale potential.  Second, different areas have different characteristics, so it’s important to define the kind of area you’d like to live in and go searching for a home in an area that meets your criteria.

‘Good’ locations
‘Good’ locations are sought after because they have desirable characteristics, e.g.

• Near the sea, rivers or other features
• Full range of local facilities
• High value homes
• Close to town
• Sun
• Views.

Homes in a ‘good’ location are popular because:

• They hold their value – even in market downturns
• Their value goes up higher than homes in other areas
• They’re easier to sell
• You are more likely to get your money back or profit from any renovations – that’s why many people advise you to buy ‘the worst home in the best street’, because of the potential for capital gain with a bit of work.

The trouble is everyone wants to buy in good locations, so the competition can be tough and the prices may be out of your budget, so it may be wise to be prepared to look elsewhere. 

‘Emerging’ locations
‘Emerging’ areas aren’t as expensive but have the potential to increase in value.  For example, some inner-city suburbs can be a good place to look since there is a trend towards moving closer to the city centre.

Things to consider

• Facilities – what facilities are there in the area?  For example, everyday shops (supermarket, fruit & vegetables, hardware, dairy), restaurants and cafes, boutiques, doctors or medical centres, library, churches, playgrounds, open spaces, sports clubs, etc?
• Environment – is it a pleasant environment to live in?  Are the homes, gardens and local facilities well cared for?  Is it a safe area (you could check local crime statistics)?
• Zoning – what is the zoning in the area and what does it allow?  If it is commercial, there may be business or even industrial developments close to your home in the future.
• Education – what are the schools like in the area?  Even if you don’t have children and aren’t planning any, being ‘in zone’ for a popular school can add a significant amount to your home’s value.  You can check the Education Review Office website for their assessment of local schools.
• Transport – how far is the area from your friends, family or workplace?  What is the public transport and/or road access like? 
• ‘Feel’ – is it quiet or ‘bustling’?  What are the neighbours like?  Is it a well-established neighbourhood or a newer, developing area?
• Things to be wary of – be careful of buying in or near an airport flight path, near a busy road or motorway, or bordering an industrial area.  These areas are often less expensive and can appear good value, but they are usually harder to sell and will not appreciate in value so readily.

Weighing it up
In the end, a good location is one that meets your individual needs.  If you’ve found a home you like in an area that has the facilities you need and seems like a nice place to live, don’t be overly influenced by whether it’s in a fashionable suburb or not.  After all, if you think it’s a nice place to live it’s likely others will too – and the location could just be tomorrow’s ‘hot’, up and coming area.

Our What do you want in a home checklist (PDF) includes all the factors above, and more.  You can use it to help you decide what you’re looking for in a home, and to compare different homes.

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