Experts have been telling us for years that buying a property in the ‘right’ area is very important if we want to capitalise on our investment. It became evident years ago when the term ‘wrong side of the tracks’ was first coined that where one chooses to live can have serious long-term implications.
The phase came into use when rail transportation played a major role in society. At the time, steam trains belched out copious quantities of smoke and soot and people quickly realised that the prevailing wind would blow the pollution in a certain direction. The wealthy residents of the day who built their homes close to the railway line always made sure they built on the side least affected by the smoke and grime, leaving the poorer sector of society to settle in the smoke-infested, less desirable areas.
Although we may no longer be affected by steam trains, the term has stuck and moving into the ‘wrong’ part of a suburb can end up hurting both the pocket and the ego. Sitting back and watching houses a few streets away selling for huge sums while you struggle to sell at a reasonable price can be bewildering. And oddly, there is often nothing to indicate what makes certain parts of suburb the ‘in’ place to be, nor is there anything tangible to identify which areas are ‘out’. One would think that a suburb is a suburb and that the same reputation would hold throughout. This, however, is often not the case.
People draw invisible lines in their minds and will often not consider moving beyond a certain landmark, fully believing that should they do so, they will not achieve a good selling price at a later stage. Strangely enough, they seem to possess some kind of sixth sense, because very often this is indeed the case. Of course, there are those who have no interest in where the property is situated and are happy to get more bricks and mortar for their money by moving into a less desirable area. Unfortunately, there are also those who believe that they are moving into a well-to-do suburb, only to discover that their new address isn’t actually the ‘right’ one.
Social standing plays an important role when choosing property. Most people tend to try and live amongst like-minded people who share similar values. Middle class suburbs attract middle class buyers and upmarket areas attract upmarket buyers. Right? Well, not exactly. In a move that even psychologists would probably find hard to explain, some areas within a suburb are simply more popular than others and therefore command higher property prices.
Popularity drives demand which, in turn, drives price. While it may be understandable that houses which are, for example, situated close to schools , malls and recreational amenities may be more desirable, very often there is no clear reason why certain streets in a certain part of town are classified as the best and why properties located in these areas will therefore sell at a higher price.
So how do you know which part of the suburb is actually the ‘right’ part? The short answer is research. The best way to unlock the secret is to investigate an area thoroughly. Keep your eye on the local press, speak to estate agents who know the region well and, perhaps most importantly, keep up-to-date on prices.
If some houses are selling for thousands less than others in a particular area, you need to ask yourself why. While the economy has played havoc with house prices, generally speaking, the price is always going to give a good indication of what is happening on the ground and should send a clear message to the buyer.
