How to choose the right suburb to live in as a first home buyer in Australia

Determining your budget

Budget always come first. You don’t want to torture yourself hunting for properties that are outside your scope, despite how fun it may be dreaming about million-dollar properties or that sweet little rural property online.

We’ve previously discussed how to determine your borrowing power for your first property, if you’ve missed it you can read about it here. It’s important to note, that these methods will provide you rough examples of your borrowing power, so it’s a good idea to reach out to a Mortgage Broker to have a clearer picture of your financial situation.  

Property type and lifestyle

Balancing the type of property vs the location can be a difficult decision for first home buyers. While the allure of a prime location is strong, it’s essential to balance it against the type of property that best suits your needs and lifestyle. A centrally located apartment may offer unparalleled convenience and access to amenities but might lack the space required for a growing family. Conversely, a house in a suburban area may provide ample living space and a yard but could mean longer commutes and fewer nearby facilities.

Evaluating your current and future lifestyle needs, such as proximity to work, schools, and recreational activities, is crucial. Additionally, consider the long-term investment potential; properties in desirable locations often appreciate faster, while the right property type can offer better living conditions and adaptability. Striking a balance between location and property type ensures you make a decision that supports both your lifestyle and financial goals.

For example, June 2024 data from REIV highlights significant variances in property prices between metropolitan and regional Victoria based on the number of rooms a property contains:

Metropolitan Melbourne

Regional Victoria

Regional areas

When considering rural suburbs as a first home buyer in Australia, it's essential to assess not just the lifestyle benefits but also the practicalities of living in a more remote area. Start by checking the availability and reliability of key utilities such as water, sewerage, electricity, and gas — some rural properties may rely on rainwater tanks, septic systems, or gas cylinders rather than standard infrastructure. Ensure there's strong access to telephone and internet services, as connectivity can be limited in rural areas, which may affect work and communication.

It's also vital to investigate potential fire and flood risks, especially given Australia’s susceptibility to bushfires and floods. Check whether the property is in a designated bushfire zone or floodplain and factor in insurance costs or mitigation measures you might need to take. Access to emergency services, road conditions, and proximity to essential amenities like shops, schools, and healthcare facilities should also play a key role in your decision-making.

‍

Future developments

Evaluating future developments in a suburb may be a key factor for first home buyers looking to make a sound investment. Upcoming infrastructure projects, such as new transport links, schools,shopping centers, and recreational facilities, can significantly enhance the appeal and accessibility of a suburb. These developments often attract more residents and businesses, driving demand and, consequently, property values.

Government and private sector investments in an area can indicate a growth trajectory, making it a prime location for long-term benefits. Staying informed about planned projects and urban development plans can help you choose a suburb poised for future growth,ensuring not only a great place to live but also a solid investment in your financial future.

For example, in March 2023 Infrastructure Victoria detailed how infrastructure proximity affect’s Melbourne home prices. Below are two examples highlighting the average increase of properties based on the proximity to infrastructure (trains, schools, hospitals, etc..) for houses and townhouses:

Average value increases for houses

Average value increases for townhouses

Whilst this is a Melbourne based example, future development may be an important consideration you make when considering which suburb to purchase a property in.

Property value trends

Understanding property value trends is crucial for first home buyers when selecting a suburb. Historical data on property prices can provide insights into the market’s stability and growth potential. Suburbs with a track record of steady property value appreciation are often seen as safer investments, offering potential for capital growth overtime.

Additionally, emerging suburbs showing signs of gentrification or upcoming development projects can present opportunities for significant value increases. Monitoring market reports and consulting with real estate experts can help you identify these trends.

A few sites that can assist you in evaluating property trends include:

• ‍Property Value by Core Logic ‍
• SQM Research‍
• Realestate.com.au‍
• Spachus

Choosing the right suburb as a first home buyer in a balance between where you want to live, the type of property you want to live in, and what you can afford. By considering all these variables whist understanding property value trends, and evaluating future developments,you can identify areas that offer both affordability and growth potential.Equally important is the availability of amenities and the overall community vibe, ensuring that the suburb aligns with your lifestyle needs and preferences. Whether you prioritise proximity to work, family-friendly environments, or a vibrant social scene, thorough research and a clear understanding of your priorities will guide you to a suburb that feels like home. Making an informed choice not only enhances your living experience but also secures a sound investment for your future.