Episode Details

Everyone knows that location is critical when selecting an investment property that will outperform.

But what makes a good location and why are some locations better prospects than others?

When I started investing around 40 years ago the emphasis for homebuyers was largely affordability and proximity to infrastructure.

The outer fringes of our capital cities were developed in the wake of freeway extensions on all sides and commuting from vast, newly born suburbs into the CBD became commonplace.

As far as amenities went, as long as you had a relatively easy drive to your place of employment, as well as nearby shops, healthcare services and schools, life was pretty good.

It's different today

Nowadays the property choices Australians make are still driven by lifestyle, but how we think and function in today's world has changed.

With more than half Australian households having only one or two people in them, more of us are:

• Choosing to start a family later in life.
• Enjoying the opportunity to work flexible hours and from home offices.
• Seeking better work-life balance and prioritising downtime before overtime.
• Opting to live within walking distance from not only infrastructure necessary for daily living, but also cafes, restaurants and recreational facilities, as lifestyle moves to the top of the owner-occupier and tenant wish list, alongside affordability.
• Downsizing to easily maintainable and cost-effective apartments and townhouses, with smaller gardens and more efficient, compact design.

A short stroll to success

This means that "walkability" has become the new buzzword on the property investment block.

Of course, proximity to amenities such as shops, parks and public transit that allows local residents to either walk or take a short train, bus or tram ride, has long underpinned property values in inner city neighbourhoods throughout the developed world.

But now we are witnessing a similar trend across an increasingly cosmopolitan Australia.

In fact, it is common for a considerable premium to be paid for properties that are a short walk to the beach or café strips and long-term capital growth figures show that in Sydney the city's most "walkable" suburbs have outperformed the averages by up to 20%.

Where it's "at" – the café culture

It should come as no surprise that as our lives become busier and time is in increasingly short supply, cafés have become a kind of transition point where we meet up with friends, family and often business associates for a "catch up".

Many city dwellers have their favoured haunts, where they're on a first name basis with the local barista and have a "regular" order.

The serving and consumption of coffee has become somewhat of a ritual and many of us fancy ourselves as coffee connoisseurs.

Given that more of us are living alone or in smaller households, it's not surprising that the relaxed, "home away from home" vibe of inner city cafes is becoming an increasingly popular draw card for those seeking a familiar social outlet.

Lifestyle locations dominate

Yes, lifestyle has undeniably become the fundamental force in today's residential real estate market.

Culturally, we have become a nation that enjoys strolling to the local corner eatery to catch up with friends or just enjoy some time out with a latte.

But it's not only suburbs close to the beach and bay that command premium. Proximity to schools with a good reputation is a must for many family buyers, with some purchasers prepared to pay extra to be within a particular school catchment zone so their children can either walk, bus or "train it" to school.

In fact, in my experience, parents are more willing to spend half an hour or more driving to work if it means their children can safely walk to an esteemed, local school.

Austral