Location Indicators To Take Into Account When Purchasing Your Home

July 15 2021

"Knowing where to buy your first home is a paralysing decision to make if you don't know what to look for. Have a read below and learn what key location indicators that may affect your decision." - Ben Crow, Chief Operating Officer

Article written by Briana Lee at Urban

As a first home buyer, you might be asking yourself, will this property be worth it in the long run? Why is location so important? Will the property be profitable to sell in the future?

Choosing a good location is arguably one of the most important factors when choosing a home. Not only can it offer convenience and better liveability, but buying in a rising suburb can be a smart way to ensure your property will hold its value. We're going to walk you through some of the top location factors to consider when choosing your first home.

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“Location creates desirability, desirability creates demand, and demand raises property prices. If you cleverly choose the location of your new home, you will not just enjoy an improved lifestyle (think - better amenities, schools, transport, and so forth) but potentially profit significantly when it comes time to sell-up and move on.”

GW Legal, conveyancing specialists

First home buyers may consider an investment plan for their first home purchase, making location an important investment feature that can be valuable to increase rental opportunities and resale value in future. Here are eight location features you could consider:

1. Investment opportunity

To maximize resale value, it can be wise to select a property in a sought-after location. Features to look for can include low noise, a well-maintained neighbourhood and streets with slight elevation for good drainage and sun.

Where possible, avoid close proximity to highways/train tracks, factories and utility lines. According to Gustan Cho Associates, “buying a house next to power lines may decrease property value as much as 10% to 40%”. 

Having easy access to public transportation, good schools, entertainment, retail, dining and recreational centres are key factors to consider. Having additional public transit choices available, whether in the CBD or the suburbs, means that the property could become more valuable over time as it becomes easier to commute to.

Being near good schools gives parents that have school-age kids the opportunity to settle or rent out the property to a family. As a result, homes located in good school zones experience a higher growth compared to lower-ranked school zones.

Research from the Real Estate Institute of Victoria states how properties located within popular primary and secondary schools are able to secure sale prices above $400k more than properties outside those school zones. 

2. Employment opportunities

When there are new businesses opening in the area, this can boost job supply making the area a desirable option for job opportunities.

As businesses grow with the population of the area, there may be higher chances of the property increasing in value as there can potentially be amenities and entertainment that will develop alongside to cater to the population. 

3. Infrastructure upgrades

Infrastructure projects (planned and under construction) can help in indicating a rise in housing demand.

Social infrastructure that may attract buyers and families to an area includes: public transportation links that provide connectivity to the city, greater selection of educational facilities, upgraded utilities, or the addition of health services.

These may be reasonably certain indicators for finding tenants or future buyers. Areas, where the construction and mining sectors are entering or extending their operations, have the opportunity to attract jobs and workers to the region, which may offer potential long-term investment and capital growth opportunities.

4. Consider looking for property in fringe suburbs

If your first choice location is out of budget, neighbouring suburbs can be an excellent solution as they can provide cheaper entry points to the market.

Townhouses and family-friendly apartments can also be considered as a more affordable alternative to the stand-alone housing stock in high demand suburbs.

5. Choosing the right suburb



  • Love the bustle of the city

  • Close to an abundance of entertainment, restaurants and nightlife

  • Shorter commute times

  • Many amenities nearby

  • Great for walkability


  • Less space

  • Noise pollution



  • Love the beach and its openness and fresh air

  • Relaxed lifestyle

  • Great place to raise a family

  • Better work/life balance as a study from Exeter University found that living close to the sea is good for your mental health


  • Higher maintenance costs due to exposure to sea air, strong winds, spot water damage, damp and rust problems

  • Less privacy during peak season



  • Often plenty of schooling options 

  • Can be more affordable

  • Relaxed lifestyle

  • Local amenities growing


  • Potentially longer commute

  • Not as much entertainment, restaurants and nightlife compared to the city

6. Insurance premiums

Environmental hazards associated with the property's location should also be addressed, as insuring a property in a flood or bushfire-prone area may be more expensive, affecting your budget.

According to a recent assessment by the Climate Council, climate change and extreme weather would cause the Australian property market to lose $571 billion in value by 2030.

Make sure to double-check to see whether the insurance covers all these hazards as it may not be the case for most properties. 

7. Limitations on your property

The Vegetation Protection Overlay (VPO), the Environmental Significance Overlay (ESO), the Significant Landscape Overlay (SLO), and the Heritage Overlay (HO) are four overlays that can be used to protect and manage vegetation in urban areas as part of Victoria Planning Provisions (VPP).

They will have limited relevance in urban areas with small lot sizes because they aim to avoid broad-scale clearance of vegetation. 

Restrictions such as the Vegetation Protection Overlay (covered in some parts of Monash and Mornington Peninsula Planning Scheme) exist in order to protect current vegetation, encourage the regeneration of native plants and trees, and maintain and improve habitat for native wildlife.

It can be used on individual trees, groups of trees, or large expanses of vegetation. This will cause limitations to any property in a protected area that you may want to renovate. 

8. Recency

When you have found your potential property, it is good to start looking for their comparable sales (also known in the industry as “comps”).

Comps are recently sold properties that have similar characteristics to the one you’ve been looking to purchase or invest in.

When it is a good deal, the value can go up when you resell in the future due to infrastructure and other upgrades.

New houses or renovated houses in that area can also drive up the value as it may increase interest.

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Source: Urban.com.au

Lee, B. (2021, July 12). Home buyer guide: Location indicators to take into account when buying your first home. Urban. https://www.urban.com.au/guides/home-buyer-guide-location-indicators-to-take-into-account-when-buying-your-first-home