No matter what type of property you’re purchasing – a house or an apartment, a home or an investment, buying quality is the crucial factor for achieving the best capital growth over time. 

Quality means a good location, a good aspect, and if it’s an older place, then ‘good bones’. 

A good rule of thumb to ensure you are buying quality is to buy 10% to 20% above the median price for the suburb. 

That means, by definition, you are buying a property that is above average for the area. 

Quality also means not just buying in a good suburb, but in a good position within that suburb. 

Buying in the best street of a suburb you can afford is better than buying in the worst street of a superior suburb.  

Quality also means a property with some unique or highly desirable fundamental features that set it apart from other properties of the same type in the area. 

Some examples of highly desirable features include:  

• An excellent street, ideally leafy and quiet 
• A north aspect to the backyard (houses) 
• Greater land size (houses) or internal sqm (apartments) than the area’s average  
• Good natural light throughout
• A particularly appealing floor plan and ample parking  
• A pleasant outlook (always sit down to assess a property’s views)
• Good privacy and peace and quiet 
• Close proximity to shops, cafes, and transport 
• The best position in the block (there is usually better privacy and quiet at the rear) 
• Good sized backyards (houses) or balconies big enough for alfresco dining (apartments) 
• A small, well-maintained apartment building 
• Period features such as high ceilings, leadlight windows, and picture rails 

Don’t be seduced into thinking a property is superior because it has air conditioning and a dishwasher – these are not the features we’re talking about. 

Look for great fundamental features – the things that can’t be added or changed by you later, like a great aspect – as these are the ones that will deliver superior capital growth over the long term.  

You also don’t want anything that devalues the property, like an easement running through the yard. 

Buying quality is important for a number of reasons: 

The first reason is that quality properties will always appreciate more in value than inferior homes.  

The second is relevant right now – that quality homes will hold up better in a downturn. 

When markets go through a correction, there is always a flight to quality. The most sought-after suburbs will hold up the best, as will the better positions throughout those areas. 

This is important because you just don’t know when you might want or need to sell. 

It is usually personal circumstances that prompt us to sell, often on an unforeseeable timeline. This is true for both owner-occupiers and investors. 

If you need or want to sell in a downturn, and you own a quality property, you can always feel confident it will still sell well. 

Those highly desirable fundamental factors will ensure your property stands out in the crowd in any market conditions. 

The views expressed in this article are an opinion only and readers should rely on their independent advice in relation to such matters. 

For more information including articles, checklists, guides and more visit McGrath’s Insights Centre.

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