- A-grade properties deliver higher capital growth
- They hold value better in downturns, and always attract plenty of would-be buyers
- Renting them is easier and they achieve rental price growth over time
- Finding them depends on some key elements they all tend to possess
In the world of strategic property purchases, it is not just suburb selection that can make the difference between an average and a superior performing asset.
Whether you are buying a property to live in or rent out, savvy property buyers always try to purchase dwellings that will appeal to owner-occupiers and investors in the future.
Generally, these types of properties are what I call A-grade, because there is always strong demand from potential buyers, which underpins price growth.
A-grade properties outperform in their local markets by:
- Delivering higher capital growth
- Holding value better in downturns
- Always having plenty of would-be buyers
- Renting easier and achieving rental price growth over time.
During the recent economic turmoil – and historically as well – it has been A-grade properties that have generally performed best because their strong fundamentals continue to work in all market conditions.
This type of superior dwelling is also usually the one that sells under the hammer for hundreds of thousands of dollars above reserve because of the strong competition amongst buyers to become its new owner.
While there are some small variants depending on location specifics, these are some of common attributes of an A-grade property.
1. Located in an established blue-chip suburb
These are suburbs where there is always excess demand from buyers and often limited supply, plus its geography makes it even more desirable, such as near a river, harbour, or beach.
Examples include riverside suburbs in Brisbane, leafy suburbs in Melbourne’s east and Sydney’s Lower North Shore.
2. Walkability and convenience
A-grade locations are also highly walkable with a high street, village or parks with local residents having the option of enjoying the outdoors or spending time at a local café or restaurant.
As well as being highly walkable, they also have easy access to nearby good schools and key transport networks such as trains, trams and busses.
3. Aesthetically pleasing
An A-grade property is often located in a quiet, flat, tree-lined street with little traffic, surrounded by similar high-quality homes.
The street will be one of the locations that is on the wish-lists of buyers when discussing their dream places to own real estate.
There are a few variations on this depending on location, but uniqueness or scarcity is also one of the fundamentals of A-grade properties.
It could be a period house that has ornate features, high ceilings, commanding street appeal or bespoke architecture that makes it stand out from the crowd, while being located on a good-sized flat block of land.
For apartments, it could be a unit within a small boutique block such as Art Deco.
Aspect and orientation are vital to consider, depending on the location of the property. There should always be plenty of natural light in A-grade properties and orientation is wholly dependent on location.
For example, in Sydney, having a north-facing rear to the property is the gold standard and in Brisbane it’s important to ensure that bedrooms are not facing west because of the strong afternoon sunlight.
6. Superior design
A-grade properties will always have superior or adaptable floor plans including generously sized bedrooms and living spaces.
The design should be coherent with everything in its right place.
A-grade properties will always make buyers go “wow” when they inspect it and never go, “what’s going on with that?”
7. School zones
In some parts of the country, such as Brisbane, school zones can make or break whether a property is classed as A-grade.
Being in the zone for a highly sought-after public school can, and does, make a big difference to a property’s appeal and price.
That’s why A-grade properties are often also located in the right streets within the suburbs that are within desirable public school zones.