As the population grows and cities spread outwards, property prices rise in upmarket suburbs. When buyers are priced out of these locations, they turn to nearby suburbs for the next best option, causing those values to rise.
This is known as the ripple effect, something property investors keep a close eye on. When prices in a popular location are on the grow, a savvy investor might buy property in the next suburb, which eventually has its own price surge and good capital growth.
Home owners can benefit too. Rather than pay big money for a house just a few minutes’ walk from the train station, you might be able to get something much cheaper that happens to be a 10 minute drive away. Eventually, your own suburb is equally sought after and you’re sitting pretty, while other buyers have to look for the next best option.