How to find suburbs with boom potential

For investors, finding that golden opportunity to invest in a suburb before it booms is the holy grail.

So, how can you predict if a suburb will have boom potential?

In order for a suburb to boom it must have:

  1. Potential for better-than-average capital growth over the next five years
  2. Be undervalued
  3. Have a median house/unit price that is affordable for most first-home buyers

What determines Capital Growth?

The potential for capital growth is based on a suburb’s proximity to:

  • CBD
  • Beach
  • Prime/expensive suburb(s)
  • Amenities such as train stations, shopping centres and highly sought after schools

How do suburbs become undervalued?

Undervalued suburbs are cheap now relative to neighbouring suburbs but have the potential to become the next “blue chip” suburbs due to a number of factors:


The area might be a little run-down now but is currently experiencing a rebirth. This occurs when, for example, old, neglected homes, often period-style, close to the CBD or sea, attract new owners and are renovated. Or when the local government spends money to improve the area.

Sydney suburbs that have already been gentrified include Balmain and Paddington in the 1980’s and 1990’s. Marrickville and Enmore are excellent examples of suburbs completing this process with areas around them including Petersham and Hurlstone Park commencing the gentrification process.

Investment in infrastructure

Public or private investment in infrastructure (light rail projects in Sydney and new train stations) can also accelerate future capital growth in an area. Public investments include major infrastructure upgrades such as a new train station, bus interchange or freeway. Private investments include renovations and/or extensions of shopping centres or construction of new homes.


Which suburbs do you think have boom potential?


Found a suburb you’d like to invest in? Or want to find out CPS Property’s top suburb picks? Contact us to find the right property in the right suburb.