The power of location: Why location is the most important factor in any real estate decision

Location, location, location: this real estate adage didn't come from nowhere. It's a well-known reminder that location is the single most important factor to consider when making real estate decisions. Jawitz Properties unpacks why location is so important. Firstly, there are economic factors at play, and location has a direct impact on your property value and future resale potential. There's also a complex set of factors that go into determining which areas are "good" investments and which are less optimal.

Unpacking the economics: why location matters in real estate

A common mistake that property buyers make is looking for their ideal home structure, regardless of the area in which it's located. It's important to remember that properties can always be renovated or remodelled - but the one thing you'll never be able to change is the location of your property. Simply put, an average property in a great location will earn you a higher return on your investment than a great property in an average area.

The economic principle of supply and demand comes into play in real estate. Homes in higher-demand areas often see faster price appreciation due to limited supply and strong buyer interest. For example, homeowners in most parts of the Western Cape have seen their property values soar in recent years, due to South Africans flocking to the province due to its good governance.

However, it's important not to rely on assumptions. Every neighbourhood is different, even within the same city or precinct. Make sure to weigh up the pros and cons of the specific area you're considering, and always do your due diligence. Ask your property practitioner for data on how property values have performed in that particular neighbourhood over recent years.

What makes an area 'good'?

There's no one-size-fits-all answer to what makes certain areas more sought-after than others. Factors like location, accessibility, amenities, and future development plans all play a role. It's essential to evaluate each area on its own merits and understand what drives demand and value in that specific neighbourhood.

For example, someone who has never visited Cape Town's South Peninsula may wonder why suburbs like Noordhoek, Scarborough and Simons Town are so sought after when they're so far from highways and Cape Town's CBD. A visit to these areas would quickly show the newcomer that it's the area's beauty, outdoor activities and ambience that make them so popular.

In short, a "good" area is one characterised by high demand, limited supply and desirable attributes that make it a sought-after address. These attributes could pertain to the area's landscape, proximity to amenities (such as good schools), low crime rates or strong economic growth.

Things to think about when evaluating an area

It can be tricky to work out where the "good" locations in a city are, especially if you're not familiar with the area. Your first step should be to get in touch with a property practitioner who knows the area well. When you're evaluating a property, one of the important factors to consider is access to highways and arterial routes. Ideally, you want a property that offers the best of both worlds: easy access and peaceful immediate surroundings.

Real estate is a long-term investment and it's important to learn everything you can about how the area has developed over time and what the plans for its future are. Your property practitioner will once again be an invaluable source of information in this regard.

Deciding where to invest in real estate is a decision that shouldn't be taken lightly. Jawitz Properties has property practitioners in every corner of South Africa and we'd be delighted to share our knowledge and help you find a wonderful home in a strategic location. Get in touch and let's talk about your property needs.