Whether you’re a budding property investor or on the hunt for a family home, finding a house that’s going to grow in value over time is usually a top priority.

The latest data reveals that, despite strong gains in residential property prices in the past year, housing affordability is the best it has been in 12 years and 10.5 per cent more affordable than it was at the same time last year.

Shane Garrett, senior economist at the Housing Industry Association, says that the results are due to low interest rates, earnings growth and a fall in home price increases.

“Increases in home prices over the past year have been significant,” he explains.

If there are more cafes, more butchers or delicatessens opening up, [or] boutique shops, the things that satisfy a higher socioeconomic demographic, they’re definitely [growth] indicators

“However, the impact of lower interest rates and continued earnings growth has ensured that home purchase affordability has improved over the past year for existing home owners and those on the cusp of entering the market in the short-term.”

For those looking to take advantage of the current buyers’ market, here are some expert strategies to spot the next boom areas in terms of price growth.

Ride the gentrification wave

If you’re looking for price growth, a safe bet is to buy a property as close to the CBD as you can afford.

Rich Harvey, CEO at Propertybuyer.com.au, recommends looking at the median price in your chosen area for the type of property you want to buy, then comparing it to the surrounding suburbs. If one suburb is drastically cheaper than the others, try to find out why this is the case – it could be the next area to boom.

Nick Dowling, CEO of Melbourne-based real estate agency Jellis Craig, advises buyers to “ride the gentrification wave”: “If you look at areas historically like Richmond in the 90s, and also Footscray and Fitzroy, and places like this, there’s a really solid and rapid wave of gentrification that flows from the city outward and you can look at where that wave is up to and I think buying just outside of that wave is strategically sound.”

Do people want it (supply and demand)

Look at the supply and demand for an area. Check vacancies, auction clearances and how long properties are on the market to buy and lease.

“I look at the vacancy rates to see how many properties there are for rent versus the properties that are tenanted,” Mr Harvey explains.

Demographic

Demographics is one of the main drivers of property values in a given location.

Michael Yardney, director at Metropole Property Strategists, advises buyers to research the people who live in the area, how they live and what they can afford. It’s a good idea to target areas with a growing population and a disposable income that can better weather the down times.

“In Australia in the last five years, on average wages went up 20 per cent, but in some municipalities disposable income went up double that – and, if you think about it, in those areas where people have more disposable income, they are going to spend more on cars, on plasmas, but also on houses and doing up their house.

“It is owner-occupiers who push up the value of properties – and, while interest rates are low right now, we know in due course they will start to increase in the next year or two as the economy picks up.”

Look ahead

It pays to do some research into future housing developments in your chosen area in case there’s a risk of over-supply.

Mr Harvey recommends visiting the local council to find out if there are any plans for more housing and checking with a property data agency for the number of property sales.

For example, if an area typically turns over 300 houses per annum, but has already sold 400 properties and has another 1000 lots coming onstream in the coming months or year, then it’s wise to be wary.

Mr Dowling agrees: “The construction and sale of apartments go in big waves. There are some risks out there at the moment in Melbourne and all capital cities, because there’s a slough of apartments coming into the market, so that’s one to be careful of unless it’s a really high quality apartment and has everything going for it.”

Infrastructure

Public transport, new roads, hospitals, good schools and other public amenities are key to identifying a growth area. Check out your state government’s long-term spending plans to find out what projects are in the pipeline and where they’re located.

Hospitals are particularly beneficial in terms of boosting property values in the surrounding area.

“If you have 750 beds coming into a hospital that’s going to bring high demand for essential services surrounding the hospital,” Mr Harvey says.

Industry

Be cautious of purchasing a property in a one-industry town. Instead, look in areas that have multiple employment drivers.

“I’m very cautious of mining towns, or areas that have one or two drivers for employment, because property demand is a derived demand,” Mr Harvey warns.

Look for hipsters and artisans

On a smaller scale, the presence of a small butcher selling good quality meat or an artisan bakery with a growing clientele are among the first signs that an area is starting to undergo gentrification.

“If there are more cafes, more butchers or delicatessens opening up, [or] boutique shops, the things that satisfy a higher socioeconomic demographic, they’re definitely [growth] indicators,” Mr Harvey advises.