Does recent price appreciation mean a suburb is a good or bad investment?

[Button]

Hi all,

I'm about to buy my first home in Auckland and am trying to pick a suburb that has good potential for capital growth. I read a lot of articles which supposedly list the "hot suburbs", but this is usually based on recent price appreciation, e.g. I know one site lists Milford as the "hottest suburb" because median prices increased by 41% in 2015.

What I'm confused about is whether the "hot" suburbs (the ones with massive recent price appreciation, e.g., Milford) are ones I should steer clear of (because they've "done their dash") or consider buying in (because there seems to be a lot of demand).

So, is recent rapid price appreciation a good or bad sign in terms of potential for future capital growth?

Thanks for any advice!

[Damap]

If you're in Auckland it honestly makes little difference. Buy somewhere with lots of home owners and the best schools you can find. Don't worry about anything else.

[Tomo]

By the time a suburb has made the heralds "hot suburbs"list its generally been appreciating significantly and you may find better value in neighbouring suburbs. You really need to understand why suburbs are "hot" and also be wary of sensationalist headline grabbing newspaper articles written by people with little experience in property. Suburbs where families want to be are likely to always be popular.