Top tips for researching the property market like a pro
Those who consistently make money in property know the market. They know the location and the history. They know what new developments are planned. They know the transportation and the schools. They know everything about the area where they invest. Because staying ahead of the competition in property investment means doing your homework.
Whilst it is not difficult, researching the property market comes down to a range of factors, including supply and demand, economic and demographic trends, as well as keeping abreast of future developments that may be scheduled for particular areas.
While each person will have a different checklist for an investment suburb depending on their investment needs, you should consider the following when researching and assessing the market profile of an area:
Get an understanding of what causes price growth Quite simply price growth happens when demand exceeds supply. So concentrate your research on determining demand relative to supply.
Remember that infrastructure projects, proximity to employment, population growth, development restrictions, interest rates, affordability etc., will all affect supply and demand
Get an understanding of how to determine supply and demand
Supply is easy to measure you simply look at what’s currently for sale, what is for rent and what is to be built in the future. You are looking for as little supply as possible.
Demand is a little trickier. There are a number of stats you can assess and analyse to get a good gauge. This includes: days on market, vendor discounting, vacancy rates, rental yields and growth and auction clearance rates.
Population growth is also a good indicator of demand and means more people will need homes. When the number of prospective residents grows at a faster rate than the supply of new properties on the market, this makes current housing more valuable, so prices increase.
Compare & analyze multiple stats
You can access information offered by property data sources such as APM Price Finder, RP Data, realestate.com.au or Residex to help you understand different property markets.
While a lot of research focuses on what has happened in the past, also pay attention to “leading indicators”, which are predictors of what’s going to happen in the future.
Additionally, most government websites provide reports or community profiles that provide information about council plans, development projects or building regulations that can help you understand the supply and demand of the area as well as offering data to refine your search
Consider Economic factors
What is the demographic of the area? Is the area likely to experience population growth? Is there much disposable income in the area? More disposable income is likely to attract growth and development, such as new shops or other desirable facilities or infrastructure projects, which are likely to improve property values. Are people prepared to pay a premium to live here?
The demographic profile of an area can help you understand the type of people that live within the suburb, such as their gender, age, disposable income, as well as their behaviour, including whether they prefer to buy or rent.
When it comes to buying an investment property doing the homework is always the key to a financially successful experience.
Finding out as much as you can from as many different sources maximises your chances of securing your ideal investment property for the best price possible.
Get in touch for a no obligation chat about researching the market to make the right investment choices.