Australian investors need to rely on key information to find a great property, critically considering the variety of property data available to inform their choice
Investors use property data to create a short list of suburbs where the numbers drive your portfolio. This key information should determine the state, city and suburb you end up investing in. The opportunity to convert an old residential site into an exciting new residential development, for example, is an option that good information may expose.
Popular sites like the ANZ Property Council release data you can absorb, but they are not the only source of information for your investment choices – as their reports are just one consideration, and indeed may be open to misinterpretation as are similar professional publications in the field.
There are a variety of reliable sources where an investor may look for up to date property data on the current market
- Government Agencies
- Industry Data providers like SQM Research, Residex, Core Logic, Real Estate Industry Association (REIA)
- Commercial providers
- Trade publications
- Local Councils
- Major Property Groups
- Investment Publications
- Hedonic Indices
The introduction of Hedonic Indices was a reaction to the frustration of the Reserve Bank to misleading market value property data, resulting in the Australian Bureau of Statistics producing a more accurate measure of market movement – providing a gauge of the change of market value from one period to another.
The kind of property data you can look to gather for any particular area include:
- Number of property sales
- Vacancy Rates
- Median house prices
- Auction rates and clearance rates
- Consumer confidence rates
- Price estimates
These can be broken down per area, and further into providing excellent insights for specific suburbs.
To help identify cost pressure and price movements, look for a valuer or agent who specialise in the type of property and location that you are considering
Consider key demographics:
- Population growth or change
- The labour market
- Interest rates
- Wage rates
- Consumer sentiment
- Policy and regulation around land release
- Recent sales data – emerging amenities
- Infrastructure developments
- Schools and educational institutions
- Major roads and transport hubs
- Crime statistics
Prices can vary based on numerous criteria, including where the suburb the property is located in, water views, access to rare areas such as desirable parks and shops.
The critical point is to understand who is producing the property data, and which of it is credible, as well as providing genuine usable insights
Investors need to be careful when considering dramatic media stories, with commentary designed for impact and ratings – which can confuse and upset otherwise rational investors. We have written about the importance of developing and evolving a well-considered property plan – considering how much research is enough, and to removing emotion from your purchasing decisions.
Investors also need to consider that markets are volatile, and that short-term data can be misleading. Monthly data can be skewed, and time-lag in data sets can create difficulty in drawing clear conclusions. The shorter the data period the more volatile the data can look – so looking at yearly rather than monthly data to indicate a broader trend to the market is generally more useful.
Ultimately it is important to get out into the market to determine what is selling and why
Investors need to be conscious of sweeping generalisations and keep a close eye on the quantity and quality of stock for sale in your short list of areas being considered. Benchmark it against the norm to help predict whether it is an area moving up or on a downward trajectory.
It’s important to understand the why and where before you jump into a volatile investment market. This is where quality property data comes into play.
Good property data is the factual information that shrewd investors use to determine and drive their investments
Get in touch with us so we can help you be in a position of confidence before you invest.