They say that knowledge is power, and this is particularly true for those looking to dabble in the property market – but how should you approach your research?
Let’s say you were in the market for a new car but had no idea where to start. Without careful research, getting from A to B in your new ride would be hindered by not knowing how much your money could get you, what type of vehicle best suits your lifestyle and even what types of issues certain cars are plagued by. Without doing your homework, you could inadvertently end up with a lemon.
Like it or not, the same concept applies to the property market. Regardless of whether you’re a first home buyer, looking to purchase your dream home for your family or wanting options to add to an investment portfolio, the Australian property market has several micro markets, particularly when comparing metro and regional locations.
While every prospective house hunter should already be working from a checklist, using data sourced from researching the property market can help you to make educated decisions, whilst being realistic about what type of property best suits your needs – but where do you start?
Six Helpful Property Market Research Methods
Taking the time to thoroughly research the state of the property market involves much more than a daily scroll through the latest listings on RealEstate.com. While this can be a great place to start if you aren’t familiar with a particular region, there are some other key metrics that may be slightly more helpful in the long run when it comes to assessing supply and demand, and whether a property or suburb is right for you or not.
Days On Market – The longer a property sits on the market, the harder it usually is to shift. If you can identify a suburb that has properties that take less time to sell today than it did a few years ago, it’s a tell-tale sign that there’s a sustainable increase in demand, which spells good news for capital growth opportunities.
Rental Yield – As this is the metric that measures the return on investment from a rental property each year as a percentage of the value or price at which the property was bought, this is important real estate data that tells potential investors how much money they will make on a particular property in rent before investing in it.
Demographic Data – Factors such as employment growth, average household incomes and age ranges can also help you to analyse future trends tied to a local property market. Areas with high employment growth and high disposable incomes mean that people can spend more money on where they live, which will often drive up prices over the long term.
Vacancy Rates – Low rental vacancies usually mean high demand. When conducting property market research as an investor, you might observe a vacancy rate of 10% in an area, but then notice that it dropped to 5% the following month. Think about why this has occurred and if there’s any significance, then assess over longer periods of time for any fluctuations.
Auction Clearances – If the majority of properties that go to auction in a particular suburb sell on the day, this suggests a positive buyer sentiment in the area as they’re willing to gamble on this method of sale to secure the right home. In addition, if properties are advertised with open inspections rather than private appointments, this means a high number of interested buyers.
Council Developments – Before making a purchase, be sure to check the local council website for any updates on future developments in the area. You will get a feel of the property market via applications for commercial infrastructure, but one subtle example of this data is that of a housing estate project development, which can severely affect the supply in this location.
Should you be looking to sell your home or purchase a new one, enlisting the services of a free property advisor like ESPA can often be a game changer. As an example, your advisor would likely research the property, local agents, check the zoning, evaluate market conditions and communicate clearly with you regarding all of your options – but where do you find one?
Take The Stress Out Of Selling Property
As a completely free service, Emergency Services Property Advisors provide property advisor services to Police, Fire, Ambulance and S.E.S personnel and their families right across Victoria.
Luke and the team at ESPA are passionate about providing support to some of Australia’s most valued public servants. Along with key industry insights, ESPA also works with a broad range of service providers linked to the real estate industry such as conveyancers, trades, legal practitioners and mortgage brokers.
If you are an emergency services worker looking to potentially buy or sell property in the future, please get in touch with Emergency Services Property Advisors today to discuss how we can turn your real estate dreams into reality, or call Luke directly on 0414 757 705.