Never underestimate the importance of property statistics!
Property statistics can help you understand what markets are doing at specific points in time.
And that is information you can use to make informed decisions about locations which might be about to upswing.
But given the amount of statistics, it can be hard to work out what is important.
Not to worry! In this blog post, we break down the three most important statistics that you need to understand as a property investor. These statistics will help you make smarter investment decisions and ensure your property selections are the very best they can be.
Demographics are one of the strongest indicators of how a property market will perform.
Demographics drive markets. If you’re an investor, it is important that you are looking for locations experiencing an increase in affluent new residents. This will eventually lead to an increase in the price of property in the area.
In fact, the Property Investment Professionals of Australia (PIPA) found that the early signs of gentrification could be identified by a:
- Larger decrease than the state average in people aged 18 years and under.
- Bigger increase than the state average in people that lived at a different address five years ago.
- Greater increase than the state average in couples without children.
- Larger increase in the percentage of females working in professional occupations.
All of these factors work together to change a suburb. As the population grows with affluent professionals, the suburb will transform, in turn leading to more barista coffee houses, more organic cafes and more wine bars.
It will also mean that property prices will start to rise, as these aspirational new residents push up prices because of their strong desire to live in the suburb.
2: Median house prices
Median house prices are all the rage these days, with many property investment groups reporting these on a daily basis.
Ignore the daily reports. Quarterly or yearly results are the timeframes to keep an eye on. They can show price movements that reflect a larger proportion of sales in a suburb over time.
Median house prices are a solid indicator of change in a suburb because price variations are often the result of a different type of property being sold or buyers being active in that location.
For example, an area may begin attracting working professionals due to a number of extensively renovated and expensive properties in the area being sold.
Conversely, first home buyers seeking more affordable housing in the area can cause the median house price to fall.
Median house prices are a great indicator of the property market, but it’s important that you do your own research to get a better idea of what’s happening in a suburb.
3: Time on market
Time on market is exactly how it sounds – it refers to the age of the listing.
When demand is high and there are more buyers than properties on the market, the time on market will be low.
On the other hand, if a flood of new properties become available, time on market will jump and prices will drop.
This statistic is powerful because it can help you identify locations that are about to boom. This will help you buy before the masses and make the most of price uplifts as time on market drops.
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