5 property stats you should pay attention to above all others
You’ve decided that you want to buy a property! Are you looking to add a great new addition to your investment portfolio? Or, have you finally saved that 20% deposit to get you started in the property game? Either way, you should know that buying a property should be viewed as an investment decision. Always beware of getting too caught up in the emotions of it.
So, what do you need to know to make the best investment decision? And where do you find this information?
Experts say that there are five property stats to pay attention to when trying to get a read on your local property market. We’ll briefly explain each property stat and give you some websites where you can find more information on these stats to help you with your property research.
Our top 5 important property stats are –
PROPERTY STAT 1: Median price
The median price of a city or even a particular suburb will give you an indication of how the local market is performing. It will give you an indication of how much you’re going to have to spend if you want to buy a property in this area.
This website is a great starting point to getting information like median price, growth rate, rental yield and clearance rates for suburbs around Australia.
PROPERTY STAT 2 : Rental yield
Rental yield provides an insight into how much you can potentially receive as income from your investment property. This is particularly important if you don’t want to live at the new property. Rental yield is essentially the rental income from a property as a percentage of the property’s value. High rental yields mean that the area is great for property investment.
You can have a look at this website to start your search on rental yields.
PROPERTY STAT 3: Clearance rate
Clearance rates can give you an indication of whether a property market favours buyers or sellers. A clearance rate is the number of properties sold via auction versus the number of properties that went to auction. Basically, it shows the success rate of auctions. If the clearance rate is high (e.g. above 70%) then it means the market favours sellers as there are a lot of buyers competing for properties (as more are selling). On the other hand, if the clearance rate is low then the market favours buyers as the market is slow and sellers may be competing for buyers.
You can find weekly clearance rates displayed here for property markets in Brisbane, Queensland and all over Australia.
PROPERTY STAT 4: Interest rates
In simple terms an interest rate is the cost of borrowing money. So when interest rates are low it generally means that it’s cheap to borrow money. This is great news for property investors who may need a mortgage to help fund their property purchase. Low interest rates have historically been a key driver in property investment as cheap borrowing means people can borrow more to pay a higher price for a property (increasing the growth in property prices).
The Reserve Bank of Australia (RBA) sets the cash rate. This has a major impact on the interest rates that the banks set. You can find the current cash rate on the RBA’s website and use comparison websites like Finder and Rate City to find the best mortgage rates being offered by banks and lenders in Brisbane, Queensland or around the country.
PROPERTY STAT 5: Demand & Supply
Lastly, take a walk around your desired area and count the number of “for sale”, “for rent” and development sites that you see. These are all good indications of supply within the area and how quickly stock moves (demand). Investing in an area with low supply and high demand is often discussed as a good strategy. You can keep track of supply statistics by gathering information from the Australian Bureau of Statistics (ABS). The ABS regularly publishes reports on its website.
These property stats are great starting points for making the best investment decision when it comes to choosing a property. Obviously you will also have your own considerations that will impact your decision as well. If you do your research and integrate your property wish list with the above property stats then you should be on your way to maximizing your future investment property.