Good morning all,
Just wanted to check a few things as starting to do a bit more research into suburbs that we can purchase our 1st IP in
1) Is Long Term Trend the long term trend up until now or what is projected?
2) When they talk about 12, 24 & 36 month growth is that past actual or future predicted growth?I have found a suburb where the median unit price is 2% higher than the median house price and think that might have decent capital gain to come on houses. Does capital gain on units and houses follow a similair bell curve i.e. if units have increased by x%, would it be prudent to believe that houses will increase by a similar % over a period?
Thanks,
KevHello Beans,
I just had a look at InvestSmart to see what you were referring to.
1) Is Long Term Trend the long term trend up until now or what is projected?
2) When they talk about 12, 24 & 36 month growth is that past actual or future predicted growth?I believe both growth measures are based on past data and are not forecasts.
The long term trend would be calculated on the past 5-10 years and obviously 12, 24, 36 is the past 1 ,2 ,3 years.When looking for a good growth suburb a long term average of 10% p.a is good.
This shows the suburb is continually increasing each year and isn't just the flavour of the month or affected by statistical outliers.Keep in mind statistics are only as good as the data and past performance does not equal future performance.
Cheers,
Dave@siraitken – If the growth has been 10% average over the long term couldn’t this possibly mean that the prices in the area have peaked and thus it is no longer a high growth area?
Ryan McLean | On Property
http://onproperty.com.au
Email MeYes Ryan there is the possibility that prices have peaked and the growth will not continue into the future.
And usually all good things come to an end.
In saying this though there is no reason why a suburb can not out perform other suburbs in the long term.
If the suburb is managed well by the council, desired by the public and attracting investment $$ property prices will increase favorably.Cheers,
Dave
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