Hello all!
I am trying to break down which stats I should be watching to best understand real estate market trends. I’d appreciate any advice !
So far, i’ve got:
1. Demographics (baby boomer trends)
2. Interest Rates
3. Legislation
4. Oil Prices
5. Economy Factors such as -> GDP, Employment Rates, CPII’d really appreciate any tips on what to look for in the above stats, as well as, any other relevant stats.
Most important is supply/demand of property in a specified area. What’s going to impact prices of property in an area more – oil prices or a doubling of stock coming on the market or a reduction in population in a local area reducing the demand?
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Hi Kristyn,
This is one demographic that is of very high importance – Steve outlines it well here:-
https://www.propertyinvesting.com/watch-out-for-this-simple-stat/In essence, always buy in an area where Owners outnumber Landlords markedly. Because Homeowners don’t relish losing their house, they will hang on by their fingertips no matter what. This puts a solid base under house values in areas where Homeowners outnumber Landlords.
Benny
Both the above advice is great advice.
I think I get were your coming from with Commodities price.
the big things are
-access to debt/credit
-buyer confidence
-supply/demand as Corey put nicely
-economic perception
-rental occupancy rates
– sale stats
and a multitude of other factors.This is such a complex and deep question because truly knowing the answer would you mean you understand the whole trend of the market in each area of the country.
But a great topic and something I ponder and study daily.
Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
There are two leading indicators that I am looking for.
1) Rental market. This is the first and leading indicator of what is happening in a market.
Is the number of properties for rent rising or falling? Are rents increasing or decreasing?
A tightening rental market is the first indicator of house price growth to come, an loosening rental market is a sign of price drops to come. Perth is a classic example. The rental market headed south 6-9 months before the sales market followed suit. The rental market is now recovering. Housing will follow, but it is always behind the rental market.2) Stock on market. Increasing number of houses for sale = falling prices. A decrease of stock = rising prices. Stock staying the same = flat prices in line with CPI.
For example, Perth currently has 14,500 properties for sale, which is an over supplied market, hence our recent poor performance (there is a reason why it is called a buyers market!). 13,000 is a balanced market. Prices will generally increase inline with CPI. 11,500 properties for sale is a sellers market. Expect prices to rise above inflation, with strong competition for good properties. Sub 10,000 is an out of control market, with poor quality properties selling for a premium.
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