Property values are heavily influenced by location based on regional, state, city and specific neighbourhood.
Job growth, population and demographics are just some of the key ingredients to the equation.
Primary
markets like Sydney or Melbourne have larger, more diverse economies and bigger
population bases to insulate them from market downturns.
In contrast,
secondary and tertiary markets are viewed as riskier still, as they are more
susceptible to dips in the economy, with shallower pools of buyers.
Whilst the
primary markets enjoy the greatest amount of transaction activity, it is
important to note that this is a factor in the overpricing of the market.
When
prospecting for good geographical areas, it is essential to research the area
thoroughly and analyse the underlying trend in that market.
For example:
· Measure
demand- how many homes are for sale in the area compared with previous years?
Why are people selling and wanting to leave?
· Review
the average sales price of property and compare them with previous years
· Are
more tenants coming into the area? It may be more profitable to buy an
apartment
· Is
the land fairly valued?
· Is
the area accessible by public transport and is there considerable investment by
the government/public sector?
· Look
into employment statistics for the area and if there are a high number of
students and employees. If there are large numbers of students, it may be
worthwhile investing in apartments.
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Marlene Liontis
Saturday, 28 September 2019
