Lies, Damn lies…. and statistics!!
In our eight episode, and the first new episode on our own Podcast channel, the “Property Planner, Buyer and Professor” dissect “How to sort the data ‘gold’ from the lies and misdirection’s, when it comes to property and location data analysis”.
Data can provide great insights, but it will never give you the full picture.
One of the key errors a property investor can make is hanging your hat solely on data, on the wrong data or misinterpreting data.
We all need to manage our cognitive biases to be careful that we are not actually the ‘artist painting the picture on the canvas’ with the data and statistics telling us the story that we want to hear!
Listen to our three experts as they take you through the different types of data, data providers and the methods in which data can be sliced and diced!
- Knowing when to use data – when is data handy?
- What is your yardstick? Compare your stats to the stats of the greater capital city.
- The relationship between data and capital growth – do you understand the reason behind the stats.
- Know what you’re looking for (and what to filter out!)
- The traps of hanging your hat on data alone.
- Why you shouldn’t look for data to support the story you tell yourself.
- Understanding data paradoxes.
- Get different data sets from different sources – are they telling you the same story?
- What positive data should you look at.
- How can you use data identify gentrification?
- What part of the story does data not tell you?
- Taking data with a pinch of salt – what is the integrity of the data you are using?
- Is it a house or a unit? The answer may not be so straight forward.
- Understanding where are the holes in data.
- New v established – thrown into one category, but the data for one type affects the other.
- How developers can pull the wool over your eyes.
The Property Buyer’s Golden nugget: throw the Comparative Market Analysis in the round file. Relying on something that has been generated by computer algorithm is very dangerous.
The Property Planner’s Golden nugget: Sometimes high yield can be positive and sometimes it can be negative. When it is higher yield it can imply that capital growth rate has been low from a period of time. How has the yield changed. It’s about getting one data point and measuring it against another data point.