How to spot an up and coming suburb – understanding demographics and statistics (Ep.75)

In this week’s episode, Dave, Cate and Pete take you through:

1. Occupations, education and incomes. Identify the key data sets the professionals look at, and how to use them to analyse whether gentrification is on the cards. And importantly, which data sets to ignore.
2. Rental properties. Spotting the trends in tenure and weekly rental payments that will steer you in the right direction.
3. Mortgage monthly payments. The trio explain what percentage of household income mortgage repayments should make up and why is this an important factor to look at.
4. Usual address and internal migration. How many people lived at the same address 5 years ago and what does this mean? Who is moving in and who is moving out?
5. Dwelling growth. How many new dwellings are being built and is this a positive or negative indicator of gentrification?
6. Population Growth. Taken at face value, population growth is one of the stats that can lead you to believe a location is gearing up for massive capital growth. The trio explain how to treat population growth and what indicative changes to look for.
7. Going to the suburbs. Don’t forget to take your eyes away from the numbers on the paper and visit the location. What are the signs that a location is attracting attention? Look out for fancy eateries and even fancier pooches on parade.
8. And of course, our ‘gold nuggets’!

Resources:

• Interpreting data to uncover an outstanding property and location– and how to sort the gold from the lies, damn lies and statistics! (Ep.8)
• How to choose a location for investment – what to look for and what to avoid (Ep.14)
• Misunderstanding what makes a good property investment – #2 of the top 7 Critical Mistakes (Ep.32)
• Dissecting 10 years of Core Logic data – capital cities & regional areas (Ep.42)
• Lies, Damned Lies, and Statistics! – Melbourne’s Median House Price Increases 1.4 per cent in 2018. 
• The population paradox: Why more people doesn’t always mean higher prices 
• Five mortgage strategies that can grow your wealth
• The Property Planner’s Fast Fact – Vacancy rates, location selection and long term trends! 
• Property Planner’s Fast Fact – Not In My Back Yard (NIMBY) Locations. 
• How Data Can Help Property Investors Identify Gentrification Before It Happens 
• More Data Reinforcing The Weak Returns Of New Apartments – Something We Have Been Banging On About For Almost Two Decades. 
• Property Planner’s Fast Fact – The three steps to property data success. 
• The six signs you are dealing with a spruiker! 
• How to Select Property Like an A-Grade buyer’s agent. 
• How to succeed with Property and Create your Ideal Lifestyle 
• Mortgage Strategy 101 – Youtube video series. 

Market update– the Property Planner, Buyer and Professor’s insights

1. Melbourne market is moving. Records have been set and houses are flying past the reserve, Melbourne is hot on the ground and quickly moving into recovery.
2. Consumer confidence has jumped to a seven year high. The Westpac Melbourne institute “time to buy a dwelling” index surged 8 per cent to 132 points – the highest reading since November 2013. Often with investing, you need to go against the grain. That means investing when everyone else is fearful of investing. If you’re doing it when everyone else is doing it, you’ll be paying more than you otherwise would have.
3. Australia has surpassed the US for the largest house sizes in the world! Spurred on by the pandemic and lengthy lockdowns, the average size of our homes have increased predominantly through the increased number of renovations, which has also been supported by the government HomeBuilder stimulus grant of $25,000 to build a new home or substantially renovate an existing home. The virus crisis has been driving the ‘great lifestyle re-evaluation’ phenomena. How long this will last post a vaccine is unknown. A side effect of increasing the foot print of our homes is increased median property values.

Show notes 

• Occupation: Professionals – Should be increasing at a faster rate than the state average 
• Median Weekly Income: Family – Should be increasing at a faster rate than the state average 
• Tenure: Rented – Should be decreasing at a faster rate than the state average 
• Rent Weekly Payments: Median – Should be increasing at a faster rate than the state average. 
• Mortgage Monthly Payments: Households with mortgage repayments that are 30% or greater than household income -Should be increasing at a faster rate than the state average. 
• Level of highest educational attainment: Bachelor’s degree or above – Should be increasing at a faster rate than the state average. 
• Usual Address and Internal Migration: Place of usual address 5 years ago – Should be decreasing at a faster rate than the state average. 
• Dwelling: Dwelling Structure – The total number of dwellings should be growing at or below the state average. 
• Population Growth: on a macro level you want to be seeing growth in population, but on a micro level it should be approximate to the greater city average, implying limited availability of land and properties. The lack of available land and property would increase demand while keeping a lid on supply. 
• Going to the suburbs: are there dogs wearing waistcoats, restaurants with degustation menus.  

Cate Bakos – The Property Buyer’s Golden nugget: there is so much more to it than hearsay or picking up tips from a well written blog. Pound the pavement and look at the early signs and indicators, but then look at the data critically. Go through all of the points that Pete has gone through in today’s session.

Peter Koulizos – The Property Professor’s Golden nugget: You need to look for trusted data, there are far too many people peddling information and you got conflicts of interest. ABS census data is old, yes, but they interview everyone. With other data sets, the data is more limited, they survey just a small section of people.