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Research is vital to a successful property investment decision. There is almost a never ending number of sources of information but in this article, I will highlight some simple suburb research that you can do on the internet.
Some of the most useful sites for me are:
• www.abs.gov.au
• www.rpdata.com.au
• www.onlinenewspapers.com
• www.google.com
Lets take a look at these in some detail:
Australian Bureau of Statistics (ABS) – www.abs.gov.au
This is the official website for Australian statistics. There is far more information on this website than you will ever need if you are looking for information to help you with your property investment decision. To help determine if I think a suburb is worth investing in for capital growth, the following indicators are what I look for:
Occupation: The number of people in Professional positions should be increasing. The higher people’s income, the more they can spend on buying or renting property.
Median Income: The pace of growth of incomes in the suburb should be greater than that of the state/nation. This indicates a wealthier demographic moving into the area.
Education: The percentage of university/tertiary qualified people is increasing at a faster rate than the state average. University qualified people generally earn a higher salary than those who don’t have a higher education qualification. This is another sign that a wealthier demographic is moving in.
Landlord Type: You should be looking for areas where the percentage of homes rented via the State or Territory housing authority is either below the state average and/or the rate of decrease in government housing is faster than that of the state.
RP Data – www.rpdata.com.au
RP Data produce some very comprehensive suburb report. It is the housing data in particular that I am interested in. I look for areas where relatively high prices can be paid for property. Let me explain.
Let’s assume that there are two suburbs with the same median house price.
Sales Prices
Suburb A / Suburb B
$445,000 / $475,000
$450,000 / $475,000
$460,000 / $480,000
$480,000 / $490,000
$490,000 / $495,000
$500,000 / $500,000 (median)
$515,000 / $600,000
$520,000 / $700,000
$520,000 / $800,000
$520,000 / $900,000
$520,000 / $950,000
In the above table, you can see that both suburbs have the same median house price, $500,000. However, it seems that Suburb A has a ceiling of $520,000 and no property has sold for more than this whereas the highest priced sale to date in Suburb B is $950,000. Which suburb would you prefer to invest in? I would prefer Suburb B as there are more opportunities to sell your property in the future for a very high price as it is obvious that people are willing to spend much more on housing in Suburb B than Suburb A.
Online Newspapers – www.onlinenewspapers.com
I regard local knowledge as critical when purchasing property. It can be hard to gain that knowledge if you are not a local or don’t live near the area. Solution? Check out the online newspapers website which has many newspapers from not just Australia but all over the world. Want to invest in Whyalla (SA) but live in Victoria? No problem. Check out the Whyalla News. Live in Manly or Manhattan but want to find out what is happening in Blacktown (NSW)? No problem. Read the Blacktown Sun. There are well over 100 national and local newspapers that you can access from this website.
Google Maps – www.google.com.au
The Google Maps facility can provide you with a bird’s eye view of an area from the comfort of your own home. You can also use the “Street View” function and get a better perspective of an area. I like to also use the satellite map as at a glance this can give me an indication where an industrial estate might be, location of shopping centres, schools, parks, etc. When using Google maps, some of the attributes I search for are:
• Not too many industrial buildings in the suburb or at least not too close to the property I wish to buy.
• Location of schools and major shopping centres.
• Location of train lines and stations. You don’t want to be in the vicinity of a train line but being close to a train station is advantageous.
• Calculate distances to the city/sea/major facilities.
• Flight Path – you don’t want to be directly under the flight path but being close to the airport can be a bonus as it is a hub of employment.
I have listed just four internet sites that I use but I know there are many more that are utilised by property investors. A smart property investor will “Research, Research, Research”.
Happy House Hunting!
Written by Peter Koulizos, university lecturer, author and buyers advocate.
