The finance and property markets are filled with statistics and measures. It’s obviously the way to read the economic state of things and the way to garner ideas on where things might be heading – crucial in planning economic moves.
When it comes to property which stats are the ones we should be keeping our eye on most closely? Below are the seven main ones that should be used in conjunction with each other that can give you broad market movements and indicate where you need further research.
Median price changes
The median house price is the midway point of all the property sold at market price (or sold amount) over a set period.
Sometimes derided by real estate agents as a tool for measuring changes in value. But an increase in median prices can mean that more expensive and prestigious houses are being built in the area and the suburb is on the move.
Alternatively, drops in median house price can indicate cheaper properties being built or sold, or increasing numbers of first-home buyers moving into the area.
The amount of rent being paid in the area can give away much information on what is happening property-wise to an area.
If rental yields are increasing it can mean supply is dropping, often because owner-occupiers are moving in and renters out. Or perhaps there’s higher competition between renters and increased demand. If you notice changes in these statistics you should research further and search listings sites and median rent figures to work out why rental yields are on the move.
Vacancy rates give you an excellent idea of rental demand and how new developments affect a market.
The amount of houses or apartments that are available on the market can indicate whether it’s a buyer’s or seller’s market and whether that is changing, obviously helpful when working out the time to buy or sell.
As the amount of properties reduces, it shows the market is heating up and when the market swells with more properties it’s the buyers that have more choice and it may mean multiple investors are choosing to cash in their capital gains.
While an excessive amount of properties on the market and they’re not moving fast can be a warning bell, it can also mean great bargain deals can be made.
Time on market
The length of time that properties are spending on the market before they sell is an important indicator. Why? Because it gives you a taste for the level of consumer demand for homes in the area, and it also gives you an idea how long it might take to sell your property in the future.
Vendor discounting is the amount sellers are dropping their property from the listed price in order to achieve a sale.
If this figure is high, it can mean a cooling market or reveal a desire for owners to move out of the area.
It can suggest that further drops could keep occurring in the future.
Indeed, the opposite is true with vendor discounting, if houses are going for more than the listed price it can show strong consumer sentiment.
Close analysis of this statistic is needed, sometimes a property discount can be due to personal reasons more than anything else.
This statistic is more general, gained from local council data rather than economic sources, but can be important nonetheless.
Meaningful changes in the area’s population make-up can help investors choose the areas they want. For example, an area that is gentrifying with more and more young professionals moving in can mean the value of a property is on the rise.