Buying in the right suburb at the right time

[MTR]

This strategy is one that very much interests me and came across an article on this by John Lindeman.

This is an overview for those keen on looking closer at this. I think its excellent.

Here are some of his key property prediction secrets, no real secret

You only need to track sales and listings.
Supply and demand, the number of dwellings available for purchase compared to the demand in any area, suburb or city. The changes in ratio over time lead directly to movements in prices because housing prices will fall in suburbs where the numbers of properties listed for sale on the market are higher than the number of potential buyers.

Compare total number of houses or units listed for sale in a suburb to the total ANNUAL number of house or unit sales in the same suburb.
The ratio will determine the current type of housing market.
This information is available even in API Mag, Databank.

For example -
Stressed Housing Market - listings 4-5 times the number of sales (prices have fallen more than 10%)

Neutral - (prices are not changing)

Boom - (prices rising by more than 10%)

Some of the best opportunities are properties that are neutral or even stressed but you need to track the current ratio of intending sellers to buyers in selected suburbs then keep a check on any emerging trends.

As suburbs usually take many months to move from stressed to buyer markets, doing your research once a month is sufficient to identify any that are on the move.

This is an example of a stressed suburb in Vic at the moment (oversupply) that he predicts will boom, Truganina, sales trend - strong rise, listing trend - strong fall.


MTR

 

[Aaron_C]

Truganina - I doubt anyone would seriously buy there as an 'investment'....pretty shocking place.

 

[MTR]

Truganina - I doubt anyone would seriously buy there as an 'investment'....pretty shocking place.

supply vs demand he has that right, this is what drives the market, this is a no brainer

Will post some of the other areas he mentioned.

 

[hawko79]

supply vs demand he has that right, this is what drives the market, this is a no brainer

Will post some of the other areas he mentioned.

I read this article with interest as I have also read John Lindeman's book (Mastering the Australian Housing market).

I think tracking the listings/sales ratio is a really good way to start shortlisting potential suburbs for further analysis. I was using the realestate.com suburb profiles to draw up some graphs of how many listings there were on the market vs the number of annual sales, but unfortunately re.com doesnt have those statistics anymore.

Does anyone know where this data can be accessed?

 

[MTR]

Total number of houses/units for sale in a particular suburb/area can be accessed each month on Databank, API Magazine. Any re agent worth his salt should be able to give you stats on ANNUAL houses/units for sale for their area.

I also short list some areas by looking at what is happening in terms of demographics, infrastructure, government rezoning and also what areas developers are targeting.

To keep it very simple I find watching listings and how quickly they are under offer very useful. Its easy to follow markets that are moving as there are very few listings and everything is under offer, yep, its not rock science that is for sure. I guess its a matter of getting in early in the cycle, rather than when its close to peaking, that will hurt.

 

[hawko79]

Total number of houses/units for sale in a particular suburb/area can be accessed each month on Databank, API Magazine. Any re agent worth his salt should be able to give you stats on ANNUAL houses/units for sale for their area.

I also short list some areas by looking at what is happening in terms of demographics, infrastructure, government rezoning and also what areas developers are targeting.

To keep it very simple I find watching listings and how quickly they are under offer very useful. Its easy to follow markets that are moving as there are very few listings and everything is under offer, yep, its not rock science that is for sure. I guess its a matter of getting in early in the cycle, rather than when its close to peaking, that will hurt.

Thanks for the reply MTR.

I've also started using Boomtown (http://hotspotcentral.com.au/) as a tool to shortlist suburbs. Obviously its never going to be an exact science, but the more data you can access, the better.

 

[MTR]

Thanks for the reply MTR.

I've also started using Boomtown (http://hotspotcentral.com.au/) as a tool to shortlist suburbs. Obviously its never going to be an exact science, but the more data you can access, the better.

Thanks. Someone posted a thread on this group and I think more in terms of their partnership/developments.

I don't subscribe to anything as too much information I find is overwhelming and sometimes confusing for me, most of the time I just come across areas via tips/re agents etc. Once I identify an idea its really easy to work out what is happening. Also the agents are key, they know what is happening on the ground in an area, I usually speak to at least 3 in my identified areas.