5 Key Market Indicators Every Property Investor Should Know

MMJ Real Estate | 20 days ago
5 Key Market Indicators Every Property Investor Should Know
If you’re looking to invest in real estate it is important to understand the current market trends.

 Here’s a rundown of some of the key market indicators and what they might mean for you.

 Is it a buyer’s or sellr’s market?

Understanding whether you’re in a buyer’s or seller’s market may help when it comes to price negotiations. In a buyer’s market, supply exceeds demand, and buyers tend to have an advantage. In a seller’s market, the reverse is true.

The type of market can vary from suburb to suburb and depends on the type of property you are selling.  Listing volumes are lower than they were at the same time last year and have started trending lower according to CoreLogic's Housing and Economic Report. 

 Property values

Rising or falling property values might be another factor to add to your decision-making equation. However, it’s important to realise that markets can behave differently from place to place.

Property values in Australia’s capital cities rose 6.4% in the past 12 months to April 2016, according to the CoreLogic Home Value Index, but changes in the individual capital cities varied from a rise of 9.8% in Melbourne to a fall of 2.0% in Perth.

Request a snapshot of property values in your suburb, and other market trends.

Auction clearance rates

Auction clearance rates tend to be high when the market is “hot”, and low when it cools down. They can give an indication of whether a property will be in high demand on auction day. They might also help you decide whether to sell your property by auction or private treaty.

Auction clearance rates have rebounded strongly early in 2016 and have averaged 68.5% so far this year.

Building activity

High levels of building approvals tend to reflect a buoyant housing market. A lot of new buildings in the pipeline could indicate that there will be some downward pressure on property values in future as housing supply increases.

Dwelling approvals are historically high but below the recent peak.  The Australian Bureau of Statistics (ABS) released building approvals data for February 2016 and over the month there were 18,252 dwellings approved for construction which represents a 3.1% increase in approvals.  Although approvals increased over the month, they continue to trend lower after peaking in March of last year.  

Rental yields

Rental yields tell you how much rent properties may fetch as a proportion of their value. They can help you make decisions if you’re thinking of investing in property.

 

Speak to one of our Property Specialists about your next move in the property market.

 



This article is intended to provide general information of an educational nature only. You should consider seeking independent financial advice before making any decision based on this information.



Information sourced from Corelogic