Invest
Property growth stats a ‘fool’s errand’, investors told
Property investors looking for wins in the current market often look to the wrong growth metrics, according to one national buyer’s agent.
Property growth stats a ‘fool’s errand’, investors told
Property investors looking for wins in the current market often look to the wrong growth metrics, according to one national buyer’s agent.
Simon Pressley, head of research at property investment advisory firm Propertyology, said it was a “fool’s errand” for investors to follow population growth forecasts when choosing where to purchase property.
“Completely contrary to what the vast majority of people believe, property prices are not all about population growth,” he said.
“Those who obsess about population data being the investor’s panacea risk setting themselves up for disappointment. It’s far from the most important factor which influences rises and falls in property prices.”
His comments come on the back of data released by the Australian Bureau of Statistics last month that predicts the nation’s populace will double to 50 million in half a century’s time.
According to the data, the population of Sydney will reach 8.8 million in 30 years’ time – the current size of London.
Brisbane will be as big as Singapore (at 5.6 million), while Melbourne will actually overtake Sydney as nation’s largest city by 2031.
“Aside from cries of ‘Where will they all fit?’, population projections often create heightened interest from avid property investors who feel these numbers provide valuable insights into the best property markets of tomorrow,” Mr Pressley said.
“Population growth data is, in truth, a lagging indicator and is a by-product of factors such as swings in employment opportunities, affordability, varying lifestyle choices, and immigration policy.”
He argued that if population growth was the principal factor driving market performance, we would not see the significant price drops currently occurring across Australia’s major cities as well as the high performance of some of the country’s regional townships.
“Why is it that, in 2018, the year directly after consecutive years of all-time annual population growth records were broken in Sydney and Melbourne, the value of a typical house declined by $90,000 and $40,000, respectively?” he said.
“If they were, how does one explain the rollercoaster annual changes in Sydney’s median house price – and every location in Australia – from one year to the next, even though the annual population changes are relatively smooth?”
Mr Pressley cited the likes of Ballina, Berri, Lismore, Launceston and Forbes as examples of markets that have performed well in the past year, despite having population growth rates below the national average.
“The northern New South Wales regional town of Moree Plains saw property prices rocket by an incredible 28.1 per cent, yet their population declined by 182 to 13,408 people.”
He said it was important for investors to understand that although population growth may be one element of market demand, a market can only grow from a culmination of numerous factors – such as employment opportunities, location to amenities, land supply, streetscape, etc.
“Demand is made up of multiple factors. Supply also has several key influences, and one should not underestimate the influence of sentiment,” he said.
“There are many, many dots to join when one tries to forecast future property price changes.”
Property
Why you shouldn’t invest like you’re playing poker
Investors are being warned to follow the numbers instead of emotions when looking to purchase properties. ...Read more
Property
Hot Property: The biggest stories this week
A landmark court decision could see more pets in apartments as the property industry attempts a return to normality: Here are the biggest property stories from this week. ...Read more
Property
From resilience to strength: How returning to normality is driving Adelaide’s growth
Adelaide’s success with preventing the spread of COVID-19 is seeing consumer confidence grow and a return to a pre-COVID lifestyle, which is having a strong impact on house prices, a researcher has ...Read more
Property
Could Sydney house prices reach a $1.5m point of no return?
With the availability of credit improving and interest rates declining, it is very possible Sydney could once again enter a market frenzy. ...Read more
Property
Victoria’s most affordable suburbs revealed
New data has uncovered the suburbs deemed the most affordable in the state of Victoria. ...Read more
Property
Pets now allowed in apartments, court rules
Pet owners are celebrating after the NSW Court of Appeal ruled that blanket bans on pets in apartments were unlawful, harsh, unconscionable or oppressive. ...Read more
Property
Why ‘purchasing properties for very little’ could still have a slow uptake
While the budget has been flagged as a win for first home buyers, a property researcher explains why the uptick in first home buyers might actually be slower than first anticipated. ...Read more
Property
How the rest of the year is set to play out for Victorian real estate
Harcourts Victoria’s CEO has provided some insight into how the remainder of the year is shaping up. ...Read more
Property
Why you shouldn’t invest like you’re playing poker
Investors are being warned to follow the numbers instead of emotions when looking to purchase properties. ...Read more
Property
Hot Property: The biggest stories this week
A landmark court decision could see more pets in apartments as the property industry attempts a return to normality: Here are the biggest property stories from this week. ...Read more
Property
From resilience to strength: How returning to normality is driving Adelaide’s growth
Adelaide’s success with preventing the spread of COVID-19 is seeing consumer confidence grow and a return to a pre-COVID lifestyle, which is having a strong impact on house prices, a researcher has ...Read more
Property
Could Sydney house prices reach a $1.5m point of no return?
With the availability of credit improving and interest rates declining, it is very possible Sydney could once again enter a market frenzy. ...Read more
Property
Victoria’s most affordable suburbs revealed
New data has uncovered the suburbs deemed the most affordable in the state of Victoria. ...Read more
Property
Pets now allowed in apartments, court rules
Pet owners are celebrating after the NSW Court of Appeal ruled that blanket bans on pets in apartments were unlawful, harsh, unconscionable or oppressive. ...Read more
Property
Why ‘purchasing properties for very little’ could still have a slow uptake
While the budget has been flagged as a win for first home buyers, a property researcher explains why the uptick in first home buyers might actually be slower than first anticipated. ...Read more
Property
How the rest of the year is set to play out for Victorian real estate
Harcourts Victoria’s CEO has provided some insight into how the remainder of the year is shaping up. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
