Identifying investment opportunities can be a difficult manoeuvrer, especially with such an emotionally-driven asset class such as residential property. It is important to adapt a strategy that shows opportunity for growth, as well as the investor’s ability to hold the asset long enough for it to realise that growth.
We do this by analysing property in five primary broad categories:
People – Politics – Performance – Productivity – Place
People buy, lease and sell properties. Understanding their motivations based on demographic information is a key step in understanding how a particular property market performs.
Often overlooked, politics is the public policy at all four tiers relevant for property (strata, local, state
and federal). This includes by-laws, zoning, priority development, and public infrastructure.
Past performance, gross rental yields, vacancy rates, affordability factors and sales volumes have a strong bearing on the positioning of a market in the property cycle and is therefore essential in determining the timing of a particular investment.
Productivity is the relevant economic data pertaining to particular property markets. This includes industries of employment, economic diversity, unemployment trends among others.
At a more micro level, place allows us to analyse pricing and its relevance to aspect, size, design and location. This is particularly important when comparing one property against another in determining the positioning within a marketplace an investor is accessing and therefore which demographic to target, hence completing the cycle.