As with most things, knowledge is key and the best way to plan for the future is to study the past. Our research team will study past trends, gather reliable date from multiple sources and ensure they are interpreted to you in a jargon free, easy to understand manner. We will also look at the affordability of an area by dividing the median price by median household income. Note well – past performance is in no way indicative of future performance which is a common trap amongst most investors which is why our recommendations will always be of a counter-cyclical nature.
The first stage of our micro-analysis is to conduct an analysis on the property itself. This includes conducting physical inspections for existing property or inspecting previously constructed product for house and land packages. Depending on product type we will be assessing things such as the product mix and diversification, inspecting the site, the quality of the fixtures and finishes used and also reviewing the legal documents.
Things have changed somewhat drastically over the last 50 years; no longer do people want to live on large parcels of land 50km away from the CBD, as far as they can from the low socio-economic located close to public transport infrastructure and exposed to the hustle and bustle of cafes, restaurants and bars.
Sentiment has shifted, and we are seeing the majority sacrificing the land mass to be closer to where they work, closer to the hustle and bustle of cafes, restaurants, bars and as close to public transport infrastructure as possible!
People buy property and demand creates growth! In order to ascertain what property type, price or size is suitable for the area we need to first identify the demographic that will be living there, what they like to do, where they like to go, and even the amount of time that they spend at home. We need to ensure we are making our recommendations based on a mutual synergy between the property and the populace; For example — we wouldn’t recommend purchasing an apartment in a region heavily proportionate young families.
Here we conduct a full price analysis in a direct comparison to other properties currently being marketed or sold. We will also conduct a preliminary cash flow analysis to determine what the holding costs may look like. We will also conduct a comparable rental analysis to determine approximate rental yield which will aid us in generating an accurate cash flow projection.
Theres no point in buying a 100m2 apartment if it has 20m2 of wasted space1 In this stage we assess the floor plan efficiency of the property and also its orientation. This is also closely tied in with our demographic stage of analysis, as different cities have different demographics and also disparate weather conditions. For example, Melbournians spend much more time dining out rather than cooking at home, and in the case of one bedroom apartments in certain areas, floor plans with a smaller kitchen and larger living space will tend to suit the demographic more so than the traditional layout.
New employment opportunities will not only bolster the regions GDP but also attract new residents to the area. The proximity to certain employment nodes can also influence the type of property that we recommend, such as medical precincts or defence bases. It is important to note that a diverse economy is essential, and we would advise to think twice before investing in a region that is heavily reliant on one industrial sector.
One of the most important stages of our analysis is conducted when assessing an area’s infrastructure injections and its supply + demand outlook. New infrastructure projects create jobs and accelerates population growth, which in turn drives demand. The most basic economic principal of growth is supply demand; we always need to ensure we are continually analysing the local zoning restrictions and future supply to an area before we recommend it to our clients.