Finding boom suburbs using data (DSR score, Picki)... really? Can't see it myself

Hi everyone,

I have a property in Gladstone that has performed extremely poorly. I have been watching this market like a hawk, and after 12 years of flat - things are rocketing up now (it's a big relief actually). The stock on market is dropped significantly, about 50% of what is on market (in my target market segment established 4 bedders) are under offer and anything coming on the market goes under offer quite quickly.

Now (to avoid this mistake I made with Gladstone), I've also been looking into Property Investment Courses and theories that you can predict short term growth using 'data', using DSR Score, Picki and other various factors.

So, I thought I'd test the theory out - especially as March data just became available.

I look at the (free) DSR score for New Auckland (Gladstone suburb) and it says

This is absolutely not the case. One typical property for example came on the market recently asking $410k, updated a day later to 'Offers over $420k' and is now sold (for $440k). Probably just 5 days on market. I know it's just one anecdotal evidence however there have been a few cases like this now.

Picki has done a little better saying that:

I do believe the boom is only just starting and will run for 1-3 years.

So what do people think?

Can you use tools like this (combined with other work and research) to find suburbs with great growth prospects?

 

Curious .

What are DSR and Picki ?

My observations is that data isn’t that good at telling you what is happening in the market right now .

Stock on market is a good indication but anything sales / price related is always a few weeks behind because sales data only looks at settled sales , whereas the market can take off in literally a week .

Trends can tell you which markets are likely to move in the short term , but they’re not that accurate in telling your exactly when that is going to happen .

If you’re watching the market closely , you’ll be in a better position to know that .

cheers

cliff

 

its kind of good to see the general trend, but agree not "up to date" (and it cant be by definition). but on same token, we dont time the market, we just looking for a convinient entry point.

 

Thanks Cliff.

DSR Score and Picki are online property data providers, similar to SQM Research, however they claim to be tools to identify boom suburbs.

FWIW Realestate.com.au and Domain also has some useful data built in too.

 

Good point - 'convenient entry point'.

Given it can take months to get finance ready (loan pre-approval), even more so if tax returns are required, and a couple of months to study the market to narrow things down to a single property - a convenient entry point is all we kinda can do anyway (say a 3 month window at best after the decision to buy has been made)

 

Thank you Y-man. Yes, it has. Also, through my actions, two families members also purchased in the area. 6 houses between us 3. Ultimately they made their own choices, but I still feel some guilt from this.

On the bright side, this area is in the early stages of a boom. I expect to end this year 50-100k up (on the average property). I can't wait until a wiser me will ride the boom for the next 1-3 years and then move on from this area.

Some great money to be made if you time yourself in and time out of this market. My main failure was adopting a 'buy and hold' strategy in this boom/busty area.

 

The reason for the boom bust was clear to see before it happened .

We did our dd on the Q’land coastal towns prior to that cycle .

Gladstone was interesting as there was large developments happening . The issue for me , and why we didn’t buy was the discrepancy between the number of people required to build the developments and the number required to run them . Thousands vs hundreds .

We bought in Rockhampton instead , which while it also historically has a boom bust cycle , it has a wider based economy so was more insulated .

The lesson I took away from Gladstone was the importance of doing due diligence into the underlying economy and knowing why people are living in a particular area .

cheers

cliff

 

Definitely shouldn't be taking months to get finance ready, a week or 2 at most for a pre-approval, use a good Broker.

 

@Orion, yes, although one tool is not enough to find market trend position.

I've posted a few times in response to posts about how to/I find a suburb to invest in. Link to post below. Hope it helps with the next one.

How to find a suburb to invest in?

 

Yes… assuming tax returns are all up-to-date, payslips are at hand and also that the borrower it is a regular PAYG employee and not self-employed or a business owner.

For me personally, it could take two weeks just to meet with my accountant to get a quote on doing the returns…

 

I do self employed finance applications all the time, they don't take months, common misconception that they take longer to process vs payg employed apps.
Requirements depend on the lender yes, the need to lodge a tax return depends on the lender and how you pay yourself.

 

Wow - this is brilliant! It's similar to what's floating around my head but nicely organised and put to paper. Thanks for the effort and for sharing.