How do you research on a suburb?

My question is how does a beginner start getting information on various matters of Australian property market?
1) Any recommended books?
2) Any blogs to follow beside this forum?
3) What is your source of information for daily updates?

 

Books:

• Margaret Lomas - 20 must ask questions - pretty good fundamentals in this book from memory

Resources:

• sqm research - great free research on asking prices, yields, vacancy rates etc.
• Onthehouse - basic/free auto appraisals
• house.ksou.cn - lots of sales, yield, rent, agent performance data on this website
• This forum
• Pete Wargent blog - property/marcoecnomics commentator with a no BS writing style (not a doom+gloomer or bull, writes netural)

Favourite two would be this forum and wargent blog.

 

Going to home opens in the suburb every weekend.

 

Thanks rizzle for such a great info!!

 

Thanks mate. But how does it help?

 

Hi Zammy,

Great suggestions above.

I would add Michael Yardney's book, "Michael Yardney's Rules of Property".

Margaret Lomas is fantastic, and she does have a bias to yield and regional areas. Michael Yardney is capital city focused, so his tips might be helpful if that is your tilt as well.

Thanks,

 

Thanks The Y-man for you insights. Its so good to see that people sharing their precious knowledge selflessly.

 

Thanks John. I'll check it out.

 

Zammy,

I would just add lastly, that you can "buy" expertise around suburb selection from a buyer's agent, or other property strategists.

It will save you the time (years probably) and effort to understand the market properly.

There are several good BA's that contribute to this forum.

Of course, if you have a budding passion for property yourself, by all means, the suggestions above are great to get started.

 

Then you know things like the amount of people at the opens, the amount of time it takes for a certain property to sell, and eventually (once the sales data is out), how much that property sold for.

Priceless information for being able to value properties down the line.

 

indeed,
going to auctions and open house on sat mornings is my favourite past time these days
You spot the change in sentiments much earlier.

 

So, how can we use that information to extrapolate the value/sentiment of the other property in the same/different street? Because other property might be in better street or may have better demand due to its looks etc?

Great info as usual.

 

A BA will sell you the results
A GREAT BA will educate you on how the results were obtained (assuming the client is interested in that process).

A BA that is only willing to sell you results and not educate (when you as the client request it) is a BA I would not use.

 

Right on the money there. But I thought renovated kitchen or bathroom (or any add ons to the property like garden, bigger size) are always valued in every area not just a particular area.

 

@Zammy

Posted this awhile ago. May find a tip or 2 that helps.




Goal Due Diligence
1. Before each purchase determine where I am in my portfolio and what the goal is for the next purchase. Is it a CG buy, CF buy, Neutral buy.
2. What strategy do I intend to employ for the purchase. B&H, Reno, Develop or a mixture
3. Ensure I have all my finance ready, and I know exactly my budget and how far I can go. Get refinancing of equity consolidated, pre approvals done, give lawyer and anyone else on the team a heads up that we're about to go into battle. Then:

State Due Diligence
1.Which states do I think are at the optimal buying segment of the property clock, (7-9 o'clock mostly for me). I use HTW reports, Core Logic Capital Market Reports, Terry Ryder reports, any other on line reports, Property magazines and the media (to gauge sentiment mostly, and of course chatter on the forum as well as engaging with my peers for property market discussion. I try to make the best choice based on a mixture of all those factors. Choosing the state is a big decision for me. Once chosen, then:

Suburb Due Diligence
1. Determine how far I want to draw a radius around my map from the CBD. Is it 5,10,15, 20km etc. Usually what will determine how far I go from the CBD is the particular state i'm looking at, the strategy i'm employing and any specific opportunities in areas that may be worthwhile exploring.

2. Choose a few suburbs that meet my buying criteria. I look for value suburbs, eg suburbs that are cheaper than their neighbours but share most of the same fundamentals to make them grow which is only a matter of time, the 'ripple effect'. Use websites like REA, Domain and even property magazines might alert you to a suburb in your chosen rough area that you can look at and do further DD comparing prices of dwellings to try and find that 'value surbur' or two. Of course make sure the suburbs have the usual good growth drivers like transport, infrastructure, amenities, cafes, hospitals, trendy hubs etc. Once I've narrowed it down to say 2 suburbs I then look at historical CG, SOM, Discounting Rate, Vacancy Rates, Supply/Demand etc. Property magazines and on line sites have all this. I make sure I use at least 2-3 sources to corroborate the data for further reliability.

Demographic Due Diligence:

1.Research what the demographic is, and what they want, in your chosen area. Is it detached housing that is most prevalent? Villas? How many bedrooms is most common? Most wanted or common size of dwelling and land (so you don't buy a 400sqm home in an area that really values 500+sqm for example), How close to transport? Families or singles? Students? etc Any specific nationality in the area that may influence your purchase?

Dwelling Due Diligence
1. When I know exactly what I am looking for after I have my list, I troll all real estate websites and look for stock that fits my description. I also call probably 10 or more REAs in the area to tell them what i'm looking for, i'm preapproved and ready to buy right now and ask that they alert me to anything that they think i might be interested in. Having 15 ppl looking for me is better than just 1 person. I also first make sure any dwelling I look at is not next to any major power poles, cemeteries, very busy main streets, noisy kindergartens, not in flood areas, bush fire areas, high crime rate areas etc.

2. When I have 'acceptable stock' in my sight, I will then use RP Data to do what I call 'Vendor Due Diligence'. See when it was bought, who bought it, for how much, etc etc. I want to know as much of the story as i can to try and put a picture together very fast to basically try and determine just how motivated the vendor might be. Really this only should take 20 mins. I then call the agent and discuss with him the property I am interested in to try and learn from him as much as I can. (i'll leave it at that for the agent because this is getting too long already).

. Basically from there its a negotiation process. I try to find many properties that meet my criteria and put offers on all of them trying has hard as possible to buy BMV and create equity on the way in and also try to buy on favourable terms eg delayed settlement, building and pest clause (a negotiation tool in its self), Subject to finance, etc. Having said that it depends on the deal. If its in my interest to go 66w then I will.

 

Once you’ve decided where you want to buy, look for agents that sell similar stock you’re after in that area. They sometimes specialise and get a feel for the agent’s team and how many listings they have. What’s their average time on market and sale price. All agents quote high but some have the hard conversations and some sit around until they get the price the owners think they can get. Many people think relationships with selling agents are for sellers but not at all. As a buyer you want to have a good relationship with the agents, be on their distro (if they sell lots of what you want) and let them know you’re a hot buyer. They manage cold and hot buyers differently.