RP Data - What does number of properties sold indicate?

I'm new to interpreting RP data so please excuse..

When trying to analyse RP data, what should I interpret 'number of properties sold' to indicate?

Does it even indicate anything?

If a town has a lot of properties sold and a lot of properties for sale what does this tell me? I've listed an example below in an area I'm interesting in an investment property.

Do these stats look good or bad?

For example..

Point CookVIC 3030

Suburb Insights for Houses in last 12 months
At a Glance
$549kMedian Sale Price 316th In VIC
14.27%Median Price Change (1 yr) 141st In VIC
$400pwMedian Rent 230th In VIC
3.8%Median Gross Yield 290th In VIC

Median Value for House split by bedrooms

• $403,000
  2 bed House
• $446,000
  3 bed House
• $513,000
  4 bed House
• $602,000
  5 bed House
• $654,000
  5+ bed House

Properties sold 953
Stock on Market 183 for Sale
Average Days on Market 56
Average Discounting -5.87%

Also, if an area has little properties for sale and little stock, does this mean anything? I was looking at another area for a PPOR and it has 4 Stock and 48 Sold in the last 12 months.

-Frank

 

The larger the number the more accurate the numbers will be as 50 sales could be either a small suburb but also a smaller sample size.

With 950 sales the median would have to be pretty close to a median price compared to 50 sales which could of had 30 cheap or expensive houses sold.

 

You can also see in those figures how long it would take to sell a property. Roughly speaking, 56 days is a reasonable market for a seller. Not hot but stock sells. 30 days or under is a very strong sellers market. Around 70 days plus and i'd say buyers have the upper hand. Discounting goes hand in hand.

My old suburb would usually have 3-15 properties listed for sale at any one time. 3 and buyers typically have no choice. If they want to buy in the suburb then they have to cough up the dollars. At 15, the buyers have more choice. But it was a pretty strong market the whole time since we bought it, it's a sought after area. People would even buy within the suburb, move a few doors down or across the street... One stat I saw was homes in that suburb would typically only trade once every 14 years.

I get regular emails from onthehouse of all the suburbs of where my properties are. It lists the proportion of homes listed for sale as a percentage of total housing stock in the suburb. It may not be 100% reliable, but I can see my Sydney locations typically have 0% to 0.4% stock on market. Conversely, my Brisbane locations have around 0.9 -1+% stock on market. So more choice for buyers --> lower prices obtained. Anyway, I keep an eye on that stat. As an owner, a lower SOM figure is better.

Note also, units/apartments are very different to houses and this may or may not be split out in the numbers. There can be strong house supply to demand but a poor unit supply to demand ratio within the same suburb. So understanding that split too is important in a purchasing decision for property investment. Land appreciates... but many more units can be built....

 

Interesting.. Thanks for the detailed response..

But with my example there with Point Cook in VIC.. Whats with 183 stock on market. I can't help wondering why everyone is selling. 15 - 30 for sale would seem normal but 183?

-Frank

 

Do you know if they are houses or apartments? Is it new estate/s?

 

Not sure about apartments but seems to be new estate yeah. That could explain all the sales?


-Frank

 

Suburb sizes vary greatly so a smaller or larger number doesn't instantly mean anything. Its the proportion of properties on market compared to total number of dwellings and compared to number of buyers that counts. New estate areas are notorious for having more supply then demand and care should be taken before buying into that area if you are investing or hoping for growth. If it's for you to live in and you like the location it doesn't matter.