Fig­ures go be­hind the boom

The Courier-Mail - Property - - REALESTATE MARKET OUTLOOK -

THE REIQ re­leased its 29th edi­tion of the Queens­land Mar­ket Mon­i­tor last week, re­port­ing on the De­cem­ber quar­ter fig­ures and re­veal­ing the Bris­bane real estate mar­ket had recorded its 14th con­sec­u­tive quar­ter of growth, to hit a new me­dian of $632,000.

The Queens­land Mar­ket Mon­i­tor looks at a range of fac­tors that mea­sure the ac­tiv­ity within the real estate mar­ket. If you’re in­ter­ested in the Queens­land real estate mar­ket, this re­port is a must-have.

Here are a few tips for un­der­stand­ing the re­port and a quick look at what’s in­cluded:

The me­dian is the mid­dle oc­cur­ring num­ber when you take out the highest and lowest num­bers.

For ex­am­ple, if five houses sold in one street for $455,000, $460,000, $465,000 and two for $470,000, the me­dian sale price is $465,000.

Me­di­ans are typ­i­cally the met­ric used in house price data re­port­ing as they tend to deal well with any out­liers, whether they are high or low, pro­vid­ing a bet­ter mea­sure for cen­tral ten­dency for what we are try­ing to rep­re­sent.

This is a great piece of in­for­ma­tion be­cause it tells you where things are sell­ing fast, and on the flip side, where homes are tak­ing longer to sell. Why is that im­por­tant?

Well, if a sub­urb is sell­ing faster this quar­ter than it did a year ago that means it’s gain­ing in pop­u­lar­ity and is an in­di­ca­tor of grow­ing de­mand within the area.

On the other hand, when time on mar­ket is in­creas­ing it is more likely buy­ers will be able to se­cure a bar­gain as ven­dors be­come in­creas­ingly will­ing to set­tle for a lower price. Bris­bane Lo­cal Gov­ern­ment Area is the fastest sell­ing mar­ket in the state with just 59 days on mar­ket and Toowoomba, at 67 days on mar­ket, is the sec­ond­fastest mar­ket in the state.

As the name sug­gests, this tells you how much the sale price is dis­counted from its list­ing price to its fi­nal sale price.

Why is this im­por­tant? It’s a mea­sure of how much sway buy­ers have over the price – are ven­dors mov­ing much to meet the mar­ket?

Bear in mind that even in a strong sell­ers’ mar­ket ven­dors usu­ally dis­count around five per cent.

If you’re an in­vestor look­ing for a sub­urb to buy, this data is very help­ful. The va­cancy rate data gives you a broad in­di­ca­tion of how the rental mar­ket is far­ing. If va­cancy rates are tight, lower than 2.5 per cent, then there should be a steady sup­ply of po­ten­tial ten­ants to your rental prop­erty.

Gross rental yield gives you an in­di­ca­tion of what rents can be com­manded in that sub­urb, which will help an in­vestor un­der­stand op­tions around pos­i­tively gear­ing or neg­a­tively gear­ing their prop­erty.

These are just some of the met­rics that the REIQ QMM re­port tracks and as an ob­server of the prop­erty mar­ket in Queens­land these sta­tis­tics will help you de­velop a deeper un­der­stand­ing of the mar­ket, be­yond sim­ply look­ing at the me­dian sale price.

For more in­for­ma­tion, visit REIQ.com/qmm.

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