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The future of property investment is all about big data. Jeremy Sheppard, Research Director at Empower Wealth, explains to Your Investment Property Magazine:
“An investor who bought a $500,000 property in Brisbane in early 2012 would now be valuing that property at just over $560,000. If that investor had of bought a $500,000 property in Sydney instead of Brisbane, their Sydney property would now be worth about $850,000.”
So, that’s a hefty gap. Basically, the opportunity cost of purchasing in Brisbane instead of Sydney was
almost $300,000!
And that’s where the big data comes in. Computers are smarter (much, much smarter) than human brains. They can process a mountain of
complex information in a significantly shorter time. If we give them, say, all the numbers showing the demand and supply levels of all the
property markets in Australia, they would be able to tell us something. Like the potential for capital growth in a particular market.
If back in 2012, the investor looked at the LocationScore for Brisbane versus Sydney—instead of just “going with their gut”—they might have been able to predict the trend in today’s current price gap. The future primarily follows history, after all. Big data unpacks the memories,
morphing them into links, making for an accurate forecast.
That and machines don’t have an emotional attachment.
Looking back, would you rather be right or rich?
There is no denying the value in big data and what it can do for your wealth building. Jeremy fleshes out the 8 demand and supply indicators LocationScore uses, including:
- Days on Market (DOM)
- Vendor Discount
- Auction Clearance Rates (ACR)
- Proportion of Renters
- Vacancy Rate
- Yield
- The Percentage of Stock on Market
- Online Search Interest (OSI)
Using these indicators, we can see which city will boom next!
To see which one it is click here or click on image. To learn more about the indicators listen to The Property Couch’s Podcast with Jeremy Sheppard here.
