Here at Wills Property we are continually improving and sharing our insight so you can maximise your investment in real estate.
This time last year I wrote a piece on the use of statistical analysis, as part of a wider strategy, to identify investment windows in residential real estate.
Twelve months from our analysis, I thought it beneficial to look back and test our ‘soothsaying’.
To re-cap we were investigating market timing and how to identify optimal windows for investment for our clients.
We selected Bronte as our suburb for analysis. Knowing and growing up in the suburb I have witnessed a lot of change!
Utilising two factor regression analysis we considered the number of houses sold and the median house price, establishing the following equation.
Median House Price = Number of sales (for 12 months) x 0.0132 + 1.4161
Assessing sales on a rolling 12-month basis we forecast that the number of sales would decrease and reverting to the longer-term average.
We forecast 80 house sales in the suburb. Results now through show that 79 houses were in fact sold.
Applying the revised number: Median House Price = 79 x 0.0132 + 1.4161
Therefore, the new Median House Price = $2.44 million.
This compares to median averages of: $3.1 million; $2.76 million; $2.50 million; and $2.35 million across 1, 3, 5 and 7 years respectively. Our predicted ‘momentum’ towards five and seven-year averages has proven correct.
Interestingly we are seeing a growing number of long term owners and investors re-engaging with the Bronte market. Whilst anecdotal at this stage the re-emergence of such participants is positive for the market. These insights allow us to best position your property in the noise of competing products and ‘volume’ agencies.
Here at Wills Property, we leverage our skills to our clients’ advantage. If you are looking at getting the best out of your property, whether it be through:
- Improved management;
- Refinancing; or
Call me today if you want the best out of your property.
John Wills FAPI
M: + 61 467 44 38 38