minute read

9 Powerful capital growth indicators to boost your property market research

Michael Fuller

March 4, 2021

Michael Fuller, Creator of Boomscore

Article by Michael Fuller

Stuck trying to decide exactly where to invest in property? These 9 capital growth indicators will help you find the best investment locations.

With over 15,000 Australian suburbs to choose from, you are most certainly not alone. But it doesn’t have to be that way, and this blog series on the 9 capital growth indicators will show you how you can cut through the media and marketing hype, and your own emotional influences, to objectively choose winning investment locations based purely on reliable statistical research. 

As a property investor, your goal is to make the best return, as quickly as possible, on the money you invest in property. Sure, you can use your know-how and contacts to hustle to get the best off market deals or use creative strategies to add value to your property purchases… but the real money comes when you invest in good property deals in locations primed for imminent capital growth. That’s where market forces drive property prices up without you having to do much work.  

“I’m not a property expert, I’ll need a crystal ball to know where the next investment hotspot might pop up”, you could be thinking. But it might surprise you that it really is quite simple to choose a great investment location - You just need to understand what triggers capital growth (property price increases) and how to do some simple statistical research using proven suburb research tools … and we have a tried and tested suburb research and ranking tool which you really need to know about. But first you need to understand the principles of capital growth; what it is, how it is affected and what to look for.

Simply put… capital growth in property is achieved when property prices rise.

Property price rises are triggered by two factors; demand for and supply of property. 

Property prices will rise if demand (the number of people wanting property in a suburb) is high relative to the supply (the number of properties available) in that suburb. 

With high demand for property from buyers, prices will rise as buyers compete to get the property or site they want. With limited supply, the fight to get what they want is made all the more intense because there is less available. On the other hand, if there are more properties for sale than people who want to buy them, then property prices will go down as sellers struggle to find the right buyers.

If there is more demand than
there are properties for sale,
then property prices will go up

If there is more demand than
there are properties for sale,
then property prices will go up

High Demand-to-Supply Ratio: the property investor’s Holy Grail.

As property investors, we want to find a property market to buy into that has a high demand to supply ratio at the point in time when we are ready to buy. We want to see some capital growth immediately after purchase to create the equity (without the effort) we need to buy again… thus adding to our property investment portfolio and/or funds.

WARNING>> These locations with a high demand to supply ratio will not last forever. As prices rise for property in a suburb, demand will subdue. Over time, developers who have realised the high demand in an area will complete projects which then add to the supply …. This creates competition which ultimately drives prices down.

But what are the capital growth indicators we need to be aware of?

There are 9 key capital growth indicators that you need to be aware of in order to compare the 15,000+ Australian suburbs (mini property markets) accurately.

Follow the links in the '9 Capital Growth Indicators' block to read any one of the blogs in this series on objective Property Market Research Statistics.

You can get the data for these 9 stats from various different individual online sources such as property portals and government websites. But don’t view these stats in isolation… The sweet sauce is held in viewing the trends of all the supply and demand statistics in combination… and side by side for every single suburb in Australia … and, of course, the trends in this data and timing is everything.

However, if you don’t have the time, knowledge or skills to retrieve all the data for these 9 stats from various public sources for 15,000+ suburbs in Australia and then to compare all this data across all suburbs in order to rank order the best investment locations (and let’s face it who does!?) then you can use a free suburb research and ranking tool called Boomscore. It does it all at the touch of a few buttons, thanks to some clever tech and Artificial Intelligence (AI).

(You can read the whole blog series by using the links in the adjacent '9 Capital Growth Indicators' block)

What's your suburb's Boomscore?

The capital growth predictor, Boomscore (established in 2010 and used by thousands of property investors) uses AI to crunch the 9 leading capital growth indicators to pinpoint suburbs that are set to boom. Boomscore helps investors narrow down potential investment locations (from 15,000 suburbs split further into houses and units (so that’s 30,000+ micro property markets) and tracks the property market with scientific accuracy. The tool provides valuable growth suburb predictions and property market forecasts which have been proven to consistently outperform the media property ‘experts’ (and certainly the market average). 

This blog series explains all you need to know about the 9 supply and demand stats - what they are, how to calculate them, why they are important capital growth indicators, where you can find the data, what to watch out for, and how you can apply this knowledge.

Read the first blog in this series: Days on Market.

You can also access a Free Essential Guide to Property Market Research

And, once you understand the principles of capital growth and the 9 capital growth indicators, you can use Boomscore to find, analyse and track your chosen investment suburbs. Get Boomscore.

Want to learn more? Click here to access Boomscore's free research materials to help you learn how to research the property market in Australia with scientific accuracy. 

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