How Free Property Reports Can Cost You Thousands

By Rich Harvey, CEO & Founder, propertybuyer.com.au

Next Level Wealth 

You can’t ignore the importance of education. Expanding your knowledge to advance life's plans and refine your decision making is a noble pursuit. Mind you, getting smarter about the things that interest you can require and exhausting amount of research and analysis.
Nowhere is this more evident than in the real estate buying space.

For many years I've watched everyday buyers try and accumulate knowledge about markets. Doing this means digesting massive amounts of information. Nowadays, property data is more comprehensive, nuanced and accessible than ever before, and all signs are that the volume of available statistics is only going to increase in the future.
However, this has created a problem. Exactly how should you effectively deal with this mountain of available information to get the best possible property outcome?

Smart decisions on property buying involve far more than just gathering as much material as possible. There's a lot of "noise" out there, and it's easy to get overwhelmed by a plethora of columns and figures.
Here's how I, as a buying specialist, deal with data in the modern world to bring about the best results for my clients.

Adopt the long view

Buyers should always remember that real estate is a long-term proposition and not a short-term game. Markets can shift quickly in response to short-term shock. Think COVID, the Global Financial Crisis and a host of other unexpected events in years gone by.

Between July 1992 and July 2022, Australian property markets experienced six growth periods and an equal number of declining periods, according to CoreLogic figures.
Such is life, and such is the property market.

Your first step is to make sure you approach analysis with a long-term view. Give weight to market data that describes trends across at least a price cycle or more. This will help you to avoid knee-jerk reactions that can cost you dearly.

Noise vs focused data

Two of the big problems with property market information are that there is a lot of it out there, and it can be far too generalised.

Useful information can be easily hidden under the volume of data at our disposal. There will be metrics pertinent to your requirements, but you need to know how to identify and properly interpret them.

It's also no good looking at just national-level, or even statewide, trends if you're focused on a specific suburb, price point and/or property type. There is no such thing as one "Australian property market". Rather, we are an interconnected tapestry of many, many sub-markets and each will respond differently to varied drivers.

Another challenge is that newly published data can lag the real-time property market.
A great example of whether data is useful or not is median prices. CoreLogic's monthly Home Value Index always highlights national and capital city median prices and other figures. But a suburb's median price result can be very different to its closest capital city with house and unit prices also varying widely.

An even better illustration is the wide variance we see across Sydney's suburbs compared to the city's often-quoted median house price. According to Domain, Sydney's median house price is approximately $1.7 million. However, examining actual sales evidence in some of the most recognised suburbs in our capital reveals a stark disconnect from this figure.

In Vaucluse, for example, recent house sales ranged between $8 million and $56 million. Travel to Narrabeen and the variation runs from $2 million to $6 million. Head west to Blacktown and houses there will set you back anywhere between $840,000 and $5 million.

The key insight is that individual house prices in most suburbs bear little resemblance to the city-wide median. Consequently, changes on Sydney’s median house price offer no real practical insight when you’re researching real estate in specific locations.

Even the regular cash rate announcement by the RBA should be treated with care if you are only looking at the number itself. Buyers should also read the Reserve Bank's full statement on their rates decision to discover if there's more to the central bank's verdict than meets the headlines.

It's a matter of understanding what information is most pertinent to your needs as a purchaser.

Avoid analysis paralysis

In today's world of immediate news and Aussies' continued obsession with property, it's easy for buyers to get caught up in all the information, rather than focused on the right property data.

Add conflicting figures and advice to an already anxious house-buying horizon, and it's not surprising that first-time buyers in particular end up succumbing to analysis paralysis.
Call it indecisiveness or overthinking but this phenomenon results in a buyer so frightened to settle on the perfect home that they don't purchase any property. They just keep craving more and more information, rather than being motivated to act.
Or, perhaps even worse, they purchase a substandard asset because they've relied on the wrong information instead of the correct focused data.

While no property purchase is entirely risk-free, buyers' agents can help those suffering from analysis paralysis.
We know how to cut through the metrics, quickly latch onto focused property data and be strategic about its analysis. We can help you reach the right conclusions by professionally and effectively interpreting the data for you.

Buyers' agents can assess real market value and a likely purchase price for a home by not only using the correct data but also their local knowledge and networks, negotiation techniques, and access to large sales databases which includes off-market transactions.

We are surgical in our approach to information, using the right numbers in the right way to reach the right outcome.
If you want to latch onto focused property data and avoid the pitfalls, speak to our Propertybuyer team today. We have the analytical skills, data sources, networks, and experience to ensure you secure your ideal home.

Disclaimer – We know most of you get this, but just to be clear, the information above is general and doesn't consider your unique situation. Please don't rely on it as a substitute for professional advice. We strongly encourage you to seek appropriate guidance for your specific needs.

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