When buying a new property or refinancing your home loan, in-depth research is critical to success. Doing proper research ensures you’ll be fully informed to make accurate and valuable decisions that will become a financial asset for you now and in the future.
With hundreds of articles of information available, researching the property market can leave you with more questions than answers. To help you, we’ve created this handy guide on the steps you need to take when thinking of climbing on to the property ladder.
1. Do your financial planning first
The first step in buying a property is to set a clear budget and organising financial means for approval for a home loan.
Determining your financial means is as simple as listing all your assets, including cash, and working out your expenses. If you don’t have a clear idea of usual expenses or how to spread out your budget, there are many tools online that can help you – borrowing power calculators, monthly repayments calculators and budget planning calculators. Using these tools can give you insight into how your usual spending and income could accommodate the required repayments on a home loan.
Once you have a basic idea of your financial position and have decided a reasonable budget, you can chat with a mortgage broker. They’ll help to discuss any goals and questions you may have along the way, as well as give you a more ‘exact’ idea of where you’re sitting on your home loan journey.
2. Start your property/location research
Data is widely available online and most of the time, free to access. You can research and leverage information through property data sources like Australian Property Monitors, Residex and Core Logic. These platforms have suburb-specific reports with details like property prices for an area and features of different suburbs.
Whilst a lot of research undertaken focuses on what has happened to the market in the past, Australia is known for having a stable real estate market. Using different online platforms can give you major leading indicators that can help predict what’s going to happen in the future.
Key factors to keep in mind:
To kick start your property market research, you’ll need to find an area that is suitable for your needs. For example, if you have children, you’d want to start looking at suburbs where there are schools and public transport options that are close by.
It’s important to keep in mind the supply and demand in an area, as most buyers want an area with capital growth potential. By using property data sources, you can work out how long properties have remained in the market without selling or find any relevant vacancy reports.
Government websites also provide reports about council plans, development projects or building regulations. This can help you in understanding the supply and demand of the area you’re looking into buying. An area that has construction for shopping centres is a promising indicator that the suburb is predicted to grow in value.
eChoice also offers free CoreLogic suburb and property reports, giving you statistics and information on the suburb and/or property in question to aid your decision. Simply call to make an enquiry.
Population growth and demographic data
It’s important to pay special attention to the demographic profile of an area, as it can help you understand the type of people that live within the suburb. The ABS website can provide you with local demographic data of an area or there are plenty of other online tools such as microburbs.com.au.
With these sites, you can find out handy information such as gender, age, disposable income as well as purchasing behaviour. They can also be helpful for finding a suburb where you likely to be most comfortable. For example, if you are a newly wedded couple, a suburb where the average age is 70+ might not be the ideal area to buy in.
Microburbs will even go as far as giving a ‘hip’ score based on factors such as the percentage of people with creative degrees or bicycle commuters.
Also consider population growth within the area. If the population is growing, this usually suggests an increased demand and future supply decrease – a formula that usually leads to price growth.
Examine a map
Find the best and worst spots within an area to make the location as desirable as possible. Using satellite images and street view, you’ll be able to see if the property is within close proximity to amenities and services you desire. These can include parks, recreational areas, hospitals and schools. Microburbs’ demographic data can also be useful in this instance for finding the suburb’s distance to pubs, coffee shops and restaurants.
Otherwise, another handy website is Walkscore.com which ranks suburbs based on a ‘walk score’ – contrived from the suburb’s ease of walking to amenities. Using this data, you can narrow down your suburb search by looking for those with the best scores.
Neighbouring suburbs can also vary vastly in price (where one will be 20% more than the other), even if they share the same postcode. This could be because a property is on a main road, is closer to an industrial area, neighbouring a golf course or it has a view. To understand the property market better in a particular suburb, check online sales and go to open inspections. The more you know about the results of sales, the better you’ll be informed about the market.
Talk to experts and the locals
Draw upon professionals who can make a knowledgeable judgement about an area and whether or not it meets your goals. A professional valuer can help you with a fair market evaluation based on the property and area, along with other market dynamics that can affect the property market. Local agents, property developers and mortgage brokers are also good options.
Additionally, locals can give you a deeper understanding of the area. Visit the streets yourself so you can build a relationship and ask those who live there what the area is like. That way, you can get a feel for the suburb and what the surrounding properties would be like.
3. Compare home loan options
Just as important as finding a property/location that will complement your lifestyle and needs is finding the right home loan product.
Before you apply for pre-approval, compare home loans to see what different lenders have to offer. Look at each individual lender’s Star Rating, followed by comparison rates. Before committing to a particular home loan, check upfront with your lender and read all terms and conditions to confirm whether or not the loan meets your relevant needs.
Mortgage aggregator services – such as eChoice – can also be useful. Whereas the big banks may only have a few home loan options available, putting the onus on you to do the research on alternative products, using an eChoice broker means that your broker will automatically consider you for hundreds of different products (including options from the big banks and smaller lenders) – giving you the best chance of finding a competitive rate.
eChoice can also help to get your home loan research started with its Free Home Loan Report service. Including a phone consultation, this service will estimate your borrowing capacity, monthly repayments, possible home loan product options and more.
Words by Joanne Ly
eChoice works with over 25+ lenders to ensure you have a wide range of home loan products to choose from. Compare competitive home loan deals in 60 seconds, and get expert advice on what options are right for you.