How does Online Search Interest measure Australia’s property market Demand?
Hi I’m Jeremy Shepherd, and I’m talking about Online Search Interest. This is one of the indicators we use here at Empower Wealth to help our investors find good growth locations.
The Online Search Interest is calculated as a ratio — it’s the number of people that are searching for property versus the number of properties that are available for sale.
So, let’s say you’ve got 200 people online, searching in a particular suburb for properties and there are only 20 properties available — then you’ve got a ratio of ten to one (10:1) — that is ten people looking per property. This is an indicator of supply and demand. Of course, supply and demand dictate price growth.
If you have a large number of people searching for property and a small number of properties available, then obviously demand exceeds supply. And this is going to push up prices.
As investors, that’s what we’re after, and that’s why we consider the Online Search Interest to be a valuable indicator.
However, it does have some problems.
It’s possible that one person could visit the same property three times in a week, and this makes it look like there are more people interested than there really are. You could also get the owner going online just to see what their property looks like when it’s listed for sale on one of these real estate portals. So there are a couple of different anomalies that can affect the calculation; but, overall it’s generally a good indicator of supply and demand.
If you want to look at the other indicators we use at Empower Wealth, check out our research page.
Thanks for watching and, as always, you can leave your comments below.