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Jeremy Sheppard Blog post by Jeremy Sheppard

Big Data Predicts 2018’s Boom Suburbs

big dataThe future of property investment is all about big data. Jeremy Sheppard, Research Director at Empower Wealth, explains to Your Investment Property Magazine:

“An investor who bought a $500,000 property in Brisbane in early 2012 would now be valuing that property at just over $560,000. If that investor had of bought a $500,000 property in Sydney instead of Brisbane, their Sydney property would now be worth about $850,000.”

So, that’s a hefty gap. Basically, the opportunity cost of purchasing in Brisbane instead of Sydney was almost $300,000!

And that’s where the big data comes in. Computers are quicker (much, much quicker) than most human brains. They can process a mountain of complex information in a significantly shorter time. If we give them, say, all the numbers showing the demand and supply levels of all the property markets in Australia, they would be able to tell us something. Like the potential for capital growth in a particular market.

If back in 2012, an investor made use of the data available and did a full-on research on Brisbane versus Sydney—instead of just “going with their gut”—they might have been able to predict the trend in today’s current price gap. Historical trends provides an immense insight into the potential future growth and big data unpacks the memories, morphing them into links, making for a more accurate forecast.

That and machines don’t have an emotional attachment.

There is no denying the value in big data and what it can do for your wealth building. Jeremy fleshes out the 8 demand and supply indicators that LocationScore uses, including:

  • Days on Market (DOM)
  • Vendor Discount
  • Auction Clearance Rates (ACR)
  • Proportion of Renters
  • Vacancy Rate
  • Yield
  • The Percentage of Stock on Market
  • Online Search Interest (OSI)

Using these indicators, we can see which city will boom next!

To see which one it is click here or click on image. To learn more about the indicators listen to The Property Couch’s Podcast with Jeremy Sheppard here.

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