Out of the six key macro-economic factors that every investor should know, there’s one which stands out as potentially having the greatest impact to an investors bottom-line.
It’s something you need to be aware of when you’re trying to identify the best areas to invest in. Obviously, you want to pick a location that’s going to perform well and will continue to do so, but how can you predict the future of what will happen in that area?
One of the most important macro-economic factors is the future supply vs underlying demand – looking at the future supply of housing and comparing that against demand for housing.
Property prices just like everything else are determined by the balance of supply and demand. If one outweighs the other by a large margin then you can expect some telling signs.
An example is this – you might find a ‘hot suburb’ only for developers later to rush in and flood it with high rise apartments, leaving your investment one of dozens of empty properties looking for a tenant. Of course, demand is relatively easy to look for. Supply however is almost impossible for the average investor to figure out.
However, if you can systematically identify areas that are going to be undersupplied in the future, you can then accurately predict which suburbs will do better than others.
We literally spend tens of thousands of dollars every single year on the latest supply data from around the country. We then use that to pinpoint the best areas and suburbs to invest in, positioning our members for positive cash flow and who can now look forward to a comfortable retirement.
We know exactly how many dwellings will be built in every single suburb across Australia, allowing us to compare the population projection for that area and work out exactly how many dwellings will be required to meet the demand of that population.
If you can determine the future supply versus the future demand for housing, you can quickly work out whether this suburb is going to be undersupplied or oversupplied in the future.
Having access to this type of data can be tricky for the average investor. This is why we arm our members with all the latest information and market insights so that they are only investing in the best suburbs.
If you’d like to learn more about this, along with the other economic indicators that you need to know as a property investor, join one of our free online Masterclasses. At this event, my co-Founder Scott Kuru and I will share with you the exact same steps we took to achieve financial freedom through property and how you can do the same.
Lianna Pan is one of only 2,997 qualified Actuaries in Australia and is Founder & Director of Research at Freedom Property Investors.