How to research the real estate market in 7 steps

Researching the property market is not as complicated as you might think, but it does involve some diving into data. We show you the best ways to get started.

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Rebecca Pike

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Key takeaways

  • Clearly define your property goals whether for investment or homeownership to guide your research.
  • Analyse key data like days on market and vacancy rates to assess local supply and demand.
  • Visit properties in person and investigate future infrastructure to uncover growth potential.

What is real estate research?

Real estate research comes down to identifying areas or suburbs which strong growth potential. This is essential for property investors concerned with long-term capital growth.

Home buyers have different research needs based on lifestyle factors and location. But they should also keep an eye on growth potential too. Your home is likely the biggest asset you'll ever own.

There is no one Australian property market

You can divide the Australian property market many ways:

  • City vs regional
  • Unit vs house
  • Inner city vs outer suburbs
  • State by state
  • Sydney vs everywhere else

You may see prices shooting up in one state while slowing in another (especially in cities affected by single industries like mining or tourism). The gap in prices between units and houses in a single suburb can be massive.

Regional cities are cheaper than state capitals, but can often see much faster growth too.

Finder survey: What features matter most to Australians when choosing a home loan?

Response
Interest rate92.18%
Fees70.59%
Offset account42.81%
Extra repayment32.1%
Lender reputation17.72%
Speed of approval10.16%
Wider eligibility criteria (e.g. self-employed docs)4.41%
Split accounts2.07%
None of the above1.35%
Other0.45%
Source: Finder survey by Pure Profile of 1112 Australians, December 2023

7 ways to research the property market

1. Figure out your real estate goal

Before you do anything else, work out what you want.

Investors usually want cheap properties that are likely to grow in value quickly. Or properties that generate high rental yield relative to the cost of the mortgage. Some investors

If you're looking to buy a home to live, in your goals will be much more unique. Work out how many bedrooms you need, consider areas you wish to live in and work out the factors in a property tha matters most to you like:

  • Kitchen size
  • Backyard
  • Proximity to schools and shops
  • How walkable the area is
  • How quiet the area is
  • Public transport options

2. Get a sense of prices in your area

You can start to get a good sense of average prices in areas you're interested in by looking at listings. Look at current listings but also recently sold properties.

Make sure you look at what real estate agents call comparable sales. If you want to buy a 2-bedroom unit in a large apartment complex, compare the sales price to other 2-bedroom units of a similar size that sold in large apartment complexes. A 2-bedroom house won't be a fair comparison.

The more properties you look at and the longer you watch the market, the better your understanding will be.

3. Hit the streets

Online listings are great to start with, but there's no substitute for on the ground research. Go to inspections, talk to real estate agents (but don't always take them at their word) and attend auctions.

This will help you get a feel for the areas you're looking at. And it will help you see through the heavily edited online photos of listed properties.

You can also see the other people looking to buy properties and get a sense for the types of buyers different areas and properties attract.

4. Figure out supply and demand

This essential economic concept applies to property as much as anything else. Investors are looking for properties in areas where demand is high (people really want to buy homes or rent here) but supply is low (there aren't enough properties available).

But this is complicated. Some popular suburbs have had high demand and low supply for years, and prices reflect this. It's harder to snap up a bargain and you may end up paying a premium. Identifying future growth areas (if that's your goal) means anticipating a future supply and demand imbalance.

This is tricky to do, but you can look at data (more on that in the next section) and also research future infrastructure, demographic or economic changes that could make an area more desirable.

5. Dive into the data

Some statistics or market trends you may want to check include the following:

  • Demand to supply ratio (DSR). Websites like DSR Data offer a scoring system based on supply and demand factors.
  • Days on market (DOM). If houses stay on the market for 80 days in one suburb but sell in less than 30 in nearby areas this is a sign demand is low. You can see this kind of data in suburb profiles in Domain and realestate.com.au, often broken down by property type and number of bedrooms.
  • Ripple effect potential. This one is tricky to measure, but the idea is that if one suburb has seen really strong demand and rising prices, neighbouring suburbs will likely see a similar benefit as demand spills over.
  • Vacancy rates. High rental vacancy rates suggest an oversupply of rental properties, while a low vacancy rate suggest high demand. But keep an eye on this trend over time, because it can be affected by things like new apartments being completed, which can cause numbers to jump quickly.
  • Auction clearance rates. Auction clearance rates can give you a sense of how "hot" a property market is. If many properties sell at auction each weekend it suggests strong demand. But this metric can fluctuate quite a lot.
Suburb-level data: clearance rates, median prices and average days on market

Here's an example of the simple suburb level data you can see on sites like Domain.

Table showing median property prices, average days on market and more.

6. Look at upcoming infrastructure and economic changes

If you can figure out what kind of infrastructure and economic development is coming to an area you can get a better sense of how the area is going to grow.

The simple, obvious example is a suburb becoming more desirable if a new high school and train station are being built in the area. A new hospital opening up could bring in more jobs and more demand for homes nearby.

If you're looking to buy an apartment as an investment, you might rethink your approach if you discover that multiple new high-rise projects have been approved nearby (it might add too much supply).

7. Think about the market cycle

Although it's not as important as you might think, you should consider the market cycle or "property clock" when buying in real estate.

Basically, markets go through cycles of high growth and then downturns. You can't really time the market, but being aware of what kind of market you're in (is it a buyer's market with lots of listing or a seller's market with high demand) can help you craft your strategy.

How do I know when there is strong demand in a market?

The following could be indicators of a market where demand exceeds supply:

  • Low DOM: If properties are on the market for a shorter amount of time compared to other markets, this may indicate that properties are selling quickly and that there is strong demand in the suburb.
  • Little change in asking price: If sellers don't need to reduce their asking price to lock in a sale, this may suggest that buyers are competing against one another and are willing to pay a higher price.
  • Properties are selling: If the majority of properties that go to auction sell, this suggests a positive buyer sentiment in the area. Also, if properties are advertised with "open inspection" times rather than private appointments, this means a high number of interested buyers.
  • Limited available property: This suggests that buyers are snapping up properties quickly and that demand exceeds supply.

Where to research the property market

Domain and realestate.com.au are the major listing sites. This is where you see properties for sale. They also offer useful suburb-level market data. You can use recently sold properties to help you estimate current price trends in a neighbourhood.

Companies such as CoreLogic, SQM Research and PropertyUpdate are popular options for researching the property market. These sites offer data, articles and analysis.

The Australian Bureau of Statistics (ABS) also has information about figures on building approvals, leading indicators and population. These may give you an idea of how areas are developing.

You can also check your area to see key statistics on population and compare with other areas.

Sources

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Rebecca Pike is Finder’s money editor, with over 7 years of experience in mortgages and personal finance. A frequent TV and radio commentator, she frequently appears on Sunrise and 7News, Today and 9News, as well as Sky News, Channel 10 and across radio and print. Rebecca previously served as Editor of Mortgage Professional Australia. She has a Master’s degree in Journalism as well as ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products, which comply with ASIC guidelines. See full bio

Rebecca's expertise
Rebecca has written 253 Finder guides across topics including:
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2 Responses

    Michael's avatar
    MichaelApril 26, 2018

    Hey there,

    Great information you have up on here i had a quick look through but am wandering if i an looking to buy a house to live/invest in a certain area what is the best way to check the crime report as everything else i can easily access but cant seem to find the best crime report page.

    Cheers

      Jeni Velasco's avatarFinder
      JeniApril 26, 2018Finder

      Hi Michael,

      Thank you for getting in touch with Finder.

      You may head to Crime Statistics Australia to check a crime report.

      I hope this helps.

      Have a great day!

      Cheers,
      Jeni

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