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One of Australia’s most lauded buyer’s agents has advised property investors to study how many jobs are being created in an area to predict whether house prices will rise.
Simon Pressley earned a place in the Real Estate Institute of Australia’s Hall of Fame in 2015 after winning national and state awards in three consecutive years.
Speaking on The Smart Property Investment Show podcast, he said: “It’s the leading indicator. Wherever there’s demand for jobs, there’s demand for shelter.”
Mr Pressley, who is the managing director of analyst Propertyology, advised savvy investors to understand the crucial difference between an area creating new employment opportunities and merely one with low unemployment.
“The Australian Bureau of Statistics is a minefield of data,” he told host Phil Tarrant. “But finding out the number of jobs in a location is not going to be useful. The unemployment rate is useless.”
“Job growth happens before property growth. It’s understanding the decisions happening behind the scenes, whether it’s by city councils, state governments or big businesses. Their decisions will create jobs.
“Don’t focus on bricks and mortar or how it will look. You need to see property as a commodity when you’re an investor.”
Simon Pressley was talking on the subject while revealing his top 10 biggest market influences. Credit policy, the state of the construction industry and political leadership were other vital indicators as was lifestyle choice and trends.
“If people get sick of things such as congestion or begin to value safer neighbourhoods, then they’ll move away.
“Internal migration data shows where people are moving to and from.”
He advised those buying rental homes to consider that what they value personally is irrelevant to the purchase.
“Never invest like that, because you’re not living there. It’s important to keep your emotions in check.”
He added that demographics have changed with advances in technology, and there are now parts of regional Australia where people can get a direct flight within an hour to a major city.
To hear Simon Pressley and Phil Tarrant discuss the top 10 in full, click here.