Get A Handle On The Local Market When Investing

“Don’t buy the house, buy the neighbourhood.”
Russian proverb

Scan the newspaper headlines and you could be forgiven for believing that there’s only one ginormous property market that goes up or down. Instead, it’s local indicators - a shortage of property, a strong local labour market and good schools that ultimately influence what you buy, when you buy and what you end up paying. In a downturn, many local economies might actually still be expanding, but depending on the number of buyers and sellers of flats or resale properties, prices in these areas could be rising or falling – at the same time.

National property price surveys can be a useful tool for assessing overall upward or downward price trends as well as giving you an indication of how long it might take to buy a place, but they have their limitations. Some only cover mortgaged properties and omit those that might be sold and owned outright. This can lower the average property price quoted versus other surveys and give a skewed reading. Results can also vary hugely depending on what stage in the property sale the market is ‘measured’.

To get a true reading of the market, spend time getting to know specific neighbourhoods in your area by driving around. Study demographics, property types and concentrate on favoured locations within those particular districts – your local library and regional authority can provide up-to-date stats and facts on all of the above.

Bottom line: A little knowledge is a dangerous thing – be thorough with your research.