How To Analyse A Property Market – Interview with Jeremy Sheppard

Analysing a property market and understand what areas are likely to grow can be difficult. In this interview with Jeremy Sheppard from DSRdata.com.au we learn how to use data to find the best places to invest.

One of the hardest things to do as a property investor is to know how to analyse a property market. We can look at so many different suburbs. We can look at different cities. But it’s really difficult to know – is that area actually going to grow in value or is it going to stay stagnant or decline?

So, today, I did an interview with Jeremy Sheppard from dsrdata.com.au. He is my go-to person when it comes to understanding how data impacts our view on a suburb and impacts whether we think a suburb is likely to grow or not.

There’s a lot of people out there touting wisdom about population growth and income statistics and all of this sort of stuff, but often, the advise they give is actually wrong. And Jeremy has his counterintuitive approach where he really looks at the data, really understands what the data means and how it’s going to affect a suburb. And he displays all the data for free over at dsrdata.com.au.

So today, I got on the line with him and we discussed a whole bunch of things about how to analyse a property market. We looked at a lot of different things. Originally, I was going to break this up, but it was such a good interview, I decided to leave it all together. Here’s a short list of some of the things that we’re going to discuss.

We look at the DSR Data story, so why did he start DSR Data? What’s so great about demand and supply and why is that important? We look at is capital growth sustainable? One of the things people say is if an area has grown in the past, it’s going to grow in the future. That may not actually be true. We look at how to analyse a property market using his tool and using other data. We look at whether or not population growth causes capital growth and the answer is, no, it actually doesn’t, but we talk about that.

We look at whether or not the property clock is a bogus idea. I really like this part of the interview where we talk about whether or not we think the property clock actually has merit, or is there a better way to look at things? We also talk about how to estimate the peak of a market, so we’re not buying at the peak and then prices drop. We also talk about why we may not actually need to buy properties under market value.

We discuss a whole bunch of other different things as well, but I’ll leave it with you for now. Here’s the interview with Jeremy Sheppard from dsrdata.com.au.

Ryan: Okay. Well, let’s start. So how did you get into property analysis, data analysis or suburbs? What caused you to start your site DSR Data?

Jeremy: First of all, getting into the data. I found myself spending a lot of time researching and I also wanted to keep things objective. I knew that a numerical basis for property investing is a good idea for objectivity because the numbers don’t have emotions and it helps me keep my emotions out and prevents me from making subjective decisions. But the other issue was that I wanted to buy in the best places in Australia and there’s nearly 16,000 suburbs.

So, how do you go about filtering that down? Having an automated tool just zips through all of them, looking for at least some positivity in certain statistics. That, to me, it just struck a cord and I found myself gathering the same sort of data all the time for individual suburbs, so why can’t I just do it for all of them? So that’s where, I suppose.

Ryan: How do you decide on the criteria to say, “Well, I’m going to look at X, Y, Z.” And the different points that you eventually decided on? Did you do this all by yourself? Like, is this a project at home sort of thing?

Jeremy: Yes. Yeah, yeah. It started off as just a home project. Yeah. I want to make good investments, how do I go about it? Initially, it was really just what was available. If there was data that I could readily get my hands on and it had some kind of impact on supply or demand, then yeah, I grabbed it and used. There’s still data out there that I can’t get that I really, desperately want.

Ryan: Like what?

Jeremy: I really cool one would be the count of people turning up to an open inspection. I think that would be a great indicator, but you’ve got to there manually. That sort of stuff just isn’t published online. So more work to do, I guess.

Ryan: So you just kind of went as a home project, “Okay, I’m going to do this for my own investing.” Back to my previous question, what made you choose – there’s a lot of data out there, right? You can get access to all these different points of data. How do you know that one data point will affect supply and demand and one won’t?

Jeremy: I guess it’s a case of just seeing how market reacts over a few years and then looking at what was it that was really – that stood out to me about that market. In the past, I’ve noticed if I’m in a bit of a bitch fight with other buyers, I know that having a large number of people, large number of buyers is a good indicator of demand and supply.

I also noticed that high-yielding markets was a pre-cursor to capital growth because the tenants move in first, they’re more agile than buyers because it’s easier to sign a lease than to sign a contract to purchase a property. If a location was attractive, you’d find the rent scale up first and that was an indicator to me.

So one of the things that I looked at was high yield and days on market – how quickly are things getting snuffed up. I guess it’s a case of you get a feel for what’s going on in a market when you’re there at the [inaudible 5:55] phase and then try to translate that to indicators of some sort, like vendor discounting. If the vendor is desperate, that can drop the price down a long way and I know that’s a sluggish sort of market. So, yeah, it was just a simple case of thinking carefully about each statistic and how it influences capital growth. That sounds really subjective, ironically.

Ryan: It does.

Jeremy: But there’s got to be a point where you say, “Okay, I value this statistic more than the other statistics because I’ve personally seen it has more of an impact on capital growth.

Ryan: With all of the things that we’re looking at, are we talking – everything is like correlation, right? Instead of causation, do you think? The stats that we’re looking at are a correlation to demand and supply. Like the stats we’re looking at don’t cause demand or supply. Is that right?

Jeremy: Yeah, exactly. Yeah, yeah. Spot on.

Ryan: So, we’re kind of looking at trailing statistics more so than leading statistics. Is that right?

Jeremy: You’re right and then wrong because what we want, ideally, as property investors, is a crystal ball – some sort of lead indicator. But we are looking at historical data. We’re looking at stuff that’s right now. Vacancy rates are really easy to figure out right now because you can jump on onthehouse.com or domain or realestate.com.au and you can see what is exactly available. And so you get an up-to-the-minute or up-to-the-hour depending on how tidy the property managers are at advertising your property for rent. You can get an idea right now.

Things like census data, the number of renters versus owner occupiers in a location. That, right now, being 2015. The last census was on August 2011. So, it’s a tad out of date. Things like sale values, they can be like a good 3 months out of date. So you are looking at historical data, but you’re also able to foresee the future because if you can accurately measure the imbalance between supply and demand and you found a location where demand does exceed supply, there has to be a balancing act.

Property market is a bit like homeostatic organisms, you know.

Ryan: I don’t know what that means.

Jeremy: Just try to maintain balance. Your skin sweats when it’s hot. It gets goosebumps when it’s cold to try and thicken itself and protect you against the cold. There’s this continual tug of war between supply and demand. You have a market where demand exceeds supply, prices go up. And all of a sudden, that subdues demand because people don’t want to pay that much again and so there’s that in-built feedback loop.

So the vast majority markets are always – or almost always – in supply and demand balance. As investors, obviously, we want to find those markets where demand exceeds supply by a significant degree.

So, if you can find a market that’s out of balance, you know what’s going to happen in the future. It’s going to come back towards balance. And so, it is a lead indicator of sorts.

Ryan: Yeah. So, you’re saying if there’s more demand than supply, then effectively, prices have to rise because it’s always trying to create that balance between supply and demand. So, if the demand is really high, then prices will likely rise in order to meet that demand and then things will level out as prices go up because more people will drop out of that market because it becomes too expensive.

Jeremy: Yes, exactly. Yeah.

Ryan: So, ideally, when people are researching an area, they’re looking for more demand than supply because the equilibrium forces there will kind of force that area up.

What are we talking about in terms of – like with DSR Data – what are we talking about in terms of time frame? Because, obviously, you could have areas where demands exceeds supply, but might have a year growth left in them versus areas that might grow consistently for the next 5 or 10 years. Can we do anything to look into that or is that kind of out of our reach?

Jeremy: I’ve done a fair bit of analysis myself on that sort of thing and it really varies depending on the market. I can’t say that a high demand-supply ratio means that prices will increase over the next 6 months or 6 years. There have been some markets when I first started recording the data that are still out of balance and are slowly creeping back.

You mentioned that prices can rise and that can balance out the demand – it lowers demand. But the other side of the equation is supply can rise and that comes from more stock. It takes a long time for developers to find a location, especially if land is unavailable or you’ve got a restrictive council. So there can be market that are – for very long periods of time – restricted in terms of supply and it always got this sort of tension.

The less sales you have in a market – so if people are just hanging on to their properties for a long time – the slower prices go up because buyers are first of all, there’s not enough turnover of stock. Secondly, buyers are uncomfortable on what price to offer because they haven’t seen comparable sales. You know, this was a one-off sale, there hasn’t been another sale for 3 months.

And so, you can get markets that are very sluggish and then, you can get markets where it’s all flush in the pan. So, the demand exceeded supply, prices rose up. Quickly, developers threw in some extra stock and all of a sudden, it’s balanced in 2 years.

So, trying to find the correlation of when things start happening is quite difficult, but if you’ve got an extreme case where the DSR is very high, you’re going to start seeing growth in values. You should have started seeing growth in values already.

Ryan: Yeah. So let’s talk about the research methodology that you recommend to people. Because, obviously, like DSR, the demand to supply ratio is a big part of that but it sounds like it’s not everything because you also need to monitor what supply is going to come to the market and all of this sort of stuff. Because most people who follow me, most people invest in property don’t do any of this. They don’t do any research necessarily into an area.

They might just buy or read a magazine and invest in an area that’s a hot spot or something. What should people do?

Jeremy: I didn’t say a thing with my first property. I didn’t do anywhere near as much research as I do now. I think I just got lucky with the first one. My approach is, first of all, to use the data simply because it’s quick. Let’s say I’ve got a budget that’s $500,000.

I’m looking for something that’s reasonably attractive in terms of yield, but not necessarily positively-geared. Let’s say I’m looking for a house rather than a unit. I’m not going to renovate it, so I don’t need to live nearby. So it can be anywhere in Australia.

So I’ve got nearly 16,000 suburbs to filter through. So, I use the statistics to weed out 99.9% of those. And that’s not a cliche, it really is like I’ll get to a couple of dozen out of 16,000 suburbs.

Ryan: So how would someone go about that process of weeding down suburbs to find a few that they may be interested in?

Jeremy: Okay. Well, I’ve got this tool on my website, the “Market Matcher”. So you plug in your criteria, like your budget and various things like yield and vacancy rates that you’ll accept. And then you hit the Go button and it comes back with a list of markets which have those sort of statistics. From then, I look at that list and probably the next thing I’ll do is go to the council website and check out –

Ryan: So I’m pulling out the market matcher now. So is this a free tool with DSR Data or is this for the paid members?

Jeremy: It is free. However, you’re limited in those statistics. All the tools that are available on DSR Data are available for free. However, what you can see in terms of statistics is limited. So the basic DSR is available for free. Things like vacancy rates, auction clearance rates, days on market, discounting. There are 8 statistics that are free. And then there’s 17 statistics available to the “Millionaire Members”, as we call them.

I call the free members “Cheapskates”. We’ve got 2 accounts. There’s only been one member who’s taken offense to that term, but there’s been a lot of people who suggest that I should change the name. So, I was thinking of using “Freelaoder” instead. Maybe that’ll be better.

Ryan: It’s still pretty offensive.

Jeremy: Yeah. I’m hoping people will see the light-hearted side of it.

Ryan: Yeah. So basically, like this market matcher. I’m going through it now. So, you set your location, your property type, houses or units. And then, what are we trying to look for? We’re looking for – so we can set values here. We can set rental yields and we can set demand to supply ratio. So, what do we want? Do we want a high demand to supply ratio? Is that what we’re looking for?

Jeremy: Yeah. That’s a nice, all-encompassing statistic. You’re looking for a high demand-supply ratio. There’s actually a suite of other statistics that I use, the Strategy Suitability Index. Let’s say you’re a risk-adverse investor, very worried. You’ve made a mistake in the past, you don’t want to repeat that. So you might be looking at certain statistics a little more closely than others.

There are statistics that I call “Sentimental Statistics”. Typical examples of those will be days on market and discounting. If you’ve got some heard mentality where people are fearing missing out. Like in Sydney for the last 12 months. You’ll see the properties get stnapped up really quickly.

People are offering more than the asking price. So, discounting is very low, possibly even negative. Days on market is less than 2 weeks.

Ryan: Yeah. I was researching Cranulla, which is in Southeast Sydney for my research course where I teach people how to do some research and vendor discount was -0.2%. I think days on market was like 33 days or something like that. So it was very low.

Jeremy: Yeah. That’s pretty low. That’s not even considering the off-market deals that take place. It’s a pretty hard market. But those sort of statistics can evaporate really quickly. They can get very negative very quickly if, say, you have some announcement in the news about interest rates rising. That sort of heard mentality can evaporate really quickly.

Whereas statistics like vacancy rate and yield, they are a little more consistent. Vacancy rate, for example, might be dependent on a lease which is 12 months. So, it takes time for that to filter out of the market. For a low-risk investor, you could favor those statistics more highly than the sentiment values.

Ryan: Okay. Is this kind of the equivalent of – you know how when people invest in stocks, they can either try and play the market as to whether the market’s hot or cold, or they can actually research the company. Like, say, someone wants to invest in Apple or whatever, go through all their data and to understand, is this a valuable company in and of itself or, you know, there’s people who play either side of the market. Do you know what I’m talking about?

Jeremy: I think you’re referring to technical analysis versus fundamental analysis?

Ryan: Yes. So, like some people just play the market trends and other people actually look at the fundamentals of a company. Is that similar when we’re looking at property? Like there’s some aspects of data that’s the sentiment in the market and there’s other aspects that are like fundamentals.

Jeremy: Yeah. And I definitely put the value-based – so Warren Buffett’s technique is try to place a value on a stock. So some statistics, I would say, like vacancy rate and yield, they’re value-based. Whereas, sentiment based ones are that heard mentality, the impact that it has.

They would be things like days on market and discount. I don’t think you can rule out the usefulness of either of the stats. It’s just a case of, are you playing it safe or do you want to maximize your immediate capital growth potential?

Ryan: Yeah. Well, I guess it just depends on your strategy as to which ones. Like you should still probably look at all of them, but depending on your strategy, you can look at some more heavily than others. Is that what we’re trying to get at?

Jeremy: Yes, exactly.

Ryan: Yeah. So if you’re more conservative, you’d look at things like vacancy rate and yield, which change slower. If you’re after the quick capital growth, you might focus on things like days on market and discounting to get potentially quick capital growth over a year to 2 years or something.

Jeremy: Yeah. That’s right. And the DSR is sort of your middle of the range. Or at least where I figured that it would be. So I’ve tried to weight the statistics relative to each other to provide a nice balance. So you’re not missing out on too much capital growth but you’re not taking too much risk by just following the DSR.

Ryan: So it’s kind of the middle ground.

Jeremy: Yeah.

Ryan: What qualifies you to collect all this data and then create this algorithm or whatever to analyse this? Are you some genius in the background?

Jeremy: No. Actually, my background is electrical engineering and computer programming. I can’t remember excelling at statistics at uni. I don’t think you really need to be that clever. You just need to be mathematically-minded. Of course, the computer programming background helps as well. So, I don’t have a data science degree or I’m not a economatrician or whatever, a panel modeler. I don’t know what they even call them.

Ryan: I don’t know either.

Jeremy: I’ve had a lot of them jump online and become customers and contact me and ask questions. I haven’t had any negative feedback, but some have asked for the entire database so they can do their own analysis and I haven’t heard anyone come back and say, “Look, you’ve made a mistake here”. So, I must be doing something right. But at the end of the day, the proof’s in the pudding – does it work? There’s a page dedicated on my website. I try to be as transparent as possible without – divulging my intellectual property – that shows how effective the DSR has been in the past.

Ryan: I think I’ve seen that. Is that where you compare the top DSR suburbs to the top hot spot recommended suburbs that the magazines put out?

Jeremy: Yeah. Australian Property Investor Magazine, almost every year, they put out their flagship issue, they call it the “Hot 100”. So they just consult with a panel of experts, “What do you think is a good location to invest in for the next 12 months?” And so, I’ve just recorded those over the years, calculated their averages, plotted them on a chart and compared it to the national average over the same time frame.

Fortunately, for all the release of that magazine, they have outperformed the national average, which is good. But the DSR has outperformed the average industry experts. And that’s just the basic DSR, so DSR Plus considers twice the number of statistics and there’s no reason why you have to take the top 100. The top 10 outperform the top 100 and that’s just a shortlist. From there, you do some more fundamental research and you can improve on that performance. And that’s just to pick a market. Then you can pick a good property within that market.

Ryan: Yeah. And that’s a whole different ball game altogether – is picking the property within the market.

Jeremy: Yeah. Unfortunately, DSR doesn’t help there. It’s really just the market level. And that’s how I use it – just a shortlisting tool to get me started in doing the back-breaking, keyboard-laborious sort of research at a property level.

Ryan: Yeah. I only discovered DSR through some of your articles. It would have been a couple of weeks ago. Your counterintuitive analysis on things really struck a cord with me and really made sense to me.

I think it was your article on population growth really impacted me because I’ve always been of the mind, you know, population growth, obviously a good sign for an area because the area is growing. And then, you just assume the population is growing, then there’s more demand in that area. But you don’t realize, “Oh yeah, people won’t move into an area if there’s not a house already there.” They’re not going to be homeless.

Jeremy: That’s right.

Ryan: So population growth doesn’t necessarily equal demand. It indicates supply. It’s a good sign, but it’s not a sign of demand.

Jeremy: Yeah. There are many locations where high population growth could actually be telling you the reverse thing that you want to know. You’re thinking it’s a safe bet, things are happening here. Really, it could be just extra supply by developers and people.

Ryan: Yeah. And that’s the thing, population could be growing, but then supply could be outstripping the population growth. And so, you really do need to go one level deeper into it. I think DSR data was such a great discovery for me because there’s so many things there that just aren’t easy to find elsewhere.

Things like your average vendor discount, even days on market trends and things like that because you guys map the trends. I just wanted to ask you – because some of the things I found I couldn’t necessarily trust, like with DSR data, some of the statistics seemed a bit odd. Without obviously giving away your secrets or anything, but how do you guys collect the data and how do we know we can trust it?

Jeremy: Yeah. Okay. I’ve seen dubious statistics published in the past, too, and I’ve been caught out by that. The one thing that investors can straightaway do to protect themselves particularly with, I think the most anomalous statistic is the yield, median yield. So, you could have a market with 1-bedroom units, 3-bedroom penthouse apartments. You get a wide variety of different markets within the market.

The median no longer becomes representative of that market and the yield is the classic example of that. You get an anomalous median rent and multiply that by an anomalous median value and you get a super anomalous yield.

Ryan: I always thought it was a bad idea to look at yield as one of your main criteria because the properties that go for rent aren’t necessarily the best properties that sell. Most people who buy the higher end of the market end up living in it versus renting it. So, it’s always going to be very skewed.

Jeremy: Yeah. Yield is a tricky one. I’ve got some ideas of how to improve it in the future, but certainly, if you’re looking at a median-based yield, it can be very deceptive. The protection that investors have is they’ve got to do some manual research. You get those top-yielding market reports that you see all over the place. The top 10, you might have one that’s legitimate, but it’s not 8% yield. It’s close to 5.5%. So it’s above average, but it’s nothing special. That’s just the nature of that sort of data.

What I would try to do in every statistic is I try and get data from multiple sources. So, let’s say you’re trying to calculate vacancy rate. There are a number of different ways you can do it. A number of different sources of the data. And so, I’ll calculate a number of different versions of vacancy rate. And then for each datum, I calculate it’s statistical reliability using whatever data, whatever metadata I know about that datum. So, metadata is data about data.

A good example is median. Let’s say you got 3 sales, the middle one is the median. That isn’t a big enough sample size to be confident that that’s the median. If you have 300 sales, then you’re a lot more confident that the middle figure is roughly representative of that entire market.

So sample size is one of the things that I consider in determining the statistical reliability. Another one might be volatility. So, vacancy rate is about 0% right now. Last month there were 6% and the month before there were 4%, so they’re jumping all over the place. That sort of volatility lowers statistical reliability. So, for every calculation, for every datum, I’m calculating the statistical reliability. And there are 9 different considerations that go into it.

Another one might be proximity to unrealistic edge cases. So, you get a quoted yield of 12%. That’s very high for a market to have and, therefore, I’m less trusting of that figure. So, the statistical reliability at 1.5% yield or 10% yield and up lowers.

You have these 9 different considerations get together a statistical reliability for one vacancy rate figure. Calculate another vacancy rate figure using some other source data and then you combine them together using their respective statistical reliability.

So, I guess, if you’re comparing DSR data’s vacancy rate versus another data provider, I’m using multiple instances, multiple versions in the hope that that will give a more accurate figure. And then, on top of that, you’ve got the DSR, which encompasses vacancy rates, yield, auction clearance rates, days on market, a whole bunch of other statistics. So, the more angles you look at a market from, statistically, the more likely you’re picking a winner if all the statistics are pointing in the same direction. It’s unlikely that every single statistic is going to be suffering from some kind of anomaly the more that you look at.

So, the plan for me in the future is just get more and more data. At the moment, DSR Plus looks at 17 statistics and I’ve got about 50 on the drawing board and not nearly enough time to put into building applets.

Ryan: It’s good for people to see and it’s good for me to see the rigor that you use in collecting your statistics and in even showing the statistical reliability, which I know you do inside there. It’s good for people to know that if we’re looking at vacancy rates on DSR Data, then you’ve collected it from a variety of sources, it’s not just something that you’ve kind of assumed yourself.

I have seen some tools that have come and go and they kind of create their own scraping tools or things like that and the data can be haywire.

Jeremy: Yeah, yeah. Well I’ve had a bit of haywire data myself, but now, over the years, I’ve learnt how to filter it out. But I’ve gotten some dodgy data from one provider. I remember, I think it was the median price for houses in Newman in Western Australia.

It was over $3 billion, which was obviously something that went haywire, as you say. But I do filtering on the data there. I know what’s realistic and I make sure that that sort of rubbish doesn’t get into my database. Because I’m an investor myself, I was using the data originally just for my own investing. So, I need it to be accurate.

My entire business is based on providing the data. So, obviously, it has to work. It has to be accurate. There are plenty of other enterprises where you just publish to get some kind of attention or to get an email address and then you market a developer’s project, or something like that, but that’s not my business.

Ryan: Well, DSR data has quickly become my favorite tool when it comes to suburb research in particular. Just because I think some of the most important stats are things like days on market, like vendor discounting, sometimes auction clearance rates if there’s enough volume there, like vacancy, not so much yield, but what else is there? Oh, you guys don’t look at capital growth history, do you or you do?

Jeremy: I do.

Ryan: It’s just not displayed.

Jeremy: It’s part of the Millionaire’s statistics. There’s a thing called “Market Cycle Timing”, and it looks at a history of capital growth. So, if a market has had pretty ordinary growth for the last 7 years and now it’s just starting to pick up, then that would trigger a higher score in the MCT, the Market Cycle Timing.

Ryan: Let’s talk about this because that’s something that people ask me a lot of questions about. It’s like the property clock. Where is a suburb within it’s cycle? Is it peaking? Is it going down? Is it at the bottom, about to go up or is it in the boom cycle? So let’s talk about market cycle timing because I think this is –

Most people, myself included, we can’t look at the data and say, “Okay, I know where in the cycle this is.” Because I don’t know if I don’t have the mind for it or I don’t have access to enough data. But that stuff just doesn’t make sense to me.

So, if there’s a tool out there that can help people to indicate whereabouts in the property clock or the property cycle a suburb is, I think people are going to be very interested in this. So can we talk a bit about market cycle timing and how can people use this tool? What are they looking for? How does it work? All that sort of stuff.

Jeremy: Just on that stereotypical “clock”. I’m yet to see a price chart that shows that stereotypical increase in growth then flattening out and then taking off again. Every market just seems to be so different, so unique. I can remember being asked to write an article by Your Investment Property Magazine on that sort of topic and I couldn’t find a stereotypical example of this property clock taking place.

Ryan: So do you think the property clock is bogus idea?

Jeremy: I think it has some merit. You definitely do see this on a macro scale. If you look at Sydney, for example. In the last few years it’s been booming and starting to peak out now. I mean there’s still good growth. I’d still be buying around Sydney right now.

I still think there’s a lot of markets, particularly in the outskirts of Sydney that are just starting to see the ripple effect flow out there. But looking at an individual market, like a single suburb, the prices just move around too radically to say that there’s this clock.

Ryan: This is good. I like this. I like counterintuitive things where people teach us one thing about we look at data and we can learn how we can approach it from a better angle. This is good.

Jeremy: Yeah. The data is trying to do the best it can with this [inaudible 33:50] information. With MCT’s, I’m looking at last month’s growth and the month before and so on. Back to about 3-5 years. No, it goes back to 10 years. So, let’s say you’ve got above-average growth in a particular market for 10 years.

Actually, a better example, really simple example. Let’s say we talk about apples and oranges. This is 100 years ago, oranges are 1 cent and apples are 2 cents. I know that there were pounds or pence or something back then.

Ryan: Let’s just go with it. We’ll run with it. Make it simple for people.

Jeremy: Yeah. We’ll just go with it. Let’s just say that one of them outperforms the other. It just has superior growth. I think the comparison I did was 6% and 4% and I did the numbers. Over 100 years, one fruit would be 7 times the value of another.

So, you can picture yourself going into a fruit shop and you could buy a bag of apples for the price of one orange. Long before that ever happened, people just stopped buying oranges because they’re too expensive and they would buy the only alternative – apples. And that change in supply and demand would mean that apples would have a boost of growth and orange will have fallen.

Ryan: Do you remember when bananas really expensive? This is years ago and you used to go into the shop and you buy one banana. It’ll be like $4. And you’ll be like, “Oh my goodness! Why am I even buying this banana?”

Jeremy: Savor it. Get a group of friends together and have a banana.

Ryan: Yeah. Whereas the other day, I just went past and I just saw bananas and they looked ripe, they looked good, I grabbed a whole bunch and bought them and I didn’t even look at the price.

Jeremy: Yeah, or mangoes. There’s a shortage of mangoes at the moment now.

Ryan: Oh, is there? Oh dear.

So that long term growth of an area, are you saying that doesn’t happen because it would just become too expensive?

Jeremy: Yeah. Eventually, it just gets too expensive, people say, “No. I can’t do it.” And you compare places like, in Sydney, Mosman versus Campbelltown. Ritzy area versus the cheap area. You can’t say that the ritzy areas will always outgrow the cheaper ones. In fact, if you want a short burst of growth, ungentrified areas have the most potential. In Western Sydney, just before the Olympic Games in Paris, they had the rowing out at Castle Ray and it was a fair amount of development activity going on there.

If you have the extension of a train line. That can’t happen in a city center because it’s already a train there. It’s already got the shops. It’s got everything it could possibly have. But when you have some infrastructure reach out into a regional area, then it has a big impact.

So, if anything, far-flung markets have the potential for more rapid capital growth than city centers. But city centers have the benefit of a diverse economy and so have lower risk. I think that the reason why city prices are more expensive than the outskirts is simply because people started buying there sooner. You know, 200 years ago, that’s where we wanted to live .We wanted to live close to the city.

The outskirts might have been Surry Hills in Sydney, which we now call CBD fringe. So, yeah, I don’t think that there’s any evidence of the data suggesting that city markets will outperform regional markets, apart from the fact that we’ve been moving away from an agricultural-based industry to services-based over the how ever many decades.

Ryan: Yeah. I think the thing for people to get is often we look at data or people teach us about data and they say cities, that’s where you get your capital growth. Regional centers, you might get positive cash flow but not as much growth. And people make these broad claims that this is always the case. I feel like what you’re trying to say is sometimes that is the case, but not always. And when we’re investing – I’m not investing in Sydney.

I don’t have enough money to buy all of Sydney. I’m investing in one suburb within Sydney or one property within that suburb within Sydney and so, we can’t take these broad statements that people use about large city areas versus regional areas and say that that’s always going to be the case for your property in your suburb. Am I on the right track there?

Jeremy: Yeah, yeah. Exactly. In fact, I’ve invested in both city markets and regional markets and the best capital growth, the fastest capital growth I’ve ever had has always been in a regional market. But at the same time, I’ve made the worst mistakes in regional markets. I think that your set-and-forget type property, you can’t have a set-and-forget property in a regional market. You need to keep your eye on it.

I’ve bought properties in regional areas that have literally doubled in value in 3 years – in less than 3 years. They’ve dropped in value as well, just as quickly. Rather than sell, I’ve refinanced, bought elsewhere and didn’t keep my eye on those regional markets and they’ve dropped since, and so I’ve got negative equity. So, from now on, I keep an eye on every market that I buy. In fact, that’s why one of the products I’ve got on my website, the Market Monitor.

You don’t want to go through the trouble of researching the same suburb you’ve already bought in every month, but you do need to keep an eye on it. So, the Market Monitor, the idea there is you just get one of these emails each month and it just shows you, “Oh, look, vacancy rates are starting to climb.” And then you can do some detailed research and maybe lock a tenant into a 2-year lease to get through a bad period of vacancy rates or maybe even sell.

Ryan: I think that’s awesome because a lot of people don’t do research after they bought the property. As you said and what you did, they just sit on it, hope it goes up, “Oh, maybe I’ll check in 5 years, see if it’s grown.”

To be able to monitor a market and to say, “Yes. It’s growing. Happy days, just hold on to it.” or to day, “No, the market’s turning.”

One example would be like Port Headland grew for years and years. 11% capital growth, huge capital growth. I think recently, it’s just been plummeting. For people, if they had bought in there, if they were monitoring the market, and to see, “Okay, the scales are starting to tip in the opposite direction.” They could potentially get out before too much damage was done. So I think that’s an awesome tool.

I want to go back to the capital growth trends and the bogus property clock because we get taught that and we think, okay, markets go in these cycles. But, obviously, even just thinking about that now, it makes so much sense that doesn’t happen. Markets don’t just always go in that sort of cycle. They don’t always peak and then always drop and then always grow again and gentrify. Every market is different.

Is there something, as investors, that we can look at in terms of capital growth trends to make sense of it? Because sometimes, I look at areas and I’m like, well it’s grown consistently, but does that mean it’s going to continue to grow consistently or has it grown too much and now it’s going to drop? Is there a way to make sense of past capital growth?

Jeremy: Yeah. It is tricky. The best you’re going to get is just a general sort of rule. There are people who go into a casino and they’ll use this strategy on the roulette wheel. So let’s say you’ve had 5 blacks in a row, they’ll bet white. Because they’re assuming the universe is going to balance out again and you can’t have a run of blacks forever. Sooner or later, it’s going to go white. So, what we know about a trend is that sooner or later, it’s going to end. The longer a trend is, the more confident we are that it’s about to end. So you’re really between a rock and a hard place there. You’re seeing a trend.

You know that it is a trend because you’ve seen a good amount of history proving that. So if you go with the trend, chances are it’s going to go the other way and that whole thing about supply and demand balancing this tug of war that it has if you have a significant amount of capital growth over an extended period of time, sooner or later, it’s going to come to an end. So, the more of it you see, the more confident you can be that it’s about to end.

Then on the other side of the coin, if you buy into a flat market, particularly regional markets, they can be dead for decades. So what you’re looking for is a combination of 2 things. First of all, you’re looking for a market that has been flat or negative for a long period of time and then, recently, over the last 6 to 12 months, you’re seeing completely different. It’s starting to pick up. It’s starting to have some growth. And that’s what the MCT tries to measure.

It doesn’t actually give you a growth figure because it’s looking at a couple of different things. So it just gives a score out of 100 for an estimate of, “Is this potentially the start of the next growth cycle?” So, has there been a long period of no growth or negative growth and now is there some signs of a change?

Ryan: Yup. I would presume you would always advise people, you’re looking for this indicator but that’s not the be all and end all. You’d want to back this up with other signs, like a decrease in vendor discounting. Potentially decrease in vacancy rates or decrease in days on market. So, you’d want to see that trend, understand that trend, but then back it up with other data points as well.

Jeremy: Yeah. As soon as you start looking at one statistic in isolation, you’re in trouble. Like population growth, you’ve got to look at — and that’s why I want to get more and more statistics. I think once we get to a point where we got, say, 35 statistics and you find a market where 32 of them are all pointing in the same direction, you can be very confident that that’s a good market to invest in. That’s a safe market.

Ryan: Yeah. I think one of the biggest mistakes people make is they do just look at just one statistic. So they look at affordability or median yield or they look at population growth. I think I saw one video and they’re talking about what’s important in capital growth and the guy was saying, “You know what’s important in capital growth? Income growth. If income grows in an area, then that’s the best indicator of capital growth.” What do you think about income growth and capital growth?

Obviously, in our discussions, that would be one aspect of it. We would never just rely on that. But do you think it’s a helpful indicator?

Jeremy: I think it has some merit. In most cases, the source of information is [inaudible 45:03] tribunals statistics. It comes from census data. I’d remember sitting at a census with someone I was living with at the time and not having my tax return in front of me and just picking a number that I thought was my income at the time. So you’ve got some inaccuracy there. You’ve got some ego at play as well.

Ryan: Yeah. That’s what I thought. People could over-inflate. With census, it’s voluntary. They’re not getting your tax records. They’re like, “Yeah, you just voluntary say I earn about this.” Sometimes people understate as well because they’re not claiming all the tax. They’re not claiming everything they make.

Jeremy: [inaudible 45:41] That’s what it is. Even though it’s anonymous, yeah. But you’ve also got the issue that right now, it’s 2015. It was in August 2011. So, it can be out of date. But the other issue is if people are in that with that income, why are they going to buy in that area? They already live there. Now, people do buy an investment property often close to home, but knowing the income of the people that are actually living there isn’t what you want to know. You want to know, what is the income of the people that are about to buy there?

Ryan: Can you find that out though? Is that a possible data point?

Jeremy: There is a group called “id”. I subscribe to their email newsletter and they say that they can actually figure out where population flows are taking place at a suburb level. I haven’t had the time to grill them over it and find out what we can know about demographics that are in surrounding areas that might be about to buy into our target market that we’re reseaching.

Ryan: Yeah. I loved what you said when we’re talking about income growth in an area and you’re saying if their income is growing in the area and that area is not the pinnacle of the market or the most expensive area, then that could actually indicate that people are likely to leave that area and go elsewhere.

Jeremy: That’s right. Yeah. You could get a massive vacancy rate. It could be [inaudible 47:12] and it could be the exact opposite indicator that you want. I think what it helps with is if there is surplus income in an area, then people are more likely to get the new kitchen, have a deck built out the back, put a pool in. So you won’t see markets deteriorate. You may have a lot of renovation projects going on and values of properties, from a purely valuation perspective, improve. But unless there’s a sale that takes place, none of that information trickles through to us.

Ryan: So do you think with income growth, when you’re looking at it, are we looking at growth in income between 2006 and 2011 and whether that’s outperformed the Australian average? Or, are we looking at how much weekly income is a household receiving and how does that compare to the price of a property in the area and if they’ve got more income, than the price of the property? Is that what we want? Which one are we more looking for?

Jeremy: Yeah. So you’re saying growth of income versus surplus of income.

Ryan: Yeah. Or it could be both or neither.

Jeremy: For a regional market, I think growth of income is a good indicator. There’s something going on there. The industry is kicking. I think, though, for the surplus income, to have any sort of impact, it’s probably less of a good indicator, even in a regional market. The reason why is, just because people have surplus income, it doesn’t mean that they’re going to go out and buy property, spending more than what it’s worth.

The theoretical idea of that is, if you have a huge amount of surplus income, someone will pay $1 million for a $500,000 property simply because they can afford it. They don’t. They’re still going to pay market value. If the market isn’t moving, then it doesn’t matter how much surplus income they’ve got. They’re not pushing prices up.

Ryan: So, really, for surplus income to have an impact, people would have to do renovations and improve the quality of the properties in the area. That would be really the only way to impact it. I think you said it again in an article, you were like, we’re assuming that as people’s income grows, their stupidity grows as well.

Jeremy: Yeah. That’s right. Yeah, exactly.

Ryan: Really, it’s coming back to demand and supply, isn’t it? Because people who have surplus of income, if they increase the quality of the property, then there’s more value there. Otherwise, it’s still demand and supply at work. Because they’re going to look at the market, see what it’s worth and buy a house for what it’s worth. They’re not just going to pay $100,000 more because they earn extra money.

Jeremy: Yeah. That’s right, yeah. It really does come back to supply and demand. That’s all there is. It’s not just property. Any commodity or service, in a free market, it really just does come down to supply and demand. I’ve seen developer projects marketed and they’ll say, “Oh, we break our research into 5 groups. There’s supply and demand and then there’s infrastructure then there’s this blah, blah, blah…” And all these other things. But really, infrastructure affects demand. Something else affects supply.

Population growth affects demand. It all comes down to supply and demand at the end. So, if you can accurately score demand and score supply and calculate the balance between them, then it’s got to be a winning formula and that’s why the DSR works.

Ryan: Yeah. Something that I’ve tried to ask you in email, but I’m not sure if it came through clearly, was talking about the peak of the market. I get so many emails from people that are like, “I’m not going to invest because I think the market’s peaked. So I’m not going to invest until it drops.” And I’m like, “Well, do you actually know that?” How can you know that? I guess I wanted to understand, with DSR, demand and supply, what is the lag time with DSR data and could we use it to identify that a market has peaked and is potentially turning?

Jeremy: I get a few people that are, particularly right now, worried about investing in Sydney because of that. They’re thinking the market has peaked. There’s possibly even some talk of interest rate rise. I can understand the insecurity. There has been a little dwindling, I suppose, in the rate of growth of the Sydney market. But really, all that’s happening now is the growth is moving elsewhere – to the outskirts of Sydney. I’ve noticed very high demand and supply ratios in places like the foothills of the blue mountains. Basically, North, South –

Ryan: Is this like the ripple effect coming out of Sydney? People are overpriced in Sydney so they’re going out.

Jeremy: Yeah. So there’s still opportunities. But trying to gauge the peak of the Sydney market and bare in mind we’re not really interested in the Sydney market. We’re just interested in –

Ryan: Well, even just a suburb. The peak of a suburb, I guess.

Jeremy: Yeah. So the peak of a suburb. When we’re talking about a peak, are we talking about the price growth? You want to know when if you’ve bought, is it now time to sell? Prices aren’t going to go much higher. Or are you thinking it’s the peak of the DSR?

Ryan: No, no. I’m talking someone’s buying – peak of prices. So after the peak, prices will either stagnate or they would drop. So that’s kind of what we’re looking at. So Sydney’s obviously gone on rocket ship growth over the last couple of years. Is there a way a suburb in Sydney, say, Cronulla, for example, or any suburb. Is there a way to watch the DSR and to see the DSR changing and indicating that supply is lowering and, therefore, prices may stagnate?

Jeremy: Yeah. The DSR is the ideal stat for figuring out what’s about to happen. So if prices are about to stagnate, price growth is about to stagnate. The DSR wouldn’t be out of balance. That’s a market that’s come back to balance. So either supply has caught up with a heavy abounded developer activity or prices have gone up and demand has just vanished. We come back to a DSR that’s around the 50 out of 100 mark. That’s where you’re going to see prices either grow in line with inflation or the long term sort of average.

Ryan: How long does it take for DSR to update? Is it weekly? Is it monthly? Is it 3-monthly?

Jereamy: It’s once a month. All the data is accumulated for a month. So auction clearance rates, its what auctions are we counting? They’re from the first of the month to the last of the month. In fact, it’s actually the last 5 weeks for auction clearance rate just to round it out so I don’t have to deal with Februarys versus Novembers or whatever. It’s updated monthly. It could be done weekly, but I just don’t think the property market is that volatile that you’re going to see a change there.

When you start dealing with small sample sizes, the amount trading volume that takes place in a week, it’s too small. You get some volatility in the figures as they jump around. You know, you have a $500,000 property sell last month and a $300,000 property sell this month. Doing it week to week it’s got to be even more volatile –

Ryan: Yeah. There’s just not enough volume. You’re not selling the same house over and over again every week. You might sell one house that’s really nice one week. One house that’s not as nice the next week. Just because you bought a house of $500,000 and next week your house sells for $300,000 doesn’t mean your house isn’t still worth $500,000.

Jeremy: Yeah, yeah. It’s bad enough looking at it month to month.

Ryan: Have you ever seen a market drop like that? Like drop in a month or something like that? Like your people are watching DSR and monitoring a suburb. Are they going to get the wool put over their eyes or something like that? Is it going to happen so quickly that people will miss it?

Jeremy: No. In fact, the DSR is very stable. You usually see it move by a couple of points each month. Out of 100, it’s a few percentage points. It doesn’t move much at all for the vast majority markets. However, there are some markets where there’s limited information available. And they could be a little more volatile. You might see it jump by 10 or drop by 10. So, what I do is I always look at a historical chart. So, let’s say we’re looking at the DSR and it seems quite high. Actually, DSR is probably not a good example.

Vacancy rates. You have a thinly traded market. Vacancy rates can jump from 0% to 10% from month to month if there’s only 20 rental properties in that suburb. So, if one comes off from the market, then straight away, that’s 5% vacancy rate. So, what I do is I look at a historical chart. And the charts I’ve got on my website dsrdata.com.au, they show the last 3 years for any statistic. So you just put your eyes across that and you can easily see. There’s a line of best fit there that say 2% vacancy rate. 0% seems unrealistic. 8% seems unrealistic. It’s around about the 2%, which seems more normal. So, I always want to look at a historical chart if I see any volatility.

Ryan: I love the charts on DSR Data because you can instantly get that view of a trend in an area or you can instantly see – obviously, if you see a vacancy rate that’s high, like 5% or 6% or more, instantly, you’re like, “Okay, that’s a bad sign.” But then you can look at the data trends and say, “Okay, well this is just volatility at work. It’s not actually an indicator or the area.” And then you see other areas that maybe it’s a little bit high, like 3% or something but it’s been going down for a couple of years and you’re like, “Okay, that’s a good sign because vacancy rate’s decreasing over time.”

The trend graph that you have inside DSR data is one of the most valuable aspects of the tool for me and for the people that I teach about how to do research because we’re not just looking at the data as it stands today. We’re also looking at the trends in that data and how it’s changing over time.

Jeremy: Yeah. The only recourse you’ve got to protect yourself against a volatile figure looking at the end of month is to, “Well, what was it the month before or the month before that?” And it’s looking at a historical chart. We can’t really do much else about it. We got a report, this is the median for this month, but you want to look at what it was the last month, the month before to weed it like that.

Ryan: I think, for people doing their research out there, there are, as we’ve talked about, lots of different things you can look at. You can look at population. You can look at income. You can look at vacancies. You can look at of these different things, but, obviously, we want to try and look at as many as we can. And I think the tool that you’ve created – I think the DSR figure that you’ve created as well is the best aggregate that we’re ever going to get at this point in time of an indicator of a market.

When people say, “Just look at income”, yeah, no. Look at other things as well. I would say, if you’re going to do one figure, ideally you’d just be looking at one figure to whittle it down to suburbs that you’ll do more in-depth research in, but I definitely think DSR or demand to supply ratio is the definitely the figure. If I was to whittle down suburbs, that’s probably what I would look at. DSR to minimize, just cut the crap. Get rid of the ones that are bad and then you’ve got ones that are good.

Question that I have for you more from an investor standpoint than the runner of DSR Data is – my assumption is that we’re going to use DSR to whittle down our suburbs. The suburbs that we’re left with will probably have the highest DSR, which means there’s the most demand in that area.

Do you have any tips or strategies for people? Because, obviously, purchasing in those areas, are you unlikely to get a property for discount, you’re going to be competing against a lot of other people. If this is your strategy, what have you done to kind of mitigate that and ensure that you’re investing and not overpaying because you’re getting caught up in the hype?

Jeremy: Yeah. This is actually a tough one. I get a lot of people complaining about that.

Ryan: Jeremy, you’re showing me too many good suburbs! What are you doing?

Jeremy: They complain that there’s simply aren’t any properties available. First of all, how do you estimate a bargain price to pay when you’ve been searching in this one suburb for the last 3 months and only 4 properties have been up for sale? It’s very difficulty to buy into the truly high demand-supply ratio suburbs and it can be very frustrating.

What I do is I try and get a group of suburbs together. So there may be 2 or 3 half a dozen suburbs. That means I’d be doing open inspections, looking in all of those suburbs, in any property that’s for sale. And I’d make loads of offers, so that if one sticks, then I take what I can get.

Ryan: Okay. I like this because I think one of the best things people ask me, okay, what’s a great way to negotiate? And one of the best ways to negotiate is to not be committed to that one property, but to have other options that you can move to if the price isn’t right. Because people negotiate, they get stuck in the one property, they end up going too high.

So, I think, spreading your research or spreading your property purchase across multiple suburbs potentially, obviously opens the door to a much wider variety of properties. So even if there’s a couple on the market at one time, if you’re looking at 6 suburbs, rather than having 2 properties that you’re fighting over, you’ve got 12 to look at, for example.

Jeremy: Yeah. That’s right. It does mean you’ve got to do a lot more research, unfortunately. I tell people that if they’re going to buy in a high demand-supply ratio market, the idea of getting a bargain, just get that out of your head. You’re not going to buy one. You cannot negotiate vendors down when they’ve got loads of buyers knocking on their door saying, “Look, I’ll give you whatever you want for this.” But that’s better than buying in a market where you have hundreds of properties to choose from.

I remember the first time I generated DSR Australia-wide. I wanted to check so I contacted real estate agents in some of the top markets. They treated me like dirt, “Yes, Jeremy, we’ll contact you once something else comes on the market.” And then, I contact, I think it was Airlie Beach, Airlie Beach at that time. This is back in 2010 – units in particular. They had a very low demand-supply ratio. They treated me like royalty, “Oh, Jeremy, there’s so much to choose from. Come fly up here.

We’ll give you the royal treatment.” I knew that’s a soft market and I could get a bargain there, but what’s going to happen to prices? So, I would much rather pay full market price, give the vendor what their asking and so that I’ve got a foot in the door of a great market. Rather than get a bargain and then just see that wiped out by a third of price falls over the next 12 months or whatever.

Ryan: Yeah. Or see it just sit there for the next 5 years and do nothing because there is no demand in the area. I think that’s good for people to get out of their mind. Because a lot of people do teach the best way to invest is to buy below market value so you can get instant equity in an area. Look, I’m sure there are ways to do that. But it just sounds so much easier to identify good markets, markets that are solid, that are likely to grow, get in there at market value and see the market rise. And if you really want to create equity, then you can do things like renovation or create opportunities within that property yourself.

Jeremy: Yeah. That whole instant equity thing. If your strategy is entirely based on buying below market value, then why would you hang on to a property once you’ve bought it? Your strategy has now come to its fruition, you’ve bought below market value. So why isn’t there a discount flip? You know there’s a renovation flip. So, you buy, renovate and sell.

There’s no such thing as a discount flip. Because as soon as you’ve settled on that property, that’s its new value – whatever you paid for it. And that’s what other buyers are looking at, “Oh, this is now the new benchmark.” So, if you can, and if every buyer in that area can get a bargain, prices are heading down, they’re not heading up.

I remember seeing one property educator complaining about Sydney prices. This is last year. They’re saying people are paying too much. Too much being above valuation. Unless people buy above valuation, capital growth doesn’t take place. It has to be someone forking out a little bit more money. And then you’ve got a new benchmark, which becomes the standard and people continue to buy above market value. That’s the only way capital growth happens.

So if you’re buying in a location where everyone’s paying fair market value, you’re buying in a stagnant location. You’ve got to pay more to get into these hot markets. That’s the unfortunate side effect of getting into the market.

Ryan: I guess the only other way that I’m thinking that people could potentially do that is to look for the ripple effect and to buy just outside the hot area at the moment where you can potentially negotiate more and then your capital growth might not happen in 12 months or 2 years, but maybe in 2 years then it’ll start to pickup because of the ripple effect from other suburbs.

Jeremy: Yeah. Yeah. Actually, that’s a good point. One of the shortcomings of the DSR is this long forecast. It really can’t possibly predict capital growth in a market where the ripple effect, for example, hasn’t taken effect or where an infrastructure project has just been announced, but it’s not impacting the market. The DSR is something that you would use perhaps in those circumstances to time your entry in the market.

If you know there’s an infrastructure project taking place. You believe this is a great location to invest in, there’s no reason why you have to put your money there, have it sit there for 2 years with nothing happening. You can monitor the DSR to see when it’s starting to pickup. But one of the shortcomings of the DSR is that long-sightedness.

Ryan: I think one of the shortcomings of anything to invest in property is the short-sightedness of that. You can’t get access to data that says, “Yeah. This area is going to grow rapidly for the next 10 years.” It just doesn’t exist.

Jeremy: Yeah. It doesn’t exist. That’s right.

Ryan: You can listen to someone telling you that, but they’re probably trying to sell you a property that’s overpriced in a market that doesn’t have any demand. So, yeah, DSR does have that limitation, but so does everything. I think DSR, people shouldn’t see it as the be all and end all. It is an amazing tool. It has some of the best information out there. The best way to track an area. But, obviously, there’s going to be speculative stuff that you need to look at as well.

Things that you just can’t get access to. Like, job growth in the area is not really easy to find. Gentrification of the area, as you drive through it, you can see some of that stuff, but you can’t necessarily prove it through data. Infrastructure projects don’t just appear in data. You’ve got to take some speculation.

Jeremy: The first place I go to after finding a location with a high DSR is the council website, just to check what development applications have been lodged. So, you may have a market that’s got great demand-to-supply ratio right now, but there’s all these pending development applications and there could be a massive oversupply about to hit the market.

It takes time to build things, obviously, so you could some 12 months of capital growth. But I check the council website for that local government area. That’s the next place I go.

Ryan: Let’s leave it at that to honor your time. This has been absolutely awesome. You have an approach that no one else I’ve seen has about analysing areas to look for potential growth in an area. I see so much people using the broad spectrum approach. Sydney’s growing, so you should invest in Sydney. We can’t invest in Sydney, we’re buying one house in a suburb. As well, your insight into population growth and your insight into all of these things.

Look, I really appreciate your time. I appreciate the tool that you’ve created, which is going to help all of my listeners, all of my followers because I think, really, it is the best tool out there for free or paid. I have access to paid tools as well and I still don’t think they’re as good.

Jeremy: That’s great. I’m glad you find it useful. I honestly don’t get much feedback. I think people just use it, buy some stuff and then I never hear from them. So, yeah, it’s great to get some feedback

Ryan: Yeah. I’ve shared it with a few people and I think a few of our minds have been blown just by the fact that it’s all in one place and that you can get access to it all. And then, obviously, if you’re super serious about investing then, the upgrade to the Millionaire package is totally worth it because you just get access to more stuff.

Look, thanks for going out there and for creating this. For making it available for free and for your time and for your insight. I look forward to following you more and hearing more about your insights into the Australian property market.

Jeremy: That’s cool. Great talking to you, Ryan. Thank you.

Ryan: Well, that completes the interview on how to analyse a property market with Jeremy Sheppard from dsrdata.com.au. I really enjoyed doing this interview. I asked Jeremy a lot of questions that I wanted to know the answer to. And so, I hope that you found it useful as well and learned a bit about how to analyse a property market.

If you are doing any research into a suburb, then I do suggest you go ahead and check out Jeremy’s website, dsrdata.com.au. You can go over there, punch in a suburb and it will show you the demand-to-supply ratio of that suburb straight away. Or you can sign up and you can get way more details. Things like vacancy rates, days on market, auction clearance rates, all the good sort of stuff over there. So, go ahead, check out dsrdata.com.au. And thank you, Jeremy, for doing this interview.

If you want more help on how to look at this data, how to understand the data, then go ahead and check out my course on how to do suburb research. You can check that out, go to onproperty.com.au/research. And there, I will show you through my video tutorials exactly how to research a suburb, what data points to look at, what each of the data points mean and how you can put all of those together to really understand whether the suburb is likely to grow or if it’s likely to stay stagnant or decline.

So, again, that’s onproperty.com.au/research. And until next time, guys, stay positive.

"This property investment strategy is so simple it actually works"

Want to achieve baseline financial freedom and security through investing in property? Want a low risk, straightforward way to do it? Join more than 20,000 investors who have transformed the way they invest in property."