Crunching the numbers

How important are statistics and what bearing do they have for investors looking into property? Before we get to the answer to this question it is important to know the current statistics.  According to the June FNB House Price Index there has been a minor acceleration to 2.6% year-on-year growth from a revised 1.8% in May. If one adjusts this slight growth rate with inflation, real house prices have declined at a rate of -2.5% per annum as at May 2011. The Consumer Price Index inflation is at 4.6%, which is still much higher than property price growth.

So back to the question of how important statistics are for property investors. Goslett answers that knowing how much a property is truly worth (which can be ascertained through gathering relevant statistics) is vitally important whether you are a buyer or seller.

“Property buyers would want to know whether they are making a wise investment choice, and this can only be decided once they have researched and obtained the actual numbers and undertaken a comparative analysis with regard to pricing and types of properties that have been sold in a specific area,” says Goslett.

According to Goslett, statistics provide a record of every deal that has already taken place as well as provide information about the history of several deals on one property. He notes that statistics are of utmost importance for estate agents and professionals working within the industry as they use them to provide a reasonable reflection of the real estate market in a specific area. They allow agents to gauge the market and possible trends in certain areas and will give the agent an idea of how to accurately market a home and price it correctly so that it is sold for a fair market value within a reasonable amount of time.

“From an investor’s point of view, statistics will give an indication of how property has performed in a certain area over a set period of time and will make it much clearer as to what to expect with regards to the performance of the market in the future,” says Goslett.

He adds that real estate statistics can largely influence a property buyer’s decisions.  If profitability in certain options is suggested by the information that is at hand, then buyers are more likely to opt for these investment choices.

Goslett notes that the two main statistics that are looked at by industry professionals are the number of properties sold in an area over the last two years and the average price thereof, along with the square metre measurement of the stand and buildings on average.

“However,” says Goslett, “before investors take any statistics into consideration, it is imperative that they know that the information is obtained from a reliable source. It is also important that they make sure the information is still relevant and is not outdated.”

Statistics will only be of value if the source is trust-worthy and the information is interpreted correctly.  Investors will not always understand the sometimes complex statistical analysis of property markets and because of this, consultations with renowned companies and highly regarded agents will help them to understand the information as well as create a more accurate estimate concerning their return on investment.

“When in doubt it is best to consult an estate agent that will be able to provide you with a Comparative Market Analysis (CMA) based on statistics received from reputable sources such as deeds office data. They will also be able to correctly assess the information and guide buyers and sellers as to what the information is actually saying,”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      The forecast for the national rental market in 2018 remains a mixed bag of good news and bad news. Although rentals are expected to rise slowly as the challenges of home affordability and tighter lending criteria tighten their grip, it’s a double-edged sword as the market also will come under increasing pressure from factors like declining disposable income levels.
    • 14 Feb 2018
      While you may not have intended to place your home on the market, what do you do if you receive an unexpected offer on your home? In areas where demand outweighs the current supply of homes available to buyers, it is not unheard of to have buyers make offers on homes that aren’t on the market, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      If you are looking to sell your home this year, Debbie Justus-Ferns, divisional manager of Renprop Residential Sales, says that there are five crucial things to do before the ‘for sale’ sign goes up.
    • 01 Feb 2018
      February is the month of love and to celebrate we will be posting about all the things we love this month. Follow the #MyPropertyLoves hashtag to keep up with our favourite things.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us