Property Market Research, how do you go about researching a Home In Brisbane? Today we are going to cover our 12 step guide!
It’s always the best/worst part of buying a property when you’ve finally found the right home, but not sure what to do? How do you research or find out if it’s going to be a good buy? How much should you pay?
A good mate of mine is wanting to by 82 Charlotte Street Paddington, and he asked…
How to research what a property in Brisbane costs
So I thought I’d put together my own step-by-step process on preparing, researching and negotiating a home in Brisbane.
And more importantly, we’ll answer the question how much should you pay for a property?
I’ll step you through the process on how to research a property online, with lots of free tools to help secure your home – as well as some bonus negotiation strategies and templates to use with real estate agents.
Including real-life examples.
So let’s get started!
Property Market Research Process
- 1. Work out your property criteria
- 2. Research your Suburb & Surrounding area
- 3. Research Rental Income per week
- 4. Calculate (Potential) Rental Income
- 5. Research Similar Sales in Brisbane
- 6. Determine the Property’s Value
- 7. Confirm the Property’s Value with a free RP Data Valuation
- 8. Bonus 1: Research the history of your home
- 9. Bonus 2: Research if your home has gone swimming (i.e. flooded in Brisbane)
- 10. Negotiate with the real estate agent
- 11. Make an offer on the property [step-by-step template]
- 12. Next Steps, and settling your new home
1. Work out your Property Criteria
As Simon Sinek once said, you need to start with why.
It’s easy to get excited about seeing new properties, and even easier to quickly fall in love with a particular aspect of a home like a kitchen, or outdoor area but it’s important to remain objective to make sure the property checks all of your boxes.
Property can be a largely emotional purchase, so you need to consider a few things before falling head over heels on a property:
- What is your “why” for buying this property? Is it to live in, are you going to rent it out in the short term, what is the properties main purpose?
- Do you plan on staying in the property for a few years? Your first home is not likely to be your forever home, it is just your first step towards your future mansion!
- Can you afford repairs and upkeep on the property? If it is an older Queenslander style property have you budgeted for ongoing repairs and maintenance? Will it need a new kitchen and bathroom in the short term?
- If you bought the property, who would buy it from you in a few years? I like to start with the end in mind, when buying a property I always think about who I will sell it in a few years. If it’s going to be a very narrow market like retirees, is this going to harm the growth potential of the property?
How long will it take to get to work?
Most property inspections are done on Saturday’s when the traffic is much different from during the week when there are commuters going to work and kids being dropped at school.
Before buying a property I check it out at least one morning before work around 8am, and again one evening around 5-5.30pm to see if it is affected by rat runners racing down your street, or traffic noise you wouldn’t otherwise notice on a quiet Saturday morning.
If you live interstate, or can’t get the time off work you can use Google Maps to factor in the extra time it takes to battler the traffic. As you can see from comparing a drive into the city from Paddington at 9 am on a Monday, versus a Saturday it can take around 6-10 minutes extra adding 50% onto your commute time.
2. Research your Suburb & Surrounding Area
Even if you are familiar with a local area it’s still worth thinking about who will buy the property from you in the future. WalkScore is a great tool to give you an idea on the local transportation situation, parks, and my personal favourite the Travel Time Map – this uses maps to show how far you can get from your potential new home by walking 20 minutes, driving 10 minutes, etc.
It looks like 82 Charlotte Street is a solid buy, with a Walk Score of 94 out of 100. This location is considered a “Walker’s Paradise” so daily errands do not require a car which means it could be a good property for renters in the future and lots of cafes and restaurants.
|Paddington (Qld)||City of Brisbane|
|Median house price (2016) 🏡||$883,000||$610,000|
|Median house price (2 bed, 2016) 👨👧||$768,000||$550,000|
|Median house price (3 bed, 2016) 👪||$815,000||$540,000|
|Median house price (4 bed, 2016) 👨👩👧👦||$1,105,000||$659,000|
|Price per sqm||$1,900||$1,010|
|Median unit price (2016)||$500,000||$425,000|
|Median unit price (2 bed, 2016)||$478,000||$420,000|
Another tool I like using at this stage is Microburbs. This gives you some really powerful data that can help understand the property and the local area quickly, including demographic data that has been extracted directly from the Census. It includes lots of different data to help get you familiar with the area very quickly, including:
- Hip Score: Stats on how many people are commuters & data from the Census to give you an idea on who your future rental tenants might be.
- Family Score: Stats on local schools, daycare and universities.
- Lifestyle Score: Stats on local cafes, pubs, gyms and pools.
- Community Score: Stats on long-term residents and other community actives in the area.
3. Research rental income per week
As I mentioned, even if you are intending on making this property your home it’s worth knowing what you could rent it out in the future – to give you options, and also help you understand if it could also be sold as an investment property in the future.
The fundamentals for a strong rental market include:
- Low Vacancy Rates – Vacancy rate is the number of rental properties on the market that are vacant. Paddington’s Vacancy Rate is trending lower currently at 3.1% which is a good sign.
- Stable Weekly Rental – Stable weekly rent shows the market is not in decline or growth. Paddington’s average Weekly Rent for a 3 Bedroom house is picking up with aa 1% increase on the quarter.
- Good Rental Yields – The rental yield is calculated as the gross annual rental, divided by the properties value. So for 82 Charlotte Street, you might get $675 per week rent, on an $875,00 value = 4.01% rental yield which is broadly in line with the other rental yields in Paddington for 3 bedroom houses.
- Supply & Demand in balance – If there is too much supply, and not enough demand prices tend to soften. Whereas if there is too much demand and not enough supply the prices increase. The number of houses for sale in Paddington has remained fairly stable since 2012, compared to the number of units which has increased.
Overall the rental market in Paddington looks reasonable, and with a limited supply of new homes being built, you would expect the rental market to remain very stable over the next few years.
To find out how much rental you might get per week, you can either ask the real estate agent for a rental appraisal or have a look yourself.
4. Calculate (potential) Rental Income
Working out potential rental per week is not an exact science. These are the same methods property managers use to determine the rental potential, and while they can be a bit subjective you can at least work out a broad idea on what rental to expect per week.
Method 1: Researching rental income using RealEstate.com.au
- Have a look on RealEstate.com.au under Rent.
- Filtering for your target suburb
- Matching your properties characterises as 3 bedroom house, yard, pool etc you can see the rental range.
- In the example of 82 Charlotte Street the rental ranges from $650 to $700 per week.
Asking $645 per week
Smaller House & Yard
Asking $690 per week
Asking $750 per week
Nicer, bigger house
Method 2: Researching rental income with RentPrice:
- Jump onto on RentPrice
- Again filtering for your target suburb
- Matching your properties characteristics.
|Property Address||Rental Amount||Commentary|
|86 Howard Street Paddington||Rented $650 per week||Smaller House|
|34 Stafford Street Paddington||Rented $620 per week||Similar house, older bathroom/kitchen|
|85 Charlotte Street Paddington||Rented $630 per week||Similar house, same street|
So overall for 82 Charlotte Street you could estimate between $620 to $690 per week in rent.
5. Research Similar Property Sales in Brisbane
This is the most important part of the process, especially in today’s market where real estate agents aren’t putting prices on properties and they are ‘leaving it to the market to decide’. In other words, they are hoping someone is going to overpay.
The fundamentals of a strong property market include:
- Low days on market – Days on market indicate how long it takes from when a property is initially listed until it is sold. Longer days on market means it is harder to sell the property because it is taking longer, as you can see from Paddington the days on market has been relatively stable since 2000 sitting around 32 days compared to broader Queensland which takes 37 days.
- Stable weekly asking property prices – Weekly asking price is another indicator of market health and shows the tend of asking prices in your local market. In Paddington, you can see this has remained broadly stable, as it uses median house prices it is difficult for this to be a completely accurate indicator as Paddington often has property sales over $3M which can cause the numbers to be thrown out.
- Supply & Demand in balance – As we covered above, if there is too much supply and not enough demand prices tend to soften. The number of houses for sale in Paddington has remained fairly stable since 2012, compared to the number of units which has increased.
- Demand to Supply Ratio Score – DSR uses a few more data points to estimate the demand to supply ratio, a simple predictor of capital growth potential. The DSR Score in Paddington is 56/100 (anything over 50 is good) and as it explains ’this is a healthy market for investors wanting to apply some value-adding strategy. Buyers are sometimes able to get away with low ball offers. Expect growth to marginally exceed the national average’.
Overall the property market in Paddington looks good, and with a limited supply of new homes being built, you would expect the property market to remain strong over the next few years.
6. Determine the Property’s Value
As with rental, working out your future home’s value is not an exact science. Ultimately the property is going to be worth the highest amount someone is willing to pay, but you can at least get an indication using the same techniques real estate agents to use to price properties.
To determine a home’s value, you need to look at recent sales of similar properties with these characteristics:
- The sales within 2 km of home, in the same suburb
- The same property type (unit/house/townhouse/land)
- The same number of bedrooms, bathrooms and car parks.
- The same, or similar land size
- The sale occurred within last 6 months
- Property is in similar condition/has a similar level of improvements (i.e. both have a pool, renovated kitchen, etc)
The last point is where your research can get a bit subjective but try to take a step back and look at it as an external investor would.
Method #1: Researching property values using SoldPrice (best method)
- Go to SoldPrice website, click “Home Sold Price”
- Enter your suburb
- Set Search filters criteria, in our case a minimum 3 bedroom, minimum 300 sq/m land and property type as a house.
- Review and shortlist results
- Add commentary to your results
36 Kennedy Terrace Paddington
3 🛏 1 🛀 2 🚗
Similar, smaller land
22 Norwood Terrace Paddington
3 🛏 1 🛀 1 🚗
85 Charlotte Street Paddington
3 🛏 1 🛀 1 🚗
Same land, carport
23 Brindle Street Paddington
3 🛏 2 🛀 2 🚗
|Smaller land, inferior|
Method #2: Researching property values using CoreLogic (ok method)
- Go to PropertyValue website, enter the address in the box.
- The website will generate an automated value figure, $870,000 to $1,099,999
- It gives a confidence of the estimate, in this case, its high.
- You can also see other properties on the market at the bottom, to give you a sense where you sit.
|Address||On the market||House||Land Size||Comments|
|22 Sorrell Street Paddington||Offers over $900-k||3 🛏 1 🛀 1🚗||405 sqm||Similar|
|10 Bowler Street Paddington||Auction||3 🛏 1 🛀 1 🚗||488 sqm||Similar|
Based on the sales its unlikely the property would be worth in excess of $1M – or if it was you would be spending too much. These properties on the market support the price range of around $915,000 to $985,000.
Method #3: Researching property values using RealEstateView (worst method)
- Go to RealEstateView website, enter the address in the box.
- It gives you an estimated value, ignore this at the moment.
- Scroll down to “82 Charlotte Street Price Estimate” and click “Choose your comparable sales”
- Keep clicking replace comparable until you get 3 sales that match our criteria above (same suburb, same type of property etc).
|Address||Sold Price||Sold Date||House||Land Size||Comments|
|18 Bathurst Street Red Hill||$840,000||Jun 2018||3 🛏 1 🛀 1 🚗||397 sqm||Different suburb|
|4 Nathan Ave Ashgrove||$820,000||Feb 2018||3 🛏 1 🛀 1 🚗||506 sqm||Sale too old|
|23 Central Ave, Paddington||$855,000||Mar 2018||3 🛏 1 🛀 1 🚗||410 sqm||Sale too old|
As you can see, only 1 of these sales meet our criteria above and wouldn’t be considered comparable to the price estimate is completely wrong.
This is the same with using OnTheHouse to do property research, the price estimate has compared properties sold in neighbouring suburbs which aren’t directly comparable.
7. Confirm the Property’s value with a free RP Data Valuation (easiest method)
- Go to our Contact Page, input your details and in the message include the property address.
- We’ll complete a free RP Data electronic valuation for you (sample here), which will do all the work for you.
- The report includes location highlights, recent sales and properties on the market.
- Most importantly it includes an estimated value and estimated price range.
- Estimated Value: $975,727 which is in line with our research.
Based on all the research above, 82 Charlotte Street Paddington will sell between a price range of around $915,000 to $985,000.
8. Bonus 1: Research the history of your home
As a fun little bonus, I thought we’d include a way for you to research the history of your home. Brisbane’s suburbs are littered with character homes with lots and lots of history. Before you move in, you can learn a little bit more of what has happened in your home in the past by visiting the Queensland State Archives and trace the history of your home. The Brisbane City Council also has services to help you research the history of your house on this page.
9. Bonus 2: Research if your home has gone swimming
Much less fun, but still very important is to research the flood history of your home and to make sure it hasn’t gone underwater before. Real estate agents don’t need to notify you if the home was flooded in the past but it can drastically affect the homes resale value if a bank can (and can’t) give you a loan and more importantly can cost you double and triple the amount in insurance. Pop on over to the Flood Awareness Map on the Brisbane City Council Website and enter the properties address.
In the case of 82 Charlotte Street, it has a medium likelihood of being flooded – meaning a flood event is likely to occur during a single lifetime of around 70 years and has a 1% chance of a flood occurring in any year. Have a look at the sample flood report here, but as you can see the property is affected by Overland Flow Path.
Overland flow flooding usually occurs when the capacity of the underground piped drainage system is exceeded and/or when the overland flow path is blocked. It is recommended you consult a Registered Professional Engineer of Queensland to determine this property’s habitable floor level and flooding depth. Please refer to Council’s planning scheme for further information.
Flooding in Brisbane is fairly common in suburbs around the river, or in low lying areas like Paddington, Rosalie, Milton and West End. It doesn’t mean the end of the world for your future home but does mean you should do some more research before going ahead AND also factor in a discount to the purchase price given there is a likelihood of being flooded in the future.
10. Negotiate with the Real Estate Agent
Now you know what you want to pay for the property it’s time to put your offer into the real estate agent.
As we covered in this guide, a good real estate agent will work hard for the seller to get the best price – so remember that the agent isn’t working for you as the buyer. As harsh as it sounds most real estate agents won’t waste time on buyers who are unsure or willing to commit but having done your property research to this point will set you apart from other buyers in the market.
You need to put your best foot forward but asking the right questions to identify potential issues on the property or information that can help with your negotiations.
- The more the agent likes you, the more information they will give you.
- Find out as much as you can about the vendor, other competing buyers, and terms they are looking for.
- Asking questions allows you to position your offer strongly, without focusing on price.
- Try not to give away too much about your position, like the amount you have been pre-approved.
- Don’t be afraid to start low on your offer (see my template below)!
11. Make an offer on the property [step-by-step template]
If I was buying 82 Charlotte Street, I would have my finance pre-approved and be ready to put in a sharp offer.
- 1. I would submit an offer in writing of $865,000 with 7 days for finance and building and pest.
- 2. I would mention to the real estate agent that –
- The property was bought for $672k in 2015 (which they will reply that substantial renovations have been completed)
- The property is at risk of flooding and will cost you more in insurance and associated risks going forward.
- And list comparable sales of 22 Central Ave $855k, 22 Norwood $870k and 23 Brindle $835k (now we know these aren’t directly comparable but it will show the real estate agent that you’ve done your research)
- Now, wait for the agent to present your offer to the vendors and wait for their counteroffer.
- 3. They might come back at $970,000 – don’t meet them halfway. Increase your offer by $5k and see what they come back with.
- 4. Worst case the vendor might counter at $1.150M and then you know they have unrealistic expectations and you can move onto another property.
When I bought my home they were asking for offers over $750,000. I started with an offer of $690,000 and settled with the vendors at $705,000 – I actually beat another offer the vendors had at $710,000 because I had shorter finance and settlement terms.
So it’s important you are organised and have your finance ready to make your offer as competitive as possible.
12. Next steps and settling your new home
Our team here at Hunter Galloway is here to help you buy a home in Brisbane. Nathan & Joshua Vecchio are Senior Mortgage brokers who specialise in making your home journey easy.
Unlike other mortgage brokers who are just one person operators, we have an entire team of experts to help make your home loan journey as simple as possible.
If you want to get started, please get in touch here and we can book a time that suits you – either a phone call information session or a face to face meeting (which doesn’t cost anything for you).
Further reading for Home Buyers…
- For our comprehensive guide for First Home Buyers, check out this page here.
- Looking at getting a loan, check out our Complete First Home Buyers guide.
- And don’t forget the costs of buying which we covered in detail here.