Excuse the biblical reference, probably a tad dramatic, however things are changing in real estate – what was once a dark hole of agent opinions and rubbery data is now illuminated by big data and analysis tools – worthy of a little drama I think!
I remember when I started my career, I worked in equities and I lamented my inability to find meaningful real estate data. Real estate was starkly different to the stock market, in the sense that shares change hands frequently, without friction and have a tonne of professionals devoted to their evaluation as investments. Tools like Bloomberg or Capital IQ are great at collecting securities estimates, but the same can’t be done for a single Australian property, there’s just not enough scale to warrant the droves of analysts pricing growth, like they would a mega-cap stock like BHP. Like a company, each property is different to the one next door, what’s going on inside and out will push and pull the trajectory of its price, just as the suburb profile or macro conditions do too. Owning a share of a company will provide exposure to a well documented and analysed investment, however most properties are owned individually, hence the task of pricing was inherently more challenging.
Fast forward to today and any listing on Realestate.com.au will show the average punter the last 5 sales prices, median configuration price, rental yields for the area, loan repayments calculators and LMI estimates – and that’s just what you get for free! Buy a professional package to CoreLogic and you’ll get all sorts of goodies; growth rates, median sale prices, yields, and cap rates at both the macro and micro levels. You’ll even get access to predictive pricing, a measure I found out CoreLogic take very seriously.
In 2011 US analytics giant CoreLogic took a majority stake in RP Data and supercharged the modest property data agency. In 2016, I was lucky enough to get a tour of the new entity from their Chief Data Scientist at the time, to say I was impressed, would be an understatement!
Having been a student of econometrics I’d often wonder, how much information went into calculating the predictive metrics CoreLogic were putting out? The answer, a lot! The multifactor regression models these guys are running go right down to pricing individual bricks used in the property’s construction – talk about detail!
Another saving grace, especially for the tech team here at Managed, has been the country’s second largest property portal, Domain launching a set of publicly available Developer APIs to boost innovation amongst the Proptech community. The API offers access to Domain’s deep dataset including; current listing information, agency details, price guide information, historical sale information, auction clearance rates, suburb performance and more.
Knowledge is critical to any investments success, including real estate – the more you ingest the better. Don’t just take your buying or selling agent, don’t just take their word as gospel, information is now at our fingertip and there’s a broad set of tools out there that can assist in evaluating your existing or prospective investment.
Our business Managed have a bunch, but if you’d like to discuss others, feel free to get in touch or discuss below in the comments.