Market Fundamentals: Renter to Owner, Unit to House Ratio & IRSAD
In this article we explore 3 fundamental real estate market metrics and explain why many investors chose to benchmark suburbs based on these indicators before moving on to assessment of market supply and demand.
If you are a property investor, you should be on the lookout for areas with a lower proportion of renters to owners (R|O ratio). These areas will typically have higher capital growth potential and will be less risky investments.
Furthermore, when looking for potential investment, it is beneficial to find areas with a lower proportion of units to houses (U|H ratio).
Lastly, you should consider investing in a suburb with higher IRSAD scores. The ABS (Australian Bureau of Statistics) has already done the hard work for you by gathering employment, education and other socio-economic data and produced a weighted comparative index for these parameters.