Why supply and demand are critical to property development

‘Building where people need the most is now identifiable’

 

There’s a fundamental step that’s absent from the pre-purchase stage of multi-dwelling property development.  In fact, given property’s tangible and immovable it’s the most important.

If supply and demand are responsible for property prices, then supply and demand should be the epicentre of the pre-purchase.  There’s no ‘undo’ button afterwards.

Measuring supply and demand comes from buyer and seller behaviour.  Therefore, it provides key insights regarding what people want and don’t want, when they want it, how they want it, and most importantly where they want it.

This information informs property developers and the construction industry where geographic areas are oversupplied, undersupplied, and where there’s a need for more.

Having access to this information makes everyone better off.  Building in areas of need, helps communities grow, while enhancing buyers capital growth potential. It helps property developers increase revenue and mitigate risk, all by using buyer and seller behaviour.

Furthermore, it’s important to understand latent supply e.g. under construction or yet to be built multi-dwelling buildings.  Understanding latent supply is paramount to the supply & demand diligence phase.

We now have access to supply and demand at address level, micro level, and suburb level.

  • Address level – At address level we can see every individual apartment and unit complex housing 10 or more dwellings. We can see scarcity levels, occupancy levels, and for sales.  We can then determine a timeframe for how long it takes for consumers to fully absorb the apartments for sale.
  • Micro level – At a micro level we can set small geographic areas and witness the supply & demand within the micro area. A micro area could be a radius of 50 metres, 100 metres, 500 metres, 1km, 2km or all of the above.  It could be an Activity Centre, train station, busy street etc.
  • Suburb level – At suburb level we can amalgamate the supply and demand data within the suburb for a holistic view. We can then compare suburb against suburb and drill down to a micro or address level.

Lastly, we can view negative environmental factors such as overhead powerlines to ensure those areas are immediately discredited.

Supply and demand plotted on a map at address level, combined with upcoming supply chains, is as close to a crystal ball as possible.

To learn more, click here.

 

Supplied-Map

Bigger bubbles represent bigger oversupply risk

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