What is Suburb Tracker?
Suburb Tracker is a tool for investors to monitor the investment metrics of a particular suburb. Over 10,000 suburbs across Australia are indexed and categorised into a Suburb Rating and a Suburb Recommendation. The indicators tell the investor the risk profile of the suburb, and the recommended action to take on that suburb in the current market cycle.
Suburb Ratings are indicative of the suburb's past performance over the long term, in most cases over 25 years. They have 3 different criteria, each forming a letter from A to D, with A being the highest classification.
The Suburb Rating Criteria are as follows:
- Letter 1: Long Term Performance - Calculated on the long term average median price growth of the house or unit market in the suburb.
- Letter 2: Volatility - Calculated on the event of price corrections and/or stagnations of the house or unit median price in the suburb over the long term.
- Letter 3: Liquidity - Calculated on long term average days on market of the house or unit market in the suburb.
The Suburb Recommendations are as follows:
- BUY VALUE - This market offers good investment value with macro fundamentals present to support growth in the short to medium term. Buy at the true market bottom to take advantage of the full growth upswing, with cyclical risk at its lowest.
- BUY MOMENTUM - On a macro level the market is at or close to halfway through this growth cycle and demand for quality property is strong and rising. Macro fundamentals are present to support growth in the short term.
- HOLD - Hold and monitor property in this market. Potential for growth in the short term is predicted but limited. Investing at this stage in the cycle holds extreme risk, due to low yields and aggressive prices.
- SELL - The market has peaked and prices are likely to soften or stagnate in the short to medium term. Consider selling in this market after consultation with your financial planner or property investment adviser.
- DOWNTURN - The market is moving through a correction stage. We see minimal growth in the short to medium term.