Article By Fiona Morris
Thursday, October 17, 2019

Growth drivers for investment success

Property investing is all about the research and thinking with your head while keeping your emotions out of the equation. Staying cool and making well-researched choices is the way to success.

Property investment research, like the stock market, can be broken into two types; data analytics and fundamental research. When smart property investors are looking for data and analytics, they turn to TUDI. But it’s important to understand how to do fundamental research.

When it comes to researching fundamentals, it’s time to get your hands dirty and deep-dive into what will cause growth in a town or suburb. This fundamental research will uncover various Growth Drivers, that will determine whether investing is a sound decision or not.

What is a Growth Driver?

A growth driver is a socioeconomic factor that has a direct or indirect effect on increasing the amount of buyer activity in a market which drives up property prices. These can include infrastructure projects, new schools or universities, new retiree towns, the opening of new factories, government spending and job growth.

New infrastructure development is a growth driver to watch

What is not a Growth Driver?

Features and benefits of an individual property are not growth drivers. They are emotionally charged personal preference, based on opinion. Beach views or a quiet street certainly add to the appeal, but they do not drive real price growth.

In fact, the potential of these features is usually already reflected in the current property price.

Beach views are lovely, but not a growth driver for a suburb

Infrastructure projects as a Growth Driver

Infrastructure projects, such as roads, hospitals, schools and even shops are important growth drivers in the property market. These projects can create and support urban renewal and redevelopment which attracts younger generations, alongside additional employment opportunities. This can put pressure on housing demand which pushes property prices higher and has a positive impact on rental yield. This is why TUDI tracks Buyer Demand so closely.

Growth Driver research for investment success

A recent TUDI Hot Spot™ Suburb, Chinchilla in southwest QLD was highlighted in the last TUDI Market Update.

With the data and analytics showing a strong buy signal for Chinchilla,  the next step is to research the fundamentals that will be impacting the property market in and around the town. This will help in making an informed decision of whether this is the right place for you to invest.

Chinchilla has a notable growth driver of new infrastructure. There are numerous projects that are starting in the 2019-2020 financial year, from both private and public companies, with billions of dollars being spent over the coming years. Research also shows the types of projects being undertaken including the build of a new power station and local highways. This will increase job growth, population and affluence within the area – all leading to an increase in property prices.

Keep a cool head, but Chinchilla is heating up!

Is it really as easy as 1, 2, 3?

  1. TUDI gives investors a head start in narrowing down the areas that suit your personal investment requirements. The 5 indicators of a TUDI Hot-Spot™  can be customised to suit your particular investment preferences and then the algorithm, based on your selection, analyses masses of data, that would not otherwise be possible by an individual to return suburb hotspots that match your preferences.
  2. Once you’ve identified a suburb with the TUDI platform that suits your property-investment requirements, you should then look at what is happening in the real world of that town or suburb. Those socioeconomic factors that will drive price growth.
  3. If the numbers and the fundamentals stack up then you are looking at an ideal investment opportunity.

Having an in-depth understanding of the data, analytics and growth drivers that are impacting particular suburbs means property investors can use their head instead of their emotions. This gives them the opportunity to make informed decisions about their next property investment.