The definition of a market trend in property is a tendency of a property market to behave in a specific manner or to move in a certain direction over a period of time, which is generally based on a sound historical data, various economic and non-economic factors.

For the time being, let us review the three primary objectives behind the significance of identifying the right market trend.

1. Locate well performing property

For first home buyers who are keen to get their foot on the property ladder or investors who are determined to move up the property ladder, they definitely need to buy or invest prudently and cannot afford to make absurd mistakes. A research on market trend can help to establish a good suburb where most well performing properties with a fine balance between capital growth and yield are commonly located.

2. Assess performance of property investment

Property investors are required periodically to assess the performance of their property investment in order to better manage their property portfolio. A market trend analysis is an exceptionally resourceful tool to gather information on the performance of their investment properties. Further appropriate actions are usually undertaken depending on whether the property is underperforming, performing in line with the expectation or overperforming when compared to the general state of local market activity and direction.

3. Distinguish property hot spots

Classifying one area as the next property hot spot is probably the most effective way to trap many potential yet inexperienced buyers on believing that they will make a substantial return on their investments. However the drawback is that a large number of these so-called property hot spots are based solely on speculation. A study on market trend will distinguish which hot spots are genuine and which hot spots are conjectural.

[ Blogger note: It is extremely important to use reliable and accurate data that is easily verifiable from a reputable source when identifying market trend. ]

We will continue our discussion and analysis on this subject in the next article.

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