7 Things You MUST Look Before Starting A Property Development Project
In property development, using data is like having a map that guides you in the right direction.
Data helps you see what’s really happening in the market, showing you what people want, where to build, and how much things will cost.
It also helps you calculate your profits and see if it’ll be a good investment decision.
When people ignore data, it’s like trying to build something in the dark.
You’re more likely to make mistakes such as overestimating demand, underestimating costs, or missing out on lucrative opportunities altogether.
Imagine launching a development project based solely on gut feeling or outdated information.
In this blog, we’ll explore all the data points you need to look at before starting a property development project.
We’ll also look at all the tools you can use to collect the required data, so you can make informed decisions.
Let’s get started.
7 Factors To Look For Before Committing To A Property Development Project
These data points help you understand the overall market and its growth points.
If the market is thriving, there’s a high chance that the value of your properties will also climb fast.
They’ll be easy to sell and you’ll be pocketing the big check in no time once it’s complete.
Before starting a property development project in an area, there are several important data points you need to check to make sure it’s a good idea.
Let’s dive into each one:
- Population Growth: This data tells you how the number of people living in the area is changing. If the population is growing, it’s a good sign because more people might need homes, shops, or offices. On the other hand, if the population is shrinking, it might be harder to sell or rent your property.
Tool: Australian Bureau of Statistics (ABS):
ABS gives you all the important numbers about people living in Australia, such as how many people live in a certain area and how fast the population is growing. By knowing if an area is growing or shrinking, you can decide if it’s worth investing in. More people usually mean more demand for homes, which can lead to higher profits.
- Demographics: This is about understanding who lives in the area. You want to know things like the average age, income level, family size, and even education levels. For example, if there are a lot of young families, building homes with multiple bedrooms might be smart. But if the area has more single professionals, smaller apartments might be better.
Tool: ABS Census Data
The census data gives you detailed information about who lives in an area, such as their age, income, and family size. By knowing the demographics, you can tailor your development to meet the needs of the people who are most likely to buy or rent your properties, increasing your chances of making a profit.
- Employment Rates and Job Growth: Look at how many people in the area have jobs and if new jobs are being created. If there are lots of jobs or new businesses moving in, it’s a good sign because people who work nearby need places to live. This data helps you understand if people can afford to buy or rent your property.
Tool: Labour Market Information Portal
This portal provides up-to-date information on job markets, showing where jobs are growing. Areas with strong job growth attract more people who need places to live. By developing in these areas, you can meet the housing demand and potentially make more money.
- Property Prices and Rent Trends: Research how property prices and rents have changed over time. If prices and rents are steadily increasing, it could mean the area is becoming more popular, which might make your development more valuable. But if prices are dropping, it could be a sign of trouble, like people moving away or the area losing its appeal.
Tool: CoreLogic
CoreLogic is a top resource for property market data, offering insights into price trends, rent values, and more. By understanding property prices and rent trends, you can choose areas where property values are rising. This means you can sell or rent your properties for more, boosting your profits.
Domain and RealEstate.com.au
These platforms provide real-time data on property prices and rents. Keeping an eye on current prices helps you stay competitive and ensures you price your development correctly, maximizing your profits.
- Infrastructure Development: Check if there are plans to build new roads, public transport, schools, or shopping centers. Good infrastructure makes an area more attractive to live in, which can increase the value of your property. If the area is getting better connected or has new facilities coming, it might be a great spot to develop.
Tools: Infrastructure Australia and Local Council Websites
These tools provide information on major infrastructure projects, like new roads or public transport. Local councils often have detailed information on upcoming projects, regulations, and local plans.
New infrastructure can make an area more attractive, leading to higher property values. Investing in areas with planned infrastructure can increase your profits as the area develops. By understanding local plans and regulations, you can avoid legal issues and delays. Knowing about upcoming projects can also help you choose areas that will grow in value.
- Environmental Factors: This includes things like flood zones, pollution levels, and natural disaster risks. Building in a flood zone, for example, could lead to higher insurance costs and make your property less appealing. Make sure the area is safe and suitable for development.
Tools: Geoscience Australia
Geoscience Australia provides maps and data on natural hazards, like flood zones. Avoiding risky areas reduces the chance of costly damages to your property. Building in safe areas makes your properties more attractive to buyers or renters, protecting your profits.
- Future Development Plans: Look into what other developments are planned for the area. If big projects like shopping malls or business parks are coming, it could drive up demand for housing. But if too many similar developments are planned, it could increase competition, making it harder for your project to stand out.
Tools: Local Council Planning Portals and Planning Alerts
Councils often have development applications and planning proposals publicly available on their websites. The Planning Alerts tool sends notifications about new development applications in specific areas.
Conclusion
In property development, using data is the key to making smart decisions that can lead to success.
By looking at population growth, demographics, job growth, property prices, supply and demand, infrastructure, crime rates, environmental factors, and future developments, you get a clear picture of whether an area is a good place to invest.
Doing this research helps you avoid costly mistakes and increases your chances of making a profit.
When you understand what’s really going on in the market, you can build properties that people want, in places where they want to live, which is the best way to ensure your project is successful.
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