Special Report. Australia s Cheapest Suburbs with the Greatest Potential for Capital Growth. For more reports head to

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Demand Supply Ratio Market Report Special Report Australia s Cheapest Suburbs with the Greatest Potential for Capital Growth Market: Australia Created by: hotspotcentral.com.au Contact: t: 1300 200 340 For more reports head to www.hotspotcentral.com.au

The Demand Supply Ratio Market Report Report Basis Prices move in response to the changes of demand and supply. For prices to rise, demand must exceed supply. The greater the degree by which demand exceeds supply, the greater the pressure on prices to rise. There can be a large number of factors influencing the tug-o -war between demand and supply. Some changes that are likely to increase demand include: New roads Extensions to railway lines New bridges New hospitals or extensions to existing ones Universities Private enterprises setting up in an area Government departments relocating New schools Changes in what people find appealing For more information about fundamental research techniques, visit www.dsrscore.com.au Some changes that might lead to increases in supply include: Releases of new land or house and land estates Developers replacing low density properties with higher density ones The degree to which these fundamental forces influence demand and supply can be measured using a set of key statistics. This report gathers and examines those key statistics. It measures the degree of balance between the forces of demand and supply across all suburbs in Australia. Note that this report only researches the statistics of supply and demand. The report does not detail circumstances concerning the drivers influencing these statistics. The research of those circumstances falls under the banner of fundamental research, not statistical research that is this report's focus.

Demand Supply Ratio Market Report Demand to Supply Ratio (DSR) There are eight recognised property statistics available from many different Internet sources. Individually, they are either an indication of the demand from tenants and owner-occupier buyers for property in the area or the available stock on market to meet this demand. When viewed together, as a whole, these eight statistics are highly predictive of future price movements in the area as a result of the gap in supply and demand or the Demand to Supply Ratio (DSR). The DSR is a score that indicates if demand is exceeding supply and by how much. It combines a number of key statistics to give an overview of the ratio between demand and supply. By using a consistent algorithm, an objective, unbiased and quantitative comparison of the capital growth potential between suburbs is possible. For more information, visit www.dsrscore.com.au. A single number called the DSR Score represents this gap in supply and demand. The DSR ranks a suburb between 0 and 48 based on how it measures against each of the eight statistics (so 8 statistics x a maximum score of 6 for each statistic = 48, which is the maximum overall score). The DSR score is useful for ranking suburbs for easier selection. 48 suggests a suburb with a high probability of imminent capital growth. 24 is a suburb or market in theoretical balance. 0 is a suburb with a high chance of price decline due to over supply relative to demand. Users of boomapp.com.au can obtain a DSR Score for units or houses in each suburb (and there are over 15,000 suburbs in Australia).

The Demand Supply Ratio Market Report The 8 Stats Behind the DSR Score DAYS ON MARKET >> This is the number of days a property has been listed for sale. The lower this figure, the more quickly property is snapped up by buyers, showing high demand. DISCOUNT >> This is the percentage difference between the original asking price requested by the seller and the eventual sale price agreed by the buyer. The lower this figure, the more demand there is since sellers don t need to be as open to negotiation in order to get their property sold. AUCTION CLEARANCE RATE >> The percentage of auctioned properties that actually sell. The higher this figure, the more demand there is from buyers since fewer properties are passed in. RENTAL YIELD >> The percentage of rental income to property value. The higher this figure, the more demand there is from renters to live in the location. VACANCY RATE >> This is the percentage of properties that are vacant. The lower this figure, the lower the supply of rentable accommodation or the higher the demand for it, or both. STOCK ON MARKET >> This is the number of properties for sale as a percentage of properties in the area. The lower this figure, the lower the supply of property or the more demand for it, or both. RENTERS VS. OWNER-OCCUPIERS >> This is the proportion of renters to owneroccupiers that live in a suburb. The lower this figure, the less supply of rentable accommodation there is. Owner-occupiers tend to take better care of their properties than tenants and are usually of a higher income demographic. ONLINE SEARCH INTEREST >> This is the ratio of people searching for property online to the number of properties for sale. The higher this figure, the more demand for property compared to supply for would-be buyers searching online.

Demand Supply Ratio Market Report Typical Value The typical value is the value of a typical house or unit in a suburb. The typical value is neither the average nor the median, but a calculation similar to medians and averages aimed at providing a more accurate and less volatile figure for the typical value of a specific market. Statistical Reliability (SR) A suburb s data is tested for depth, breadth and quality, and then scored. This statistical reliability is a good measure of how much you can rely on the data behind the score. The more sources of data, the more accurate the conclusions that can be drawn. Data that has historically shown itself of a higher quality should be given more credit or weight in calculations. Unrealistic figures should be either weeded out completely or at least given lower credibility. Statistics that have volatile changes from month to month should not be relied upon as much as those showing consistency. The Cheapest Suburbs report is based on a search for suburbs with the highest DSR Score (or capital growth potential) within certain price brackets, i.e. typical values of $400,000, $300,000 and $200,000.

Demand Supply Ratio Market Report Data January 2014 and subject to change. Visit boomapp.com.au to verify. sourced in Copyright and disclaimer notices for research reports In compiling this publication, hotspotcentral.com.au has relied upon information supplied by a number of external sources. The publication is supplied on the basis that, while hotspotcentral.com.au believes all the information in it is deemed reliable at the time of publication, it does not warrant its accuracy or completeness. In addition, to the full extent allowed by law, hotspotcentral.com.au is excluded from liability in contract, tort or otherwise, for any loss or damage sustained by subscribers, or by any other person or body corporate, arising from or in connection with the supply or use of the whole or any part of the information in this publication through any cause whatsoever. Any liability is limited to the amount paid to hotspotcentral.com.au for the supply of such information.

The Benefits of Buying Wholesale Once you ve chosen a good location, how do you further increase your chances of investment success? The answer is to buy wholesale and not retail. Watch this free Webinar to find out how hotspotcentral.com.au can help you buy property at cost price ( wholesale ). It s a unique way of buying property that is endorsed by one of the major banks in Australia; where investors partner with an experienced builder who then passes on the developer s profit, selling cost and stamp duty savings, delivering a large upfront saving. You can save $126,000 on a brand new $420 000 townhouse and own a new property every year on a single deposit. The Benefits of Buying Wholesale BUYING WHOLESALE CREATES AN INSTANT CAPITAL GAIN OF APPROX. 20% >> no relying on the market for growth. THIS CREATES A CASH BUFFER OF 20% FROM DAY 1 >> peace of mind if interest rates go up again, as they will. LVR (LOAN TO VALUE RATIO) DROPS SIGNIFICANTLY THAN IF PURCHASED RETAIL >> property goes from negative to positively geared from day one. INVESTORS CAN TAKE OUT THEIR ORIGINAL DEPOSIT ON SETTLEMENT >> and hold the property on 80% Loan to Value Ratio (LVR) or less in most cases. NO LMI >> instant equity reduces the LVR below Lender s Mortgage Insurance threshold TAKE OUT ORIGINAL DEPOSIT TO INVEST IN ANOTHER PROPERTY >> repeat after each project and add one new property each year to your portfolio without saving for the next deposit. SAVE MORTGAGE INTEREST COMPARED TO PAYING RETAIL PRICE >> interest saving of $8,800 plus per annum (see case study).

The Benefits of Buying Wholesale SECURITY OF TITLE THROUGHOUT >> development site is owned by you through each phase, including construction (you even choose the finishes if desired). OPTION TO OWN IN SMSF (SELF-MANAGED SUPER FUND) >> this is an industry first, effectively enabling development in SMSF with access to profit on completion. This is achieved through ownership of a special class of share that represents the townhouse itself. Finding a wholesale opportunity, and realising upfront savings, in a location now that s a DOUBLE WHAMMY!