How it works
Suburbgrowth.com.au’s capital growth predictions are created on the economic principals of Demand and Supply.
Where there is evidence of high demand and short supply, the resulting price movement is up. Vice versa, where there is evidence of high supply and low demand, the resulting price movement is down.
Since 2010 we have been collecting hundreds of millions of property data records and every month we continue to collect and store millions of data records to run our property forecast analysis.
Our forecasts use powerful computing of this ‘big data’ using market data variables and statistical techniques to create and refine our algorithms to produce our future capital growth predictions.
Our Modelling Approach:
The modelling approach adopted to create the capital growth predictions uses the following 7 steps.
- Explore multiple variables in search of those that show a clear ‘demand’ or ‘supply’ relationship with residential property at the suburb or more focused level
- Once our key variables are identified, we access data from multiple sources collecting as much raw data as possible
- Clean, aggregate and transform data within our data model to ensure accuracy, stability and reliability of the future data outputs
- Perform a monthly data run to produce suburb level predictions for both house and unit property types
- Ongoing back-testing of predictions against actual performance to test reliability
- Continued testing of new variables to improve the data model and future capital growth predictions
- Introduce any new variable, if proven viable, to the overall data model to increase forecasting accuracy
There are currently 17 market variables being used to derive our current forecasts.
Our Forecasting Methodology:
Whilst being closely protected intellectual property, a simple way to explain it is that each variable within the overall model is given special weighting, a bit like the well-guarded secret formula of Coca-Cola or the secret herbs and spices recipe of KFC.
Our data model performs a vast series of calculations using our proprietary algorithms to derive a prediction each month for locations across Australia for both house and unit markets. These forecasts are broken down into one-year, two-year and three-year capital growth predictions.
In addition to the capital growth predictions, we also supply other useful information about the suburb in an interactive report platform for the user.