31. Use available stats to your advantage
Rapid capital growth is all about imbalance in supply against demand. Prices change according to the law of supply and demand. When demand is high and supply is low, prices rise. This is a market out of balance. It will need either high price growth or sudden supply to restore balance.
As an investor you should be looking to capitalise on markets that are out of balance. Locate markets with growth potential by examining the supply and demand for property there. A number of indicators can help including rental vacancy, days on market, stock on market, discounting rate and rental yield. You can get this information at the back of Your Investment Property
magazine or at dsrscore.com.au.
Along with the demand to supply ratio (DSR) data, check for recent price growth. If there has been significant price growth in a market with a high DSR score, the price growth remaining
may not last for too long before the demand is subdued. To maximise your capital growth potential find markets that have a high DSR as well as lack-lustre recent growth over the last few years.