Interview with Terry Ryder of Hotspotting

They say finding the perfect property relies on three things:

Location

Location

Location

While Nestoria can help you find what you're looking for once you know where you're looking, Terry Ryder can help you decide where to look.
Terry has been investing, researching and reporting residential real estate since 1981, during which time he's written four books on the subject, as well as his column in The Australian.  He also runs Hotspotting.com which is a site designed to help people choose the right area to buy in, and has shared a few of this thoughts with us about the ins and out of the Australian property market.

What would you say are the main problems facing people wanting to buy property in Australia at the moment?
The biggest problem is access to quality information. Real estate is the worst reported sector in Australia. Few of those who report on real estate have any credentials or knowledge of the subject. Most real estate coverage is regurgitation of propaganda from vested interests – and the outcome is misinformation.

Nestoria has found that each of the markets we become involved with is quite different. What are some of the unique features of the Australian property market and what are the main external factors that influence the market?
Australian real estate has resisted the collapse of values that occurred in the US, the UK and Europe. There are multiple reasons: the Australian economy has been the strongest among the developed nations during the GFC; it has strong population growth, boosted by overseas migrants, at a time of limited new supply (but not the “chronic housing shortage crisis” claimed by some); there is considerable wealth in the country underpinned by resources; and Australia has a highly-regulated banking system which avoided the reckless lending practices that contributed to the decline in the US market. Australia also has a strong culture of home ownership and high levels of government assistance to first-home buyers, at both federal and state levels.

What are the most common questions people ask you when you've got your Hotspotting hat on? And what are the most popular searches on your site?
The most common question is: “where’s the next hotspot?”. I started the website because I had found over almost three decades of researching and writing about real estate that the one thing property buyers wanted to know is which areas will out-perform in the future – and they wanted to know about them before they started to grow.
The other common question or issue for people is how to get started. Many would-be investors have little idea about how to get started with property investment. Often they don’t have a clear idea of their objectives or their risk profile.
The most popular report on the website is Queensland Hotspots. Queensland has an enduring reputation among investors as a growth region which delivers for investors.

What kind of advice can you offer people in response?
I keep telling people they have to do the research. Property investors tend to be a tad lazy but there’s no short-cut to doing the legwork if you want to invest wisely and safely. There’s a mountain of information out there, readily accessible via the Internet – people just have to be willing to take the time to access it.

Obviously for investors choosing a property that's going to increase it value is a huge focus, but what about for the rest of the market?
I think this is the biggest factor for buyers – accessing property in areas that will show superior growth. The other key issue is affordability. A common complaint from people is that they want to invest in real estate but can’t afford the prices in the “good” locations. But often people misunderstand where the “good” areas are. More often than not, it’s the cheaper areas that show the best long-term growth rates. That inspired me to create the Cheapies with Prospects report (regional locations with cheap houses and also good growth prospects) and the Ugly Ducklings report (the equivalent report but for capital city suburbs).

Are there any basic rules you'd set out for people to help them choose a property that's going to do more than retain its value?
Remove emotion from the equation. Understand the different criteria for buying investment property, as opposed to buying a home. Remember that “ugly real estate” in cheap areas often shows the best growth. Do the legwork research. Always get a valuation and building/pest inspection before committing. Don’t believe the bullshit you read in daily newspapers. Never take anything at face value: question everything and everyone. Don’t believe anyone who claims the inner-city suburbs show the best growth. Ignore the present: it’s the future that matters.

Do you have any advice for people on how to find that sort of property?
Look for locations with growth drivers. I have distilled the key growth drivers down into 10 “creator categories” and I look for areas that have three or four or more of those 10 factors in play – new transport infrastructure, urban renewal processes, major new job-creating developments, etc.

How do you think the internet or other technologies have changed the property market?
The internet has changed everything. Information is so much more accessible. It’s made it possible – and safe – to buy property without a personal inspection. It’s made the weekend newspaper advertising irrelevant. The new technologies mean no one needs a real estate agent anymore, if only sellers realised it.

Do you see technology changing the market further in the future (one agent that I spoke to talked a lot about using tablet computers to help his clients refine their choices before a viewing for example.)?
Yes, I think as technology develops we will see more use of concepts like virtual walk-throughs. It will allow buyers and sellers to deal more directly, without the need for expensive go-betweens (agents).

If you could invent some kind of site or technology or app. etc. for property, and there were no limitations on its powers, what would you think would be the ultimate property tool/ product?
Fast access to data showing re-sales of homes in a given area, so people could determine real value movements rather than relying on median prices, which are full of anomalies and absurdities. Real estate websites that provided full and accurate information on homes, rather than the agency waffle that dominates current sites, leaving out so much crucial information.

Can you share with us the most important thing you think you've learned about buying and selling property in Australia?
Regard the whole country as your market. Avoid emotion. Do the research. Don’t read newspapers. Use the Internet. Learn to negotiate. And never sell good real estate.

If there's anything else that you'd like to mention or cover please feel free to add your ten cents as well – after all you're the expert, and that's why we're interested in your opinion.
Good information is the most important thing. Learn where to find it.