“Property Market Movers” is a series of articles that will focus on the factors that affect the property industry, the way in which these data impact different aspects of the industry, and interesting tidbits that help illuminate different ways of looking at the industry.
In this edition of “Property Market Movers,” we bring the Stoke-on-Trent property market into view. We focus specifically on ST12 (dark green) and ST4 (Orange), because their different pricing trends caught my eye.
The average asking prices in ST12 have been steadily decreasing, as shown by the blue line on the chart below. Meanwhile, the average asking prices in ST4 have remained relatively consistent.
The average yield, however, displays different trends. Since October 2015, the average price yield in ST4 has been steadily decreasing, while the average price yield in ST12 has been steadily increasing. (The drop between July 2015 and October 2015 in the ST12 yield may be due to the slow sales within that period for ST12 properties.)
When put together, the decreasing average price asked combined with the increasing average yield of ST12, make this area worth watching. These conditions possibly confer a unique opportunity. On the other hand, the same data implies that it may be best to hold off on investing in ST4.
Several factors that may be responsible for the discrepancy between ST12 and ST4 include location and demographics. ST 12 covers only Barlaston, roughly halfway between the city of Stoke-on-Trent and the small town of Stone. Meanwhile, ST4 covers Stoke, Fenton, Penkhull, and Trentham. The more central location of ST4 makes it a more attractive to tourists and more prone to a higher population density. In addition, the credit scores in ST12 are higher than those in ST4, suggesting that mortgage rates may be lower in ST12, contributing to the increasing yield there. These factors suggest that ST4 properties are likely more sensitive to macroeconomic conditions, thus leading to these discrepancies.
Although the general trends show more favourable conditions for ST12 than ST4 at the moment, a closer look reveals a hidden opportunity between the indicators. To further parse out the numbers, we turned to the scatter plot tool in the REalyse platform.
Remember that we are looking for an area with a low asking price and a high yield. Using the scatter plot, it looks like ST4 2 is worth further analysis. Conversely, we can see that the asking price for ST5 4 is rather high, though it is generating rather low yield. With this comparison, ST4 2 appears to be a possible opportunity.
We’ve done the legwork to bring together the numbers so that you can ask the more important questions.
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All images taken from the REalyse platform.
'REalyse (Treex Ltd) does not provide any form of investment advice or property advice or any other regulated function. Note that any information or opinions, presented or referred to in this article are for information purposes only. Any actions taken by a reader are done entirely at their own discretion, you are responsible for your own investment decisions and hold Treex Ltd harmless from the results of any such decisions'. Whilst every effort has been made to ensure the accuracy of the information herein some inaccuracies may remain.'