Statistics can be interpreted and perceived in different ways, depending on how they are analysed. Take the UK property market, for example, which according to most experts will experience average growth of 5% during the next five years. This represents extremely positive news, but if you break down these figures further you may find a slightly different perspective.
To begin with, house prices in London will only rise of 1.5% in 2015. They are then set to fall by an estimated 3.6% before the end of 2016, before rebounding and enjoying sustained and consistent growth for a subsequent period of five years.
This breakdown reveals two interesting insight. The first is that property growth must always be considered in regional terms, as not all areas will prosper at the average rate. In addition to this, it is also fair to surmise that there may be peaks and troughs within any period of growth, meaning that such expansion may be a little more challenging and uncertain than initially imagined. So if you want to sell a house fast or are considering entering the buy-to-let market, your market research must be detailed and include both regional and in-depth economic data.
In terms of the future market, the recent report from the Centre for Economics and Business Research (CEBR) offers an upward revision from its January output, where a fall of 0.6% was actively forecast for 2015. Despite this, it is important to respect the fact that the market will experience genuine turbulence in the coming months, as this will enable home-owners and potential buyers to prepare and make sensible financial plans. The good news is that the main trigger of this turbulence is likely to be stamp duty changes in the UK, the impact of which has been felt far quicker than initially expected.
So while property market turbulence must be acknowledge and respected, it should not detract from the fact that the sector is likely to experienced pronounced and consistent growth over a five to six year period. This means that everyone from landlords, investors and vendors can afford a slightly more ravenous appetite for risk, driving higher levels of profit in the process. Ultimately, you must find the ideal balance between processing data and not being intimidated by encountering short-term turbulence or a temporary drop in property values.