Unlike some industries which rely on a specific method to get results, when it comes to real estate there’s not one, but several, methodologies which can be used to accurately measure the market. One approach is vertical analysis vs horizontal analysis.

Put simply, vertical vs horizontal analysis comes down to how you view the market. Do you look at it from a vertical or horizontal position? Do you take into account past and future records and statistics (vertical analysis) or simply consider the current situation (horizontal analysis)?

Often the answer to these questions will depend on what standpoint you’re coming from. Let’s take vertical analysis, for example, property investors tend to observe the overall real estate market from a vertical position (history and future) as this encompasses their entire investment portfolio; commentators, on the other hand, tend to adopt a horizontal position, which means they are only concerned at what’s immediately before them (present environment).

Whatever viewpoint you take (vertical or horizontal) there will always be several differentiating factors that come into consideration. Currently, on a national scale, such factors include the global financial crisis (GFC) and annual wage growth, which is at a historical low. In fact, when it comes to better understanding the current real estate market, keeping track of annual wage growth statistics can provide great insight, as this is an obvious trigger for increased action in the housing markets.

Nationally, we must also take into consideration the increasing number of household borrowers who are opting to pay off their loans via the interest-only option. Sure, this might prove to be an affordable option for borrowers now but it’s not a good sign of things to come once the Reserve Bank cash rate starts to rise. While this won’t be immediately, it is on the cards and therefore is certainly something to keep an eye out for. According to experts, it is predicted that the current cash rate will fall further next year (2015) but will then start to increase in late 2015 to early 2016.

With terms such as GFC being thrown around, it’s clear that the Australian economy has been through a rough trot in recent times. However, don’t be fooled, it’s not all doom and gloom, especially when it comes to local real estate right here in Brisbane. In Brisbane’s CBD, factors that differentiate vertical and horizontal analysis are much more positive.

Take interstate buyers for example… the Brisbane real estate market is currently buzzing with energy at the moment thanks to the increasing number of interstate buyers whom are seeking to take advantage of Queensland’s rewarding market conditions. A major plus for investors and home buyers alike! Not to mention Brisbane’s major urban development plans for the inner-city. This is another big tick for our local property market.

Effectively, due to these local positive indicators, Brisbane is expecting an increase in property values in 2015, which is nothing but great news for our local property market!

So remains the question, when it comes to understanding the real estate market (locally or nationally) are you a vertical or horizontal analysis type? Do you look for past and future market trends (GFF and annual wage growth statistics) before purchasing real estate or are you only interested in what is happening right now (current trends)?

Whatever ‘type’ you are – vertical or horizontal – the professional team at HS Brisbane Property understand the real estate market like the back of their hands and can certainly help you to make the most of local opportunities. Furthermore, if you want to take advantage of the current buzz surrounding Brisbane’s inner-city real estate opportunities then do yourself a favour and contact Hannah on 0419 782 133 for more information.