Identify settlement risk
Settlement risk is the risk that the market value of a property purchased off-the-plan will deteriorate between the contract date and settlement date (after construction is completed). It is categorised into three forms.
- Inherent: Risk in off-the-plan purchases made in recent years that are expected to settle in the near term.
- Oversupply: A medium to longer term risk resulting from high levels of new unit supply arriving in a short time frame, unable to be absorbed by the local market.
- Uneven distribution: When new unit supply isn’t spread evenly and not all suburbs have the same market dynamics to absorb it.
Highlight areas of concern
Highlight areas of concern for oversupply, which can be used to influence credit policy and manage portfolio risk with suburb level data.
Identify areas of high growth
Identify areas of high growth to support resource allocation to take advantage of new business opportunities.
The volume of units expected to complete in the next 24 months.
Existing product composition, vacancy rates and rental concentration.
Changes in home values and rental rates.
Units statistics available for each suburb nationally.