One of the best indicators of future property price growth – or decline – in a specific location is the pattern with transaction levels in the area.

Every three months we analyse property sales activity in every significant suburb and town throughout Australia for the quarterly editions of The Price Predictor index and this analysis reveals the locations where prices are likely to fall or stagnate or decline.

Sales volumes are always a good indication of future property price movements.

When sales numbers rise steadily over consecutive quarters, prices inevitably will rise. Fortunately, there is a time lag between a change in market activity and major impact on prices, and this allows investors who spot the trend to buy ahead of the price growth.

Conversely, if there is a steady quarter by quarter decline in sales activity in a location, price growth is likely to falter and in some cases prices may decrease.

This analysis forms the basis on The Price Predictor Index report which I regard as our most important report.