A New Way Forward in Property Investment

Owning a home is a dream many Australians share, yet for first-time buyers, it often feels just out of reach. Prices keep climbing, and traditional routes seem blocked. It's like trying to catch a train that speeds up every time you get close. But what if there's another way to navigate the property landscape?

At Picki, we've developed the R Score to empower you with insights once reserved for seasoned investors. It's time to take control of your financial future and make property ownership a reality.

Rethinking the Australian Dream

You're saving diligently, watching every dollar, yet the goalposts keep moving. Each time you think you're close to buying a home, the market shifts, and prices jump again. It's frustrating and disheartening, leaving you feeling like you're standing still while others move ahead.

Imagine changing the game. Instead of following the traditional path, what if you could take a smarter route that aligns with your goals?

“Live Where You Love, Invest Where It's Best”

Embracing Rentvesting:

High property prices in desirable areas make home ownership seem impossible. The idea of owning a home where you live feels like a distant dream. But who said you have to buy where you live?

Rentvesting offers a fresh perspective. You can rent in your preferred location, enjoying the lifestyle you love, while investing in high-growth areas elsewhere. This strategy allows you to build wealth through property investment without compromising your current living situation.

It's about thinking sideways, not backwards. By adopting a rentvesting approach, you're not giving up on the dream—you're taking a different path to get there.

Introducing Picki: Your Partner in Rentvesting

Navigating the property market can feel like exploring a dense forest without a map. Thousands of suburbs, each with their own potentials and pitfalls, can overwhelm even the most diligent investor. The sheer volume of information makes it hard to know where to start.

With Picki, we've created user-friendly tools, deep market insights, and educational resources tailored for first-time investors like you. We simplify the journey, turning complex data into actionable insights so you can make informed decisions with confidence.

The R Score: Your Compass in the Property Jungle

Imagine having a seasoned local expert guiding you to hidden gems in the property market. The R Score acts as that expert. It's a powerful metric that predicts a suburb's future growth potential. We began by analyzing and considering over 120 key data points - to find which were more important to us as property investors.

By distilling complex information into a simple score for every suburb in Australia, the R Score provides clear, actionable insights. It's like having a compass that always points you toward the best investment opportunities.

The Journey of Innovation: The Origins of the R Score

The story of Ripehouse, Picki, and the R Score begins with Jacob Field, a passionate property investor and technology innovator. Over two decades ago, Jacob started investing in property and quickly realized that countless theories about what drives property growth lacked hard evidence. Most investment decisions were based on gut feelings or incomplete data, leading to inconsistent results.

Driven by a desire to create a more scientific approach to property investment, Jacob set out to develop a system that could predict property growth with precision and accuracy. In 2011, he founded Ripehouse, combining deep knowledge of property investing with cutting-edge technology and data analytics. His goal was simple but ambitious: to create a data-driven model that could consistently identify the best suburbs for capital growth—before the broader market caught on.

The Evolution of the R Score

What began as a simple idea quickly evolved into one of Australia's most sophisticated property forecasting tools. Initially, Ripehouse focused on gathering as much data as possible—historical sales, population growth, rental yields, infrastructure projects, and economic conditions. Jacob and his team applied machine learning algorithms to these data points, refining the model to make accurate predictions about future suburb performance.

The turning point came when the R Score integrated proprietary data streams—such as off-market property listings and local government infrastructure spending data—that gave it a competitive edge. The score evolved into a multi-variable growth model, analyzing over 120 data points, to find the most relevant data metrics to predict future growth. With each iteration, the R Score became smarter, factoring in new data and learning from past predictions to improve its accuracy.

Today, the R Score isn't just an indicator of current market conditions—it's a forward-looking tool that helps investors and professionals alike identify suburbs poised for significant capital growth.

The R Score examines critical factors that influence property growth:

Market Trends: Analyzes long-term and short-term price movements to identify growth patterns.

Supply and Demand: Considers vacancy rates, stock on the market, and building approvals.

Economic Indicators: Assesses local employment rates and infrastructure investments.

Demographics: Examines renter-to-owner ratios and population growth.

The model continually evolves and is fine-tuned to ensure it remains at the forefront of property investment technology.

Understanding other Property “Scores” or “Algos”

In the property investment world, there's no shortage of scoring systems and predictive models claiming to identify the best suburbs for growth. But not all scores are created equal.

DSR Score: The Demand-to-Supply Ratio provides a snapshot of market balance but one could suggest it lacks the depth for predictive insights into future growth. It focuses heavily on immediate supply-demand pressures without considering long-term factors like population growth or infrastructure spending.

Boomscore: Offers forecasts based on short-term market trends but often misses the mark in longer-term predictions due to its narrow focus on short-term signals. Investors relying on Boomscore may have seen rapid price spikes followed by sudden slowdowns.

HTAG: Blends historical data and economic forecasts but lacks transparency into its inner workings. Its future predictions may often lag behind real market movements, and a lack of publicly available results could indicate inconsistent selections over time.

Private Predictive Models: Use proprietary scoring models unavailable to the public. While they leverage machine learning techniques similar to the R Score, they often lack transparency about previous results and don't provide as comprehensive a data set.

R Scores Track Record

At Ripehouse, we believe in transparency. We conducted an analysis of the R Score's performance over a 12-month period from January 2023 to January 2024. The results show that the R Score isn't just predictive—it's consistently accurate in identifying high-growth suburbs.

The Methodology

We selected suburbs with an R Score percentile above 90% in January 2023. These top-rated suburbs were compared based on their median sold prices in January 2023 and January 2024 to measure capital growth over the year. The query returned 746 suburbs with clear data for both starting and ending price points. Suburbs with populations under 10,000 or incomplete data were excluded to ensure accuracy.

The Results

Across these high-performing suburbs, the average capital growth was an impressive 32.48%. The median sold price increased from $557,924 to $739,139 over the 12-month period. It is pleasing to report that this growth outpaces both national averages and other widely used property scoring systems.

For example, DSR Score reported a 17.81% average capital growth for their top 100 recommended suburbs during the same time.

How We Compare to the Alternatives

While the R Score's 32.48% capital growth is a strong result, it's essential to note the difference in approach. Other alternatives like DSR Score often focus on short-term demand-supply imbalances, which may lead to more volatile results. By contrast, the R Score's holistic model began by evaluating over 120 data points across economic, demographic, and infrastructure variables, ensuring sustainable growth - to find the 17 most relevant (check them out below).

The R Score's selection criteria are designed to mitigate risks, focusing on enduring growth drivers rather than fleeting market trends.

Looking Ahead: A Trusted Metric for the Future

In property investment, it's crucial to have a model you can trust—one that captures short-term spikes and ensures long-term resilience. The R Score has proven to be a reliable, data-driven tool that consistently identifies high-growth suburbs before they hit the mainstream radar.

This isn't about one or two hand-picked success stories; it's consistent, broad-based capital growth achieved by applying a meticulous, data-backed approach. This approach is battle-tested, having been responsible for over $1.3billion in real world residential property purchases.

Since 2015, properties selected using the R Score have seen an average annual compounded growth of 17.7%. Even when other areas were declining, suburbs identified by the R Score continued to grow.

The Importance of Owning Our Data: The R Score Advantage

In property investment, data is everything—the right data, in the right hands, at the right time. One key factor that sets the R Score apart is our commitment to owning and managing our data. This allows us to access a larger dataset, provide regular updates, and deliver more accurate predictions than competitors relying on third-party providers.

Why Data Ownership Matters

Many property tools rely on third-party data sources, which can be outdated and shared among multiple users. This makes gaining a true market edge difficult.

By owning our data, we control the entire process—collection, cleaning, and analysis. At Ripehouse, we've built a property search engine that gathers data daily from over 10,000 websites, sourcing both on-market and off-market listings. This often allows us to spot new opportunities 1-2 days before they hit major listing platforms.

This ownership extends to critical metrics like days on market, rental yields, vacancy rates, population projections, and infrastructure investments.

A larger, exclusive dataset means we can fine-tune our R Score calculations with more precision, offering deeper insights than publicly available sources.

Larger Datasets = Better Predictions

We monitor over 200,000 properties daily, significantly more than major listing sites. This vast dataset gives us an edge in making predictive growth models like the R Score more accurate. By examining a wide range of historical and current data, we identify trends others miss. The more data points we collect, the better our AI and machine learning models recognize patterns leading to future growth.

Regular Updates Keep You Ahead

Owning our data allows us to update it regularly—often daily. This ensures the R Score reflects the latest market conditions, not outdated information. In property investment, timing is everything. With frequent updates, the R Score stays dynamic, adjusting to changes in real time and keeping investors informed of new opportunities or emerging risks.

Why Investors Should Care

For first-time investors, reliable, up-to-date data can make all the difference. Acting on real-time insights gives you an edge, allowing you to identify suburbs on the verge of growth and avoid areas cooling off. It's not just about more data; it's about better data.

Owning our data gives Ripehouse, and by extension Picki, a significant edge over competitors. It allows us to offer more accurate predictions, provide regular updates, and ensure investors are acting on the best possible information. In the property market, knowledge is power—and the R Score puts that power in your hands.

Trusted by Professionals: The R Score's Proven Track Record

The R Score isn't just a tool for individual investors—since 2015, it's widely adopted by buyer's agents and family offices across Australia as their go-to system for identifying high-growth suburbs.

70+ Buyer's Agents: Rely on the R Score for client investments.

$1.3 Billion: Properties purchased using the R Score system annually.

About 1% of All Residential Purchases in Australia: Reflecting widespread trust in our tool.

These numbers demonstrate trust. Professionals managing large portfolios consistently turn to the R Score because it offers accurate predictions and real-world results. For family offices handling generational wealth, the R Score provides confidence to invest in areas promising both capital growth and long-term stability.

The Data Points Behind the R Score:

Picki’s R Score is a powerful metric designed to predict a suburb’s future growth potential by analyzing key data points. These data points act as “Alpha factors” in our proprietary model, providing a comprehensive look into both current market conditions and future projections. Below, you’ll find a breakdown of each data point, its importance rating, and why it matters for property investors.

1. Suburb Sold Price Delta (recent price change or rate of change)

Importance: Very High

What it is: The change in the suburb’s rolling 1-year median sold price over a 3-month comparison period.

Why it’s important: A lower delta signals stability or growth, indicating strong market conditions.

Example: A suburb where prices have been steady, or have even slightly softened in the last three months, may be positioned for strong future growth without being overheated.

2. Suburb Rental Yield

Importance: Very High

What it is: The current rental yield in the suburb.

Why it’s important: Higher rental yields indicate strong demand from tenants, which can lead to price growth.

Example: A yield of 5.8% suggests a suburb where properties are generating significant cash flow for owners. Asset values flow towards higher incomes generated from those assets. Yield allows us to compare the income to the asset value.

3. Suburb Sold Price

Importance: High

What it is: The current 1-year rolling median sold price for the suburb.

Why it’s important: Lower median prices can signal affordability and growth potential, as buyers and investors enter the market.

Example: A median sold price of $550,000 might attract first-time buyers and investors looking for growth potential in affordable areas. An affordable entry point is attractive to a large buying pool.

4. LGA Proximity to Utilities

Importance: High

What it is: A proprietary metric assessing access to key amenities like shops, schools, and transport.

Why it’s important: The better serviced a suburb is by these utilities, the more attractive it becomes to buyers, driving price growth.

Example: A suburb with excellent access to schools and public transport often sees consistent demand and stable growth.

5. Suburb Days of Supply (DOS)

Importance: High

What it is: The time it would take to sell all properties on the market, assuming no new listings.

Why it’s important: Lower DOS indicates high demand relative to supply, signaling a competitive market with potential for price growth.

Example: A suburb with a DOS of 80 days suggests properties are selling fast, indicating strong demand.

6. Suburb Price Delta vs. State

Importance: Average

What it is: A comparison of the suburb’s sold price delta to the state average.

Why it’s important: This metric shows whether a suburb is outperforming or underperforming compared to the wider state market.

Example: If a suburb’s delta is higher than the state’s, it may be positioned to lead in price appreciation.

7. LGA Projected 3-Year Population Growth

Importance: High

What it is: A projection of population growth in the local government area (LGA) over the next three years.

Why it’s important: Population growth often drives demand for housing, pushing prices up.

Example: An LGA projected to grow by 3.5% over the next three years suggests strong future housing demand.

8. State Sold Price Delta

Importance: Average

What it is: The change in the state’s sold price over a given period.

Why it’s important: It provides a macroeconomic view of market trends, helping investors understand broader movements beyond the suburb level.

Example: A rising state sold price delta indicates overall positive market conditions, which can have a ripple effect on specific suburbs.

9. LGA Median Household Income Growth

Importance: High

What it is: The growth in median household income in the LGA.

Why it’s important: Higher income growth signals stronger economic conditions, which often lead to greater housing affordability and demand.

Example: An LGA with a median household income growth of 4% is likely to experience rising property values due to increased buying power.

10. Suburb Owner-Occupiers Percentage

Importance: Average

What it is: The percentage of properties in the suburb occupied by their owners.

Why it’s important: High owner-occupier percentages can indicate stability, community investment, and reduced rental turnover.

Example: A suburb where 70% of properties are owner-occupied tends to be more stable and attractive to long-term buyers.

11. Suburb Rent Price Delta

Importance: High

What it is: The change in asking rent prices over the past three months.

Why it’s important: Rising rent prices indicate increasing demand, which can signal future property price growth.

Example: A suburb where rents have risen 3% over the last three months suggests a tightening rental market.

12. Suburb Rental Yield Delta

Importance: Average

What it is: The change in rental yield over the past three months.

Why it’s important: Positive yield deltas indicate growing rental demand, making the suburb more attractive to investors.

Example: An increase in rental yields signals strong rental demand, providing a potential boost in property value.

13. Suburb Days on Market (DOM) Delta

Importance: Low

What it is: The change in the number of days properties spend on the market over the past three months.

Why it’s important: Shorter DOM indicates quicker sales and increased demand, while a rise in DOM may signal a slowing market.

Example: A suburb where DOM has decreased by 15% over the last quarter suggests properties are selling faster.

14. Suburb Vacancy Rate (Picki Rental Momentum Score)

Importance: Very High

What it is: The percentage of rental properties currently unoccupied.

Why it’s important: Lower vacancy rates indicate stronger rental demand, which can lead to future price growth.

Example: A vacancy rate of 1.5% suggests a very tight rental market, making it an attractive area for investors.

15. Suburb Public Housing Percentage

Importance: Low

What it is: The percentage of public housing in the suburb.

Why it’s important: Higher levels of public housing can impact property prices and community investment levels.

Example: A suburb with 5% public housing is likely to have a different growth trajectory compared to one with 30%.

16. LGA Project Spend Per Capita

Importance: High

What it is: A proprietary metric measuring the amount of project spending (e.g., infrastructure, transport, utilities) in the LGA.

Why it’s important: High project spending can improve the area’s appeal, driving future growth.

Example: Significant project investments in transport infrastructure could make an LGA more desirable, pushing property values up.

17. LGA Employment Diversity

Importance: Average

What it is: A measure of how diverse employment opportunities are in the LGA.

Why it’s important: A more diverse employment base reduces the risk of economic downturns, supporting stable property growth.

Example: An LGA with a wide range of industries is more resilient, leading to stable or rising property prices.

These data points work together in Picki’s proprietary R Score algorithm to give you a clear view of a suburb’s growth potential. By analyzing these factors and their relative importance, you can make smarter, data-backed decisions about where to invest next.

Nerd Alert -Testing a formal R&D R-Score Hypothesis

Objective and Hypothesis

Ripehouse Advisory aims to aid property investors in identifying high-performing capital growth locations.

The core hypothesis posits that real estate market dynamics—such as market activity, demographic shifts, and economic factors—are predictive of future capital and income growth in residential properties. The hypothesis explores various datasets, including days of supply, new project expenditure per capita, new housing supply, and rental price changes.

Methodology

1. Feature Engineering: This involves discovering, cleaning, and integrating new data sets that potentially affect property prices. The focus is on identifying ‘independent variables’ that could predict future capital growth.
2. Data Analysis: Using multivariate AI machine learning algorithms, the relationship between these variables and future price movements is analyzed. The data is sourced globally and tailored to the specific nuances of the Australian residential real estate market.
3. Experimentation: The approach includes forming a test array of suburbs, engaging with local property professionals for sanity checks, and refining the predictive model through iterative testing and retesting. Key steps include:
4. Splitting data into training and testing sets
5. Utilizing machine learning to discern the primary drivers of property price movements.
6. Assessing model performance through actual vs. predicted outcomes and adjusting based on findings.

Key Personnel

The project is supported by professionals with expertise in economics, computer science, data science, property investment, and engineering. This team leverages their diverse backgrounds to enhance the predictive accuracy and reliability of the R score.

Observations and Adjustments

Initial findings highlighted certain variables with no significant correlation to property performance, which were subsequently removed from the model. Continued refinement focuses on aligning the model more closely with real-world outcomes, ensuring that the predictions are both practical and applicable.

Evaluation and Results

The model’s effectiveness is quantified through comparisons between predicted and actual capital growth performance across various Australian suburbs. A strong positive Pearson correlation (0.69) indicates a robust predictive capability. Variable importance scores further detail the relative significance of each factor considered in the model.

Practical Applications for the R-Score in Picki.com.au

Targeted Local Government Areas (LGAs): The algorithm identifies top-performing LGAs for potential growth, with detailed insights into current market conditions and future prospects.

Precision in Property Selection: From a large pool of properties, the algorithm filters down to those that meet strict investment criteria, focusing on aspects like supply and demand dynamics, property specifications, and growth potential.

Performance and Back Testing: The video mentions the algorithm’s effectiveness based on past performance and its ability to predict growth, highlighting historical capital growth rates generated for clients.

Application at Various Levels: The R score is applied not only to LGAs but down to suburbs and individual streets, ensuring a highly granular and targeted approach to property investment.

How to Use Picki's R-Score Capital Growth Insights

On Picki, you can:

- View the Picki R-Score for every suburb in Australia.

- Filter and Sort Suburbs based on their Picki R-Score to find areas that match your investment goals.

- Find Properties with a High Score - to help zoom in on the highest property potential.

We provide you with the tools to dive deep into the data, so you can invest with confidence.

Not just the R Score - Exploring the Picki Platform

The Followers Feature: Invest Smarter with Crowd Insights

As a first-time buyer or investor, tapping into collective intelligence is a significant advantage.

One of the most powerful features Picki offers is the Followers tool. This feature allows you to follow specific suburbs and stay updated on important market movements.

Even more valuable, you can see which areas other investors are following—giving you a window into where experienced property buyers are focusing their attention.

It's like having a community of experts scouting out the best markets, giving you a front-row seat to the action.

Why Following Suburbs Matters

Track Demand - Spot Trends: A spike in followers for a suburb can indicate increasing interest and potential price growth. It's like watching the tide come in before anyone else realizes it.

Stay Informed: Receive alerts about market shifts, new listings, and other key changes in the area.

Leverage Experienced Investors: Many users following suburbs on Picki are seasoned property buyers. Seeing which areas they're tracking can guide you to potential hotspots.

Compare Markets: By following multiple suburbs, you can compare their performance and identify the best opportunities.

The Popular Suburbs Feature: Stay Ahead with Market-Wide Interest

In the fast-moving property market, knowing which suburbs are attracting attention is key to making smart investment choices.

Picki's Popular Suburbs feature shows you which areas are generating the most views from users across the platform. This insight goes beyond who's following or owning properties—it reveals which suburbs are sparking general interest and potentially where the market is heading.

High interest means potential buyers, investors, and curious users are actively keeping tabs on these areas.

Why Popular Suburbs Matter

Identify Emerging Hotspots: A suburb getting a lot of views might signal a rising market. Spotting this early can give you a valuable edge.

Track Market Sentiment: Views measure market sentiment. A suburb with many views suggests growing interest from a broad audience.

Compare Popularity: By comparing views across suburbs, you can gauge which areas are capturing the most interest, helping you understand broader market focus.

Get Early Insights: Popular views may indicate areas just beginning to gain traction. Acting on these early signs can help you secure a great deal before prices rise.

The Owners Feature: Gain Confidence with Real-Time Property Insights

Picki doesn't just help you track potential investment opportunities—it lets you manage and monitor properties you already own through our Owners feature.

By uploading your properties, you unlock access to exclusive, data-driven insights into their current value using our best-in-market Automated Valuation Model (AVM) tool.

You're not alone on your property journey—you're part of a network of investors working toward financial growth. You are able to see where other investors also currently own properties - helping you to gauge if investors are putting their money where their mouth is, their previous success - and if they are someone you should be listening to.Don’t worry - your privacy and private property address details are always hidden. Just basic high level information is shared.

Why Adding Your Properties Matters

Stay Up-to-Date with Property Values: Our AVM tool provides regular, accurate estimates of your property's current market value, helping you track performance.

Access Key Insights: Get instant updates on local market movements, offering a clearer picture of how your investment fares compared to similar properties.

*Optimize Your Portfolio: Real-time valuations and market insights allow you to make smarter decisions about refinancing, selling, or holding onto your property.

Seeing Where Others Own: Leverage Collective Experience

Beyond tracking your properties, the Owners feature lets you see where other Picki users own property. While specific properties remain private, this aggregate data provides valuable insights into markets where seasoned investors are putting their money.

Join the Conversation

We believe in empowering investors with knowledge. If you'd like to discuss this topic further, join us on our Reddit community (https://www.reddit.com/r/picki/). Connect with other investors, share insights, and stay informed about the latest trends in the property market.

Take Control of Your Investment Future

Don't let outdated metrics steer you wrong. With Picki's advanced tools and insights, you can see the full picture and make smarter investment decisions.

Visit https://www.picki.com.au/pricing and explore how our R-Score Metric can help you invest with confidence.

“Live Where You Love, Invest Where It's Best”