Market analysis is a prerequisite for matching of property to be developed with market needs. It comprises establishing the market place for the project and analysing the supply and demand scope of competition and opportunity to establish the potential and desired characteristics for the proposed project.
When properly conducted, it can provide the developer with information on the demand strength and trend, and determine the validity of the requirements for a particular building in a particular location at a particular time, how and in the future. In practice, three levels are involved in market analysis. These are (a) consideration of the present and future national and regional property market picture, (b) consideration of the site (or each site) and its immediate locality as to economic potential, and (c) recommendations based on the conclusions of market analysis.