Experts say you should buy at the bottom. Even amateurs have figured out that would be nice.

Problem is, I wasn’t alive 230 years ago. Prices have well and truly moved on since the bottom.

Perhaps that’s not the “bottom” they’re referring to. Maybe it’s more of a dip than the genuine bottom.

So, should I buy the 1st month I see any negative…[Read more]

I’ve heard plenty of experts say something like, “This area will always be in high demand”. But it is a misleading kind of “demand”.

A teenage boy might “demand” a Ferrari, but that demand has no impact on the price of Ferraris.

Historical data shows that exclusive, affluent, nice areas don’t outperform lower socio-economic areas over the…[Read more]

Some experts advise investors buy under median value, so there’ll be more properties “dragging up” your property’s value. But it doesn’t matter what the median for the suburb is, valuers will compare a property to: nearby properties; that have similar features; that sold recently.

It is impossible for the median to “drag” values up.

It’s b…[Read more]

A lot of “experts” suggest investors steer clear of public housing. But historical data suggests it’s no big deal…

The scatter plot shows a red dot for each suburb in 2012 that had a known percentage of government housing. Some had very little (left) while others had a lot (right).

In the 5 years that followed 2012, some suburbs had high…[Read more]

I’ve heard plenty of half-baked experts say that cheaper suburbs are riskier. They say that the more affluent areas closer to the CBD hold their value better. However, historical data during price corrections says the opposite.
Using Distance From CBD

For the 1996 correction:

Worst 100 falling markets had a median distance to CBD of 35 km…[Read more]

For a long time the belief has been that a vacancy rate of 3% is the sign of a market in balance. But for the last decade the national vacancy rate hasn’t risen above 3%…

2% seems to be a much more accurate round number to quote.

But what if the last 10 years was unusually tight? How do we know the entire country wasn’t out of balance for…[Read more]

I had a client who was planning to buy in a suburb where a new business park would create 500 jobs.

I calculated the population within a 40-minute commute. I then estimated the unemployment rate for that area.

There were literally thousands of potential job applicants who had no incentive to move one inch. And if they did move, they had a…[Read more]

Sooner or later, with the internet of things, we’re gonna have to let go of the old adage about “time in the market”. Timing the market will eventually rule.

About half the time spent owning an investment property is unprofitable. Here’s a typical example of 30 years of the Sydney median…

And while Sydney was flat, other cities were booming,…[Read more]

If you could only invest in one of 2 markets and you knew the growth would play out in the next 25 years as follows…

…which would you pick?

It seems obvious until you see this…

Sell out of A after 5 years and buy in B.

This will only work if the growth difference between A and B over those first 5 years exceeds the cost of selling…[Read more]

Data suggests that the longer the time-frame, the more likely 2 suburbs will end up with the same long-term growth rate even if they are in different cities. The following chart shows that the majority of 1-year capital growth has been between 0% and 5%.

This chart was derived from an examination of over 40 years of growth history for suburbs…[Read more]

Many investors and even professionals look at the past performance of a property or suburb to gauge it’s future performance. Problem is they interpret the data round the wrong way.

The following chart averages growth history from 3 decades of data across thousands of Australian suburbs.

The higher the performance over the last ten years, the…[Read more]