Property Heatmaps© are created by comparing the real values of property in an area (based on the PricingReality™ valuation method) to the asking prices (Comparative Sales prices) in the area.
The Property Heatmaps are an accurate representation of the median ‘real value’ of property compared to the median selling prices in a city.
These are represented firstly by way of a graph, which shows the level of market selling prices compared to the real value of property.
An investor should ONLY purchase property beneath the 0% black axis line!
Ideal market purchase opportunities occur only in most cities about 20% of the time. Unfortunately 80% of investors (inadvertently) purchase at the incorrect time. (above real value).
The difference between purchasing at the correct and incorrect time is vast: These who purchased property at the CORRECT TIME have achieved average Capital Growth of in excess of 9% during each subsequent 10 year period, over the past 25 years.” These that purchased property at the INCORRECT TIME have achieved average Capital Growth of less than 5% during each subsequent 10 year period, over the past 25 years.
Based on the purchase of a $500,000 property, the difference in Capital Growth amounts to a whopping $369,231 over each subsequent 10 year period! (This represents 74% of the original purchase price.)
Clearly then, the message shown in the data should not be ignored.
SYDNEY BRISBANE MELBOURNE PERTH – REAL VALUE
In the above graph, prices above the 0% ‘Real Value’ axis represent property prices above the median real value in the city and the corollary prices beneath the 0% axis represent property prices beneath the median real value.
The above graph of the data is derived from the Heatmap charts which plot the difference between actual median selling prices in a city and the actual median real value of these same properties, on a monthly basis.