This month, a milestone has crept up on me; it’s my six-year anniversary as the Director of Metropole Property Strategists in Sydney.
I’ve been working in the field of property investing for far longer – more than 25 years, for anyone who’s counting!
My specific focus and area of expertise is identifying opportunities within Sydney’s property market and I must say, it’s been very interesting to watch this market develop over the years.
It’s hard to imagine now, with Sydney in the midst of an unprecedented value boom, but six years ago, buyers were almost frightened of Sydney property
The sought-after suburbs generally managed to attract buyers and experience capital growth, regardless of broader market conditions – I’m referring to high-end pockets such as the Eastern suburbs of Vaucluse, Double Bay and Bellevue Hill – but overall, Sydney real estate wasn’t faring too well.
It pays to remember that when I began working with Metropole in 2009, we were still experiencing the aftershocks of the GFC.
As a result, many of our clients were unsure about property: where property values were going, how finance markets were trending, and whether the world economy would even be able to recover from such dire financial circumstances.
Under that cloak of fear and uncertainty, many people were (quite understandably) cautious about property.
That’s partly why I wasn’t surprised when my advice occasionally went down like a lead balloon.
For instance, I recall being scoffed at six years ago when I was actively helping clients to buy properties in Sydney’s inner west.
It’s the city’s stereotypical blue collar, working-class areas and it’s home to a melting pot of ethnicities.
Back then, no one thought it would have the kind of growth it has experienced in the last half-dozen years.
I predicted it – and our clients who followed my lead have done very well out of investing in that well-serviced, central property pocket.
What were once less appealing, working class suburbs have gentrified, especially after popular suburbs like Newtown became so pricey that people began looking at nearby neighborhoods to access a similar lifestyle, while getting more bang for buck and better value.
It’s what’s known as the ripple effect and it is one of many reasons why Sydney’s property values have continued to grow.
Of course there were many other locations where we recommended for our clients to invest.
This was based on detailed demographic research and then our team having years of on the ground knowledge and extensive industry contacts
Now there’s nothing new about this…
I’ve been advising Australian property investors to buy in Sydney well before this most recent price boom, because in my view, investing in Australia’s biggest metropolis makes a lot more sense than relying on certain segments of the economy, like resources and mining, to keep your properties afloat.
The formula I like to use is relatively simple.
I call it the three W’s:
- When, which is about timing.
- What, which is about deciding whether to buy a house or apartment. And…
- Where, which comes back to that old adage of location, location, location.
Whilst all of these three pieces of the jigsaw puzzle are important parts of the whole process, for me, the most important one is ‘where’.
Location in any property purchase is paramount, because it’s something you can’t ever change.
I know that a lot of people put a lot of energy into the ‘when’, or timing, but to me that’s not as crucial as ‘where’.
Of course, no one wants to buy when the market’s over-heated, but at the end of the day if you’ve got yourself a plan – and at Metropole, we always advocate for a long-term, buy and hold strategy – then it becomes less about timing the market, and more about time in the market.
Ultimately, experience had taught me that investing in property can be fallible.
There is no such thing as a ‘foolproof’ investment or a guaranteed growth market.
That said, my specialty is in leveraging our team’s market expertise to put together a plan and a strategy to help our clients acquire top performing investment properties that outperform the general market.
With Sydney’s median property price having recently reached the magic $1 million mark, it’s an interesting time for me to reflect upon the last six years.
I recall having a conversation with Michael Yardney earlier this year, during which I tipped that the median would reach $1m within the next few years; I didn’t expect it to happen quite so soon, but that’s the thing about real estate.
When you least expect it, the markets can surprise you!
By the way…
If you’re wondering why Sydney’s property market has been booming, it is more than just low interest rates.
After a long lull in property price growth between 2003 and 2008 the market was playing catch up.
This has been accelerated more recently as Sydney’s economy has been rising steadily since its change of government in 2011, boosted by high levels of spending on infrastructure; and this in turn this is boosting business and consumer confidence.
Of course jobs creation and rising confidence also leads to population growth, which further fuels the property market.
And even though our markets are going to slow over the next year, there’s plenty more upside in Sydney’s property market.
My guiding principles as an investor are simple:
They are: never speculate, never over-extend yourself, have a coping strategy in place to deal with changing circumstances, and invest with a plan that helps you create wealth without making too many sacrifices along the way.
These principles have served myself our clients very well over the years, and hopefully they will continue to do so for many years to come.
Thank you for taking a walk down memory lane with me; where Sydney’s property market will be in a further six years will be an interesting ride.
I’m looking forward to watching it unfold and look forward to working with many of you in the future!
If you’d like to have a chat about getting into the property markets or if you’re already a property investor and would like to have a review of your existing portfolio’s performance please click here and organise an obligation free strategy session with me.
And it would be a particular pleasure catching up with you if you’re one of the hundreds and hundreds of clients the Sydney Metropole team has helped over the last 6 years.