By Michael Yardney January 30, 2025

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Want to know what will make me a better property investor in this “interesting” market?

Property Investment
Want to know what will make me a better property investor in this “interesting” market?

Key takeaways

Property markets move in cycles, and while it's reasonable to expect eventual upturns and downturns, predicting the exact timing of these cycles is nearly impossible. Historically, Australia has experienced around nine significant property cycles in the last 50 years, offering insights into future trends but not precise timing.

Expectations are broad insights drawn from history and current trends, such as anticipating property growth or downturns over time. Forecasts are precise predictions about when, where, and how these changes will occur. These are far less reliable and often lead to poor decision-making.

Acting on forecasts often results in poor investment decisions due to the uncertainty and unforeseen factors influencing market turning points. Many "hot spot" recommendations or dire crash warnings fail to deliver consistent results.

Interest rate hikes and rising living costs have created affordability pressures, but the shortage of properties and low unemployment offer counterbalancing stability. Long-term prosperity is supported by Australia’s growing wealth and cultural aspiration for homeownership.

Prepare for property market ups and downs without acting on forecasts. Focus on long-term investment strategies rooted in sound fundamentals rather than speculative timing.

I expect that the current slower phase of the property cycle to come to an end at which time I expect the value of many properties to increase significantly in value again.

I have no idea when this will happen.

Now just to make things clear...those aren't contradictory statements.

The first is an expectation, the other is the rejection of a forecast.

And if you want to be a successful property investor, you’re going to have to understand this important difference.

It's one thing to look at history and see that the property market cycles with some frequency and then form a baseline of what to expect in the future with this knowledge.

However, it’s quite another thing to predict the precise timing of the turning points in the property cycle.

And it's another thing entirely to devise a strategy that reacts to those predictions.

Property analysis isn't black and white...

Yet some people believe they can predict markets and they tell you about (or sell you into) the next property “hot spot” or currently there are those telling you not to invest at all because we're about to go have a real estate crash.

There's an important grey area, which is expecting certain events to occur without having an opinion on exactly when, where, why, or how.

I’ve been investing for over 50 years now and in that time there have been 9 significant property cycles.

I can use this as a very rough rule of thumb for the future, based on the idea that despite the challenging times the Australian economy is going through at present we've got even more positive fundamentals to drive our property markets than past generations had.

While there are many sound fundamentals underpinning the long-term prosperity of our property markets, two of the big ones that give me comfort are the significant population growth that we will experience over the next decade and the increasing wealth of our nation.

Think about it...

Sure the RBA raised interest rates to slow down inflation and this plus the rising cost of living have caused a property affordability problem for many.

But currently, we have a shortage of properties that have created a rental crisis, and unemployment levels are at near record lows.

We are encouraging selective immigration of people who bring money into our country and who can do skilled jobs and pay taxes.

And despite the headwinds we'll experience, there are many other strong fundamentals underpinning our housing markets

These include:

There is a shortage of good properties for sale and virtually no properties to rent.
As I mentioned, strong international immigration which increases demand for housing.
There is little new construction in the pipeline – we’re not building enough dwellings and increasing construction costs at a time of a shortage of labour means the end value of new projects will need to be up to 30% higher to make projects viable for developers.
Unemployment is at almost historically low levels meaning anyone who wants a job can get a job (so they'll be able to pay the mortgage repayments.)
Wages are starting to grow.

Economy

Many home owners have significant equity in their homes.
We have a strong banking system that has been strict in its lending criteria, meaning there are very few non-performing loans.

And over time our increased prosperity and the Aussie dream of owning our own home will ensure that the value of well-located properties will keep increasing.

These factors reassure me that my long-term plans are sound and based on what has always worked – rather than trying to pick what is right for the current market.

Now I have an expectation:

If I plan on investing for the next 30 years, I should count on things getting ugly at least another six times.

Maybe it'll be a little more, maybe less.

But I have an expectation, a rough idea of how the game works.

Yet it's not a forecast.

A forecast is, "The property market will turn in the second half of 2025” or “Australia will have a recession in the first half of 2027."

That's precision, with a disregard for both the history of people making such forecasts and the events that cause these turning points which, a lot of the time, is something that can't be foreseen.

Here’s the big difference

The important difference between an expectation and a forecast is the impact it has on my behaviour.

If I expect property booms and property downturns I won't be surprised when they come.

I know they're a normal part of the game.

But since I'm not sure when they will come, I won't attempt to do much about it.

Attempting to do something about it – trading, timing, buying and selling – is the root of most investors’ mistakes.

A forecast suggests that you know when something will happen, which is permission to act on it.

There's little reason for a forecast other than acting on it.

But unfortunately, this creates two problems:

The false hope of knowing exactly when the property market will turn. Even the experts keep getting their forecasts wrong.
The high probability of regret from trading around these forecasts. Just see the results all the hot spotters have achieved or the lost opportunity for those who tried to time the market.

In other words…

Expectations rather than forecasts make me a better property investor.

Are you wondering how you should invest in this interesting phase of the property cycle?

If you're like many property investors, you're probably wondering what's the right thing to do at present.

Should you buy, should you sell, or should you just wait?

You can trust the team at Metropole to provide you with direction, guidance, and results.

Whether you’re a beginner or an experienced investor, at times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s exactly what you get from the multi-award-winning team at Metropole.

We help our clients grow, protect and pass on their wealth through a range of services including:

Strategic property advice – Allow us to build a Strategic Property Plan for you and your family. Planning is bringing the future into the present so you can do something about it now! Click here to learn more
Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $4Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney, and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment-grade property. Click here to learn how we can help you.
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Property Management – Our stress-free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years, and our properties lease 10 days faster than the market average.

About Michael Yardney Michael is the founder of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media.