The caterpillar and the butterfly

One of my children’s favourite stories was the Very Hungry Caterpillar.

KidsNo matter how many times they heard the ending; there were always gasps of amazement when the caterpillar changed into a beautiful butterfly.

What seemed like a miracle to them is actually a normal part of the life cycle of many insects, but it took me a long time to realise that this is also how the property market often behaves.

Many cities such as Sydney and Melbourne are like a very hungry caterpillars, right now.

They devour their way through our funds, leaving us negatively geared with prices stagnant or falling.

We call these buyer markets, where vendors are competing against each other and purchasers are scarce.

But like the butterfly triumphantly emerging from its cocoon, these markets will suddenly turn into things of beauty with booming prices and soaring rental yields.

Caterpillar Butterfly In CityThey may appear to be changeless like a caterpillar’s cocoon, but hidden from view, the housing market stats are telling us that Sydney, Melbourne and Brisbane, in particular are generating steadily rising numbers of potential buyers and reducing stocks of new properties.

With these trends, demand will soar ahead of supply and housing prices will take off, just like a butterfly triumphantly taking flight.


Subscribe & don’t miss a single episode of Michael Yardney’s podcast

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

Need help listening to Michael Yardney’s podcast from your phone or tablet?

We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.


Prefer to subscribe via email?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.

John Lindeman


John Lindeman has well over a decade of experience researching the nature and dynamics of various types of assets at major data analysts and is a leading property market researcher, author and commentator. For more information visit Lindeman Reports.

'The caterpillar and the butterfly' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.