Property markets right now are the best buying conditions I’ve experienced since back in 2018/19.
Using these conditions as an opportunity to set oneself up for a better future requires three essential ingredients: ‘The 3 Cs’.
I’ll explain those shortly.
In this short report, we’ll focus on how ‘change’ and buyer activity translates into capital growth. And we’ll use evidence to explain why those who buy now will be the biggest beneficiaries of inevitable policy changes in the very near future.
The national median house value has already increased from $175,000 when I started business 28 years ago to currently $1.2 million.
In one form or another, ‘change’ occurred in each of those 28 years.
But one thing which never changes is the opportunity for ambitious people to realise their longer-term goals.
Just this week, I shared a de-ja-vu experience with a client during a Zoom meeting.
While finalising a few details in preparation for buying an investment property, we enjoyed a chuckle about how the current sombre sentiment of society is very similar to back when they bought their last investment property in H2 2022.
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This time 4 years ago, society’s groupthinkers were paralysed by RBA interest rate increases, daily commentary about a so-called ‘mortgage cliff’ and the nonsensical suggestion that it was not a ‘good time’ to buy.
Meanwhile, the discussion I was having then with our client was about productive stuff like the pros and cons of paying a cash deposit versus deploying equity from existing assets… And how a specific city identified by Propertyology will target growth drivers and enhance resilience within our client’s portfolio.
Well, we ended up paying $450,000 for our client’s investment property in H2 2022. And today it is worth at least $850,000.
So much for it not being a ‘good time’ to buy.
Those real numbers put into perspective the ‘opportunity cost’ suffered by people who participate in groupthink and allow themselves to become paralysed despite having the capacity to make significant progress.
In the words of our client: “The $400,000 increase in my net worth in just 4 years from that one property is more than I could save in 20 years.”
Mind-fog, the critical mass and capital growth
Humans are masters at convincing themselves that there’s yet another crisis.
When the so-called crisis relates the value of most households’ biggest assets and we reflect over 10 or 20 years, each ‘crisis’ is little more than a blip on that line graph.
It is scientifically proven that, when society is faced with significant change, the human mind’s processing of the change can create confusion (mind-fog) and, for some, a presumption of bad outcomes (or fear).
A great example of this lack of clarity en mass is how we all felt in H1 2020 when a raft of changes was forced upon our daily lives due to the onset of the pandemic.
When major change impacts real estate, it can create mind-fog for a critical mass of prospective buyers.
In the graphic below, I have used statistical evidence from the last 36 years to highlight five (5) separate periods of major policy change and how mind-fog produced a dramatic reduction in buyer activity (the green columns).
Related article: Snakes and Ladders
The second orange box from the right in the chart is the period referred to earlier when our client paid $450,000 for their first investment property.
Take note of the sharp reduction in buyer activity (the green columns) during that period when the RBA Cash Rate skyrocketed from 0.1 to 4.1 percent.
Statistical evidence in the chart also confirms, despite being required to pay a higher interest rate, the groupthinkers overcame their mind-fog within just over a year. And the orange arrow is the swift increase in buyer activity.
In fact, each of the ‘mind-fog windows’ lasted a relatively short period of time and were immediately followed by a significant increase in transaction volumes, producing a rise in competition among buyers.
When that occurs, the volume of properties to choose from diminishes sharply, property search times take longer, and the eventual purchase price becomes significantly more than what it would have been prior to mind-fog setting in.
It’s the actions of the bigger critical mass which produces above-average rates of capital growth, enjoyed more by those who purchased before them than those who followed the herd.
The Federal Budget announcements on 12 May 2026 marked the beginning of the latest mind-fog window for property buyers.
Once again, the early settlers will be rewarded most.
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The 3 Cs…
From home upgraders, to downsizers, first homebuyers, relocators and (especially) property investors, a significant critical mass of people who ordinarily would have taken action to realise an important goal are currently sitting on the sidelines.
While there has been a raft of recent policy changes which the majority of Australians would (quite rightly) describe as ‘shitty’, it is inevitable that the policies will be reversed by the next election, if not before.
Above all else, keep in mind that there has never (ever) been a single year when Australia built too many new homes… housing will never (ever) go out of fashion… and nothing will be at the core of more goal setting than residential real estate (nothing).
Moments like now is precisely what Warren Buffet, the world’s most famous investor, is referring to when he says: “There’s no better time to be ‘greedy’ than when the masses are fearful.”
Related article: Strategies to get off the rat race treadmill
Those reading this who do aspire to having a better future would be wise to do the work now and take action while others are collecting splinters in the bum. Then reap bigger rewards which many decades of evidence supports.
Now and always, buying property requires one to tick all three (3) of these boxes:
- COLLATERAL: whether using cash savings or equity, can you raise the funds required to cover deposit requirements and property acquisition costs?
- CASH FLOW: if your own back-of-the-coaster budget calculations conclude that you can comfortably afford the annual holding costs, move swiftly to organise finance approval.
- CONFIDENCE: contrary to the current commentary produced by the group-think ringleaders, there are extremely good reasons to be confident about the solid floor under current and future asset values.
There will never be a ‘bad time’ for one to invest in their future.
The most important question is not ‘when?’, but ‘where?’ [read this Case Study].
And that’s why Propertyology’s unparallelled experience and skills is so valuable.
Propertyology are national buyer’s agents and Australia’s premier property market analyst. Every capital city and every non-capital city, Propertyology analyse fundamentals in every market, every day. We use this valuable research to help everyday Aussies to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.
