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Dumb Sh!t People Say About Property Markets

Dumb Sh!t People Say About Property Markets
December 1, 2023 Propertyology Head of Research and REIA Hall of Famer, Simon Pressley

A collection of deeply held mistruths and real estate myths are a world record example of gospel generated by garbage, and validation via consensus.

‘They’ says this… ‘They’ says that…

Who the heck is ‘They’?

For generations, ‘They’ has done incredibly well at convincing everyone that they have the inside running on everything.

‘They’ is a respected member of the community, there is no reason to believe that ‘They’ would lie and They’s explanations always seem perfectly logical.

With no obvious reason to question what ‘They’ says, their ‘wonderful’ words of wisdom get widely broadcast.

Every utterance of what’s “in the news” is then instantly adopted as gospel by large segments of society.

Nekminnit, all of the sheep are walking along the same path and the birds are all singing from the same sheet.

The most fascinating thing is that, while what ‘They’ says sounds logical, ‘They’ has never forensically examined the evidence. ‘They’ will never know what they don’t know because they will forever be a generalist.

Unfortunately, there’s an obvious absence of curiosity from all of the sheep and the birds to ensure that their own decisions are made using the best possible information.


Related video: Real estate lessons from the last 80-years


They say:

“…wages have not grown as much as house prices. Therefore, strong rates of capital growth are not sustainable…”

The evidence says:

The purchase of every single type of goods and services requires income (wages) to purchase it, but there is no linear correlation between the rate of ‘wage growth’ and the price growth of umpteen different goods and services.

Specific to real estate, different properties in different cities come with a different price tag, in a similar way that different people earn different incomes and have different financial habits.

According to decades of official evidence, the value of Australian housing has increased at an annual average rate of between 5 and 8 percent per year while the ‘average wage’ generally increases by 2 to 3 percent per year.

‘Housing affordability’ is not a one-fits-all equation or an ‘index’. It is a person-to-person, city-to-town and property-to-property scenario. Just as it is when an individual borrower is applying for a home loan.

Factually false property market theories are arguably the world’s best example of GroupThink Tomfoolery.

GroupThink’ is a term coined by Yale University social psychologist, Irving Janis, in 1972.

According to Janis, groups of so-called ‘intelligent people’ sometimes make the worst possible decisions due to a variety of reasons, including that the individuals within the group might have similarly sheltered backgrounds and can therefore be insulated from critical information (such as evidence).

When a decision is made through GroupThink and it seems reasonable or logical on the surface, it is likely to be readily adopted by a large critical mass.

So, even though the decision or belief is completely flawed, society has created another Wive’s Tale.

Janis’s theory of GroupThink and insulation from critical evidence is prevalent with the many (inaccurate) generalisations regarding capital cities and regional locations.

‘They’ is the leader of a group of naïve natterers of nonsense who place each of Australia’s 8 capital cities into ‘one box’ and all of the  400 regional townships into ‘another box’.

This is despite the indisputable fact that Hobart TAS, Perth WA and Sydney NSW are very different capital cities, while luscious Launceston TAS, astonishing Albury NSW, terrific Townsville QLD, beautiful Bendigo VIC, and marvellous Mount Barker SA are also very different regional cities.


They say:

“…Capital cities are safer investments than regions… capital cities produce more capital growth than regions… capital cities are more popular to live in …”

The evidence says:

The evidence (indisputably) proves the aforementioned entire statement to be complete rubbish.

Those who suffer from a capital city conformation bias need a dose of Jack Nicholson: “You can’t handle the truth!” (A few good men)

‘Capital city’ and ‘region’ are nothing more than terms which have absolutely no bearing on property market performance.

The best-performed property markets over the last 20-years were among the 400 regional cities/towns. Fact.

And I’m absolutely certain that will be the case again over the next 20-years [make sure you read this report].

As for the so-called ‘popularity’, over the 21-years that ABS has maintained detailed internal migration data, in every single year more Australians have relocated away from capital cities to regional locations than the opposite direction.

A total of 428,135 (net) people left capital cities over this period – that’s equivalent to a city bigger than Canberra (Australia’s 7th largest city) in just 21-years.


They say:

“…Housing demand is all about population growth. It has the biggest influence on property markets…”

The evidence says:

Population growth only has a small influence on real estate value growth.

At an individual city/town level and in a broad national sense, Australian real estate history is littered with instances of house values not following population growth trends.

One of countless examples is Perth. During a recent 14-year period, Perth’s median house value remained unchanged despite having Australia’s highest population growth.

The health pandemic produced 2 consecutive years of Australia’s lowest population growth in more than 100-years, yet Australia recorded its second biggest property boom ever.

The above graphic demonstrates that Sydney has experienced periods with house values declining despite very high population growth (5YE 2008), contrasted by a property boom at a time when population declined (2020-21).


Related article: 100-years of real estate evidence


They say:

“… the only way to improve housing affordability and to ease pressure on the rental market is to build a lot more homes…”

The evidence says:

That’s complete bollocks – construction is not the problem.

I fear that ‘They’ will never allow themselves to understand this critical piece of housing intelligence.

Throughout the last 50-years, despite the public sector only funding 2 percent of them, Australia has consistently built healthy volumes of new homes.

This includes building more properties than normal during the 2-years of the pandemic while there was no population growth at all.

According to official ABS data, over the 10-years ending March 2023, Australia added a (net) annual average of 160,000 dwellings to the national housing stock. Net overseas migration over the same period created demand for 60,000 per year.

It’s all well and good to say ‘just build more’. But, for an overwhelming majority of people, their changing housing needs will be satisfied by one of Australia’s 11.5 million (established) properties, as opposed to the 160,000 new homes that are built each year.

With or without population growth, every person’s housing needs (and finances) change multiple times throughout their lifetime. So, one individual’s demand for housing is created multiple times.

The biggest problems associated with Australian housing are a series of poor policies which significantly limit the supply of established homes for sale and the supply of rental accommodation. That includes credit policy, stamp duty policy and a suite of onerous rental policies in each state.

Whether brand new or established properties, there will never be enough available (to buy or to rent) if the regulatory environment does not support those who fund them.


While logic helps people to feel comfortable, somethings in life (such as medicine and property markets) are far more complicated than the logic of ‘A+B=C’.

A legitimate specialist separates everything that ‘They’ (the generalist) says from the truth.

Specialists have an innate curiosity to understand cause-and-effect (laboratory-style). Their focus is on mastering knowledge in a chosen field. It is a full-time gig with daily rituals which challenging status-quo thinking. They are constantly studying evidence to develop elite-level intelligence.

Elite knowledge and lots of different experiences is what underpins better decisions.

Don’t confuse the wisdom of Yoda with what a world full of Homer Simpsons collectively believe and say.

If ‘They’ were the best shepherd to follow, the world would be littered with geniuses, mega stars, wisdom, and gazillionaires. That’s not the case.

Mumblings in the absence of evidence, no matter how logical they may seem, are just mumblings.

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