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There is a property debate raging at present: is the future for property bright, or is the bubble about to burst?
Obviously if you are considering investing in property, or are about to buy a home, it would be good to know who's right. 
After a number of boom years we have entered a flat period in the property cycle, but what’s unusual this time round is that every state is in the slump stage of its cycle. The trouble is that the negative media surrounding this is spooking many inexperienced investors.
I’ve heard many theories as to why the property bubble will burst. Some doomsayers are predicting a property crash because house prices have risen too high and are now unaffordable. Others suggest we have taken on too much debt both personally and as a nation.
Just because houses prices are high or unaffordable to some doesn’t mean we have a property bubble. 
How have property markets corrected in the past?
To understand what’s ahead, let’s look at what happens when property markets got ahead of themselves in the past.
Sydney had a terrific boom between 2001 and February 2004. In fact it was one of the best performing property markets between 1996 and 2004 helped in part by the excitement related to the Olympic Games.
After this boom the Sydney property market corrected. It didn’t collapse – it just corrected – with values falling from peak to trough by 9.3%, and this fall took a total of 23 months to play out, according to <a href="https://www.rpdata.com/" title="RP Data" target="_blank">RP Data</a>.
Of course not all parts of the Sydney market dropped in value equally – some areas held their values well. And even in the regions where values fell, property prices didn’t plummet – they gently followed a downward path.
But look at where Sydney property prices are today – most properties are worth significantly more than they were at their high point in 2004.
A similar pattern occurred in Brisbane and Perth, where values peaked in February 2008 after a long boom in both cities pushed their house prices well above the average national price growth. Again, property prices didn’t collapse – they just sauntered along, allowing the fundamentals to get back into alignment.
Going back to the previous decade, much the same happened in the early 1990s, when we experienced “the recession we had to have”. After the remarkable property boom of the late ’80s, interest rates rose to peak at about 17% and the property markets around Australia stalled. But once again, they didn’t collapse. They just flatlined for a few years as affordability, supply and demand other economic fundamentals caught up.
The only times Australian property values dropped significantly (albeit for a short time) was after the Second World War and during the Great Depression.
In the 1940s house prices dropped 17% over a two-year period, but according to John Edwards of <a href="https://www.residex.com.au/">Residex</a> they jumped back and grew strongly for many years after that.
Property values also dropped during the Great Depression when unemployment was high, but times are different today. No one is suggesting that Australia is heading for a depression; in fact we’re experiencing the opposite – a booming economy. That’s why talk of a property market collapse is nonsense.
Why don’t Australian property markets collapse?
Well, some do!
Just look at the Gold Coast, where the values of some properties have fallen by 40%.
But here’s why. The Gold Coast is driven more by speculation than by underlying supply and demand fundamentals. The large fall in prices there is because there is too much developer stock on the market and the fact that many people are selling up their holiday homes after the GFC.
The point is that in general our capital city property markets don’t collapse because they are illiquid. People don’t sell up their homes just because interest rates rise or when times get tough.
What could cause a property market collapse? 
Looking at what has happened in the past, both here and overseas, the factors that could make our markets collapse are:
<ol start="1">
<li>A depression or a severe recession – no one is suggesting this is likely in the near future, with the mother of all mining booms buoying up our economy.</li>
<li>
Unemployment levels so high that a mass of people can’t afford to keep their homes. Again this is unlikely to occur with unemployment levels being as low as they are.</li>
<li>
Interest rates rising to levels that cause home owners to default on their mortgages. I am hopeful the RBA won’t allow this to happen.</li>
</ol>
Why property won’t crash.
There are a number of reasons why we won’t see major falls in home prices in our capital cities any time soon. We have:
<ol start="1">
<li>Robust population growth fuelled by immigration and to a lesser extent strong natural population growth. Although immigration levels have dropped, we’re still growing at a faster rate than any other country in the developed world.</li>
<li>A healthy economy that will continue to perform at a level that is the envied by of much of the Western world and will create jobs for anyone who wants one.</li>
<li>A sound banking system with reasonable interest rates, tight lending practices and a low default rate.</li>
<li>A shortage of properties in some locations, which means rents will rise.</li>
<li>Difficultly getting finance for new developments and rising construction costs, which means new developments will be more expensive and underpin the value of established homes.</li>
<li>A healthy level of household debt. Sure we are borrowing more, but the debt tends to be in the hands of those who can afford it. Many Australians are saving more, taking on less credit card debt and paying off their mortgages faster than they need to, which improves the state of their personal finances. This in turn reduces the risk of house prices collapsing if interest rates rise or the economy hits a speed bump.</li>
<li>A culture of home ownership – 70% of us own or are paying off our homes. In contrast to some overseas markets, Australians have high equity in their properties and a conservative debt position. In fact half of all homes have no debt against them.</li>
</ol>
What’s ahead?
There’s no sugar-coating it – Australian house prices are high, but affordability has increased over the past year thanks to flat property prices and wages growth. Recent research from Rismark shows the average dwelling price-to-disposable household income ratio has fallen from a peak of 4.7 times in December 2009 to 4.2 times in the 2011 March quarter.
Yet there is still a large demand for housing – people are still getting married, having babies, getting divorced and coming from overseas. If they can’t afford to buy their homes they are going to rent, and this will force rentals up.
The bottom line is we are now moving into the stabilisation stage of the property cycle where values may only grow a few percent higher than inflation for a few years, but it’s a time when investors will be compensated by higher rents.
Of course, being a buyers’ market will mean that informed investors will be able to pick up a great investment property below intrinsic value if they do their research and negotiate wisely. And when they look back in a few years time they’ll wonder why they didn’t buy more properties while others were waiting for the bubble to burst.
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Seven reasons why Australian property won't crash

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The rich are getting richer according to the recently released BRW Rich 200 list. The total wealth held by this year’s Rich List members was up 23% on last year, in part helped by our resources boom.
And just in case you haven’t notices, the divide between the rich and the poor has never been so evident according to the BRW. The average income for Australian families is $80,000 with just 15% of us earning $150,000 or more each year, which seems to be Treasurer Wayne Swan’s definition of wealthy.
In contrast it would take the lower-ranking members on the Rich List less than 5 days to earn $150,000, which seems to be the new cut off between the rich and the average Australian.
So, what can we learn from Australia's wealthy individuals?
Firstly property remains the single biggest source of wealth with 49 real-estate entrepreneurs in the top 200 list, and many of those who didn't make their fortunes in property have stored their wealth by investing in property.
This should come as no surprise – looking back over the years, no matter how the Australian economy changes, the Rich 200 has always been dominated by the property entrepreneurs.
Remember, there's nothing wrong with seeing what other successful people do and applying those principles to your own life. If so many extraordinarily wealthy people have used real estate profitably, it stands to reason that there's money to be made in this sector.
The other lessons I learned by reading the various entrepreneurs' stories are:
Anyone can become rich in Australia. While 17% inherited some of their fortune, most on the Rich List were self-made successes, some coming from working-class backgrounds. Attending a private school and an elite education is clearly not a prerequisite to joining Australia’s wealthy. While some forged important networks at school, many went to public schools and others didn’t even finish high school. In fact, less than half have tertiary qualifications.
 
Invest counter-cyclically. While the average Australian was gripped with fear of the fallout from the Global Financial Crisis, many successful investors took advantage of the opportunity to buy up big over the last few years. Remember Warren Buffet's famous quote: "Be fearful when others are greedy, and be greedy when others are fearful."
Make your millions and then reinvest it – don't spend it. This is really just using the power of compounding to grow your asset base before you start spending up big.
Take risks early on, but not once you are established. While many entrepreneurs took big risks to get their enterprises going, successful investors then preserved their wealth by cautiously investing rather than taking further risks.
Have one good idea and repeat it. One core trait that successful entrepreneurs share is the ability to take a good idea and repeat it over and over again. Look through the list and you’ll see so many entrepreneurs stick to the same concept for years and just expand in different locations.
Pick the trends. This is different to picking fads, which are transient.
Go for growth. Sure, cash flow is important but to become really rich you need a large asset base. While the average Australian tries to increase their cash flow, the wealthy are obsessed with building their asset base. Much the same as those on the BRW Rich 200 list who concentrate on building their balance sheets even more than they do on their profit and loss accounts.
Surround yourself with a good team. As I've often said, if you are the smartest person in your team, you are in trouble.
Take action. All the people who made it onto this year's BRW Rich 200 list started with a dream and then took action.
You’re never too young and you’re never too old. The youngest member of the BRW Rich 200 is aged 35 and has an estimated wealth of $1.01 billion, which is even more than the oldest member who at the age of 92 has accumulated $289 million.
Michael Yardney is the director of Metropole Property Investment Strategists, a best-selling author and one of Australia's leading experts in wealth creation through property. For more information about Michael visit <a style="color: #333333; font-weight: bold; font-size: 13.5px; text-decoration: none;" href="https://www.metropole.com.au/">www.metropole.com.au</a> and <a style="color: #333333; font-weight: bold; font-size: 13.5px; text-decoration: none;" href="https://www.propertyupdate.com.au/">www.PropertyUpdate.com.au</a>.
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The rich are getting richer, and so can you

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If you're looking to buy your next home or investment property, or even if you're considering selling your property, a question you would be asking yourself is, "How much is this property really worth?"
Whom do you ask to find out? The selling agent? A valuer? A buyers' agent? Maybe the bank? Or do you buy one of those online reports from the property data providers?
It probably won't come as a surprise that they are all likely to come up with different "values".
You may have heard of the concept of "fair market value" in property, which is defined as "the price a buyer will pay and a seller will accept given that neither the buyer nor the seller is under pressure to close the deal".
Pressure, or motivation, comes from life changes such as divorce, a sudden job transfer, difficulty meeting mortgage repayments or a death in the family, and these things compel either the buyer or seller to act quickly.
Now, when we're talking fair market value, let's get one thing clear – it might not always be "fair" to you.
It might not be what you call "equitable", because fair market value is impartial, it takes no sides and it doesn't care about what you need or what you want. As a buyer you want to buy the property at the best price possible and as a seller you want to achieve the highest price for your home.
So back to my original question – whom do you ask for advice?
The real-estate agent
If you ask the selling agent what the property you're considering buying is worth, he is obliged to work for his client – the seller. Although he can give you details of comparable sales and an indication of interest in the property from other potential buyers, the selling agent should be trying to maximise the sale price for his vendor.
A valuer
You could pay $400 or so and get an independent professional valuation, but you'd probably be disappointed.
I've found that a formal valuation is of limited benefit in setting a realistic market price to purchase a property and will generally be low when choosing the asking price when selling your home. It's just another figure to add to the mix of possible prices.
Call me cynical, but in the current market, when property values are flat, I've found valuers come down on the conservative side.
The bank
When you apply for a loan for your new property the bank will determine its value, but again this might not accurately reflect the property's market price.
Banks tend to value properties at a figure that will reflect what the can reasonably expect to recoup if they take possession and on-sell your property if you default on your loan repayments. They either use their own staff or an outside firm of valuers, but these are often driven by valuations without even looking inside the property.
An online report
A number of property data and research companies provide reports you can buy online to estimate the value of a property.
What's the catch? I've found that they can be 10% to 20% out on the real price of a property. They can be wrong either way – estimating the property is worth considerably more or less than its value.
Think about it – they don't know if the property has had an airconditioner installed or whether it has threadbare carpets or recently polished floor boards. They don't know whether the property has been recently renovated or is in original condition.
In my view, I wouldn't bother with this type of report.
A buyers' agent
A buyers' agent could be a good source of independent and unbiased property price advice.
Buyers’ agents are licensed estate agents, but the opposite to selling agents, because they work for and are paid by the buyer.
If you choose one who works in the geographic patch you are considering, he or she should have an intimate knowledge of the property market, what is selling and what isn't and the prices that properties are selling for.
More and more investors and home owners are now using buyers' agents to level the playing field when they are looking for their next property purchases. Not only will they assist with background research and pricing, but you can use their negotiating skills to help you obtain the best price.
To be successful in today's flat property markets thorough research and astute property selection is important, as is buying at the right price. Investors can't count on the rising tide of property prices to cover up their buying mistakes.
If you are not able to or don't have the time to do this research yourself, then you need to get a good team on your side to help in your next property purchase or sale.
 
Michael Yardney is the director of Metropole Property Investment Strategists, a best-selling author and one of Australia's leading experts in wealth creation through property. For more information about Michael, visit <a href="https://www.metropole.com.au/">www.metropole.com.au</a> and <a href="https://www.propertyupdate.com.au/">www.PropertyUpdate.com.au</a>.
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How much is that property really worth?

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After years of strong capital growth in most of our capital cities, it’s clear that 2011 will be a different year – one of minimal growth.
The trouble is that there are now more properties for sale than there are buyers.
Affordability has become an issue for many potential buyers, who are feeling the pinch of many interest rate hikes last year. At the same time there is less consumer confidence as a result of the mixed messages in the media, and this means many would-be home buyers and investors are sitting on the sidelines waiting to see what will happen.
What these observers of the property markets will notice is that rents are going to rise significantly over the next few years.
Why?
Our population is still growing in our major cities, and people have to live somewhere. If they can’t afford to buy they’ll rent, and we’re just not building enough new dwellings to accommodate them all.
This leads to the question – can all these tenants afford the rent hike many landlords would like to impose?
 There’s some encouraging news from leading property researcher <a href="https://www.matusik.com.au/" title="Michael Matusik" target="_blank">Michael Matusik</a>, whose 2011 rental market survey found the majority of tenants are willing to pay more in rent and have the ability to do so.
 The survey found that although seven out of 10 tenants want to buy their own property, and just over half anticipate doing so within the next 12 months, most want to stay in their current accommodation and are willing to pay more rent rather than move.
 Two-thirds of the renters surveyed said they were prepared to pay 5% more in rent, and a further 30% said they would accept an even bigger rent increase in order not to have to move.
 Even better news for property investors is that the majority of tenants can afford to pay more. Three-quarters of the respondents reported that they were paying less than a third of their income in rent and half were paying less than a quarter of their pay on accommodation.
 With vacancy rates well below the long-term average, rising demand for rental accommodation and a shortage of new accommodation, rents are likely to start rising again. This will be welcomed by property investors, as most experienced only sluggish income growth over the past year.
According to <a href="https://www.rpdata.com/">RP Data</a> capital city rental growth for the 12 months to March 31 was:
<ul>
<li>Sydney +5.3%</li>
<li>Hobart +4.5%</li>
<li>Perth +4.4%</li>
<li>Darwin +3.7%</li>
<li>Adelaide +2.8%</li>
<li>Canberra +2.5%</li>
<li>Melbourne +0.9%</li>
<li>Brisbane -1.0%</li>
</ul>
Just to make things clear – what we are experiencing is the property cycle running its normal course.
At times when properties are affordable and buyers are out in force pushing up prices, rents tend to lag behind. Then in the current stage of the cycle, when price growth stagnates because there are fewer buyers and more tenants in the market, it is the time when rents catch up.
That’s just how the property cycle works.
Michael Yardney is the director of Metropole Property Investment Strategists, a best-selling author and one of Australia's leading experts in wealth creation through property. For more information about Michael visit <a href="https://www.metropole.com.au/">www.metropole.com.au</a> and <a href="https://www.propertyupdate.com.au/">www.PropertyUpdate.com.au</a>.
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Rents on the rise

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Warren Buffett is arguably the greatest investor of all time. He has a great track record of creating and maintaining his wealth through share investments, but many of his principles also apply to property investors. So let’s look at some of Buffett’s investment principles and see how we can apply them to our property investing.
 Adhere to a proven strategy.
Buffett’s success has often been put down to his extraordinary patience and discipline, never deviating from his proven investment strategy even when faced with short-term changes in the market.
 This is a great lesson for property investors, as most don’t have a plan or adhere to a proven strategy. In fact, many investors spend more time planning their next holidays than they do planning their financial futures.
 If you don't have an investment strategy to keep you focused, how can you hope to develop financial independence? It's too easy to get distracted by all the "opportunities" various interests keep spruiking. Unfortunately many of these supposed opportunities don't work out as expected. Look at many of the investors who bought off the plan or in the next "hot spot", only to see the value of their properties underperform.
 Invest counter-cyclically.
Buffett is a renowned counter-cyclical investor, advising: “We attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
This is also the investment strategy of many successful property investors and has proven to be a winning formula for many who invested in property last year, when many predicted that property prices would fall further. So be sceptical of conventional wisdom – not because the crowd is always wrong, but because the crowd is always late.
Sometimes it’s best to do nothing.
A great quote from Warren Buffett is “The trick is when there is nothing to do, do nothing.” Yet many investors get itchy feet and want to do more, put another deal together or buy another property. There are stages in the property cycle and times in your investment journey when it is best to sit back and wait for the right opportunities, because wealth is the transfer of money from the impatient to the patient.
Specialise, don’t diversify.
Buffett has adopted a focused investment philosophy, investing the bulk of his funds in a few companies. However, most advisers suggest diversifying. This is really just playing the game of investment not to lose, rather than playing the game to win, and leads to average results.
A successful investor specialises. He or she becomes an expert in one area or niche and reproduces the same thing over and over again, getting great results.
Invest for value.
Buffett is a value investor who says: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price," and it’s the same with property. Lock in your profits by buying the “right property” – one that will outperform the averages in the long term because of its scarcity or the potential to add value.
In today’s flat property market bargains abound, but they don’t necessarily represent good long-term investments. Rather than buying a cheap property, buy the best property you can afford. Remember, the price you pay for a property isn't the same as the value you get. Successful investors know the difference.
 
Invest for the long term.
Even Buffett can't predict which way the markets will move in the short term, and he is quite certain no one else can either. So instead, he takes a long-term view of the market, saying if you don't feel comfortable owning a stock for 10 years, you shouldn't own it for 10 minutes.
 Similarly, those investors who have created wealth out of property take a long-term view. This doesn’t mean buy and forget – you should regularly reviewing your property portfolio.
When was the last time you checked to make sure you were getting the best rents or that your mortgage was appropriate for the current times? Maybe it's time to refinance against your increased equity and use the funds to buy further properties?
And sometimes it is appropriate to consider selling an underperforming property to enable you to buy a better investment.
 
Don’t invest in anything you don’t understand.
During the boom years investors’ hunger for high returns took them into exotic terrain, whether they realised it or not. Promoters often promised large profits using opaque schemes, and the same has been happening in the last year or two from a new breed of property pretenders.
Warren Buffett never invests in anything he doesn’t understand – neither should you.
 Manage your risks
Many investors don't fully understand the risks associated with property investment and therefore don't manage them correctly.
 One common error is not having sufficient financial buffers to see them through from one property cycle to the next. Smart investors have financial buffers in their lines of credit or offset accounts to not only cover their negative gearing but also to see them through the down times like we’re currently experiencing and through times of increasing interest rates.
 Savvy investors don't only buy properties; they but themselves time.
 Another way smart investors minimise risk is to buy their properties in the correct ownership structures to legally minimise their tax obligations and protect their assets.
 A final lesson from the master is that bad times will come and go with surprising frequency over our investing lifetimes, but if we have a plan and stay focused on sound financial strategies, we can gain financial independence through prudent investing.
Michael Yardney is the director of Metropole Property Investment Strategists, a best-selling author and one of Australia's leading experts in wealth creation through property. For more information about Michael visit <a href="https://www.metropole.com.au/">www.metropole.com.au</a>  or <a href="https://www.propertyupdate.com.au/">www.propertyupdate.com.au</a>.
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Invest like Warren Buffett

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Since one of the primary drivers of property prices is where people choose to live, I like to know where future population growth is likely to occur to ensure the value of my properties keeps rising.
It should come as no surprise that the vast majority of people in Australia live within the capital cities. According to RP Data, 64% of Australia’s residents lived in one of our eight capital cities of June 2010, with 55.5% living in Sydney, Melbourne, Brisbane or Perth.
Although we have vast open spaces in this lucky country, much of it is empty expanse, and two-thirds of our population lives in only 0.5% of the overall land mass.
More Australians lived on the land a century ago, but with the industrial revolution the jobs and therefore the population moved to the big cities, and this trend has continued. Even 50 years ago only 60% of our population lived in capital cities, but people keep moving to where the jobs are.
Sure, we have a resources boom and a small percentage of our population is being drawn to the mining towns, but the vast majority of Australian business is housed within the major capital cities, and that's where the jobs are.
I've always chosen to invest in capital cities rather than regional Australia because a larger population base means more owner-occupiers looking for homes, which pushes up prices, as well as more tenants driving rental demand and therefore rents upward.
With good employment prospects and major infrastructure like schools, hospitals and public transport, as well as desirable lifestyle amenities such as shopping, recreation, restaurants and entertainment venues, capital cities will continue to be home to a large portion of the population.
I admit that there are some regional towns that have exhibited great capital growth, and in some cases better growth than some underperforming suburban areas, but on the whole capital city properties have outperformed other types of properties in the long term.
This is particularly true for our four major metropolises – Melbourne, Sydney, Brisbane and Perth – where more than half our population reside.
Another important consideration is that our large capital cities boast diverse economies with a wide array of industries supporting them, compared with regional towns, where the local economy is often driven by one or two industries. Having a more stable economy ensures that the property markets in our big cities are less subject to sudden changes. This is different to the more speculative holiday hotspots and mining towns, where fortunes can be made and lost in the blink of an eye.
Just look at the once booming Gold or Sunshine coasts, where properties are languishing on the market and prices have fallen due to a significant drop in the tourism sector – the main industry that largely drives that local economy.
Of course all property markets are cyclical and will have their highs and lows, but over the long term it is evident that above-average capital growth will be found in the suburban property markets of our major metropolises. While this may lead to affordability issues, particularly for first-home buyers trying to get into these markets, it also means there will be a good supply of tenants for those investors who own the right properties.
For me capital cities are the place to be.
Michael Yardney is the director of Metropole Property Investment Strategists, a best-selling author and one of Australia's leading experts in wealth creation through property. For more information about Michael visit <a href="https://www.metropole.com.au/">www.metropole.com.au</a> <a href="https://www.propertyupdate.com.au/">www.propertyupdate.com.au</a>.
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City living or country retreat?

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The conflicting messages in the media lately have left many investors wondering where Australia’s property markets are heading. Even the different research organisations seem to be coming out with conflicting reports about what’s happening to property prices.
 Then there has been increasing concern about economic problems overseas, plus reports of further interest rate rises on the horizon. No wonder so many investors are wondering: what comes next?
The problem is that many of these investors have not owned properties throughout a complete property cycle, and this makes them uncomfortable as we move through the various stages.
Today I will delve into my memory and see what we can learn from previous cycles to help you understand where our markets are heading.
 But before I do I’d like to remind you that while we’re currently in the slower stage of the property cycle, the bottom line is that as a long-term investment, property is hard to beat.
I remember reading a research report from Massey University suggesting that Australian residential property has been the best-performing asset class over the long haul. The study dated back to 1920 and showed that property produced an average return of around 15% per annum (combining rental income and price gains) since that time.These figures don't really reflect how good property is as an investment, as they don't take into account the power of leverage and the higher returns you can obtain on your own funds. When you factor this in, property far outperforms all other asset classes over the long term.
 But while there's little doubt that property is a potent wealth-builder in the long term, it goes through the same kinds of cycles as other investment classes, which means that the reported high long-term average returns take into account periods of very high growth and also periods when property went nowhere for a few years.
 
<hr class="system-pagebreak">
 
Think of the ’80s
 Back in the early 1980s house prices across most of the capital cities were stagnant. Melbourne's median house price languished at about $50,000 from 1980 to 1983, then grew steadily but unspectacularly before really taking off in 1987.
 In Sydney, the median house price reached about $80,000 in 1981 and stayed there for the next four years. Perth prices were falling in 1983, and Brisbane house prices were going nowhere after a year or two of 25% returns in the early 80s. It took until 1987 before these property markets all began to boom again.
 After crashing in 1990, property prices in Sydney and Melbourne stayed flat until 1995 and then they started moving slowly upwards. And it wasn't until 2000 that prices in Brisbane finally took off after a decade of growing at 5% or less per year. Interestingly, this was despite a huge influx of immigrants from other states coming to the sunshine state.
 In Perth, a short recovery followed the boom and bust of the late 1980s and early 1990s. The market there ambled along, with annual returns at about 6% until its boom in the middle of last decade, where Perth's median property price overtook all capital cities other than Sydney.
 In the last year or two some of our property markets performed strongly while others languished. Melbourne and Sydney were of course the shining stars, with a couple of years of strong growth.
The lesson to learn from all of this is that as a property investor you must be aware of and prepared for these cycles.
Sure, it's hard when you are in the middle of the flat period of the property cycle, as Brisbane and Perth have been for a few years. But look at the property prices that prevailed 10 and 20 years ago and look at property prices today. Property investment is a long-term play – you need to be patient, as values in our major capital cities have doubled every seven to 10 years.
 What causes the cycles?
 What were the factors behind those cycles? It's the old story of supply and demand. Property prices are pushed up by the demand created by a healthy economy, by high levels of employment, population movements caused by migration and immigration and positive market sentiment.
They are dragged down when the economy performs poorly, when interest rates rise, when employment and immigration figures fall, when supply exceeds demand and when the marketplace is nervous about wealth and the future.
 Cycles are an inevitable part of any investment market, and our property markets are behaving normally at present.
 One more thing: there are local, as well as national, property cycles. Each state is at a different stage of its property cycle, and within each state there are cycles within the various suburbs.
 
<hr class="system-pagebreak">
 
What’s ahead for property?
 Eventually the cycle will move on – it always has. Traditionally the more affluent suburbs tend to perform well at the beginning of the property cycle, and that's what is likely to happen again this time around.
 As our economy and the sharemarket pick up, more affluent Australians will be back in the market upgrading their homes. Many will be many chasing similar types of property, which will push up values in our more “upmarket” suburbs. As values increase in these innerring suburbs, the price differential between these and their neighbouring suburbs will increase. Soon buyers will start looking for “bargains" in these adjoining suburbs, and the increase in property values will ripple out to the middle-ring suburbs.
 This increase in property values and higher rents will start to draw investors back into the market. However, many beginning investors will hold back at this early stage of the property cycle, waiting for more signs of certainty.
Of course while they are waiting many will miss out on significant property price growth the savvy investors who get in early and buy counter-cyclically will enjoy.
 What about affordability?
 Every cycle I hear the cry "Property prices are too high! They can't keep going up like that", I remember it in the early 1980s and then again in the late ’80s, when people said house prices just couldn’t go up any more. "They are so high our children will never be able to afford a house" was the catch-cry, but prices doubled over the next decade.
 Of course, many are saying the same again now. However, while most of us are sympathetic to the plight of the average first-home buyers struggling to get into their first properties, I feel that even if they don't admit it, secretly most home owners enjoy hearing how house prices keep rising.
Those of us already in the "game" take comfort from the fact that our homes, our castles, are quietly but consistently increasing in value. And deep down we hope this continues because not only does it make us feel wealthier, it actually makes us wealthier.
 There is no doubt that affordability will be an issue for many in the future and this will limit the growth of property prices in some areas more than others. For example, first home buyers and those in the lower socio-economic brackets are more likely to be affected by rising interest rates than those with more disposable income.
 What this means is that some areas – particularly new suburbs and the lower-priced suburbs – will perform worse than the more affluent suburbs as the cycle moves on.
 Business as usual
 In summary, our property markets are behaving normally, working their way through their individual property cycles. Within each state the property markets are fragmented, with some suburbs holding their values well and sometimes slowly increasing in value while other suburbs, particularly the outer "mortgage belt" suburbs, languish.
These cycles mean there are great opportunities out there for property investors who are selective and think long term.
Are you ready to exploit the opportunities that will arise?
 
Michael Yardney is the director of Metropole Property Investment Strategists, a best-selling author and one of Australia's leading experts in wealth creation through property. For more information about Michael visit <a href="https://www.metropole.com.au/">www.metropole.com.au</a> and <a href="https://www.propertyupdate.com.au/">www.PropertyUpdate.com.au</a>.
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Learn from history

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

Michael Yardney

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