Timing versus time in the market Some property market experts and analysts promote a buy and hold strategy, called “time in the market” and others advocate a buy and sell strategy known as “timing the market”.  But sometimes, the same experts will switch from one strategy to the other. For example, early last year, when most experts expected a pandemic induced property market downturn, the call was no, you can’t time the market, but now that the market is booming, that’s all changed to yes, you can time the market. Does this mean that you can time the market at some times, but not at ot ..read more

Cash flow booms are coming The closing of our national borders to overseas arrivals is impacting population growth in some States and Territories, but is also causing cash flow booms for property investors in others. John Lindeman reveals where to find them. It’s understandable that much of the focus on international border closures caused by the pandemic has been negative, because lower population growth ultimately means less demand for housing. For example, we know that housing demand in locations where overseas students, tourists and migrants were renting prior to the pandemic has been hi ..read more

Will this boom become an investor bubble? High price growth often motivates investors to buy properties in the expectation that the growth will continue or even escalate, so are investors about to jump on board and turn this boom into a price bubble? Although the number of investors in the property market is growing, the percentage of investors buying property is around 30% of all buyers, still far lower than during 2014/15, when over 60% of all properties purchased in Sydney and Melbourne were bought by investors. There are several reasons why investors are not taking part in the current bo ..read more

When the boom is over We all know that all property booms eventually come to an end, so what will happen to property prices when the current boom is over? Property booms don’t all finish in the same way. Booms where investors have been heavily involved can become superheated bubbles and then they bust, with prices crashing. In fact, as price growth comes to an end, we can expect the usual dire warnings of an imminent property market crash to make headlines in the media. The current boom, however, has been caused by home buyers rather than investors, so does this mean that growth will eve ..read more

The importance of size in property markets When property investors talk about size, they are referring to population. Some won’t even consider a potential investment location unless there are at least 5,000, or 10,000 or even 20,000 people living there, but is there any logic to using size as a benchmark? Size is one of those accepted truths about the property market. It’s based on the fact that people create economic and demographic diversity, so the bigger the local population, the more robust and stable its housing market is likely to be. This is why  many property investment courses ..read more

The property market stripped bare John Lindeman strips the market bare to find out why housing prices are shooting up almost everywhere and reveals what will happen next. There are many explanations for the current housing market boom, such as lower interest rates, relaxed borrowing rules, buyer grants, building incentives, stamp duty waivers and tax cuts. But while these have all contributed in some way to the rise in buyer demand, they don’t explain the dramatic increase in the number of potential buyers, or the huge rise in their buying power. When we strip the market down to the b ..read more

The compounding growth myth unmasked Ever heard of the power of compounding growth? You’ll often see it promoted as the reason that property investment can provide such great results. But does it really work? John Lindeman investigates. Many experts assure you that property investment is a long term game because prices always rise over time. Future growth builds on past growth, delivering the snowballing result called compounding growth.   Because of the power of compounding growth, some strategists even insist that timing the market is futile. By this they don’t mean that its future pe ..read more

How to profit from a growth market Warren Buffet has just two rules that investors must follow to ensure success. His first rule is Never lose money and the second is Never forget the first rule. So how can investors use this wisdom to profit in the current market? It would seem that getting into a growth market is the best way to avoid losing money, and in fact many investors do just that, by holding off buying properties until they are sure that prices are rising. There’s an issue with buying in growth markets The issue is that property market performance in a city, region or even a ..read more

Bubble, boom or bust - what lies ahead? Some experts are claiming that our property markets are heading for a boom, while others are warning that we could soon be in a price bubble about to bust. John Lindeman gives us his take on what lies ahead. There’s a huge difference between property booms and price bubbles. Bubbles invariably bust and when they do, housing prices end up much lower than where they started. Property booms, on the other hand eventually run out of steam with an occasional small price correction followed by a prolonged period of little to no growth. The issue is that they ..read more

The three little pigs The story of the three little pigs and their experience with property provides investors with valuable insights into how property booms occur and why they end. Each of the three little pigs chose a different strategy, one building a house from straw, another from sticks and the third from bricks, but in the end, only the brick house was able to withstand the big bad wolf’s huffing and puffing.   Their experience closely resembles the three types of housing market booms, which are those created by investors, opportunity led booms, or those driven by genuine deman ..read more