What history can tell you
History shows us that property doubles in value every 7 to 12 years. Each property market is cyclic, that is, it goes through times of fast growth followed by little or no growth. When one market eg Sydney is in strong growth, other markets eg Brisbane will be in a little or no growth phase. The markets are referred to as being counter cyclic – when one is doing well, another is doing not so well.
This means for example that when the Sydney’s growth slows, Melbourne’s picks up followed by Brisbane. This is the reason we emphasise the importance of property as a mid to long term investment. The key however is to identify the markets with the highest probability of short to medium growth and lowest probability of downside risk. This enables you to build equity faster and therefore add to your property portfolio.
It also means that there are always new opportunities for property investment as there are always markets somewhere which are experiencing their growth phase. Choosing properties in growth markets assists in developing well-balanced, diversified portfolios.
