Before we get into it, the first thing we got is what some of the housing prices have done in some of the capital cities around the country. As I said earlier, every capital city is in a different time on the cycle so it’s important to see which city is the next one to go to and not buying at a wrong time or buying at the highest prices and then potentially when you’re holding your property through a downturn or correction which I’ll cover shortly.

 

So let’s have a quick look at Brisbane and Sydney. So what we can see here is that traditionally housing prices will at least double every ten years. As you can see during some of these decades – in the 70s, 80s and 2000s they more than doubled. In fact they tripled and quadrupled in the 70s and 80s.

So when we use that 10 year period as a guide when our property should double then we’re on the right track when it comes to planning.

Which market to get into? That’s the next question because not all the cities are on the same time of the cycle. What we can do if we are smart investors is move from city to city buying properties at the right time and not holding properties where values are dropping and flattening out. We will be buying our properties at the right time where they are going to grow.

Let’s have a quick look at how that works.

The Property Clock is the great way to do this. So the property clock, we put over any market, within that market we’ll have a peak, we’ll have a falling market, we’ll have its lowest point, and then we’ll have a rising market.

This occurs within roughly a ten year period. When the market hits the peak, that’s when demand is being outweighed by supply.

Now prices are going to correct themselves and we’ll have a correction in the market where the prices will fall and then will hit its lowest point where prices will then flat whilst you’ll find demand come into equilibrium again. So what we want to do is to identify the best time to then buy our property in this cycle, which is 7 o’clock. That is what we call ‘The start of the rising market’.

Six o’clock would be your lowest point, so here you get the lowest prices but we don’t know how long it’s going to be at six o’clock so we want to be in that part of the market where all those factors that I speak about in the ‘Factors that drive growth webinar’ we’ll be applying those factors to this market then we’ll identify where 7 o’clock is. If all those things are happening, we have what’s called the ‘perfect storm’ and that’s when we are going to achieve all growth in that shorter period as opposed to buying property at the high price, seeing a price fall, holding on through a flat spell and then waiting for the growth.

So potentially we got five or six years of opportunity cost there while the holding of property is costing us money to hold that property. To maximise ourselves as smart investors, we are buying property here, getting all that growth that’s going to appear in that cycle in the shortest amount of time and then that puts us to the position to then move on to our next property. That all makes sense, doesn’t it?