| As most of you know, the property market - like | | | | stage of the cycle which experienced investors |
| any market that operates on supply and demand | | | | are used to riding out as real estate allows for |
| - moves in cycles. History tells us that this cycle | | | | affordability to readjust. |
| usually (but not always) runs for about seven | | | | It is during this transition that real estate listings |
| years. | | | | tend to be on the market for longer. Rental |
| Plus, during a boom developers get busy building | | | | vacancy rates decline, rents start to steadily |
| so it is Half that time is marked by a period of | | | | increase, and more sellers are forced to reduce |
| slowdown and stabilisation, as boom-time prices | | | | asking price for homes for sale. |
| give many investors and homebuyer's cold feet. | | | | These are all characteristics of today's market in |
| not uncommon to be left with an oversupply of | | | | many parts of Australia. We are now well into the |
| real estate for sale, which can take some time to | | | | next cycle, and increasing rents and rental |
| shift. It is during this stage of the cycle that a lot | | | | properties, combined with stable property prices |
| of people think of rental properties instead of | | | | are beginning to lure investors back to commercial |
| buying. | | | | real estate and homes for sale. |
| This strong demand for rentals takes us into the | | | | While it's useful to take the property cycle into |
| second part of the cycle, when improving yields | | | | account, successful investors are those who rely |
| can draw investors back and the market picks up. | | | | on the history of property growth and make their |
| So currently at what stage of the property cycle | | | | asset selection based on proven fundamentals. |
| are we | | | | Well-chosen commercial real estate and property |
| Towards the end of 2003, if we look back, there | | | | for sale will always increase in value. |
| were the first signs of a slowdown, when two | | | | Therefore, whether the next upswing is one, two |
| consecutive interest rate rises followed by | | | | or three years away, one thing is certain - you |
| negative press alarmed buyers away from the | | | | cannot stop a cycle. In addition, it is always |
| property market. Homes for sale in Australia have | | | | preferable to be building a successful portfolio at |
| seen prices even out and, in some areas, decline | | | | this stage of the cycle than when prices of |
| (with the exception of WA and the NT). This is a | | | | property are peaking. |