Episode Details

2022 promises to be a fascinating year in real estate.

Last year was relatively unusual – we experienced a once-in-a-generation property boom where values grew strongly almost everywhere.

Around 98% of locations across Australia recorded rising property values; with many properties rising in value by more than 20%.

This year is shaping as a more "normal" market, where some locations will still see strong property price growth, some will experience moderate price growth, some locations will languish, and a few locations will see property values falling.

And this will be dictated by local supply and demand and local economic conditions.

New factors will further underpin our property markets this year.

1. More investors will be getting into the market due to finance approval and higher rents. They will replace the first home buyers who are now finding properties less affordable.
2. Around 200,000 visa holders will be coming to Australia in the next year as our international borders open. They will primarily be coming to Melbourne and Sydney where the jobs are

Don't be scared by the property pessimists.

Don't lose any sleep over the predictions that property values will drop 10 - 15% in 2023.

In my mind the big banks' economists will be wrong – just like they were with their calls of property Armageddon in 2020.

Property investment rules to keep in mind in changing times like these

It seems that everyone is an investment genius when the property markets are booming.

But even though our property markets have been resilient, in fact booming, the markets seem to be slowing down a little. And don't be fooled into thinking that all our economic and business problems are over.

Now don't get me wrong – I don't think there's a property crash any time ahead, but I clearly see many headwinds that could slow us down – both international and local challenges.

That's probably why I've been asked by both clients and the media what rules do I apply in times like this when the markets are changing in front of our eyes.

1. Become financially fluent

The secret to financial freedom is to spend less than you earn, save the balance and then wisely invest your savings in growth assets.

Becoming financially fluent means you will invest rather than speculate.

One of the reasons most investors don't develop the financial freedom they deserve is because they don't understand the rules of money and they end up buying their properties with emotion.

Be it your first property or your next property, it should be part of a long-term plan and a stepping stone to building a substantial portfolio.

By having a plan and a system to gauge the worth of an investment you will achieve better results.

2. Learn to invest rather than speculate.

Don't buy properties with emotion.

Instead, you must start with a strategic property plan.

First concentrate on building a substantial asset base over a number of property cycles, then slowly lower your loan to value ratios. Eventually, you'll be able to live off your cash machine.

In other words, invest for the long term.

3. Not every property is an investment-grade property

Remember that while the location of your property will account for around 80% of its performance, it's also important to own the right property to suit the local demographic.

4. Don't believe the hype

Be careful who you listen to for advice.

There are some great independent advisors out there, but the market is flooded with developers, property marketers, and real estate agents who don't really have your best interests at heart.

5. Location does the heavy lifting

Location will do 80% of the heavy lifting for your property's performanc