Episode Details

The Australian housing market is going gangbusters and all the signs are the boom is here to stay for some time.

But how do you profit from this current growth cycle?

In today's podcast, I discuss 6 property trends that you're going to see – and hopefully take advantage of – in 2021.

Then, in the second half of the podcast, I chat with property researcher John Lindeman, who will teach us how to profit from this stage of the growth cycle, because if history repeats itself, lots of investors will unfortunately lose money instead of profiting.

My aim is to ensure that at the end of this episode you'll have more direction and certainty to take advantage of our property markets over the coming year.

6 Property Trends to Look for in 2021

• Demand from Homebuyers Will Remain Strong: People have saved money, borrowing costs are lower than they've ever been, and interest rates won't rise for a while. Plus, COVID is under control. These factors will inspire more people to buy and FOMO will continue to drive homebuyers into the market.
• Investors Will Eventually Squeeze Out Homebuyers: Increased competition and rising property values will edge out first-time homebuyers as more investors get into the market.
• Property Prices Will Continue to Increase: Consumer confidence, low interest rates, economic growth, and a favorable supply and demand ratio will all help drive property values. However, some segments of the market will continue to struggle.
• Buyers Will Pay a Premium for the Right Neighborhood: People want 20-minute neighborhoods, with the ability to live, work, and play all within a short distance of each other. And buyers will be willing to pay more to get that.
• Expensive Properties will Outperform: Higher-end properties are leading the way in growth.
• Upgrading Will Be Common in 2021: After lockdown, small apartments will seem to confine, and people who a deposit by not traveling or spending much on entertainment during the quarantine will be eager to upgrade to a bigger and better place, especially given the ease of borrowing money.

How to profit from this growth cycle

Profiting from this growth cycle isn't as easy as it seems. Property researcher John Lindeman reminds us of Warren Buffet's famous two rules that all investors must follow if they want to ensure their success.

The first rule is never to lose money and the second rule is never to forget the first rule.

But if history repeats itself, some investors will lose money even though overall our property markets are booming, Today, John Lindeman and I discuss the things you need to know in order to profit instead of losing money.

Subjects John Lindeman and I discussed today:

• Investors need to make sure they're buying in markets where the growth is yet to come.
• You can't measure growth by the length of time that price growth has been occurring or the amount of growth that has taken place.
  • Growth is revealed by the types of buyers creating the demand.
  • First home buyers, upgraders, downsizers, and investors have different motives and limits when it comes to buying property
  • If we know which group is doing most of the buying, we can estimate when the growth is likely to end
    • Investors are motivated by profit.
    • Owner-occupiers are motivated by affordability
    • In the current market, most buyer demand is being generated by owner-occupiers, not investors
    • Investors can take advantage by buying property in areas that have not yet experienced growth but have the potential to.
  • As first-time homebuyers reach affordability ceilings are reached and their growth slows down, growth will ripple to more affluent areas as upgraders take advantage of the market.
    • So far, not much of this has happened yet.
    • However, this means that suburbs in desirabl