Tick....Tock....The Property Clock
The metaphor of the Property Clock is often used to generalise where property is at in the cycle of boom and bust.
I’m starting to think the batteries in my clock died at 6.30…
Property Development and Investment is such a different beast post-GFC compared to pre-GFC. Since the GFC of 2008, and since at least 2010 when property development really hit a wall, the total amount of investment in property has declined dramatically, but yields for well placed, new, national tenanted properties have tightened to record levels as investors’ have sought returns on their money greater than 1-2% cash rates.
In addition, the two-speed economy of the regions versus the capital cities has grown exponentially. Whilst Brisbane, Sydney and Melbourne have seen price and demand growth in residential (although corrections in this market are afoot), tumble weeds still blow through the regional development industry, and these winds are generated by the pandering of our politicians to the quick fix, the next election result, and a complete lack of political will to invest in regional Australia.
The property clock in the capital cities is lapping the regional clock. The capitals have had rises and falls in the last 10 years whilst the regional clocks remain stuck at the bottom.
That’s why we need base load power in the regions…so that my property clock can power up again.
John Rosel