The best time to plant your property money tree - November 2024

By Rich Harvey, CEO & Founder, propertybuyer.com.au

For decades, the New South Wales Central Coast region was in a property market holding pattern. It was flying under the radar of homebuyers and investors alike. But COVID’s significant upheaval brought the region into the limelight. Now, a raft of drivers across the political and economic spectrum will deliver exciting times to the Central Coast – and those who own property will be among the biggest beneficiaries.
Anthony Knight, Principal buyers’ advocate for Propertybuyer on the Central Coast, has lived in the region for decades. We recently chatted about the region and why he’s excited about what’s to come.

Having worked in the property space for a long time now, and after helping thousands of people buy property to build wealth, I’m regularly asked by aspiring investors to share my advice.

There’s an old Chinese proverb that perfectly summarises my approach to real estate: “The best time to plant a tree was 20 years ago. The second-best time is today.”

It describes my view that growth takes time, and some seasons will offer the ideal conditions for a tree to flourish, while others will be temporarily tough and hinder significant progress. But, over many years, it all evens out and what began life as a tiny seed can grow into a strong and magnificent tree that stands the test of time and provides ample shade for you and your family for generations to come.

But you must plant the actual tree to achieve growth. And the more you put it off, the longer it takes to reach its full and magnificent potential.

The mistake that some aspiring gardeners - properly investors in this analogy - make is putting too much weight on short-term weather forecasts - or market doom and gloom. They see a few blips on the meteorological map, like heavy rain or a dry spell, and delay planting any seeds out of fear.

That’s the mistake many green thumbs made five or so years back when they packed up their tools and ventured inside, finding comfort in inaction.

Now, they’re realising that the grass is truly greener on the other side of the fence, where neighbours are enjoying lush gardens because they made strategic and long-term decisions.

Five years of exceptional growth

Imagine you’d invested in a property this time five years ago. The outlook was for decent growth on the back of enticingly low interest rates, but affordability pressures had experts split on how much prices were set to change in the mid-term.

There were hopes of a good year ahead in 2020, but a bit of uncertainty about how things might play out.

And then, at the back end of 2019, the world became aware of a little thing called coronavirus. Within months, life as we knew it would grind to a halt and a long and painful period of pandemic management would begin.

The outlook for housing markets was dire. Catastrophic crashes were predicted. One big-four bank even predicted rapid and severe losses in the region of 30 per cent. You would’ve been mad to park your cash in bricks and mortar… right?

Those kinds of alarming predictions were repeated when the Reserve Bank started hiking rates in response to an inflation crisis. No-one in their right mind would take on a mortgage in the midst of an historic tightening cycle… right?

So we were told. The latest CoreLogic data makes for painful reading for those who hesitated out of fear.

If you’d bought in Sydney in early 2020, you’d be currently looking at a typical gain of 29 per cent, or almost $300,000 more than you paid. In Brisbane, median values have grown staggering 66.9 per cent, or $354,000 in dollar value equivalent. In Adelaide, a subdued market few had considered, prices are 70.8 per cent - or $335,000 - higher than five years ago. Perth investors would be sitting on a 76 per cent gain, or $347,000 more.

Even smaller markets like Hobart are 27 per cent, or $141,000 higher, while Darwin values have grown by 23 per cent, or $93,000. Canberra’s median home price is 30 per cent higher than five years ago, up $200,000.

Melbourne is the outlier here, given the city was subjected to the longest lockdowns in the world and is still struggling to recover, with harsh taxation changes dissuading investors. But it’s still in positive territory over the past five years, albeit modestly at 9.9 per cent total growth, equating to $69,000.

Even those investors who planted a property investment seed outside the capital cities are celebrating. The growth over the past five years is sitting at:

• Regional NSW: 49 per cent, or $243,000
• Regional Victoria: 30.6 per cent, or $131,750
• Regional Queensland: 67 per cent, or 272,500
• Regional South Australia: 67.9 per cent, or $178,000
• Regional Western Australia: 72 per cent, or $225,600
• Regional Tasmania: 46 per cent, or $162,298

Ignore the current forecasts

Economic jitters. Interest rate uncertainty. The slow inflation war. Housing affordability. There’s a lot out there to be troubled by at the moment.

Much of the headlines you see are a mix of things, from beat-up and sensational reporting to short-term or flawed forecasting. Just like at the onset of Covid, when financial Armageddon was about to destroy all our hopes and dreams, or in the midst of the Global Financial Crisis in 2008, when the recovery was expected to take at least a decade.

Maybe the economy will contract. Maybe interest rates will stay on hold for longer than hoped. Perhaps there will be small ups and downs in the inflation right. And maybe affordability will remain a drag on certain segments of the market.

But none of those things last forever. Market drivers speed up and slow down. Prices rise and fall. Momentum intensifies and wanes. And property market cycles roll on.

If you’re buying for the long-term, none of these things matter that much. If you’re buying strategically, short- and mid-term factors can have much less of an impact, and even make no difference at all. If you are smart and have the right approach to real estate, it doesn’t matter if it’s bone dry or drenched next week, your sapling has the best possible prospects of enduring all kinds of weather and growing into a robust and glorious tree over time.

The biggest mistake you can make is never planting it.

Choose your trees wisely

Not all trees will grow healthily in all locations. Most are best suited to particular climates and need the right type of soil. Others require a huge amount of maintenance and constant care. Some are robust and can survive just about anywhere.

Property investing is the same. In order to ensure the tree you plant has the best prospects of surviving the test of time, you need to choose your seedlings carefully. They need to be the right trees for your particular patch of dirt.

What’s your yard look like? What are your personal circumstances now and how might they evolve over time? What are your long-term goals? What kind of vista do you want to gaze out upon in 10-, 20- or 30-years’ time?

Identifying the answers to these questions will help guide your investment decision-making and ensure you’re not wasting time, money and effort on trees that will never grow, or will sprout but remain fledgling shrubs for their lifetimes.

A buyer’s agent can help you understand where you are now and where you want to be in the future, then devise a strategy to get you there. They can help you come up with a wish list of property types, price points and anticipated growth trajectories, and then explore the myriad markets to nab them for the best possible property with the least amount of fuss.

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