It won’t surprise readers when I say I believe there’s no greater way to build long-term, retirement-sustaining wealth than through smart, astute real estate investing.
At least, that’s the case for those that know exactly how to play the 18-year land cycle.
It may sound like a big statement.
We’ve all heard the Spruiker’s cliché that property doubles in value every seven to 10 years, right?
It’s a somewhat disputable stat.
The claim comes from median price data.
Take the bayside suburb of St Kilda East in Melbourne as an example.
It’s a hop from the iconic Luna Park, famous St Kilda Pier - bustling with vibrant cafes all within easy access of public transport facilities.
In 2013, the median price of houses was $1,050,500.
By the first quarter of 2024, it had pretty much doubled to $2,095,000
The median is merely the middle figure of a bunch of sales. So, it does cloud the data somewhat.
In other words, not each and every house in the suburb may have doubled in value over that 10-year period.
Some may have taken longer.
But I can tell you now – I’ve seen many examples over the course of my career, of houses that have not just doubled in value in ten years - but tripled!
The key here is having the knowledge to know what to buy, where to buy – and importantly, timing the cycle to get the greatest gains.
The latter is somewhat harder these days with government intervention in land policies that can gift windfalls or reverse prices throughout the cycle.
I’ve provided a lot of info on that front over the past few weeks/months.
And note, the biggest gains are not found in fancy suburbs like St Kilda and surrounds.
Often if comes from buying into an area that still carries a stigma to it.
An area sitting below the city median.
One that is just starting to gentrify and attract a population influx.
It’s these regions that give a short burst of accelerated capital growth and ongoing gentrification, that you don’t typically get from pricier suburbs.