Investopoly Ep 381: Warning- Property investors should ignore the last 5 years of data
Nov 4, 2025
Stuart dives into why property investors should be wary of relying on the last five years of data. He highlights how unique disruptions like soaring construction costs and extreme interest rate changes skews true market trends. The shift in borrowing capacity and overseas migration patterns further complicate the landscape. He warns against hasty conclusions from recent trends, advocating for a focus on long-term data. Local knowledge, he argues, remains crucial for successful investments amidst evolving market dynamics.
AI Snips
Chapters
Transcript
Episode notes
Construction Costs Skew Short-Term Growth
- Rising construction costs since COVID have materially inflated house values where improvements form a large share of total value.
- This skews short-term growth in lower land-value areas and needs adjustment when comparing markets.
Credit Rule Changes Altered Buyer Patterns
- Changes to credit rules and interest-only caps since 2017 reduced borrowing capacity before COVID masked effects with ultra-low rates.
- Subsequent rate rises revealed permanent shifts that pushed buyers into more affordable markets, distorting recent data.
Migration Caused A Rental Spike
- Net overseas migration has averaged ~20% higher since 2020, driven largely by temporary visa holders.
- That surge mainly tightened rental markets and caused a one-off spike in rents and vacancy pressures.