Hotspotting Terry Ryder & Tim Graham

According to our national newspaper, The Australian, the fact that property prices have continued to rise in spite of higher interest rates is, and I quote, “weird” – and apparently the people described by the newspaper as “experts” are scratching their heads about it.
The article that contained this nonsense was just another plank in the ever-growing pile of misinformation about real estate issues perpetrated by economists and journalists who don’t allow their ignorance of property issues to prevent them from commenting about them.
Journalist Anthony Keane is the personal finance editor at The Australian. And given that he has a fancy title and he works for this major standard-bearer Newscorp publication, the national newspaper, we the readers are entitled to expect him to know something about the subjects on which he pontificates.
Sadly, he does not.
In claiming that it’s unusual, indeed “weird”, for prices to rise when interest rates have increased, he is demonstrating that he’s not a student of history and he doesn’t waste any time on research before banging away on his computer keyboard.
He simply regurgitates the outpourings of economists who subscribe to the kindergarten analysis view that falling interest rates mean property prices rise and rising interest rates mean property prices fall.
That pretty much sums up the views of senior economists working for the big four banks and others like them. They continue to believe that interest rate trends dictate everything in real estate, although there is a mountain of evidence that confirms this is not the case – notably in the past 18 months.
Many of Australia’s most spectacular property booms have occurred during times of high and and rising interest rates, including in the late 1980s and the early years of this century, when mortgage rates were higher than now and rising, but market activity and prices kept on increasing.
Last year, we had the RBA continuing to lift the official interest rate – we saw a total of 13 monthly rises by the time they paused – and yet we had substantial price growth nationally, including boom-level price increases in several of our capital cities and also in several regional markets.
According to Anthony Keane, this represents what he calls “a new world of weirdness”.
The reality is that it’s not weird, it’s quite normal.
And the people who are apparently “scratching their heads” about it are not experts. If they had expertise, they would understand the dynamics in real estate markets and be unsurprised at the price outcomes.
People who are really bad at predicting housing markets and price outcomes, like the big bank economists, would rather claim the market is wrong than admit that they are.
The past 18 months in real estate has not been an aberration or a unprecedented maverick event – it’s simply another demonstration of the reality that interest rate events are NOT the prime influence on trends in real estate.
Right now there are far more powerful forces in play, including the imbalance between supply and demand.
So, is this (as suggested by The Australian) a new world of weirdness? 
No, it’s not, it’s simply business as usual in property markets across Australia, in which interest rates are a factor but not a particularly powerful force – in times when the biggest influence is the shortage of everything important in real estate at times of high demand, causing prices, rents and yields to rise in good locations.
Far from this being a case of “weird is the new normal”, normal continues to be normal.

The new 2025 Financial Year is upon us and, as we do every year, we are making special offers to real estate consumers and to our business customers.
One of the key factors for success for real estate investors is basing decisions on quality research.
As we launch into the new financial year, it’s crucial to have the best information at your fingertips.
To help set up investors with a suite of reports that cover all the key bases, we’ve put together a bundle of reports that nominate great locational options for capital growth, for rental yields and positive cashflow, as well as our Australian Property Guide that provides information about the key rules and costs like stamp duty in each state and territory.
So this special bundle provides the new edition of National Top 10 Best Buys, as well as National Top 10 Positive Cashflow Hotspots report and the Australian Property Guide at a price that saves you $248 if you bought each of those three reports separately.
Having these three reports gives you a major head start on the competition for the best places to buy in Australia in FY2025.
For real estate professionals we have two key membership products, Property Pro and Enterprise.
These provide a range of features, including access to our new one-stop-shop research portal, all our hotspots reports and a range of other key benefits.
Our EOFY special deals provide a saving of $1,500 for the Property Pro membership and an annual saving of $3,000 for the Enterprise membership.
Overall, it’s a package of special deals that has something for everyone, whether you’re an investor who wants to buy, an investor who plans to sell or a real estate professional with a business seeking to provide the best advice to customers.
And if you want to take advantage of these offers, you need to take action this week – as the special deals expire on June 30.
 

The most successful property investors have some features in common - and making decisions based on genuine research is one of the key ones. But those people are relatively rare.
My observation of the behaviour of investors over four decades shows that more people make investment decisions based on media soundbites than on real research.
And, as we embark on a new financial year with all kinds of competing forces in play in real estate, it’s more important than ever that real estate consumers base their decisions on research, rather than media frenzy and herd mentality.
Far too many people are leaping recklessly into the Perth property market because mainstream media keeps telling them that prices are booming and will keep on doing so, backed by commentary from real estate people who have a vested interest in prolonging the boom.
At Hotspotting, we think this media soundbite approach is fraught with peril and that many of the people diving into the Perth market - grabbing anything that’s for sale and paying more than the asking price, without regard for the quality or location of the property - will regret their decisions made in haste without proper due diligence.
It’s a reflection of those views that our new edition of the National Top 10 Best Buys report does not include any locations in Perth. Based on detailed research, we think this market has peaked (after three years of major price growth) and will not be the national leader on capital growth in FY2025, as some are predicting – or hoping.
We think there are other, better places for people to be putting their money – safer, less volatile, less heated markets with good potential for capital growth. Well-researched investors buy in areas with growth credentials BEFORE prices escalate.
Our choices for good locations to buy in FY2025 are based on research-based knowledge of the key trends driving demand in the best locations across Australia. 
We’re not focused on short-term sugar-hit gains; we’re focused on places we think will do well in the medium to long term. We base our choices on economic factors, demographic trends and on the locations of influence from big infrastructure developments.
At Hotspotting, we are constantly on the look-out for evidence of change in property market trends and individual locations.
Places that have been weak performers on capital growth in the past can become the leaders of the future because something major has changed in that market – often caused by the development of major new infrastructure.
Sometimes it’s a significant demographic shift – such as the trend that has seen large numbers of people leaving the biggest cities and moving to smaller cities or to regional areas, in search of a different and more affordable lifestyle, enabled by technology.
In the past 12 months we have observed a surge in demand for units and townhouses by a range of buyer cohorts, for a host of different reasons – and this is changing one of the dominant paradigms of real estate: that houses outperform units on capital growth.
We have also seen he re-emergence of markets that had exceptional price growth from 2020 to 2022, have had 18 months of correction or flatlining and now are starting to grow again. We call them “the second wind markets”.
Real estate is dynamic, with change as a constant: if you read the new edition of our National Top 10 Best Buys report, you will know about all the key trends that matter in the new 2024-25 financial year.
 

The report we call The Pulse provides critical intelligence for property investors because it shows how you can get both a high rental yield and excellent capital growth if you choose your location well.
Recent editions of The Pulse have featured locations where rents have grown 10-15-20% in a year, but so have property values – providing the ultimate win-win-win situation for property investors.
Hotspotting produces this report in association with leading national experts on property depreciation, Washington Brown – who provide additional key elements to the data in this report.
The figures from Washington Brown show that intelligent application of depreciation tax benefits can create a significant increase in the rental yield of your property.
It depends on a number of factors, including the tax bracket you are in, but typical depreciation benefits for an investment property can lift a 6.3% gross rental yield to 6.75%.
A 6.4% yield can improve to 6.8% or 6.9%.
Tyron Hyde, the CEO of Washington Brown says that “Depreciation is the secret sauce when it comes to property investing - and can turn a good, positively geared property into an even greater property! 
“Better yet, depreciation can turn a negatively geared property into a positively geared scenario.”
Tyron Hyde reminds us that property investors are able to claim the wear and tear of a property against their taxable income, which should be factored into the yield of a property.
Depreciation is a non-cash deduction, which means, unlike all other expenses on your property, you don’t have to pay for it. 
The depreciation amount you can claim is built into your property when you buy it; you just need a Quantity Surveyor like Washington Brown to calculate the number.
So, if you get a copy of The Pulse, you can learn a number of key things for property investors: 50 locations which are affordable, where you get above average rental yields, and which have good potential for capital growth – and the important data from Washington Brown which shows how depreciation benefits can turn a good rental yield into a great rental yield.
 

Victoria has become the state that property investors don’t want to know about, because its politicians at both state and local level appear to have declared open season on investors.
The State Government in Victoria has a budget deficit problem and has made the decision that many politicians in Australia make, which is to resort to the housing market as their favourite cash cow.
They can’t slug home-owners or first-home buyers with new or higher taxes because that’s politically unpalatable – but investor owners are relatively few in number so they can attack them with less damage politically.
It will result in fewer investors, therefore fewer rental properties, and therefore higher rents for tenants, but hopefully (in the minds of the state politicians) tenants will blame their landlords rather than the government.
So the State Government in Victoria has smashed owners of investment properties in the state with big increases in existing taxes – notably land tax – and with the introduction of new taxes.
It’s almost as if they see investors as a criminal class and they all need to be punished.
If that isn’t enough, now the State Government has announced it will mandate the upgrade of a range of components inside rental homes 
This would force landlords to install insulation, draught-proofing, cooling and heating systems and new shower heads – and the estimates for the cost impact of that range from $5,000 to $10,000.
Consumers Affairs Minister Gabrielle Williams, displaying the out-of-touch divorced-from-reality quality so common among politicians, says this is a relatively small cost for property owners to wear and won’t be a problem for anyone.
But for typical owners, an additional cost of $5,000 or $10,000 on top of huge increases in interest rates, insurance, maintenance costs and government taxes including land tax and council rates, this is a killer blow.
There is already an exodus of investors from Victoria because of the recent tax increases and this new imposition of enforced upgrades will compel many more to sell up and leave the state.
Veteran property commentator Jonathan Chancellor has described the Victorian State Government measures as “a lesson in what not to do” in the face of a rental shortage crisis.
He said that the state bureaucracy had admitted that Melbourne’s rental supply may contract as a result – keeping in mind that it’s already alarmingly low.
But it doesn’t end with this appalling state government. Local councils have already joined the increasingly popular political sport of demonising and punishing investors.
The Merri-bek Council, or elements of it, want to take the assault on property investors to a new level. The plan is to double council rates on investment properties and reduce rates for everyone else.
They say that, if it forces investors to sell and their properties are bought by owner-occupiers, that’s a great thing. In fact, according to the policy stated by the proponent, Cr James Conlan, that’s the main objective.
The logic, if you can call it that, is that it will make homes available for purchase by first-home buyers. But most suburbs in this LGA have median house prices well above $1 million. The three Brunswick suburbs are all around $1.3 million. 
How many first-home buyers in Melbourne can pay over $1 million as their first foray into the property market.
It’s simply not going to happen.
But, beyond that, where will the tenants of these properties go? Who will provide the rental properties if the local council forces all investor owners to sell, which appears to be the ultimate objective of this appalling proposal.
Vacancy rates in the postcodes of Merri-bek LGA are well below the already-low Melbourne average – many of them have vacancy rates around 0.5%, which is at crisis levels.
Looking more broadly across the state, the number of homes occupied by renters in Victoria has fallen by 10,400 in just three months a

There are many so-called research reports in Australia which do a very poor job of providing useful, accurate, credible information to consumers – but the worst of the worst is a report called Demographia which pops up once every year to misinform Australians about affordability.
This report, which is a shameless propaganda exercise by a developer lobby group, sets out to portray Australia as a place where no one – and I do mean no one – can afford to buy real estate.
The lobby group is apparently trying to convince governments across Australia that the development industry is over-regulated and that this over-regulation is causing unaffordable housing everywhere – and I do mean everywhere – in Australia.
This ridiculous report has been claiming for 20 years that the whole nation of Australian is unaffordable.
And the latest edition of the report claims that significant chunks of Australia are and I quote, “impossibly unaffordable”.
Now, think about it for a moment. If this was true, no one could afford to buy homes in Australia at all. Because, essentially, that’s what they’re claiming - that no one can afford to buy real estate.
Clearly, that’s a ridiculous and preposterous claim because all over Australia there is a high level of sales activity and prices continue to rise in most locations.
The latest official lending figures show that loans to owner-occupiers, to first-home buyers and to investors have all risen substantially in the past 12 months.
There is high demand for homes and for investment properties and the high level of sales is causing prices to rise in most locations.
Now, none of that would be possible if the Demographia report was credible and accurate – because it says the whole country is unaffordable.
Indeed, it says our major cities are the most unaffordable in the world.
But here’s the thing – the report doesn’t cover the world. It only compares Australia will a tiny proportion of the nations on the planet.
There are over 200 countries in the world – and how many are included in this report? Just seven. Australia and six others.
And yet it maintains that it can justify the claim that Australian cities are the most unaffordable in the world.
Now, if common sense prevailed, you and I wouldn’t even be aware that this report exists because it’s so implausible and lacking in any merit whatsoever.
But we DO know about it because news media in Australia doesn’t care about ethics or accuracy or fairness or credibility.
Journalists, sadly, care only about the headline and don’t care that the information on which the headline is based is patently, blatantly and obviously false.
Michael Bleby, who apparently is the Deputy Property Editor for the Australian Financial Review, was happy to report that Sydney, Melbourne and Adelaide are all “impossibly unaffordable” and ran the headline “Impossibly unaffordable housing a social risk”.
Bleby stated that Sydney is the world’s second-least affordable city for housing, based on the content of the Demographia report.
Now, I’m assuming that Bleby has seen the report, because it would unprofessional and unethical in the extreme to make such claims without looking at the evidence.
So I can only conclude that he doesn’t care too much about the substance of what he is writing, so long as it generates clickbait.
News Corp journalist Aidan Devine put his name to an article that stated that three of our capital cities were ranked in the top 10 most unaffordable housing markets in the world – and then claimed that Australia was the least affordable housing market in the English-speaking world.
So these journalists and others were happy to make these outrageous claims despite what the facts show us.
I’ve read half a dozen different articles on this and only one of them mentioned, briefly, the small number of countries in the report.
In Sydney, claimed by the report to be “impossibly unaffordable”,