Why you MUST invest in Australian Real Estate NOW!

Uncertainty makes many people hesitate, but I explain why Australian residential real estate can stay resilient when other assets swing. I break down the data behind demand for established homes, the supply pressures building in the market, and the practical rules I use to invest with confidence for the long term. 

• Why tangible housing demand holds up in uncertain markets 
• Why rising construction costs can push buyers toward established properties 
• How a property’s slower selling process can reduce sharp volatility 
• Why residential real estate sits at the center of Australia’s economy 
• The wealth effect and why governments avoid steep housing falls 
• Long-term growth data across wars, the GFC, and COVID 
• Targeting affordable areas with strong demand and low supply 
• How inflation can erode the real value of debt over time 
• Why Australia attracts capital as a perceived safe haven 

If you're listening to this and you think, I want to do something, but I just don't know where to start, I don't know where to look, to be able to go out there and continue to build, reach out to us and we can have a chat and see if we can help you invest confidently, invest in those right areas.

Transcript

Why Invest During Uncertainty

SPEAKER_00 0:00

Why right now you must be investing in residential Australian real estate. When global uncertainty rises, people want to bow out, they want to sit on the sidelines and not take action. Sophisticated long-term investors do not get sucked in from the negativity from mainstream media. They look at and they understand how the system within Australia works. There is one asset class at the center of the Australian economy, and this is residential Australian real estate. My name is Casey Taylor, and I'm the host of the Tailored Property Wealth podcast, and we talk about all things property and finance. In today's episode, I'm going to be breaking down in depth a lot of the data on why Australian residential real estate is going to be further in demand based on the current environment, the war in Iran, and the uncertainty in the marketplace. Now, the first thing I want to touch on today is why residential Australian real estate really does benefit from times of uncertainty. And that is because there's a lot of volatility in other marketplaces, in other asset types. People start to get more comfortable with a tangible asset. And we're going to break that down exactly today. We have to remember, and I bang on about this all the time, as long as human beings are on this planet, we need somewhere to live. And because of the residential space, there is always going to be a requirement for us to live somewhere. And that is why residential Australian real estate is one of those asset types. I want to kick things off with the established space and established properties. And one of the reasons it's going to be more in demand is because we're going to have construction costs rising off the back of oil prices. And because of that, that is going to impact the supply we have in this country and the new supply being added. We know right now that there is a massive issue with our supply. We have the government targets well behind their goal and what they're wanting to achieve. And that is only going to be further negatively impacted because of these rising costs. There's going to be less margins. And because of these less margins means that some of these new builds will not go ahead and will not take place, or they become more expensive, and people start to pivot towards an established property that's already there. People don't really understand this metric as part of that. You can go out and you can purchase an established property in an established area and it doesn't see those construction costs increase for that same asset as such. Yes, obviously growth does occur, but it's a lot easier to go out and purchase an established property where you know at that point in time your construction costs aren't going to rise dramatically. Now, I mentioned that Australian real estate is a requirement as long as human beings are here and it's an intangible asset. So what that means is that some of these other asset classes, when people lose confidence, they they start to tap out of the share market, for example. And that's why we see the volatility there. You can go and sell your shares quite quickly and you can bow out of those. So that's where we can see those corrections be far more impacted and far larger than that of property. Whereas if someone wants to exit property, it's a process to be able to do that. If I want to sell my property today, I need to go, I need to get a real estate agent out, appraise the property, list with them, run a marketing campaign, sell the property, and then settle as well. So it can be a two to three month process if we make the decision today to sell. We see that the residential space in real estate is a lot more resilient because of that. So this is going to mean that we're going to see more people move towards the residential real estate space than sometimes the share market. And this is just going to be continued fuel and continued demand in that established space within real estate. Now, within Australia, the residential Australian real estate space is worth right now, as per the ABS in the December quarter 2025 data, worth$12.3 trillion. Now that means that the Australian economy is heavily reliant on residential real estate. You have to think about it from the perspective that because of the lending that's tied to the rese space, some of the biggest companies within Australia are the Big Four Bank: CBA, Westpac, NAB, and ANZ. And that means that if the property space corrects heavily, the government need to intervene because it has a ripple effect from there. And this is why over long-term data, and we will get into that today, you can see that continued increase in value. Because we are so reliant on the Resi space, this is where we see the government always providing grants and incentives into the real estate space. One of the important things to note is that if property prices start to correct as well, what happens is because everyone is so heavily invested into that residential real estate space, if property prices start to drop, people start to feel less wealthy, they start to spend less. And that's where it really starts to negatively impact the economy as well. And it has effects that way that are negative, that the government doesn't want to get us to that point where we're falling into recession. This is called the wealth effect. And if people are feeling wealthier, that's where they spend more. And if they're not feeling wealthy, they don't spend as much. Now, obviously, in the current environment, we do have some sticky inflation. So we don't want people out there spending massively. However, we're just thinking of this on the flip side. Now, because of the value in real estate, this means that the government actually wants property prices to continue to trend upwards. And with this, if we look at long-term data, we know the property performs extremely well. Core Logic, now known as Catality, released data in 2022 over the last 30 years. Now, that data was from 1991 to 2021. There was a massive amount of growth in the residential real estate space over that 30-year period. So my apology, the data is actually from 1992 to 2022. Now, that 30-year data, if we're looking at prices in capital cities, houses increased by 453%, and units increased 306%. And if we're looking at regionals over that 30-year period, they grew in houses by 313% and 212% for units in the regional market. So over time, there is still massive amounts of growth in those assets. Now, if we think back to past wars, past challenges in the environment and economy, there's been things such as the Gulf War, the Iraq War, the GFC, and most recently COVID. Yet throughout that period of time, long-term property continues to grow. This is where you mustn't get complacent. You mustn't just get caught up in the headlines, caught up in data for one, two, three months for 12 months. It's really crucial to look at it long term and understand what that performance is like. However, there's other ways where you can still invest and invest in areas that are actually going to still perform strongly. What we actually do is we focus on affordable price ranges within those capital cities. Some of the top end of the market is more affected by some of these movements, by interest rates increasing than the lower quartile percentage. And that's because people can still transact in that affordable, affordable space. And it is a lot more resilient. And if we can target areas where income is high, where property prices aren't at their borrowing capacity ceiling, and we can see that there's high demand with a low supply, there is going to be continued pressure, continued performance in these locations. We can even see this from a couple of years ago when we're in a rate rising cycle. There were many areas we were going into and targeting while rates were rising, and they're doing 20% in a year. And that is because they're in the affordable locations with strong demand and limited supply. This is the core understanding that you must be following when purchasing to mitigate your risk, to get that performance and continue to grow your wealth base and move into multiple assets. We also need to remember in this environment that inflation actually devalues our debt. So, for example, if we have$500,000 worth of debt today, as inflation continues on, and we see this year after year typically, even if it's in the in the range of two to three percent, our debt value in 10 years' time is going to be worth less in 10 years' time than it is today, because of inflation. And on the flip side of that, inflation actually ends up in asset prices. So as inflation increases, this trends translates back to our asset prices, and we see that shift and that increase in value. And that's why over time, if we purchase in the right locations, we hold long term, we can hold our debt level at the same amount, paying interest only, not paying any debt off, but our LVR drops, our risk to the banks and to the lenders drops, and we continue to build our wealth base and increase our net wealth margin. Another thing that we want to consider is that capital starts to flow to environments that are resilient, that are safer, and people have more confidence. And that is our country. It's a safe haven. Australia is a safe economy that people want to move to in general. And once this sort of thing starts to happen, there is lower confidence in certain areas. That demand only increases for residential real estate in Australia. So right now, with this environment, this is why the residential real estate space and houses in established areas are low risk. They're still going to be in demand because people still need somewhere to live. They can still afford to get into these locations, even if we are seeing rates rise a little bit at the moment. And this is exactly why right now you need to be investing in your future and not just going to work, getting your paycheck, saving a little bit each week, only to rely on the pension into retirement and being asset rich with no passive income. These things are going to continue over time. We're going to have increased costs. We're going to have inflation. And this is where you need to go out there and you need to invest in assets and build your wealth base. Because as time goes on, you build your wealth base. If we have inflation, if we have costs increasing like we are today, you're going to be less affected because your wealth base is larger if you have more assets, if you have more passive income over time. Otherwise, you're continuing to get further and further behind. You have to play the game or the game will play you. That is simply it. You have to go out there, you have to take action, you have to do things to be able to change your financial future. If you're listening to this and you think, fuck, I want to do something, but I just don't know where to start, I don't know where to look, to be able to go out there and continue to build, reach out to us and we can have a chat and see if we can help you invest confidently, invest in those right areas. We can put you in touch with a mortgage broker to see where you're at, what your financial position looks like to be able to continue to build your wealth, come up with a plan, come up with a strategy so you can continue to build your wealth. I personally am still investing right now. I'm getting into the market and continuing to grow the wealth base because I know in 15, 20 years' time, prices are going to be massively on discount to what they will be then. Prices will be higher in six to 12 months' time than they are today if you're investing in the right locations and you're understanding the fundamentals and supply and demand. I hope this episode has been valuable for you. It's really important to understand a lot of those metrics and what actually happens with the residential real estate space in times of uncertainty that we're in now. It is a safe asset class to be in. And because of that, we benefit in times like this. I hope you've enjoyed this one, and we'll see you on the next episode. Thanks.