How Can I Use Property Investment to Build Long-term Wealth?

Australia boasts one of the most impressive track records for long-term property yields globally. However, one of the biggest mistakes property investors make is losing patience, which often leads to missing out on the full rewards.

How has Australia’s property market performed?

According to a recent report by the Switzerland-based Bank for International Settlements, Australian house prices have experienced the most sustained upswing globally since the early 1960s. This remarkable growth cements Australia’s reputation as a robust property market.

But it’s not all smooth sailing. Like any market, property prices are subject to cycles of rise, fall, and stabilisation before climbing again. These fluctuations are a normal part of the property cycle and not a reason to panic.

The key to success? Think long term.

Property investment, like other long-term investments, rewards those who can ride out short-term volatility. In most cases, what feels like a temporary setback is simply a stepping stone to long-term growth. The key is holding on.

A real-life example of patience in action.

In 2008, we negotiated the sale of a block of 91 apartments in Sydney’s southwest. Each two-bedroom, two-bathroom, one-car apartment was sold for $405,000.

A few years later, some clients expressed concerns about the apartments’ performance. Rental yields were low, and property values had only slightly increased. We encouraged them to remain patient, pointing out that they had bought in a strong suburb at a competitive price and that holding the properties would likely yield the best results.

Despite this advice, some investors sold their apartments in 2010 and 2011. After accounting for costs, most barely broke even.

Fast forward nine years, and those same apartments were recently valued conservatively by a bank at $875,000 – more than double their original price. Rents during this time fluctuated, with some years seeing a 5% increase, others experiencing small declines, and periods of flat growth before rebounding.

The takeaway: patience drives profit

This example highlights the importance of patience in property investment. While there may be valid reasons to sell – such as unexpected life events or capitalising on a short-term market boom – holding on often leads to greater rewards.

In some cases, selling strategically can be beneficial. For instance, freeing up funds for a higher-potential investment or capitalising on a short-lived surge in demand (like in holiday towns). Whatever the scenario, having the right advice is crucial.

The bottom line: be patient

The ultimate message is clear: property investment rewards patience. Market fluctuations, including stagnation and slumps, are normal. Yet, history shows that in Australia’s major cities, the long-term trend is consistently upward. The longer you hold, the more likely you are to reap the rewards.

At Providence, we don’t just find properties – we uncover opportunities. By blending decades of experience with rigorous research, we empower our clients to make confident, informed decisions. Ready to start your property investment journey? Let’s find the right opportunity for you.