---
title: "The Australian Prime Minister Just Sold His Investment Property. Should You Panic?"
description: "When politicians start offloading property at a discount, it signals something. But the signal isn't what most people think. Here's what the smart money is actually doing."
author: Yan Zhu
date: 2023-07-27
category: Investment Strategy
url: https://premiumrea.com.au/blog/australian-pm-selling-property-what-it-means
tags: ["property market signals", "political selling", "Melbourne", "investment strategy", "market timing", "affordability", "contrarian investing"]
---

# The Australian Prime Minister Just Sold His Investment Property. Should You Panic?

*By Yan Zhu, Co-Founder & Chief Data Officer at PremiumRea — 2023-07-27*

> Politicians selling property at a loss. Li Ka-shing exiting markets years before crashes. When the people with the best information start selling, the rest of us should pay attention — but not necessarily follow.

Something caught my attention last month. The Australian Prime Minister quietly listed his Sydney investment property and reportedly accepted $150K below asking price. He's not the only politician offloading — several members of parliament from both sides have been reducing their property holdings over the past twelve months [1].

The Chinese have a saying: spring water warms first for the ducks. The people closest to the water feel the temperature change before everyone else.

Politicians have access to information that ordinary investors don't — policy direction, immigration settings, infrastructure commitments, regulatory changes in draft. When they start selling, it's worth asking why. But the answer isn't as simple as "the market's about to crash." The answer is more specific, more geographic, and far more useful than a blanket panic.

## What the politicians are actually signalling

Let's be precise about who is selling and where they're selling.

The properties being offloaded are predominantly in Sydney, Brisbane, and Perth — markets that have run hard over the past three to five years. Sydney's median house price hit $1.4 million by late 2020. Brisbane and Perth both saw 20-30% gains driven by interstate migration and mining economics [2].

Affordability in these markets is stretched. Sydney's price-to-income ratio exceeds 12x. Parts of Brisbane are approaching 9x. Perth's coastal suburbs have blown past 10x on the back of mining wages that may not be permanent [3].

When politicians sell in these markets, they're not predicting a crash. They're doing what any smart asset manager does — they're rotating out of overheated positions. They're taking profit in markets where the easy gains have been made.

The Li Ka-shing parallel is instructive. In 2016, the Hong Kong billionaire began selling mainland Chinese property assets. People thought he'd lost his touch. Chinese property prices rose for another five years after his sales. By 2024, many of those markets had retreated to 2016 levels [4]. He didn't time the top perfectly. He didn't need to. He sold when the risk-reward tilted unfavourably and redeployed elsewhere.

You can question a politician's character. You can question a billionaire's ethics. But you should never question their commercial instincts. They have information asymmetry working in their favour, and they use it.

## The immigration variable nobody's talking about honestly

Here's the elephant in the room. Australia's property market is, at its core, a population growth story. More people means more demand for housing. More demand against constrained supply means higher prices. This is not controversial [5].

But population growth is a policy lever. And the political direction on immigration is shifting.

Both major parties have signalled tighter immigration settings. Student visa caps have been debated. Skilled migration pathways are being restructured. The net overseas migration figure — which hit record highs of 500K+ in recent years — is being deliberately wound back [5].

If politicians with access to forward policy settings are selling their Sydney and Brisbane properties, one interpretation is that they believe the population growth engine that powered those markets is about to cool. Less migration means less demand. Less demand in an overheated market means either price stagnation or correction.

Again — this isn't a national property crash signal. It's a market-specific one. The markets that rose on the back of migration-fuelled demand are the ones most exposed when that demand moderates.

## Why Melbourne is the contrarian play right now

Here's where this gets interesting for people willing to think independently.

Melbourne has been flat to slightly negative for three years. While Sydney gained 25% and Brisbane gained 30%, Melbourne's median barely moved [6]. The narrative has been relentlessly negative — high land tax, tenant-friendly rental laws, oversupply of apartments.

But let's look at what the politicians are NOT selling. None of them are dumping Melbourne property. Why? Because there's nothing to dump. Melbourne didn't have the speculative run-up. There's no froth to skim.

And that's exactly the opportunity.

Melbourne right now sits where Sydney sat in 2019 and Brisbane sat in 2020 — at the bottom of its cycle. Affordability is still reasonable. You can buy a freestanding house on 600+ square metres for $590K-$650K in the outer southeast. Try doing that in Sydney. You'll get a one-bedroom unit in Parramatta for the same money [7].

Our team operates exclusively in Melbourne, and specifically in the southeast corridor — Cranbourne, Hampton Park, Narre Warren, Berwick, Frankston. We buy properties where the land value exceeds 80% of the purchase price. We renovate using our in-house team. And we guarantee minimum rental yields of 5% written into the service agreement [7].

Last year we transacted nearly 100 properties. Not one was in Sydney. Not one was in Brisbane. Every single one was in Melbourne. And I'm putting my own money where my mouth is — my entire personal portfolio is deployed here.

When people say "but isn't that risky, having everything in one market?" I say: find me another capital city where you get this combination of affordability, land value, rental yield, and infrastructure growth. If you can, I'll invest there too.

## Never earn the last dollar

Li Ka-shing's famous dictum: never try to earn the last copper coin. Leave some profit on the table. Exit before the crowd does.

This principle applies both to markets you should leave and markets you should enter.

If you're holding property in a market where affordability has stretched past 10x income — and especially if it's approaching 14x — it's time to think about rotation. Not panic selling. Not dumping at any price. Strategic rotation into a market that still has room to run [8].

Melbourne's outer southeast is trading at 5-7x household income. That's the sweet spot — affordable enough for the next wave of buyers (first home buyers, young families, migrants) to enter the market and push prices up. When you buy in an affordable market, you're buying ahead of demand. When you buy in an overheated market, you're buying into the tail end of demand [3].

I've had clients liquidate Sydney holdings (despite being in profit) and redeploy into two Melbourne properties. Within two years, the two Melbourne assets had appreciated more than the single Sydney property would have — plus they were generating positive cash flow instead of negative gearing losses [7].

The politicians might be selling for reasons we'll never fully know. But the underlying logic — rotating out of expensive, stretched markets into affordable, early-cycle markets — is sound. It's exactly what we do for our clients every week.

## What this means for you

If you're holding property in Sydney, Brisbane, or Perth and wondering whether to follow the political class out the door — the answer depends entirely on your specific asset, your debt level, your cash flow, and your time horizon.

But if you're sitting on the sidelines with capital to deploy and you're looking at Australian property markets in late 2020, Melbourne is the obvious entry point. Not because I say so. Because the data says so. Affordability under 7x. Land still available at $600K for 600+ sqm. Rental yields of 5-6% achievable with renovation. Three years of flat growth creating a value gap relative to every other capital city [6].

Don't follow politicians blindly. But don't ignore what they're doing either. The information they have is better than yours. Use their actions as one data point among many.

And remember: the best time to buy in any market is when everyone else is looking somewhere else. Right now, everyone is looking at Sydney and Brisbane. Melbourne is empty. That's where the gold is.

I'm Yan Zhu. I only buy Melbourne. And my chequebook agrees with me.

## References

1. [Australian Parliament House, Register of Members' Interests, 2020. Multiple parliamentarians disclosed property divestments in NSW and QLD during the year.](https://www.aph.gov.au/Senators_and_Members/Members/Register)
2. [CoreLogic, 'Monthly Housing Chart Pack — December 2020'. Capital city price movements showing Sydney, Brisbane, and Perth gains versus Melbourne stagnation.](https://www.corelogic.com.au/news-research/news/2020)
3. [CoreLogic, 'Housing Affordability Report', Q4 2020. Price-to-income ratios by capital city: Sydney 12x+, Brisbane approaching 9x, Melbourne 7-8x.](https://www.corelogic.com.au/research)
4. [CK Hutchison Holdings Annual Reports, 2016-2020. Li Ka-shing's strategic divestment of mainland Chinese property from 2016 onwards.](https://www.ckh.com.hk/en/ir/annual_results.php)
5. [Australian Bureau of Statistics, 'Overseas Migration, Australia', Cat. No. 3412.0, 2020. Net overseas migration data and forward projections for population growth.](https://www.abs.gov.au/statistics/people/population/overseas-migration)
6. [Domain, 'State of the Market Report — Melbourne', December 2020. Three years of flat to negative growth creating value gap relative to other capital cities.](https://www.domain.com.au/research/)
7. [PremiumRea portfolio data: 350+ transactions in Melbourne southeast. All-in Melbourne strategy, $590K-$650K median purchase, 80%+ land value ratio, 5%+ yield guarantee in service agreements.](#)
8. [SQM Research, 'Housing Boom and Bust Report 2020-2021', Louis Christopher. Cycle analysis showing Melbourne at trough position with upside potential relative to peaked Sydney/Brisbane markets.](https://sqmresearch.com.au/publications.php)

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Source: https://premiumrea.com.au/blog/australian-pm-selling-property-what-it-means
Publisher: PremiumRea (Optima Real Estate) — Melbourne buyers agent