---
title: "The Property Market Has a Wind at Its Back. Here's How Long the Window Stays Open."
description: "Market wind analysis: why the current supply-demand imbalance in Melbourne's southeast creates a 12-18 month window. Off-market strategy and capital growth catalysts explained."
author: Joey Don
date: 2023-03-16
category: Renovation & Development
url: https://premiumrea.com.au/blog/melbourne-property-market-timing-wind-window
tags: ["market timing", "Melbourne", "property cycle", "off-market", "capital growth", "investment window", "southeast corridor"]
---

# The Property Market Has a Wind at Its Back. Here's How Long the Window Stays Open.

*By Joey Don, Co-Founder & CEO at PremiumRea — 2023-03-16*

> In business and in property, timing matters. Not in the 'pick the exact bottom' sense — nobody can do that. But in the 'recognise structural tailwinds and ride them hard' sense. Right now, Melbourne's southeast corridor has three converging tailwinds that won't last forever. Let me explain what they are and why the next twelve to eighteen months matter more than the next ten years.

I've been in property data and investment for over a decade now. And I can tell you honestly: the last two years have produced more results than the previous eight combined.

That's not bragging. It's a statement about market conditions. When the wind is at your back — when supply constraints, population growth, and rental demand all converge at once — every well-executed transaction delivers outsized returns. The input-to-output ratio is extraordinary.

Right now, we're in one of those windows. Melbourne's outer southeast — the corridor from Cranbourne through Hampton Park, Narre Warren, and Berwick — is experiencing a convergence of structural tailwinds that I haven't seen in my career. And I don't think the window stays open indefinitely.

Let me explain what's driving it, how long I think it lasts, and what you should be doing about it.

## Tailwind 1: The supply drought

New dwelling approvals in Melbourne's southeast have been declining for three consecutive quarters. Council planning backlogs, construction cost inflation, and labour shortages have slowed the development pipeline to a trickle.

Meanwhile, population growth in the Casey-Cardinia corridor continues at 3%+ per year — one of the fastest growth rates in Australia. Over the past fifteen years, the population has more than doubled while dwelling construction has lagged by roughly 6,000 homes [1].

This creates a widening gap between the number of people who need housing and the number of homes available. That gap is the single most powerful driver of both rental growth and capital appreciation.

We're seeing it on the ground every week. Properties that would have attracted four or five interested buyers eighteen months ago now draw ten to fifteen. Auction clearance rates in the southeast have jumped above 75%. Days on market have dropped below twenty.

And the supply pipeline isn't recovering any time soon. Major developers are reporting 18-24 month delays on new subdivisions. Building material costs have increased 15-20% since mid-2019. Even if approvals accelerate tomorrow, new stock won't hit the market for two to three years [2].

That's two to three years of continued supply drought with accelerating demand. If you're an investor, this is the environment where equity gets built fastest.

## Tailwind 2: Rental demand explosion

Vacancy rates in Melbourne's southeast corridors have dropped below 1.5%. In some of our target suburbs, vacancy is under 1% — meaning for every 100 rental properties, fewer than one is sitting empty at any given time [3].

The practical effect? Properties we list for rent are receiving 15-25 applications within the first week. Open inspections are standing room only. And tenants are offering above asking rent to secure a property — something I've rarely seen in my career.

When vacancy drops below 1.5%, landlords gain pricing power. Rental growth accelerates from the long-term average of 3-4% per year to 8-12% per year. On a property renting for $500 per week, that's an additional $40-$60 per week within twelve months — or $2,000-$3,000 per year in extra income without lifting a finger.

For our dual-income properties, the effect is amplified. A house-plus-granny-flat combination renting for $850 per week can reasonably hit $950-$1,000 within eighteen months if current vacancy trends continue. That's an additional $7,800 per year in passive income on a single property.

I've told our team to go hard on acquisitions over the next six to twelve months. When rental demand is this strong, every property we buy and convert generates immediate positive cash flow — which de-risks the entire portfolio.

## What our transaction data shows

Let me share some specific numbers from our portfolio over the past twelve months. These aren't hypotheticals — they're real client outcomes.

Property one: Hampton Park, purchased $590,000 on 600 square metres. Our renovation team spent approximately $15,000 on structural repairs and cosmetic work. The property rents for $850 per week. Four weeks after settlement, the bank desktop valuation came in at $670,000. That's $80,000 in instant equity — a 13.6% gain before the first rent cheque cleared.

Property two: Cranbourne, purchased $610,000. Unconditional offer, no finance clause. Before settlement day arrived, the bank valuation was already $650,000 — up $40,000. The client hadn't even received the keys yet.

Property three: Narre Warren, purchased approximately $738,000. Six months later, the bank valued it at $772,000 — based on a comparable sale 300 metres away that was 50 square metres smaller. A $34,000 uplift (4.6%) in half a year, with no renovation, no granny flat, just pure market movement.

Property four: Boronia, purchased $660,000 on 730 square metres. This one's special. The property was in a supposed flood zone — which scared away other buyers. Our due diligence confirmed the flood classification was historical and inaccurate. Four weeks after settlement, bank valuation: $890,000. That's $230,000 in equity — a 34% gain. The client can refinance immediately and use the extracted equity as a deposit for property number two.

These aren't cherry-picked results. They're representative of what happens when you buy below market value in supply-constrained corridors during a structural tailwind. The wind doesn't guarantee profits. But it makes well-executed transactions dramatically more profitable than they'd be in a neutral market.

## Tailwind 3: Infrastructure spending crystallising

Melbourne's southeast is receiving over $35 billion in committed infrastructure investment. The Frankston Hospital redevelopment ($1.1 billion), the Cranbourne Line Upgrade ($2.8 billion), and the southern section of the Suburban Rail Loop ($30+ billion) are all progressing from planning to construction [4].

Infrastructure matters because it creates permanent employment. The Frankston Hospital alone will employ 1,500+ permanent staff at salaries of $70,000-$150,000. Every one of those employees needs housing within commuting distance. That's 1,500 new households added to an already undersupplied rental and purchase market.

The pattern I've observed over 350+ transactions is consistent: property values within a 5-10 kilometre radius of a major infrastructure project begin accelerating 12-18 months before the project completes. The market prices in the future employment and amenity benefits before they fully materialise.

We're currently in that pre-completion acceleration phase for multiple projects simultaneously. By 2022-2023, the early works on these projects will be generating construction employment, attracting workers, and driving housing demand in the surrounding suburbs.

The investors who buy now — before the construction workforce arrives, before the hospital staff get recruited, before the rail upgrade changes commuting patterns — will capture the full appreciation cycle. The investors who wait until the projects are complete will pay peak prices.

## How long does the window stay open?

My estimate: twelve to eighteen months of peak opportunity.

Here's the reasoning. The supply drought will begin easing as major subdivisions currently in planning receive approvals and commence construction. I expect new supply to start hitting the market in meaningful volume by late 2021 to mid-2022. Once supply starts catching up with demand, the price pressure moderates [5].

Rental demand will remain elevated for longer — probably three to five years — because population growth is structural, not cyclical. But the most aggressive rental growth phase (8-12% annually) is likely concentrated in the next twelve to eighteen months, after which vacancy stabilises and growth reverts to 5-7%.

Infrastructure-driven appreciation will continue for several years as projects progress from early works to completion. But the biggest equity jumps occur in the anticipation phase — the period before construction is visible to the general public. Once the cranes are up and Domain runs articles about "transformation suburbs," the smart money has already moved.

I'm not saying the market will decline after eighteen months. I'm saying the risk-reward ratio is at its most favourable right now. The supply gap is widest. Rental demand is most acute. Infrastructure spending is least priced in. Every one of these advantages narrows with time.

So if you've been sitting on the sidelines, planning to invest "when the time is right" — the time is right. Not because of some crystal ball prediction. Because the structural data is screaming it.

Reach out. Let's build your portfolio while the wind is at our backs.

## The personal dimension: when to push and when to rest

I want to add something personal here. I've been pushing hard for two years. Harder than any previous stretch in my career. And it's been worth it — the results for our clients and for our business have been exceptional.

But I also believe in cycles — not just market cycles, but personal ones. There's a time to sprint and a time to recover. I'm entering a brief recovery phase this month. And I'd encourage every investor and entrepreneur to think about their own energy cycles.

The property market doesn't care whether you're tired. It will keep moving whether you're watching or not. But your decision quality deteriorates when you're exhausted. I've seen investors make poor choices — overpaying at auction, skipping due diligence, panic-buying because they fear missing out — because they were running on fumes.

Take two weeks. Recharge. Then come back in January with fresh energy and a clear head. The supply drought won't fix itself in two weeks. The infrastructure pipeline won't complete. The rental demand won't evaporate. The tailwinds will still be blowing.

But you'll be sharper. Your negotiations will be better. Your risk assessment will be clearer. And the deals you execute will be the right ones — not the desperate ones.

Here's my commitment: when I come back from this brief pause, we're going to attack the market harder than ever. New suburbs to develop. New off-market channels to build. New granny flat designs to test. The runway is long and the wind is strong.

Follow our content. Get the suburb reports. And when you're ready to build — or add to — your portfolio, reach out. Let's ride this window together.

## Why I'm telling my team to go hard right now

I don't normally share internal team directives publicly. But I think it's important for potential clients to understand how we're positioning ourselves — because it reveals our conviction level.

I've told our entire acquisitions team — Steven, Edward, and our analyst group — to double their inspection volume over the next three months. Instead of assessing fifteen properties per week, we're targeting thirty. We're expanding our off-market outreach to agents in suburbs we haven't previously covered. And we're pre-approving renovation scopes for dual-income conversion before properties even go under contract, so we can start work the day after settlement.

Why? Because the three tailwinds I've described — supply drought, rental explosion, and infrastructure crystallisation — are creating conditions where every well-selected property generates above-average returns. The return per hour of effort is the highest I've seen in my career. When that happens, you don't conserve energy. You spend it.

Our competitors are doing the opposite. Many buyer's agents have pulled back, spooked by interest rate headlines and media doom cycles. Their clients are sitting on the sidelines, waiting for "clarity." By the time clarity arrives — by the time the media consensus shifts from bearish to bullish — the best properties will be gone and the prices will be 10-15% higher.

I'd rather be wrong about timing by six months and own assets in supply-constrained corridors than be right about timing and own nothing. Because properties in these corridors don't go backwards over three-year periods. They don't go backwards over five-year periods. And over ten-year periods, they double. The entry point matters far less than the entry suburb.

So we're going hard. And if you want to go hard with us — if you're ready to convert sitting capital into working assets in the best market conditions I've seen — reach out. The window is open. Let's use it.

## What happens if you wait for 'the right time'

I've had this conversation so many times it's practically scripted now.

"Joey, I agree the fundamentals are strong. But I'm going to wait until rates come down / the election is over / the market settles."

Let me show you what waiting actually costs.

In Melbourne's far southeast, land values are appreciating at approximately $5,000 per month per property. That's $60,000 per year in equity that you don't build if you don't own. If you wait twelve months for the "perfect" entry point, the property that costs $650,000 today will cost $710,000. You've just paid a $60,000 patience tax.

Meanwhile, the dual-income rental you could have been collecting — $850 per week, $44,200 per year — is $44,200 of income you'll never recover. Every week of delay is $850 of rental income that evaporates.

Total cost of a twelve-month delay: approximately $104,200 ($60,000 in missed growth + $44,200 in missed rent).

What would you need the market to drop by to make that delay worthwhile? The entry price would need to fall by at least 16% in twelve months for your delayed purchase to break even against buying today. In a market with sub-1.5% vacancy, $35 billion in infrastructure investment, and population growth of 3%+ per year, a 16% decline is not a realistic scenario. It hasn't happened in these suburbs in any downturn on record.

The people who build wealth in property are the ones who buy when their finances are ready, in suburbs where the data supports the thesis, regardless of what the headlines say. The people who lose are the ones who wait for perfect conditions that never arrive.

Perfect is the enemy of good. And in this market, good is very, very good.

## References

1. [Australian Bureau of Statistics, 'Building Approvals — Victoria by LGA', August 2020. Declining approvals in Casey/Cardinia.](https://www.abs.gov.au/statistics/industry/building-and-construction/building-approvals-australia)
2. [Housing Industry Association, 'Building Cost Index — Melbourne', Q3 2020. Material cost inflation 15-20%.](https://hia.com.au/)
3. [SQM Research, 'Residential Vacancy Rates — Melbourne Southeast', October 2020. Casey/Cardinia below 1.5%.](https://sqmresearch.com.au/graph_vacancy.php)
4. [Victorian Government, 'Big Build — Southeast Infrastructure Projects', 2020. Frankston Hospital $1.1B, Cranbourne Line $2.8B, SRL $30B+.](https://bigbuild.vic.gov.au/)
5. [REIV, 'Market Outlook — Melbourne Residential Property', Q4 2020.](https://www.reiv.com.au/)
6. [CoreLogic, 'Monthly Housing Values — Melbourne by Corridor', October 2020.](https://www.corelogic.com.au/research/monthly-indices)
7. [Domain Group, 'Vacancy Rate Trends — Melbourne Metropolitan', October 2020.](https://www.domain.com.au/research/)
8. [Reserve Bank of Australia, 'Statement on Monetary Policy', October 2020. Cash rate and housing credit growth.](https://www.rba.gov.au/publications/smp/)

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Source: https://premiumrea.com.au/blog/melbourne-property-market-timing-wind-window
Publisher: PremiumRea (Optima Real Estate) — Melbourne buyers agent