Invest
How to get ahead through counter cyclical buys
Property investors who are worried about falling markets are being advised that it could be an opportunity to grow their portfolio, so long as they can successfully execute a counter cyclical strategy.
How to get ahead through counter cyclical buys
Property investors who are worried about falling markets are being advised that it could be an opportunity to grow their portfolio, so long as they can successfully execute a counter cyclical strategy.
In a conversation with nestegg, InvestorKit’s director, Arjun Paliwal, advised investors of the risks and rewards of counter cyclical investing.
Mr Paliwal explained how stock levels and buyer choices are the key indicators for an investor who is looking to purchase a property below its peak.
“An example of an area that may present opportunities to purchase for cheaper than peak, it is looking at stock levels because increased stock levels drive up days on market,” Mr Paliwal said.
The longer a property is on the market, the potential of a property falling to below its peak increases, helping the investor get ahead.
However, Mr Paliwal explained the importance of looking beyond the headline with a fall in city values not necessarily being an indicator of a counter cyclical purchase.
“Someone could have a distressed sale, but it doesn’t mean you get it for a good deal. Yes, their personal circumstances could be distressed, but if there’s low inventory levels, then there’s buyer demand in comparison to stock levels, then it’s likely you don’t purchase the property for a good price,” Mr Paliwal said.
“The key for investors looking to buy counter cyclical properties is to make sure there’s an increasing level of stock which allows more buyer choice, meaning it takes longer to sell, meaning greater discounting.
“If those things are occurring, you might find yourself in the position to pick up a deal. But the risk is you don’t know where the bottom is, so it’s just a decision you have to be OK to make,” Mr Paliwal said.
Despite falling property values in Melbourne, investors might still struggle to make a counter cyclical purchase in specific areas, Mr Paliwal explained.
“When I think about the impact on property prices [in Melbourne]. There was a moment in March where discounting was available as lockdowns and social distancing was a new thing.
“Since then, there hasn’t been too many opportunities even in Melbourne because of lowering stock levels.
“The refinance boom is a great way to look at it. When someone has been through a lockdown for the second time, sure it doesn’t get any easier, but responses as a home owner become less of a knee jerk reaction,” Mr Paliwal explained.
He noted that this could mean stock levels do not rise, which will hurt buyers looking to enter the market.
“You have to understand the human requirement for shelter. So, if someone really had to sell it, they don’t wait for lockdown. They try to not sell it, hence refinancing, and they still have to have a roof above their heads, so whether that means they go to a cheaper area, it all comes down to stock levels.
“If stock levels are on the rise, then you can get that discount now. So, there are pockets of Melbourne in areas like Wyndham and the west where stock levels are rising.
“But on the flip side, you have parts of Frankston and the Mornington Peninsula where stock levels are quite low and people are going there for affordability.
“So, I personally think if you were looking for distressed levels in Melbourne, it could happen now, but it depends on where you look and stock levels,” Mr Paliwal concluded.
RELATED ARTICLES
About the author
About the author
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
