Q&A: Darwin, Market Metrics, Buying Again & More

Question 1: Is a booming greenfield estate in Perth now too risky to buy into?

A listener flags a Perth suburb (referred to as "Treeby" in the discussion) with heavy new land-and-house package development, now priced above $900,000 after roughly 40% growth over three years, asking whether it's now too risky, even though it would have been a good buy three years ago.

Jeremy reiterates his general rule of avoiding greenfield estates, given the combination of ongoing supply risk (as long as vacant land remains available nearby, continued development will keep tempering growth), heavy depreciation on new builds (he generally avoids anything under 20 years old, preferably 40+), and typically low land-to-asset ratios on small, new blocks. He also raises building quality concerns common with high-volume project builders. His suggested alternative approach, if pursuing this kind of area at all, is buying vacant land directly and engaging your own builder, rather than buying an already-packaged product, or better yet, targeting nearby, already-established suburbs with more land content per dollar spent instead.

Reviewing the specific data, Damien and Jeremy note this suburb has around 2,500 dwellings, a median block size of just 375 sqm, and stock on market around 1.4% (with a couple of nearby comparable suburbs slightly higher, around 2–2.5%), against a benchmark of roughly 1% being considered balanced. A Google Maps review confirms substantial existing development plus considerable additional vacant land to the north and northeast, indicating ongoing future supply risk. By contrast, they highlight nearby established suburbs with larger blocks (700–730 sqm) as offering better underlying land value for a similar investment.

On interpreting the historical growth figures for individual suburbs in this cluster, Jeremy cautions against reading too much into an outlier figure (one suburb showing 95% three-year growth) without checking dwelling count, in that case, only around 380 houses, a small enough sample that the reported growth figure could be skewed by low sales volume. Larger, more reliably measured suburbs in the same area showed more consistent growth in the 28–49% range, some actually underperforming the broader Perth market (around 40–50% over the same period) despite still posting strong headline numbers. Their overall message: focus on where capital is best allocated going forward, not on how a market has already performed, since past growth doesn't change the risk profile of buying in now.

Question 2: Which commonly used metrics don't actually correlate well with capital growth?

Jeremy names several metrics he considers largely unreliable indicators of future capital growth: proximity to the CBD and "blue chip" suburb status (no demonstrated long-term correlation), wage growth (no clear correlation found in the data), and demographic profiling (for example, assuming a suburb "needs" larger homes because of family size, when in reality available housing stock shapes who lives there, not the reverse, meaning demographic patterns often reflect supply rather than genuine demand). Population growth is also flagged again as a common point of confusion, more indicative of supply at the local suburb level than of genuine demand, even though it can carry more relevance at a broader state or national level.

Both note that some providers and buyers agents will selectively cite whichever metrics happen to support a market they're already positioned in or motivated to sell, reinforcing their standard advice: track how an actual purchased property performs against the national average over time (they suggest an annual calendar reminder to get a valuation and check this), rather than relying solely on any single provider's reported metrics at the point of purchase.

Question 3: Does Darwin have genuine growth potential, given other capital cities have already boomed?

A listener notes strong recent buyer activity in Darwin (properties reportedly selling within days, particularly to interstate buyers agents) and asks whether it's positioned for future growth.

Jeremy sees some promising early signs ("green shoots") in specific Darwin suburbs, though he personally wouldn't be entering the market just yet. He cautions against relying on anecdotal reports from a small number of local agents to judge overall market conditions, since agent perspectives can be biased and unrepresentative of the broader market. His suggested practical check: monitor vacancy rate trends over the past six months specifically, since a market being bought heavily by investors (rather than owner-occupiers) can see vacancy rise as newly purchased properties are added to the rental pool, potentially alongside softening rents, both signs of a market driven more by investor speculation than genuine underlying demand.

Question 4: What are the "hidden" negatives of property investing that many YouTube channels don't cover?

A listener notes that much online content promotes property ownership as straightforwardly beneficial, focusing on gross yield, without adequately covering net costs, buffers, and the practical realities of ownership.

Jeremy and Damien acknowledge this is a fair criticism, and revisit points covered in Episode 36: the significant fixed costs of ownership (interest, council rates, potential strata or land tax, insurance, management fees, loan fees), variable costs (maintenance and repairs), and the practical time investment involved in buying or selling a property, plus buyers agent fees if used. They note net yield after all expenses (excluding interest) often works out to a fairly modest figure (around 2%, by their estimate), reinforcing that property investing isn't inherently "easy money," and requires genuine ongoing financial discipline. Damien adds that Australians' general cultural comfort and familiarity with property, plus the country's overall liveability, means there will likely continue to be structural demand supporting prices over time, but that this doesn't remove the real, ongoing costs of ownership in the meantime.

Question 5: How can Google Maps be used to estimate future supply, and is there a way to get an exact figure?

Jeremy clarifies that maps can't give a precise current supply figure, they're primarily useful for visually assessing potential future supply (checking for large tracts of vacant, developable land nearby, as opposed to unbuildable terrain like swampland, steep terrain, waterways, or protected reserves). He notes it's impossible to know in advance exactly how a developer might subdivide available land or how many developers might become active in an area, so an exact number isn't really the right thing to look for. Instead, he reiterates that stock-on-market percentage (rather than a raw count of current listings) is the correct metric for assessing current supply, since it accounts for how large or small a suburb's total dwelling stock actually is. Damien adds that ABS data can supplement this picture for understanding broader supply trends, while reiterating that, for most novice investors, established, already-built-up areas remain the simpler, generally lower-risk option compared to greenfield or developing areas.

Question 6: Should I buy a third investment property, or hold my equity in an offset account earning 7%?

A listener shares a detailed personal situation: mid-30s, based in Brisbane, earning around $150,000 a year, with an existing portfolio of a $1.2 million home (purchased for $500,000), a $550,000 investment property (purchased for $320,000), and a recently acquired second investment property purchased for $630,000 (now valued at $640,000). They're weighing whether pursuing a third property (which may strain borrowing capacity) makes sense against their offset account, which is effectively earning a 7% after-tax return.

Damien's first step would be understanding the loan structure in more detail (whether investment loans are interest-only, and whether the home loan is on principal-and-interest), followed by a close look at current cash flow surplus and how a new purchase would affect it, alongside how much of a cash buffer would remain afterward. He stresses that maintaining genuine liquidity during the accumulation phase matters, being maxed out with no backup buffer creates unnecessary financial pressure, regardless of how attractive the numbers look on paper. He also raises the option of reviewing the existing portfolio for any property that may have limited remaining growth potential, potentially selling and reallocating that equity (including paying down non-deductible home loan debt) rather than necessarily taking on an entirely new, separate purchase.

On the specific comparison, Damien notes a 7% risk-free, liquid return in an offset account is a genuinely strong, low-stress option, compared to an estimated ~20% return typically targeted with a new leveraged property purchase, but with meaningfully more risk and reduced flexibility involved. Jeremy adds a cautionary note about lender lock-in risk: investors who stretched their borrowing capacity to the limit during the low-rate environment a few years ago, sometimes via smaller lenders willing to extend serviceability further, can now find themselves unable to refinance away as rates rise, effectively trapped with a single lender's rate increases. Both stress that once committed to a new purchase, holding for at least 3–5 years is generally necessary to allow genuine capital growth to play out, rather than treating it as a short-term decision.

Ultimately, both frame this as a genuinely personal decision dependent on risk appetite, lifestyle goals (Jeremy specifically raises whether the investor is looking to reduce working hours or is still in a long accumulation phase), and how much further financial pressure they're comfortable taking on, rather than a single objectively "correct" answer.

Closing Thoughts

Damien and Jeremy close by inviting listeners to keep submitting questions via email or comments, noting they're considering expanding into a more personalised consulting service based on listener interest, and encourage likes, subscriptions, and shares.