Australia’s 30-Year Property Boom Is Over, Says AMP — 3 Reasons I Disagree | APS168

Australia’s property super cycle is over, and for the next ten years, prices won’t go up. That’s not me saying it. AMP’s chief economist Shane Oliver just put out a report, and that’s his core conclusion. Not a crash. Not a decline. Strip out inflation and real house prices go nowhere for a decade. He’s worked out that Australian property currently sits about 20% above its 100-year trend. If he’s right, the “buy and it goes up” rule that’s worked for 30 years might be done. But I don’t agree with him. Ten years of a flat market? The conditions for that are nowhere close to being met. In today’s video, I’ll walk you through his logic, check whether his past predictions have actually been accurate, hear from even bigger bears, and then lay out why I think this call doesn’t hold up.

Three Cycles, One Century

So what’s a super cycle? It’s not the regular property cycle where prices go up for five years and come down for three. A super cycle is a 10 to 30-year mega trend, pushed along by big forces like population growth, interest rates, and policy. Think of it this way: a regular cycle is a wave, but a super cycle is the tide. Waves go up and down all day long, but once the tide turns, the whole waterline shifts.

Oliver pulled out a 100-year chart plotting Australian house prices from 1926 to today, adjusted for inflation. Over that century, real prices grew at roughly 3% a year on average, more or less in line with the broader economy.

In 100 years, there have only been three super cycle upswings. The first was in the 1920s, right after World War I. Returning soldiers flooded back and the population exploded. The economy boomed and prices took off with it. Then the Great Depression hit and ended it overnight, with real prices falling all the way to 1943 before they bottomed. The second ran from after World War II through to the early 1970s. Baby Boomers were buying homes, the economy was running hot, and prices climbed for 20 years before the stagflation of the 1970s cut it short. After that, prices went sideways for close to 20 years.

Those first two are ancient history. The one that matters is the third, starting in the mid-1990s and running to today. It was powered by falling interest rates, financial deregulation, a surge in immigration, and the 1999 CGT change that introduced the 50% discount. And every time a super cycle has ended, real prices have gone flat or drifted lower for 10 to 20 years. No exceptions.

Now Oliver says this third super cycle may have run its course. So what’s his reasoning? He says the 30-year run was held up by five pillars.

The Five Pillars

First, the long-term decline in interest rates. In 1989, mortgage rates were at 17%. By 2021, they’d fallen to 2% to 3%. In plain English, the same family going from 17% to 3% could borrow more than double what they could before. More borrowing power means higher bids, and that pushed prices up for three decades . This was the single biggest driver of the boom.

Second, financial deregulation. Banks loosened up on lending, and money got easier to borrow.

Third, dual-income households became the norm. Two salaries servicing one mortgage meant families could take on bigger loans.

Fourth, the immigration surge that kicked off about 20 years ago and kept pushing housing demand higher.

Fifth, the 1999 switch to a 50% CGT discount combined with negative gearing, which brought a flood of investors into the market.

Those five pillars held for 30 years. How overvalued has the market become? Oliver looked at the price-to-rent ratio, a measure similar to a price-to-earnings ratio for stocks. By that measure, detached houses nationally are overvalued by 38%, while apartments sit at just 8%. In a downturn, detached houses are far more exposed.

Here's his core argument: four of those five pillars are either reversing or already gone. Interest rates have bounced off the floor, with the RBA hiking three times to 4.35%. Dual-income households are already standard, so there’s limited room to push further. The government is cutting immigration back to a target of 225,000 a year. And investor tax breaks have been cut, with negative gearing restrictions and a minimum 30% CGT. The only pillar still standing is the housing supply shortage, with the country still 200,000 to 300,000 homes short.

But Oliver himself wrote one line that almost no media picked up. He said supply shortages are the biggest barrier, and it’s too early to call the super cycle over.

He’s not even fully committed to his own conclusion. And that raises a bigger question: how accurate have his predictions been?

How Accurate Has He Been

Oliver is one of the most recognised names in Australian financial commentary. He's been AMP's chief economist since 1984. But when it comes to his house price track record, the generous read is he often gets the direction right. The less generous read is he consistently overshoots on the downside.

Take the 2017 to 2019 downturn for example. His base case was a 20% drop for Sydney and Melbourne, which he later revised to a possible 25%. What actually happened? Sydney fell about 15%, Melbourne about 11%. His forecast was roughly double the actual decline.

His 2020 COVID call was even further off. He predicted falls of 5% to 20%. Prices dipped about 2% and then took off, up 22% by the end of 2021. He called for a 20% fall and the market delivered a 22% rise, a gap of more than 40%.

Then the 2022 to 2023 rate hike cycle. He forecast 15% to 20% fall nationally. In March 2023 he published an article saying the bottom might not be in and warning people not to buy the dip too early. Prices fell about 9% then bounced back, finishing 2023 up nearly 8%. AMP later admitted their call had been too pessimistic. Anyone who listened missed rally after rally.

The pattern is clear. Direction right, magnitude wrong. Every miss leans bearish, and his forecasts tend to be about double the actual fall.

And the “super cycle ending” call isn’t new. He wrote in April 2021 that the long bull market might be nearing its end. In 2022, he asked whether the 25-year run was over. Both times, prices kept going up. He acknowledged it himself: “I thought five years ago it was close to over, but the post-pandemic immigration surge extended it.”

When someone’s made the same call multiple times and been wrong each time, what are the odds this one lands differently? Now here’s where it gets interesting. There’s an even bigger bear out there.

The Even Bigger Bears

The founder of MacroBusiness, is one of the best-known housing bears in Australia. His take on Oliver’s report? Too optimistic. He’s calling for a double-digit national decline.

His logic is simple: Australian mortgage rates are among the highest in the developed world, the RBA isn’t cutting anytime soon, and prices have to come down before the market gets back to levels buyers can afford.

IFM Investors ran the numbers from a different angle. From April 2020 to March 2026, national prices went up 64%. How much have they pulled back? PropTrack data shows a 1.8% decline from the March peak. A 64% run-up and a 1.8% pullback. ANZ gets more specific: Sydney down 14.5% peak to trough, about $190,000 off the median price.

Six institutions have published 2026 forecasts. KPMG says 1% nationally. Morgan Stanley says 10%. Same market, same data, completely different conclusions.

Worth noting though: MacroBusiness has been Australia’s most prominent housing bear for years. The framework puts heavy weight on affordability and rates but gives less weight to supply constraints. His view is worth hearing, but the framework itself already leans pessimistic.

Oliver says flat for a decade. MacroBusiness says double-digit falls. I’m not saying either of them is making things up, I’m saying the framework they’re using gives too little weight to one critical factor. And that changes the conclusion.

Want to know exactly where you stand and what your next property move should be? Book a VISION Blueprint Session — in 45 minutes, you'll walk away with a personalised Property Investment Blueprint built around your numbers, your goals, and your timeline. And if you want ongoing support from a team that handles everything from strategy to settlement, VISION Gold Membership is your next step. Link in the description below.

Where the Logic Breaks Down

Short term, over the next six to nine months, prices will keep adjusting. I’d expect a total national decline of about 5% to 7%. But ten years of a flat market? I completely disagree.

Oliver sees four of his five pillars weakening and decides prices have to go sideways. But he's jumping to that conclusion too fast. He's not giving enough weight to the one pillar he himself calls the strongest: housing supply.

The country is still short by hundreds of thousands of homes. Annual completions sit at about 180,000. The federal government’s 1.2-million-home target is already 27% behind schedule. Builder insolvencies over the past few years wiped out capacity; apartment construction has stretched from under two years to nearly three, and detached house land settlement and build periods have blown out too. This is structural, not cyclical. Falling prices squeeze developer margins, fewer homes get built, and the gap widens.

Some people ask, why not go big on modular construction? Build the homes in a factory, truck them to site, assemble in 10 days, done. Problem solved?

That mixes up two different things: how fast you can build one house versus how many you can build in a year. Modular makes up about 5% of new housing in Australia, turning out 5,000 to 10,000 units a year. Fleetwood, the biggest listed player, does about 1,500. The country needs 240,000. Even if every existing factory ran at full tilt, you’d get maybe 20,000, which barely scratches the surface.

And modular companies here have a high failure rate. Strongbuild went under, and its successor Viridi also got into trouble. ABC reporting found at least six similar companies have collapsed. In the UK, Ilke Homes went into administration in 2023 owing over 300 million pounds. The story is always the same: high fixed factory costs, unstable orders, and one major client pulling out can bring the whole operation down.

Modular still needs land, planning approvals, and infrastructure. The National Construction Code isn’t applied consistently across states. Japanese companies tried to break into the Australian market and pulled out because the regulations across states were too complex. The Productivity Commission’s 2025 report said modular is unlikely to be a silver bullet for housing productivity.

Modular is a 10-year industry shift, not a short-term fix. Expecting it to close a gap of hundreds of thousands of homes within five years isn’t realistic.

OK, that’s supply. Now look at demand. The government says net migration will come down to 225,000, but saying and doing are two different things. Every time a government has promised to cut immigration, actual numbers have come in above the target. Even at 225,000, that’s still positive growth, still people arriving who need housing. And the policy creates its own contradiction: overseas nurses and teachers are waiting 12 months for visas, and construction workers can’t get in either. You’re restricting demand, but you’re also restricting the ability to build.

There’s an even more direct problem with Oliver’s logic. His argument rests on rates entering a structural uptrend. But all four major banks forecast cuts starting in 2027. CBA has the earliest call at May 2027 and NAB projects a terminal rate of 3.60%. If rates come down within 12 to 18 months, then the whole idea that rates are permanently higher just doesn't hold up.

And here’s the part that really matters. Oliver’s own 100-year chart works against him. How did the first two super cycles end? The Great Depression and severe stagflation. Both were full-blown economic crises. Where are we today? Unemployment sits at 4.5%, still historically low against a long-run average of about 5.5%. Bank bad-debt ratios haven’t spiked. Consumers aren’t cheerful, but they’re not falling apart either. Comparing where we are now to the Great Depression is a stretch.

So here’s where I land. Short term, there’s adjustment pressure. But ten years of flat prices? The conditions aren’t there. Prices only stagnate that long if the supply shortage gets resolved, and at the current build rate, that won’t happen within at least five years. In this environment, location and holding period matter more than ever. The 541 rule puts it simply: 50% of your property investment return comes from location, 40% from how long you hold, and the remaining 10%, entry timing, is exactly what most people spend too much energy on.

Even though I don’t buy the flat-market thesis, that doesn’t mean you go in blind. If Oliver is right and the market goes flat for ten years, can you still make money?

Winning in a Flat Market

Under his own assumptions, nominal prices still grow 2% to 3% a year. And flat doesn’t mean a straight line. There are still ups and downs, and cyclical swings don’t vanish. Oliver’s 100-year chart shows that the flat market stretch from the 1970s to the 1990s still included strong rebounds like 1988 to 1989. What matters is which side of those swings you’re on. If we are heading into that kind of environment, the cash flow performance of a property carries more weight in your decision. I’ve covered strategy adjustments for this in detail inside our membership programme, but here are the indicators you need to track.

The most important is the unemployment rate, specifically whether it crosses 6%. Once it does, the risk of forced selling goes up. Second is construction volume, whether the country is hitting 240,000 homes a year. If it is, the supply shortage argument weakens. The other two are whether net migration drops below 150,000, and whether RBA rates are temporarily high or structurally elevated. The ABS and RBA publish these monthly, and we cover them in our channel’s monthly market reports, so you don’t have to go digging.

Super cycles end when the structural foundations change. The question isn’t whether a correction happens; it’s whether the foundations have actually shifted. And right now, the biggest one, supply, is moving in the wrong direction for anyone betting on a flat market.

Watch the video version of the blog on YouTube.

15 Minutes Free Consultation (Limited-Time Free Offer)

If you have any questions about Australian real estate, we invite you to use our 15 Minutes Free Consultation service. Once you have filled in the form, a professional property investment strategist will be in touch with you. They will assess your needs and provide fundamental advice. This service is designed to help answer general property-related queries. BOOK NOW.

VISION Membership

Our Flagship Service: VISION Membership. Your One-Stop Property Investment Manager – Build a Tailored Portfolio and Achieve Financial Freedom

Whether you're an employee, a professional, a business owner or even a new migrant, everyone has a financial goal for the future. The VISION Membership is designed to solve all the pain points in your Australian property investment journey through one single, comprehensive service.

By analysing your current financial situation and long-term goals, we'll tailor a property investment plan just for you. Our team will match you with the ideal mortgage structure, tax strategies, wealth planning, and legal support, empowering you to go further, faster, and smarter on your path to financial freedom.

VISION Membership is perfect for busy individuals who want a professional team to create, expand and manage their Australian investment portfolio. If you're looking for a dedicated team, including real estate investment experts, mortgage brokers, accountants, financial planners, and property solicitors, VISION Membership is your ideal solution.

Start with an obligation-free 30-minute discovery session on Zoom. BOOK NOW.

VISION Buyer’s Agent

No time for inspections? Tired of dealing with pushy selling agents? Unsure how much to offer or feeling nervous about auctions? Worried about buying the wrong property? If any of these sound like you, AusPropertyStrategy's Australia-wide VISION Buyer's Agent Service is here to help.

We provide end-to-end support to help you build an optimised property portfolio and achieve your financial goals—whether you're investing interstate, refinancing, or planning post-settlement leasing or resale. Our services cover everything from suburb research and property selection, to price negotiation, auction bidding, and post-settlement support.

Start with an obligation-free 30-minute discovery session on Zoom. BOOK NOW.

real estate australia,real estate investing,australian property,australian housing market,australian economy,australian property investment,australian property market,buying property,australian real estate,mortgage brokers brisbane,first home buyer,Australian Real Estate,Australian Real Estate Investment,Australian Property Investment,Real Estate Investment,Property Investment,Property Investment Australia,Passive Income,Positive Cash Flow,Australia Real Estate Investing,Australian Real Estate Investors,Australian Property Investors,Vision Wealth Mentors,Vision Real Estate Investors Australia,financial freedom, freedom through property investment,real estate investors,property investment,passive income,positive cash flow,real estate course,real estate courses,real estate training,australian property market,property investment brisbane,property investment sydney,melbourne property market,investing in brisbane,investing in melbourne,how to invest in property,buying properties,start investing in property,property investment strategy,how to buy investment property,property investing tips,best suburbs to invest in sydney,locations real estate,prime location,property growth by suburb,capital growth suburbs