Liquidity Leads. Property Follows.
Written By Doug Hastings
If there’s one principle that continues to hold true across decades of market cycles, it’s this:
When global liquidity rises, asset prices tend to follow.
Liquidity — in simple terms, the capital central banks and financial systems inject into the economy — is the fuel that powers investment markets. When there’s more money circulating, investors look for places to deploy it. Property. Equities. Digital assets. Whichever appears poised to deliver a return.
We’ve seen this pattern before.
History Repeats
After the Global Financial Crisis, governments responded with unprecedented monetary stimulus. Once stability returned, asset prices didn’t just recover — they surged.
The same occurred during and after the COVID-19 crisis. With trillions pumped into global systems to prevent economic collapse, markets roared back with one of the fastest recoveries in modern history.
In Australia, property prices rose between 20–40% in some suburbs during that cycle.
The cause and effect were clear:
Liquidity rises → Confidence returns → Prices climb.
The Current Disconnect
Now, here’s where things become interesting.
Liquidity is climbing again.
Central banks globally are increasing liquidity levels in the background, despite tight monetary policy headlines. Cash is flowing, albeit less visibly than during previous cycles.
But this time, Australian property markets — especially in Sydney and Melbourne — aren’t moving in sync. Prices are flat in many areas, even while equities and Bitcoin flirt with record highs.
What’s going on?
It’s All About Timing (and Sentiment)
Two key factors help explain the delay:
Time lag — Liquidity doesn’t impact asset prices immediately. Historically, it takes 8–12 weeks before broader effects begin to show up in real estate.
Sentiment drag — Right now, headlines are full of uncertainty. Talk of recessions, interest rate confusion, and geopolitical instability are weighing on buyer confidence — even as the fundamentals remain strong.
Fundamentals Remain Solid
Despite the hesitation, Australia’s core property drivers haven’t changed:
Ongoing housing shortages in major urban centres
Strong population growth through migration
Tight rental markets and rising construction costs
Wage growth supporting long-term affordability
These are the conditions that historically lead to renewed upward pressure on property prices once confidence returns.
What Smart Buyers Do Next
At Hastings Beaumont, we’re not here to chase the market. We’re here to help our clients anticipate it.
When liquidity rises and prices stall, we don’t see a red flag — we see an opportunity.
Because just as in past cycles, once sentiment catches up to liquidity, prices tend to follow. And by then, the buyers who acted early are already in position.
Strategic, informed property buying is about timing — not timing the market, but recognising what drives it.
If you’re ready to move before the next growth wave, we’re here to guide the way.
