On the other hand, there are the blokes like me who contend that in cities such as Sydney, at least, a population policy which sees ~60,000 extra heads in the metropolis each year will likely result in higher prime location land prices over time (although there will surely be ebbs and flows along the way).
Lessons to be learned
Mark my words, I can always find a way to tie a blog post back to AC/DC, no matter how obliquely. In an Atlanta interview in 1978, then lead singer Bon Scott noted ominously:
"The more we work, the more we move on, the more ideas we get. It’s getting better and better. I can’t see an end to it. It’s just like...infinity rock and roll."
Tragically, Bon died alone in 1980, choking after a night of excess, his quote remaining as a stark reminder of that most incurable of human conditions: when times are good we think they will be good forever. It's the same human trait which causes people to become addicted to intoxicants, sex or gambling, and governments or world leaders to get addicted to debt, or monetary stimulus, or spending, or conquering other countries, or whatever else.
Commercial tenants and developers in 1985-1989 London had made a range of assumptions about the future course of rents, property prices, inflation and interest rates which proved to be inaccurate.
It is worth considering, however, whether you have an adequate plan to deal with property market downturns. Losers in the real estate sphere tend to be those who are forced sellers in bear markets, and particularly those who are compelled to sell into thin markets (e.g. the premium sector).
If you are treating property as an investment - be it commercial or residential - you should focus on acquiring only property which is continual and growing demand, but which has scarcity value and is in limited supply (for mine, this does not include, therefore, most mining towns or regional property markets, where demand can inherently be lower and land can be more easily re-zoned, released and developed). And also remember that the longer your planned time horizon for holding a quality, well-located investment, correspondingly the lower the risk of an adverse outcome.
It's fascinating to re-read the 'property wealth' books of yesteryear, many of which suggested that those who didn't recognise the new demand for property on the Gold Coast were foolishly failing to move with the times. And, indeed there was plenty of demand for units on 'the Goldie' as the population grew. What they perhaps failed to recognise was the supply side of the equation as new developments boomed, and that residential property markets which are founded predominantly upon speculation as opposed to fundamentals can ultimately be fragile.
1 M. Brett, How to Read the Financial Pages, Fifth Edition (Random House, 2000)