Show notes – Can You Predict Property Market Recoveries? Property Cycles & Mean Reversion – Is Melbourne A Hidden Opportunity or a Risky Bet? (Ep. 302)

Show Notes – Mean Reversion in Property

In this episode of The Property Trio, Cate, Dave and Mike dive deep into the concept of mean reversion in property investment, with a spotlight on Melbourne’s underwhelming recent performance — and whether it’s setting the stage for a strong comeback.

So, what is mean reversion in property? And should investors rely on it when making strategic decisions?

Dave kicks things off by breaking down the theory: the idea that property prices, after a period of stagnation or decline, tend to revert back to their long-term growth trajectory. But is it just theory — or does it actually play out in the real world?

The team explores case studies to separate the fact from the fiction:

• Sydney serves as a textbook example — a flat market for nearly a decade before roaring back to meet its historical growth trend.
• Perth raises questions — is it an example of mean reversion that simply took 14 years, or a market with a new baseline after a mining boom?

Mike brings fresh data to the table, revealing specific Melbourne suburbs with large “growth gaps” — locations that are currently well below their projected values based on historic growth. We’re talking shortfalls of up to $400,000+. He names six standout local government areas, from inner-city blue chip to outer-ring high-yield potential.

Cate brings her on-the-ground expertise to the discussion, highlighting the nuances in each area — from social housing mixes to local infrastructure and amenity — and why data alone isn’t always the full picture. Dave adds valuable insight into how borrowing trends and sentiment may play a role in when, or if, these areas bounce back.

The Trio also explore:

• Why some historically blue-chip suburbs haven’t rebounded — yet
• The real-world implications of relying on mean reversion for your next property investment
• How economic conditions, policy changes and sentiment influence timing
• Why being “data-led” must also be paired with local knowledge and smart strategy

As Cate wisely puts it, mean reversion is a theory, not a guarantee — and one that comes with both opportunity and risk.

For anyone watching the Melbourne market and wondering whether it’s time to buy, or if waiting could pay off, this episode is essential listening.

Whether you’re an owner-occupier, investor, or planning your next move, understanding the role of mean reversion in property could be the strategic edge you’ve been looking for.