I see you found my property clock at www.hpc.co.nz
This clock specifically indicates the "time" of the Auckland property market in New Zealand (in the typical property cycle) .
Whilst the "time" on the property clock in Auckland differs, from say Sydneys "time", the same principals of the Auckland property market should apply to the Sydney property market and vice versa. These principals are simple truths like "the law of supply and demand" or "what goes up must come down" etc.
The "time" is driven by certain "drivers" of the property market and include market influencing factors like an event that causes a shortage of accomodation resulting in (not only) more rental cashflow (from higher rents) but a higher property value as well.
I know I am just a humble kiwi but here are my thoughts for you...
From where I sit (across the ditch in Auckland) I have been vaguely observing the Sydney property market for several years (I lived there in the late '80's) and I am truly amazed at how your market seems to have defied all logic (ie have you not just had a 5 year boom?) and values have continued to rise far in excess of what appears sustainable in the short to medium term.
From what I can see you have already experienced the "decoupling" of property values from property rents.
We too experienced the same phenomenum in Auckland in 1996 when most property investors were focusing on capital growth alone. We then experienced (in this order) increasing vacancy rates, decreasing rents, increased interest rates and interestingly enough our property values went into decline in 1997 and they only turned around last year on the back of (wait for it...) decreasing vacancy rates and increasing rents!
I am open to being better educated on why things are so different over there but in my opinion the Sydney property market fundamentals seem to be all wrong... I see that negative gearing seems to be the norm over there due to the very low yields available.
I know my bias is to NZ (I'm a kiwi) but we are buying positive cashflow properties in Auckland right now!
Our property cycle is in a different phase than yours as we have only just entered our boom phase recently (after 5 long years of experiencing a slump!)
A classic example of positive cashflow is the deal a friend of mine bought just last week. About 3 months ago he asked me to help him buy his first IP. I outlined a strategy for him and he embraced it entirely. He was diligent in his homework and his research of values, areas, rents etc. And I helped him make several offers on properties he didn't buy before he achieved this fantastic buy...
He has just purchased a purpose built building (circa 1946) of 3 flats in tidy condition in a good area (Mt Eden - 2 km from the CBD) for $525,000 with rents of $900 / week! This deal easily pays his interest cost @ 7% p.a. on 100% borrowings plus all outgoings and has a positive cashflow of over $100/week.
He also commissioned a Registered Valuation which revealed a value of $575,000.
Not bad for a first IP purchase! $100/week cashflow and $50,000 in equity!
Now, before you jump on the next flight to Auckland, don't get me wrong... not every deal here is that good, but he has applied the same principals (and legwork) that seasoned investors apply DO THE NUMBERS and MAKE IT PAY ON DAY ONE or DONT BUY IT!
Savvy property investors in NZ don't buy for capital growth because they see that as the cream and positive cashflow as the milk to keep your IP's alive. Another way of putting it is this, CASHFLOW IS KING. In my opinion capital growth should not be your primary reason for investing because if it is then you will only taste the bitter pill of reality, sooner or later, when you experience negative capital growth! And if you think that will not happen then think again... Night always follows day and time WILL tell.
Over the years I have learned that the property cycle can be a powerful influencer of either increasing OR decreasing your wealth. As a PI you need to be able to tell the "time" in the cycle so you can position yourself to financially weather any storms (and maximise any opportunities) the "market" may bring.