Key takeaway: The cheap and high yield trap is buying low-priced, investor-heavy suburbs without checking the fundamentals. Matthew Hughes, Managing Director of Capital Property Advisory and a PIPA board member, says his team no longer buys below Perth’s $850,000 first home buyer cap and turns away budgets of $600,000 to $650,000, favouring owner-occupier driven suburbs for long-term outperformance.
In this episode of Geared for Growth, Mike Mortlock is joined by Matthew Hughes, Managing Director of Capital Property Advisory and board member of PIPA.
Matthew brings a sharp, data-driven perspective to today’s property market, cutting through the noise of short-term gains and hype-driven investing. With Perth continuing its strong run and other markets showing signs of transition, the conversation dives into what actually drives long-term outperformance.
While many investors chase “cheap and high yield” opportunities, Matthew explains why that strategy is becoming increasingly risky – and why his team is actively turning clients away in certain price brackets. He also lifts the lid on CP Analytics, his proprietary system built on seven key pillars designed to identify high-quality investment locations across more than 1,000 suburbs.
This episode challenges conventional thinking around growth, scale, and strategy, highlighting the importance of discipline, fundamentals, and playing the long game in an increasingly complex market.
Matthew says many high-volume buyers agencies chase cheap, high-yielding stock without looking at fundamentals. In areas with nearly 50% renters, investor demand can push prices beyond what locals can afford, and when investors start taking profits the fall can be sharp. He points to the post-GFC period, when Mandurah dropped 40% while the areas his team buys in dropped 7 to 10%.
CP Analytics is Capital Property Advisory’s proprietary system, built on seven pillars that are each made up of dozens of data points. It analyses about 1,072 suburbs and grades them A to D. B-grade suburbs or better reach a shortlist only if they meet minimums such as owner-occupier percentage and a positive gentrification signal, then Matthew or a local expert reviews them, because data in isolation can be dangerous.
Matthew thinks Perth still has some runway because of its chronic undersupply, but he sees the value in the $850,000 to $900,000 range rather than the bottom quartile that has driven growth so far. He expects growth to slow through the year and listings to rise gradually, with rents and the affordability end peaking first. He predicts a soft landing, though investor-driven areas could fall harder.
Matthew likens Victoria today to Perth in 2018 and 2019, when many of his clients bought and did well. His approved list is short: Perth metro and Victoria, including Geelong and a handful of middle ring Melbourne suburbs. He acknowledges higher duty and land tax and lower yields, but predicts the right asset and location in Victoria will make more over five years than Brisbane, Perth or Adelaide.
This is general information from the podcast, not financial advice.
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