Insights From Rob Flux’s Predictions

Summary of Rob Flux’s Presentation at October Bootcamp in Sydney

Rob Flux, a highly experienced property developer and founder of Property Developer Network, shared insights on residential property development, market cycles, and economic factors influencing Australia’s housing crisis. His presentation outlined how to predict market trends using leading indicators and drivers, explaining why small-scale property developers are crucial in addressing the current housing shortage.

Key Points:

1. Rob’s Background & Journey

Bought his first house at 18, investment property at 21, and owned a house outright by 24.
Initially followed a buy-and-hold negative gearing strategy but later shifted to property development.
Faced setbacks, including losing everything during a divorce at 37 and starting over.
Established Property Developer Network, now Australia’s largest property networking group (28,500+ members).

2. The Current Housing Crisis

Lack of supply due to low building approvals and high demand.
COVID caused a major slump in development approvals, leading to a shortage.
Mass migration post-COVID (518,000 people in a year) has exacerbated the rental market strain.
The government aims to build 1.2 million homes in 5 years, but this has never been achieved before.

3. The Role of Small-Scale Developers

80-90% of all development approvals are for small-scale projects (six-pack and below).
Large developers focus on urban sprawl or high-rise, leaving a ‘missing middle’ (townhouses, duplexes, subdivisions).
Opportunities exist in small-scale development due to demand and government incentives.

4. Market Trends & Predictions

Indicators vs. Drivers:
- Indicators: Measure past trends (e.g., auction clearance rates, stock availability).
- Drivers: Predict future movements (e.g., government incentives, population growth, purchasing power).
Current Market Position:
- Property market has hit the bottom and is turning upwards.
- Interest rate cuts expected soon (Nov 2024 – early 2025).
- Small-scale developers will be key players in solving the housing crisis.

5. Government Incentives & Major Infrastructure Projects

Billions being spent on transport corridors, highways, and urban infrastructure.
Governments rolling out incentives for property developers (especially in NSW).
New South Wales leading in incentives, but other states are following.

6. Population Growth & Migration Trends

Australia expected to add 2 million people in the next 7 years.
Interstate migration trends:
- Sydney & Melbourne losing population due to high costs.
- Brisbane, Perth, and Adelaide gaining as more people relocate.

7. Supply & Demand Mismatch

Building approvals remain low, meaning there is a significant housing shortfall.
Developers who act now will benefit from this window of opportunity.

8. Interest Rates & Purchasing Power

Interest rates will decline in late 2024 or early 2025 as inflation stabilizes.
Unemployment may rise slightly as part of the economic balancing act.
The RBA is closely monitoring inflation, aiming for a soft landing.

9. How to Predict Market Movements

Study market drivers, not just indicators.
Use headwinds & tailwinds:
- Headwind: A factor slowing down the market (e.g., high interest rates).
- Tailwind: A factor accelerating growth (e.g., infrastructure projects).
Current market = turning point → time to take action.

10. Final Message

Rob’s market recovery predictions have been spot on!
The next wave of opportunities is here—developers who act now will be ahead of the game.

Key Takeaways

The housing crisis is real and growing due to migration and supply shortages.
Small-scale developers are critical in filling the gap.
Market is turning upwards – now is the time to act.
Interest rates expected to drop in early 2025.
Government incentives & infrastructure spending create strong opportunities for developers.
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