Hong Kong investors are always looking for the next 'hot spot' in which to invest, whether it be Phuket, London or Sydney. Typically, it is extremely difficult to pinpoint exactly when one should make their move into a property market and many people rely on their friends or the general media for information. In Australia's case, this is often a fatal error. Research reports and media stories are often based on statistics. Statistics by their very nature are from the past. By the time these figures are collated and published, there can be a serious time lag, often by as much as six months. But statistics can of course highlight past trends and point to the future. For example, statistics show us that the Sydney house market has been 'flat' pretty much since it peaked in mid-2003. That means for the past four years in Sydney there has been little real price growth on average and history shows us that the longer Sydney goes without growth the faster the upturn when it comes. Is it going to be this year, next year, or 2009? The word on the street from industry insiders, agents and property developers is that premium locations have already started their upturn and other suburbs are likely to follow later this year, or early next. It is unlikely this will be reported in the general media until statistics for the past six months have come out, and are analysed. So we believe that history will show us that the Sydney market 'peaked ' in 2003, remained flat until this year, then start its upturn next year. The astute investor would try to move ahead of this trend and invest now. Our experience is that most investors in Sydney wait too long to move into the market, and then miss the early capital growth that tends to explode in Sydney quite quickly. Other cities in Australia do follow similar if slightly different cycles. In Melbourne, the market took a breather in 2003 but has continued to move upward since then, albeit at a slower rate than usual, so we expect this upturn in the Melbourne housing market to gain momentum through this year. Rental occupancy rates are at record highs, with rent rises already starting to be seen. Australian investors in recent months have been surging into this market, and overseas buyers would be well advised to follow. Perth has operated on a different cycle than the east coast cities due mainly to its resources boom. Perth prices for property have pretty much doubled over the past 18 months, but there seems to be a slowdown starting to happen now. Brisbane has had a slow two years but like Melbourne, there has been a massive resurgence this year in investors coming back to the market. The high rental occupancy rates, combined with the shortage of new projects should ensure this market moves ahead strongly over the next two years also. Rentals are starting to rise throughout the country, with an 11 per cent increase in rents recorded in Brisbane and Perth, 8 per cent in Melbourne, and 5 per cent in Sydney over the past 12 months. Normally as rents rise, properties become more attractive to investors due to the higher returns, and they start investing again in a big way. Since October 2002, 'owner-occupier' housing demand has grown to record levels, despite interest rate rises, and investors could shortly follow. With Australian property having shown good solid capital growth of between 6 and 10 per cent per year over the longer term, and most cities having had only moderate growth over the past four years, it would seem that an upturn could be about to start. Many overseas investors tend to wait until the market has already started rising, perhaps expecting double-digit growth that they sometimes see in Hong Kong, however, by waiting too long you can often miss the vital early growth that tends to happen in Australia. If it suits you financially at the moment, and you have been putting off investing to 'watch the market' we would suggest that now is as good as time as has been seen in five years to enter the Australian real estate market. Interest rates remain moderate, and while Australia has seen several rate rises in recent years, they remain near their lowest in 30 years. In summary, there is little downside in most Australian cities at the moment, with the exception of Perth and Darwin. In the other cities we are starting to see the classic signs emerging of a forthcoming upturn. The only question is how strong will this upturn be, and for how long will it last? Michael Bentley is the managing director of Citylife Property Group