Quick Hits #1 - How productivity gains drive up Land Prices
Productivity drives land prices. Understanding this concept is a key to property investment and underpins much of what we will talk about on PAFO.
As humans we always want to create more from fewer inputs. Less time, less raw materials, less labour, less cost, and history proves that throughout the ages humans have accomplished this. Travelling further, faster, and cheaper. Consuming more with ever-increasing living standards.
Yet as TVs, cars and other technology become better and cheaper, land continues to increase in value because as all these advancements and gains make us more productive. The more productive, the more profitable, and since land is priced upon the capitalisation of its future profitability, these gains feed directly back into land prices.
This is why despite its beautiful location, a house in William Creek is significantly cheaper than one in Noosa.
Understand this concept and you will unlock the key to why Property IS Australia’s Favourite Obsession and the common thread that will flow throughout the stories of our guests on this podcast.