Why demand isn't enough
Many investors focus on demand population growth, jobs, infrastructure. Demand matters, but it's only half the equation.
The other half is supply. And when supply is constrained, even modest demand can drive outsized capital growth.
What scarcity actually looks like
Scarcity isn't a marketing buzzword. It's a measurable characteristic:
- Limited land available for new development
- Heritage or zoning restrictions that prevent densification
- Geographic boundaries coastlines, river fronts, parkland
- Established, tightly-held streetscapes with low turnover
The compounding effect
When a location is both desirable and scarce, price growth compounds. Each cycle builds on the last, because new supply can't dilute demand.
This is why the IGP Investment Index weighs scarcity heavily. A property in a location where nobody can build a comparable alternative has a structural advantage that compounds for decades.
The takeaway
If you can identify scarcity before the market fully prices it in, you give yourself the single greatest advantage in residential property investing.
Andrew
Director, Investment Grade Property
