Landlords should be focusing on higher yields

These include a focus on cost control, rents increases, and, most importantly, buying properties with the highest yields - for the lowest risk.

Some of the key drivers of returns in recent years, for example, strong capital gains and positive monthly cashflow, especially over 2020-21, have been dramatically reduced, and the economics of investment look likely to be trickier over the next few years.

Average property values are now falling steadily, and if the 2008-09 financial crisis is anything to go by, even after the market has reached the bottom, it could be a number of years until it regains the recent house price peak. In other words, the next four to five years could be a quiet time for capital gains.

In its latest Market Pulse, CoreLogic’s chief property economist Kelvin Davidson says in this environment, it will be no surprise to see investors focusing on yield - trying to buy properties that have the highest rent in relation to their purchase price, albeit still within the investor’s tolerance for risk.