Bill Gross (Pimco) article this morning relating to leveraging in the markets ‘new’ normal prompted some thoughts on residential investment in the space we are in now. Cameron Kusher (RP Data) made it quite clear yesterday when reviewing the national price growth, and something all of us have intuitively know for some time, the broad market returns many investors have experienced in the last ten to fifteen years can’t be expected to be seen again any time soon (we could say a once-in-a-lifetime occurrence but ever the optimists). The key components to residential return, rental yield and capital growth, have to be hunted down aggressively. Passive approaches, accepting average yields in areas expecting capital growth in-line with inflation, are readily available. The astute investor will need to dig a little deeper outside the comfort zone of capital cities to find those investments capable of bringing ‘real’ returns. To the adventurous go the spoils.