From Twain to Today: Land’s Value and the Coming Cycle Shift

Among Twain’s many quotable lines, none bears more significance in the world of real estate than “buy more land, they’re not making it anymore”. This article dives into the relevance of that quote today and how the breakthrough mass production of steel in 1856 allowed developers to build upwards for the first time — prompting today's investors to ask: Should I invest in apartments or land?

Throughout history, wars and conflicts have been driven, at least in part, by disputes over land and property. Albeit on a larger scale than the individual investor, control of territory has often equated to power, resources and strategic advantage. From the Roman conquest, driven by the expansion of land and influence (117 AD), to the modern-day conflict between Russia and Ukraine, which is largely influenced by control over land and geopolitical positioning. Property has long played a foundational role in investment strategies, offering tangible value in building an investment portfolio that prospers in all economic seasons.

It comes as no surprise to any experienced investor that the capital gains with houses, at a macroeconomic level, far exceed those of units.  

Land holds value. There's a limited supply of land. As the population grows and demand increases, it becomes more valuable. This directly benefits houses more than units because the land component is a larger proportion of the house's total value.

Henry Bessemer, the British engineer, developed the first inexpensive industrial method for mass-producing steel from molten pig iron. This innovation revolutionised construction and manufacturing — enabling the rise of skyscrapers and modern infrastructure.

Despite the ever-increasing supply of units, Mark Twain’s reminder holds true… they aren’t making any more land.

Although houses showed stronger capital gains, units delivered higher rental yields, highlighting a reversal when using yield as a proxy for cash flow. Oftentimes, that gap in rental yields can be the difference between a positive and negatively gearing investment property.

Rental income is closely tied to the number of bedrooms, rather than the land size. Tenants typically choose a property based on how many people it can accommodate, not the size of the land that it sits on. This means that a 2-bedroom unit and a 2-bedroom house in the same suburb often command similar weekly rent. Houses cost significantly more to purchase but don’t earn proportionally more rent, which weakens their rental yield and cash flow performance.

As we’ve explored in our recent article on land cycles, property markets tend to follow a long, repeating rhythm that shapes booms and busts over decades. With the current cycle pushing towards its late stages, there’s a case that land-heavy assets may become increasingly vulnerable to corrections. In such times, investors have historically looked to other hard assets — like gold and silver—not as replacements, but as parallel stores of value that tend to thrive when property and equity markets falter. While nothing is certain, the interplay of land cycles and precious metals is worth watching closely as the global economy approaches its next turning point.