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Cate Bakos, David Johnston and Mike Mortlock, Cate Bakos, David Johnston, and Mike Mortlock द्वारा प्रदान की गई सामग्री. एपिसोड, ग्राफिक्स और पॉडकास्ट विवरण सहित सभी पॉडकास्ट सामग्री Cate Bakos, David Johnston and Mike Mortlock, Cate Bakos, David Johnston, and Mike Mortlock या उनके पॉडकास्ट प्लेटफ़ॉर्म पार्टनर द्वारा सीधे अपलोड और प्रदान की जाती है। यदि आपको लगता है कि कोई आपकी अनुमति के बिना आपके कॉपीराइट किए गए कार्य का उपयोग कर रहा है, तो आप यहां बताई गई प्रक्रिया का पालन कर सकते हैं https://hi.player.fm/legal।
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In a difficult week for Los Angeles, we hope this episode can provide a little bit of respite. Jessica Shaw is joined by Keely Flaherty from Tudum for a deeper dive into the gripping limited series, American Primeval , starring Betty Gilpin and Taylor Kitsch. Then also talk about the delightful return of Cameron Diaz and Jamie Foxx in the new action comedy, Back in Action , directed by Seth Gordon. Follow Netflix Podcasts for more and read about all of the titles featured on today’s episode exclusively on Tudum.com .…
The Property Trio
सभी (नहीं) चलाए गए चिह्नित करें ...
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Cate Bakos, David Johnston and Mike Mortlock, Cate Bakos, David Johnston, and Mike Mortlock द्वारा प्रदान की गई सामग्री. एपिसोड, ग्राफिक्स और पॉडकास्ट विवरण सहित सभी पॉडकास्ट सामग्री Cate Bakos, David Johnston and Mike Mortlock, Cate Bakos, David Johnston, and Mike Mortlock या उनके पॉडकास्ट प्लेटफ़ॉर्म पार्टनर द्वारा सीधे अपलोड और प्रदान की जाती है। यदि आपको लगता है कि कोई आपकी अनुमति के बिना आपके कॉपीराइट किए गए कार्य का उपयोग कर रहा है, तो आप यहां बताई गई प्रक्रिया का पालन कर सकते हैं https://hi.player.fm/legal।
Formerly The Property Planner, Buyer and Professor, our show rebranded in 2023 to The Property Trio.
Residential property is the only asset class we live in, it is where we raise our families, and it is our most expensive investment, yet property advice remains unregulated. Our objective is to educate time-poor professionals through deep insights from our experts who have provided thousands of Australians with personalised advice and education spanning two decades. In a climate where we are overloaded with information and one size fits all recommendations from the media, well-meaning friends and family and so-called advisers, we will distill the raw truth from the ill-informed.
So join the Property Planner, David Johnston, The Property Buyer, Cate Bakos and the Quantity Surveyor, Mike Mortlock as they take you on a journey of discovery through the maze of property, mortgage, and money decisions to empower you to create your ideal lifestyle!
…
continue reading
Residential property is the only asset class we live in, it is where we raise our families, and it is our most expensive investment, yet property advice remains unregulated. Our objective is to educate time-poor professionals through deep insights from our experts who have provided thousands of Australians with personalised advice and education spanning two decades. In a climate where we are overloaded with information and one size fits all recommendations from the media, well-meaning friends and family and so-called advisers, we will distill the raw truth from the ill-informed.
So join the Property Planner, David Johnston, The Property Buyer, Cate Bakos and the Quantity Surveyor, Mike Mortlock as they take you on a journey of discovery through the maze of property, mortgage, and money decisions to empower you to create your ideal lifestyle!
296 एपिसोडस
सभी (नहीं) चलाए गए चिह्नित करें ...
Manage series 2905854
Cate Bakos, David Johnston and Mike Mortlock, Cate Bakos, David Johnston, and Mike Mortlock द्वारा प्रदान की गई सामग्री. एपिसोड, ग्राफिक्स और पॉडकास्ट विवरण सहित सभी पॉडकास्ट सामग्री Cate Bakos, David Johnston and Mike Mortlock, Cate Bakos, David Johnston, and Mike Mortlock या उनके पॉडकास्ट प्लेटफ़ॉर्म पार्टनर द्वारा सीधे अपलोड और प्रदान की जाती है। यदि आपको लगता है कि कोई आपकी अनुमति के बिना आपके कॉपीराइट किए गए कार्य का उपयोग कर रहा है, तो आप यहां बताई गई प्रक्रिया का पालन कर सकते हैं https://hi.player.fm/legal।
Formerly The Property Planner, Buyer and Professor, our show rebranded in 2023 to The Property Trio.
Residential property is the only asset class we live in, it is where we raise our families, and it is our most expensive investment, yet property advice remains unregulated. Our objective is to educate time-poor professionals through deep insights from our experts who have provided thousands of Australians with personalised advice and education spanning two decades. In a climate where we are overloaded with information and one size fits all recommendations from the media, well-meaning friends and family and so-called advisers, we will distill the raw truth from the ill-informed.
So join the Property Planner, David Johnston, The Property Buyer, Cate Bakos and the Quantity Surveyor, Mike Mortlock as they take you on a journey of discovery through the maze of property, mortgage, and money decisions to empower you to create your ideal lifestyle!
…
continue reading
Residential property is the only asset class we live in, it is where we raise our families, and it is our most expensive investment, yet property advice remains unregulated. Our objective is to educate time-poor professionals through deep insights from our experts who have provided thousands of Australians with personalised advice and education spanning two decades. In a climate where we are overloaded with information and one size fits all recommendations from the media, well-meaning friends and family and so-called advisers, we will distill the raw truth from the ill-informed.
So join the Property Planner, David Johnston, The Property Buyer, Cate Bakos and the Quantity Surveyor, Mike Mortlock as they take you on a journey of discovery through the maze of property, mortgage, and money decisions to empower you to create your ideal lifestyle!
296 एपिसोडस
All episodes
×1 #294: A Recap of the 2024 Year in Property – And Our 2024 Prediction Hits, Misses, Lessons and Surprises 1:04:10
1:04:10
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1:04:10Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The Trio love this retrospective. Each year, they predict the following year and at year end, they review their predictions and rate each other's accuracy. Today's show is a lot of fun, and it's our longest podcast recording ever.... sorry folks. We will try to keep it under an hour going forward. Dave got the best score for our first question; "What will the market do?" "I think we'll see value growth of about 2% to 7% nationally next year." "I think the market will be weighed down by Melbourne and Sydney as they're starting to move into negative territory." "There'll be some good buying opportunities in Melbourne and Sydney for the first three to six months, but because they are about 50% of the overall Australian property market, I think they'll hold it back." "I think rental growth will outstrip value growth." ....solid marks for Dave on this one. The second question was more specific. The Trio had to nominate their capital city top performers. How did they rate? Cate's claim, "I'm going to go with Adelaide as the city that nails it". While she only picked the number two, her rationale was sound and she nominated the three top performers. None of the Trio picked the strong regional areas though. Their fourth question related to investor numbers. There was almost a thirty per cent increase in investor activity, yet none of the Trio picked this trend. What gave way to it? Tune in to hear their thoughts. How did governments intervene in the property market? From superannuation changes to tax changes, shared equity and build to rent, our Trio did score some points on this segment of their predictions. And Mike mentioned the chance of rent caps joining the conversation. What about developers and new builds? What did our crew get right with their predictions? Mike sheds light on liquidations and builder challenges. And.... the question that everyone wants to have answered. What will happen with interest rates? The Trio share what they based their opinions and projections on, and there are some great learnings for our listeners to glean. Kudos to Governor Bullock for explaining the Reserve Board's decisions each board meeting. And just for those who wondered what Mike's prediction was? "I think we might end up getting a cut in the August meeting." Dave and Cate are still paying out on Mike. Rents and Vacancy rates was the next discussion topic. The consensus is that Dave won this prediction. "Vacancy rates will stay at similar levels, unfortunately. We might see a slight uptick, but they're going to stay pretty similar around record lows." "Rental growth, I think, will outstrip capital growth." The Trio's predictions around sales volumes and listings were interesting. Cate sheds light on some of the challenges that buyer's agents face with agent's anecdotal claims. Risks that could impact the market was an intriguing segment. Dave's geopolitical views reinforced his willingness to go for the big ticket items, every time! From Trump to China and Russia, the Trio talk about some of the global challenges we face. Cate's concern about natural disasters and insurance costs scored her points on this segment. And Mike reminded our listeners of the following. "Political intervention is the number one risk to perverting the market." And lastly, how did the Trio feel inflation figures would wind up in 2024? From trimmed mean figures to post-COVID challenges, the Trio thrive with this discussion. Mike and Cate concede that Dave won this challenge. Show notes: https://www.propertytrio.com.au/2025/01/27/distilling-2024-predictions/…
1 #293: Market Update Dec 24 – Listings Hit 5-Year Highs, Affordable Properties Surge, National Values Slip & Adelaide Faces Unique Challenges 47:37
47:37
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47:37Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The Trio enjoy regrouping after a lovely summer break. This week, they canvas the December figures. The indices deliver mixed outcomes, and overall the national monthly movement registers a slight market decrease, but what can this be put down to? There are markets within markets, and the Trio break down some of the standout results. From regional cities, to Adelaide's incredible run, there are some noteworthy stats to digest. AND... maybe the Trio will construct an episode on Darwin for our listeners! Stay tuned.... Market segmentation counts for so much and the Trio point out the outperformance of the lowest quartile in six of the seven states and territories. What does this signal? And why would investors broadly target lower quartile properties? Cate shares her insights.... Rents... good news for renters but bad news for investors? Not really. While rents aren't in double digits any longer, rental growth is still mostly above CPI. Cate steps through some of the considerations that owners need to apply when considering rental increases. "But it's listings that i tend to get excited about because they filter through into our market dynamics." New listing volumes were decent last year. They were at or above the five year average. However, all listings were below the previous five year average, but the tightening was a reflection of stronger listing volumes in 2024. The Westpac consumer sentiment index is a powerful glimpse at times, and Jan 2025 reveals some interesting changes. Time to buy a dwelling, family finance, and annualised interest rate expectations... as the Westpac release suggests, "The consumer mood has soured for two months in a row and remains on the pessimistic side. However... consumers expect things to continue to improve from here." Lastly, the Trio wonder what predictive ability the ASX's rate tracker has when it comes to signalling specific dates for rate cuts.... only time will tell, but February is looking interesting! The portion of lending for investment housing is significantly above recent historical levels. Wealth effect? Comfort with no further rate increases? What has driven this? Dave points out some of the interesting indices across the varying data houses. Simple indexes can pick up some changes sooner, and Dave has some great insights for our listeners to consider. Show notes: https://www.propertytrio.com.au/2025/01/20/ep-293-dec-market-update/…
1 #292: Property Trends to Watch in 2025 - What Every Investor and Homebuyer Needs to Know 45:45
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45:45Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM This week, Cate hosts the show and the Trio list three specific trends to watch in 2025. Dave opens up the discussion about the financial markets and contemplates the chances of a rate cut in February. He notes that the market have fully priced in a cut by the month of April. To date, the RBA's RateTracker is still showing a 73% expectation of a rate cut at the next RBA meeting. What will a rate cut do for owner occupier, investor and renovator sentiment? Cate considers the driving force upon buyers rushing in. Is it the cost of mortgage repayments, or sentiment itself? Market segmentation will be interesting once a rate cut filters through also... keep an eye on the upper quartile of the market. With government incentives, green upgrades, e-vehicles and a growing environmental consciousness, we can anticipate a significant shift. But are investors being put off by the price tag of some of these energy-efficiency upgrades? Mike talks about some of the positives for landlords who do embrace them, including depreciation benefits, while Cate covers the state and territory incentives currently on offer. We're seeing a shift in who's buying and renting properties. Dave steps through the generational changes over the decades with some great data. The superannuation laws that apply to individuals aged 55 and above are having an impact on the mobility of the housing market. Downsizing isn't the same as 'right-sizing'. Are some retirees spending the same amount of money on their smaller, retirement-age home? And what is impacting today's down-sizers and right-sizers that didn't impact the generation prior? Tune in to find out. The fourth segment is that of emerging hotspots. Dave shares some exciting hotspots for growth, along with the growth drivers that the Trio have identified for each. Infrastructure upgrades create jobs, and Mike circles in on some of the specific major projects on his list. The final segment relates to the role of technology in property investment. From AI to fractional investing, and blockchain, Mike has a bit of a list. The pace of change is hard to fathom and Dave notes that consumers will continue to embrace tools and get particularly hands on. “It’s an exciting time for tech-savvy investors, but a balanced approach is key. Use the tools, but don’t skip the groundwork.” Show Notes: https://www.propertytrio.com.au/2025/01/13/five-key-trends-for-2025/…
1 #291: The Truth About Building Inspections - What They Reveal, What They Don’t and How to Ask the Right Questions 46:32
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46:32Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM This week, Dave hosts the show and the Trio chat all things Building Inspections. Cate starts out by clarifying the purpose of a building inspection. Contrary to popular opinion, building inspections aren't tickets to renegotiate a sale. Under certain circumstances, a renegotiation can occur, but the market conditions and competing buyer numbers will likely determine this. Building and pest inspections each require a distinct qualification, and Cate sheds light on the differences and methods of each, and the aspects of an inspector's findings that are conducive to pest infestation. Dave broaches the costs that can rack up when buyers are in the hunt for a property, particularly in the case of auction campaigns. The Trio chat about some of the ways that buyers can approach this issue. Cate also has some tips about 'on-sold' reports. Sometimes property negotiations can move very quickly, especially when an auction property receives a strong offer prior to auction day. Cate steps the listeners through the timeline that buyers need to be mindful of when arranging a building and pest inspection. Dave highlights the importance of managing a due diligence checklist. Should buyers get a building inspection before they negotiate a deal, or after? There are many different situations that buyers face, and sometimes it's not possible to avoid organising an inspection prior to securing a property. The Trio chat through some of the situations that buyers face, and how they need to navigate the building and pest inspection process. The Trio break down the building and pest inspection clause in the contract. From legal wording to the options that buyers have, this detail may be tiny, but it's very important. Cate shares some good questions for buyers to ask their building inspector when a fault or an issue is identified. What is the severity? What do I need to do to address the issues? How quickly should I do so? What is the risk if I don’t address immediately? Building and pest inspectors have their limitations and there are a number of things that the inspector won't check. Cate talks through some of these scenarios for our listeners and provides a real life example that she recently experienced. Lastly, the Trio chat about how buyers can source a great building inspector, and the secondary benefits of building inspections. ..... and our gold nuggets! Mike Mortlock’s gold nugget: Mike shares two gold nuggets.... the importance of impartiality when asking for a building inspector recommendation. Mike seconds Cate's firm recommendation to ensure that a discussion with the building inspector ensues. Relying on the report alone can lead to some panic for many, and obtaining clarity and context on the issues is valuable. Cate Bakos’s gold nugget: Some things can look worse than they are, and cracking isn't always a big deal. Other things that seem benign can be problematic. Building inspections are valuable. Show notes: https://www.propertytrio.com.au/2025/01/06/the-truth-about-building-inspections/…
1 #290: Five Ways Property Buyers Fail to ‘Property’ Plan and How to Create Your Winning Plan 39:28
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39:28Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM This week, Dave has prepped a great episode for our listeners. Cate opens up the conversation with the first of the five mistakes that buyers make when they fail to plan. Failing to set clear short and long term goals can undermine an investor's outcome from day one. Dave provides some clear pointers for buyers to adopt as they encounter this critical first step. "Entering the property market without a plan or without goals is like running a marathon with a blindfold on. You’re bound to trip up and face setbacks." Mistake number two prompts some good discussion between the Trio. Jumping into the market without a strategy for the next purchase is unfortunately something the Trio hear about often from remorseful buyers. Making property purchase decisions that don't align with goals is more common than people would think. As Mike suggests, buyers need to consider so many facets of the property game; from managing risk, savings buffers, cashflows, tax positions, and of course, where the family home fits. Once you have aligned these aspects, you can then determine the - macro location such as the city or state that best suits that price range, your goals for the property itself for yield and growth, considerations such as minimising land tax, owning in different locations for diversification, factoring where different cities are sitting in the property cycle You can only take this macro view and planning approach to your next purchase strategy if you start with goals and a long-term plan. Mistake number three is allowing emotions to dictate decisions. There are many ways in which emotions can creep up on us. To name just a few, bias can grip, sometimes it's fatigue, and other times it could be fear of missing out. Dave shares some examples that he's seen people fall prey to over the years. "This often happens when we don’t have long-term goals to keep us focused and maintain perspective", says Dave. How can buyers balance their emotions and avoid mistakes? Mike's tips are simple and objective, but not easy to adopt without a clear plan. Mistake number four: Believing in the get rich quick myth. Dave sheds light on some of the short-term victories that seem enticing and he warns that buyers also need to assess the downside risk and be comfortable with it. Buyers need to be very wary of a range of spruikers too; some will promise double digit returns, while others could be masquerading as advisors while they sell off a stock list. "Short-term investments carry high risks, from unpredictable market conditions to expensive renovations to blow outs in costs for developments. It requires significant expertise and resources. Unless you are a successful developer, you generally need to adopt a “get rich slow” mindset." Lastly, mistake number five relates to accumulating properties without considering cashflow and savings buffers. Dave's experience with investors shines through when he lists a variety of scenarios he's witnessed over the years in relation to large property portfolios. While many investors get it right, there are plenty who don't. Our recent economic conditions have placed pressure on some multi-property investors and Dave has some good words of wisdom four those who place a value on a large portfolio. ..... and our gold nuggets! Dave Johnston's gold nugget: The key to property investment success is to view it as a series of informed strategic decisions that align to your short and long term goals. Mike Mortlock’s gold nugget: Mike relates an investor scenario to the recent Block series Cate Bakos’s gold nugget: Emotion counts for so much and Cate suggests that there is only one type of property that buyers should be emotional about. "You should be entirely emotional about buying your home. Make sure you buy a property that you love. But for your investments, you don't have to love them. You just have to be proud of them." Show notes: https://www.propertytrio.com.au/2024/12/30/five-ways-buyers-fail-to-plan/…
1 #289: Shared Equity Strategies - Making the Most of Government Schemes and Property Planning Strategies as You Transition to Full Ownership 41:21
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41:21Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM A lovely listener writes in to us with some questions about the Victorian shared equity scheme. Shared equity opportunities aren't restricted to just Victoria though. This ep is relevant to any Australians who are considering a shared equity option with the government. How should Luke approach this? Should he pay it down with savings (or debt), sell and upgrade, or convert the home to an investment in time? Some background on our listener: Luke is 30 years old, high school teacher, on $120k annual salary, 1 baby, 2 dogs, 0 cats. (We like that dog to cat to child ratio!) His partner will return back to work in about 6 months on approximately $70k but this timeframe is up in the air to some degree subject to how life with the baby and parenting goes, but when she does go back, this will take their total income up to $190k. Luke bought his home in the Northern suburbs of Melbourne for $670k in 2021 with the Victorian Homebuyer Fund’s help, contributing 5% of the purchase price himself and with the Gov’t Fund covering another 25%. The home’s value has since increased to around $720,000 to $740,000, maybe more. Dave talks our listeners through the government's stake, and how the rules determine the equity split as the property appreciates. Luke can repay the government in various ways, but which way is the optimal? Tune in to find out. Luke needs to be aware of the calculations that govern the methodology for government payout. Mike lists some of the rules that the government have determined for equity buy-back. From bulk payment minimums to valuation steps, the rules are reasonably structured. Should Luke reduce the government's share gradually, versus saving up to repay the government later? Every situation is unique, but Dave shares some ideas for our listener to consider. One is a bit outside of the square, but it's a great discussion point. The Trio canvas the pro's, cons and realities of shared equity. Is a Lender's Mortgage Insurance premium something that a shared equity purchaser should consider? As Mike eludes to, it's really a question of timing, planning and goals. Cate challenges Mike.... those who consider shared equity schemes with the government need the help, and she points out the merits of such schemes. Luke has a few options to consider, but a few restrictions to bear in mind also. The Trio wish him the very best of luck with his property journey. ..... and our gold nuggets! Mike Mortlock’s gold nugget: Mike highlights the upside for those who have limited deposits. Dave Johnston's gold nugget: Aim to maximise your ownership as soon as possible! Full equity ownership is one benefit, but the options to renovate, improve, extend, invest are exciting too. Cate Bakos’s gold nugget: For those who can enter with a small deposit under the First Home Guarantee Scheme or Home Guarantee scheme.... they could also consider these options too. Show Notes: https://www.propertytrio.com.au/2024/12/23/shared-equity/…
1 #288: Market Update Nov 24 – Perth, Brisbane & Adelaide Slow, Listings Surge in Perth & Adelaide, Rate Cut Predictions & Productivity Woes 43:15
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43:15Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The Trio are back together in the studio! The Trio comment on some of the interesting indices for the state of the nation in the month of November. Cate marvels at regional performance outstripping capital city performance. The big tier, top three cities are showing weaker growth and Melbourne has continued to show modest price falls. Dave predicts that 2025 could be the story of Melbourne and Hobart. He shares his rationale... let's see how his prediction lands! Mike points to the stratified price figures and notes that the lowest quartiles are outperforming, all but for ACT and Dave touches on the per capita recession we are all currently in. Canberra's public servant population defies this trend. Rents are dipping, but they are all still in positive territory, as as Cate mentions, the rental growth is still outstripping CPI. "Any other precedent would say that these are huge numbers, but they've come off the boil a long way," says Mike. Rental increases now are normalised now though, and as Peter Koulizos has said before, rents had to play catch-up. Rental yields have decreased substantially for many regional cities, and Cate considers some of the challenges and changes that have impacted quite a few regional markets since COVID lockdowns. Sales and listing activity is a great insight into market supply. Cate doesn't expect listing figures to dramatically increase and she hints that pent up demand could show itself in early January in the larger markets. Could the start of 2025 be a bit different to recent past years? Tune in to find out. Contrasting the listing figures from October to November tells an interesting story too. Hobart's decrease in listings when contrasted against this time last year is significant. What is happening in Hobart? The Trio chat about the pressure on the RBA to control monetary policy, and they consider the key drivers and data points that our RBA are keeping a close watch on. From productivity to services inflation, unemployment to public sector job growth, (just to name a few) there are plenty of moving parts that remain a challenge. The quarterly GDP figures are out for the month of September and the strongest segment leading the charge is Agriculture, Forestry and Fishing at 6.5%. Lastly, the Trio share their thoughts on when the next rate movement could be! Show Notes: https://www.propertytrio.com.au/2024/12/16/ep-288-nov-market-update/…
1 #287: How Government Interventions Are Shaping the Property Market – The Real Impact & Side Effects of Property Regulations 43:11
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43:11Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Today, Cate and Mike tackle a broad array of government incentives, legislative changes and initiatives. Have they all worked? And what are some of the unintended consequences. "Lack of consultation is probably a root cause of some of these negative outcomes." The rollout of the recent Victorian rental minimum standards is one key example. As Cate points out, some of the broad brushstroke recommendations weren't all practical. The investor-led sales have also distorted the market somewhat, (for both sales and rentals) particularly when older style houses in need of renovation are concerned. From the Pink Batts scheme to cottage industries, the Duo cover off some of the negative news stories from the past. Mike dares to touch on land tax. Queensland's repealed land tax legislation is a great case in point, and Mike's company's data supported the fact that the policy was conceived. Over a 98 day period, a 17.8% drop of investment activity in this short period resulted. Data is so valuable. Pivoting from sales activity to purchaser activity, Mike and Cate consider stamp duty concessions. Thresholds are important to note, as concessional caps sometimes don't seem to make a lot of sense. Which states have got it right, and which states are missing the mark? How do concessions distort markets? Cate cites the Victorian COVID recovery stamp duty stimulus and she discusses the impact that it had on median sale prices and market segmentation. Tackling underquoting is an enormous problem for regulators. Legislation on quoting regimes across the states and territories varies greatly, but some measures that have been intended to solve the issue have amplified the issue even further and convoluted the process. And how has rent-bidding legislation impacted the industry? Tune in to find out... Lastly... what is the lasting legacy of the HomeBuilder grant? Did our government get it right? From trade shortages to untenable deadlines, there were plenty of challenges for homeowners to manage. Market distortion was a key problem, according to Cate. Mike quotes a 33% material input price hike during the COVID period. ..... and our gold nuggets! Mike Mortlock’s gold nugget: “If you move the needle somewhere, there is going to be a ripple somewhere else.” Cate Bakos’s gold nugget: Foreign investor surcharges rattled Melbourne's market a decade ago. Specific areas were impacted and local owners felt the brunt of this. Show notes: https://www.propertytrio.com.au/2024/12/09/government-intervention/…
1 #286: Is Investing in Property Still Worth It? Navigating the Shifting Property Landscape 39:57
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39:57Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Today, Cate and Mike dive headfirst into the findings from the Property Investment Professionals of Australia (PIPA) Sentiment Survey, taking the opportunity to unpack some pressing questions while Dave is away. A big thank you to all the investors who contributed to the survey—it’s their insights that shape episodes like this! Why are more investors selling properties in major cities like Brisbane, Melbourne, and Sydney? Cate and Mike explore the rising compliance costs, government policies, and economic pressures that are prompting these decisions. They also examine how this trend is reshaping the rental market, leaving renters with fewer options in an already tight landscape. Mike highlights a key survey finding: While investor sentiment has cooled, nearly 46% of respondents still believe it’s a good time to invest in property. He delves into why Australia’s long-term housing fundamentals—like leveraging, supply constraints, and resilient demand—continue to appeal to savvy investors. Cate reflects on the contrasting approaches states are taking to housing reform, with Victoria’s “hammer of Thor” policies driving investors away, while WA’s incentive-driven approach encourages positive change. Together, they share insights into what reforms are stressing investors most and how policies can better support both tenants and landlords. They also tackle the challenges of cash flow shortfalls caused by rising interest rates and costs. While some investors are forced to increase rents, others are reluctant, choosing to keep loyal tenants even if it impacts their bottom line. . .... and our gold nuggets! Mike Mortlock’s gold nugget : “Participating in surveys like PIPA’s isn’t just about sharing your story; it’s a chance to influence policy and create real change for investors.” Cate Bakos’s gold nugget: “This ecosystem thrives when both tenants and landlords feel supported—let’s aim for balance, not division.” Show notes : https://www.propertytrio.com.au/2024/12/02/is-investing-in-property-still-worth-it/…
1 #285: First-Time Property Investors and Family Planning - A Smart Approach to Wealth-Building 40:32
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40:32Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Today the Trio roll up their sleeves and tackle first-time property investors and family planning. A special callout to our lovely listeners, "Sheree" and "Chloe" (not their real names), for prompting this insightful episode. Why do first-time investors often consider helping their children onto the property ladder? Cate and Mike discuss Sheree's situation, where family planning meets wealth-building. Cate highlights the unique challenges and strategies for investing with a long-term goal of aiding children, even when they're still in primary school. Cate dives into key considerations such as the structure of the investment, future financial implications and the need for expert advice. Whether it's about protecting the asset, tax-effective planning or ensuring the investment is a gift and not a burden, the duo unpacks what parents need to know before buying property for their kids. Mike emphasises the importance of planning for retirement first before taking steps to support children. They explore how defined benefit super funds like Sheree's provide a foundation of financial security and why this can influence property investment decisions. Chloe’s question focuses on planning her first property investment. She impresses the team with her detailed groundwork—budgeting, borrowing and cash flow planning. Cate underscores the importance of clarity around long-term goals: Is it about building a multi-property portfolio or securing a single growth asset? This distinction guides every next step. The team debates whether to go for national versus local expertise when selecting a property, with Cate advocating for local buyer's agents who deeply understand their markets. She also highlights the risks of analysis paralysis and the elusive "perfect property." Instead, they encourage focusing on sound fundamentals and a strategy aligned with future aspirations. . .... and our gold nuggets! Mike Mortlock's gold nugget: "The more work you do on your strategy, the fewer options—and more clarity—you'll have for making the right decision." Cate Bakos's gold nugget: "When you're helping your kids, always ask: Is it a gift or a burden?" Show notes: https://www.propertytrio.com.au/2024/11/25/first-time-property-investors-family-planning/…
1 #284: Market Update Oct 24 – Sentiment Waxes & Wanes but for Which States? Melbourne Yields Make History! Mid-size Capitals Slow 44:47
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44:47Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Cate kicks off this episode with Dave while Mike hikes around New Zealand. The Duo note some of the interesting indices for the state of the nation in the month of October. They marvel at Hobart's quick pivot and wonder what has driven the positive growth. The combined regions outperformed the combined capitals too, and despite the strong monthly performance in Perth, they note that growth has slowed of late. Dave and Cate delve into reluctant-seller psychology. After the high's of 2021 for the eastern states, and observing Perth's stellar run over the past couple of years, it's interesting to consider what behaviours are exhibited when locations experience downturns following a strong run. Dave notes that consumer sentiment data is suggesting many have a keen eye on Melbourne, and Cate shares some observations about the regional performance in Victoria. Segmenting the market into price quartiles tells quite a story. Cate and Dave use some examples in the market and they canvas the reasons why the various price points have performed so differently to each other. Rents remain steady, and aside from Hobart, the pace of growth has slowed. However, vacancy rates remain very tight and yields have strengthened. Dave points out that this combination of data is a leading indicator for value growth. Perth's downward trajectory over the past few months is quite obvious, but what could be driving Hobart's rent? Could it be an increase in short-stay dwellings? Has domestic travel to the Apple Isle increased? Or could it be related to the weather? The Duo mull it over... The correlation between capital growth and listing activity is one of the Trio's favourite discussion points each month. Although Dave makes an important point. "One of the issues with a five year average is that it doesn't factor in population growth." What's driving listing activity around the nation? Tune in to find out.... New listing activity has pivoted and Melbourne, Hobart and Canberra listing activity has dropped compared to this time, last year. On the flip-side, Perth and Darwin are exhibiting higher numbers of new listings. The consumer sentiment index shows a marked increase in the "Time to Buy a Dwelling) measure, and Dave breaks down the data by state. Victoria's measure is now over 100, a 31.5% increase, while Western Australia's measure dropped to 66. Dave points out the potential price signals in combination with listing activity. Investors are moving back in to the market at a higher rate and lending has remained steady accross the board. Victoria has underperformed on the investment lending front, unsurprisingly. NSW leads the chase with 44% of new loans secured in September. Monthly change of employed people jumped 44,000; a figure that eclipses what many would have expected. Our unemployment rate remains steady despite fears of job-losses as coined by the RBA. And... time for our gold nuggets... Cate Bakos's gold nugget: The new listing activity for 2024 campaigns is easing and there is only realistically another fortnight to run before campaigns finish and the market goes into hibernation over the Christmas period. For any buyers who wanted to purchase in 2024, now is the time! Get out there! David Johnston's gold nugget: Make your own decisions based on your own personal economy! Shownotes: https://www.propertytrio.com.au/2024/11/15/ep-284-oct-market-update/…
1 #283: Your Guide to Regional Property Investing - Critical Strategies and Townsville in the Spotlight 38:33
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38:33Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Today the Trio roll up their sleeves and tackle regional investing. A special callout to our lovely listener, Ester for prompting this exciting episode. Why do investors choose to invest regionally? Cate shares some of the reasons she started investing in the regions. Cashflow is one key element, but diversification also counts.Cate sheds light on some of the considerations that investors need to apply when selecting one region over another. Distance, demographics, target tenants and the growth drivers are all important considerations. Lack of diverse employers is a threat to some of the smaller regional cities, but Townsville is not one of these. It's the 14th largest city in Australia and this glorious, sunny city has a lot on offer. The Trio delve into what makes Townsville special. Cate shares some of the common traps and downsides that investors need to be aware of when it comes to regional investing. Picking a cheapie and buying in the Bronx is a risk for those who don't do their homework. Careful selection of a good investment area is critical.Keeping trade services in mind is really important in the regions. Cate also sheds light on some of the difficulties associated with harnessing tradespeople in some of the regional cities.Let's talk about Townsville! There are some significant projects underway and the Trio list some of these. The strategic location and port access count for a lot also, and the Trio also chat about the economic and industrial drivers in the area. Townsville is made up of more than forty suburbs, and it's bigger than Darwin when it comes to population count. It's the largest urban centre in northern Queensland, and surprisingly, health is the number one employer in the city. Townsville's involvement in defence is significant and the Trio share some of the insights they've gathered. Job growth is the big item for discussion, though. The fundamentals sound very strong and sustainable. Tune in to find out more...... .. and our gold nuggets! Mike Mortlock's gold nugget: "Firstly, make sure Townsville, (or any other region) fits within your strategy. But... is the word already out about Townsville?" Cate Bakos's gold nugget: You really need to understand the growth drivers, the vulnerabilities of the area, the good streets, the tenant demands and the flavour of the region. Buy and hold, long term is a great fit for regional cities. Special mention to our industry friend, Simon Pressley from Propertyology, for his generosity with his research and information. Show notes: https://www.propertytrio.com.au/2024/11/11/regional_investing/…
1 #282: The Ultimate Guide to Property Depreciation - Maximise Your Investment Returns with Expert Advice on Tax Deductions 42:59
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42:59Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Today's episode is all about depreciation; Mike's wheelhouse! Dave opens the conversation with a question for Mike, "How often should I update or review my depreciation schedule to maximise my tax benefits?" Reports last an owner as long as they hold the property. Mike delves into the role of the quantity surveyor when it comes to estimating construction costs. One of Cate's investing mistakes gets aired; after having completed a significant renovation on an investment property, Cate overlooked the chance to arrange a depreciation schedule at the onset. Mike unlocks the magnitude of unclaimed deductions in our nation. How easy is it to arrange a depreciation schedule, and what documentation is required? And how do self managed superannuation fund property assets differ when it comes to deprecation? Mike explains the challenges of high depreciation versus high capital growth. He is often asked the question by investors, and his Southbank high-rise, one bedroom apartment example illustrates the inverse relationship between the two measures. If a property is over forty years old, is there any point looking at arranging a depreciation report? Tune in to hear the answer! Mike explains the importance of physical inspections when a tax depreciation specialist is formulating the depreciation schedule, and he also sheds light on the circumstances that allow for a physical inspection not to be conducted. Mike's service station story is a warning to investors who engage professionals who cut corners. What is the difference between a repair you claim through your accountant and a depreciable item on your schedule? Mike shares the nuts and bolts for our listeners. ..... and our gold nuggets! Cate Bakos's gold nugget: Well-meaning advice from accountants to maximise tax deductions isn't always great property advice. If in doubt, get a second opinion. Mike Mortlock's gold nugget: Don't assume that it's not worth getting a depreciation schedule. Always check! Show Notes: https://www.propertytrio.com.au/2024/11/04/depreciation/…
1 #281: Mastering Accessing Equity - Loan to Value Ratio Strategy, Risks, Benefits & Hidden Opportunities that Shape Mortgage Strategy 45:10
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45:10Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Today's episode is all about loan to value ratio's (LVR). Mike throws Dave the first question; "In twenty words or less, what is LVR?" Cate delves into the reasons why LVR is so important when it comes to Mortgage Insurance. Managing risk is what lenders do, but once a buyer triggers mortgage insurance, dwelling types, quirks and risks count for a lot. Heightened scrutiny and having the final say on loan approval is something that a mortgage insurer often holds. Cate also explores those professionals who get exemptions when it comes to LVR and mortgage insurance waivers. Dave's examples bring this point to life; from postcode restrictions to zoning types to the property condition. Policies vary greatly among lenders and it can be quite complex. Cate also shares some of her experiences and insights in relation to tricky properties that sometimes pack a nasty lending surprise. Strategic mortgage brokers can assist with the associated challenges. Dave shares the history of LVR and Lenders Mortgage Insurance in Australia with the listeners... a step down memory lane for some, but a significant step for home ownership in Australia. Cate reminisces about the impact of smaller deposits and the burden of Lender's Mortgage Insurance. Is it a cost of doing business? Absolutely, but it's tough on first home buyers. Cate's support of the First Home Guarantee is strong, but she feels our Government need to offer more places to eligible applicants. And the 2% savings guarantee for eligible single parents is one policy she loves. LVR can be a great metric to track our prudential regulator’s level of concern. Macro-prudential policy intervention is evident when we look through the history books at high LVR loan origination. But what does the current five-year data show us? Tune in to find out. We talk a lot about macro-prudential regulation and how it affected credit, particularly for investors during the 2014 – 2019 period. APRA intervened, and before we knew it, lending became tough, despite reasonable interest rates. Credit was almost impossible for investors. Dave talks our listeners through the challenges of this period and the impact that our regulator had on the property market. LVR is a viable measure of health that a lot of investors and businesses use. Cate talks us through the concept of overall LVR, and how it can be reduced/optimised. Lastly, Cate and Dave touch on cross-securitisation... the good, the bad, the ugly. ..... and our gold nuggets! Cate Bakos's gold nugget: Buyers must manage risk when they are in high LVR territory when they are making unconditional offers. Dave Johnston's gold nugget: "LMI is the cost of doing business, as Peter Koulizos has told us." Dave talks about the benefit of being open minded to a higher LVR and LMI in order to get into the market earlier. Mike Mortlock's gold nugget: Mike talks about the potential cost of avoiding LMI, and he reminds listeners that these costs can be modelled. Show Notes: https://www.propertytrio.com.au/2024/10/28/mastering-accessing-equity/…
1 #280: The Impact of Infrastructure on Property Values & Choosing Between Melbourne and Brisbane for Your Next Investment 57:34
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57:34Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Marilyn's question is about the suburban rail loop civil works in Melbourne, and how this could influence the suburbs and property markets that are impacted by the project. Dave sheds light on the shortfalls of Melbourne's current rail lines, and the future changes that the project will enable. "It is the most expensive infrastructure project in Australian history". Mike ponders how the new stations and hubs could impact different genres of properties and he dares to step into town planning initiatives. Dave asks the obvious question; how will higher density, (and more inhabitants) impact businesses and heightened demand for services? How could this impact property prices in the 1.6km radius within these affected stations? Cate points out that this insight is transferrable amongst several other cities that have invested in their rail infrastructure. Cate and Mike discuss the positives of a commutable location with easy transport hubs. Will buyers pay more for an easy commute to work? Absolutely. What are the likely impacts of higher density hubs in designated locations? The Trio consider the impact across the nation for various planning changes for high-amenity areas. And Cate raises the question: what do these new stations mean for the various precincts that are impacted? Melbourne has four new train stations hitting the map in 2025 and there will be plenty of positives. Hunter asks the Trio where they'd invest if they had $500,000 or $1,000,000 in either Melbourne or Brisbane. Cate ponders why Melb vs Brisbane is a popular consideration. Recency-bias from the Olympics, or weather differential are two considerations, but could it be price-points? Or the media? Is Melbourne's potential bounce back a factor? Dave lays done some really important property planning considerations, and Hunter's scenario is put under the microscope. The Trio unpack some of the complexity that should be considered, and Cate shares some specific Victorian examples at these two price points. Mike unpacks locations around the country where listings have increased at the highest rate. What are they? And why have the listings exploded? Tune in to find out.... ..... and our gold nuggets! Mike Mortlock's gold nugget: The strategy is more important than the hotspot! Cate Bakos's gold nugget: Rail amenity counts for a lot. What are our town planners thinking, and how is rail infrastructure playing a key role in our growing population threat to traffic congestion? Show Notes: https://www.propertytrio.com.au/2024/10/21/listener-questions-rail-projects-and-melb-vs-brisbane/…
1 #279: Market Update Sep 24 – National Price Growth Slows, Rents Drop to 4-Year Low, Is Perth Finally Slowing as Listings Boom Nationwide? 50:35
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50:35Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike kicks off this episode, and after stumbling with Cate's surname (yes, he's on fire with names), the Trio crack into the market update for September. "Is this the beginning of the peak or decline for these markets?" Perth's rate of growth has slowed, and the Trio ponder whether it's listing numbers, tightening household savings, or interest rate pain that is contributing. How long can the three top performers maintain this strength? And are they at their peak? Perth's annualised growth is currently sitting at 24.4%, which is significant by any historical measures. Taking the Reserve Board's monthly press releases into account is important. Until we return our inflation numbers to a figure within the target band, our interest rate pain is likely to remain. Dave sheds light on net overseas migration numbers and draws a parallel with the slowdown in price growth, and the Trio overlay the listing figures that are amplifying the supply/demand imbalance. Mike and Cate chat about mean reversion and some of the weaknesses of this popular argument. Just because Darwin hasn't performed well over many years, does not mean that Darwin's 'turn' is next. There is more to mean reversion than just labelling a slow performer 'the next one'. Rental pressure continues to soften. What could explain Hobart's pattern? Rents have all come off the boil with the exception of Hobart. Cate has some insider insights.... Will pressure on rents continue to ease? As Dave mentions, household formation rates are playing a powerful role in the rental numbers also. Cate ponders the impact of student numbers and the effect on market segments, specifically inner-city apartments. The key takeaways from the consumer sentiment index include 'Time to buy a dwelling'. The WA figures are interesting in particular. The 'Interest rate expectations index' has dropped substantially, and once again, the differences across the states and territories might be telling us a valuable story. Sentiment counts for a lot, and Cate considers the impact of the anticipation for a rate cut during September. The 'House price expectation' index was another that the Trio noted and Dave noted WA's and QLD's softening for this measure, and contrasted it against Vic's and NSW's uptick. And we've hit the highest number of new investor lending commitments that we've seen since Jan 2022 this month, and as Dave points out, "That was back when the cash rate was just 0.1%." Are first homebuyers getting enough support? Shared equity... yeah/nah? The Trio chat about some of the government led initiatives that offer some support to first homebuyers. And... time for our gold nuggets... Cate Bakos's gold nugget: The rate of change of rental growth is easing and it will be interesting to see how this filters through into political policies. David Johnston's gold nugget: "Markets are cyclical. No market is always flying or always struggling. Have a long term plan when you're buying property." Mike Mortlock's gold nugget: When it comes to first homebuyer activity, it seems that we're addicted to stimulatory stuff. But we don't tend to have many policies that help with supply. "We need to attack the supply issue, rather than stimulus, stimulus, stimulus."…
1 #278: Crafting a Personalised Plan for Retirement Success: Boosting Cash Flow, Scaling Back Work and Strategic Downsizing 45:30
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45:30Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Today's episode is a great case study. Georgia is stating to feel the strain of managing her two investment properties and she wants to make sure she makes the right decisions now so that she can enjoy her retirement. Georgia is 52 and has no children, lives in Sydney, and works four days per week. She owns a property in Pagewood, (Sydney's eastern suburbs) and St Leonards (lower north shore). Collectively they are valued at $2.86M and they bring in a rental income of $86,000 per year. Her plan has always been to eventually move in to the Pagewood property, but she wants some help working out when and how to do this. Ultimately though, Georgia will want to downsize into something more manageable. What are Georgia's key challenges? Georgia has no borrowing capacity in this current economic and lending climate. The change in interest rates have been tough on Georgia, (and many others), but her offset balance and savings balance ($285,000) are holding her in good stead. Dave steps through these challenges in details and has some ideas and modelled scenarios to share with Georgia. Should she hold? Should she sell? Or are there other options? Considering the cashflows is one thing, but calculating the recent capital growth that Georgia's two properties have delivered is also important. Mike shares Georgia's financials with our listeners, and while the data is detailed, it's reassuring to see just how much wealth she has built whilst also enjoying the important things in life. One key observation is the power of time, and what this has done for Georgia. Georgia has a portfolio equity position of $1.257M and an LVR of 56%. She has stayed the course, and as Cate points out, "It's a healthy LVR!" Georgia considered selling one of her properties to fund her cashflow. Dave chats about the modelling, likely outcomes and questions they addressed. What did they determine would optimise Georgia's scenario? And what did she decide? Tune in to find out how the modelling gave her the answer. Cate touches on the value of time, and the prize that it can deliver for those who are patient. Mike discusses the shock that our pace of interest rate increases delivered for a lot of investors. While we may be close to equilibrium, our last two years have been tough on plenty of households. Back to Georgia... what is her risk profile? And what determines risk profile? And how does risk profile translate into goals, options and decisions? Back to metrics... the Trio chat about how to best construct conservative estimates and Cate leans on her 29 years of investing experience and assures Dave that his vacancy rate modelled assumptions are reliable. Mike circles in on the historical growth of each of Georgia's two properties and he wholeheartedly supports her decision. Dave shares in detail the three scenarios that were modelled... and following trialling multiple versions, the findings were compelling. Tune in to find out! ..... and our gold nuggets! Cate Bakos's gold nugget: "Personal finance is just that.... it's personal!" Mike Mortlock's gold nugget: Mike's vegies and dessert metaphor is apt, but in this case, he marvels at how Georgia made the vegies into dessert. Her regimented approach impressed us all. Dave Johnston's gold nugget: This was one of Dave's favourite case studies and he highlights why you don't need to own lots of properties to get a benefit out of one key plan. Show notes: https://www.propertytrio.com.au/2024/10/07/case-study-retirement-success/…
1 #277: Cate, Dave and Mikes First Property Purchase – Lessons, Insights and Reflections 39:04
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39:04Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Today's episode is a special one. The Trio have often reflected on their own past experiences as investors and home buyers. This time, they decided to share their nerves, excitement and rookie mistakes when they each tackled their own first purchases. Mike had an exciting week when he bought a home, rolled his car and took of to Thailand on a trip. He paid $230,000 for a home in Waratah (Newcastle) and thought hard about all of the ways that he could generate some income out of his asset. Renting a room to his previous flatmate, drawing up a depreciation schedule, and contemplating a cleanup of an otherwise rugged property was the beginning of Mr Mortlock's property success. A $30,000 immediate uplift for a $12,000 investment was a great payoff. Young Dave was a 25/26 year old mortgage broker, driving around in his EB Ford Falcon when he decided to get serious about mortgage broking. His red clinker brick, older style apartment caught his eye immediately, and for all of the right reasons. Dave paid $176,500 for his first home. Cate touched on the fear of debt and the enormity of the pressure she felt once she took possession of her first home. This isn't an uncommon feeling for some buyers. "What if I lose my job?" Cate's first purchase was a townhouse that she bought off-the-plan in Mordialloc. She talks about the pros, cons, and the better alternatives she could have targeted. She contrasts the skills she had then vs now. Dave was able to apply his mortgage broking skillset to his acquisition, but he maintains that he felt very nervous about the purchase itself. From contract signing to comparable sales data, Dave recalls that he was relatively green as a first home buyer. He recalls the ways that he monitored and researched loan products and interest rates. How did buyers navigate the home buying process back in their day? Cate recalls her expensive phone bills, when agents had mobile phones and Telstra charged by thirty second blocks for landline calls to mobiles. "Doing the legwork" was different for first home buyers prior to online property search engines being commonplace. From slicing out line advertisements in the paper to collecting magazines in the coffee shops, Dave and Cate reminisce. What were their income to asset price ratios? Clearly, Dave and Mike were on better incomes than Cate. Mike: 3.4% Dave: 3.5% Cate: 4.8% How did the Trio members each borrow? What were their loan products? Did they go via a broker? And how did grants and initiatives spur on their decision to purchase? And how have their first purchased properties performed over the years since reselling? ..... and our gold nuggets! Mike Mortlock's gold nugget: "Don't sell if you can avoid it!" Dave Johnston's gold nugget: Getting into the market and making a decision is important. Don't overanalyse, get in the game. Cate Bakos's gold nugget: Surrounding yourself with knowledgeable people is important. Cate's top two picks are; 1. a strategic mortgage broker, and 2. a great conveyancer. Show notes: https://www.propertytrio.com.au/2024/09/30/our-first-property-purchase/…
1 #276: Where to Find Budget-Friendly Properties in Australia’s Capitals 31:06
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31:06Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike's company, MCG Quantity Surveyors, recently released a comprehensive report on affordable housing in our capital cities. The report focuses on the lower 25% of the property market across Australia’s major capital cities. MCG wanted to identify what’s truly "affordable" in each market by analysing the 25th percentile of sales prices. This approach gives a clear snapshot of the most budget-friendly properties currently available, which is crucial information for anyone trying to navigate today’s challenging market. Cate steps through some of the median prices around our nation and she contrasts Sydney against Perth. Mike asks, "How many years of income it would take to purchase a median priced home in the market?" House price to income multiples are a reasonable measure of affordability, and the multiples for both houses and units across the two cities is fascinating. Contrasting other cities is intriguing too; Perth vs Hobart requires more consideration than just income multiples. There is no doubt that the metric is a bit of a blunt instrument, though. Are there specific areas within our cities where affordability is better, or is it tough across the board? I In Sydney, for example, regions like the Outer South West, Central Coast, and the Outer West and Blue Mountains offer more affordable options compared to the inner suburbs. These areas typically offer a more suburban or semi-rural lifestyle, which tends to come with a lower price tag. In Melbourne, the western suburbs such as Werribee and Tarneit are also known for being more affordable, particularly for houses. These areas are popular among families and first-time buyers who are looking for more space without the hefty price tag of inner-city living. "Mike, for someone looking to buy or invest, where should they be focusing their attention?" Despite the strong recent growth, Perth still rates. Tune in to hear why.... Cate prompts Mike to share what the data means for the future of affordable housing in Australia. Affordability varies significantly not just across the country, but even within individual cities. It’s crucial for buyers and investors to understand these local dynamics and to do their homework. While the headlines often focus on the un-affordability of the major capitals, there are still opportunities out there if you know where to look. The data really emphasises the importance of being informed and strategic in your property decisions. Whether you’re buying your first home or looking to expand your investment portfolio, understanding the market is key to making the right choices. ..... and our gold nuggets! Mike Mortlock's gold nugget: Median house price to income multiples challenge some buyers and Mike showcases the opportunities that quality units can provide when considering the lure of inner-ring, blue chip suburbs. Cate Bakos's gold nugget: With all of the changes we're seeing at local council level, it will be interesting to see how the affordability measure changes with higher density developments that are closer to CBD. Dave Johnston's gold nugget: "Always flip it around to your own situation, your own economy and your own price point in order to work out what the best investment is for you." Show notes: https://www.propertytrio.com.au/2024/09/23/budget-friendly-properties-in-aussie-capitals/…
1 #275: Market Update Aug 24 - Perth & Adelaide Surpass Melbourne Median, Buyer Sentiment Up in NSW & Vic as National Market Cools 59:04
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59:04Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike kicks off this episode, and after establishing Dave's surname's correct spelling, the Trio launch into the August figures. National figures were up across the board +0.5%, but as Mike eludes, it's really a tale of eight cities. How long can the three top performers maintain this strength? And are they at their peak? Perth's annualised growth is currently sitting at 24.4%, which is significant by any historical measures. "We've got three very heavy lifters, and their growth isn't really easing", says Cate. Although Dave's focus on Brisbane's growth rate suggests it may be a city that is coming off it's recent high pace of growth. Interestingly, median values are not the most reliable indicator of places on the performance league ladder. The Trio have discussed the imbalance of houses to units in the various capital cities, and they cite this example as a case in point. Given Melbourne has a higher proportion of units than each of Adelaide, Perth and Brisbane, the median value figure is influenced by this ratio in every city. What could trigger Melbourne's market to rebound? Cate steps through her three possible triggers for change. Dave points out the rental yield figure; a potential indicator of a price signal to a lot of investors. For the first time in the history of the Core Logic gross rental figures, this is the first time that Melbourne has been on par with Brisbane and Adelaide. The Trio delve into the impact of COVID and the market recovery, followed by Victoria's static performance on the Victorian regions. Will pressure on rents continue to ease? Supply is our challenge, but quite a few cities are showing a slowdown in rental rises. An increasing household formation rate, seasonality in the southern states, and lower student numbers are contributing to some of the easing. In addition, holiday house sales have softened the rental conditions, as has the return to work for many workers. Less people need their additional bedroom for work-from-home purposes, hence household formation rates have been able to increase. Listing numbers count for a lot when it comes to capital growth, because supply and demand can tell us a lot. The three high performing cities have particularly tight stock levels and a decline in old listing numbers, however Brisbane appears to be exhibiting higher new listing numbers this month; a possible sign of market easing. And while listing figures are segmented for cities, unfortunately they aren't segmented for dwelling types, and as Cate points out, there are markets within markets. The Trio cast their gaze over the Westpac Consumer Confidence Index. A slight increase in the 'time to buy a dwelling' looks significant until we recognise that sentiment to buy a dwelling is still well under 100, indicating that less than half of the population believe that now is a good time to buy a dwelling. Dave's state-based focus is intriguing though. Which cities have had modest increases, and which have shown far higher figures? The answer may surprise... Inflation remains our RBA's challenge. As Dave points out, inflation hurts everyone, while higher interest rates hurt a segment of our market. Our reserve bank governor's caution is palpable and the Trio's general consensus is that we won't see an interest rate cut in 2024. Turning to finance and lending; refinances have fallen away and loan percentages have been impacted by this change. But what has caused the tumble in refinancing? The Trio unpack the various triggers for this. And the Trio consider Loan to Value Ratios (LVR's) and the historical changes that have occurred with leveraging, deposit sizes and costs of borrowing..... an ep in the making! Dave, Cate and Mike discuss the intricate balance that the RBA have to manage between inflation, employment, wage growth and market confidence. Lastly, the three year bond yield currently sits slightly below our current interest rate and indicates a potential for short to medium term market expectations for a rate reduction (or two or three)... time will tell, but our money markets are interesting leading indicators. And... time for our gold nuggets... Cate Bakos's gold nugget: For all of the investors who have been experiencing rental growth.... we have to keep market conditions in perspective, and given rental growth is slowing, investors need to pay attention to their property manager and take on good advice. David Johnston's gold nugget: "If you invest, expect ups and downs, but don't lose sleep during the downs. Usually, when we make mistakes, it's when our investments are flat, and people feel the heat and sell." Maintaining a long term, pragmatic expectation is a healthy perspective. Show notes: https://www.propertytrio.com.au/2024/09/16/ep-275-aug-market-update/…
1 #274: Fast-Tracking Financial Independence - Navigating Debt, Portfolio Growth, Expenses and Retirement Goals 33:30
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33:30Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM This week our topic comes from a valued listener, Gaurav. Gaurav and his wife have made some impressive strides in building their property portfolio since moving to Australia in 2019 by now owning 6 properties, and they're at the stage where they are looking to achieve financial independence within the next 5 to 7 years. "Hi Property Trio Team, I have been listening to your podcast for the last two years and have listened to every episode of the property trio previously The Property Planner, Buyer and Professor, we do miss Peter, though Mike is a great add to the team. Our goal is to be financially independent in the next 5 to 7 years. Are we on the right track, what are some of the steps we should take to get there in time." Mike steps through the specifications of the six properties in their portfolio, all the while marvelling at their acumen and sheer drive. Their total debt sits at $3.219 million, giving them a Loan-to-Value Ratio (LVR) of about 76.6%. This is impressive, and no mean feat! Our couple's rental incomes may be strong, but their debt repayments are greater, leaving them with a net monthly rental loss of $3,195. But stepping through living expenses, owner-occupied mortgage obligations, negative gearing benefits and other deductions change the figures significantly. Mike sheds more light on the associated tax benefits that Gaurav and Amit have access to. Given that their properties are negatively geared, they’re in a position to leverage some tax benefits. Their annual loss on the properties is approximately $38,340. With the properties being jointly owned, this loss would be split evenly, reducing both Amit and Gaurav's taxable incomes by $19,170 each. Given their current employment incomes, this reduction in taxable income would translate into a tax refund of about $7,092 per person. Combined, that’s a total refund of $14,184 for the year. When we break it down on a monthly basis, this refund adds an additional $1,182 to their cash flow each month. So, after factoring in this tax benefit, their after-tax surplus jumps to $6,570 per month. This is a significant boost to their financial position, helping them manage their expenses and potentially accelerate their investment goals. Dave steps our listeners through the outlook and timing for our amazing couple to reach cashflow-positive status with their portfolio. Cate asks the big question: Can this couple retire within seven years? At the seven-year mark, our couple's projected property portfolio is valued at just shy of six million dollars, but despite this impressive figure, they aren't in a position to retire. The Trio ponder the power of time and they mastermind some ideas for Gaurav and Amit to consider in order to optimise their retirement outcome. "To answer their original question, I think to be conservative and provide a range, I would say that they could expect to be able to live partially to entirely off their rent in 10-15 years on their current trajectory", says Dave. "A big part of this picture is to maintain good savings habits." Dave canvases some suggestions to consider for our duo to maximise their lifestyle flexibility. Divesting doesn't always feel great for investors, but sometimes selling assets is an important part of an investor's long term plan. .... and our gold nuggets! Mike Mortlock's gold nugget: Dedicating time and being decisive is the key, according to Mike. Dave Johnston's gold nugget: "Most people don't actually know their numbers when they are looking to make a purchase, let alone having a long term plan." Flying blind is so dangerous, as opposed to having a clear strategy that can aid you to make decisions that are aligned with where you want to be in the future. Cate Bakos's gold nugget: Selling a mature property vs holding - what is the right approach? It all stems from strategy. There is no right or wrong, but investors need to be clear about their strategy before they start acquiring assets. Show notes: https://www.propertytrio.com.au/2024/09/09/listener-question-financial-independence/…
1 #273: Mastering the Art of Intuitive Property Inspection - Using Your Sixth Sense to Spot Invisible Warning Signs 45:15
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45:15Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM This week our topic comes from Cate. Dave kicks off the episode by delving into the concept of a "sixth sense", and questions the science behind it. From pattern recognition experience, to subconscious processing, and a study called heuristics, Dave questions the notion of this ability. "When do your spidey senses start to ring alarm bells?" Cate steps through some of the signs that she has picked up on when canvasing a neighbourhood or a neighbouring property. What are the subtle signs? And what should buyers keep an eye out for? Cate shares some real life experiences in this gripping episode. Safety is paramount, and the Trio talked together about some of her hair-raising, less than pleasant inspections. Having safety protocols in place is essential for all buyers, including buyer's agents. When else do you get a sense of an issue with a dwelling? Being familiar with issues such as illegal conversions, works that have been conducted without permits, and questionable extensions/renovations that may not have insurance cover is a valuable accrued experience. How does Cate tackle some of these issues to determine whether a property is worth pursuing or not? Mike delves into vendor behaviours and vendor personalities. How can an experienced person determine a potentially difficult vendor? And what insights can buyers apply to get a better idea of what type of vendor could be on the other side of the transaction. Cate shares some of her past actions when it comes to protecting buyers from vendors who attempt to do the wrong thing. One of her stories includes a vendor who swapped out good appliances for inferior appliances. Contract inclusions and documentation is critical. Strata managers are another key person in the due diligence steps for a strata property, but gleaning information is not always easy. However, there are some warning bells that buyers should be aware of. Sometimes issues can stem from legal representatives that aren't responsive or throw other stressful challenges into the mix. Cate steps through some of the tell-tale signs and things to look out for. And what about sinister issues? The Trio unpack some of the more spooky elements that can sometimes strike in a property. .... . and our gold nuggets! Mike Mortlock's gold nugget: Mike shares a good tip he remembered about meeting the neighbours if in any doubt. Cate Bakos's gold nugget: "If it's an important thing, and it's been agreed to, get it in writing. And if the other person is reluctant to sign, there is your warning bell. Show notes: https://www.propertytrio.com.au/2024/09/02/intuitive-property-inspection-sixth-sense/…
1 #272: How Proximity to the CBD Across 10km Rings Impact Property Yields, Contrasting Houses vs. Units & the Regions 41:36
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41:36Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM This week our topic comes from a research report commissioned by Mike’s business MCG Quantity Surveyors, and it focussed on how yields change per city as distance from the centre of the town or CBD increases, so there’s a lot to unpack here. We often hear people quoting about buying within say 10, 20 or 30kms from the CBD, but Dave unpacks the factors that also need to be taken into account with this consideration, and Cate questions whether commute times are the more important measure. But how do units and house metrics differ when it comes to distance from CBD? Rental yields are one interesting metric that MCG's study has focused on in each capital city. There is one city that bucks the trend... and it's Melbourne. Melbourne's unit rental yields decrease as the distance from CBD increases. What is driving this? Could it be buyer attitudes towards outer ring locations? Is infrastructure the problem? Or is Melbourne's landscape physically different? Tune in to find out. A Affordable and aspirational are two very different drivers. Cate and Dave ponder how our urban make up differs around our capital cities. In particular, Dave cites some interesting student population statistics. The results may surprise our listeners! Regional areas were also canvased in the study and some of the drivers for double-digit yields are explained by Mike, and he cautions those investors who target rental yields without understanding the other aspects of investment strategy and asset selection. The Trio take a trip around Australia and uncover some of the highest rental yields across the nation. Cate and Dave agree on the importance of looking beyond the rental yields. Conducting thorough due diligence is essential for any investment area. "The study has essentially confirmed our thoughts that regions are higher yielding than cities and the super-yields are often associated with mining and the like. So getting back to these concentric rings of distance from the CBD. What do we think the strengths and weaknesses of an arbitrary division like that is for investors?" The Trio loved bringing this episode to life and MCG Quantity Surveying have provided the report for listeners to access. We've saved it in our show notes and we hope our listeners enjoy digesting it. ..... and our gold nuggets! Cate Bakos's gold nugget: It's integral for investors to know what their purpose is for investing. Different life stages and different retirement strategies could shine a spotlight on yield. David Johnston's gold nugget: "That's a great one Cate. I might just double down on that!" Mike Mortlock's gold nugget: Mike likes the fact that they took a metric that is often used, and demonstrated that research is not always valuable to investors. Yield is not everything, it's just one part of the puzzle. Show notes: https://www.propertytrio.com.au/2024/08/26/proximity-to-cbd-across-10km-rings-impact/…
1 #271: Market Update July 24 – Adelaide Closing in on Melbourne’s Median, Investors Return in Force & Renters See Relief as Growth Slows 56:21
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56:21Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike kicks off this episode, and the Trio reminisce about Pete Koulizos's special place in the history of the show as they marvel at Adelaide's stellar growth. How sustainable do they think the City of Church's continued growth is? Dave references the quartile performance breakdowns, and the possible leading indicators when it comes to capital city growth cycles. The softening of the higher priced quartile of the market is important to note. The market sentiment is currently hinging on interest rates and the possibility of a rate cut, and Cate canvases the challenges associated with this, and in particular, her local market. Despite the heightened listing activity, interstate investor interest is buffering Melbourne's price falls. The difference between the heated markets and the softer markets at the coal face boils down to the sense of urgency. Brisbane, Adelaide and Perth are plagued with tough buying conditions, while other softer markets are experiencing longer days on market, more indecision and relaxed competition. The chart illustrating the onset of COVID in March 2020 relative to peak levels attracts some attention and the Trio consider the growth drivers, inhibitors and obvious reasons for the vast differential in growth figures. Considering that during this time, three cities that have delivered between 64%-70%, contrasted to 10.6% and 28.7% in Melbourne and Sydney, respectively is fascinating. How important is timing, and can we pick a market peak and trough? The rate of rental growth is the smallest monthly rise since August 2020 and some markets are exhibiting rental drops. It's fair to say that rental movement appears to be plateauing now. Cate reminds listeners about the seasonality of asking rents and rental stock, particularly in cooler climates. Dave hints at the impact of reducing rental rates on the CPI money markets also, and considers that the impact on inflation could be positive. And what is happening with listings? We have more new listings than previous years, but our total listing figures are still below historical levels. Mike points out the correlation between listing figures and capital growth and Dave circles in on Brisbane. Could heightened new listing figures hint that Brisbane's market is peaking? The standouts in the Westpac Consumer Sentiment Index are relate to the Interest Rate Expectations index and the Family Finances vs a Year Ago. Are households getting accustomed to the conditions now, or have household savings stabilised now that some of the other costs like fuel and consumables have calmed down..... or could it relate to the recent tax cuts? Mike points out the impact of insurance and the costs associated with natural disasters on the inflation figures. Breaking the figures down into states and territories is interesting though, and NSW records the bleakest outlook for Time to Buy a Dwelling, as Dave cites. The figures within the ABS lending indicators data demonstrate that investors are certainly strong. Owner occupier finance for first home buyers is reasonably strong in both QLD, VIC and ACT and Dave puts this down to incentives and government support. Lastly, Dave discusses the delicate balance between interest rates, the unemployment rate, and the complexity that the Reserve Bank board have to consider at every step. And... time for our gold nuggets... Mike Mortlock's gold nugget: While the monthly updates are great, month to month isn't a big indicator of movement. It's really the trends that we need to pay attention to. David Johnston's gold nugget: "If you're not willing to purchase interstate, then the month to month figures aren't that relevant. If you're not willing to purchase interstate, then the best time is now." Cate Bakos's gold nugget: Household spending of toys has been curbed, and Cate takes some encouragement from the decrease in travel/holidays in the finance and spending activity figures. Here's hoping for an interest rate cut soon! Show notes: https://www.propertytrio.com.au/2024/08/19/ep-271-july-market-update/…
1 #270: How to Build a Diversified Investment Portfolio - Aligning Personal Goals with Timing, Age & Inheritance 46:33
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46:33Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Emma has a great question: "I am early thirties and my husband late thirties, we have two young children. We recently made our forever home purchase in Seaholme around a year ago (not many in Melbourne know where that is but Cate will!) $2+ mil. Our mortgage is approx $880k, mostly offset. I love the area and all going to plan we stay here forever, no plans to upgrade. Our combined income is just over $500k per year (gross) I work part time and will increase my income when kids go to school. We own an inner city apartment that is rented at $900 a week and will sell when kids are out of childcare. We have cash savings that could enable a deposit on an investment property. My husband has purchased multiple properties in the past, (mostly smaller interstate properties) and our PPOR is my first property purchase. I have always been into shares and have done quite well for us investing pre home purchase. My default thinking has been 100% share investment after buying the PPOR however perhaps an investment property is the way to go first. My query is timing, now or wait?" Alignment of investment timing with personal financial stability is crucial for several reasons. Financial stability determines an investors ability to manage and sustain and investment, particularly in volatile markets. It also puts an investor in a stronger stronger position to absorb any unexpected costs or economic downturns that might affect their investment. Factoring in time and compound growth, an investor has some positive outcomes to look forward to, and Dave talks our listeners through some realistic modelled projections. "And this is why starting early is so advantageous." Emma has also asked for the Trio's thoughts on shares vs property and what would be a good diversification mix. Emma has a background in shares and has done well. Starting off with diversification first, how should this consideration be factored into an overall investment strategy? From superannuation to asset allocation, there are many important considerations for investors to canvas. Tune in to find out... How does a person's age factor into an investment strategy? Mike dares to answer... but there is a common theme.... TIME. What role does property play in property investment, and how does it compare to shares? Dave shares another fantastic example of leverage vs cash. Over 10,20 and 30 years, the outcomes are astonishing. Shares versus property... Mike is in the hotseat, but Dave details the pros and cons of each too. But canvasing a balanced strategy; for someone who is ambivalent and not particularly swayed towards either property or shares, the Trio have a few thoughts about how investors can achieve a balanced strategy. Dave's key points include; An initial focus on securing a home and acquiring 1-3 investment properties as soon as possible, Opening a focus to shares, whilst maximising super contributions in the early days Retaining the ability to continue paying down any existing debt Timing share investments when rental cash flow becomes positively geared, and Maintaining a healthy balance of both asset classes Cate's knowledge of Melbourne's inner-west shines through, but she reminds listeners that there is more to property strategy than just circling capital growth prospects. Assuming Emma is circling capital growth, Cate has some local insights to share. What advice does Dave have for those who are anticipating inheritance and/or bonuses? Research suggests that this can impact negatively on people's diligence with budgeting and investing ..... and our gold nuggets! Cate Bakos's gold nugget: These listeners are young and they are thinking pro-actively about investing. Time is their best friend! David Johnston's gold nugget: What jumps out for Emma and her husband is the fact that they have been investing since a young age. Dave marvels at their diligence, and reminds listeners that this couple are in a great position because they started young. Mike Mortlock's gold nugget: Mike reflects on the shares vs property discussion and he challenges our duo to consider the power of leveraging. Show Notes: https://www.propertytrio.com.au/2024/08/12/demystifying-auction-campaigns-2-2/…
1 #269: Auction Day Drama - Setting Reserves, Mastering Your Strategy, Handling Setbacks, Auction Day Pressures & Preparing for Success 40:09
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40:09Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM We often talk about property acquisition experiences from the buyer’s perspective, but this second part episode is all about the auction campaign process from an agent’s perspective. The Trio specifically circled in on the challenges and flavours of auction day, noting the various twists and turns that campaigns can take. What visibility does the vendor have throughout the campaign? From campaign updates to online buyer activity reports, the agents can track a multitude of leading indicators to share with the vendors along the way. Dave promps Cate to share some of the things that can go wrong for the vendor and their agent in the final week of the auction campaign. Buyers circumstances can change, finance delays could ensue, legal issues could arise, or buyers could purchase alternative properties. So many challenges can crop up and agents need to be prepared to pivot quickly. And what happens when another similar property comes onto the market with a lower auction quote range? Mike questions vendor-led curveballs and Cate chats about the things that can lead vendors to change things up. Cate walks the listeners through some of the behind-the-scenes things that most buyers wouldn't realise, including reserve price setting. The Trio delve into the pro's and cons of leaving the reserve price setting to auction day. The pressure that many vendors face is quite significant, and Cate's insights into the 'half time show' (or referral) sheds light on the intensity of the decision to place the property on the market. Pass-ins can be terrifying for some, but being equipped with knowledge and comparable sales research can make a huge difference. Cate shares some tips for buyers who may face a pass-in. Cate demystifies heckling, auction disrupters and intimidating behaviours. She also delves into the risks that buyers take if they annoy the auctioneer. Intimidating bidding is tough for buyers who are ill-prepared, but there are other mistakes that buyers make at auction. Cate's real life story about bidding increments and auction rules illustrates the critical mistakes that buyers sometimes make. The auctioneer, agents and vendor's plights must be considered when bidders make mistakes. .... and our gold nuggets! Mike Mortlock's gold nugget: Mike reflects on the complexity of auction campaigns. Cate Bakos's gold nugget: How you are viewed by the vendor. The agent is the conduit between the buyer and the vendor. Buyers need to consider the impact and influence that the agent can have on the vendor when it comes to favouring certain buyers. David Johnston's gold nugget: Agents deal with different vendor personalities all the time. It's OK to ask for a bit of background about the vendor if you are wanting to understand more about what the agent is dealing with behind the scenes. Show Notes: https://www.propertytrio.com.au/2024/08/05/demystifying-auction-campaigns-2/…
1 #268: Demystifying Auction Campaigns - Navigating Underquoting, How Agents Attract Buyers, Pricing Tactics and Assessing Buyer Interest 46:37
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46:37Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM We often talk about property acquisition experiences from the buyer’s perspective. We have spoken a lot on the show over the years from Cate's perspective as a buyer’s agent. But this episode is a little bit different. The Trio have delved into the auction campaign process from an agent’s perspective to share behind the curtain for our listeners. We often find that when we step into another person’s shoes, we get an appreciation of the situation from their side. This episode is all about demystifying some of the agent-speak when it comes to auctions, but it’s also about educating our listeners to be able to get a better appreciation of the twists and turns auctions can deliver. What are the key differences between an auction campaign and private sales campaigns? The conversation quickly arrives at underquoting, and Cate distils the limitations to the transparency of the campaign, and the Trio chat about the variability of auction results. Cate also touches on the power of social proof, and also the situations when underquoting backfires on agents. The Trio canvas the challenges that agents and vendors face when competing campaigns are quoting lower estimated auction price ranges. "Appraising a property is a combination of art and science." Dave delves into the challenges that a real estate professional, (and even a valuer) faces when appraising or valuing a property. Cate chats about the skill of the agent to manage good dialogue with their buyers, but she also sheds light on the usefulness of CRM's. What are some of the hallmarks that buyers exhibit that agents take note of? Tune in to find out. Mike reminds buyers to channel their disinterested-teenager vibes! What steps could an agent take if they sense that they have limited buyer interest on an auction campaign? And what does it mean when an auction quote range changes? Cate shares her industry insights and explains some of the pivots that agents sometimes initiate during a campaign. The Trio chat about the best way for vendors to approach agent selection when selecting a property. Those who promise the world aren't necessarily the best agents to go with. Due diligence is critical and a science-based approach from the agent at the commencement should be obvious. Dave delves into the planning and the campaign calendar that agents present to their vendors. From photos to styling, advertising to open for inspections... there are a lot of important steps that agents manage. And why do agents resist pre-auction offers from some buyers, but allow others to trigger a pre-auction sale with a sharper offer? There is a reason why this sometimes happens... .... and our gold nuggets! Mike Mortlock's gold nugget: Mike chats about the benefits of buyer's agents and the skills and services they bring to the table. Cate Bakos's gold nugget: Agents deal with different vendor personalities all the time. It's OK to ask for a bit of background about hte vendor if you are wanting to understand more about what the agent is dealing with behind the scenes. Show notes: https://www.propertytrio.com.au/2024/07/29/demystifying-auction-campaigns-1/…
1 #267: Crafting a Winning Property Strategy - Navigating Asset Selection, Growth vs Cash Flow & Changing Property Purpose 47:25
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47:25Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike kicks off the episode with the first listener question. Josephine writes in... she and her partner have just secured their first property with the help of the First Home Guarantee, and the purchase is about to settle. They were initially planning to reside in the property, but after discussions they are wondering if they have made the right move. They are keen to continue building a property portfolio and they are worried that they should have considered an investment first. Was it a mistake? Should they revise their strategy? And is it costly to switch the property to an investment now? The Trio unpack this dilemma... or is it a dilemma? Dave breaks down the questions and congratulates Josephine and her husband on a great achievement. They have navigated the purchase of a potential family home that could be improved/extended, getting "the big rock in the jar." Dave concedes that they have actually got the purchase mechanism in the right order. Our listener is planning on moving out and renting the property out for a while before moving back, and while there are tax considerations and critical dates to consider, their overall strategy sounds feasible. Moving back in with parents will enable them to manage their cashflow optimally and continue saving hard. Cate acknowledges their Lender's Mortgage Insurance advantage also. Dave addresses the burning technical question: Are there big implications to switching from owner occupier to investment and back again? Paying interest only and preserving all of the debt is an important consideration if they are considering this property as a stepping stone to later be converted to an investment property later on. Cate's sage words about the importance of getting great tax advice before making firm decisions that can't be reversed, resonate. Mike revels in sharing some tax details with our listeners. There are two main elements of depreciation topic; Division 40, (Plant and equipment) and Division 43 (Structural components). Both are treated differently when a borrower renovates and Mike sets out some examples of how each are treated. "You're 26 and you've got a house. You're crushing it!", says Mike. Catherine's listener question is all about the optimal configuration of a character dwelling in Melbourne. She wonders if she should be targeting two bedroom, one bathroom cottages, larger three bedroom houses or improved dwellings with ensuites. Cate details the styles, eras and historical timeframe of Melbourne's growth during the turn of the century through to pre-war. Where can you find the different categories and styles? How do they perform? Why are they so special? And what changes did COVID create to demand for Victorian cottages? The Trio discuss the variables, from price points, to the work from home phenomenon, and renovation opportunities. Yield, (cashflow) and Land to Asset Ratio are important considerations when an investor is considering layouts and configurations. Dave tackles the strategy-piece that Catherine should be considering as she devises her purchase plan for this purchase. Cate shares some A-grade period property selection tips... tune in to catch them! . ... and our gold nuggets! Cate Bakos's gold nugget: If a buyer can identify a property that has no obvious detractors to a mainstream buyer, they are poised well for capital growth. Dave Johnston's gold nugget: Getting the big rock in the jar sooner, the better. For most people it's the most expensive asset they hold, (and for some, the only asset they hold). Getting the big rock in the jar early enables borrowers to get the debt down sooner, and allows them to focus on their investment plans for retirement. Mike Mortlock's gold nugget: "It's all about strategy, and Dave and Cate are all in for the period homes!" Shownotes: https://www.propertytrio.com.au/2024/07/22/winning-strategy-and-asset-selection/…
1 #266: Market Update Jun 24 – Record House Price Expectations, Mid-Size Capitals Soar & Finding Rental Growth Equilibrium 51:07
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51:07Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike kicks off this episode, and the Trio unpack the latest stats. Brisbane, Adelaide and Perth continue to be the star performers, with Perth taking up first place with an annualised growth rate of 23.6%. On the flip side, Cate shares her coalface findings on Melbourne's climate, citing opportunities as "low hanging fruit." Cate describes some of the interstate investor interest in Melbourne as speculative and opportunistic. Dave raises the point that interstate migration has played a key role in some of the growth data also, as have investors whose purchase and selling activity has been triggered by tax and legislation changes. While the pace of growth of rents has slowed, rents are still all positive, and with the exception of Darwin, Canberra and Hobart, our rents are still out-pacing CPI. The Trio reflect on Peter Koulizos's sage observation in past years; rents are only just catching up after a long period of limited growth. Mike wonders what the driving force is for rental growth easing. Could it be a supply and demand factor? Are more people cohabitating? Have rents reached a natural cap based on affordability? The Trio debate some of the possibilities, including re-partnering of couples following the COVID response. And what is happening with listings? We have more new listings than previous years, but our total listing figures are still below historical levels. However, the increasing number of 'old listings' in Victoria is showing signs of total supply potentially outpacing buyer demand. This month's Westpac Consumer Sentiment has some changes since last month. As Cate says, "Everybody seems to think that the next twelve months isn't looking so rosy but they can visualise good times ahead of that." Dave distils consumer sentiment into states and territories. Time to buy a dwelling index had the largest declines in the capital cities that have recorded the highest price gains. The Trio tackle a conflicting driver of sentiment; the wealth effect. Mike cites the 'crane index', which is a crude measure of building activity and supply. It is as basic as counting the cranes on the city landscape. The Trio uncover two interesting extra charts. The cash rate target vs cumulative change in national home values proves Peter Koulizos's point that there is not a direct correlation between house price growth and interest rates. The chart below shows the difference between median monthly rent value and mortgage repayment for the equivalent property. It illustrates the huge differential between the mortgage repayments and the rental payments for the same dwelling. And... time for our gold nuggets... David Johnston's gold nugget: Dave wants Core Logic do conduct a deep dive analysis into the Victorian market purchaser/investor activity following recent land tax changes. Cate Bakos's gold nugget: Cate would also love access to our various state and territory revenue offices to understand the impact of the reforms and taxes, particularly on overseas investors. Mike Mortlock's gold nugget: Mike shares the importance of buying when you are ready, as opposed to attempts to time the market. While the white noise and doomsayer stories float around in the media, it's important for investors to keep a long term focus. Shownotes: https://www.propertytrio.com.au/2024/07/15/ep-266-june-market-update/…
1 #265: Tax Time Tips for Property Investors - Avoiding ATO Scrutiny, Optimising Deductions, Repairs, and Depreciation 54:32
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54:32Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Dave hosts this week's show and Mike is in the hot seat to shed light on some of the items that the Australian Taxation Office, (ATO) is focusing on this year. Specifically, the ATO is honing in on a few key areas that often trip up property investors. What could these be? Tune in to find out... From deductible expenses to claims for repairs and maintenance, there are quite a few ways that investors make boo-boo's at tax time. Redraw versus offset: What is the difference? And how do borrowers sometimes make a mess of it? Dave shares the six key principles that he and his team share with their clients in relation to this very topic. What is the third thing that the ATO is targeting investors for? Mike details the rules around properties that are not occupied full time by tenants, and he also shares an interesting fact that a lot of people wouldn't realise. What is the implication if an investment property has been inhabited by the owner before it becomes a rental property? This applies to over 20% of investors! Repairs versus capital improvements... what's the difference? What do people often get wrong? And why does timing matter? Mike sheds light on these questions. What did Cate get wrong with her tax depreciation a few years back? Mike enjoys ribbing Cate, but it was an expensive oversight, and one that the Trio don't wish on our listeners. Mike shares the five basics that an investor needs to know about tax depreciation, from timing to feasibility, the magnitude of the return to the firm who tackles the depreciation schedule. His simple list of three triggers should give every investor a hint as to whether it's worthwhile conducting the depreciation schedule. Cate shares her tips for making tax-time a bit easier, particular for multi-property investors. .... and our gold nuggets! Cate Bakos's gold nugget: If you're already active in property, your tax affairs are probably starting to get a bit detailed. It might pay to go and see an accountant to prepare your return for you by the time your return is getting detailed . Mike Mortlock's gold nugget: We shouldn't be thinking "tax time is coming and now we have to do all this work." What systems can investors put in place to make tax time a bit easier? Mike has some great suggestions. Dave Johnston's gold nugget: If you have a property portfolio and you feel that you haven't been getting strategic mortgage advice, it may be a good idea to go and see a strategic mortgage broker. They may even identify some tax deductions that you've been missing. Shownotes: https://www.propertytrio.com.au/2024/07/08/tax-time/…
1 #264: The Ultimate Guide to Rentvesting – How to Unlock Property Potential in High-Cost Cities to Create Your Ideal Lifestyle 46:25
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46:25Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Rentvesting is not for everyone, but many people do not even consider it, which may be to the detriment of their finances or lifestyle. Maintaining an open mind to rentvesting and exploring it’s potential will provide you with greater clarity on your pathway forward, whether you take that path or cross it off as an option. Dave explains what rentvesting is, and why it's becoming a popular strategy among first-time buyers. From desireable rental locations to growing wealth, there are plenty of reasons why some choose to adopt this strategy. Mike touches on the key benefits and he highlights his own rentvesting benefits that he's currently experiencing. Cate covers off some of the reasons why rentvesting is more affordable in capital cities, particularly the lower-rental-yielding cities such as Melbourne and Sydney. Dave shares a real-time example in Melbourne's leafy Hawthorn East. He contrasts a mortgage versus a rental property for a make-believe couple and the cashflow differentials are quite a surprise! For a first home buyer versus a renter, the difference in monthly cost is more than three times. Was buying always this difficult? Cate dares to ask the question and Dave steps our listeners through the last forty years. But Cate sheds light on the cost of property on the opposite side of town. How do these locations compare, and what is the multiple of the average annual wage these days? Mike explains why it's so difficult to get into highly sought-after locations, but he also explains why the number of rentvestors is so limited. And there are quite a few reasons! But how short a tenure is too short for a rentvestor? Tune in to find out.... . ... and our gold nuggets! Dave Johnston's gold nugget: Carefully consider your own personal situation and goals. Rentvesting can be great, but it's not for everyone. It only makes sense that your property decisions should be informed by your over-arching property strategy. And how will your next purchase impact your future purchases? This is a very important question. Mike Mortlock's gold nugget: Mike uses a car analogy. Selecting the right car for the right track is critical. "Asking the place where you want to live to be the investment as well, is sub-optimal for property success." Cate Bakos's gold nugget: Cate reminisces about a successful real life client scenario that was based on a well-carved out strategy. Show Notes: https://www.propertytrio.com.au/2024/07/01/rentvesting/…
1 #263: Strategies for Early Homeownership, Passing on Money Management Wisdom and Teaching Financial Independence 58:49
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58:49Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Helping versus hindering our children's financial futures... it's all about mindset! Dave hosts today's episode and the Trio enjoy sharing their thoughts about the various ways we can help our children get a foot on the property ladder. First homebuyer participation is up a little bit when contrasted against recent years. Dave runs through some of the key reasons that could be contributing to this increased level. First home buyer activity bounced up with targeted government incentives during GFC recovery and COVID recovery. Both also had record low interest rates. “The series shows only two substantial spikes in first home buyer loans between 2008-09 and 2020-21. These can largely be explained by temporary government incentives for housing purchases. There was a temporary boost to the first home owner grant introduced around the GFC, and a temporary HomeBuilder grant introduced around the onset of the pandemic (which was not specifically targeted at first home buyers, but could be used in combination with the then recently introduced ‘First Home Loan Deposit Scheme’).” (Source: Core Logic) The Trio take a walk down memory lane as they recall some of the various first home buyer incentives introduced by our governments since the GFC. Dave canvases the concept of false economy when it comes to incentives and price points that some buyers chase that don't completely align with an optimal strategy. Cate delves into some of the issues that could arise when parents' generosity is too great. From a lack of appreciation to jealousy among peers, (and many others), there are some significant risks that need to be considered. Cate chats about hers and her husband's approach with their daughter's property deposit savings regime. From a small inheritance from her grandmother a few years ago, followed by ETF share portfolio outperformance of that little nest egg, this seventeen year old has been making regular contributions to her portfolio with her part time job. What is the deal that Cate has struck with her? Tune in to find out... The Trio reflect on the great encouragement that their own parents imparted. Thinking about the great lessons and moments of pride during our own childhood can lead to some great ideas that can be paid forward. And lastly, Cate talks about some of the non-financial ways that we can make a positive difference for kids these days. .... and our gold nuggets! Cate Bakos's gold nugget: When you're working out how you can help your kids with their financial future, make sure you let it be their journey. Mike Mortlock's gold nugget: Mike reflects on Cate's daughter's $5000 nest egg which was compounding. That 'early win' is a very valuable introduction to good investing. Dave Johnston's gold nugget: Getting his children applying some research and selecting companies in a share portfolio from the age of grade six is an exciting plan that Dave has been considering. Show notes: https://www.propertytrio.com.au/2024/06/24/helping-our-children/…
1 #262: Market Update May 24 – Perth Surges, Brisbane Now 2nd Priciest City for Houses & All Dwellings, Passing Melbourne & Canberra 53:06
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53:06Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike kicks off this episode, and the Trio chat about the ferocity of the Perth market and they ponder the nature of cyclic markets. Is Perth cyclic? And is this city sharing a pattern with any other cities, or is Perth unique? And how is it possible that rental growth is still strong when investors are buying up? Brisbane's outperformance is noteworthy too, with this beautiful city taking the lead on Melbourne. Hobart's decline in rents defies most of the nation, but Cate explains some of the driving forces at play. Namely, the sea-change/sea-change moves during lockdown are reversing for many, and combined with the update in overseas holiday activity (to the detriment of domestic travel), cities like Hobart are experiencing different trends to most of our other capital cities. Mike tackles yields and marvels at the combined capitals average yield, but as Cate reminds listeners, average yields are not a perfect measure because the ratio of houses/units across our cities varies greatly. If only Core Logic could give us a separate measure for houses versus units! And what is happening with listings? We have more new listings than previous years, but our total listing figures are below historical levels. This tells us that buyer demand is strong, and is soaking up the listings faster than they are hitting. While the Spring market has returned after two years of glitches to 'the norm' over COVID, some things have changed. Cate talks through some of these, including off-market listings. "Such a tale of eight cities", says Mike as he compares the difference in listing volumes across several capital cities. But by drawing our listener's attention to the three data sets, (new listings, old listings, total listings), in triplicate they tell a very interesting story. Cate ponders the viability of gauging the retraction of old listings when it comes to identifying markets that may be over-heated. This month's Westpac Consumer Sentiment Index is reasonably unchanged from last month. There is no doubt that the affects of higher interest rates are biting for many households. However, as Cate says, "It's a bit of a boring chart, but right now, boring is good." Lending indicators are showing some strong numbers; with the exception of construction. Despite investor numbers coming off a low base, Dave explains that buyers are making decisions now that it's obvious that the risk of interest rate increases is lower. Cate shares an interesting chart that segments funding into construction, established, land, new builds and alterations/repairs. There is no doubt that the pain of the construction industry is showing up in the data. The bond yields shows that the rate today is predicted by the markets to be the 'new norm'. Dave steps the listeners through some of the charts, including the unemployment data. "Unemployment has often been the collateral damage as the RBA has been increasing rates to bring down inflation, but this time they are trying a different tact, and they've actually said that", states Dave. And... time for our gold nuggets... Cate Bakos's gold nugget: Buyers have to consider a broad picture before they circle in on one city that's doing well. Getting our hands on the rate of change of old listings offers a bit of valuable insight. David Johnston's gold nugget: Market updates talk about the monthly market gyrations, but ultimately it's about the big picture and the long term that really matters. And what's right for your personal circumstances is vital. Understand your own strategy and understand the price point that's right for you. Show notes: https://www.propertytrio.com.au/2024/06/17/ep-262-may-market-update/…
1 #261: Recovering from Buying a Lemon - How to Revive Your Property Journey, Stage of Life Considerations & Market Cycle Management 43:22
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43:22Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Dave opens our episode with a cautionary tale. We are grateful to our listener, Daniela who wrote to us about a challenging experience she and her husband had with a purchase she described as a "lemon." After having bought a house and land package in Perth that delivered underwhelming capital growth performance for nine years, Daniela and her husband chose to sell the asset when moving to Melbourne for work. Sadly their timing wasn't great and they feel they missed the full cycle (home, upgrade, downsize). Now they find themselves with $110,000 in savings, a limited array of property options that appeal to them, a student son living with them, and a dilemma on their hands. Do they buy a house in the outer suburbs or consider apartments? And if they can afford two apartments instead of a house, will this help them gain a better financial position? Mike and Cate tackle the houses vs apartment outperformance question. Cate steps back to the heart of the listener question and suggests that finding a suitable home should be the primary focus at this stage, (as opposed to their appetite for capital growth outperformance). Four unfortunate headwinds have compounded the issue for the couple now, namely; Their timing with the Perth market was unfortunate Markets are cyclical and managing market cycle risk is always a challenge when buy and hold timeframes are short House and land packages are notorious for underperformance due to the lower Land to Asset Ratio Melbourne's broad property value is still greater than Perth "Over the previous ten years, Melbourne prices grew 96 percent, yet Perth prices in the same timeframe only delivered eight percent." From managing simultaneous sales/purchases to strategising a surprise interstate move, Dave touches on some of the important elements for buyers to consider. Daniela and her husband sold the house in Perth, but could have they had a better long term outlook if they'd held onto Perth? And should they be buying in Melbourne now that they have moved there? There are a lot of questions that the Trio bring up for our listener couple to think about. Daniela has nominated two options that she feels could be feasible, but why does Cate suggest that she could be on the wrong track? And what other options could be viable? Tune in to find out... Stage of life is very important when it comes to determining a property plan. The Trio discuss the next items for Daniela and her husband to canvas in relation to their strategy. "If they are focusing on Melbourne as their forever place, there is a silver lining. The market has stood still for them", says Cate. .... and our gold nuggets! Mike Mortlock's gold nugget: "Avoid perverting the course of what you are trying to achieve with dual ambitions." Having a clear strategy on a primary requirement can mitigate this risk. Cate Bakos's gold nugget: Only once you trigger a sale event is when a result is crystallised. Cate recommends buyers seek professional advice before triggering a loss or a gain. Shownotes: https://www.propertytrio.com.au/2024/06/10/recovering-from-buying-a-lemon/…
1 #260: Celebrating 5 Years of The Property Trio - Our Journey and Favourite Property, Mortgage and Money Insights 54:18
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54:18Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike opens our 260th episodes, congratulating Dave and Cate on five years of podcasting. The Trio have decided to take a trip down memory lane and reflect on some of the eps, and the special bond that they all share, Pete included. Cate gives the listeners a bit of background about what drove the market update deliveries, and how the show has evolved as a result of lockdowns and listener feedback. Reflecting on the initial seven episodes from their pilot run has been fascinating and they share a few fun soundbites. Why don't the Trio invite guests on the show? They actually imagined at the start that they would, but it's become a point of difference to stick to the Trio, (plus Pete for the occasional appearance). Cate expands on why the show is likely to remain as just the three hosts. Deep-diving into the data, and in particular their chosen topics has a dual benefit for the Trio. Sometimes they select a topic that really stretches their own knowledge. Replacing Pete was no mean feat and Cate reflects on Mike's appointment and some of his cheeky antics. The Trio have each selected some of their favourite snippets from the early days .... we hope you enjoy! Show Notes: https://www.propertytrio.com.au/2024/06/03/celebrating-five-years/…
1 #259: Home Building & Development Project Perils - Tackling Escalating Expenses, Development Finance, Project Overruns & Their Impact 42:17
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42:17Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM This week, we unpack a fabulous listener question from Melissa. "What advice would you give to those of us who have construction loans were the build is dragging and we're being squeezed between increasing rents, increasing interest rates, and increasing construction costs?", she asks. "And what advice would you give to anyone considering a construction loan? " Cate steps through some of the planning, building and environmental issues that can threaten a build or renovation. Mike sheds light on the flow-on effects that are triggered by planning and building delays. From overcapitalisation to materials surcharges, council enforced orders and others, there are some serious risks that must be considered by those who decide to build or renovate. How can renovators avoid some of the stressors? Dave has some good tips... How many people consider the contractual details, milestone payments, additional costs and cashflow considerations? It can be tricky to navigate these points, but Mike has some great ideas he shares with the listeners who are considering embarking on a build or a renovation. How long should people spend in the planning phase? Mike sheds light on some of the elements that get missed at the design phase. Did you know that approximately 60% of defects occur at the design phase? The Trio share their advice for those who are thinking about a construction loan. Construction lending experience is critical, and Cate and Dave chat about the key differences between traditional, established-property lending versus construction lending. And what is an "as-if completion valuation"? And what is the process that needs to be followed? Mike gives us some valuable insights into the role of a Quantity Surveyor. ..... and the gold nuggets! Cate Bakos's gold nugget: There are three things that Cate thinks are really important to nail. 1. understand the budget. 2. work with someone who will work to your budget. 3. have a very good strategic finance person on your side. Mike Mortlock's gold nugget: "Make sure the contract is reviewed!" Having an firm understanding of all of the important elements is so valuable for those who are building and renovating. Show notes: https://www.propertytrio.com.au/2024/05/27/home-building-and-development-project-perils/…
1 #258: Market Update April 24 – Brisbane, Adelaide & Perth Juggernauts Continue, Unit Demand Rises, Federal Budget Rental Relief & Trajectory 52:59
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52:59Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike kicks off this episode, and directly following Budget Night, the Trio chat all things Federal budget. From the lack of new property initiatives to questioning the impact of the Federal Rental relief, one thing is obvious. The Labour government are acutely aware of the need to see inflation rates reduce, and we are less than one year out from an election. The budget could be described as tame, but that doesn't slow the discussion at all for the Trio. April’s increase takes the current growth cycle into its 15th month, with housing values up 11.1% since the trough in January last year. However, almost every capital city is recording stronger growth conditions across the lower value range of the market. The shift towards stronger conditions across lower value markets can also be seen between the housing types, with growth in unit values outpacing house values over the past three months. Hobart was the only city where houses recorded a larger gain than units over the past three months. Regional markets have shown a slightly stronger quarterly growth rate over the past five months than their capital city counterparts, following a 10-month period where the combined capitals index was outperforming. Regional Victoria (-0.1%) was the only rest of state market to record a decline in values over the rolling quarter. Nationally, rents were up 0.8% in April, a slightly lower rate of growth relative to February and March when the national rental index rose 0.9% and 1.0% respectively. As Dave points out, Although rental growth may be tapering, supply remains extremely short and the trend towards smaller households seen through COVID has been slow to reverse, further amplifying rental demand. It is likely rental growth will remain well above average for some time yet. In April, the national gross rental yield rose to 3.75%, the highest reading since October 2019, up from a record low of 3.16% in January 2021. Vacancies continue to remain tight, although a subtle ease is evident from last month to our current month, with more than half of the capital cities increasing slightly. Dwelling sales look to have moved through a cyclical peak in November last year. Although the monthly trend in home sales is highly seasonal, the less seasonal six-month trend has remained relatively flat since the November rate hike. Estimated sales over the past three months are tracking 8.6% higher than at the same time last year, and about 5.1% above the previous five-year average. Listing volumes tell an interesting story, and as Cate points out, the rate of new listings is remarkably 'normal', in fact it's slightly stronger than the past five year average. However, the total listings tell another story. Demand is exceeding supply, and older listings are now being snapped up by buyers. The trio canvas what the possible driver could be, and they determine that old stock, (in particular, units) could be the reason. Given the the relative outperformance of units in most capital cities, this possibility doesn't seem all that extreme. In an effort to cover off the Consumer Sentiment Index, we turned to the ANZ Roy Morgan poll given Westpac's index is yet to materialise. Consumer Confidence remains very weak, sitting at its lowest level for the year. Show Notes: https://www.propertytrio.com.au/2024/05/20/ep-258-april-market-update/…
1 #257: The Comprehensive Guide to Townhouses – Performance, Selection, Property Planning and Development Projects 47:24
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47:24Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Cate circles on on what technically defines a townhouse. She shares an example and talks about the differences between apartments and townhouses when it comes to land on title. Mike asks a tough question, "How do townhouses perform, as compared to houses?" but as Cate points out, it's not a hard and fast rule. There are elements that can bolster up the value (and performance) of a townhouse such as vista, prestigious locale, water views etc. Of course Land to Asset Ratio comes into play, but it isn't fair to classify all townhouses the same. Dave talks about the complexities of buying a townhouse that is yet to have it's subdivision registered. This is technically deemed an 'off the plan purchase' and this does carry lending risk for some buyers. But what can buyers do when they need to move in to their new home by a certain date, but title registration is delayed? Cate shares an interesting possible solution .... a license agreement. Cate runs through the various subsets of units; apartments, villa units, and townhouses. She breaks down the hierarchy of land ownership for each subset and details some of the formats of townhouses and common land versus no common land. And how do some townhouses qualify for no owner's (or strata) corporations? "These types of townhouses are inherently more valuable". The Trio delve into the attributes that developers look for to optimise their profits on a multi-unit development site, but Cate also talks about some of the investor mistakes associated with medium-density development activity areas. What are some of the attributes that Cate looks for when assisting developer clients? Tune to find out... Lending is not always straight-forward or easy for developer finance and Dave shares some of the categories of lending and LVRs, from small-time residential to larger-scale commercial. Buckle in for some valuable, technical insights and explanations, and Cate points out the risks. And what are some of the things that developers get wrong? ..... and the gold nuggets! Cate Bakos's gold nugget: Bedroom count can create a difficult compromise. Is the bedroom too tight? Is the proportionality of the unit not feeling right? You have to ask yourself the question; "Have you bought yourself a lemon?" Overcapitalisation risk challenges the profitability of making changes, so buyers need to search in the right area for the right townhouse. Dave Johnston's gold nugget: If a townhouse is going to be a stepping stone home or an investment, it can be quite feasible for first time buyers. Dave implores buyers to consider buying into a great location that is close to where they would ultimately like to live in their family home. Mike Mortlock's gold nugget: Mike likes townhouses! Provided, of course, that they are well-located. He notes the stronger rental yields, but his concern is that of scarcity. Show notes: https://www.propertytrio.com.au/2024/05/13/all-things-townhouses/…
1 #256: Property Investor and Taxpayer Insights from the ATO Unveiled – Exploring the Shifting Sands of the Property Investment Landscape 45:41
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45:41Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike has crafted a great episode from the 2020/2021 tax year data. The average income rose to $68,289. Surprise, surprise, Double Bay came in at first $266,000 and Dover Heights, Rose Bay and Vaucluse came in second at $230,597, and Toorak (Vic) starred, but Cottesloe and Peppermint Bay in WA came in third at $229,000. The median is what’s interesting. Stats can be distorting. The median in the top ten suburnbs is $80,000, but the average is significantly higher”Cate sheds light on the returns lodged during the year 2020/2021 which were up 28.3% on the 2006/2007 financial year. A large proportion of SMSF owners account for this strong differential and the Trio ponder the popularity of SMSF investment. “If you don’t own your own home, you’re in big trouble when you retire.” How much truth to this claim is there? The Trio unpack the history of superannuation and reflect on super from an employer’s angle too. The big bucks earners start with Surgeons at an average income of $457,281, followed by Anaesthetists, then ‘Financial Dealers’ (whatever that means?!), and fourth with Mining Engineers. Where does the revenue come from? Company tax and GST, followed by individual income tax, and only 15% is GST. Dave dares to raise the concept of bracket creep. Mike shares a startling stat, “88.35% of Aussies earn less than $120K, but the remaining 11.65% pay just over half of all income tax in Australia.” The bracket that most Australians sit within is the $6001 – $37,000 income earners. Dave adds that 4% of income earners pay 35% of tax and he highlights the sensitivities of bracket creep and the required changes. Historically we have always had net rental losses, but what happened in 2020/2021? Cate explains…tune in to find out!How many people earn six or more properties? Cate has some insightful stats to share. Check out our show notes to see an interesting breakdown. .….. and the gold nuggets! Mike Mortlock’s gold nugget: Things are a little bit more complex than the media would have you believe. When you slice and dice the data, you get some interesting results. But stay tuned for the battle leading up to the Federal election. Cate Bakos’s gold nugget: The fiancial year where we saw net rental gains (2020/2021) needs to be contrasted against the following year. We’re on treacherous territory with over 90% of private investors servicing the rental market while our politicians focus on the downside of negative gearing. Dave Johnston’s gold nugget: The word negative gearing needs to be understood better in relation to all business activities. As Dave points out, when this term is associated with property it’s portrayed as ‘the big bad wolf’, but negative gearing is widely misunderstood. Shoe notes: https://www.propertytrio.com.au/2024/05/06/ato-insights-unveiled-what-does-the-data-tell-us-about-investor-behaviours/…
1 #255: Property Plan Case Study #9 - Can We Scale Back Work With a Sea Change at Age 50? Navigating Work, Wealth, and Waterfront Dreams! 53:11
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53:11Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Cate kicks off the episode and invites Dave to share a bit of information about our exciting case study couple and their quest to move to Venus Bay to enjoy a simpler life. They asked Dave's team to help them work out how they can achieve their goals, including the generation of a passive income and retaining their Melbourne home as an investment. Is it realistic? Is it achievable? The Trio delve into the emotions that can run when setting these types of goals. They also congratulate our case study couple for having a firm goal and setting about constructing a plan. "Not having a plan is like chipping away at a piece of marble without knowing what the statue is going to be", says Mike. Rachel and Marcus have a very solid financial outlook. Cate gives a fiscal snapshot of their debt, income and equity position for context and Dave runs through the critical questions that are asked in order to determine their property plan. Our case study couple rated themselves on the risk profile meter as 4-4.5 out of 5, however the Trio challenge this and discuss their rationale for down-scaling our couple to lesser risk score. Dave steps through the assumptions and inputs, and Cate weaves through each of the three scenarios that were presented to the couple. What is a prudent capital growth forecast rate? And when should consumers be wary? Mike expands on the reasons why some claims can be dangerous and Cate warns about the risks of buying brand new. The three scenarios show a progression of outcomes, and with small tweaks and changes, each scenario is quite different from the last option. But what are some of the most stunning outcomes, and what are the powerful tweaks that could surprise many of us? Tune in to find out.... Cate touches on the risks of buying a future home, and the Trio share some of the mitigants others who find themselves in a similar situation to consider. One of the three scenarios not only gets our hard working duo to their goals, but enables them to enjoy an even higher passive income. What are some of the tips, tricks and counter-intuitive moves that they had to consider? We wish Rachel and Marcus a wonderful and rewarding journey, and a fabulous future in Venus Bay! ..... and the gold nuggets! Cate Bakos's gold nugget: The tiny little decisions that can be made from one scenario to another may not seem significant, but can be very conservative in the long run. The counter-intuitive suggestions can make a huge difference. Dave Johnston's gold nugget: This is a great example of the benefit of creating a property plan. "For anyone who's interested in creating wealth through property, setting a plan will set you a step ahead." Mike Mortlock's gold nugget: Make sure you have income protection insurance and other risk-mitigating insurances. Congrats to our case study couple! Shownotes: https://www.propertytrio.com.au/2024/04/29/listener-questions-moving-to-the-coast-for-a-simpler-life/…
1 #254: Integrating Property Plans & Financial Plans: Tips & Tricks for Self-Employed, Single Parents & Schemes to Get on the Property Ladder 55:34
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55:34Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Cate kicks off the episode by sharing that the podcast is just a couple of recordings away from it's fifth birthday! Kym is a single mum of two teenage kids, a business owner and her rent on her home has just gone up substantially. Kym has been yearning to get into property ownership for a few years now, but she is facing a few headwinds currently. Dave talks our listeners through some of the hurdles that self employed borrowers face, from financials and timeframes, to heightened scrutiny. He also sheds light on some interesting small business statistics. "Small businesses comprise 97.3% of businesses in the whole nation". Dave steps through the impact that dependants (i.e. children) have on borrowing capacity with some context of a case study. While Mike talks through the high rate of rental increase that Kym is facing. What can a renter do if their rental increase is unfair or unsubstantiated? Tune in to hear... The Trio chat about some of the initiatives available to those who need a bit of assistance with their home buying. From National initiatives to state-based offerings, the Trio chat about each opportunity and consider those that could be helpful for Kym to explore. Shared equity schemes, deposit guarantees, regional opportunities and concessions are some of the items on the discussion table. (See these initiatives in the show notes). We hope Kym finds some of this helpful, and we love the fact that Kym reached out with a question that applies to so many people. For our second listener questions, Claire asks, "What do you do when your financial planner is anti-property?" Dave breaks down some of the key differences between the role of a financial planner and a property planner. The Trio ponder some of the reasons why some financial planners are less than enthusiastic about property as an asset class. Cate has a few possible reasons on her laundry list and she chats with Mike and Dave about some of these reasons. "You can't sell a third of a property easily." So, how can investors get the best out of their financial planners, and how can they navigate any perceived negativity about property. The Trio have a few tips to share. ..... and the gold nuggets! Cate Bakos's gold nugget: "To anyone who's looking to get into the property market and needs a little bit of help.... check out some of the initiatives on offer and familiarise yourself with them." Dave Johnston's gold nugget: Dave expands on his answer for Claire about the role of a property planner versus a financial planner. Mike Mortlock's gold nugget: Look at the 'ad-backs' and make sure your accountant is providing reliable information to your broker. Show notes: https://www.propertytrio.com.au/2024/04/22/listener-questions-single-parent-and-financial-planners-vs-property-planners/…
1 #253: Market Update Mar 24 – Migration Trends Driving Values, Taking Stock of Perth, Melbournians Think it’s a Better Time to Buy & Rate Cut 52:19
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52:19The March 2024 data is out, and Cate concedes she got it wrong with her March data predictions. She's considered the reasons why, and Cate sheds light on a possible reason for this, and it relates to bias. Dave overviews the last twelve months of growth, and he points out that the last year has delivered almost 10% growth for the combined capitals; something very few would have predicted. Cate sheds light on some of the enquiry she's getting, and some of the reasons why investors are turning away from ultra-hot markets. Perth is one example of a hot market, and the Trio explore how much steam remains in the Perth market. Cate recalls a great article from Pete Koulizos in the recent PIPA Newsletter... he believes that Adelaide will continue to perform. Tune in to hear more... Mike segues into rental performance. Median rents as a function of income highlight the expensive cities for tenants. Cate's insights into house versus unit rents is interesting also. Is there a correlation between increased land tax and increasing house rents? Mike explores. Mike dares to broach the question Perth's climbing rents and tight vacancy rates; surely this signals that Perth is not at the top of the cycle. Sales data is showing volumes above the five year average; although the Trio plead with CoreLogic to reinstate listing numbers and agent appraisal activity. Distressed listings are showing an uptick in a few states, however. Are any jungle drums beating in Victoria? Cate delves into the data and asks the hard questions, although Dave wonders if distressed listings paint a picture of the overall health of a given market. Is there a correlation? The Westpac consumer sentiment index isn't showing a dramatically different outlook since last month, but at a state level the indices aren't all aligned. Dave hints at the cities that are showing a more optimistic outlook. Investment lending has increased despite headwinds such as interest rates, additional taxes and onerous rental reforms. This state breakdown of investment activity is intriguing, particularly the disparity between Vic/Tas and the other, hotter states. And... time for our gold nuggets... Cate Bakos's gold nugget: Cate considers how we interpret data, and how bias can be introduced. Dave Johnston's gold nugget: "n order to avoid FOMO, understand the right price point for yourself. Work out your strategy and match up the property location and type to your strategy. Look at the long term when you're making your property decision. Mike Mortlock's gold nugget: "You can't buy the data, you can only buy the property." Shownotes: https://www.propertytrio.com.au/2024/04/15/ep-253-march-market-update/…
1 #252: The Owner-Occupier vs. Investor Dilemma – Navigating Purchase Strategy, Affordability, Asset Selection & Loan Approval 45:09
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45:09Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Sally is about to purchase her first home. She has a deposit of $300K and is targeting a purchase price of $700K - $800K. Sally wants to live in the home, but is feeling that her borrowing capacity as an owner occupier is holding her back. She asks the Trio whether she should initially purchase as an investor in order to borrow more. Dave breaks down Sally's initial strategy with a few clever questions. Sally is targeting Melbourne and she works in town. She is thinking of living in it for 5-10 years, and then upgrading to a larger family home when the time comes, keeping this initial property as an investment. Five to ten years is a long time though, and Sally is keen to find a property that will be adequate for her for a 5-10 year period. Cate has some thought-provoking ideas for Sally to consider. Cate also talks about tenure, and the importance of buyers making sure they have at least five years of tenure in their plan. Sally has indeed stated that she has done some homework and she’s identified that 2BR townhouses and villa units might be the ideal purchase. Cate demystifies villa units and recalls the conversations she had in previous eps with Pete about dwelling description variations around the nation. Sally has made a deliberate decision to avoid apartments. But.. not all apartments are equal. "There's apartments, and then there are apartments". Which are the variety that Cate thinks are absolute out-performers? Tune in to find out. Given townhouses aren’t all equal, the Trio unpack the various types of townhouses. Sally notes that the market conditions have changed a bit over the last couple of years in Melbourne. How can Sally best navigate the Melbourne market over the coming months? Sally circles back to her original suggestion about getting an investment loan for a property that she wants to live in. But as Dave explains, it’s not that easy. How do the banks regulate this? Lastly, Sally is unclear on whether she gets the stamp duty benefits if it’s an investment loan. Dave sheds light on some great tips for our loyal listener. .....and the gold nuggets: Cate Bakos’s gold nugget: Sally can use the ‘sold’ tab on the property search engine to get a great peg in the sand. Dave Johnston’s gold nugget: “ Make sure you can purchase a property that you can see yourself living in for 5-7, even 10 years. Can you get a better quality asset in a better location, even if it means forgoing stamp duty savings?” Mike Mortlock’s gold nugget: Mike congratulates Sally for saving $300,000 for a deposit, and he assures Sally not to worry about Melbourne’s slow performance. Shownotes: https://www.propertytrio.com.au/2024/04/08/listener-question-owner-occupier-versus-investor-dilemma/…
1 #251: Rental Revolution Revealed - Unit Rents Gain Ground on Houses, a Temporary Surge or Lasting Trend? 44:53
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44:53Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM For today's episode, Dave throws it out to Mike... the paper that Mike's business has uncovered relates to growth of rents in units, contrasted to house rental price growth. Median rental growth for units have eclipsed that of houses, but why? The Trio unpack their theories. Are investors pushing rents up or is the supply/demand equation speaking up? Mike hands the wooden spoon to the Victorian Parliament "People always want to be close to the action". Mike ponders the pull of the city. And Cate mentions traffic congestion... is it an issue? Labour shortage is challenging our economy. As Mike and Dave point out, "Anyone who wants a job, can have one." Cate sheds light on unit performance in Melbourne and the investors who feel disenfranchised. We now have an undersupply issue that has challenged units in Melbourne. But what is Mike's data telling us? "How is our aging population likely to challenge this data?", asks Dave. Mike shares his thoughts. And why is WA outperforming? The Trio shed light on this outperformance. And our gold nuggets: Dave Johnston's gold nugget: Dave looks forward to the pub! Mike Mortlock's gold nugget: Unit yields may outperform houses. Mike ponders affordability and concludes that units should be considered. Cate Bakos's gold nugget: "There are markets within markets. It's pockets, it's streets, it's orientation. You have to remember to use the data wisely when you have a specific wish list." Show notes: https://www.propertytrio.com.au/2024/04/01/median-rental-gap-between-houses-and-units-closing/…
1 #250: Investment Borrowing Masterclass – Maximise Tax Deductions and Advanced Mortgage Strategies for Long-Term Wealth Creation 39:11
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39:11Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM For today's episode, the Trio are diving into the sophisticated world of investment borrowing and they'll unpack the nuances of leveraging borrowed funds to not just acquire investment properties, but also to optimise the financial structure surrounding your investment to legally optimise deductions. Despite accountants being tax expertes, they are not mortgage strategists and so it is important that investors understand these strategies and are able to impliment them with their strategic mortgage broker. Whether our listeners are seasoned investors or just starting out, today's masterclass with Dave will equip buyers with the insights to navigate the complex landscape of investment borrowing. Dave launches into the ep with the first tip about investment borrowing. But he confuses Mike about good debt versus bad debt. Cate defines good debt, bad debt and terrible debt! Should buyers try to borrow the full purchase price plus all purchase costs? Surely this could feel alarming for those who are debt averse, but the Trio shed light on when this is a great idea, and why it's so beneficial for investors. Cate raises the concept of 106% Loan to Value Ratio and Dave distils how this works, and why it's not an uncommon LVR. Why is 80% LVR such a well-versed figure though, and what lender benefits to some professionals get to enjoy in relation to higher LVRs? "If you read in the media, it's all about the cost you have to save for a deposit, but who really saves 20%?", asks Mike. Good question, Mike. The Trio shed light on the reality of this claim. Is there any reason to set up the investment loan limit for more than the full purchase price plus costs? And when is this a dangerous play? Mike delves a bit deeper... From cash-out policies to drawdown processes, Dave walks our listeners through this complex question. "The true cost of your interest rate after the tax deduction is cheaper than the cost of your interest on your home loan (as long as you're above the tax free threshold with your earnings." What does Dave mean by this, and why is this so critical to understand in relation to 'good debt'? Which tricky scenarios might fall outside of that general rule of paying interest-only on investment, and P&I on your home loan? Dave has three scenarios, and Cate excitedly recognises that her own personal journey currently fits one of these quirks. And lastly, Dave has some general advice for listeners who are planning to upgrade their home and retain their old home as an investment. .... and our Gold Nuggets! Dave Johnston's gold nugget: "If you're getting strategic mortgage advice, make notes." The retention rate of detailed information isn't often compromised, and it's important for borrowers to be clear on their mortgage strategy and set up. Mike Mortlock's gold nugget: Number one rule - investment debt is what you want to maximise, and home loan debt should be minimised. Cate Bakos's gold nugget: Not being afraid of good debt is important. But being aware of the worst kind of debt is also very important too. Unsecured, expensive and short-amortised debt can be problematic. "I highly recommend you talk to a strategic mortgage advisor if you have that kind of debt." Show notes: https://www.propertytrio.com.au/2024/03/25/mortgage-masterclass/…
1 #249: February market update - One percent national vacancy rates?! 46:59
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46:59Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The February 2024 data is out, and the Trio circle the headline; the ridiculously tight vacancy rates nationally. Mike compares houses and unit performance and ponders the drivers for unit purchasers. Dave delves into Perth's outperformance and notes the predictions he and Pete made eighteen months' prior. Is buyer confidence up? Cate sheds light on her own experience at the coalface. But how does data lag impact the figures, and will Cate's prediction match the March data? Only time will tell... What is happening with the regions? For the quarter, combined regions have outperformed the combined cities, but why? The Trio unpack this. Mike dares to broach the question... "Where is Melbourne at?" The Novocastrian dares to challenge the proud Melburnians with this question, but they rise to the challenge and shed light on what is going on in their home city with investors. And have the regions suffered to the detriment of Melbourne's recovery? Not at all, but Cate explains the dynamics post-COVID. Cate also shares the value-proposition of houses in nearby regions versus apartments in Melbourne's inner-east. Vacancy rates are so tough on tenants right now and the Trio note that vacancies have tightened even further. From changed planning laws to talk of investor incentives, the jungle drums are beating. But sadly the Trio concur that conditions will continue to deteriorate until governments make a different kind of change. Listing activity is higher, yet sales volumes reflect that buyer demand is meeting supply and this coming weekend is set to be a stand-out weekend for auction numbers. But what will post Easter, and early winter look like? "We only need to talk about rate decreases and people go crazy" Rental values have re-accelerated in 2024. Feb recorded the highest rental reading for the last eleven months. Will rent growth outpace capital growth? The Trio weigh in... and they don't all agree. The three year bonds curve shows that the money markets are predicting three rate reductions as an average cash rate. And... time for our gold nuggets... Cate Bakos's gold nugget: For any prospective tenants out there, you have to be prepared to differentiate yourself in this tight vacancy rate environment. Dave Johnston's gold nugget: This month suggests that so many data points are pointing towards a property price rebound this year, so if you are considering buying property, it's time to get your ducks in a row. Narrow in on your strategy, arrange your pre-approval and be clear on the plan. Shownotes: https://www.propertytrio.com.au/2024/03/18/ep-249-february-market-update/…
1 #248: Home Dreams vs Investment Dollars - Upgrade & Sell vs Rentvest & Hold, Location Choices & School Zones, Taxes & Cash Flow Pressures 56:08
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56:08Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Dave and Cate man the fort this week while Mike does his charity ride... and the duo decided to tackle a great listener question about lending policy, loan structuring and the critical decisions that arise for many. Jim and his partner have a very important scenario to run past the Trio. They are particularly high income earners with $500,000+ combined incomes, but there are some critical messages here that apply to all home owners and investors. The challenges they face have been exacerbated by increased interest rates, but they also have had second thoughts about the home that they selected in 2019. The dilemmas are very real... how do Cate and Dave address them? Our listeners chose to buy a house that had less appeal than some of the others that they were missing out on in the lofty hot market of Sydney. Why do people go for the lower hanging fruit? And what are the risks? Dave and Cate share their thoughts, from fatigue to FOMO. Should they sell and rent-vest, re-purchase in another location, or hold their home? "They need to nail the big rock in the jar, which is where they'd like to live long-term to raise their kids." Dave's ever-pragmatic insights shine through... tune in to hear more. Cate discusses the importance of partners being on the same page as each other, and this is a fantastic case in point in relation to rent-vesting. Rent-vesting is often a particularly challenging strategy for couples and Cate explains why. She also shares a personal experience dating back to 2008 that derailed hers and Ian's rent-vesting strategy. Jim asks, "Should we purchase a B grade property in an A grade suburb, or an A grade property in a B grade suburb?" Dave and Cate don't necessarily agree, but they each share their answers openly and Cate cites a great recent example. Dave takes up the challenge to help Jim and his partner with the cashflow challenge. How can they ease the pressure, and what are some of the options? Dave and Cate enjoy a good banter about investment strategy, and in particular, retirement strategy... and this is what it's all about! And lastly, can Jim and his partner achieve $140,000pa passive income? Dave uncovers the answer. .... and our Gold Nuggets! Dave Johnston's gold nugget: "If you do plan to purchase a family home, don't put off deciding what that looks like. Start planning for it!" Cate Bakos's gold nugget: "I wish everyone could afford a property plan. If you can get that right from the start, you can establish things from the ground up". And when you're a high income earner, it really does carry some weight. Mike Mortlock's gold nugget: Mike talks about the importance of being quite discerning when it comes to buying the family home, and not compromising on the key element. Show notes: https://www.propertytrio.com.au/2024/03/11/listener-question-dilemma/…
1 #247: The Ultimate Settlement Guide - Navigating the Steps, Paperwork, Timelines & Traps to a Successful Settlement 51:28
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51:28Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Dave hosts this time. He opens the episode with the obvious question, "What is settlement?" Did you know that settlement dates are completely negotiable? And did you know that some people conduct their own conveyancing?, (although the Trio don't recommend this, as it involves a lot of risks and responsibilities.) If you do your own conveyancing, you will need to research what is required and the relevant legislation. Like real estate licences, they are state and territory based. Cate shares some of the challenges associated with cheap, unreliable conveyancers. Physically, how does settlement happen? Cate and Dave weigh in, and Dave explains how settlements hinge firmly around the broker and the banks. Settlement day is a bit of a magical event. Cate talks through the parties who are involved, how long the actual settlement takes, how it's facilitated and how conveyancers conducted settlements before our online portal, PEXA existed. What is an “ideal” settlement day? What does it look like? The Trio canvas the steps and the paperwork required to get to settlement. From legal transfers to 'funds to complete', bank loan documentation certification and pre-settlement inspections. There are many steps that are important in the lead up to settlement day. When are short settlements advantageous? And why would a buyer consider making a short settlement? Cate explains that many buyers think that a shrewd offer with a short settlement is the key to tough negotiating, but sometimes this isn't the best way to drive a good bargain. What can go wrong at settlement? Tune in to find out! What causes delays? Dave and Cate step through a range of issues that can threaten a smooth settlement, from finance to lost titles, to late subdivisions, caveats and lost titles. There are many elements to manage and be aware of when it comes to property settlements. What happens if the purchaser is at fault and can’t give the vendor confidence that they can settle? The answer to this question can be quite ugly, but it's important that purchasers appreciate the gravity of the situation when it comes to obtaining finance in time. And let's assume settlement goes to plan.... what are the next steps? Dave steps listeners through the nitty gritty that borrowers should check straight after offset to make sure they are on course with their mortgage strategy and loan facilities. .... and our Gold Nuggets! Mike Mortlock's gold nugget: "Don't do it yourself! And book the truck for the day after settlement!" Cate Bakos's gold nugget: "Make sure you've got a really good checklist! Give us a yell if you'd like a checklist emailed over to you." Shownotes: https://www.propertytrio.com.au/2024/03/04/settlement-day-what-can-go-wrong/…
1 #246: Tackling Housing Affordability - Part 2: The Trio’s Blueprint to Foster a Healthy Property Market 45:23
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45:23Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM In this innovative, two part series, the Trio share their own ideas and ideals to contribute to some solutions for solving the housing crisis. Dave is clear. "It's all supply, supply, supply". But he is clear on the need to define the 'ideal' balance being agreed and struck. Cate and Dave debate the short-stay accommodation impact on rental supply... is short-stay problematic? Mike weighs in with his thoughts. Will the day come when the government(s) decide to entice investors back? As Cate points out, limited investor participation is dangerous. But politicians need votes. The Trio tackle consider some possibilities, but questioning the disincentives is their first stop. The Trio share their ideas, with Cate's investor-incentives, and Dave's finance considerations. Cate contemplates the role that banks could play with postcode-based information. Mike likes the idea of moving towards a more European approach; long lease terms. Tune in to hear more. How could lending changes enhance our chances of improving the housing crisis? And what changes to some great existing government policies could make a significant difference? "Some of this is a function of being one of the wealthiest nations in the world". How can we provide support housing for critical workers? And how can we provide crisis accommodation? Does decentralising government services have a positive impact on housing? Cate runs through quite a few of the Trio's ideas. There is no doubt that many solutions have unintended consequences. Political decisions aren't easy, and tax reform and legislative change are often unpopular. The Trio recognise this and reflect on the power of consultation and healthy debate. Shownotes: https://www.propertytrio.com.au/2024/02/26/tackling-housing-affordability-part-two/…
1 #245: January 2024 Market Update - Reinvigorated buyer energy and funding holidays with unsecured debt. What's going on?! 51:04
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51:04Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The January 2024 data is out, and the capital city league ladder has been changing. But are houses and unit imbalances across capitals skewing the data? Dave explains.. "Data does let us down like that", says Cate and she shares some another example of stock segmentation and purchaser incentives skewing data. What's happening with the regions? The quarterly data shows that regions have outpaced the capitals. Are we seeing a recovery in some of the regions that suffered during 2023 with the reverse-COVID exodus? Mike dares to broach the inflation data and asks his co-hosts when they think interest rates will fall. Dave suggests August/September this year, whereas Cate won't be surprised if it's even in 2025. Time will tell! The national rental index recorded it's strongest monthly rise since April. Could things get worse before they get better? Cate shares her concern about the rate of investor sales and anecdotal evidence from agents' reporting. Cate predicts that rental hikes will eclipse 10% nationally. She also talks about the challenges being tougher for families, as opposed to singles and couples. We have sales volumes to thank for our 2023 year holding up as it did, but now that sales numbers have increased, will the supply and demand ratio threaten capital growth? It seems not. Buyer appetite is strong and sentiment has ticked up somewhat. The stock availability, (or lack thereof) has a direct correlation with capital growth, as shown in our charts in the shownotes. Yet the distressed listings have The Trio intrigued. Is Victoria's data point a green shoot or an anomaly? It's one to watch.... The Westpac Consumer Sentiment data provided some good discussion; what a difference the surprise inflation figures made! But which measure still has Cate worried? Cate draws attention to the unsecured lending figures and holds concerns about some of the items that people are financing on high-interest credit. Dave explains how the consumer sentiment index is determined with 50+ sub-groups of people assessed. It's an interesting peek behind the curtain! Investor activity is up and it has been steadily increasing. Despite the investor-led sales, talk of increased rents and the potential for strong capital growth surges are exciting a cohort of investors. The three year bonds show that we could see rates drop in the near-term, yet the ten year bonds suggest that rates could sit at similar levels to where they currently are now. And... time for our gold nuggets... Cate Bakos's gold nugget: Stop spending on discretionary stuff! And better yet, stop using unsecured debt to do it. We need to bring down inflation. Dave Johnston's gold nugget: An interesting fact... House values have continued rising at a faster rate relative to units. House and unit median values are at their greatest differential ever. Mike Mortlock's gold nugget: Don't make it a holiday, make it a toy, and make it second hand.... AND use cash! Shownotes: https://www.propertytrio.com.au/2024/02/19/ep-245-january-market-update/…
1 #244: Tackling Housing Affordability - Part 1 - Dissecting Proposals for Housing Innovation 56:18
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56:18Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM In this innovative, two part series, the Trio canvassed some measures that could be implemented to ease affordability and promote the healthy functioning of the Australian property market. Mike took some inspiration from an industry friend's article, and Cate and Dave chimed in with their thoughts on some of the initiatives from the article. In Part 2, the Trio will cover their own ideas and insights to foster a healthy property market. How do the Trio define a healthy property market? Dave considers the different perspectives from all of the various stakeholders. From developers to renters, first time buyers to investors, NIMBY's, local council, retirees, ... the list is enormous. Cate weighs in with her thoughts on the multiple barriers for acquiring home ownership, in addition to the 'big three'. Our casualised work force, for one is a significant blocker for credit availability for many. Dave cites an insufficient supply of new property. The Trio step through the six innovations in the article, namely; 45 year loan terms Phasing out stamp duty Balloon payments Separating the 'real risk' from 'robotic risk' Social housing accountability, and Superannuation, LMIU and Family Equity Dave's insights into loan term increases is enlightening and he chats about the historic changes of loan terms over the decades, and also the impact of the scars inflicted from the GFC. He touches on the stigma of longer loan terms, and essentially, borrower mindset. "Are all innovations stimulatory?" asks Mike, and he proceeds to cite many examples. Cate shares some of her preferred initiatives that have been devised to assist first home owners, but she also illustrates the failings of past concessions/grants, and poorly considered incentives. Dave boldly tackles the concept of Stamp Duty abolition and proposes some thoughtful ways that the State Governments could maintain the revenue stream. He also touches on the possibilities that superannuation offset accounts could open up. How could balloon payments work? And what are the pitfalls? Dave expands on the possible unintended consequences. ...And our gold nuggets! Cate Bakos's gold nugget: This is a courageous episode, and lots of people have lots of different ideas on this. What is important is that people in this industry who do care about housing feel like they are in a safe space to speak up. Mike Mortlock's gold nugget: "We require a national debate on this." The politicians have had their opportunity and they have had quite a few fancy ideas that have exacerbated some of the issues. "Investors are part of the solution." David Johnston's gold nugget: "Send us your thought on what you think will make a difference to creating a healthy property market for all participants. Show notes: https://www.propertytrio.com.au/2024/02/12/tackling-housing-affordability-part-one/…
1 #243: Building Long-Term Wealth: Mastering Land to Asset Ratio & Paying Down Your Home Loan Vs Investing Surplus Cash Flow 47:47
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47:47Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM This week's episode features a two great listener questions, the first from Catherine. "My husband (39) and I (32) are doing well financially and trying to decide our next move. Our goal is to pay off our mortgage but we feel like maybe we should be buying an investment property. In SA western suburbs, our house is worth around $900k and our mortgage is sitting at $290k. We have a spare $3000 monthly (after bills and allowances) that we are putting on our mortgage. If we buy an investment property it will be negatively geared but we aren't sure whether it is worth buying now as we will have to contribute to repayments. To buy a house with some land in a decent area is around $600-700k+. Will the tax deductions be worth it or should we wait and keep smashing our mortgage, pay it off in 5 years?" Many people feel compelled to pay down debt, but this isn't necessarily the optimal way to build future wealth. The Trio share their individual thoughts around Catherine's dilemma, explaining leveraging, setting financial goals and discussing the positives of good debt. Dave also includes a scenario to illustrate the potential in store for Catherine and her husband. Dave acknowledges the strain and subjectivity of such a personal decision. Debt aversion can strike many, and as he points out, understanding our surplus cash flow is a critical step to getting it right. The scenario Dave cites is modest, and the modelled outcome spells a $500,000 superior net asset position for our listener couple. Our second listener question challenges the use of the Land to Asset Ratio as a metric. Lennard's musings are plentiful and Cate, Dave and Mike tackle each one. If capital growth is maximised by a higher Land to Asset Ratio, why wouldn't an investor just buy land? And is a million dollar farm in the outback a better investment than a small parcel of land in a blue chip, city suburb? And how do you quantify the exact land to asset ratio metric? Lennard's questions are probing and they keep the trio on their toes. They canvas the difference between capital growth returns, rental returns and tax returns. Each also offer examples to help explain the ways in which a Land to Asset Ratio metric can be a helpful measure. Dave tackles Lennard's question about how a buyer could attribute a value to both the land and the dwelling components of a property. He points out that it's not an exacting science. When can dwellings appreciate? Dave takes up the challenge and faces it head on, citing scarcity, inflation and maintenance. Mike chimes in with the term "functional obsolescence" and he illustrates depreciation. Land to Asset Ratio is not static, and nor is there an optimal ratio. It's important for investors to recognise where their own tolerance comfortably sits. . ...And our gold nuggets! Cate Bakos’s gold nugget - Due diligence counts for so much, and it goes way beyond Land to Asset Ratio calculations. Mike Mortlock's gold nugget - Value drops and depreciation are two very different concepts. Dave Johnston’s gold nugget - Land to asset ratio is just one factor when assessing the future capital growth prospects of a property. It is not a valuation methodology at all. Show Notes: https://www.propertytrio.com.au/2024/02/05/building-long-term-wealth-and-mastering-land-to-asset-ratio/…
1 #242: December Market Update 2023 - How has the year closed out? 48:53
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48:53Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The December data is out, albeit in parts after the Core Logic team put out a thinner report over the break. Dave points out that December represented the smallest gain in property growth and he ponders whether the most recent interest rate increase triggered a slowdown at year end. Dave also draws our attention to the 'tale of two cities', and the two-speed property economy between the mining states and the non-mining states. Cate questions the relationship between listing activity and growth rates. Is there a correlation? And are we back to the good ol' days when it comes to the summer break and the property industry shutdown? What's happening with the regions? Dave and Cate shed light on some of the elastic behaviours in certain regions. Mike shares his press release story about the national rental crisis with the listeners... tune in to hear more. Was the December rental figure a data blip, or has the rental demand started to ease? Cate demystifies things for our listeners. Gross rental yields have ticked up to new levels, but as Dave explains, "that's what they used to look like!" Like many other property-related cycles, rental yield, too is cyclic. Are we expecting a busy listing period over the coming months? Cate shares some coal face intel and some insights into buyer activity currently. What is the Westpac Consumer Sentiment Index telling us? Have the interest rate increases finally bitten hard? And what direction does the Trio think rate movements will take over the coming months/year? And Mike asks Dave for some business insights into borrower activity; it's an intriguing overview and it ties in with the data. Lastly, Cate draws attention to the construction challenges being faced now. And... time for our gold nuggets... Cate Bakos's gold nugget: For all those people who are planning on purchasing sub-median priced property in early 2024, stay close to the agents as ex-rental stock emerges Dave Johnston's gold nugget: Dave emphasis the need to make your own personal decisions based on your own economy. Show notes: https://www.propertytrio.com.au/2024/01/29/ep-242-december-market-update/…
1 #241: 2023 - The Trio’s Property Predictions - who got them right? And did we get any wrong? 1:01:44
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1:01:44Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Pete joins us in the studio! Mike kicks off the Trio's predictions for 2023 and he runs through their January predictions, holding each accountable for their forecasts. What will the market do? Cate admits she was quite bullish on this question, while Dave thought prices would drop 5-8%. It was the Property Professor who got this prediction right. Which capital cities will be the top performers? According to Mike, the Trio all got this one right in identifying Perth as a top performer. Cate concedes though that Melbourne demonstrated resilience, as opposed to a bounce-back, and she points out that none of them picked Brisbane. And Pete sheds light on some fundamental reasons why Perth was so popular for eastern states investors. How will the regions perform? With hybrid office working environments, things are changing now, but what will the larger regions do in the short term? Who got it right? And what is in store for office spaces? ...Tune in to find out. Investor numbers: What did the Trio underestimate? How has credit policy played a role? And how did tax legislation changes impact investor activity? The Trio ponder. What government intervention could impact the property market? Each of the Trio had a good point, but who got it the 'most' right? Developers and building - what did the Trio think would be in store for 2023? Why could we see private builders ease their pricing? Does Cate have a valid theory? And Mike sheds some light on the challenges today for volume builders... and it's insightful. Pete adds his insights on the current building pipeline and Dave discusses supply chain woes. Dave was determined the deserved winner of this prediction. Where will interest rates land at the end of 2023? The Trio concede defeat! Rents and vacancy rates - where would they end up at the end of 2023? Cate and Pete took out top marks for this prediction: "Record increase in asking rents for 2023. It will shadow 2022, we’re not getting more stock, we’re getting more people. With interest rate increases, some people who were looking at purchasing might be looking at renting instead." Where did the Trio peg listing and sales volumes by year end 2023? Full marks to Dave! "We’ll see it around the 5 year average this year, first 6 months will be flat, but pick up in the back half of the year. And what risks did they anticipate could impact the market? From recession to higher unemployment, war/invasion and share market corrections, the Trio canvas some of the possibilities. Lastly....where did the Trio think inflation would head? Pete speaks candidly about the practicality of reading inflation charts. But did Dave and Cate get it right? Or were they one year too early with their predictions? ....And our gold nuggets! Peter Koulizos's gold nugget: Borrow as much as you can to buy as much as you can, and hold on for as long as you can! Cate Bakos's gold nugget: The differences of opinion between the Trio is what makes the show interesting, but it also sheds light on the importance of noting different economists' points of view. We pride ourselves on being fiercely independent. Shoe notes: https://www.propertytrio.com.au/2024/01/22/2023-predictions-unpacked/…
1 #240: 2024 - The Trio’s Property Predictions and Insights for the Year Ahead 52:07
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52:07Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Cate kicks off the Trio's predictions for 2024 and reminds Mike that he will be accountable in a year's time. Dave picks value growth of 2-7% nationally in 2024, with the market being weighed down by Melbourne and Sydney, with a comment that he feels we'll see a similar year to 2022. Cate feels that a strong supply of listings in early 2024 will dim the growth potential for the busy cities in the early months. The supply and demand ratio may lead to some great buying conditions during this period. Cate backs Perth, Adelaide and Brisbane for outperformance growth for the year. Mike leans on Chris Gray's comment, "It will either go up, go down, or stay the same." Yep, thanks for that Mike. Mike does share some economist's updates for our listeners though and challenges Dave with a 7-9% growth estimate. Mike suggests that 2024 could be a year of two halves. Tune in to find out why. Will 'chicken and egg' impact our markets again? And could this lead to a stock undersupply? The top three performers.... Who will get it right? And who will be proven wrong? The Trio place their bets! Cate challenges Dave and Mike with their insights and predictions into investor numbers and government intervention. From vacancy taxes, rent freezes, superannuation, and first home buyer initiatives, they have some fun debating the possibilities. Cate also touches on the tax opportunities that could arise as our baby-boomer generation age. Mike's insights into developer activity and construction is intriguing. It's a must-listen! Interest rates and inflation.... where do Cate, Mike and Dave think they will land in 2024? Their responses aren't aligned either. The Trio agree that rental vacancy rates aren't likely to improve for renters and Cate gives Victoria a special mention for double digit rental growth for the year. The Trio also contemplate listing numbers for the new year and the impact that this could have on the markets. And lastly, Dave, Cate and Mike toy with unlikely and the unpopular as they discuss the biggest potential threats to the market. . ...And our gold nuggets! While they've enjoyed putting together this episode, they remind listeners that predictions can be fickle. "Hotspotting is never as important as the planning", says Mike. Show notes: https://www.propertytrio.com.au/2024/01/15/2024-predictions-and-insights-for-the-year/…
1 #239: Optimising Offset Accounts - Mortgage Strategies for Investors Who Have Home Loan Debt to Create Wealth & Maximise Retirement 43:46
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43:46Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM This week's episode features a great listener question from Ben. "Offset account question I am grappling with. I am nearing retirement and have three investment properties in NE Melbourne, two of which are IO and fully offset. Third is IO and partially offset. I have a PPOR P&I loan with and offset account set up. I continually go round the conundrum of whether to park my funds offset against investment IO loans or the PPOR P&I loan. I fully understand the extra cash flow I get by not paying interest on the IO loans, and effectively have the rent as income (taxable). And offsetting P&I PPOR actually makes no difference to my P&L unless I do something downstream - sell or refinance. Any thoughts?" Cate offers the layman's view on Ben's predicament. Can Ben have his cake and eat it too? Dave would suggest that Ben 100% offsets his home loan first, and then he would target placing his surplus funds into the highest interest rate investment loan offset account. Switching his home loan to Interest Only is another good option. Mike prompts Dave with a question: "What stages of life do you typically see your clients facing this conundrum?" Cate weighs in with some insights based on recent economic and banking changes, relating Ben's conundrum to some of her client's questions. When APRA stepped in, requiring banks to set home loan rates lower than investment rates, things started to change for a few investors. Tune in to hear more... Cate's simple solution hinges around refinancing his home loan to Interest Only, but is it that easy? Dave weighs in with some of the challenges Ben may face. Dave has a technical solution, but it's not easy and will require some intense concentration! Mike ponders; can refinancing the existing debt to reduce the minimum loan repayment commitment help Ben's case? Cate and Dave step through the pro's and cons of the various approaches on option to Ben, highlighting the tax benefits, interest rate differential and long-term benefits. And the Trio shed light on the benefits of offset against Principal and Interest loans. ...And our gold nuggests! Dave Johnston’s gold nugget - If Ben can't refinance and can't go to IO, Dave highlights the important points for Ben to consider. Sometimes going backwards from a cashflow perspective isn't always the worst case scenario. Looking forward, doing the maths and not losing sight of the bigger picture is important. Cate Bakos’s gold nugget - Visibility is everything. If Ben has a dashboard and can get a sense of timeframes, he will get a better sense of perspective. His overall portfolio will likely hold him in good stead, but in the meantime he could do a stocktake of his current discretionary spending, and conduct a health check on his current home loans. Mike Mortlock's gold nugget - There is no simple answer, but there are a number of ways that he can do this. Knowing what the banks will allow is important too. Show notes: https://www.propertytrio.com.au/2024/01/08/can-we-retire-at-50-and-how-many-properties-will-we-need-2/…
1 #238: Case Study #8 - Do We Buy a Home Now & Convert Into an Investment? Can We Retire at 50 & How Many Properties Will We Need? 51:30
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51:30Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Happy New Year to our listeners! Mike introduces James and Lisa's case study. They are both 36 and have a goal of attaining $80,000 of passive income per year into retirement, and scaling back work to 50% by the age of 50 remains an ideal. Their annual combined incomes are $144,000 and they have $90,000 in savings. Can it be done? And what do they need to compromise on to reach their goal? Cate ponders their plans and discusses the cost disparity between life in the major capitals versus the regions. She also touches on 'overshooting the runway'; a common pleasant surprise for those who make firm plans early in life. Dave explains how he and his team would typically tackle the determination of subsequent property purchases, timing, budget and buffers. How did James and Lisa's property plan compare to other plans? Tune in to find out what scenario Dave's team recommended to this duo. Do they purchase an investment first? Do they move to their ideal future home location? How many properties do they ultimately need? The alternative options for James and Lisa are an interesting surprise! Mike and Cate tackle the investment-future use conundrum; a common investor challenge that the Trio see often. And Dave makes a valid point about the differential in post-retirement outcomes when sensible financial decisions are made at the start of an investor's journey. It's little wonder that compound interest is considered the eighth wonder of the world. ....And our gold suggests! Cate Bakos’s gold nugget - Retirement is not what it used to be. We don't just stop. We have much longer retirements these days and we do have to think about how we wish to enjoy our segments of retirement, well before the 'golden years'. Dave Johnston’s gold nugget - When modelling out a property plan, setting pathways and determining if a goal is achievable is critical. Decision-making often has to face adjustment as life changes. Show Notes: https://www.propertytrio.com.au/2024/01/01/can-we-retire-at-50-and-how-many-properties-will-we-need/…
1 #237: The Future of Property Investment - Unlocking the Power of AI, Opportunities and Challenges 45:54
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45:54Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Merry Christmas to our listeners! AI's Role in Real Estate Investment... "AI, and particularly generative AI, is a game-changer in real estate investment, even for the average Australian investor." Mike and Dave explore some of the immediate scope that AI can offer, from generating realistic property images, to creating detailed market reports, and even forecasting future property value trends based on a range of complex factors. Understanding Generative AI vs. Traditional Machine Learning.... Mike ponders the power of capturing a series of ‘photographic memories’, and details how AI has aided him with his quantity surveying data and identification of trends. Moving forward, can AI predict sentiment? It’s an interesting thought-experiment. Dave contrasts the take-up of Chat GPT against other advancements such as the World Wide Web, Facebook, and the telephone. How does AI already exist in the property world? The Trio ponder… Mike shares some of the practical applications of generative AI for investors “These AI tools are user-friendly and are designed with the layperson in mind. They can analyse your financial goals and suggest investment strategies, almost like having a personal investment advisor powered by AI." But Dave reminds listeners that information found on the internet shouldn’t be blindly trusted. Cate talks about the risks to businesses when it comes to AI mistakes. Can AI predict an outperformance property? Or is this a task that requires human touch? Tune in to find out what the Trio each think. Cate shares the last paragraph of the episode, which was generated by AI: “AI, and specifically generative AI, is transforming how Australians invest in real estate. It's making sophisticated investment analysis more accessible to everyone." ....And our gold suggests! Dave Johnston’s gold nugget - Dave ponders the limitations and contradictions associated with AI predicting the best property in the country. Mike Mortlock’s gold nugget - Mike points out that many price models models and capital growth predictions are often wrong, and he wonders how AI will tackle irrational human behaviour. Cate Bakos’s gold nugget - Cate challenges the usefulness of chat boxes and scripts when it comes to disingenuous scripting and important client communication. Show notes: https://www.propertytrio.com.au/2023/12/24/ai-the-future-of-property-investment/…
1 #236: Market Update November 23 - A rate increase, higher listing volumes and regions are rallying 56:00
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56:00Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The November data is out! The headline figures prove that the 'middle sized cities' are still out-performing; Perth, Adelaide and Brisbane. And Melbourne disappointed with the first negative month in a while. We have seen a new peak in house prices in Australia and for the combined capitals; we have seen a new record high for house prices. Cate and Mike marvel at the volatility, and in particular the disproportionate declines that our markets have experienced in recent years. And Dave pulls apart the weaknesses in median prices when it comes to data segmentation associated with houses versus units. Have the Victorian regions bounced back? Maybe. But how does wage price index correlate? "If you want a job, work from home. if you want a career, come back to the office." Do you agree with this quote? And how has WFH impacted Australian property? Cate delves into investor-led sales and how the segmented data is captured. And she asks when policy makers will recognise the rate of investor sales. The Trio focus on rental increases and vacancy rates; despite the rate of growth relaxing, rental growth is still broadly in positive territory for most cities. And when we consider our new arrivals, and policy around skills, it's questionable that our services-inflation woes are being accurately addressed. Mike asks Cate about new listings, and she points out a few points of interest in relation to the relationship between new listings and buyer demand. Cate talks about the impact of the most recent cash rate increase and the typical hallmarks of December market conditions. Mike steers us through the Westpac Consumer Sentiment Index. There have been a few subtle changes, and the Trio attempt to understand the broad attitudes towards timing the market and economic outlook. Personal, unsecured loans have tricked up and Cate is troubled. Tune in to hear more... And Dave covers loan approvals, mortgages and decreasing refinancing numbers. Dave reports that this is the lowest read since May 2022. Lastly, Cate and Dave touch on Sydney vs Melbourne price disparity and some of the reasons why Sydneysiders are taking advantage of the Melbourne market. And... time for our gold nuggets... Cate Bakos's gold nugget: For all of those budding purchasers who are focusing on 2024 as their year... take advantage of the buying conditions in the early part of the year. Agents are talking about increased listing volumes and the supply/demand ratio may favour buyers. Dave Johnston's gold nugget: Dave emphasis the attractive conditions that buyers could face in Melbourne, Sydney and Darwin in the early months of 2024. Show notes: https://www.propertytrio.com.au/2023/12/18/ep-236-november-market-update/…
1 #235: Property Portfolio Puzzles - Unravelling the Mystery of How Investors Amass 10+ Properties 41:07
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41:07Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM A lovely listener, Zak has written in to the the Trio. He and his partner have worked hard as young professionals and have acquired two properties; each with high 80's LVRs. One is a boutique apartment in Melbourne's leafy inner south/east, and the other is a character brick house in beautiful pocket of Ballarat. But despite their strong incomes and dedication to their financial goals, their borrowing capacity has precluded them from further investing for now. The question he has is, "how is it that some individuals (often in their early to mid thirties) are able to amass large portfolios of (say) 10+ properties?" Can it really be done, or is it a mirage? The Trio enjoy unpacking this one. Dave starts with some possible explanations for how these young multi-property portfolio investors manage it, and he also shares some interesting data direct from the ATO about the percentage of multi-property investors. Scarce indeed! "Let's talk about the psyche of someone who wants ten-plus properties". Cate sheds light on what drove her to pursue a quick succession of investment property purchases when she was younger. Mike leads the conversation around ego-metrics too. The Trio challenge some of the mirages out there that investors claim as 'investments', and Cate talks about the headache factor of a large portfolio, particularly when she considers upkeep on interstate holdings. Mike challenges Dave to share some of the alternative financing sources that our listener duo could consider to break past their borrowing capacity constraint. Dave delves into cashflow and buffers, and he talks about risk and where it is relevant when it comes to multi-property investors. Dave and Cate agree on one key ingredient that can certainly optimise an investor's chances of attaining a multi-property portfolio... and it's time. Lastly, our gold nuggets…… Mike Mortlock's gold nugget: Forget the white noise! Just stick to the simple stuff. There's no tricks. Set a plan based on what you want your retirement to look like. Dave Johnston's gold nugget: Work out how much passive income you need for retirement (in rent), work out the total property value you are aiming to purchase, and consider the number of properties that this represents. Shut out the superfluous noise and don't worry about what others are investing in. Cate Bakos's gold nugget: Time is your best ingredient, so don't sit around waiting to jump into property. When you can, you should. Show notes: https://www.propertytrio.com.au/2023/12/11/unravelling-the-mystery-of-how-investors-amass-ten-plus-properties/…
1 #234: Unveiling the Secrets of Elite Strategic Mortgage Brokers – Navigating Advice, Skills, Results, Relationships & Regulations! 45:10
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45:10Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM What does it take to become a great strategic mortgage broker? "You need to listen with intent", says Dave. There is so much more to effective mortgage broking than just having a good grasp of numbers and a sharp recall of loan products. The most successful professional advisors ask seven times more questions than the average advisor. Cate weighs in with a comment about how a good advisor can deliver an answer. She also talks about the privilege of being a trusted advisor. And Cate doesn't worry about scripts and dialogue. It's all about listening and asking the right questions. The ability to notice body language and the EQ required in a role like this is intriguing. Tune in to hear more! Why is mortgage strategy so much more important than rate? Dave runs our listeners through all of the important considerations in the mortgage strategy. What are some of the technical skills required to be a SMB (strategic mortgage broker)? Mike challenges Dave about the Royal Commission and the change in legislation for Responsible Lending. Dave sets the record straight! And he shares some good stats too. Cate and Dave discuss the broker commissions and the practical reasons why SMB's maintain good, ongoing relationships with their clients. Dave and Mike discuss the processes required to mitigate the consumer's risk when it comes to deposits and settlements. Deadlines and clauses govern a lot of tasks, and attention to detail is critical. Dave shares some of the worst case scenarios. Lastly, our gold nuggets…… Mike Mortlock's gold nugget: Mike recalls witnessing mortgage brokers and accountants arguing about add-backs and servicing calculations. This early awakening showed Mike the value of a good quality mortgage broker. Dave Johnston's gold nugget: Dave reminds listeners that he has hardly mentioned interest rates in this episode. Strategic mortgage broking goes so much beyond rate. Cate Bakos's gold nugget: "If you win them on rate, you'll lose them on rate". Cate relays an important message about the importance of looking beyond offering the cheapest rate. Show notes: https://www.propertytrio.com.au/2023/12/04/unveiling-the-secrets-of-elite-strategic-mortgage-brokers/…
1 #233: Uncovering Diverse Pathways to Buyer’s Agency, Extra Skills to Gain an Edge & On-the-Job Training 52:31
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52:31Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Cate talks candidly about buyer's agency and how she found her way into this space. Is a university degree essential? Important? And what other past experiences help a BA on their journey? Tune in to find out. Mike also speaks about some of the impressive BA's he's met and interviewed, and he considers the importance of analytical skills, soft-skills and diverse backgrounds. The Trio ponder the challenges of adapting to BA-life. From long/late hours to liability, deadlines to negotiation pressure, the role is nothing short of dull. As Mike says, "It's nowhere near as glamorous as it seems." What extra skills can give BA's an edge? Great question, Dave. The Trio move on to buyer's agency training. "It's not the piece of paper you want, it's the knowledge." Cate shares her thoughts on some of the pathways that BA's can learn. She also talks about specific past roles that will be complementary for aspiring BA's. The Trio tackle the training backgrounds and previous jobs that can be problematic for new BA's. Can leopards change their spots? It's an interesting debate. Cate shares a short experience she had when she was in 'gardening leave' in a government organisation and she draws upon the disparity between that role and the world she works in. And Mike reminds Cate that she was a rubbish dining companion when her clients called during a work dinner. Dave dares to ask Cate about some of the short courses available that concern her. Tune in to hear more! Lastly, our gold nuggets…… Mike Mortlock's gold nugget: Mike splits his answer into two. For aspiring BA's, they really need to take the training seriously. He cautions people to do a lot of research. And for consumers who are looking to select a buyer's agent; put a great checklist together and be prepared to quiz them hard. Dave Johnston's gold nugget: Dave feels consumers should ask for a BA with at least two years' experience in a BA firm. Cate Bakos's gold nugget: #askforexperience Shownotes: https://www.propertytrio.com.au/2023/11/27/becoming-a-buyers-advocate/…
1 #232: Perth Property Gold Rush - Analysing Western Australia's Property Investment Surge & Future Risks 39:12
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39:12Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike has prepared some industry-first data and the Trio deep-dive into it for our listeners this week. Dave's overview of this special city spans it's impressive performance of late, and the uniqueness of Perth when it comes to the house to unit ratio. Mike also weighs in with some interesting history about WA's quest for independence. 66% of Western Australians voted to leave the commonwealth in a 1931 referendum, but for technical reasons, the vote didn't initiate change. The mineral wealth stands WA disproportionately from other states in terms of federal funds allocated per state and territory, and Dave delves into the state budget and the revenue generated by WA. With WA accounting for half of the nation's exports, this important statistic is very telling when it comes to understanding what drivers influence markets. Mike's data compared Q1 2022 to Q1 2023 and found that WA had moved from the 4th most popular state for investors to 2nd in that 12 months. In real terms, it was a 22.49% change in favour of WA with every state except the ACT declining in favour over that period. WA represented 9.38% of all residential investor activity in Q1 2022, and jumped to a whopping 22.49% in Q1 2023 second only to QLD at 37.97%. Despite this recent renaissance, Cate reminds listeners that for the 14-year period starting 2007 to the end of 2020, the Perth property market essentially stayed flat. At the start of 2007 Perth had the highest median house value of Australia’s eight capitals, and at the end of the next 168 months, it went nowhere, while house values actually doubled in Sydney. Mike's insights into population changes are fascinating.. tune in to find out! Reading the iron ore crystal ball is no mean feat, but Dave shares his outlook. The Trio share their concerns for investors who are rushing in without understanding the volatility and drivers of a market like Perth. Timing the entry and exit is never an easy thing to do. As Dave points out, an over-reliance on mining is a risk. Lastly, our gold nuggets…… Mike Mortlock's gold nugget: It's important to be heavily researched on the location as best you can. Thinking about resale and retirement should be a key consideration also. Dave Johnston's gold nugget: "The most important economy to be across is your own economy. Ultimately you need to make decisions that are right for you." Cate Bakos's gold nugget: The tyranny of distance needs to be factored in to any investor's interstate purchase decisions. Long term buy and hold plans need to be consider the maintenance burden that long distance renovating can create. Show notes: https://www.propertytrio.com.au/2023/11/20/perth-property-gold-rush/…
1 #231: Market Update October 23 - Another rate increase, retail spending is up, and here comes Black Friday! 45:44
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45:44Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The October data has Perth leading the chart, but as Dave reports, the mid-sized capitals are the capitals that are showing us the strongest results. There is a correlation between growth and listing rates though. Listings have jumped in Spring for Sydney and Melbourne, supporting Dave's correlation theory. Cate identifies data integrity issues, citing Hobart's data as an example. All it would take is a disproportionate number of listings at either end of the market to skew a data set in a city as tight as Hobart. The Trio ponder foreign buyer disincentives and taxes, in particular the impact on Australia with other countries applying new taxes and restrictions. Dave notes the rate of immigration Australia is currently experiencing and notes that it's at an all-time high, hence putting additional pressure on housing. Yet, as Cate says, we need more people in this high inflationary environment to assist with providing services. Such a difficult balance! Are the mid-cities thriving because they are more affordable right now? And what impact is the return to the city by the tree-changers and sea-changers having on the data? Cate explains... Cate shares some insights into investor-led sales, and she also talks about which buyers are soaking up these investor sales. Check out our Resources below for more. No real respite in store for renters in most cities, unfortunately. The Trio note that the vacancy rates are as low as they've seen in their time. At this stage, there is no real stimulus on the horizon that is likely to change this issue for renters. Dave cites some scary stats. But as Cate points out, household formation rates may return to former levels as house-sharers re-band, young adults move back 'home', and singles re-partner. Listing activity is up nationally, but the Trio discuss the drivers for this, the differential compared to past years, and the overall resilience of the market. Mike wonders whether the number of Perth sales could be initiated by vendors who have been practising Loss Aversion. Are they happy to sell, now that values have finally returned? And the opposite of Loss Aversion is a Distressed Sale Cate and Dave point out the fact that the states that the media report are 'in crisis' are not showing large numbers of distressed sales, relative to total listings. In Mike's words, "Media beat-up?" Maybe. Total housing lending fell 7.8%, but it's still 1.5% higher than a year ago. The 'mortgage wars' we saw in past months are not quite as rampant as they were. Dave proposes we'll see some competition in refinances. Will APRA bring down the buffer? Tune in to hear Dave's thoughts.... And... time for our gold nuggets... Cate Bakos's gold nugget: New listing activity for the remainder of the year..... most markets slow down for Christmas break. So, for anyone who is thinking that 2023 has a few exciting listings to come out; we only have a couple of week's new listings remaining. Dave Johnston's gold nugget: It's a good buying time in Melbourne and Sydney with rising stock levels. Dave feels that this 'purple patch' opportunity for buyers will continue. Show Notes: https://www.propertytrio.com.au/2023/11/13/ep-231-october-market-update/…
1 #230: Equity Unleashed - Property Planning & Borrowing for Renovations & Wealth Creation 49:52
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49:52Got a question for the trio? https://forms.com//form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM A great listener question prompts today's show. Sam writes; "We brought our 4 bed 2 bath mid century family in Greensborough area in mid 2021 for 1 mil approx. Since then the price has fallen then risen, and generic real estate apps pricing it at around the same value. The house is older style, has good bones but over time we would love to undertake a moderate renovation. The property is in a good family friendly/school zone, and with the right modifications there is immediate reasons to move from this property. We are getting close to 80%LVR, which I understand is a threshold for accessing finance. The original plan was to build our plan out with two more 600k investment properties." From accessing equity to balancing investing versus renovating, Sam has a handful of great questions for The Trio. Dave unpacks the question about unleashing equity. "Cash-Out" loans are something they could consider, and as Dave explains, equity access isn't limited to those borrowers who need to stretch to 90% loan to value levels. The question of mortgage insurance is an interesting one, and both Cate and Dave share some interesting insights, along with some exciting new loan products to suit today's market. The mechanics of accessing equity can vary. Dave explains how investors can sensibly approach this task, from examples, process steps, and timeframe expectations. The important point Dave makes relates to renovations, though. And how many listeners have heard of "as-if complete" valuations? Dave and Mike share some special tips. Investment versus lifestyle conundrum is something that strikes often, and Dave works through some of the questions that investors need to think through. Cate debates where she would invest the money. Cash-outs versus progressive drawdowns... Dave walks our listeners through some of the options. And is there a magic number for LVR's and equity access? Tune in to find out. Lastly, our gold nuggets…… Mike Mortlock's gold nugget: Identifying the strategy is essential. "Ruthlessly efficient decisions!" And Mike shares "SIC Building syndrome".... something to google! Dave Johnston's gold nugget: Some situations warrant a good property plan, and Sam's questions could constitute this. Informed and educated decisions are the best decisions. Cate Bakos's gold nugget: CMA's are just automated valuation tools that can sometimes get things horribly wrong. Algorithms can't always recognise important factors. Getting a proper appraisal with some science backing the data up is a great approach when working out what a property is genuinely worth. Show notes: https://www.propertytrio.com.au/2023/11/06/listener-question-renovate-or-invest/…
1 #229: All Things Apartment & Units Part 2 – Secrets to Selection Success, Finding Capital Growth, Land to Asset Ratios & Other Expert Tips 40:51
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40:51Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Cate kicks off the episode with some quirky title types that can be sometimes found for apartments. Particularly when considering an Art Deco era apartment, buyers need to brace themselves for Company Share and Stratum titles. They are generally cheaper products, but they come with danger for some borrowers. Cate explains the differences between these types and she expands on why buyers need to exercise caution when deposit funds on hand are less than 40%. Can Stratum and Company Share be converted to Strata? Yes, indeed they can, but it's not always straight forward and it's often more than the mere cost of the legal fees and the subdivision. Dave discusses the options that buyers have when it comes to lending policy restrictions for apartments. Small apartments can wreak havoc for some borrowers, as can apartments with commercial zoning. Dave ponders whether zoning will be altered for office spaces that are being converted to residential products. Mike's high rise apartment case study is alarming; and it goes to show how rules can be changed within a development. Owning an apartment in a complex is nothing short of complex! Cate talks about the elephant in the room; strata fees for off the plan apartments. It's a must-listen! Dave opens Pandora's Box when he asks Cate about the risks of high rise, high density properties. From cladding issues to to Air BnB issues, car stackers, special levies and location woes, Cate drags out her laundry list. Cate details what it is she loves about boutique blocks. The list is broad, but downsides do exist. Tune in to find out! And... what do you do if pets aren't allowed in an apartment block? Lastly, our gold nuggets…… Mike Mortlock's gold nugget: Too many investors think that low strata fees are attractive, but they need to think about their sinking fund schedule and the long term cost of ignoring important things. Cate Bakos's gold nugget: Cate also chats about low strata fees. It's a bit of a Goldilocks conundrum. Too low, or too high... there is a sweet spot when it comes to strata fees. Show notes: https://www.propertytrio.com.au/2023/10/30/all-things-apartments-part-2/…
1 #228: All Things Apartments & Units Part 1 – From Boutique to High-Rise, Uncovering Opportunity, Oversupply & Lender Restrictions 35:45
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35:45Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The Trio kick off this exciting ep by defining where apartments sit in the unit subset, and Dave shares with the listeners his favoured types of apartments. Some of Dave's criterion paves the way for a high-scoring gem... he shares some valuable must-haves and nice-to-haves. Highly sought-after, great allure, attractive land to asset ratio and unbeatable locations! Dave shares some startling facts about the recent historical capital growth performance of apartments versus houses. Core Logic did a study in August 2022 for the last thirty years across the two data sets. While the data showed that combined capitals exhibited 450% growth for houses, while units only clocked 307%, and for regions the house data set tracked 314%, and units, 213%. Cate discusses some of the reasons for this relative underperformance and she also chats about the mistakes that some have made in the past when they were aligned to one geographic base and ignored other gentrifying options with strong growth drivers. As Mike says, "Blue chip or bust? It doesn't make sense. Their model doesn't have flexibility." Will the older style apartments bounce back? Only time will tell, but Cate discusses the 'apartment renaissance' that she's noticed of late, particularly with an aging population. Mike cracks into the 1,000 Assets Study, specifically a trip down memory lane since 2016. Initially 47% of their investor study were purchasing units. Into 2018/2019, it dropped to 40%, and following this, a huge drop-off surprised Mike, with a recent figure of 18% recorded. Mike puts this down to a few factors, including the pandemic, horrific building defects and cladding issues, and the evolution of investor education. This, coupled with the increasing number of units per building has translated into heightened apartment avoidance for many investors. Unit complexes are getting bigger and the average count of apartments per building has risen from 61 to 110 over this period. Buyers do tend to red flag huge developments, particularly of late. "Your job is to help them grow wealth, not to save them tax" is one of Cate's sayings when it comes to accountants recommending new properties. Cate shares some of the common reasons why buyers have been more fearful about some apartment subsets in recent years. From off the plan risks to lender appetites, there are a few alarm bells that listeners should pay attention to. But the Trio talk about some of the positive changes they've seen across developments and designs of late. Cate talks about the elephant in the room; strata fees and expensive special levies. It's a must-listen! And Mike treats our listeners to a chapter on the Rental Loss Index and their subsequent study. From oversupply to high vacancy rates, this insight is particularly powerful for investor insight. And our gold nuggets…… Cate Bakos's gold nugget: Cate takes a leaf out of the Property Professor's handbook. She urges investors not to purchase off the plan, high-rise apartments. Mike Mortlock's gold nugget: Mike reminds listeners that not all units are bad! They can also have a decent Land to Asset Ratio. Show Notes: https://www.propertytrio.com.au/2023/10/23/all-things-apartments-part-2/…
1 #227: Market Update September 23 - Eighth consecutive month of national growth, and consumer sentiment has ticked up 52:35
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52:35Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The September data throws us a few mixed bag items! Dave shares his takeaway: listing levels and an interesting correlation. Cate identifies the eighth consecutive month of national price growth, and she draws listener attention to capital cities versus the regions. The Trio ponder the power of commuting distance to major cities. Is there a sweet spot ratio when it comes to listing volumes and price movement? Mike ponders... tune in to find out. What's happening with rents? And why is the pace of growth easing in so many cities? Household formation rates are changing and this is having an impact on rental growth. Cate shares a bit of insight into a recent journalist interview about this very topic. She also talks about the specific challenges within the rental market when it comes to families. On a related topic, Dave points out the pre-COVID, post-COVID and historical average rental vacancy rates and it's a particularly telling reflection. The Trio canvas the pace of this change and contrast today's yields to past decades. Things have evolved remarkably for investors over the past decade. "Time is your most powerful ingredient when it comes to yield", says Cate. Cate shares a Core Logic chart with Mike and Dave; it illustrates the importance of looking longer term at any city's performance. Both Perth and Hobart demonstrate opposing performances when 12 month versus ten year charts are contrasted. Some cities and regions are particularly cyclic and investors need to be aware of this. And finally, consumer sentiment; as Mike says "there's green shoots!" The major household item figures have notched back up above last month's dip. Have four consecutive months of holding rates contributed to a greater willingness to spend again? Dave has some great state-based figures to cite also. Housing finance is an interesting chart to ponder. Mike and Dave debate the impact of rates on hold, and Dave points out that the mix of owner occupiers to investors remains quite the same as recent historical levels. Importantly, he points out reductions in building costs. Related to decreasing costs, Cate includes the Freightos Baltic index in this monthly update. Dave and Cate pick out some of their most noteworthy segments from the September data... Listen in to hear what each spotted. Dave notes core inflation was down, yet headline inflation increased. This suggests that the markets could be anticipating another rate rise. What is this attributable to? Services, insurances and transport are among a few. Services inflation remains an inflationary problem. And... time for our gold nuggets... Cate Bakos's gold nugget: Cate shares context around the Freightos Baltic index; a whopping 62% reduction this week, compared to the same week a year ago. Dave Johnston's gold nugget: We're likely to hit our record market high again within a month or so based on the data and the rate of growth through 2023. Show notes: https://www.propertytrio.com.au/2023/10/16/ep-227-september-market-update/…
1 #226: Property Planning to Unlock Financial Security: Hold or Sell Decisions Through Rising Holding Costs & Modelling for Retirement Suc 46:24
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46:24Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The Trio enjoy fielding this second question from a loyal, long time listener, Alison. Only last year, Alison reached out to ask the Trio to weigh in on a stay/move question. Alison and her daughter were living in a recent purchase on the inner-side of Melbourne's Nepean Hwy, but missed their days by the beach in their former home. Alison had purchased a four bedroom townhouse on 'the other side', but aside from missing her beach life, she also found the home was too big for their needs. The Trio encouraged her to make the move back to their old stomping ground, and Cate recalled some of her happy days in her old 'hood in beachside Mentone too. Alison, now 47, took the plunge this year. She rented out the four bedroom townhouse and purchased a three bedroom unit back on the beach side of Mentone. This time, she writes to the Trio to ask about their thoughts on whether she should retain the four bedroom townhouse, or whether she should sell. With all of the changes to land tax and possible changes to planning laws, ongoing rental reforms and heftier interest rates, Alison is feeling a little bit nervous and wondering what the Trio think. She notes that her large townhouse is projected to be cashflow neutral in six years, but she is also mindful of the pressure she faces as a sole bread-winner. She is also managing a property in the Bass Coast and while her long term intention is to retain this property into retirement, Alison throws out the question to the team about her entire portfolio. "Do I hang on to the 4 bedder and wait until it has enough value to clear my ppr mortgage? Or should I hang on to it for the longer term- past 6 years until it is earning me money? I know it won’t be for a long time." First and foremost, the Trio congratulate Alison on her achievements and in particular, her ability to pivot quickly. According to the Australian Landlords Association, landlords own more than 80% of rental properties. Despite this significant contribution, it often feels like landlords are somewhat overlooked (and in some cases, trampled on) in discussions focusing on the challenges facing renters. Dave starts with Alison's property planning and shares some astounding projections. Alison currently owns $2.92 million worth of property at age 47. If Alison is able to hold onto these assets over a long term growth rate of 5% per year, by age her wealth position will be as follows: 60 - $5.36m 65 - $7m 70 - $8.8m 80 - $12.94m This gives listeners a glimpse into the power of time. Dave also delves into debt retirement and timeframes for cashflow neutrality.... tune in to hear more. The Trio then step into Alison's future rental returns and they also consider the necessary evils; land tax and other taxes. When it comes to property portfolio management, knowledge is power, and cashflow is king. Dave's overview is valuable and his preference for targeting capital growth assets comes to light in this listener Q&A. Tackling interest costs, short term cash shortfalls and buffers is a popular theme for this gripping episode, but what Cate shares in relation to rental growth is important for Alison to take note of. Like a strand of DNA, the rent does broadly grow in line with the rate of capital growth, but not always in perfect synchronicity. Gross rental yields are typically elastic, and Alison can look forward to enjoying long term rental growth at the same rate as her capital growth rate. From selling Bass Coast to selling the townhouse, holding all and working hard for more years, the Trio each share their thoughts, pro's and cons, risk mitigants, and they each give Alison some good food for thought. No divestment decision is easy for investors, and Alison gets three points of view in this Listener Q&A ep. And our gold nuggets.... Mike Mortlock's gold nugget: Mike shares a carrot and stick analogy. The stick is the tax, but the carrot, (the capital growth) is harder to focus on because the stick can hurt. It's important to remain objective. Dave Johnston’s gold nugget: "The starting point for any successful property plan is understanding the numbers and the long term implications for any options and choices that you have in front of you." Cate Bakos's gold nugget: Cate uses a real-life, personal example to share with listeners the power of time. Show notes: https://www.propertytrio.com.au/2023/10/09/sell-or-hold-listener-question/…
1 #225: Navigating the Fixed Rate Mortgage Cliff - Is It Real or Hype? Data Behind Headlines, Property Market Repercussions & Managing Risk 42:58
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42:58Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike bravely delves in to mortgages.... and dares to ask whether the mortgage cliff is a threat to our property market. Is it a beat-up? Or is it something we should be bracing for? Dave mentions the Y2K bug and questions the power of fear. "Miliions on Mortgage Cliff" is a headline Mike cites, and he plans to challenge the magnitude quoted. Mortgage stress, mortgage delinquencies and timelines are on Mike's discussion list. Firstly, Dave explains the concept of the fixed rate cliff, and sheds light on what is is that the media have many gripped with fear (or hope) about. It essentially hinges on a large volume of exceptionally cheap loans that are coming out of fixed rate and re-adjusting to today's variable rate. For many borrowers, their holding costs will be considerably higher this year. However, the Trio are determined to uncover the numbers, the percentages and the truth about the fixed rate cliff claims. Cate ponders why more people didn't fix during the pandemic and finds a good bar-tab comparison. "The determinants of mortgage defaults in Australia; evidence for the double-trigger hypothesis" is a paper that Mike stumbled across. Jokes aside; negative equity is strongly correlated with whether a loan is in arrears. The Trio define and unpack this for our listeners. From high LVR loans to reducing credit, Cate and Dave ponder the impact of regulator intervention. Dave points out that global economies vary greatly, and the pair share some examples of past lending practices that are not so commonplace today. While Mike has some fun with the special effects and the audio bleeps, Dave gets serious about shedding light on the real numbers when it comes to mortgage arrears. Rising property values and regulatory control over credit have certainly shielded our nation from broad arrears. Mike shares some stats and it's a compelling data set. Tune in to find out more... Cate asks Dave about refinancing activity. Despite the value of new lending deteriorating, the rate of refinancing is HUGE. The value of external refinancing is up a massive 21% over the last year. What are the reasons? Dave expands... it's intriguing to hear first-hand from a business owner about the behind-the-scenes of a mortgage broking business during COVID. "Mike, the numbers seem large..." Cate quizzes Mike about some of the stats quoted in relation to the expiry of fixed rate loans and Mike puts the numbers into perspective. It's a must-listen! The vast majority of lending is on variable rates and Mike's numbers-brain looks over the data and contrasts it to the claims. "There's a lot more to be positive about than the media lets on". Cate considers the plight of first home buyers who were not entirely prepped for higher interest rates, and she points out that two per cent was never sustainable. "One third of people have a mortgage, one third of people have paid off their mortgage, and one third rent". And Dave's overview of ASIC's position and the non-bank lenders is intriguing. We hope our listeners have gleaned some good insight from this ep. And our gold nuggets…… Mike Mortlock's gold nugget: While some new variable rate mortgage holders will be feeling some pain, spending is moderating and Mike holds hope that the 'mortgage cliff' is a bit of a beat up. He believes that rate cuts are likely to be around the corner. "It's not a cliff... that's my summary.' Dave Johnston’s gold nugget: Dave also feels that it's not a cliff either. It will likely have a 'slow tail' and there will be some pain, but not so much in the owner occupier residential market. Cate Bakos's gold nugget: Overall, there will be a mortgage cliff for some individuals, but Cate doesn't think that there will be advantageous buying conditions as a result. We have to consider the other forcefields; new arrivals (skilled migrants), a rapid increase in rents, and we also have to consider the impact of inflation on property values, and lastly; confidence from high employment. Show Notes: https://www.propertytrio.com.au/2023/10/02/breaking-into-buyers-agency-2/…
1 #224: Breaking Into Buyer's Agency (and Other Advisory Roles) - How to Start, Survive, and Thrive 45:54
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45:54Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Today's listener question opens up a very popular discussion topic.... buyer's agency. James writes in to ask the Trio about a change of career... from carpentry to Buyers Agency. He's unclear of the pathway into the industry and he's keen to know how to be a great Buyers Agent. Cate shares some information with our listeners, from state/territory based qualification requirements to online groups and portals. Firstly, Cate steps listeners through the training and licensing regimes in Victoria, separating out the formal classroom training from the 'apprenticeship'. The difference between a regular Buyers Agent and a great one comes down to dedication, mentorship and commitment to learning the technical skills required. The Trio discuss some of the barriers to entry and the challenges that budding Buyers Agents face; from study to the difficulties of running a business, salary expectations and lack of financial safety nets. Cate talks candidly about the hardest parts of the role for those who decide to embark on Buyers Agency as a career. "The three toughest things are.... the hours, the hours and the hours." Dave used to run a Buyers Agency with Property Planning Australia many years ago and he draws upon some of the key attributes that the successful BA's had. He outlines five attributes and relates them to a successful client journey. Dave asks Cate to articulate what she meant by 'responsibility and liability' that a BA carries. 'Caveat Emptor', as Cate describes it is the risk that a buyer takes on when purchasing a property. Cate also outlines some of the potential nightmares that need to be identified in the pre-purchase due diligence phase. She describes her work tasks as 40% communication with clients, agents, legals and others, 40% due diligence, 20% actually looking at properties. Cate wraps up the episode with some recommendations for budding BA's, along with some of the worst mistakes and poor assumptions some make. And our gold nuggets…… Cate Bakos's gold nugget: The three ingredients for a great buyers agent are: Commercial grit - be able to negotiate well and stare someone down Analytical ability - you need to be great with spreadsheets and data High EQ - you must be very good at putting yourself in someone else's shoes and genuinely relating to them Dave Johnston’s gold nugget: "Expect it to be bloody hard work. Just like any profession at the high end." Mike Mortlock's gold nugget: You can't disclaim away your area of expertise. Being cognisant of the reasons why people engage a BA is really important for every BA. Show notes: https://www.propertytrio.com.au/2023/09/25/breaking-into-buyers-agency/…
1 #223: Market Update Aug 2023 - Listings Jump, Who Said Rate Hikes Equal Property Declines, Capital-Regional Divide & Bad ‘Debt’ Rising 51:09
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51:09Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Now that our Stig (aka Sound Editor, Jamie) has sorted out our audio, we bring a new sound clarity to our listeners... we hope you enjoy! As our residential Australian property market ticks over to a ten trillion dollar value, Cate shares the August stats with our listeners and points out that the market is doing more than just demonstrating a recovery. The market is now moving reasonably solidly, and even Hobart's rate of contraction has slowed. While Dave is reluctant to call the bottom of the market for Hobart, he does point out the home value index, particularly for Sydney. Although he touches on the volatility of Sydney's performance over recent years. Dave highlights the sheer weight of some of our regions such as the Gold Coast and the Sunshine Coast, however he maintains that we have an increasing disparity between capitals and regions. Mike asks Cate about the mass exodus from city to regions, and whether there has been a reversal, but Cate clarifies her answer. "A regional city is very different to a coastal holiday hotspot." Tune in to hear more... Mike notes the crazy pace of change for unit rents, but Cate highlights the trajectory of Melbourne house rental growth and ponders the relationship between some of the tough reforms and taxes facing the southern city. Mike asks "How are rents still going so strong in Perth?" and Cate has a theory that links to Wage Price Growth. See our ABS chart to illustrate this. Moving on from the perks and perils of WA, the Trio turn their gaze to the rental vacancy rates. Mike ponders whether the vacancy rate has stabilised, but as Cate suggests, it can't get much lower. Cate shares the reality from the coal face in relation to listing volumes. "As quick as they can supply them, the buyers are grabbing them." Dave considers the impact of higher migration rates on the supply and demand ratio also. And as for the Westpac Consumer Sentiment Index... Family finance vs a year ago; a huge change for September. Things have tightened considerably and Cate debates whether the mortgage cliff has had effect, or whether 'talk' of the mortgage cliff itself is impacting sentiment. And finally, the major household item figures are declining in response to higher interest rates. Dave reports on the lending figures for August. Refinances hit a record high, once more and construction continues to tumble, demonstrating that we just aren't building new dwellings at enough pace. Dave note unsecured lending to find holidays is up, and this is not habit that we want to encourage. Mike shares a great saying that one of our industry friends, Pete Wargent voiced. "Spend less than you earn and invest the difference." Dave and Cate pick out some of their most noteworthy segments from the August data... Listen in to hear what each spotted. And... time for our gold nuggets... Dave Johnston's gold nugget: Time in the market versus timing the market... Dave shares what investors should be basing their decisions on. Cate Bakos's gold nugget: Buyer sentiment, stock levels, and upgrading/downsizing... should people buy first and sell second, or vice-versa? Show notes: https://www.propertytrio.com.au/2023/09/18/ep-218-july-market-update-rental-increases-are-slowing-2/…
1 #222: Futureproofing Your Home & Investment Portfolio – Mortgage Mastery & Property Planning Problem Solving 51:59
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51:59Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Today's listener question opens two fantastic conversations, each about two very differing scenarios. Nick (34) and his wife (33) have not only achieved a great start with a principle place of residence loan being fully offset, but they have other properties in their portfolio too. Cate congratulates them on this achievement, particularly given their ages and the fact that they have a baby too. They have been cognisant of their cashflows and they have saved and managed their money superbly. One twist to the story, however is that some of the total offset funds belong to Nick's parents. While it helps with the interest repayments, the Trio talk about some of the challenges and risks that can result from arrangements like this. From personal interest repayment arrangements to obligations and burdens that can be created, Cate talks through the emotional difficulties that some can face. And if the parents decide to ask for the money back, will this negatively impact the couple's future plans. Dave points out the importance of flagging a loan from parents as a sum that could be repayable on demand. He also unpacks the way that lenders view such arrangements, and maintains a pragmatic view for our listeners. Nick also asks the Trio about converting their principle and interest rate to interest only... a perfect segue for Dave to discuss the merits of an interest only loan arrangement for disciplined investors. Preservation of the loan balance leads to higher tax deductions, greater control of their money, cash buffers to go towards the future home, and enhanced choice going forward. It's easy, but it's not simple and so many people miss this incredible strategy. But.... it's only for disciplined investors. Preservation of the loan balance leads to higher tax deductions, greater control of their money, cash buffers to go towards the future home, and enhanced choice going forward. Mike prompts a question about refinancing to increase tax deductability and Dave and Cate shed light on "The Purpose Test", and the rationale that the ATO apply when it comes to deductable debt. The Trio's finale for Nick and his wife relates to their question about when and where they should buy. Cate says, "It's a very ambitious goal, and don't let me separate ambition from reality. I think that the two can go hand in hand when you've got a great plan." Dave reinforces Cate's point about the importance of planning and he offers some good questions for them to consider. Mike opens our second listener question from an Adelaide family... Jess has three properties with her husband George. They have tackled moving home since having a child, and they ask the Trio whether they should consider selling down a property to renovate a property within their portfolio. They also consider two other options; one revolving around avoiding capital gains tax. Cate speaks about the importance of happiness when it comes to the family home, whereas Dave talks about the need to consider postponing the move into their family home. He talks about setting up the goals in stages, alongside a robust financial plan, and Dave spells out each of the five important stages. Cate shares two real life experiences for our listeners that involve a two and three step renovation that moderates the expenditure and the risk of overcapitalisation. From investor concerns, dwelling types that investors wish to invest in, states they'd like to invest in, and investor intentions over the following year, the survey findings show some intriguing predictions. We hope you have enjoyed this episode. And our gold nuggets…… Cate Bakos's gold nugget: Cate likens a long term debt reduction strategy to that of a Grand Prix. From coordinating break times, fueling up at pit stops, and maintaining a long term focus, it shouldn't be a short, face race. Dave Johnston’s gold nugget: The lifestyle vs investment conundrum is such a consideration. People have to decide how much, ultimately they will put into a family home. It's unique to every family and every couple, and it takes clear communication and patience. Mike Mortlock's gold nugget: The end goal cannot be pushed too far away. Is buying an investment property pushing the family home purchase too far down the road? Shownotes: https://www.propertytrio.com.au/2023/09/11/futureproofing-your-home-and-investment-portfolio/…
1 #221: Analysing Market Mindset – Gun-Shy Buyers, Developer Exits, Houses vs Units & Investor Concerns 57:35
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57:35Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Cate enjoys playing host again, this time as the trio unpack the API survey, (Australian Property Investor magazine). They reminisce about the good old days, when the mag used to hit the shelves each month and they'd earmark articles, celebrate their own appearances in the magazine, and collect the publications, filled with post-it notes. The gap in performance between houses and units has closed a little recently and Dave notes that the data doesn't really capture this in the survey. "In fact, houses are the preferred intended purchase over the next 12 months among 37 per cent of respondents, a seismic shift from the mere 21 per cent with that intention just three months ago." From land to asset ratio to cultural housing preferences, there are a few reasons why houses are still preferred dwellings. Mike addresses the issue that developers are currently facing as they are deterred by building sector cost woes. Numbers have declined from 16.5 per cent to just 9 per cent of those planning to procure a property. Mike shares how he expects this indicator to play out in the market now that new dwellings have become a headline topic for every second political story. Another interesting question that the survey polled related to the transacting activity in the last year. The proportion of people saying they’d made no property moves in the past year soared from 13 per cent to a remarkable 30 per cent in just three months.... not surprising given the interest rate moves, but Dave tackles this question and talks about some of the challenges buyers face beyond funding costs. The survey also found that of the 70 per cent of respondents who transacted on property in the past 12 months, 63 per cent of those did so on more than one property. Mike discusses the obvious opportunity that many investors took advantage of during this time. Interest rates remain, together with the associated difficulties caused by a lack of finance availability, the biggest concerns confronting survey respondents. Dave addresses this issue head on and he and Cate discuss how they have seen purchasing decisions, buyer motivation (and timing) impacted by RBA rate decisions. Their insights may surprise our listeners... Cate shares the survey findings around decisions to buy and decisions to sell. Surprisingly, it's the buyer camp who are most impacted by rate increases. This is despite record low listing activity during this period. Mike considers the RBA and the respondents' feelings about the performance of our Reserve bank. A troubling 47 per cent of respondents gave the RBA a fail mark for having performed to a poor or very poor level. The amount that gave the RBA a mark of average or above was 54 per cent, well down from the 61 per cent of last quarter. Tellingly, the big shift was in the proportion that rated the RBA’s efforts as very poor, which took off from 15 to 25 per cent in the past three months. The trio pick apart some of the key mistakes that our former RBA Governor made. Rents continue to be a heady topic. Cate and Dave break down some of the findings and they ponder the negative views of investors within the community, and how investor disincentives are playing out now. The Trio often talk about the Westpac consumer sentiment figures on property recently, but this survey highlights some different views; Respondents believed that there is plenty more upside in the property market, with 72 per cent expecting property prices to increase nationally, while 55 per cent believe regional property prices will increase. Time will tell! From investor concerns, dwelling types that investors wish to invest in, states they'd like to invest in, and investor intentions over the following year, the survey findings show some intriguing predictions. We hope you have enjoyed this episode... and especially with some of Mike's 'easter eggs'. And our gold nuggets…… Dave Johnston’s gold nugget: If we look at the things that are putting people off buying, it's the external factors. "The most important economy is your own economy." Mike Mortlock's gold nugget: Mike talks about the disparity out there right now in relation to buyer sentiment. "If you're in a position to purchase a property, now is the time to do it." Shownotes: https://www.propertytrio.com.au/2023/09/04/analysing-market-mindset-the-api-survey/…
1 #220: Decoding RBA Cash Rate Adjustments: The Data Behind the Decisions, Property Market Impacts & the Puzzle of Rising Property Values 58:14
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58:14Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Cate enjoys playing host again and she congrats Dave on the preparation of this challenging set of eps. Simplifying difficult concepts is one of the hardest things to do when presenting information to others. What data does the Reserve Bank monitor when deciding whether rates should be increased? Household consumption - from the Wealth Effect to COVID savings giving rise to YOLO, Dave suggests that this driver is only just starting to come down. Mike recalls the supply chain woes and the cash stimulus that got us to where we are today. Given that most people's wealth is tied up in property, it is of little surprise that spending went hand in hand with property value growth following the post-COVID price surge. Labour markets - Dave describes what this term really means, and he highlights the relationship between unit labour costs (productivity), unemployment and wages growth. "If wage growth is higher than inflation, then our spending power will increase. But we have to get a little bit better at our jobs each year for this to happen," says Dave. Neutral/Preferred Level of Unemployment and Cash Rate - What impact does the unemployment rate have on inflation? Tune in to find out.. Productivity - From migrant worker initiatives to the Australian Productivity Commission, Mike and Dave cover off the importance of productivity. Mike shares an example about his widget factory with our listeners to illustrate an interesting point. "Long term productivity growth is the key driver of our living standards," points out Dave. Overseas Economies and Interest Rates - From economic interdependence to the flow of capital between countries, there are plenty of factors that are important to note when it comes to overseas economies. Rising inflation, interest rates, wage costs, and unemployment. ... The trio talk about how these might negatively impact the Australian property market with regards to purchasers and renters. Why have property prices been on the rise despite all of the negative factors weighing on the economy? Dave takes our listeners through nine reasons, (and drivers) that explain why our property markets have been so resilient during tough economic times. What could cause prices to rise again, even if they start to plateau? The Trio ponder this together. We hope you have enjoyed this technical episode. And our gold nuggets…… Cate Bakos's gold nugget: "For any listeners with interstate property, it pays to scout around for some good tradespeople." Dave Johnston’s gold nugget: Prices are starting to stabilise. "Your trend is your friend" states Dave, but what happens once prices have plateaud? Dave shares his predictions for economic activity and how this will translate into property price movements. Mike Mortlock's gold nugget: Mike reminds listeners that they don't need to master economic data, but they should at least pay attention to RBA meeting notes, what's happening with the cash rate, and what the RBA is looking at. "....but if you don't want to subscribe to the RBA, just come to the Property Trio". We have resources available on the Resource tab of our website. Shownotes here: https://www.propertytrio.com.au/2023/08/28/decoding-the-data-behind-rba-decisions/…
1 #219: The Role of the Reserve Bank of Australia (RBA), Why they Target Interest Rates & Why we Need Inflation, Just not too much! 50:52
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50:52Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Cate hosts this this exciting second trilogy episode and the Trio enjoy working through some of the burning questions about the RBA and their responsibilities, actions and challenges. What is the RBA’s mandate and how does it relate to inflation? Dave kicks off with the answers. FIrst, stability of the currency keeps Australia's purchasing power optimised, and on par with other economies in the world. Secondly, maintenance of full employment in Australia, "Everyone who wants a job, has a job," states Dave. And third is the economic prosperity and welfare of the people of Australia. These responsibilities are within the RBA remit: Monetary Policy: The RBA uses monetary policy tools, primarily through adjusting the official cash rate, which influences short-term interest rates and helps control inflation and support economic growth. Currency and Payments System: Issuing and managing the Australian dollar currency. It aims to maintain confidence in the currency and ensure the smooth functioning of the payments system, which involves overseeing the operation and stability of Australia's financial infrastructure. Financial Stability: Promote the stability and resilience of the financial system. It monitors and assesses risks to financial stability, implements policies and regulations to address those risks, and collaborates with other regulatory bodies to ensure the overall stability of the financial sector. Economic Research and Analysis: Conduct economic research and analysis to gain insights into the Australian and global economy. This research informs the bank's decision-making process regarding monetary policy and other areas of its mandate. Banking Services: Provides banking services to the Australian government, other financial institutions, and some international organisations. These services include managing the government's bank accounts, issuing government debt, and facilitating the smooth functioning of the financial system. 2. Why do we need inflation? Encourages Spending and Investment: Inflation can incentivise consumers and businesses to spend and invest rather than hoard cash. When people anticipate rising prices, they are more likely to make purchases and invest their money in assets or projects that have the potential to generate returns. This increased economic activity can stimulate demand, drive production, and contribute to economic growth. Supports Debt Repayment: Inflation can make it easier for borrowers to repay their debts. When there is inflation, the value of money decreases over time. As a result, borrowers can repay their debts with money that has less purchasing power compared to when they initially borrowed. This can provide relief to individuals and businesses burdened with debt obligations. Facilitates Wage Adjustments: Inflation can help in wage adjustments and maintaining labor market flexibility. As prices rise, wages tend to adjust to reflect the increased cost of living. This flexibility allows wages to respond to changes in supply and demand conditions in the labor market. It can help ensure that workers' wages keep pace with the overall price level and maintain their purchasing power. Encourages Long-Term Investment: Inflation can incentivise long-term investment over short-term speculation. When inflation erodes the value of cash holdings, investors are more likely to invest in productive assets such as stocks, bonds, or real estate to preserve or grow their wealth. Long-term investments contribute to capital formation and can support economic development and productivity improvements. Provides Monetary Policy Flexibility: Inflation allows central banks to use monetary policy tools to manage the economy. By adjusting interest rates, central banks can influence borrowing costs, control money supply, and steer the economy towards desired outcomes such as price stability and sustainable growth. Inflation provides a reference point for central banks to set their policy rates and implement appropriate measures. 3. Why the target for inflation is set at 2-3 per cent? A target range of 2-3 percent inflation is often considered a good target for central banks for several reasons: Price Stability, Facilitates Monetary Policy, Avoids Deflationary Pressures, Supports Real Income Growth, and International Consistency. The trio ponder these various reasons and apply some relevant examples. 4. Why do we make cash rate adjustments? Reducing the demand of goods and services in response to the spending that has pushed prices up at a fast rate. In addition, we are controlling the supply of money via bond management are two of the reasons, according to Dave. Dave sheds light on some of the RBA open market operations, and makes the point that fiscal policy must work in tandem with monetary policy. Mike shares with us all his explanation of Quantitative Easing, aka "Money Printing". He demystifies this concept superbly by outlining the drivers for QE, the purpose of QE, and some of the outcomes of QE. The unintended consequences are something we need to consider and Cate presses Mike on this. 5. Outcomes from rising rates to reduce inflation Reduced Consumer Spending: Increasing interest rates make borrowing more expensive for consumers, including mortgages, auto loans, and credit cards. Higher borrowing costs can discourage consumer spending, particularly on big-ticket items, leading to a decline in consumption. This reduction in consumer spending can have a dampening effect on economic growth Decreased Business Investment Higher interest rates can also raise the cost of borrowing for businesses. This can discourage investment in new projects, expansions, and equipment purchases. And our gold nuggets…… Dave Johnston’s gold nugget: Through understanding the risks that sit in the economy, investors can be better placed to understand the market long term. The benefits of long term planning hinge around managing risk. Mike Mortlock’s gold nugget: "You can see that there's a very complex interplay between things", and Mike believes that every property investor should familiarise themselves with the RBA meeting discussions. The implications discussed in the RBA meeting minutes do have a real effect on property investors. Knowledge is power when it comes to making long term property decisions. Shownotes: https://www.propertytrio.com.au/2023/08/21/managing-inflation-through-targeting-interest-rates-and-the-necessity-of-economic-inflation/…
1 #218: Market Update July 23 – Rental growth slows, will rent freezes fan the flames, exploring the office exodus & capitals thrive 43:42
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43:42Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Cate points out that the capital cities have outperformed the regional cities of late, and Dave draws our listener's attention to the sheer performance of Brisbane, Adelaide, Perth and Sydney when contrasting the median value ladder places. Despite the upturn, many major cities are still beneath their cyclical highs. Cate's discussions at the coal face signal that some of her listing agent friends are quite busy with their appraisal activity - always a precursor to higher listing volumes. Mike quizzes Cate on this leading indicator and it's something all buyers can take a pulse on when chatting to agents, but data is also available on CMA report generation; a great relationship to note between appraising and listing. And Mike circles Perth as a discussion point. Dave and Cate are reluctant to suggest that Perth's outperformance will sustain longer term, but both agree that the combination of growth and yield hold Perth in a 'watch this space' category. Mike quizzes Cate on the movement from the regions back to the city and Cate corrects Mike's assumption. The viability of country-life hasn't necessarily changed for those who moved away from the city during lockdowns, but now that bosses are calling their staff back to the office, many buyers are buying a 'second home' option as their city pad. Cate shares a recent client's purchase; a $365,000 unit in Melbourne's Footscray. With an appraised rental of $380pw, an asset like this demonstrates that 5%+ returns are possible in Melbourne. Cate's concerns about depleting rental stock are attributed to a few factors, including higher divorce rates and city-pad, part-time dwellers. Dave speaks about the rate of rental increases easing, but still cautions the state governments to consider the negative consequences of rent freezes. Cate discusses the need to consider each market separately, given that different drivers and threats are destabilising some markets more than others. "If you are a tenant and you're copping a 15% rental increase each year, you'll absolutely feel it", says Cate. The Trio discuss the fact that growth in national rents reached 35 consecutive months in July - the longest stretch since 2013. They also chat about 'optimal' vacancy rates and all agree that 2-3% signifies a healthy rental market. Cate threw in an Office Vacancy chart to share with Mike and Dave. The chart shows some significant vacancy rates (circa 13%) and Cate explains why office vacancies are so contrasted from residential vacancies. Tune in to hear why.... Dave and Cate discuss the Spring market and ponder whether buying conditions will improve during this season. Cate circles October/November as her ideal buying months for 2023, and notes that listing numbers have improved through the months of July and August. As the "All listings" chart shows, however, buyers are still soaking up the listings and buyer demand still outstrips seller motivation. The Westpac Consumer Sentiment data is out, and it's somewhat puzzling for the Trio. "Time to buy a dwelling" is slightly higher, while sentiment shows that house price expectations show that we expect house prices to go up. "I wish I could, but I can't" suggests Mike as a good explanation for this unusual set of data. Cate's 'toys' index has still slightly gained. Trips to Europe seem to be the flavour of the day for a lot of people. Lastly, Cate shares some extra observations for our listeners; an uptick in first home buyer activity, low dwelling approvals, reducing distressed listings, and a troubling increase in personal (unsecured lending). These all tell an interesting story in their own right. Tune in to hear more. And... time for our gold nuggets... Dave Johnston's gold nugget: Dave talks about some of our two-speed markets, citing the Gold Coast, South-East Tasmania and Newcastle/Lake Macquarie as high performers, and he delves into some slow performers in Victoria. There really are markets within markets! Cate Bakos's gold nugget: Cate anticipates higher listing figures in Spring and feels that the 2023 opportunity for buyers could match late 2022's. Show notes here: https://www.propertytrio.com.au/2023/08/14/ep-218-july-market-update-rental-increases-are-slowing/…
1 #217: The Inflation Conundrum - Unravelling its Causes and Consequences 41:48
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41:48Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Inflation... What is it, why is it a problem and what causes it? Mike hosts this this exciting special episode and the Trio work to demystify this economic phenomenon, along with some of the terms that we often hear in the news. Inflation is also known as the CPI, short for the Consumer Price Index, because this is the index that records the changes in pricing of all the goods and services in the economy. So, if someone says CPI they are referring to the rate of Inflation. As Dave points out, wages growth is also a significant part of the picture and our RBA is attempting to engineer our wages growth to slightly outstrip economic growth, (aka inflation), our standard of living will then improve as our incomes outstrip the cost of goods and services that we are buying. Bringing economic growth back into the target band is a delicate balance as our RBA aim to avoid a recession and aim for a 'soft landing', as Mike puts it. Dave steps through our listeners in a structured, easy-to-comprehend way. In General - Inflation can be caused by several factors, including these four key ways which we will place in the order of which they have occurred in current times: 1. Monetary Inflation: When there is an increase in the money supply in the economy, it can lead to inflation if the production of goods and services does not keep pace with the increased money supply. This is often influenced by central banks and their monetary policies. Covid times this has been the massive government stimulus to infinity, money printing and reducing rates to zero or below. Historically inflation has sat at 2.5%, although our inflation levels prior to 2021 were particularly low. In fact, as Dave points out, inflation was concerning on the 'low side' at this time. Productivity was the key concern at the time, and for six years our RBA held rates at very low levels to stimulate spending. Dave walks listeners through the hefty rate of inflation increases that we've been experiencing for the past 18 months and Cate points out some important context about other previous low interest rate periods. Mike quizzes Cate on her experience as an investor spanning more than two decades and Cate shares her teenage memories about the 1988/1989 impact on her family during a really tough economic period. Mike tackles some of the pressures the RBA face in relation to fiscal policy (government) vs monetary policy (the bank). Dave shares with our listeners some of the ways that our government influenced the economy, particularly through the COVID period. From quantitative easing to the provision of the funding facility to the lenders, over-stimulation is now the issue that the RBA are now tackling. Cate steps through CPI from the chart below and she sheds light on some of the non-permanent inflationary pressures, and also those that can be attributed to external factors such as the Ukraine invasion and COVID lockdowns. Mike touches on "YOLO", (you only live once) challenges following the lockdown and concedes that our appetite for lifestyle experiences such as travel are working against the RBA's actions to tame inflation. As Dave coins it, "Revenge Spending". 2. Cost-Push Inflation: This happens when the cost of production, such as wages or raw materials, rises and businesses pass on those increased costs to consumers in the form of higher prices. Covid times this was the breakdown of supply chains due to closed borders, the lack of availability of workers and reduction in trust between many western countries and China in particular, then the Russian invasion of Ukraine all pushing up the costs of supply. The prices of goods increased strongly as retailers pass through the costs associated with supply chain disruptions and higher shipping prices which are now starting to subside. Meanwhile, the cost of building a new house – the largest component of the CPI basket – increased at its fastest rate in more than a decade due to a boom in construction activity (due to government stimulus for building new dwelling and renovations for the first time ever) and record inflation in building material prices. 3. Demand-Pull Inflation: This occurs when the demand for goods and services exceeds the available supply, leading to an increase in prices. In the March 2023 quarter - Services annual inflation recorded its largest annual rise since 2001 is the real worry now for the reserve bank. “This happened due to all the stimulus, increased personal savings, growth in property values and desire to travel again and revenge spend that happened in 2022 and into 2023.” 4. Expectations: If people anticipate higher future prices, they may adjust their behaviour by demanding higher wages or raising prices, thereby contributing to inflation. “This is the final phase that the reserve bank is very wary of which leads to a wage price spiral, entrenched expectations for prices, especially for services to continue to rise at this faster rate”, says Dave. Mike shares a frightening example of post WW1 hyper-inflation in Germany. Four to five marks to the US dollar increased to a trillion marks to the US dollar. Mike regales some other horrendous real-life stories. Cate and Mike chat about the impact of a high-inflation environment, from stagflation to vulnerability for those who don't own assets. Cate talks about the contingent who aren't likely to be negatively impacted by inflation. What is the negative impact inflation has on the economy and individuals? While moderate inflation is considered a normal feature of a healthy economy, high or hyper-inflation can have adverse effects. It erodes the value of your savings relative to cost of goods, services or asset prices such as housing, Reduces purchasing power because every dollar you earn is reducing in value relative to the prices of goods and services, Distorts economic decision-making meaning governments and individuals start to make different, unusual or abnormal decisions, and This can create economic instability and lead to a reduce standard of living for the country citizens. And our gold nuggets…… Dave Johnston’s gold nugget: we have to be prepared to deal with changing financial circumstances on our journey... from those we can control, to those we can't. Succeeding, (and thriving) all comes down to your risk mitigation strategies and buffer accounts. We need to understand these things are a possibility, and we need to plan for them. Cate Bakos's gold nugget: We are going to share our comprehensive show notes in our Resources tab on our website here. Show notes: https://www.propertytrio.com.au/2023/08/07/the-inflation-conundrum-unravelling-its-causes-and-consequences/…
1 #216: Valuing Uniqueness - Appraising Properties with Special Features or Drawbacks 57:57
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57:57Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Dave hosts this episode and opens by suggesting that appraising property requires a delicate balance of art and science. Appraising a property: How do we discount or add on a premium when something noteworthy is impacting the property positively or negatively? How do we apportion a premium or a discount when a feature is a stand out or a significant detractor? And how do we know how much to apply to the premium or discount? Dave quizzes both Mike and Cate how they tackle this very question. Dave delves into positive attributes first. Notable designers or architects, and Cate shares a reference to Eltham's Alistair Knox New works/extension/renovation Mike shares the different methods of valuing, from recent comparable sales analyses to the summation method. Cate discusses the importance of comparing apples with apples when it comes to attributes, such as isolating specific zones when selecting recent sales. Quiet court Train station within 200-500m Attractive zoning (ie. growth zone vs standard, residential zoning) North facing rear Great views Ultra wide block (from a development point of view) Ideal floorplan (let’s use cottages as an example) Heritage signfiicance Dave then moves to the detractors. Properties in serious need of repair South facing rear Challenging zoning Dave sheds light on some of the lending challenges that buyers will face with some of these negative attributes, in particular, challenging planning zones and tight internal floor areas. Main roads High voltage power lines Train lines Ugly surrounds (ie. industrial buildings) Tough overlays (ie flood, bushfire) Bank lending policy issues, ie. floor area Significant strata fees or high special levies Brick cracking Obvious problematic neighbours Flight paths Development sites next door/over the back fence that could threaten privacy and natural light Restrictive covenants Houses with sordid histories Compulsory acquisition possibility Easements in awkward spots How do the Trio suggest buyers can apply a discount or a premium when a property is impacted by any of these? Should buyers a rule of thumb percentage value-change for any of these? Cate's answer may surprise our listeners... tune in to find out. Mike discusses the difference between Quantity Surveyor due diligence and Buyers Agent due diligence, but he does need to take into account some attributes such as poor quality soil, flood or fire overlays, and restrictive covenants when generating reports. And lastly, Cate shares how buyers tend to approach compromised properties and the risks of selecting bad quality off-markets. Not forgetting Pete's famous analogy, Cate cites his bad bag of apples quote. And our gold nuggets…… Mike Mortlock’s gold nugget: Mike is struck by the exhaustive list that Cate shared in this episode and he implores buyers to catalogue the list each time they check out a property. Cate Bakos's gold nugget: "When you buy a bargain, you sell a bargain." Show notes: https://www.propertytrio.com.au/2023/07/31/valuing-uniqueness-appraising-property-with-special-attributes/…
1 #215: Property Puzzle - Piecing Together Your Next Purchase Strategy 47:57
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47:57Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The Trio decided to celebrate Bastille Day by giving this listener a pseudo name; Amelie. Our listener sent through a multitude of great questions and the trio decided to circle in on Amalie’s challenge for this episode. Amelie* is in her mid-twenties and she co-owns a property with her brother in Sydney’s west. She’s a good saver, has a good job and she is keen to purchase her second property. She has a few ideas, but her brother has very different thoughts. With such an important person in her life creating a bit of a debate, Amelie wonders if she should reconsider her original plans. From units versus houses, to market timing, first homeowner grants, alternative cities and co-ownership, she has quite a few variables that her brother has challenged her with. Amelie puts her conundrum to the Trio and asks for some help. The Trio broke Amelie’s questions into seven main segments; 1. Timing the market vs timing the market. Dave’s general rule is “buy when you’re ready.” It is very difficult to time the market, and lost time can be costly. The clear steps that Amalie needs to initially take hinge on getting great, specialised advice. After all, we don’t even know what Amelie’s borrowing capacity is as this stage. Cate asks, “Where do you want to live? And how quickly do you want to get there? Are you happy renting/living at home for now?” Mike suggests that Henri is “trying to get a bit too fancy with timing cycles.” 2. House versus unit. Although the twenty-year price history demonstrates that median house price growth has outperformed median unit price growth, Dave points out that this is general data only, and there are markets within markets. Unit buyers need to be cognisant of the negative impact of buying new, along with the associated strata costs. Capital growth is directly linked to a high Land to Asset Ratio, and it’s integral that investors give their portfolio the best chance of high performance by noting this important ratio. Other special attributes, particularly for units in Sydney include; - views/vista - quality street - great suburb - boutique block - scarce, older style block Dave also notes that Sydney in particular is quite different to other cities when it comes to apartments because Sydney offers the highest proportion of apartments and units in the nation. Cate has concerns about Amelie’s affordability comment. She focuses on the need for thorough due diligence to avoid surprise costs and cashflow threats. Cate also sheds light on the challenges that borrowers face when co-borrowing, particularly in relation to ‘joint and several’ borrowing. Mike shares concerns about Amelie’s safety net ideal and he discusses the risks that could impact family relationships when cashflow gets tight and parents are asked to help financially. 3. Buying in the city you live in. Dave talks about the difference between buying in a familiar city, versus buying in the city where you ultimately plan to live. Gaining a foothold in the market where you wish to live is a great risk mitigation strateg. Hedging against another location underperforming is the path that Dave is going down. Cate needs to see Amelie’s borrowing capacity before she can agree with Dave’s approach. If Amelie’s borrowing capacity is too insufficient for a quality Sydney property, she may well be better placed to consider alternative cities. The Trio all agree that timeline is an important consideration for Amelie. 4. Outer-ring As Cate points out, investors will get a different result in an outer ring and the negatives include; - tougher socio-economic demographics - the threat of low scarcity and surrounding house and land package areas And Cate suggests that contrasting an inner- or middle-ring location within a nearby regional city against the Sydney outer-ring options is a valuable exercise. Dave shares some of the merits of such an approach too. Tune in to find out why this could be a great alternative. 5. Rental yield. This consideration is driven by current cashflow requirements, future acquisition projections and Amelie’s ability to increase her income over time. Rental yield can’t be overlooked, otherwise the risk of an unplanned sale (or co-ownership) will rear it’s head. 6. First home buyer schemes. Sometimes saving $30,000 now is very valuable for a buyer, but for someone like Amelie who has good savings on hand, the scheme may cost Amelie far more than the $30,000 of upfront savings. The Trio talk about the false economy that is sometimes represented in the quest for pocketing the grants or discounts. “It’s a bonus, not a driver”, says Cate about the opportunity cost. 7. Buy and hold versus selling earlier. The Trio unanimously agree that Amalie’s brother’s recommendation in relation to selling is not the best advice for her situation. Dave talks about the importance of understanding how she can use equity to leverage and get into her next property. And our gold nuggets…… Cate Bakos’s gold nugget: Cate draws on her client experience over the years and notes that many have ultimately unwound their co-owned property structures with family members. This is due to a combination of joint and several lending restrictions and changing personal plans. Mike Mortlock’s gold nugget: Mike congratulates Amelie but he implores her to think about where she wants to live and to develop a good strategy that incorporates her principle place of residence. Dave Johnston’s gold nugget: suggests that Amalie needs to figure out her price point with a strategic mortgage broker and then consider how her next purchase fits within her property plan. Show notes: https://www.propertytrio.com.au/wp-admin/post.php?post=490&action=edit…
1 #214: Market Update June 2023 - Interest Rate Increases Yet to Dampen the Market, Sydney Soars, Investor Exodus & Regional Surprises 50:40
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50:40Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike kicks off our episode with the fresh announcement of our new RBA Governor. The trio wish Michelle the very best in her new role, and they also chat about the departure of Philip Lowe and the key mistake that likely drove the change in Governor. Mike points out that the overall national increase of 1.1% is not really a national story and Cate reinforces that the strength of the Sydney market is driving much of this positive growth data. Dave also draws regional performance to our listeners' attention. The capital cities are outperforming the regions; a twist that we have been anticipating but haven't seen for quite some time. The pace of growth across the board has slowed down, however, and this could be apportioned to the continued rate rises through June. Internal migration patterns have normalised; our rate of moving to the regions has certainly calmed down since COVID lockdowns. In some cities (such as Melbourne) we are seeing some elasticity and people are returning to the city. Cate shares an interesting observation from her coalface. She is taking enquiry from quite a few Sydneysiders who are either investing in Melbourne, or moving to Melbourne. The disparity between the two biggest cities is greater how than historical ratios, and Sydneysiders are obviously seeing value in the Melbourne market now that the differential is higher. Cate also mentions that established, boutique units in the Melbourne market seem to be demonstrating capital growth too, and this is something that Melbourne hasn't experienced for over a decade. Mike has been chatting to many business owners and property managers about the proportion of sales that are investor-owned properties. Rent rolls are eroding as many investors opt out of property, and anecdotally this is obvious across the board in many cities, but particularly in Victoria. "The sales department are basically setting fire to their rent rolls...maintaining rent rolls as a steady source of listings," says Mike. The Trio look at the 'days on market' data but Cate uncovers a key reason why this data isn't neccessariliy a perfect reflection of buyer/seller demand. In auction-centric markets, agents have strong control over the type of campaign that a property can be sold by. Auction campaigns have a usual four week lead time until the sale date, and surely this data skews the data. "It's not an organic reflection; it's deliberately controlled by agents." Mike prompts the underquoting debate also... perhaps this is a good topic for another episode! Stay tuned. Hobart and Canberra are the two capital cities that have bucked the trend and had strong listing activity. This supply and demand imbalance is reflected in the growth data, unsurprisingly. Mike asks Cate and Dave about distressed listings, and despite the media suggestions that the fixed rate cliff and the increased interest rates could give rise to distressed listings, Cate points out that this is not occurring, and the data supports this. And the CoreLogic findings for new listings vs total listings is telling. New listings are still well below the historical five year average, however the total listing figures have nose-dived. This illustrates an increased buyer appetite for old listings, (those with greater days on market than 180 days), a sure sign that buyers are outstripping sellers. Mike asks Cate to comment on the vacancy rate data. A slight amount of easing is evident in some markets, but as Cate points out, "there are markets within markets" so the data is not entirely reliable. Melbourne is still surging with house rents, and units remain tough propositions for renters. Dave suggests that migration (both internal and overseas) are still contributing to the rental issue. Mike does challenge the relationship between new arrivals and unit rents; it's an interesting conundrum. The Westpac Consumer Sentiment data is out, and it's somewhat puzzling for the Trio. Cate's 'toys' index is a concerning figure. We are still spending, and the increasing interest rates haven't curtailed our attitudes towards spending like our RBA wish they would. As Mike says, "It's the buying-stuff activity that is keeping our inflation high." Lastly, Dave shares some clever data about purchase activity. It might surprise our listeners! Tune in to hear more. And... time for our recaps this time, (because Mike forgot about gold nuggets).. Dave Johnston's gold nugget: Dave summarises the market by saying price growth is slowing down, but it's still positive. He also touches on investor-led sales and he hints at supply of new listings increasing... happy news for the buyers out there. However, upgrading remains a challenge for a large cohort of buyers. Cate Bakos's gold nugget: We have a segmented market and the renovation projects remain a significant challenge while builders and trade materials are in limited supply. Mike Mortlock's gold nugget: it's an uptick in sentiment, and an uptick in investors getting out of the market. Show notes: https://www.propertytrio.com.au/2023/07/17/ep-214-june-market-update-what-is-driving-interstate-interest-to-melbourne/…
1 #213: Exploring How Government Policy Shapes Investor Behaviour - Decoding the Queensland Land Tax Ripple Effects 43:41
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43:41Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike's planning for this episode has Cate and Dave laughing... our newest muskateer is challenging the Trio with his cheeky script. But they won't fall prey to his tricks. Today's episode is all about some insightful data that Mike and the team at MCG uncovered about changing investor behaviours during the Queensland land tax proposed changes of 2022. "Anecdotally, (investors) were avoiding Queensland when they were legislating the land tax changes." Mike's data captured three significant segments in time: pre, during and post the land tax legislation and eventual repeal. "I was pretty unimpressed as an investor," says Cate, who considered selling her Queensland property at the time. Cate sheds light on the attitude of investors at the time of the legislation changes. Buyer behaviour was a reflection of the concern about increased land tax obligations. Focusing on the data - as Mike points out, 40.9% investment purchases in Australia were in Queensland prior to the legislation being enacted. "During that 98 day period, the figure dropped to 33.6%, representing a 17.8% drop", says Mike. Cate queries some of the other variables that may have impacted the data, including interest rate increases, COVID lockdowns. Dave asks Cate about the impact of this legislation on the rental market. The volume of sales would have no doubt eroded the rental stock, and as Cate points out, Queensland was enormously impacted by homelessness. Mike also sheds light on how the State Government taxes are offset by Federal Government negative gearing benefits.. Tune in to hear more... The Trio are clearly not supportive of the Queensland Government's land tax move on land tax in 2022. Post-the repealed date, the figure only rebounded to 34.73%, a figure that still signals that investors were spooked. Combined with the Greens' policies, the investor market are cautious, particularly in Queensland. And as Dave noted, a lag effect can last a long time. Victorian land tax changes, combined with tough rental reforms and a supply/demand imbalance will likely erode Victorian rental supply and the two resident Victorians in the trio discuss this. Household formation changes, combined with Air BnB and investor fears are playing havoc with Victoria's investor stock levels. As Cate says, "it goes beyond assuming that it will net itself out." Mike discusses the 'build to rent' and superfund theories that are populist decisions presently. The conundrum is that the conditions are just making things tougher for renters. From developers to local council to The Great Australian identity.... Cate sheds light on some current Victorian government established property acquisitions and the challenges that are associated with high rise social housing stock. She also chats about the current vacancy rates and how historically significant our current vacancy rates are. As far Queensland's land tax legislated land tax changes boded; "It's misguided and it has unintended consequences", says Dave. Cate discusses the need for continued investor participation to quench the current renter thirst. Combined with limited control over this asset class, the Trio agree that things are precarious for the current rental housing crisis. Lastly, Mike feels that Queensland didn't acknowledge that they got it wrong with the 2022 policy. Moving on to our gold nuggets!... Cate Bakos's gold nugget: For our investors who are wondering how all of this legislative change impacts them. Check your legislation and find out all about market rent, how regularly you can increase rent, and what new policies impact you. Mike Mortlock's gold nugget: It's very unpopular to discuss positive roles that investors provide in society. It's a tough juggle socially for many who are balancing the need to grow their wealth with the altruistic drive to provide housing. Show notes:…
1 #212: Unlocking the Secrets of Inspecting Property - Expert Strategies for Assessing Properties like a Pro 47:37
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47:37Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM This episode is all about the things that buyers should look for when inspecting property; the red flags, practical tips, seeing beyond hire furniture and fresh paint, .... and the non-negotiables. "Before we put any inspections in the diary, we check Google Street View." Cate talks through the things that she's looking for when selecting properties to shortlist for her clients. From electrical transformers on power poles, speed humps and roundabouts, to dodgy neighbourhoods, Street View can safe wasting time driving across town. Technology really has revolutionised how we do business. Cate also looks for title types and zoning before getting excited about a listing. She and Dave ponder the importance of this in relation to lender scrutiny too. As Dave points out, understanding where true value lies can save buyers from wasting time and missing out on a lot of viable opportunities. Dave asks Cate to share some of the steps she recommends when embarking on price analysis. Starting with recently sold examples on the sold tab of the search engine is a great first step. We can't underestimate the value of talking to friendly local agents too. Mike sheds light on how he also looks forensically at past sales of the subject property, overlaying capital growth forecasting based on sale dates. He also throws out an AI challenge to our listeners! And Mike chats about the need for buyers to dig deeper when a property listing photo is missing a facade picture. Tune in to hear more... Checking the status of the sale is important too. Sometimes properties are under offer, withdrawn, or about to sell quickly, so it's a worthwhile phone call before you plan a drive across town. "When you arrive, what is important to note before you even get out of the car?" Parking and any parking restrictions - can you get a park nearby when you visit? Surrounding area - does it feel safe? Neighbouring properties - are they well kept? Are they shadowing the property? Any noises or smells? Ease of getting in/out of the property - can you pull in and out of your own drive? Dave quizzes Cate on what she looks for once she's inside the property. She starts with the agent conversations, and the ways that buyers can be remembered for all the right reasons. Capturing video notes is a very handy tool that Cate employs, but she always asks permission from the agent. She sheds light on the aspects of the inspection that she notes in her inspection videos, and explains the benefits of doing so. COVID really changed things for property inspections, particularly for the lockdown cities. "If you remember back to 2021, we had just five minute inspections at one stage", says Cate. Mike talks about the value of a virtual inspection for spacial awareness; an understanding of the flow of the property. The trio talk about the hidden things that buyers don't always capture, and how a video inspection can aid this. From subfloor to gutters, there are tips and tricks that they share to give our listeners an extra edge with their inspections. And MIke's Quantity surveyor strengths shine though in relation to understanding functionality and age of items. Functional obsolescence is a term they all have a chuckle about, but understanding ATO effective lives is a great insight for investors. ...And our gold nuggets! Cate Bakos's gold nugget: Going in with a really clear idea of must-haves and nice-to-haves is integral. If the property has a deal-breaker, buyers need to be prepared to walk away. Mike Mortlock's gold nugget: Imagining the property without styling and staging is a real blind spot of people and we have to remember that staging is designed to make us pay more for the property. He also notes that many investors make the mistake of looking through the wrong lens. Lastly, asking the agents the right questions is critical. Being coy won't help buyers at all, particularly in this market. David Johnston's gold nugget: Differentiating what is 'easily changeable' from what isn't is is Dave's big tip. It's the unchangeables that make a difference in the long run. Shownotes: https://www.propertytrio.com.au/2023/07/03/unlocking-the-secrets-of-inspecting-property-with-expert-strategies-for-assessing-properties-like-a-pro/…
1 #211: How Many Properties Do You Really Need, Do I Buy 2 Cheaper Properties or 1 Higher Value & Retirement Planning 52:27
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52:27Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The trio enjoy a catch up after Cate's visit to Adelaide and a day out with Pete and the students. Pete sends a special hello to all of our listeners! Mike's weekly market update circles around the RBA minutes and the monetary policy paragraphs. He notes that "the case for justification is getting stronger" and he highlights the increased risk of inflation returning to the target, hence the interest rate move. Cate's interlude into off-market transactions may surprise our listeners. "Situational" off-markets can be ideal, but "Opportunistic" off-markets are becoming problematic. Dave weighs in with his insights also and shares Cate's concerns about buyer's agents who purport to transact a heavy weighting of off-market sales. Our episode entails two great listener questions. The first is intriguing: Llohyd bought a rundown house in Hillcrest, SA for $550K with $440K debt November 2022. It’s in the process of getting subdivided to build two. His broker has just conducted a CBA desktop valuation and his property has almost $120K equity, and his options are bountiful. He reaches out to the trio examine his options and it's an enthralling conversation. Does he build? Sit tight? Consider other options? Tune in to find out what the trio discuss. From considerations around build cost to equity positions, long term land banking to selling with plans and permits, all options are on the table. Our second listener question is always a ripper. Jasmin asks the trio, "If I have a loan for $820K with an LVR or 80%, can I use that to buy two properties worth, and should I consider that option. Or can I only buy 1 property? " "If I had a dollar for every time I've been asked this question, I'd have a piggy bank full of dollar coins", says Cate. Cate asks whether our listener is investing for capital growth, or for rental yield. There is no right or wrong answer, in fact it boils down to an investor's personal financial position. Mike supports this view but he also loves the idea of diversification, however he focuses on asset quality and the need for an investor to understand what it is that they are trying to achieve. Dave sheds light on the risks associated with price point selection, the power of compounding, the perils of procrastination, and the impact on the ability to purchase their family home. "Make sure you've got the big rock in the jar sorted out", says Dave. A true key point for Jasmin to consider. . ..And our gold nuggets! Cate Bakos' gold nugget: The winter market can be tough on the southern states, so for people who are contemplating shopping through the winter months, perhaps thinking about gearing up for spring is a good idea. Bear in mind supply and demand during winter months and don't put pressure on yourselves. Mike Mortlock's gold nugget, (or black opal): Mike ponders the merit of having full context of our listener's long term plan. We can't just tell Lloyhd and Jasmin to opt one way or the other... it all comes down to planning. Shownotes: https://www.propertytrio.com.au/2023/06/26/listener-questions-june-2023-2/…
1 #210: May Market update - How the Upper Quartile is Driving Market Movements, Generational Shifts & Boomer Effect, and Recession 51:48
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51:48Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike kicks off our market update with Sydney - up by 5% for the quarter. While this big city does a lot of heavy lifting when it comes to median figures, Cate points out that every single capital city is recording positive median price movement for the month of May. Dave brings our attention to the pace of growth for the city markets over the short term, as we see these markets gain pace over the regional markets as they play catch up. Dave also chats about the breakdown of the market segments, specifically pointing out the relative volatility of the top quartile of the market. As history has shown us, the highest priced properties are often the first to tumble in downturn and the fastest to rebound in a recovery. An intriguing fact that the Trio discuss as media headlines focus on the mortgage holders' pain is the cohort who are paying cash for their purchases. Whether they be down-sizers or those who have inherited wealth, many purchases are actually settled without the need for lending. First home buyer participation rates are another side-topic of conversation for the duo and Dave notes some of the grants, opportunities, initiatives and changes that give today's FHB's some significantly higher benefits than in previous years. "The bank of Mum and Dad's average assistance is over $50,000 nowadays," says Dave. Dave points out the distortion caused within the median values data when it comes to houses and units. Taking two very different cities into consideration (ie. Melbourne and Brisbane) is a case in point when we consider the ratio of units to houses. And Cate raises another data-distortion consideration; what happens when we have an overrepresentation of sales from one particular segment of the market? Mike reminds us about the impact of initiatives that favour particular price-points too. We need to remember that data analysis sometimes needs to be drilled much deeper. Dave reports the rental movement for capital cities and regions. Capitals are still experiencing pressure and new arrivals will be amplifying this impact. Regions are slowing down, and as Dave explains, only about 15% of new arrivals head to the regions, with the vast majority heading to the capital cities. Units rents are rising much faster than houses and an obvious reason for this is affordability; units are simply cheaper to rent. Listings are well under the five year average. Mike questions Cate about the slight uptick in May, but Cate is quick to put it down to Easter school holidays avoidance. There are no signs of reprieve for buyers who are experiencing the impact of stock shortage, unfortunately. House price expectations have increased; indicating that people are expecting house prices to rise. Key changes include 'time to buy a major household item', 'economic conditions over the next five years', and 'time to buy a dwelling'. Mike delves into this last one; it seems a strange contradiction, but as Cate points out, this measure wasn't much different a year ago. Even in the crazy pace of 2021, this figure still sat below 100 which suggests that the broad consensus is that it's not a good time to buy a dwelling. People are pessimists! Dave's pet subject... lending! "But we're not lending anymore", says Mike. Dave unpacks these loan commitment figures and hints that investors may be turning a corner. Cate queries the investment loan data and whether these figures could be including vacant (or personal use) dwellings that aren't actually housing tenants. Productivity remains a key concern and stagflation represents a threat to our economy if things don't improve. Dave details this risk for our listeners. Lastly, our new favourite index, the Freightos Baltic Index is a revealing chart. Freight costs have returned to pre-pandemic levels and this could be a positive beacon for our inflationary problems. And... time for our gold nuggets.. . Dave Johnston's gold nugget: The breakdown of Goods and Services is an interesting dilemma. With services costs rising but goods settling down, our RBA has their work cut out for them. Cate Bakos's gold nugget: Freightos Baltic Index! This is a compelling chart when it comes to gauging the cost of freighting goods; a significant proportion of the overall cost for imported goods. Mike Mortlock's gold nugget: When will our spring selling season arrive? Or could listing activity remain low? Mike talks about the challenges buyers face while our supply and demand ratio sits at current levels. Show notes: https://www.propertytrio.com.au/2023/06/19/ep-210-may-market-update-from-generational-shifts-to-the-r-word-recession/…
1 #209: Listener questions - Mastering property planning in unique circumstances, and unveiling buyer’s agent conflicts 1:00:50
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1:00:50Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Mike's market update focuses on some new tax data which identifies the highest earning suburbs in Australia. WA's Cottesloe and Peppermint Grove take the lead and the range of incomes will surprise a few. Among other facts and figures, gender wage gaps, average superannuation balances and richest professions all featured in Mike's segment. "The average Australian taxable income currently sits at $63,882." Our first listener question asked the Trio about their take on the Four Corners Episode that aired in late March 2023. The show focused on poor agent behaviours and conflicts of interest, and our lovely listener wondered what sort of controls exist around such behaviours and duty to disclose. Cate pares it back to two important things that buyers must remember. agent behaviours, and warning bells for consumers Our listener also asks about agents' representation to buyers when it comes to asking prices and auction quotes. Cate shares her thoughts about underquoting and some of the challenges that are faced by both listing agents, vendors and consumers. While underquoting is a horrible practise, Cate agrees with Dave's message. Buyers owe it to themselves to be familiar with resultant sales prices in their area, and applying some pricing methodology is not a difficult science for a committed buyer. Mike's reference of cognitive bias is so true for so many vendors though, and it's crucial that vendors maintain a realistic approach. Impartiality is the key word and Cate, Dave and Mike decipher what can go wrong for consumers when their trusted professional has a conflict that undermines their fiduciary duties. Our second listener question is a special one; a loyal listener (and property investor) is keen to help her friend get a strong foot holding on the property ladder and she asks the Trio whether her friend's Melbourne apartment is one to hold or one to sell in the quest for a strong performer longer term. Cate, Dave and Mike rise to the challenge with their individual strengths shaping some ideas about how our listener can best help her friend. Cate focuses on another element that loving friends and family often overlook.... we can't imprint our own values and dreams on others. Property investing needs to be prompted by a fire in one's belly, and dragging a friend along for the ride is often a difficult challenge. As Mike points out, strategy, deliberation and commitment is essential for a committed investor. And Dave discusses the need for a desired spending limit, methodical cashflow analysis, and a determination of savings on hand, LVR and borrowing capacity... and then accessing funding is another step yet again. ...And our gold nuggets! David Johnston's gold nugget: Dave addresses both listener questions. For our first listener, Dave harks back to the most important point to retain: "Do your due diligence." And his advice for our second listener's friend is to "Do your plan!" Simple, but not easy. Mike Mortlock's gold nugget: As much as we want to be kind and look after our friends, we can't go too far with it. "Imagine if Da Vinci was petrified of not being able to pay the rent and wasn't sketching in his notebook, what kind of world would we be living in?" Show notes: https://www.propertytrio.com.au/2023/06/12/listener-questions-june-2023/…
1 #208+: Extended Market Update Midweek Special - One per cent servicing buffers, rising unemployment and tenant's rights 12:06
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12:06Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM This midweek updaate was too juicy to wait for, so the trio bring to light three new market updates to share with our listeners. Mike talks about some breaking data signalling a weakening job market and he sheds light on what futher changes could mean for the economy. Cate touches on an interesting rental story where a tenant took on the landlord at a tribunal. And Dave discusses a new lender option for some borrowers who may be eligible for a significant buffer rate reduction; a surpring move in a sea of 3% buffer rates.…
1 #208: The Distance Dilemma - Decoding the Proximity Puzzle for Property Investors 54:04
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54:04Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM The trio kick off this exciting episode with a discussion about the Westpac consumer sentiment index and the recent changes that our markets have been experiencing. Dave and Mike ponder the role that the media play versus the money market commentary, and Cate highlights the shrinking confidence about the time to buy a major household item index, a positive signal that the RBA rate increases could be (slowly) taking effect. Today’s show is all about the distance people buy their investment properties from where they live and whether that has changed over the last few years. The popular view is that people typically buy very close to where they live because they know their own backyard. However, we’re diving into some new industry research that dispenses with the stereotypes and gets down to facts with real data. We are fortunate to have some valuable and telling data at our fingertips due to MCG Quantity Surveying's 1000 assets study; an annualised data release that Mike and Marty share with the property community and media. Mike shares with the listeners what it was that prompted this collation of information. Mike challenges Dave and Cate to consider how far they each thought investors were generally prepared to travel. Cate also asks Mike to shed light on some of the 'accidental investment' examples, and how this data signals such a property. Dave chats openly about the biggest risks associated with dual-purpose investing and Cate also talks about some of the emotional reasons that can lead an investor to purchase 'around the corner'. The trio talk through the changing figures associated with this amazing measure, from pre-pandemic to pandemic, through to post-pandemic. Prior to the pandemic, the average distance that an Aussie investor's property was from their home measured 293km. The pandemic average distance shifted to a colossal 599km, a startling change. The trio unpacked the drivers, the changes and their thoughts on the significant jump. The intriguing question that Mike asks is, "what on earth happened post-pandemic?" ....and the answer may surprise (we won't ruin the surprise for our listeners!) This incredible evidence supports some of the trends that we've witnessed in Australian property investing and we love that Mike and Marty's business have some clever data that is unique to what we'd typically find through the usual data channels. The trio sift through the radii findings listed in this table, not only analysing the pre-, pandemic and post- average distance, but also the changes within the shorter-distance data findings. It's a ripping episode and one that showcases our third muscateer's appreciation for great data. "While it appears that we’re transitioning back to a more normal reality in the post-pandemic era, there’s no doubt some needles have shifted forever. In fact, discussion about modern history will almost always be divided along pre- and post-pandemic lines." Shownotes: https://www.propertytrio.com.au/2023/06/05/decoding-the-proximity-puzzle-for-property-investors/…
1 #207: Mortgage mastery for investment borrowing and the hold or fold dilemma 51:13
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51:13Got a question for the trio? Click here This ep is crafted around two excellent listener questions that hinge around mortgage strategy. But before the trio jump into the questions, they share their market updates. Land tax reforms (and other 'fruity' ideas) are the topic of conversation for many Victorian investors, and Cate talks through the changes with Mike and Dave. She touches on some of the challenges that Victorian property owners have faced through the pandemic and she also considers some of the negative implications of the new changes. Cate wonders whether the direct impact on renters will result in segmentation due to the vulnerability of cash-flow neutral investors. Dave ponders the impact of this tax change on the Victorian market, and holds concerns that the unintended consequences could the exacerbate the existing rental problems in the state. With supply issues at record lows and such tight vacancy rates, Dave fears that this will just make the problem worse. Mike asks Dave and Cate a left-field question, "as land tax increases state revenue in one state, federal government tax revenue decreases. How does our Federal Government feel about this?" Our first listener question is sent to us by Emily, who asks the Trio about converting her home loan to an interest only loan product once her offset account is working at full capacity. Dave's rationale for recommending interest only is intriguing, but it's important to note that this information is not designed as a 'one size fits all' solution. Investors need to have a plan, understand their options and remain focused on the long term goals when it comes to stepping-stone properties. Accidental investing is not necessarily a great outcome if the property is not a suitable long-term asset to hold as an investment. Some of the key benefits of an interest only loan as outlined by Dave include; More interest to claim once the property becomes an investment property Building up savings more rapidly, and in turn these savings can be used to pay more for a future home and will reduce the debt balance on the non-deductable loan. The big unknowns, according to Dave are; "most people don't understand the strategy, and we also can't be certain that the home will eventually be an investment property down the track." Dave's sagely explanation of this common dilemma is gold for our listeners, and many investors benefit from this approach when a stepping-stone property is no longer personally used and a future home acquisition is on the agenda. The Trio remember the old days when lenders offered much longer interest-only periods to investors, and they compare the differences now that today's investors face, particularly when it comes to loan amortisation. Our second question comes to us from another fabulous listener, Marco, who asks a great question about the use of equity, as opposed to applying higher loan to value ratios, (LVRs) and paying for Lender's Mortgage Insurance. "Is LMI the devil, or should we consider holding onto that cash as a buffer?" asks Mike. Dave distils some of the important details when it comes to mortgage insurance and LVRs, pointing out how tax deductions are optimised, and savings are maximised in tandem. Cate adds some questions that are important for investors to ask themselves; understanding how much time remains to achieve the investment goals, what incomes they'll potentially earn in the future, how long they wish to work for, what the short-term economic cost impact is, and what is in their plan. Life throws up curveballs, but one eye-opening aspect that Dave touches on is the importance of remaining patient. Some acquisitions take many years, but the visibility that can be offered through clever modelling software can't be underestimated. Having a clear plan and a scope of timeframes is integral to a successful journey. One of the biggest costs that Dave sees impacting property investors is selling a property that they could have otherwise kept if they'd had the right mortgage strategy. Thank you to our listeners - we appreciate these great questions. We have more listener questions eps to come too! And... our gold nuggets! Mike Mortlock's gold nugget; "don't be the cleverest person in the room!" Mike supports reaching out for specialist advice - the financial difference when it comes to getting great advice can really add up. "It could be the best ROI you ever get." Cate Bakos's gold nugget relates to the first listener question.... refinancing! Cate implores investors to stay on top of their paperwork, supporting documentation and their credit conduct so that they can ensure that refinancing isn't a nightmare. David Johnston's gold nugget: If you get your mortgage strategy right and align it to your property plans, (particularly in relation to converting a current home to a future investment property), you can not only optimise your tax deductions and have more cash to put towards your next home, your extra property in your portfolio will make a significant difference to your retirement. Shownotes here: https://www.propertytrio.com.au/2023/05/29/ep-207-mortgage-mastery-for-investment-borrowing-and-the-hold-or-fold-dilemma/…
1 #206: Breaking free from buyer's paralysis - Mastering the art of property decision-making and conquering FOBBABO 41:40
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41:40Got a question for the trio? Click here This ep was about FOBBABO, an acronym Cate made up years ago. She coined this phrase a while back when buyers started having second thoughts after an ideal property came along. This episode is dedicated to the trick buyers often play on themselves… some of the reasons why, things that amplify FOBBABO, why it can be dangerous, and ways to tackle it when it happens to you. Dave hosts this exciting episode and explores with Mike and Cate some of the other psychological challenges buyers face, from FOMO (Fear of Missing Out), to 'the winner's curse', an segment that Dave, Cate and Pete covered back in episode 94. Dave asks Cate to share how FOBBABO usually manifests and becomes obvious to a buyer’s agent, and Cate also sheds light on the pro's and cons of FOBBABO, which market cycles it usually strikes in, and why the media can be quite unhelpful for those who are struggling with this fear. Dave also challenges Cate to delve into some of the painful lessons that FOBBABO can create, and the trio speak about the difference between our most recent property downturn and previous downturns. Dave shares his insights on the impact of inflationary pressures, rising interest rates and in particular, diminished borrowing capacity for many buyers as a result of the rate hikes. This time, FOBBABO presents even more dire risks for some buyers... tune in to find out more! The trio talk about some of the ways that buyers can limit the negative impacts FOBBABO can cause and Cate talks listeners through her 'reverse search engine' exersise. This not only helps give perspective for buyers who are feeling the threat of FOBBABO, but also enables them to construct a clear feasibility study that highlights not just the likely types of eligible properties, but their frequency of sale also; an essential element to note for anyone who is concerned about a moving market. The trio share eight tips to ward off the chances of FOBBABO biting... check out our show notes. And... our gold nuggets! Mike Mortlock's gold nugget is all about buyers making sure they have their brief nailed down. The reverse search engine exercise caught Mike's attention and he encourages our listeners to utilise this tool when it comes time to circle in on their purchase plans. Cate Bakos's gold nugget relates to the importance of taking action. Buyers have to be informed to be prepared to pull the trigger.... but once they have made the decision to buy, they just have to go for it! Shownotes here: https://www.propertytrio.com.au/2023/05/22/ep-206-mastering-the-art-of-property-decision-making-and-conquering-the-fear-of-buying-before-a-better-option/…
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