Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm
Speaker 1: James Kirby, the Wealth editor at the Australian. Welcome aboard everybody,
Speaker 1: It's Tuesday. We're talking property and one of our regular
Speaker 1: guests on the show with me today, Jared McCabe of Wakelan,
Speaker 1: will be here in the studio with me. We've got
Speaker 1: a lot on our plates. We wanted to talk to you,
Speaker 1: particularly about buying a first home anywhere in the country.
Speaker 1: If you had a buyer's advocate standing besides you would
Speaker 1: not that be nice. Whether you're a first home buyer
Speaker 1: or any type of buyer, it would be nice. What
Speaker 1: would they say, especially on first homes, What particular guidance
Speaker 1: would they give. We had a big response on the
Speaker 1: shows about land tax, hardly a surprise new tax basically
Speaker 1: coming through the system on property around the country. Victoria
Speaker 1: leading the way on that one, but you noticed in
Speaker 1: the new Southwest budget last week they came in on
Speaker 1: land tak as well, and the land tax costs will
Speaker 1: go up across the state there and also interesting response
Speaker 1: from a lot of listeners about whether on the basis
Speaker 1: that the land tax has driven Victoria into something of
Speaker 1: a slowdown for sure, whether Victoria and Melbourne in particular
Speaker 1: is a bargain in this market, lots to talk about.
Speaker 1: Hello there, Jared James, how you of wake and thank
Speaker 1: you for coming in I problems?
Speaker 2: Thanks for having me again.
Speaker 1: Jared, you might know as a buyer's advocate on the street,
Speaker 1: on the ground and has his own podcast as well
Speaker 1: and is a very articulate member of the advocate community.
Speaker 1: You might say so, just on what we've promised. First
Speaker 1: of all, at the top about if you were buying
Speaker 1: a first home as opposed to an investment property, there's
Speaker 1: probably particular things there. First home buyers probably don't use you,
Speaker 1: do they use advocates very oyd.
Speaker 2: No, they do.
Speaker 3: Look sometimes they are very cost conscious, which is understandable
Speaker 3: because budgets are very restrictive and you've got to take
Speaker 3: into account a lot of things. But we do certainly
Speaker 3: work with first time by its Sometimes it's with parents
Speaker 3: wanting to assist and making sure that they're getting guidance
Speaker 3: to make the right decision. But we do find that
Speaker 3: we do work with first times. It's not probably a
Speaker 3: regular stream, but there are advocates around who that's what
Speaker 3: they pitch at too, that they will work pretty much
Speaker 3: solely with first home buyers.
Speaker 1: I know they're different than see an investor.
Speaker 3: Not necessarily, I mean, well, the buyer is. I mean,
Speaker 3: the advocate is still looking for the same sorts of things,
Speaker 3: but the buyer is different and you need to have
Speaker 3: a different mentality as well. I think from a first
Speaker 3: home buyers perspective, one of the key things to do
Speaker 3: is make sure you've got the support mechanisms around you
Speaker 3: before you really get too far down the track. And
Speaker 3: what I mean by that is mortgage brokers or person
Speaker 3: at the bank, whoever you're dealing with in that space,
Speaker 3: a solicitor or a conveyancer, to make sure that your
Speaker 3: contracts can get reviewed in a timely manner. If it's
Speaker 3: a property that's going to need a building inspection done,
Speaker 3: make sure you know that they're going so you.
Speaker 2: In a position to for the and to be able.
Speaker 3: To respond quickly, because depending upon where you are and
Speaker 3: the type of property that you're looking at auctions, you
Speaker 3: can quite often have a bit of a timeline that
Speaker 3: you work can work towards. But with a private sale,
Speaker 3: things can move very quickly, and if you're not ready
Speaker 3: to submit an offer, or don't know any terms that
Speaker 3: you may need to put forward with that offer. Then
Speaker 3: you can get caught off guard quite quickly.
Speaker 1: Does everyone get a building expection these days? It's not no, no,
Speaker 1: they don't know it's optional. It is.
Speaker 2: It's absolutely it's optional.
Speaker 3: I mean, and depending on the type of property that
Speaker 3: you're looking at, we tend to find apartments, some of
Speaker 3: the oldest style ones. It's worth doing. Sometimes you can
Speaker 3: find that a building inspection with an apartment can only
Speaker 3: tell you so much. Yes, and without them being able
Speaker 3: to take plaster and things off the walls, which not
Speaker 3: many things are going to allow you to do it.
Speaker 3: It doesn't it's not necessarily all that beneficial. But if
Speaker 3: you're looking at a period home, for instance, you'd be
Speaker 3: mad not to.
Speaker 1: Yeah, Or if you knew nothing about building correct, don't
Speaker 1: like me, But well, buying a house many years ago,
Speaker 1: we use a building inspectory. He came out to it
Speaker 1: was one of those old fashioned outside standalone Donnie's the
Speaker 1: head of timber door, and he came through the roof.
Speaker 1: He came through the roof and somehow landed on his
Speaker 1: feet and wasn't turreted, never mentioned anything and complained anything
Speaker 1: when I think about it, the things that happen when
Speaker 1: you buy an old police but that's what a lot
Speaker 1: of people they used to do. At least a part.
Speaker 1: We're told that a lot of buyers are shy for
Speaker 1: a variety of reasons, including the three D shortage of
Speaker 1: going near period homes. But just so on that issue,
Speaker 1: then those principles if you like about buying a first holm,
Speaker 1: if you're an advocate and you are helping someone, are
Speaker 1: they the same in every stage?
Speaker 2: They vary from state to state. I mean, the principles
Speaker 2: around what.
Speaker 3: Will be included and what you should do are the same,
Speaker 3: but there's different things that will be included at different
Speaker 3: stages too. So for instance, if you are in Victoria
Speaker 3: where and you're buying somewhere within the ten to fifteen
Speaker 3: kilometer rats of the city, there's a good chance that
Speaker 3: it could well be an auction. Therefore you need to
Speaker 3: get your building inspection done prior to bidding at that auction.
Speaker 3: Whereas if you go to a regional area or you
Speaker 3: go to perhaps Adelaide, Brisbane, where yes they do auctions,
Speaker 3: but there's also a larger percentage of private sale, then
Speaker 3: you may need to you may be able to submit
Speaker 3: an offer subject to that building and pestings. And there's
Speaker 3: different things that are included within contracts as well around
Speaker 3: owners corporation certificates or minutes from previous AGM. So some
Speaker 3: states require that to be included with the vendor statement.
Speaker 3: Others require the buyer to do the research on that
Speaker 3: side of things themselves.
Speaker 1: Okay, favorite discression around it all. Still, that's what you're.
Speaker 3: There for, and that's what as you said, that's where
Speaker 3: you need to do your due diligence so that you
Speaker 3: know what's required so that when you are ready to
Speaker 3: go and to start searching seriously, that you're prepared.
Speaker 1: We did have, as I mentioned, a lot of people
Speaker 1: were interested in the shill where we talked about whether
Speaker 1: Melbourne was a bargain at the moment relative to the
Speaker 1: other states, and certainly in terms of price increases. It's
Speaker 1: way behind the piece, isn't it. And you're on the
Speaker 1: ground here. Is there a sense that there's it's a
Speaker 1: good time.
Speaker 3: To buy in certain Fieler I mean, there's a lot
Speaker 3: of it depends on who you are as a buyer.
Speaker 3: There's a lot of negativity around investors at the moment
Speaker 3: with exactly as you said, the talk of the discussions
Speaker 3: around land, but there's been a number of other changes.
Speaker 3: Is also further changes proposed around requirements on landlords as
Speaker 3: to what they.
Speaker 2: Need to do to comply.
Speaker 3: Perspective propons, isn't it, And there was an introduction in
Speaker 3: about two years ago, and they're discussing further around insulation
Speaker 3: and air conditioning requirements and those.
Speaker 2: Sorts of things as well.
Speaker 3: So investors in Victoria feel as though it's almost death
Speaker 3: by a thousand cuts. And then when you look and
Speaker 3: see that the growth patterns haven't been as strong in
Speaker 3: the past five to seven years is what they perhaps
Speaker 3: have been in other states, they're starting to look at well,
Speaker 3: is this property worth continuing to hold or should I
Speaker 3: look at alternative investment strategies?
Speaker 2: Should I look at investing in other states?
Speaker 3: So that's part of the reason why the market hasn't
Speaker 3: kicked along. But I think that is another reason why
Speaker 3: when the market does move, Victoria Melbourne particularly is going
Speaker 3: to look quite good in terms of its value for money.
Speaker 1: Yeah. Right, And if you're a first HomeBuyer, obviously you
Speaker 1: want to buy anyway. Are there just I'm always say
Speaker 1: of going too little good because you have a nation
Speaker 1: of models, but quickly either parts of the city you
Speaker 1: think are rape for the first time buyer.
Speaker 3: Well, there's always I mean, first home buyers need to
Speaker 3: look at what they want to because there'll be lifestyle requirements,
Speaker 3: and that's I guess where we differentiate between what you're
Speaker 3: looking for from a personal perspective versus what an investor
Speaker 3: might look for from the bowth point of view. But
Speaker 3: the other thing to always keep in mind as a
Speaker 3: first home buyer is that this is highly unlikely to
Speaker 3: be a property that will be used as a stepping stone.
Speaker 3: It's not going most likely not going to be your
Speaker 3: forever home. So if you get too caught up in
Speaker 3: what might and what I might want right now, you
Speaker 3: may forego other attributes that enable you to take.
Speaker 2: Those steps up the ladder.
Speaker 3: The problem we are able to going forward, So there's almost
Speaker 3: sometimes with a first time buyer, it's a good thing
Speaker 3: to have almost a bit of an investor's mindset, so
Speaker 3: that you are looking at properties that potentially can build
Speaker 3: you some equities.
Speaker 1: Because the stats would say you're going to live there
Speaker 1: for five years.
Speaker 2: Then something in that sort of range.
Speaker 3: Yeah, I mean, ideally from an investor's perspective, you be
Speaker 3: holding property for ten plus years. But if you can
Speaker 3: get a property that as a first home buyer, that
Speaker 3: can build equity because it's got some good growth, but
Speaker 3: also potentially there's ways that you could add value yourself
Speaker 3: to build equity too, then that's going to help you
Speaker 3: to improve your financial position to be able to take
Speaker 3: steps up that property ladder, which is what first home
Speaker 3: buyers want to do.
Speaker 1: Okay, and either price of talent, I think there's opportunities.
Speaker 3: I think the oldest style apartment market's been held back
Speaker 3: in Melbourne for a long period of time, and that's
Speaker 3: more than just COVID. That's been an extensive period. So
Speaker 3: I think there's value to be had in those sorts
Speaker 3: of areas. I think villa units are a good option
Speaker 3: too from a first home buyers perspective, some of the
Speaker 3: middle ring suburbs of Melbourne that have still got really
Speaker 3: good public transport.
Speaker 1: Linkages and you get for the price of an average house,
Speaker 1: you're getting there is a thing about units enough fashionable
Speaker 1: right there. You're talking about the single story clinker sixty
Speaker 1: down the side. Did you get a little garden? You
Speaker 1: get a garage? You get a home basity.
Speaker 3: There's a good link component to those sorts of properties too,
Speaker 3: as opposed to say apartment where you perhaps don't have
Speaker 3: that outdoor space, but with the villa unit you've got
Speaker 3: that little courtyard. Most likely, if you've got the right ones,
Speaker 3: you've got a lock up garage. You've probably got a
Speaker 3: nice entry hallway with rooms leading off, so it's got
Speaker 3: a small house type field. And then if you're in
Speaker 3: a good, quiet residential street that's got good access to
Speaker 3: the local amenities, then if you did choose to upgrade
Speaker 3: at some point, but you're in a strong enough financial position,
Speaker 3: then it may well be a good property to retain
Speaker 3: as an investment and continue to build that way too.
Speaker 1: Oh right, yeah, except you could probably can't do much
Speaker 1: with them.
Speaker 3: The developments, there's limitations, but as land values continue to increase,
Speaker 3: then we're seeing more and more, probably not so much
Speaker 3: in the middle ring suburbs, more in the inner suburbs
Speaker 3: where particularly with some of the older style apartments, developers
Speaker 3: are now coming in because the land value is outstripping
Speaker 3: the value of the improvements. So the sum of the
Speaker 3: parts is actually not as great as the whole, and
Speaker 3: so the developer comes in and says, well, your unit,
Speaker 3: your apartment might only be worth five hundred thousand dollars
Speaker 3: on its own, but if I can get this whole
Speaker 3: parcel of land apartment to me, if I can get them,
Speaker 3: what is worth seven to fifty.
Speaker 2: Yeah, and so we are.
Speaker 3: We've been expecting this. If you speak to my mentor,
Speaker 3: Richard Wakelan, he's been saying this for thirty plus years,
Speaker 3: that this is going to happen, and now he's starting
Speaker 3: to it.
Speaker 2: Yeah, and it's coming through.
Speaker 1: Tell me that did all the cities have those? It
Speaker 1: seems to me they do. Do all the cities have those?
Speaker 1: As Biller units you call them. They were built in
Speaker 1: the what seventies through eighties.
Speaker 2: Sixties, sixties, seventies, nineties.
Speaker 3: I mean there's even some that are nineteen thirties down
Speaker 3: bayside Ellwood sort of way.
Speaker 2: You can see some of the.
Speaker 1: Binger story six six, as you said, drive it down
Speaker 1: the middle.
Speaker 3: Mostly it's sixties and seventies, some in the fifties, but
Speaker 3: mostly sixties and seventies.
Speaker 2: Okay, yeah, so's.
Speaker 3: They can be as small as two or three to
Speaker 3: as big as eighteen to twenty, depending upon the size
Speaker 3: of the parcel of plane.
Speaker 1: It's really interesting you say that, and I've always thought
Speaker 1: the same teen but they are.
Speaker 2: Not cool, they're enough.
Speaker 1: It's hard to move from here. Yeah, it's hard to
Speaker 1: move from you know, you're a fashionable part of town.
Speaker 1: You might be in in the middle of Sydney or
Speaker 1: Melbourne in some fashionable suburb and then you should tell
Speaker 1: your friends we've bought a villa units. But I think
Speaker 1: you're onto something there. Okay, we want to take a
Speaker 1: short break and we'll be back in a moment. Hello,
Speaker 1: Welcome back to the Money Puzzle podcast. I'm James Kirby
Speaker 1: talking to Jared McCabe, regular.
Speaker 2: On the show.
Speaker 1: We're talking property around the nation, investment first home buyers,
Speaker 1: guidance from a buyer's advocate. There for you, the greatly
Speaker 1: underestimated appeal financially of the villa unit. Yes that's six
Speaker 1: units with with the six bins outside you pass on
Speaker 1: Monday morning. Not fashionable. But but we're talking land value
Speaker 1: smack in the middle of the major cities and definitely undervalued.
Speaker 1: And you get a lot for you, as you're saying
Speaker 1: getting bank for your book, you actually get this, get
Speaker 1: a lot. Yeah, very interesting. Now I wanted to ask
Speaker 1: you one other thing before we go to this. We've
Speaker 1: got some great questions, but just a quick one. Mortgage
Speaker 1: broker has become very powerful. Yes, they actually the majority
Speaker 1: of mortgages in Australia are now sold through mortgage brokers,
Speaker 1: though though the bank's process and the bank's mortgages, the
Speaker 1: majority are so by mortgage brokers. They grew from nothing
Speaker 1: once upon a time John Simon's AUSSI home runs and
Speaker 1: they took over the market. Basically, it's suit of the banks.
Speaker 1: Something big happening this year. Come my Bank, the biggest
Speaker 1: bank in the market, the nation's biggest lender, has a
Speaker 1: plan to pull it back in house and kind of
Speaker 1: cut the brokers out. What difference would it make if
Speaker 1: the brokers started to thin out?
Speaker 3: Look, I think from a boyer's perspective, or if you're
Speaker 3: doing refinancing that sort of thing, people will always be
Speaker 3: financially conscious.
Speaker 2: So if there's a wise and means to.
Speaker 3: Be able to save money, there are going to be
Speaker 3: that's going to be a big consideration. But I think
Speaker 3: the other thing that probably hasn't necessarily been discussed quite
Speaker 3: as much is that the personal contact that you can
Speaker 3: get from mortgage broker, I think is really important. And
Speaker 3: the personal attention, whereas you can and you will more
Speaker 3: often than not be dealing with the same person every
Speaker 3: time be able to sit down with you and so
Speaker 3: you know you'll as a personal connection, they know your circumstances,
Speaker 3: whereas quite often with the bank, you'll pick up the
Speaker 3: phone and it'll be a different person that you'll speak
Speaker 3: to every time. So it depends on what you're prioritizing
Speaker 3: to as a client as to whether or not that
Speaker 3: financial side of things is absolutely key. And perhaps for
Speaker 3: a first time buy that might be really important, but
Speaker 3: for others where the personal contact the understanding is vital,
Speaker 3: and I'd probably put myself into that category. I would
Speaker 3: rather have that connection then have to deal with a
Speaker 3: different person to explain my circumstances every time.
Speaker 1: Yeah, and if anyone dould enough to remember, that's what
Speaker 1: it used to be like to ring every bank. You
Speaker 1: want to find out what three banks mortgagris were? Are
Speaker 1: you to ring the three of them? And as Jared says,
Speaker 1: that different person every time. Ohky, I just thought i'd
Speaker 1: bring up with you or I have some really good
Speaker 1: questions I wanted to try and di buye them up.
Speaker 1: So what I'm gonna do is the first two are
Speaker 1: on land tax because just to cover offer listeners in
Speaker 1: case you've missed this, in Victoria, they pulled the threshold
Speaker 1: for paying land tax down to fifty from three hundred.
Speaker 1: So everyone is in the net. Everyone's actually getting their
Speaker 1: bills these few weeks, and they are aghast, of course,
Speaker 1: because they've never got this bill before out of the blue.
Speaker 1: But it's been a way for the Victoria state government,
Speaker 1: which is in deep debt, to find money in the market,
Speaker 1: and there is in parallel with that they have then
Speaker 1: catch up on social housing, which they have to do,
Speaker 1: but in this case, unfortunately, they seem to have mapped
Speaker 1: the sort of price of it straight onto property industry alone.
Speaker 1: Controversial move. Victorian prices have been the softest in the
Speaker 1: nation since they did it. Victorian investors as a percentage
Speaker 1: of buyers in Victoria are only thirty forty percent in
Speaker 1: other states. But interestingly, last week in the new South
Speaker 1: Wales budget they copied Victoria and they have not increased
Speaker 1: the land taxter or whatever, but they've changed just like
Speaker 1: Victoria did. They They've moved. They're playing games with the
Speaker 1: thresholds where they won't index them, so more people will
Speaker 1: be caught every year. People are aware of this now
Speaker 1: that there's basically whether it's coordinated or not doesn't matter.
Speaker 1: The states are driving more taxes and revenues out of
Speaker 1: the property sector to the two big ones already unleashed,
Speaker 1: and we'd see what Queensland has to do. So here's
Speaker 1: the first question from Sally. I'm a long time listening
Speaker 1: to the show. Thank you for the podcast on New
Speaker 1: South Wales tax changes. There was a fair bit of
Speaker 1: discussion how this would effect investors. I'd like to hear
Speaker 1: your view on how it might affect other groups, such
Speaker 1: as first home buyers. The land tax threshold, by the way,
Speaker 1: in Sydney is a million dollars in Victoria's fifty thousands.
Speaker 1: I mean that's extraordinary, isn't it. Anyway, she says, given
Speaker 1: the threasholders a million dollars one point seven five to
Speaker 1: I would think this would drive up people's interest choice
Speaker 1: properties with low land values. Well, yes, Sally, I know
Speaker 1: this is advice of course, any information, yes, but in reality.
Speaker 2: For investors too.
Speaker 3: So for first it's not going to be payable for
Speaker 3: those that are using the properties their principal place of residents.
Speaker 1: Yeah.
Speaker 3: Yeah, but what it may do is that you may
Speaker 3: find that investors start to look at properties where the
Speaker 3: land component is worth below that get to avoid this.
Speaker 3: So what it may do and what may be worth
Speaker 3: considering if you're in a fortunate enough position to be
Speaker 3: able to afford that bracket, is that as an unoccupier,
Speaker 3: you may be getting good value for money by looking
Speaker 3: at properties that have got land values in excess of
Speaker 3: the threshold because there's less competition in.
Speaker 1: That run, because people are just trying to steer under it.
Speaker 3: So we saw that in reverse a number of years
Speaker 3: ago in around the first home buyas grant when it
Speaker 3: was focused on around six hundred thousand dollars and at
Speaker 3: one stage there it was a flat. Anything in excess
Speaker 3: of six hundred thousand dollars, the grant was void. Yeah,
Speaker 3: below six hundred thousand there was discounts.
Speaker 1: So there was great competition and that up to six under.
Speaker 3: As soon as the price went over six hundred thousand,
Speaker 3: they would just drop out. And I remember going to
Speaker 3: an auction a number of years ago for an apartment
Speaker 3: in North Carlton, and I had an investor client looking
Speaker 3: at that property and we had a budget of six
Speaker 3: hundred and ten thousand as a limit, and I paid
Speaker 3: six hundred and one and it was I watched all
Speaker 3: of these first time buys fight as soon as it
Speaker 3: hit the six hundred.
Speaker 2: They all just stopped still. I put six o one
Speaker 2: in an that was it.
Speaker 3: And so there's elements of similarity with that, obviously for
Speaker 3: differing reasons, and it's not a hard and fast limit,
Speaker 3: particularly with the indexation, but that's something that you may
Speaker 3: start to see in New South Wales. That could be
Speaker 3: something that plays out given that the low threshold in Victoria.
Speaker 1: Everyone it doesn't matter, but you could play around the
Speaker 1: Sydney one, which is one million and tventy five thousand
Speaker 1: dollars for what it's worth before an investor has to
Speaker 1: pay antax on the property. It's interesting. It just shows
Speaker 1: you that if you pick up on these changes in
Speaker 1: the market, if you know that, you can really have
Speaker 1: an advantage that you were talking about. If you're at
Speaker 1: an auction and you know that nobody wants to pay
Speaker 1: more than six hundred thousands, you get it for six
Speaker 1: hundred and one. Really good story. It really kind of
Speaker 1: captures what we're talking about. Okay, Pete. Having listened to
Speaker 1: your podcast on NANTAX, I am struck by how complex
Speaker 1: and inefficient the system is. Apart from sporting competitions. Can
Speaker 1: you think of a single good reason why we still
Speaker 1: have state governments? Ah, that's one for another show, Piete.
Speaker 1: I was amazed. It was only in the COVID crisis
Speaker 1: that I realized the extent and the depth of potential
Speaker 1: power of the states really and how they did everything
Speaker 1: differently and really ignoring each other. It was just extraordinary.
Speaker 1: So I suppose that was it at its worst in
Speaker 1: some ways. But then there are other very strong reasons
Speaker 1: four states. It's a big country after all. All I
Speaker 1: can say on property investment is that you should know
Speaker 1: your state and know how things work. We're talking about
Speaker 1: land tax today. There's no land tax in the Northern Territory.
Speaker 3: So I think the important thing from Pea's perspective is
Speaker 3: if you're looking at other taxes and other other states,
Speaker 3: Like you said, James, that you probably need to have
Speaker 3: a good financial planner in your corner there so that
Speaker 3: they know and your accountant who knows your tax circumstances
Speaker 3: and knows your financial position. So that they can say
Speaker 3: to you, well, look you've already got one property in
Speaker 3: this state, and this is if we buy another one,
Speaker 3: this is what's going to happen to your land tax
Speaker 3: because it'll go from single holding the multiple holding and
Speaker 3: how will that impact. So perhaps rather than going there,
Speaker 3: we could go to this state and look at an
Speaker 3: option that way as well. So I think the financial
Speaker 3: planner comes really much into play.
Speaker 1: Assuming that they know all that. Yeah, one other thing
Speaker 1: that struck me there was Queensland in a crazy breeve
Speaker 1: stunt about two years ago. The same government, mind you
Speaker 1: that's there now try to tax even in other states.
Speaker 1: If you recall, yes, I do remember that that was extraordinary.
Speaker 1: They tried to bring in a tax whereby if you
Speaker 1: were in Melbourne and see Queensland and you had a
Speaker 1: property in Melbourne a property in Queensland, they were accounting
Speaker 1: the Melbourne property in it. They were literally raiding another
Speaker 1: state to get money. They didn't get going. It got
Speaker 1: shot down. But there is an election in Queensland and
Speaker 1: in a few weeks and we'll see what they plan
Speaker 1: to do, because they'll do something and we knew that
Speaker 1: way is it's done something. Victoria's done something. So keep
Speaker 1: your eyes open folks on that one. And that's the
Speaker 1: land tax issue. I hope we've covered that properly for you.
Speaker 1: It really is an issue. Everyone thought that negative gearing
Speaker 1: would change, or capit against that would change. Nothing happened
Speaker 1: and then sort of like ambush from another corner, ifture
Speaker 1: come from a different direction, come from the States. Okay,
Speaker 1: we'd be back in a moment with some really good questions. Hello,
Speaker 1: welcome back to The Australian's Money Puzzle podcast. I'm James Kirby, Well,
Speaker 1: editor at The Australian, talking to Jared McKay, a buyer's
Speaker 1: advocate from the Wakeland Group. Okay, Matthew says, is the
Speaker 1: Gold Coast included in Brisbane property market? Everyone talks Sidney,
Speaker 1: Melbourne and Brisbane, just like we were there, Jared, they
Speaker 1: never mentioned the Gold Coast. All my colleagues in Sydney,
Speaker 1: they've two hours away and still live in Sydney. Is
Speaker 1: Brisbane actually Southeast Queensland? Well, I know when I talk
Speaker 1: to the researchers, they always talk about Southeast Queensland as
Speaker 1: a separate unit, not Brisbane. When they say things are
Speaker 1: really happening or whatever, in Southeast Queensland.
Speaker 2: They mean ex Brisbane and Brisbane. I mean my understanding too.
Speaker 3: With Gold Coasters, the population growth theories as big as
Speaker 3: and there was talk at once they job believed that
Speaker 3: it was going to become one of the biggest cities
Speaker 3: in the history outside of the three that we've just mentioned.
Speaker 3: It's in terms of grouping together, it's definitely its own entity.
Speaker 1: It is. Yeah, Southeast Queensland, absolutely, and a lot of
Speaker 1: action there from property market after Perth. It's probably the
Speaker 1: hottest zone in the country right now and maybe even
Speaker 1: a bit more realistic by that, I mean there is
Speaker 1: great price action in Perth, but stocks very tightly held. Yes,
Speaker 1: while you have a.
Speaker 3: Much deeper diverse market around Southeast write a supply increasing support.
Speaker 1: Yeah exactly. Yeah, you have that complexity of the market
Speaker 1: and probably not as volatile in the long period of
Speaker 1: time because you've got the Perth market is invariably linked
Speaker 1: with the success or otherwise of the mining and resources group. Okay,
Speaker 1: Charles says, longtime listener, second time questioner. Okay, I'm fifty four.
Speaker 1: I will paraphrase this with a mortgage on a property
Speaker 1: I'm hoping to downsize and pay off the mortgage and
Speaker 1: retire at sixty. Would you suggest not advice with an
Speaker 1: inherited lonsum I reduced the mortgage immediately or pay down
Speaker 1: the amount into my superree Again Okay, here's the question
Speaker 1: put universally, should you pay down the mortgage or add
Speaker 1: to your Super. I have a colleague Cleono doubt who
Speaker 1: did a peace one in the Weekend Australian just last weekend.
Speaker 1: And it's funny. We can do this piece every year
Speaker 1: and it not only does it always get great readership,
Speaker 1: but it often has a different answer depending on how
Speaker 1: things are going. And just now it's amazing. But technically,
Speaker 1: mathematically really no matter what way you cut it, because
Speaker 1: of the tax advantages of Super, if you had a
Speaker 1: choice between in most cases most of the time, if
Speaker 1: you're the choice between putting a dollar into Super or
Speaker 1: a dollar against your mortgage, even at these rates, the
Speaker 1: dollar into Super is more beneficial mathematically than the dollar
Speaker 1: into the mortgage. But I don't know. I know that's
Speaker 1: the answer, but personally I'm not convinced by it because
Speaker 1: I find it really hard to put a proper value
Speaker 1: on their home and owning the home. The whole system
Speaker 1: is tilted towards you owning the home. The whole tax
Speaker 1: system is tilted towards the home owner, not just a CGT,
Speaker 1: but pension access and everything. With an investor, I'm not
Speaker 1: it might be slightly different. And in this case, I'm
Speaker 1: thinking that Charles is an investor. It doesn't actually spell
Speaker 1: that out. But if you were an investor, then I
Speaker 1: suppose it would you would be weighing it up slightly differently.
Speaker 2: Depends on your tax position and things then too.
Speaker 1: It does.
Speaker 3: So yeah, I think that one's a it's very much
Speaker 3: a personal circumstance talk question. I think it probably needs
Speaker 3: a little bit more of an intimate understanding.
Speaker 1: Yes, sorry, Charles, we are ducking that one. And that's
Speaker 1: fair enough because it's two. I'm sorry, but it's it's
Speaker 1: you know, it really is a highly personalized situation. So
Speaker 1: I tried to make it broader because we can't. I
Speaker 1: give advice, of course, but take a look at Cleono
Speaker 1: Daud's piece last Saturday in the Weekend Australian where she
Speaker 1: measured the two things against each other to see the figures,
Speaker 1: which are of course invariably put together forest Place superannuation groups.
Speaker 1: I guess what they find that you're better off putting
Speaker 1: your money into super The thing we don't know is
Speaker 1: how much is the property really worth long term, and
Speaker 1: it can be very hard to beat that in our
Speaker 1: tax system. Yes. Yeah, so just before we go, tell
Speaker 1: us about the mood on the ground for investors and
Speaker 1: for us tom buyers. People thought interest rates we're going
Speaker 1: to come down.
Speaker 2: They haven't come down.
Speaker 1: Is that method? Is that cool things a bit?
Speaker 3: Probably hasn't changed things too much at this stage. It's
Speaker 3: the market from a Victorian perspective, is pretty well just
Speaker 3: ticking along at present. It tends to go into a
Speaker 3: bit of a hibernation through the school holiday July period.
Speaker 3: There's typically not as much activity around, and then once
Speaker 3: we move into August and September things will start to build.
Speaker 3: So that'll be a really interesting time just to see
Speaker 3: whether or not how the supply levels go, because typically
Speaker 3: if you see that supply lift, if the demand isn't
Speaker 3: there to meet it, then we can see the clearance
Speaker 3: rates start to come off and prices can come back
Speaker 3: a little bit. Yes, and the expectation probably at the
Speaker 3: start of this year, when all the talk that we're
Speaker 3: going to say some interest right cuts in the back
Speaker 3: half of the year that that's where we might start
Speaker 3: to see a little bit of improvement. Yeah, I think
Speaker 3: that's probably still twelve rolling months off. Okay, as in
Speaker 3: from a market movement perspective, because the interest right cuts
Speaker 3: when I do eventually come won't necessarily lead to a
Speaker 3: market jump straight a Whid'll take.
Speaker 1: It to percolate through, just like on the other side
Speaker 1: when you raise interest chates it takes a long time
Speaker 1: to Yeah, does it actually come through? Yeah, yeah, it builds. Okay, terrific, Well,
Speaker 1: thank you very much. Great to have you in the
Speaker 1: studio again.
Speaker 2: Thanks for having me.
Speaker 1: That was Jared McCabe of the Weightlan Group is a
Speaker 1: buyer's advocate and the terrific as usual friend of the show.
Speaker 1: You can catch him here regularly on the Money Puzzle.
Speaker 1: Thank you for all the emails, Keep them coming. I'd
Speaker 1: love to see some more on all subjects the Money
Speaker 1: Puzzle at the Australian dot com dot au. Talk to
Speaker 1: you soon. Four