1 00:00:03,430 --> 00:00:05,990 Sean Aylmer: Welcome to the Fear and Greed daily interview. I'm Sean 2 00:00:05,990 --> 00:00:09,420 Sean Aylmer: Aylmer. Talking about properties is pretty much a national pastime, 3 00:00:09,420 --> 00:00:11,500 Sean Aylmer: but a whole range of things have happened over the 4 00:00:11,500 --> 00:00:14,690 Sean Aylmer: past year or so that have shifted the conversation into 5 00:00:14,690 --> 00:00:18,410 Sean Aylmer: another gear altogether. House prices have been soaring, industrial and 6 00:00:18,410 --> 00:00:21,510 Sean Aylmer: warehouse sites have been in demand as eCommerce as booms. 7 00:00:21,750 --> 00:00:24,509 Sean Aylmer: Office buildings have sat empty, yet people still want them 8 00:00:24,510 --> 00:00:26,910 Sean Aylmer: and people are still building them. I wanted to get 9 00:00:26,960 --> 00:00:30,210 Sean Aylmer: an idea of where property is heading and what investors 10 00:00:30,210 --> 00:00:32,300 Sean Aylmer: should consider, as well as some of the ways to 11 00:00:32,300 --> 00:00:35,569 Sean Aylmer: invest in property without doing it directly. Trilogy Funds is 12 00:00:35,570 --> 00:00:38,909 Sean Aylmer: an Australian fund manager and financier of property- based investments. 13 00:00:39,180 --> 00:00:41,730 Sean Aylmer: Philip Ryan is the co- founder and managing director of 14 00:00:42,030 --> 00:00:45,040 Sean Aylmer: Trilogy Funds, which is a supporter of this podcast. Philip, 15 00:00:45,040 --> 00:00:45,970 Sean Aylmer: welcome to Fear and Greed. 16 00:00:46,200 --> 00:00:48,150 Philip Ryan: Hello, Sean. How are you? 17 00:00:48,150 --> 00:00:50,409 Sean Aylmer: Well, thank you, well. Have you ever seen a period like the last 18 00:00:50,409 --> 00:00:51,140 Sean Aylmer: 18 months? 19 00:00:51,420 --> 00:00:54,630 Philip Ryan: Well, Sean, one advantage I think I've got from my 20 00:00:54,630 --> 00:00:57,350 Philip Ryan: age is that I've actually seen quite a few market 21 00:00:57,350 --> 00:01:01,790 Philip Ryan: cycles in my life. That actually extends back to childhood 22 00:01:02,090 --> 00:01:04,990 Philip Ryan: when I started investing in shares as a teenager, but 23 00:01:04,990 --> 00:01:07,539 Philip Ryan: also when I was studying law. I was actually interested 24 00:01:07,540 --> 00:01:10,190 Philip Ryan: in shares and I was reading books like The Intelligent 25 00:01:10,270 --> 00:01:14,699 Philip Ryan: Investor, but also reading microfiches, which many members of the 26 00:01:14,700 --> 00:01:16,521 Philip Ryan: audience wouldn't wouldn't even know what they were. 27 00:01:16,520 --> 00:01:16,521 Sean Aylmer: "A what?" 28 00:01:16,521 --> 00:01:23,140 Philip Ryan: They were really almost like photographs of old newspapers. And one of those was 29 00:01:23,140 --> 00:01:26,690 Philip Ryan: The Wall Street Journal, which was tracing through periods before 30 00:01:26,690 --> 00:01:31,209 Philip Ryan: the 1929 crash and also afterwards. If you try and 31 00:01:31,250 --> 00:01:34,310 Philip Ryan: look at areas in history, which have seemed to me 32 00:01:34,310 --> 00:01:36,660 Philip Ryan: to be reasonably similar to today, you've got to go 33 00:01:36,760 --> 00:01:40,649 Philip Ryan: back to the 1960s and 1970s. One of the things 34 00:01:40,870 --> 00:01:44,040 Philip Ryan: I remember as a very young boy, as coming into 35 00:01:44,040 --> 00:01:47,930 Philip Ryan: a teenager in 1970s, was we had a relatively stable 36 00:01:48,000 --> 00:01:52,410 Philip Ryan: environment in the 1960s. And then in 1972, we had the election 37 00:01:52,410 --> 00:01:54,970 Philip Ryan: of Gough Whitlam, which actually brought quite a bit of 38 00:01:54,970 --> 00:01:58,150 Philip Ryan: euphoria to a lot of people. They were seeing a 39 00:01:58,150 --> 00:02:01,760 Philip Ryan: change in government after many years of liberal government. And 40 00:02:01,760 --> 00:02:05,610 Philip Ryan: also of course, Gough Whitlam, through the labor government, was increasing 41 00:02:05,610 --> 00:02:09,870 Philip Ryan: money supply. So, we started to see increases in inflation. 42 00:02:09,870 --> 00:02:12,910 Philip Ryan: Interest rates at the time were very, very low, and 43 00:02:12,910 --> 00:02:15,230 Philip Ryan: people of course were able to borrow money. And I 44 00:02:15,230 --> 00:02:18,710 Philip Ryan: remember back in the 1960s, my dad, for example, went to 45 00:02:18,710 --> 00:02:20,810 Philip Ryan: the bank to try and borrow money to buy another 46 00:02:20,810 --> 00:02:23,690 Philip Ryan: house. And the bank said, " Well, why do you need 47 00:02:23,690 --> 00:02:26,260 Philip Ryan: two houses for? Ones enough, so we're not going to 48 00:02:26,260 --> 00:02:26,710 Philip Ryan: give you the loan." 49 00:02:26,710 --> 00:02:27,160 Sean Aylmer: Wow. Wow. 50 00:02:28,660 --> 00:02:30,889 Philip Ryan: To me, that sort of environment is very similar to 51 00:02:30,889 --> 00:02:32,669 Philip Ryan: today. But I've got to say, one of the things 52 00:02:32,669 --> 00:02:36,089 Philip Ryan: I'm conscious of is actually investment biases, and that's where 53 00:02:36,090 --> 00:02:39,329 Philip Ryan: you try and hook into something which was similar to 54 00:02:39,330 --> 00:02:42,410 Philip Ryan: your life and say that it's going to repeat today. And the 55 00:02:42,419 --> 00:02:47,530 Philip Ryan: differences between the 1970s and today are quite marked in terms 56 00:02:47,530 --> 00:02:50,369 Philip Ryan: of things like in the 1970s, we had the oil crisis 57 00:02:50,740 --> 00:02:53,769 Philip Ryan: which meant that the price of oil increased many hundreds 58 00:02:53,770 --> 00:02:56,610 Philip Ryan: of percent. In the mid seventies, and then again, there was another 59 00:02:56,610 --> 00:03:00,609 Philip Ryan: oil crisis in 1979. So, that really hit the Western 60 00:03:00,610 --> 00:03:04,050 Philip Ryan: world's bottom line in terms of price of everything to 61 00:03:04,050 --> 00:03:07,910 Philip Ryan: do with transport. Not just the cars we saw transition 62 00:03:07,910 --> 00:03:11,750 Philip Ryan: from the big old V8s more to six and four cylinder cars. 63 00:03:11,990 --> 00:03:16,709 Philip Ryan: But moreover, you saw also rapid increases in prices which occurred during that period. 64 00:03:16,960 --> 00:03:19,360 Philip Ryan: And then of course, we had the effect of unemployment 65 00:03:19,370 --> 00:03:22,120 Philip Ryan: and interest rates. So in a broad sense, I think 66 00:03:22,120 --> 00:03:25,290 Philip Ryan: that there's some elements which are similar in terms of leading 67 00:03:25,290 --> 00:03:28,110 Philip Ryan: to inflation and high interest rates. But I don't see 68 00:03:28,110 --> 00:03:31,880 Philip Ryan: that there's necessarily those extraneous events. Of course, it could 69 00:03:31,880 --> 00:03:34,510 Philip Ryan: happen. I mean, there could be a war, for example. 70 00:03:34,700 --> 00:03:38,610 Philip Ryan: And of course, we've seen increases and decreases recently in 71 00:03:38,610 --> 00:03:41,580 Philip Ryan: all prices, but nothing of the magnitude that occurred back then. 72 00:03:41,920 --> 00:03:44,500 Sean Aylmer: Okay. So let's bring it back to Trilogy Funds. What do 73 00:03:44,500 --> 00:03:46,720 Sean Aylmer: you tend to focus on? Is it residential or industrial, 74 00:03:46,720 --> 00:03:48,770 Sean Aylmer: retail office? What's your specialty? 75 00:03:49,110 --> 00:03:52,080 Philip Ryan: We actually look at the whole suite. So in terms 76 00:03:52,080 --> 00:03:55,710 Philip Ryan: of residential, through the Trilogy Monthly Income Trust, we actually 77 00:03:56,020 --> 00:03:59,970 Philip Ryan: land on around 130 different property projects on the east 78 00:03:59,970 --> 00:04:03,110 Philip Ryan: coast of Australia. So, they're projects ranging from around $ 3 79 00:04:03,110 --> 00:04:06,470 Philip Ryan: million up to $ 30 million in terms of loan value. 80 00:04:06,470 --> 00:04:10,110 Philip Ryan: So, the project value is actually obviously significantly higher than 81 00:04:10,110 --> 00:04:13,010 Philip Ryan: that again, and that actually gives us good helicopter view 82 00:04:13,260 --> 00:04:14,630 Philip Ryan: of what's happening in each state. 83 00:04:14,880 --> 00:04:14,900 Sean Aylmer: Yeah. 84 00:04:15,260 --> 00:04:18,719 Philip Ryan: In terms of industrial, we actually have the Trilogy Industrial 85 00:04:18,720 --> 00:04:23,219 Philip Ryan: Property Trust, which owns a suite of different industrial properties, 86 00:04:23,450 --> 00:04:27,020 Philip Ryan: and that's based on areas from south Australia through to 87 00:04:27,020 --> 00:04:30,839 Philip Ryan: Queensland. So, that's actually quite widely diverse as well. But 88 00:04:30,839 --> 00:04:34,279 Philip Ryan: we started that actually in 2018, and we really centered 89 00:04:34,279 --> 00:04:38,090 Philip Ryan: in regional areas like Mackay. Because as a countercyclical play, 90 00:04:38,650 --> 00:04:42,610 Philip Ryan: Mackay and those other central Queensland areas were suffering from 91 00:04:42,610 --> 00:04:46,200 Philip Ryan: the mining downturn which followed through from 2014. So, we 92 00:04:46,200 --> 00:04:48,739 Philip Ryan: were fortunate in getting in quite early on that. And 93 00:04:48,740 --> 00:04:51,930 Philip Ryan: as a result of that, investors have benefited from a high 94 00:04:51,930 --> 00:04:55,029 Philip Ryan: yield in that trust and also increasing unit price as 95 00:04:55,029 --> 00:04:57,940 Philip Ryan: well. In terms of retail, we don't have much exposure to 96 00:04:57,940 --> 00:05:01,279 Philip Ryan: that. Thank goodness, during COVID I might add, but I could 97 00:05:01,279 --> 00:05:04,240 Philip Ryan: see in the future that could also be a countercyclical 98 00:05:04,240 --> 00:05:08,240 Philip Ryan: play because you see areas of retail, which has actually struggled 99 00:05:08,290 --> 00:05:10,380 Philip Ryan: during COVID. I've got to say, I'm not a big 100 00:05:10,380 --> 00:05:13,650 Philip Ryan: fan of inner city retail. I mean, the CBDs as 101 00:05:13,650 --> 00:05:16,880 Philip Ryan: you just walk around a pretty desolate. And reminds me 102 00:05:16,880 --> 00:05:20,690 Philip Ryan: again, thinking back in the past, of the 1990s recession, 103 00:05:20,970 --> 00:05:24,380 Philip Ryan: when we actually saw a lot of retail small businesses 104 00:05:24,380 --> 00:05:28,120 Philip Ryan: fold. That's very, very sad to see, and I've got to say 105 00:05:28,140 --> 00:05:31,410 Philip Ryan: I'm not too sure when that might recover. I suspect 106 00:05:31,410 --> 00:05:33,400 Philip Ryan: it'll be some time. And then when it comes to offices, 107 00:05:33,960 --> 00:05:36,970 Philip Ryan: we do have some standalone property trust, which do have 108 00:05:36,970 --> 00:05:41,060 Philip Ryan: exposure to office and commercial. They've had a tough time 109 00:05:41,060 --> 00:05:45,029 Philip Ryan: during COVID, particularly in terms of incentives to obtain new 110 00:05:45,029 --> 00:05:48,430 Philip Ryan: tenants. So, incentives very much are blown out. Just for the 111 00:05:49,120 --> 00:05:53,420 Philip Ryan: listeners' information, that's where the landlord provides an incentive in 112 00:05:53,420 --> 00:05:56,830 Philip Ryan: terms of rent free or through fit out or other 113 00:05:56,830 --> 00:06:00,010 Philip Ryan: means in order to secure a tenant so that the tenant 114 00:06:00,010 --> 00:06:03,950 Philip Ryan: pays a higher rate. Well, incentives in Brisbane, Sydney, and 115 00:06:03,950 --> 00:06:08,370 Philip Ryan: Melbourne, in many cases in north of 40%, which is extraordinarily high. 116 00:06:08,370 --> 00:06:11,720 Philip Ryan: The highest I've ever seen it And of course, that's affected the 117 00:06:11,720 --> 00:06:13,360 Philip Ryan: yields on those particular trusts. 118 00:06:13,730 --> 00:06:21,089 Sean Aylmer: Stay with me, Philip. We'll be back in a minute. My guest 119 00:06:21,089 --> 00:06:24,180 Sean Aylmer: today is Philip Ryan, co- founder and managing director of 120 00:06:24,180 --> 00:06:28,420 Sean Aylmer: Trilogy Funds. Okay. So, retail could be a countercyclical play. 121 00:06:28,760 --> 00:06:31,190 Sean Aylmer: Office, there's plenty of incentives out there so it's probably 122 00:06:31,190 --> 00:06:33,700 Sean Aylmer: good if you're the buyer, not the seller as much. 123 00:06:33,960 --> 00:06:37,110 Sean Aylmer: What do you think about residential and what do you think about industrial over 124 00:06:37,190 --> 00:06:38,850 Sean Aylmer: next 18 months to two years? 125 00:06:39,220 --> 00:06:41,330 Philip Ryan: Yeah. Well, I like residential, but of course it's got to 126 00:06:41,330 --> 00:06:43,960 Philip Ryan: be in particular areas. Now, I might be a little bit 127 00:06:43,960 --> 00:06:47,380 Philip Ryan: parochial, but actually still like residential in Brisbane. The main 128 00:06:47,380 --> 00:06:51,700 Philip Ryan: reason is that Brisbane's property market, it's roughly correlated the 129 00:06:51,700 --> 00:06:54,230 Philip Ryan: Sydney of Melbourne, but it does dance to its own tune. 130 00:06:54,230 --> 00:06:57,560 Philip Ryan: And typically over the last few decades, it has often 131 00:06:57,800 --> 00:07:00,830 Philip Ryan: a period of about 10 years of flatness. And that was 132 00:07:00,830 --> 00:07:05,490 Philip Ryan: pretty evident during the 1990s when Sydney and Melbourne took 133 00:07:05,490 --> 00:07:08,839 Philip Ryan: off in about '96, but Brisbane property market stayed flat 134 00:07:08,839 --> 00:07:11,880 Philip Ryan: till around the year 2000 and then has a big 135 00:07:11,880 --> 00:07:14,770 Philip Ryan: kick along. And usually, that's as a result of falling 136 00:07:14,770 --> 00:07:18,900 Philip Ryan: unemployment, other more symmetry like local infrastructure spends and the 137 00:07:18,900 --> 00:07:21,500 Philip Ryan: light. And I got to say, when you look at Brisbane's 138 00:07:21,500 --> 00:07:25,680 Philip Ryan: picture; we've got increasing infrastructure, we've got the Olympic games 139 00:07:25,680 --> 00:07:28,990 Philip Ryan: obviously, which of course will cause extra infrastructure to be 140 00:07:28,990 --> 00:07:32,570 Philip Ryan: built. We're seeing also interstate migration from Melbourne to Brisbane 141 00:07:32,570 --> 00:07:35,130 Philip Ryan: so I think that's very positive. Now in terms of 142 00:07:35,130 --> 00:07:38,160 Philip Ryan: prices. Well, I think one of the lead up to 143 00:07:38,160 --> 00:07:41,140 Philip Ryan: prices in a Australia has obviously been low interest rates. That's 144 00:07:41,140 --> 00:07:43,210 Philip Ryan: just speaking the obvious. But the other thing is, of course, 145 00:07:43,550 --> 00:07:45,610 Philip Ryan: is that there's been a lack of supply. I mean, 146 00:07:45,610 --> 00:07:48,330 Philip Ryan: people haven't been selling their properties. So, there's been a 147 00:07:48,330 --> 00:07:51,500 Philip Ryan: supply in the market generally. And as a result of people 148 00:07:51,500 --> 00:07:54,640 Philip Ryan: wanting to buy, that's caused prices to move quite significantly. 149 00:07:54,870 --> 00:07:56,710 Philip Ryan: So, there's been a bit of a FOMO in terms 150 00:07:56,710 --> 00:07:59,620 Philip Ryan: of people buying property. And that's of course, effect of first 151 00:07:59,850 --> 00:08:02,930 Philip Ryan: home buyers who have been used to seeing property prices 152 00:08:02,930 --> 00:08:06,380 Philip Ryan: being reasonably flat and then suddenly they're escalating. Now in 153 00:08:06,380 --> 00:08:09,750 Philip Ryan: terms of that FOMO, we're starting to see that transition 154 00:08:09,750 --> 00:08:12,850 Philip Ryan: from a buyer's market to a seller's market where the 155 00:08:12,850 --> 00:08:15,310 Philip Ryan: sellers are now saying, " Oh, well look, we now want 156 00:08:15,310 --> 00:08:18,330 Philip Ryan: to sell our property because we're concerned that property prices 157 00:08:18,330 --> 00:08:20,760 Philip Ryan: have risen so much that we'll be concerned that they 158 00:08:20,760 --> 00:08:23,970 Philip Ryan: might be about to fall," and that's causing more supply, 159 00:08:23,970 --> 00:08:26,300 Philip Ryan: and I think we'll continue to see that in each 160 00:08:26,300 --> 00:08:30,590 Philip Ryan: capital city. When you dissect the residential market, houses are 161 00:08:30,760 --> 00:08:33,840 Philip Ryan: always a standout. I think apartments, they're still over supply 162 00:08:34,120 --> 00:08:37,439 Philip Ryan: in Melbourne in areas like Docklands and also Southbank. We 163 00:08:37,440 --> 00:08:42,020 Philip Ryan: did see oversupply in Brisbane in 2016 through overbuilding and 164 00:08:42,020 --> 00:08:45,590 Philip Ryan: places like Newstead, the Gabba, and also West End. But over 165 00:08:46,110 --> 00:08:49,309 Philip Ryan: time, that's been basically saved up by the market, and 166 00:08:49,309 --> 00:08:52,900 Philip Ryan: more particularly by interstate buyers. And they've been useful for, 167 00:08:52,900 --> 00:08:56,809 Philip Ryan: say, rental stock. And of course we haven't seen increase 168 00:08:56,809 --> 00:09:00,900 Philip Ryan: in supply in terms of new builds. In many ways, 169 00:09:01,110 --> 00:09:03,280 Philip Ryan: that's the way the building market works is that there 170 00:09:03,280 --> 00:09:06,510 Philip Ryan: are periods of over supply, and then of course there's no supply, and 171 00:09:06,510 --> 00:09:09,040 Philip Ryan: then of course there's an undersupply and then prices go 172 00:09:09,040 --> 00:09:11,829 Philip Ryan: up. And so, we'll start to see that also in apartment 173 00:09:11,830 --> 00:09:15,540 Philip Ryan: markets. Just crossing over to industrial. Look, the thing I 174 00:09:15,540 --> 00:09:18,220 Philip Ryan: like about industrial of course is that when you look at our 175 00:09:18,240 --> 00:09:21,839 Philip Ryan: portfolio, it's exposed to the mining sector, but it's also 176 00:09:21,880 --> 00:09:26,060 Philip Ryan: exposed to manufacturing and also logistics. Moving forward, I think 177 00:09:26,360 --> 00:09:29,349 Philip Ryan: logistics will continue to play apart because as we move 178 00:09:29,350 --> 00:09:32,290 Philip Ryan: towards a more digital economy, we're going to see more 179 00:09:32,290 --> 00:09:34,780 Philip Ryan: and more things which are transported and more things which 180 00:09:34,780 --> 00:09:37,070 Philip Ryan: will be demanded by people. And I think when you 181 00:09:37,070 --> 00:09:39,610 Philip Ryan: look at people who are ordering online, it's still not 182 00:09:39,660 --> 00:09:43,050 Philip Ryan: the majority of people. That will transition over a period of 183 00:09:43,050 --> 00:09:46,370 Philip Ryan: time where people be buying all sorts of things online, 184 00:09:46,370 --> 00:09:49,099 Philip Ryan: and as a result, that's quite positive. The one thing 185 00:09:49,160 --> 00:09:51,210 Philip Ryan: I've got to say we just have to watch out 186 00:09:51,210 --> 00:09:55,380 Philip Ryan: for in all markets at the moment is over exuberance. And particularly 187 00:09:55,380 --> 00:09:59,630 Philip Ryan: in an industrial, I do see yields decreasing where people 188 00:09:59,630 --> 00:10:03,780 Philip Ryan: are paying 3% or 4% cap rates on particular properties. 189 00:10:03,790 --> 00:10:05,120 Sean Aylmer: Yeah. It's pretty expensive. 190 00:10:05,210 --> 00:10:07,920 Philip Ryan: Yeah. Well, that concerns me because of course when you 191 00:10:07,920 --> 00:10:10,579 Philip Ryan: look at the risk free rate of return, you look 192 00:10:10,580 --> 00:10:13,540 Philip Ryan: at official cash rate 0. 1%, you can invest in a 193 00:10:13,540 --> 00:10:16,370 Philip Ryan: term deposit or so at less than one, but if 194 00:10:16,370 --> 00:10:19,670 Philip Ryan: you buy a commercial building or industrial property, if it's three or four, 195 00:10:20,280 --> 00:10:23,179 Philip Ryan: that doesn't represent much in terms of risk. It doesn't 196 00:10:23,179 --> 00:10:25,890 Philip Ryan: take much for markets to move in terms of either 197 00:10:25,890 --> 00:10:30,280 Philip Ryan: increased interest rates, or alternatively, a tenant falling over. The 198 00:10:30,280 --> 00:10:33,960 Philip Ryan: one thing, I guess, which benefits industrial and commercial property 199 00:10:34,220 --> 00:10:37,430 Philip Ryan: is, of course, the rent review mechanism is tied to 200 00:10:37,730 --> 00:10:41,949 Philip Ryan: CPI. So when inflation increases, you'll see rents increase, but 201 00:10:42,040 --> 00:10:45,050 Philip Ryan: also you'll find that it does affect cap rates as well. 202 00:10:45,670 --> 00:10:48,360 Sean Aylmer: Are you worried about rising interest rates? Because undoubtedly, the 203 00:10:48,360 --> 00:10:50,900 Sean Aylmer: next move in rates will be up whenever that is. 204 00:10:51,270 --> 00:10:53,620 Sean Aylmer: But this time three or four years, we will certainly... 205 00:10:53,770 --> 00:10:57,609 Sean Aylmer: I mean, almost certainly have fairly sharply higher rates. 206 00:10:57,870 --> 00:11:01,350 Philip Ryan: Yes. Well, we've been a beneficiary of interest rates. I never foresaw 207 00:11:01,350 --> 00:11:03,750 Philip Ryan: in my lifetime that we'd see interest rates so low. 208 00:11:04,000 --> 00:11:08,540 Philip Ryan: They're the lowest for 4, 000 years apparently, so all you can say 209 00:11:08,540 --> 00:11:10,219 Philip Ryan: is that they got to go up at some particular 210 00:11:10,220 --> 00:11:13,010 Philip Ryan: point in time. And that will be representative of a more 211 00:11:13,010 --> 00:11:16,190 Philip Ryan: healthy economy. the reason why they're low obviously is because 212 00:11:16,190 --> 00:11:20,080 Philip Ryan: of COVID and that really quite a courageous and front 213 00:11:20,080 --> 00:11:24,790 Philip Ryan: foot forward position by Western governments worldwide, and also central 214 00:11:24,790 --> 00:11:27,670 Philip Ryan: banks as well. So we've been beneficiaries of that, but 215 00:11:27,670 --> 00:11:30,110 Philip Ryan: of course, those days will come to an end. I 216 00:11:30,110 --> 00:11:34,709 Philip Ryan: think the RBA and governments are much more sensitive in terms 217 00:11:34,710 --> 00:11:38,130 Philip Ryan: of consequences these days than what they were back in the 218 00:11:38,130 --> 00:11:43,520 Philip Ryan: 1990s and also the GFC, and that was where central banks 219 00:11:43,630 --> 00:11:48,170 Philip Ryan: tended to act too quickly, too late. They would raise 220 00:11:48,170 --> 00:11:50,740 Philip Ryan: interest rates up to a period where it would actually 221 00:11:51,010 --> 00:11:54,220 Philip Ryan: absolutely kill off economic growth and have rising unemployment as 222 00:11:54,220 --> 00:11:57,030 Philip Ryan: a result. Remember, the RBA has always said that its 223 00:11:57,030 --> 00:12:00,370 Philip Ryan: main objective is to actually keep the unemployment rate down 224 00:12:00,370 --> 00:12:03,360 Philip Ryan: to 4%. I think with that in mind, we will 225 00:12:03,360 --> 00:12:06,969 Philip Ryan: see rising interest rates, but they'll be of a small magnitude. Now 226 00:12:07,059 --> 00:12:10,170 Philip Ryan: there's a few things I think, which will affect residential 227 00:12:10,170 --> 00:12:13,099 Philip Ryan: property prices in particular next year. One is, of course, 228 00:12:13,100 --> 00:12:15,160 Philip Ryan: what I talked about before, which is FOMO on the 229 00:12:15,160 --> 00:12:18,090 Philip Ryan: seller side. So, we're starting to see more supply come on the 230 00:12:18,120 --> 00:12:20,929 Philip Ryan: market. In some particular areas like the Gold Coast, for 231 00:12:20,929 --> 00:12:24,099 Philip Ryan: example, I think is one area where it's had a 232 00:12:24,130 --> 00:12:27,109 Philip Ryan: magnificent rise and usually what is quite a volatile market 233 00:12:27,110 --> 00:12:30,210 Philip Ryan: over the last couple of years, and I think that 234 00:12:30,260 --> 00:12:32,610 Philip Ryan: we will see more stock come on the market. I 235 00:12:32,610 --> 00:12:34,710 Philip Ryan: don't think necessarily see that in Brisbane, because I think 236 00:12:34,710 --> 00:12:37,670 Philip Ryan: they're still catching up. But in Sydney, Melbourne, likewise, we'll 237 00:12:37,670 --> 00:12:39,989 Philip Ryan: probably see more stock come on the market. But that's 238 00:12:39,990 --> 00:12:43,210 Philip Ryan: a healthier market and we'll see, I suspect, and these 239 00:12:43,210 --> 00:12:46,679 Philip Ryan: are my views only, but that we'll see a reasonably 240 00:12:46,679 --> 00:12:50,650 Philip Ryan: steady residential property market. I don't see that there'll be massive 241 00:12:50,650 --> 00:12:53,300 Philip Ryan: falls. There may be in some areas of oversupply, but 242 00:12:53,300 --> 00:12:56,360 Philip Ryan: general I think you'll see that markets level off. Subject 243 00:12:56,360 --> 00:13:00,960 Philip Ryan: to course to extraneous events. For example, is COVID over? 244 00:13:01,150 --> 00:13:03,110 Philip Ryan: Is there going to be an international war or some 245 00:13:03,110 --> 00:13:06,870 Philip Ryan: other outlier which might affect all of our wellbeing? 246 00:13:07,260 --> 00:13:09,559 Sean Aylmer: Yeah. Philip, thank you very much for talking to Fear 247 00:13:09,559 --> 00:13:10,010 Sean Aylmer: and Greed. 248 00:13:10,220 --> 00:13:11,210 Philip Ryan: Thank you. Thanks, Sean. 249 00:13:11,360 --> 00:13:13,970 Sean Aylmer: That was Philip Ryan, co- founder and managing director of 250 00:13:13,970 --> 00:13:17,330 Sean Aylmer: Trilogy Funds. This is the Fear and Greed Daily Interview. Join me 251 00:13:17,330 --> 00:13:19,640 Sean Aylmer: every morning for the full Fear and Greed podcast with 252 00:13:19,640 --> 00:13:21,960 Sean Aylmer: all the business news you need to know. I'm Sean 253 00:13:21,970 --> 00:13:23,260 Sean Aylmer: Aylmer, enjoy your day.