WEBVTT - Melbourne rebound - where are the bargains? 0:00:10.400 --> 0:00:13.600 Hello, and welcome to the Australians Money Puzzle Podcast. I'm 0:00:13.680 --> 0:00:17.040 James Kirby. Welcome aboard everybody. My guest today is a 0:00:17.120 --> 0:00:20.080 Nissa Cavallo of the Ida Property Group and she's been 0:00:20.120 --> 0:00:23.720 on the show actually more than once, and the last 0:00:23.720 --> 0:00:26.799 time we heard from her, I won't say a voice 0:00:26.800 --> 0:00:30.040 in the wilderness, but she did outdime with some confidence 0:00:30.520 --> 0:00:33.720 how Victorian property market, which she is an expert on, 0:00:34.120 --> 0:00:37.000 she had seen it as a bargain. Basically, this is 0:00:37.040 --> 0:00:40.120 when things were pretty pretty bleak and as you know 0:00:40.240 --> 0:00:44.599 that Melbourne was the worst market for some time on 0:00:44.640 --> 0:00:47.839 a national basis. Now most recently we see that basically 0:00:47.920 --> 0:00:51.160 Melbourne prices have been rising at an annualized rate something 0:00:51.200 --> 0:00:54.320 in the order of six percent and were probably gathering 0:00:54.400 --> 0:00:59.520 pace through this period. So I've invited Anissa back on 0:00:59.560 --> 0:01:02.560 the show to talk first of all about this area 0:01:02.600 --> 0:01:04.360 because I think from a nation my point of view, 0:01:04.360 --> 0:01:07.880 it's where everyone's looking as investors. But I also want 0:01:07.920 --> 0:01:10.840 her she does have an interesting story which I haven't 0:01:10.880 --> 0:01:12.800 put to you before for the simple reason I wanted 0:01:12.800 --> 0:01:15.160 to put her to you as a property expert first 0:01:15.200 --> 0:01:17.960 and foremost, But how she actually got into all this 0:01:18.160 --> 0:01:20.440 is very interesting, which we talk about in the second 0:01:20.520 --> 0:01:23.040 segment of the show. But first and foremost, and this 0:01:23.120 --> 0:01:26.720 is Cavallo, try not You could almost gloase there if 0:01:26.720 --> 0:01:29.280 you wished, but but they wouldn't come across on the podcast. 0:01:29.720 --> 0:01:34.039 But thank you. I mean, let's say it was going 0:01:34.120 --> 0:01:35.880 to happen, right, it was probably going to happen that 0:01:35.920 --> 0:01:38.640 Melbourne would turn. I didn't think it would turn quick. 0:01:38.840 --> 0:01:41.399 Absolutely well, firstly, thanks for having me back, James. I 0:01:41.440 --> 0:01:44.959 appreciate it to glow. And look, I think in many 0:01:45.000 --> 0:01:47.360 cases when you listen to economists, eventually, if you wait 0:01:47.400 --> 0:01:49.680 long enough, what they say is correct. Right, But we 0:01:49.680 --> 0:01:52.040 were talking about the next twelve months, so we did 0:01:52.040 --> 0:01:55.840 get it right. The fundamentals are just there and we've 0:01:55.840 --> 0:01:59.720 talked about it before. Population growth, we've got stronger wages growth. 0:02:00.120 --> 0:02:02.680 The population growth hasn't really changed other than that little 0:02:02.680 --> 0:02:06.640 period during COVID. There's just been so many positive characteristics 0:02:06.680 --> 0:02:09.560 about Melbourne and the last five years in particular have 0:02:09.639 --> 0:02:11.960 set us back ten And I know I've heard that 0:02:12.000 --> 0:02:14.000 you've spoken about this a lot on the show, that 0:02:14.120 --> 0:02:16.359 the numbers for the ten years is dire and that 0:02:16.760 --> 0:02:21.360 presents an incredible opportunity for investors that are willing to 0:02:21.360 --> 0:02:24.160 go against you, against the grain, which is really tricky. 0:02:24.280 --> 0:02:27.400 So yeah, I was right. It's not surprising. I don't 0:02:27.440 --> 0:02:31.160 think we're not celebrating it, right, We're not popping the champagne. 0:02:31.440 --> 0:02:34.440 But the first indicators are certainly there. And it's a 0:02:34.480 --> 0:02:36.320 bit of a relief, to be honest, for me, because 0:02:36.320 --> 0:02:38.280 I'm highly exposed and a lot of my clients are. 0:02:39.040 --> 0:02:41.240 I suppose, so you professionally put yourself out there. It 0:02:41.280 --> 0:02:44.240 wasn't just a notion and you would have acted upon it, 0:02:44.280 --> 0:02:46.960 so you wanted to see it happen. Look, well, take 0:02:47.000 --> 0:02:49.679 it that it is happening. It's not shooting the lights out. 0:02:50.120 --> 0:02:53.640 It's all it's doing so far, it would seem. And 0:02:53.720 --> 0:02:57.280 Calendar twenty five is coming back to something like a 0:02:57.320 --> 0:03:00.239 normal market what you would expect an Australian city. Five 0:03:00.280 --> 0:03:03.000 minions should be ticking away at least six percent parannum. 0:03:03.520 --> 0:03:05.520 So let's just take it down. Is the situation, and 0:03:05.560 --> 0:03:08.919 that it could get better. Now, before we talk about 0:03:10.040 --> 0:03:12.840 where and style and type of property that might be 0:03:12.840 --> 0:03:15.839 attractive in the city, can you tell us I think 0:03:15.840 --> 0:03:21.360 the tax the role of new taxes that were announced 0:03:21.400 --> 0:03:24.800 by the Victorian State government at the very depth of, 0:03:24.880 --> 0:03:26.639 you like, of the cycles, So when things were really 0:03:26.639 --> 0:03:28.560 at their agrimace, they went and really sort of kicked 0:03:28.560 --> 0:03:31.160 it in the head by adding new taxes, and they 0:03:31.240 --> 0:03:34.920 got a lot of attention. Is that still a risk 0:03:35.280 --> 0:03:37.720 from a broad point of view for people investing in 0:03:37.760 --> 0:03:38.360 this market? 0:03:38.880 --> 0:03:43.000 Well, as we've discussed, I think it presented an opportunity 0:03:43.040 --> 0:03:46.320 because if you had a look at the true impact 0:03:46.440 --> 0:03:50.160 on the majority of investors, I think it was it 0:03:50.320 --> 0:03:53.520 was for majority investor property investors. It came to seven 0:03:53.600 --> 0:03:56.280 hundred and fifty to nine hundred dollars extra a year 0:03:56.440 --> 0:03:59.440 that was tax deductible, and if you consider where interest 0:03:59.560 --> 0:04:02.000 rates have been in the past while property prices go up, 0:04:02.400 --> 0:04:06.000 that's not really a massive financial disincentive to invest. So 0:04:06.080 --> 0:04:09.840 for me and what we discussed was it was largely sentiment. 0:04:10.200 --> 0:04:12.160 I mean, we could have been taxed twenty dollars and 0:04:12.200 --> 0:04:13.960 we wouldn't have been happy with it because we felt 0:04:14.000 --> 0:04:16.040 it wasn't our fault, right, Why are we tacked? 0:04:16.040 --> 0:04:18.400 Why we So you're saying that the dollar terms, it 0:04:18.440 --> 0:04:21.880 wasn't backbreaking, but it was, but it sure was in 0:04:21.960 --> 0:04:23.320 terms of sentiment wasn't it. 0:04:23.800 --> 0:04:27.240 I think that the sentiment was also partly because we thought, well, 0:04:27.240 --> 0:04:29.200 what are they going to do next? We'd had enough 0:04:29.320 --> 0:04:33.679 and interstate investors, Melbourne had a good run for many years. 0:04:33.920 --> 0:04:38.160 We were relatively oversupplied in supplied in some areas, not 0:04:38.200 --> 0:04:41.640 all areas, which isn't always a massive issue. But I 0:04:41.680 --> 0:04:44.200 think that it had a good run. That we dealt 0:04:44.240 --> 0:04:47.200 with COVID in a way that wasn't very popular, and 0:04:47.240 --> 0:04:49.479 then it was like what else is this government going 0:04:49.560 --> 0:04:51.240 to do? What else are they capable of? And it 0:04:51.279 --> 0:04:53.440 was almost like I like to liken it to the 0:04:53.480 --> 0:04:57.760 Carton Football Club, everybody almost really enjoyed the lot, you 0:04:57.760 --> 0:04:58.599 know Melbourne. 0:05:00.839 --> 0:05:05.359 Some Sydney siders enjoy seeing Melbourne's struggle in any fashion. 0:05:05.480 --> 0:05:08.480 I don't tell that for a moment. We know that 0:05:08.560 --> 0:05:11.039 we know that all too well. But let's rise above 0:05:11.080 --> 0:05:14.560 all that as investors and look strictly at the numbers. 0:05:14.800 --> 0:05:18.960 So I suppose what I'm asking you is that issue 0:05:19.040 --> 0:05:21.320 that seem government are still in power in Victoria, right, 0:05:21.360 --> 0:05:22.920 So is that risk still on the table? 0:05:23.520 --> 0:05:26.840 Well, okay, okay, So I think that we've seen this 0:05:27.400 --> 0:05:30.600 pan out now for a period of time and realized 0:05:30.720 --> 0:05:33.440 that not a lot has happened. We haven't had this 0:05:33.680 --> 0:05:37.280 huge despite what the media says, and even the headlines 0:05:37.320 --> 0:05:40.279 of people are leaving Victoria and drives, it's simply untrue. 0:05:40.279 --> 0:05:42.719 If you look at the ABS figures more people left 0:05:42.800 --> 0:05:46.159 Queensland last year than Victoria and that's on a numbers basis, 0:05:46.160 --> 0:05:48.840 so on a percentage basis, it's much greater. Right, So 0:05:49.480 --> 0:05:52.560 I think we've got it. People are starting to see 0:05:52.960 --> 0:05:56.640 the truth. There's not anything massive that's happened. We haven't 0:05:56.680 --> 0:06:00.440 grown hugely, but we've also become incredibly a foe audible 0:06:00.560 --> 0:06:04.360 and I know that whilst there are some talks about 0:06:04.839 --> 0:06:09.560 some additional taxes on property in general, it seems that 0:06:09.640 --> 0:06:14.080 the huge, the huge imposition to Victorians in particular, it 0:06:14.400 --> 0:06:17.200 has stopped, right, So we're not not quite sure that 0:06:17.279 --> 0:06:19.160 much more is coming. I think we've had We've watched 0:06:19.160 --> 0:06:22.120 it play out a bit. There's also been other states 0:06:22.120 --> 0:06:25.400 that have made very unpopular policy decisions, and you know 0:06:25.520 --> 0:06:28.600 that just hasn't been as as widely publicized. 0:06:29.000 --> 0:06:31.440 Actually, Hugh Robinson's The Financial Advisory based out of Brism 0:06:31.600 --> 0:06:33.120 was on the show sometime ago and him at the 0:06:33.160 --> 0:06:34.840 point that Land tax is actually and the way it's 0:06:34.880 --> 0:06:36.880 going on the forward estimates inside the budgets of the 0:06:36.920 --> 0:06:39.360 two states, land tax will be higher in Queensland than 0:06:39.400 --> 0:06:42.000 it will be in Victoria, and so the Victoria might 0:06:42.040 --> 0:06:44.880 have more taxes, but the one that really matters to 0:06:44.920 --> 0:06:47.359 most people is land tax and it's heading to be 0:06:47.440 --> 0:06:50.040 higher in Queensland. Okay, we've got those things on the table. 0:06:50.320 --> 0:06:53.640 Where in the city of Melbourne are the bargains and 0:06:53.720 --> 0:06:57.159 what are the type of properties that offer opportunity to 0:06:57.200 --> 0:06:57.800 our listeners. 0:06:58.720 --> 0:07:02.880 Well, my strong focus for most people that are trying 0:07:02.880 --> 0:07:05.960 to increase wealth, right, not drawing down on their income, 0:07:06.000 --> 0:07:08.840 but increasing wealth is capital growth and everyone's heard me 0:07:08.880 --> 0:07:10.400 talk about that a lot. I think that's where the 0:07:10.440 --> 0:07:13.680 magic is. You change your wealth position by through capital 0:07:13.720 --> 0:07:16.920 growth with property yield after all the costs associated with 0:07:16.960 --> 0:07:19.480 it rarely changes anything. Okay, it's a good way to 0:07:19.480 --> 0:07:21.840 pay for the asset while it grows in value. So 0:07:21.920 --> 0:07:24.680 my strong focus is how do we find there's nuggets 0:07:24.680 --> 0:07:28.560 of growth. And you've said affordable anyway, and affordable is 0:07:28.560 --> 0:07:32.440 actually a really important part of finding these nuggets. Those 0:07:32.520 --> 0:07:35.280 areas that are less affordable that have bigger supply issues 0:07:35.320 --> 0:07:37.480 have traditionally had a lot of volatility, so you've really 0:07:37.520 --> 0:07:40.400 got to ride the wave. So I'm really looking for 0:07:40.400 --> 0:07:44.200 those suburbs that are affordable because if you think about 0:07:44.240 --> 0:07:47.120 it just logically, there's a much greater percentage of the 0:07:47.120 --> 0:07:50.120 population that can afford it, so you've got more buyers. 0:07:50.200 --> 0:07:53.840 You know, always so looking for affordability, and there's different 0:07:53.840 --> 0:07:56.320 ways to do that. There's going into those sort of 0:07:56.360 --> 0:07:59.400 those growth corridors, which I do like. Some of those 0:07:59.440 --> 0:08:02.440 growth corridors that can sometimes appear like they've got a 0:08:02.440 --> 0:08:06.360 lot of land available, also present the opportunity to build 0:08:06.400 --> 0:08:09.800 more hospitals, to build more schools, to build better roads, 0:08:10.160 --> 0:08:12.480 and so the Victorian State government has done a very 0:08:12.520 --> 0:08:15.280 good job of building what we call employment clusters. We 0:08:15.360 --> 0:08:18.680 don't build commuter suburbs where you have to commute to 0:08:18.680 --> 0:08:21.760 get to work. I think it's something like seventy percent 0:08:21.840 --> 0:08:24.600 of the people that live in the Melton that work 0:08:24.760 --> 0:08:29.320 and live in melton Shire actually work locally. They don't commute, 0:08:29.320 --> 0:08:32.360 which is a huge number of local workers. So I'm 0:08:32.440 --> 0:08:35.240 looking for if I'm looking for growth corridors, I'm looking 0:08:35.240 --> 0:08:39.440 for a lot of local employment. Could be southeast your Cranburns. 0:08:39.480 --> 0:08:41.960 A lot of that is now getting quite expensive. And 0:08:42.000 --> 0:08:44.240 I can tell you fifteen years ago people looked at 0:08:44.280 --> 0:08:46.760 Cranburn and said it's all land, there's too much available, 0:08:46.760 --> 0:08:50.200 and yet it's been an incredible performer against other inner 0:08:50.240 --> 0:08:51.120 urban suburbs. 0:08:51.559 --> 0:08:53.800 Of interesting straight away that when you're looking at the city, 0:08:53.880 --> 0:08:57.360 you're looking at you were looking at middle to alto suburbs. 0:08:57.600 --> 0:08:59.880 You didn't do you mention them first? 0:09:00.080 --> 0:09:01.120 Yeah, I'm mentioning them first. 0:09:01.160 --> 0:09:03.920 These are growth, these are new housing estates basically. 0:09:04.360 --> 0:09:06.720 It sometimes new housing estates, sometimes we get a bit 0:09:06.720 --> 0:09:08.839 closer to the suburb. Right now, I'm talking about new 0:09:08.840 --> 0:09:11.240 housing estates. We've done a lot in Melton, a lot 0:09:11.240 --> 0:09:13.839 in Deanside, a lot in Werribe. I mean, Weerriby is 0:09:13.840 --> 0:09:16.520 an established area, but it has a few little infill 0:09:16.679 --> 0:09:19.400 sites that we've invested in. So that's one way to 0:09:19.440 --> 0:09:21.600 do it. And the good thing about that is that 0:09:21.640 --> 0:09:24.640 you're getting the benefit of a lot of migration, a 0:09:24.640 --> 0:09:27.240 lot of population growth, but a lot of a lot 0:09:27.440 --> 0:09:30.600 of infrastructure growth. There are new jobs going in which 0:09:30.640 --> 0:09:33.559 creates household income growth, which in the end is a 0:09:33.640 --> 0:09:36.080 lead indicator for price growth. Right So I love that 0:09:36.600 --> 0:09:40.960 then there's another way to find affordability, but without investing 0:09:41.000 --> 0:09:43.400 in units and townhouses which are unlikely to give you 0:09:43.440 --> 0:09:45.920 the same effects in terms of capital growth. Because we're 0:09:45.920 --> 0:09:48.440 focusing on capital growth, we want as much land as possible, 0:09:48.679 --> 0:09:53.160 and that's going to those regentrifying suburbs. You know, your Coburgs, 0:09:53.400 --> 0:09:57.800 your sunshines going towards the Monash, further out from the Monash, 0:09:57.800 --> 0:10:00.640 even your seafrets are very expensive now. But finding those 0:10:00.640 --> 0:10:04.600 suburbs that are still a little affordable the problem is 0:10:05.080 --> 0:10:06.920 one of the things that a lot of that in 0:10:07.480 --> 0:10:09.600 my experience, that I've learned the hard way, and that 0:10:09.640 --> 0:10:12.760 a lot of people don't take into consideration when they're investing, 0:10:12.880 --> 0:10:15.800 is one thing, is this property doubling in ten years 0:10:15.920 --> 0:10:18.840 or doing more right? Capital growth great, but you have 0:10:18.920 --> 0:10:21.720 to be able to hold it, and the holding costs 0:10:21.760 --> 0:10:24.240 is often the killer, just like cash flow in a business. 0:10:24.720 --> 0:10:27.360 And if you are buying older properties, because you want 0:10:27.360 --> 0:10:29.839 to spend seven hundred and fifty which is the average 0:10:30.000 --> 0:10:34.000 investment price, so average investor in Australia will want to 0:10:34.000 --> 0:10:36.640 spend about seven hundred and fifty to eight hundred. There's 0:10:36.679 --> 0:10:39.040 not a lot of brand new, beautiful properties that you 0:10:39.040 --> 0:10:41.320 can buy in the inner urban ring for that price. 0:10:41.600 --> 0:10:43.640 So you're often if you're going in an urban, you're 0:10:43.640 --> 0:10:47.199 often buying something that may may cost you a lot 0:10:47.240 --> 0:10:49.920 in terms of you know, constantly doing it up, et cetera. 0:10:50.080 --> 0:10:52.040 And often the yields can be a little bit lower, 0:10:52.360 --> 0:10:54.880 and so if it's hard to cash flow and it's 0:10:54.880 --> 0:10:57.040 hard to hold, then you may not be in a 0:10:57.120 --> 0:10:59.480 position to hold it long term. So I've had a 0:10:59.480 --> 0:11:02.960 lot of it's James that have purchased older properties. I 0:11:03.080 --> 0:11:05.120 did it myself, It's what I used to do, and 0:11:05.120 --> 0:11:07.040 they've just said, we just simply can't afford it because 0:11:07.040 --> 0:11:08.880 every cent that we get from the tenant just goes 0:11:08.920 --> 0:11:11.080 and in repairs. 0:11:10.760 --> 0:11:13.520 Because he used our relatively low, very long. So the 0:11:13.559 --> 0:11:15.720 red lincome is con considering what they've paid out and 0:11:15.760 --> 0:11:17.920 come considering what the mortgage is, what's coming in is 0:11:17.960 --> 0:11:20.440 relatively low. So they get caught in that sort of trap, 0:11:20.480 --> 0:11:24.199 and that's more common in the inner city older style properties. 0:11:24.280 --> 0:11:29.200 Is it, Yes, absolutely absolutely so. Are the only better 0:11:29.200 --> 0:11:31.680 in the subject of the subverbs that you've mentioned, Is 0:11:31.720 --> 0:11:32.600 the yield any better? 0:11:32.960 --> 0:11:36.199 Well, they are. You can you can get something relatively new, 0:11:36.240 --> 0:11:38.320 a couple of years old. We're often looking for something 0:11:38.440 --> 0:11:40.760 no more than five years old if we can, right, 0:11:40.840 --> 0:11:43.400 because we want as much as possible to just buy 0:11:43.440 --> 0:11:45.280 this asset and get on with that day job and 0:11:45.320 --> 0:11:46.679 let it go up in value. I just don't even 0:11:46.720 --> 0:11:48.200 want to know about it, I say to some of 0:11:48.240 --> 0:11:50.719 my clients. If my life depended on driving it to 0:11:50.760 --> 0:11:52.439 some of my suburbs, I wouldn't even know where they are, 0:11:52.480 --> 0:11:54.200 which is a good thing. I don't want to worry 0:11:54.240 --> 0:11:54.679 about them. 0:11:54.720 --> 0:11:57.080 Well, that's the Warren Buffett line. You know that he 0:11:57.120 --> 0:11:59.200 should be able to go to the movies for the 0:11:59.280 --> 0:12:01.560 afternoon care of what the share market is doing, if 0:12:01.559 --> 0:12:02.280 he's made the right. 0:12:02.120 --> 0:12:05.360 Decisions, Yes, exactly. Just let them do their thing without 0:12:05.440 --> 0:12:08.199 me worrying about them. And so in some of these 0:12:08.200 --> 0:12:12.120 suburbs you can still purchase things that aren't necessarily units. 0:12:12.320 --> 0:12:14.280 If I am looking at a unit for a client, 0:12:14.400 --> 0:12:16.800 I'll be looking for something that's on as much land 0:12:16.840 --> 0:12:22.800 as possible, and obviously I will rely heavily on site 0:12:22.840 --> 0:12:26.319 inspections and professional building inspections, et cetera to make sure 0:12:26.320 --> 0:12:29.240 there's no underlying issue. But I'm always looking for as 0:12:29.320 --> 0:12:31.600 much land as I can get, and also as much 0:12:31.720 --> 0:12:34.680 house as I can get because you need to tenant it. 0:12:35.160 --> 0:12:37.280 So some of these outer suburbs that have got, in 0:12:37.360 --> 0:12:42.280 particular new hospitals, new infrastructure that is under construction, because 0:12:42.320 --> 0:12:44.680 you know, a promise of a hospital could be twenty 0:12:44.760 --> 0:12:48.760 years away, right, So I'm looking for a Footscray Sunshine 0:12:48.800 --> 0:12:52.240 has got an existing hospital. Melton's Hospital has commenced, and I. 0:12:52.320 --> 0:12:55.600 Just ask you, as an investor, is that just a 0:12:55.640 --> 0:12:57.480 signal or is it literally that you will be able 0:12:57.559 --> 0:13:00.000 to rent to people who work in those big areas, hops, 0:13:00.280 --> 0:13:00.640 et cetera. 0:13:01.080 --> 0:13:04.959 Yeah, I'm using hospital probably unfairly, but I love hospitals 0:13:05.000 --> 0:13:07.280 because they create long term growth and they bring in 0:13:07.360 --> 0:13:10.120 other professionals, and they're bringing in a relatively high income. 0:13:10.360 --> 0:13:12.840 And if you're talking about so remember I said that 0:13:13.200 --> 0:13:17.160 in our experience, the most important factor and characteristic for 0:13:17.240 --> 0:13:22.280 future price growth in Australia globally is something family income growth, 0:13:22.320 --> 0:13:25.200 household income growth. And if a new hospital is going 0:13:25.240 --> 0:13:28.000 in then you're often particularly in these outer rings or 0:13:28.040 --> 0:13:30.640 the inner urban ring, but right on the borders, you're 0:13:30.640 --> 0:13:35.640 often increasing the employment the household employment income as a 0:13:35.679 --> 0:13:38.120 result of having a lot of health workers. In some 0:13:38.200 --> 0:13:41.920 of the suburbs we're looking at, there's new legal facilities 0:13:41.920 --> 0:13:44.240 going in, new courts, et cetera, which is also a 0:13:44.280 --> 0:13:47.240 great thing because what you're looking for is the sort 0:13:47.240 --> 0:13:49.520 of infrastructure that is going to bring a lot of 0:13:49.520 --> 0:13:53.520 employment and long term employment. Schools are wonderful because it 0:13:53.559 --> 0:13:56.440 will bring people looking to house their children in a 0:13:56.440 --> 0:13:59.400 good quality school, and certainly a good quality high school 0:13:59.600 --> 0:14:03.000 can be unbelievable for a suburb. There are many suburbs 0:14:03.000 --> 0:14:04.960 that people just buy or rent just to get their 0:14:05.000 --> 0:14:08.000 children into these really great public schools. But it doesn't 0:14:08.000 --> 0:14:11.560 necessarily create a lot of jobs, whereas there are other 0:14:11.600 --> 0:14:14.200 types of infrastructure that will create a lot of jobs 0:14:14.280 --> 0:14:17.920 and also entice other workers to come in and service 0:14:18.280 --> 0:14:20.760 the local health workers, et cetera. So it's sort of 0:14:20.800 --> 0:14:22.600 a you know, snipall effect. 0:14:22.480 --> 0:14:24.000 Just something I really want to put to you, and 0:14:24.120 --> 0:14:26.360 I mean, obviously I'm thinking is very strong and it's 0:14:26.360 --> 0:14:29.760 interesting and it's interesting how you are looking. Obviously, it 0:14:29.760 --> 0:14:32.160 turns out we're talking about city of Melbourne being a bargain, 0:14:32.200 --> 0:14:36.000 so which areas. But your theme and you're largely could 0:14:36.000 --> 0:14:38.200 be applied at any city. Let's come back in a moment. 0:14:38.240 --> 0:14:39.880 I want to ask you about one thing that sort 0:14:39.880 --> 0:14:42.480 of hangs over all that that just me threaten it 0:14:42.800 --> 0:14:54.280 back in a moment. Hello, Welcome back to the Australians 0:14:54.320 --> 0:14:57.280 Money Puzzle Podcast. James Kirby here with the Nisa Cavello. 0:14:57.560 --> 0:14:59.840 We left you with a cliffhanger. What is it that 0:15:00.080 --> 0:15:06.200 possibly go wrong with Anissa's concept of the opportunities? Can 0:15:06.200 --> 0:15:07.600 I put words in you about and say, in any 0:15:07.600 --> 0:15:10.480 city and it just happens to be Melbourne being the 0:15:10.480 --> 0:15:13.160 one that you are expert in and from a nationwide 0:15:13.160 --> 0:15:16.640 perspective is clearly the bargain state at the moment. But 0:15:16.840 --> 0:15:20.120 you and you outline how you like these new areas, 0:15:20.160 --> 0:15:23.160 new clusters, new growth developments, for they have new hospitals 0:15:23.160 --> 0:15:26.320 and they have you're really focusing on houses and alone 0:15:26.320 --> 0:15:28.920 houses with land. The only thing that I would from 0:15:28.960 --> 0:15:31.520 an economic point of view, the challenge might be supply. 0:15:32.440 --> 0:15:36.760 That scarcity isn't there and that Melbourne and Victoria actually 0:15:36.800 --> 0:15:40.280 has the best supply in the country. There's a variety 0:15:40.280 --> 0:15:41.520 of reasons for that, but the main one is that 0:15:41.560 --> 0:15:43.800 you can keep building forever. There's no parks, lakes or 0:15:43.880 --> 0:15:45.680 the ocean. To get in the way like other cities. 0:15:46.440 --> 0:15:48.560 What do you say to that if I said to you, 0:15:48.600 --> 0:15:50.840 I love your thinking. I'm ready, I've got my checkbook 0:15:50.960 --> 0:15:52.600 half opened, but I'm worried about supply. 0:15:53.720 --> 0:15:58.720 Well, we don't. I'm not only investing in these growth areas, 0:15:58.720 --> 0:16:00.080 but it is an area that we do like. It 0:16:00.160 --> 0:16:01.960 is one of our themes. Okay, just to say that, 0:16:02.040 --> 0:16:04.080 just a bit clear, but if you looked at it, 0:16:04.080 --> 0:16:07.120 I think I use the example before a Cranburn fifteen 0:16:07.160 --> 0:16:10.240 years ago was just paddocks and many people said, why 0:16:10.400 --> 0:16:12.800 would I invest there? There is so much supply. Now 0:16:12.840 --> 0:16:16.280 there is nothing. And so often when you have these 0:16:16.360 --> 0:16:20.200 large land supplies and you have these huge population growth 0:16:20.240 --> 0:16:22.120 to go with it, it's the chicken and the egg. 0:16:22.360 --> 0:16:24.800 Why are we getting the population growth? Because there is 0:16:25.280 --> 0:16:28.360 job opportunity because there is land to build new roads, 0:16:28.400 --> 0:16:31.080 There is land to build new hospitals and new schools, 0:16:31.320 --> 0:16:34.080 so we are able, we have the capacity to build 0:16:34.080 --> 0:16:38.000 these employment clusters which will then bring the population. So 0:16:38.080 --> 0:16:41.320 that's one thing. Sometimes this presents opportunities. And sometimes when 0:16:41.360 --> 0:16:44.800 you drive out to suburbs like towards Caroline Springs and 0:16:44.960 --> 0:16:47.200 you go on the Western Ring Road, and then you 0:16:47.360 --> 0:16:49.000 end up on the I've forgotten the name. I think 0:16:49.000 --> 0:16:54.200 it's EMA, and just you go past vacant Land, huge 0:16:54.240 --> 0:16:57.000 industrial estates in vacant Land. A lot of that is 0:16:57.040 --> 0:17:00.520 not rezoned residential, a lot of it is commercial, and 0:17:00.600 --> 0:17:04.200 so there are huge pockets of future employment in these areas, 0:17:04.240 --> 0:17:07.479 which is exciting. So some of it is actually an 0:17:07.480 --> 0:17:11.400 opportunity for Victoria because we have the land to create jobs, 0:17:11.680 --> 0:17:15.200 to create employment clusters. The other thing that people don't 0:17:15.240 --> 0:17:18.280 take into consideration is we've had a lag in building 0:17:18.680 --> 0:17:22.119 approvals and construction, a massive lag, and yet our population 0:17:22.240 --> 0:17:26.000 growth has accelerated, and so we are now way behind 0:17:26.040 --> 0:17:26.919 where we need to be. 0:17:27.880 --> 0:17:31.040 Okay, So it sounds like excepploint doesn't disturb you really 0:17:31.240 --> 0:17:33.840 because you're coming in with a it's a more optimistic 0:17:33.920 --> 0:17:35.920 view rather than saying no, we need a bit of serciosity, 0:17:35.920 --> 0:17:38.680 forget the price. You're coming in a different point of view, really, 0:17:38.680 --> 0:17:41.520 which is like top down. You're saying no, there's population growth, 0:17:41.560 --> 0:17:43.400 so there's going to be literally new towns, and these 0:17:43.440 --> 0:17:46.280 new towns the values will improve. And I suppose what's 0:17:46.280 --> 0:17:50.080 interesting with your approaches that century level, Like you said 0:17:50.080 --> 0:17:53.600 seven fifty, which is, if someone's listening in Sydney, what 0:17:53.680 --> 0:17:55.080 can they buy for seven fifty I have? 0:17:55.640 --> 0:17:57.840 Again, they're lucky, that's right. 0:17:57.720 --> 0:17:59.679 Very little. There's something I wanted to bring in here, 0:18:00.280 --> 0:18:01.840 which is we have lots of people on the show 0:18:01.920 --> 0:18:05.600 and they're coming with different perspectives on property to us 0:18:05.640 --> 0:18:08.479 just a little bit. I wanted to tell the listeners, 0:18:08.520 --> 0:18:10.520 now that we know you know that we know your expertise, 0:18:10.560 --> 0:18:12.600 now that we know what you have to see, it's 0:18:12.640 --> 0:18:15.919 interesting how you started in property, and you might just 0:18:16.240 --> 0:18:18.119 synopsize it for us as to how you got to 0:18:18.520 --> 0:18:22.000 where you are, and just before you do in how 0:18:22.000 --> 0:18:23.320 many properties are you running now? 0:18:24.520 --> 0:18:28.280 So I'm under my peak. So and I hate answering 0:18:28.320 --> 0:18:30.760 this question because I say all the time to media, 0:18:30.840 --> 0:18:33.359 I don't want everybody to go up by seventeen properties. 0:18:33.800 --> 0:18:36.600 I think it's ridiculous for most people. Right, yeah, I 0:18:36.640 --> 0:18:39.600 think you know, two, three, four really good place properties 0:18:39.680 --> 0:18:41.280 is all you need. But I'm in the industry, so 0:18:41.320 --> 0:18:44.240 I buy and sell. I'm now under fifteen. I'm about 0:18:44.280 --> 0:18:46.439 to start buying up again. So I've gone down and 0:18:46.480 --> 0:18:49.080 I go up, and again I don't recommend other people 0:18:49.160 --> 0:18:51.680 do that because the cost of transaction is so high with. 0:18:51.680 --> 0:18:54.040 Property, you're in it all day long. You're a professionally, 0:18:54.119 --> 0:18:56.280 it's right. So you're taking three or four properties for 0:18:56.320 --> 0:18:59.000 the serious investor. It's interesting because we talked about stocks 0:18:59.000 --> 0:19:02.720 and we see ten. If you're serious, ten to fifteen, 0:19:02.760 --> 0:19:04.760 you should be able to name them, remember them and 0:19:04.800 --> 0:19:06.520 know how much they are on the d If you've 0:19:06.600 --> 0:19:09.119 got forty stuction, probably not able to do that. So 0:19:09.320 --> 0:19:11.840 something similar with the properties had to concentrate. So tell 0:19:11.920 --> 0:19:13.719 us how did you get to this point? How did 0:19:13.760 --> 0:19:14.560 you get into property? 0:19:15.680 --> 0:19:17.720 Well, it's a long I won't go back all the way, 0:19:17.800 --> 0:19:20.320 but I bought property when I was very young, not 0:19:20.400 --> 0:19:22.800 knowing what I was doing. I was in financial services 0:19:22.800 --> 0:19:25.040 for many years. But I'm Italian and if you know 0:19:25.080 --> 0:19:27.760 anything about Talian parents, they make you buy property or 0:19:27.800 --> 0:19:29.440 you're not a good girl, right or a good boy. 0:19:29.560 --> 0:19:32.679 So you do what you're told. You do what you're told, and. 0:19:32.600 --> 0:19:34.720 So I thought, I think that. 0:19:36.680 --> 0:19:38.840 It's a lot of helt. So I bought a couple 0:19:38.840 --> 0:19:41.600 of properties, and I unfortunately listened to my parents. I 0:19:41.600 --> 0:19:43.399 didn't do what I wanted to do because I wanted 0:19:43.400 --> 0:19:45.640 to buy a property in footscram my mother said, oh, 0:19:45.680 --> 0:19:47.600