1 00:00:14,630 --> 00:00:17,590 Speaker 1: Hello and welcome to The Australian's Money Puzzle Podcast. I'm 2 00:00:17,630 --> 00:00:20,910 Speaker 1: James Kirby, the Wealth Editor at The Australian. Welcome aboard, everybody. 3 00:00:21,230 --> 00:00:25,380 Speaker 1: Interesting week for property investors, homebuyers too. You might have 4 00:00:25,420 --> 00:00:27,780 Speaker 1: seen the budget. You say, well, I didn't see much 5 00:00:27,820 --> 00:00:30,580 Speaker 1: in the budget for homebuyers, and we will be talking 6 00:00:30,620 --> 00:00:32,280 Speaker 1: about that in a moment. You might have seen the 7 00:00:32,320 --> 00:00:37,300 Speaker 1: budget reply from Peter Dutton. Budget replies don't normally carry 8 00:00:37,360 --> 00:00:40,800 Speaker 1: much news, I find, but this year, of course, he's 9 00:00:41,030 --> 00:00:45,699 Speaker 1: reiterated And expanded to some extent on the coalition's plan, 10 00:00:46,080 --> 00:00:48,730 Speaker 1: which would be to allow people to use their super 11 00:00:48,740 --> 00:00:51,890 Speaker 1: to buy their first home, up to $ 50, 000. That is 12 00:00:51,930 --> 00:00:55,850 Speaker 1: a controversial policy. I wonder what you think of that. 13 00:00:55,870 --> 00:00:58,050 Speaker 1: I have to tell you that I think it would 14 00:00:58,070 --> 00:01:02,970 Speaker 1: be very successful. For the simple reason that the tax 15 00:01:02,990 --> 00:01:08,090 Speaker 1: system is utterly loaded in favor of homeowners. And I 16 00:01:08,130 --> 00:01:11,130 Speaker 1: think people, if they don't know that, they will gradually 17 00:01:11,170 --> 00:01:13,959 Speaker 1: get to know that. if they are potential home buyers. 18 00:01:14,520 --> 00:01:17,240 Speaker 1: Another theme which is really starting to get going this 19 00:01:17,300 --> 00:01:20,740 Speaker 1: year is that units and townhouses are looking better by 20 00:01:20,760 --> 00:01:23,959 Speaker 1: the day against standalone properties. And that is a reversal 21 00:01:24,560 --> 00:01:26,600 Speaker 1: of what we've seen for recent years. I'm going to 22 00:01:26,640 --> 00:01:31,100 Speaker 1: talk about that with my guest, Terry Ryder of Hotspotting. 23 00:01:31,120 --> 00:01:32,700 Speaker 1: He's been on before. How are you, Terry? 24 00:01:33,600 --> 00:01:37,750 Speaker 2: Very well, James. And like you, very interested in what's 25 00:01:37,810 --> 00:01:39,990 Speaker 2: in the budget and also what's not in the budget. 26 00:01:40,910 --> 00:01:43,510 Speaker 1: Is there something in the budget I failed to notice, Terry? 27 00:01:45,170 --> 00:01:47,430 Speaker 2: No, I think I've been reading what you've been writing 28 00:01:47,470 --> 00:01:49,230 Speaker 2: about it, James, and I think you've picked up on 29 00:01:49,270 --> 00:01:53,420 Speaker 2: most of the major issues that are included in the budget. 30 00:01:53,960 --> 00:01:58,700 Speaker 2: From our perspective, it's what's not there that's probably most significant, 31 00:01:58,720 --> 00:02:02,330 Speaker 2: particularly dealing with the rental shortage short term. 32 00:02:02,500 --> 00:02:06,690 Speaker 1: Was there something outstanding you thought they are in a 33 00:02:06,710 --> 00:02:08,150 Speaker 1: position to do that they didn't do? 34 00:02:09,630 --> 00:02:12,870 Speaker 2: Well, yeah, I mean, the reality is that over 90% 35 00:02:12,870 --> 00:02:15,300 Speaker 2: of the homes that people rent in this country are 36 00:02:15,340 --> 00:02:18,940 Speaker 2: provided by private investors, often referred to as mum and 37 00:02:18,960 --> 00:02:22,639 Speaker 2: dad investors, not big corporations, not government, who have been 38 00:02:22,860 --> 00:02:29,690 Speaker 2: underfunding social housing for many years. And private investors have 39 00:02:29,730 --> 00:02:32,990 Speaker 2: been increasingly, little by little, dropping out of the market 40 00:02:33,070 --> 00:02:35,970 Speaker 2: in recent years. They're not present in the numbers that 41 00:02:36,010 --> 00:02:40,679 Speaker 2: we need to provide a balanced market, vacancies around 3%, 42 00:02:40,680 --> 00:02:46,110 Speaker 2: for example. And there are reasons for that. They've been demonised, disincentivised, 43 00:02:46,570 --> 00:02:49,690 Speaker 2: little by little, steadily over the last five or six years. 44 00:02:50,030 --> 00:02:52,070 Speaker 2: And that needs to be reversed. Otherwise, we're going to 45 00:02:52,110 --> 00:02:56,390 Speaker 2: continue to have this slow drift of people out of 46 00:02:56,470 --> 00:02:58,750 Speaker 2: property investment. And that begs the question. 47 00:02:58,770 --> 00:03:00,510 Speaker 1: To be fair to them, they did put enormous money, 48 00:03:00,510 --> 00:03:04,930 Speaker 1: $ 6 billion in the latest cut, into social housing. Does that, 49 00:03:05,110 --> 00:03:06,109 Speaker 1: in its way, reduce. 50 00:03:07,630 --> 00:03:09,769 Speaker 1: Pressure on vacancy rates ultimately? 51 00:03:09,790 --> 00:03:12,519 Speaker 2: Well, my reading of it, and I think I was 52 00:03:12,560 --> 00:03:16,760 Speaker 2: reading what various people have analysed in terms of what's 53 00:03:16,820 --> 00:03:22,680 Speaker 2: in the budget, $ 6 billion towards dealing with the housing shortage, 54 00:03:22,720 --> 00:03:25,079 Speaker 2: some of which going into social housing, some of which 55 00:03:25,139 --> 00:03:27,769 Speaker 2: is going into infrastructure, a lot of which is going 56 00:03:27,830 --> 00:03:32,609 Speaker 2: into a handout to people to subsidise their rents. Big 57 00:03:32,669 --> 00:03:37,280 Speaker 2: numbers nationally, but for the individual, quite small numbers. We'll 58 00:03:37,310 --> 00:03:39,390 Speaker 2: make a small difference, but not a great difference. It 59 00:03:39,430 --> 00:03:42,930 Speaker 2: doesn't deal with the core issue. The core issue is 60 00:03:42,990 --> 00:03:45,990 Speaker 2: really the shortage of landlords in this country. That's what 61 00:03:46,030 --> 00:03:53,030 Speaker 2: we have a chronic undersupply of, and that's not addressed. Politicians, 62 00:03:53,710 --> 00:03:59,430 Speaker 2: certain politicians anyway, have been rather demonising landlords and private 63 00:03:59,470 --> 00:04:02,030 Speaker 2: investors as the villains of the peace. They're actually not 64 00:04:02,070 --> 00:04:04,910 Speaker 2: the problem. They're the solution. and that's not addressed in 65 00:04:04,930 --> 00:04:05,890 Speaker 2: this budget. 66 00:04:05,910 --> 00:04:08,530 Speaker 1: Okay, I hear you loud and clear. Tell me about 67 00:04:09,230 --> 00:04:12,430 Speaker 1: the idea of people being allowed to use super for 68 00:04:12,470 --> 00:04:14,770 Speaker 1: buying their first home. Do you think it would work? 69 00:04:14,950 --> 00:04:16,750 Speaker 1: If it worked, what difference would it make to the 70 00:04:16,790 --> 00:04:17,469 Speaker 1: property market? 71 00:04:18,420 --> 00:04:22,100 Speaker 2: Look, I mean, it will work to the extent that 72 00:04:22,120 --> 00:04:24,800 Speaker 2: it will help people get into the market, you know, 73 00:04:24,820 --> 00:04:28,640 Speaker 2: to provide perhaps a deposit that those struggling as renters 74 00:04:28,700 --> 00:04:32,740 Speaker 2: paying higher and higher rentals, in the current circumstances to 75 00:04:33,000 --> 00:04:36,100 Speaker 2: accumulate a sufficient deposit to get into the market. So 76 00:04:36,160 --> 00:04:38,300 Speaker 2: in the short term, it can have a positive impact. 77 00:04:38,440 --> 00:04:41,539 Speaker 2: I don't agree with, there's always a chorus of people 78 00:04:41,580 --> 00:04:46,820 Speaker 2: who spring up in the media when there's suggestion of 79 00:04:47,040 --> 00:04:49,660 Speaker 2: giving some help to first home buyers, whether it's grants 80 00:04:50,080 --> 00:04:52,240 Speaker 2: or this measure allowing them to use this, but that 81 00:04:52,279 --> 00:04:55,060 Speaker 2: will just inflate prices. I don't think there's any evidence 82 00:04:55,100 --> 00:04:58,080 Speaker 2: that that's true. And I don't think that'll be the case. 83 00:04:58,100 --> 00:05:00,500 Speaker 2: It will give people a helping hand and get people 84 00:05:01,900 --> 00:05:05,960 Speaker 2: the assistance they need perhaps to get that deposit together 85 00:05:05,980 --> 00:05:07,050 Speaker 2: and get into the market. 86 00:05:07,930 --> 00:05:10,500 Speaker 1: I suppose economists would probably argue with you that they 87 00:05:10,520 --> 00:05:14,510 Speaker 1: do lift prices, that if you stimulate, in any way, 88 00:05:14,529 --> 00:05:16,690 Speaker 1: if you give them access even to their super, which 89 00:05:16,750 --> 00:05:19,530 Speaker 1: is their own money, but even so, in doing so, 90 00:05:20,370 --> 00:05:22,029 Speaker 1: they have more to bid, right? They have more money 91 00:05:22,070 --> 00:05:23,830 Speaker 1: when they stand at the auction on a Saturday morning 92 00:05:23,850 --> 00:05:25,370 Speaker 1: so they can push up prices. 93 00:05:26,130 --> 00:05:30,479 Speaker 2: But I don't think... I think that factor is overstated. 94 00:05:30,500 --> 00:05:34,599 Speaker 2: I don't think people can just bid up prices. It's 95 00:05:34,640 --> 00:05:37,700 Speaker 2: often said that investors go to auctions and bid up prices. 96 00:05:38,120 --> 00:05:41,660 Speaker 2: In actual fact, I think there's a competition between an 97 00:05:41,720 --> 00:05:45,589 Speaker 2: investor and a first-home buyer, and they're the same age 98 00:05:45,650 --> 00:05:47,930 Speaker 2: and they have the same incomes. The first-home buyer actually 99 00:05:47,970 --> 00:05:50,530 Speaker 2: has a considerable advantage over the investor in terms of 100 00:05:50,770 --> 00:05:52,830 Speaker 2: it's all about borrowing capacity and just how much you 101 00:05:52,870 --> 00:05:55,909 Speaker 2: can afford to pay. You can't just keep bidding up prices. 102 00:05:55,930 --> 00:05:58,680 Speaker 2: You're limited by... your borrowing capacity and how much you 103 00:05:58,720 --> 00:06:02,539 Speaker 2: can afford to pay. And because investors pay higher interest 104 00:06:02,580 --> 00:06:05,420 Speaker 2: rates and because they don't have government grants and they 105 00:06:05,460 --> 00:06:10,840 Speaker 2: pay higher rates of stamp duty, higher everything really, council rates, insurances, 106 00:06:10,880 --> 00:06:14,900 Speaker 2: the lot, they're actually at a competitive disadvantage to first-home 107 00:06:14,930 --> 00:06:18,089 Speaker 2: buyers if they're standing side-by-side at an auction. 108 00:06:18,150 --> 00:06:21,810 Speaker 1: Yes, that's very interesting. I mean, yes, I see where 109 00:06:21,830 --> 00:06:24,410 Speaker 1: you're coming from. And if they're a self-managed super fund investor, 110 00:06:24,430 --> 00:06:28,360 Speaker 1: they're at a significant disadvantage. In terms of their costs, 111 00:06:29,060 --> 00:06:31,240 Speaker 1: not to mention the lending rates that are forced upon 112 00:06:31,260 --> 00:06:34,220 Speaker 1: them in the market. Okay, that's a very interesting point. 113 00:06:34,600 --> 00:06:37,320 Speaker 1: I just want to move on to a larger notion, 114 00:06:37,370 --> 00:06:40,370 Speaker 1: which I know you've really been picking up of late, 115 00:06:40,410 --> 00:06:42,470 Speaker 1: which is, and you call it a new paradigm. So 116 00:06:42,490 --> 00:06:45,669 Speaker 1: I'd love you to explain to our audience who are 117 00:06:45,750 --> 00:06:50,890 Speaker 1: active investors, what you're saying about the changing nature of 118 00:06:50,970 --> 00:06:54,700 Speaker 1: the post-COVID market in relation to units versus houses or 119 00:06:54,740 --> 00:06:55,740 Speaker 1: apartments versus houses. 120 00:06:56,430 --> 00:06:58,870 Speaker 2: Yeah, well, for as long as I've been doing what 121 00:06:58,910 --> 00:07:02,650 Speaker 2: I'm doing, researching and writing about real estate, over 40 122 00:07:02,650 --> 00:07:06,670 Speaker 2: years now, it's always been considered the rule of thumb 123 00:07:06,690 --> 00:07:09,070 Speaker 2: in real estate that houses on land provide better capital 124 00:07:09,110 --> 00:07:12,070 Speaker 2: growth and apartments. And if you look at the historical data, 125 00:07:12,290 --> 00:07:15,350 Speaker 2: that's supported by the numbers. What we're saying is that's 126 00:07:15,410 --> 00:07:18,830 Speaker 2: starting to change. And in some locations, many locations around Australia, 127 00:07:18,860 --> 00:07:22,260 Speaker 2: it has changed. So we're coming across more and more 128 00:07:22,360 --> 00:07:25,910 Speaker 2: instances now where we're looking at the numbers for apartments 129 00:07:26,090 --> 00:07:28,290 Speaker 2: and the numbers for houses in the same suburb or 130 00:07:28,310 --> 00:07:30,940 Speaker 2: the same town. And we're seeing that in the past 131 00:07:30,940 --> 00:07:35,840 Speaker 2: 12 months or the 10-year growth averages, apartments increasingly are 132 00:07:35,920 --> 00:07:41,220 Speaker 2: actually outperforming. And we're really interested in this trend. We've 133 00:07:41,240 --> 00:07:44,020 Speaker 2: been charting it for the last, say, 12 months or so. 134 00:07:44,040 --> 00:07:48,500 Speaker 2: It became quite strongly evident in the second half of 135 00:07:48,500 --> 00:07:53,590 Speaker 2: 2023 and it's continued in 2024, increasingly so. It's not 136 00:07:53,630 --> 00:07:57,190 Speaker 2: just about affordability, although that's part of it, because obviously 137 00:07:58,870 --> 00:08:03,150 Speaker 2: apartments in the same suburb are considerably cheaper than houses 138 00:08:03,230 --> 00:08:07,240 Speaker 2: in most instances. It's also about lifestyle. There are actually 139 00:08:07,340 --> 00:08:11,720 Speaker 2: quite a number of buying cohorts that are increasingly opting 140 00:08:11,820 --> 00:08:15,520 Speaker 2: for what you might call attached dwellings versus detached dwellings. 141 00:08:16,220 --> 00:08:22,210 Speaker 2: And so we've got people downsizing, older people downsizing, young 142 00:08:22,250 --> 00:08:25,350 Speaker 2: people trying to get into the market affordably. We've got 143 00:08:25,910 --> 00:08:29,420 Speaker 2: buyers who just simply like that low maintenance, lock up 144 00:08:29,450 --> 00:08:33,439 Speaker 2: and leave lifestyle. We've got lots of migrants coming from 145 00:08:33,520 --> 00:08:37,520 Speaker 2: countries where attached dwellings are the norm. They're comfortable with 146 00:08:37,580 --> 00:08:40,520 Speaker 2: that style of living. And there's another factor I think 147 00:08:40,820 --> 00:08:43,180 Speaker 2: is increasingly evident, and we're hearing more and more about 148 00:08:43,220 --> 00:08:46,640 Speaker 2: this from developers of apartments, that is the safety issue. 149 00:08:47,540 --> 00:08:51,660 Speaker 2: Safety is becoming increasingly an issue, particularly for older people. 150 00:08:51,700 --> 00:08:58,020 Speaker 2: There's so much media about crime on the streets, knife attacks, 151 00:08:58,280 --> 00:09:04,150 Speaker 2: all sorts of stories about violence. And people are perhaps 152 00:09:04,190 --> 00:09:09,530 Speaker 2: feeling increasingly not safe on the ground floor in a 153 00:09:09,570 --> 00:09:13,030 Speaker 2: suburban home. They feel a lot safer on the 10th 154 00:09:13,070 --> 00:09:16,489 Speaker 2: or 15th floor of a secure modern apartment building. And 155 00:09:16,530 --> 00:09:20,850 Speaker 2: that's becoming a big factor. driving demand increasingly towards apartments. 156 00:09:21,570 --> 00:09:24,360 Speaker 1: Well, that's interesting. I wasn't aware of that. What I'm 157 00:09:24,390 --> 00:09:27,220 Speaker 1: hearing when you tell me about these suburbs where the 158 00:09:27,280 --> 00:09:32,460 Speaker 1: apartments are doing better in recent times, per square metre, 159 00:09:32,500 --> 00:09:37,320 Speaker 1: if you like, over the standalone homes, it's not the 160 00:09:37,360 --> 00:09:39,500 Speaker 1: majority of suburbs just yet, is it? Is it just 161 00:09:39,520 --> 00:09:40,040 Speaker 1: select pockets? 162 00:09:40,080 --> 00:09:42,469 Speaker 2: No, I couldn't say it's the majority of suburbs. What 163 00:09:42,490 --> 00:09:46,050 Speaker 2: we would say is that increasingly we're coming across instances 164 00:09:46,190 --> 00:09:53,010 Speaker 2: where In various ways, apartments are outperforming. In some cases, 165 00:09:53,110 --> 00:09:55,829 Speaker 2: on all the metrics, it might be that in the 166 00:09:56,030 --> 00:09:59,070 Speaker 2: past 12 months, the median price for apartments has grown 167 00:09:59,110 --> 00:10:02,410 Speaker 2: more than for houses. On the 10-year growth average, apartments 168 00:10:02,790 --> 00:10:06,770 Speaker 2: are more. Obviously, rental yields would tend to be higher, 169 00:10:06,970 --> 00:10:10,699 Speaker 2: although there are additional costs, of course, with apartment owners. 170 00:10:11,250 --> 00:10:16,059 Speaker 2: But also days on market are very often considerably shorter. 171 00:10:17,300 --> 00:10:20,449 Speaker 2: We're seeing examples of that popping up. particularly in the 172 00:10:21,050 --> 00:10:24,449 Speaker 2: more expensive markets. So affordability is a factor, obviously. So 173 00:10:24,570 --> 00:10:27,240 Speaker 2: we're seeing instances in Sydney, we're seeing instances in Melbourne, 174 00:10:27,660 --> 00:10:31,420 Speaker 2: a lot of suburb examples in Brisbane, and some of 175 00:10:31,440 --> 00:10:36,870 Speaker 2: the more expensive and popular and large regional cities, particularly 176 00:10:36,890 --> 00:10:40,490 Speaker 2: the Gold Coast and the Sunshine Coast. I mean, for example, 177 00:10:40,510 --> 00:10:45,960 Speaker 2: in Noosa Heads, Apartments are expensive there as well as houses. 178 00:10:45,980 --> 00:10:49,120 Speaker 2: The 10-year growth average for houses is very good, 9.5% 179 00:10:49,120 --> 00:10:54,449 Speaker 2: per year, according to the CoreLogic figures, but apartments are 180 00:10:54,570 --> 00:10:56,390 Speaker 2: close to 15% per year. 181 00:10:57,130 --> 00:11:00,510 Speaker 1: Is that so? Isn't that interesting? Now, the economist in 182 00:11:00,550 --> 00:11:03,850 Speaker 1: me says, is this like a reversion to the mean? 183 00:11:04,030 --> 00:11:07,380 Speaker 1: Is this just that the houses ran too hot and 184 00:11:07,440 --> 00:11:09,390 Speaker 1: the apartments are now catching up? 185 00:11:09,400 --> 00:11:12,140 Speaker 2: Look, I think it's more that there are, more and 186 00:11:12,179 --> 00:11:16,400 Speaker 2: more by cohorts who are choosing apartments. And it's the 187 00:11:16,470 --> 00:11:20,209 Speaker 2: weight of demand from growing numbers of people opting for 188 00:11:20,570 --> 00:11:25,910 Speaker 2: attached dwellings that is causing price performance to improve. It's 189 00:11:25,950 --> 00:11:28,410 Speaker 2: always been felt that the land content is the big 190 00:11:28,470 --> 00:11:33,090 Speaker 2: factor in driving price growth. I've never been totally sure 191 00:11:33,110 --> 00:11:36,580 Speaker 2: that that's true. And increasingly, we're seeing examples where that's 192 00:11:36,620 --> 00:11:37,500 Speaker 2: been contradicted. 193 00:11:38,000 --> 00:11:40,300 Speaker 1: But that means it's a hell of a lot more 194 00:11:40,340 --> 00:11:42,600 Speaker 1: than a... then some sort of temporary reversion to the 195 00:11:42,620 --> 00:11:44,760 Speaker 1: mean then, isn't it? It's like a structural change in 196 00:11:44,800 --> 00:11:45,800 Speaker 1: the nature of the market. 197 00:11:45,820 --> 00:11:47,900 Speaker 2: Well, that's why we're calling it a paradigm shift because 198 00:11:47,920 --> 00:11:51,210 Speaker 2: the dominant paradigm has always been that houses have outperformed. 199 00:11:51,610 --> 00:11:54,390 Speaker 2: But we're seeing more and more instances where it is 200 00:11:54,830 --> 00:11:58,170 Speaker 2: being contradicted. And so we're saying a new paradigm is 201 00:11:58,230 --> 00:12:01,490 Speaker 2: in play because it's not just the last 12 months 202 00:12:01,530 --> 00:12:04,360 Speaker 2: we're seeing superior performance in more and more suburbs, but 203 00:12:04,420 --> 00:12:09,439 Speaker 2: it's the 10-year growth averages. Now, Surface Paradise, the iconic, 204 00:12:10,710 --> 00:12:15,390 Speaker 2: Gold Coast market where median price for houses is close 205 00:12:15,470 --> 00:12:18,580 Speaker 2: to $ 2 million, whereas the median price for apartments is 206 00:12:19,010 --> 00:12:22,540 Speaker 2: a tick over $ 600, 000. The 10-year growth averages for both 207 00:12:22,580 --> 00:12:26,400 Speaker 2: are good, 8% for houses, but 10.8% for apartments. And 208 00:12:26,440 --> 00:12:30,059 Speaker 2: of course, the yields are infinitely better, only 2.8% median 209 00:12:30,100 --> 00:12:34,120 Speaker 2: yield for houses in Surfers Paradise, but 5.3% for apartments. 210 00:12:34,559 --> 00:12:38,120 Speaker 2: And those on markets are much shorter for apartments in 211 00:12:38,160 --> 00:12:43,900 Speaker 2: that market. Now, historically, Surfers Paradise Apartments have been terrible 212 00:12:43,940 --> 00:12:45,819 Speaker 2: performers up until, say, three years ago. 213 00:12:45,840 --> 00:12:47,830 Speaker 1: You beat me to it. 214 00:12:48,100 --> 00:12:49,520 Speaker 2: Yeah, yeah. 215 00:12:49,559 --> 00:12:51,240 Speaker 1: Because they can keep building them, right? 216 00:12:52,020 --> 00:12:53,949 Speaker 2: But you see, that's one of the things that's changed. 217 00:12:54,270 --> 00:12:58,510 Speaker 2: Many of the big high-rise apartment developments in Surfers Paradise 218 00:12:58,550 --> 00:13:00,650 Speaker 2: and elsewhere on the Gold Coast that might otherwise have 219 00:13:00,670 --> 00:13:03,510 Speaker 2: been built have not been built because they just don't 220 00:13:03,550 --> 00:13:06,770 Speaker 2: stack up financially with the cost structures as they now exist. 221 00:13:08,540 --> 00:13:12,600 Speaker 2: And I'm having conversations with major developers who are saying 222 00:13:12,640 --> 00:13:16,800 Speaker 2: things to me like, look, because the cost of building 223 00:13:16,840 --> 00:13:19,080 Speaker 2: these buildings have grown so much and because we have 224 00:13:19,140 --> 00:13:24,080 Speaker 2: shortages of tradespeople and materials, it's not feasible for us 225 00:13:24,120 --> 00:13:27,210 Speaker 2: to build a high-rise apartment unless we can sell all 226 00:13:27,250 --> 00:13:31,970 Speaker 2: the apartments for at least $ 1 million. So if it's 227 00:13:32,010 --> 00:13:34,410 Speaker 2: not a market where we can sell apartments for $ 1 228 00:13:34,370 --> 00:13:38,709 Speaker 2: to $ 1. 5 million, it's not viable to build it. So 229 00:13:39,830 --> 00:13:42,929 Speaker 2: a lot of the big high-rise projects on the Gold 230 00:13:42,970 --> 00:13:45,430 Speaker 2: Coast have been deferred or scrapped. So we have the 231 00:13:45,500 --> 00:13:48,540 Speaker 2: opposite problem to that traditional boom-bust thing that we used 232 00:13:48,580 --> 00:13:50,800 Speaker 2: to see on the Gold Coast because they built too 233 00:13:50,840 --> 00:13:54,179 Speaker 2: much high-rise. Now we've got a shortage, and it's not 234 00:13:54,240 --> 00:13:57,780 Speaker 2: something that can be turned around quickly. So we're starting 235 00:13:57,820 --> 00:14:03,260 Speaker 2: to see rising demand for and improving projects price performance 236 00:14:03,320 --> 00:14:05,260 Speaker 2: for apartments. And one of the things, of course, that 237 00:14:05,370 --> 00:14:08,630 Speaker 2: apartments in these markets can offer that houses on land 238 00:14:08,850 --> 00:14:11,450 Speaker 2: generally can't, not always, but as a rule of thumb, 239 00:14:12,230 --> 00:14:15,090 Speaker 2: apartments have view. And that's a big factor, perhaps, in 240 00:14:15,130 --> 00:14:16,949 Speaker 2: deriving demand and therefore capital growth. 241 00:14:16,970 --> 00:14:22,030 Speaker 1: Gee, that's really interesting. I mean, you're talking like you're 242 00:14:22,070 --> 00:14:25,730 Speaker 1: laying out a scenario which is like a looming golden 243 00:14:25,790 --> 00:14:28,470 Speaker 1: age for the apartment investor. Am I getting carried away there? 244 00:14:28,530 --> 00:14:32,860 Speaker 2: No, no. I think that's a fair assessment because... You know, 245 00:14:32,880 --> 00:14:35,239 Speaker 2: it answers so many of the things that people are 246 00:14:35,260 --> 00:14:40,700 Speaker 2: looking for. It answers affordability, relative affordability, superior rental yields 247 00:14:40,740 --> 00:14:46,340 Speaker 2: in times of higher interest rates, and we're increasingly seeing 248 00:14:47,040 --> 00:14:50,210 Speaker 2: really good capital growth performance. So it's sort of ticking 249 00:14:50,260 --> 00:14:56,030 Speaker 2: all the boxes for more investors. And, of course, low maintenance, 250 00:14:56,150 --> 00:15:00,580 Speaker 2: provided that you– bought in a building that has a 251 00:15:00,620 --> 00:15:03,460 Speaker 2: track record of low maintenance because, you know, one of 252 00:15:03,480 --> 00:15:05,660 Speaker 2: the issues with apartments, of course, is that so many 253 00:15:05,720 --> 00:15:08,500 Speaker 2: defects are coming to light. And it seems to me 254 00:15:08,540 --> 00:15:11,790 Speaker 2: that the ideal apartment investment is not a new one, 255 00:15:11,850 --> 00:15:17,910 Speaker 2: not an off-the-plan apartment purchase, but something that's established in 256 00:15:17,930 --> 00:15:21,040 Speaker 2: a good location, perhaps a little bit more boutique rather 257 00:15:21,100 --> 00:15:25,750 Speaker 2: than a 30- or 40-storey high-rise apartment. That kind of 258 00:15:25,820 --> 00:15:29,200 Speaker 2: apartment in, say, an inner suburb of the inner west 259 00:15:29,240 --> 00:15:33,240 Speaker 2: of Sydney or some of the inner suburbs of Melbourne 260 00:15:33,780 --> 00:15:36,400 Speaker 2: and also Brisbane could be the way to go. 261 00:15:37,180 --> 00:15:40,120 Speaker 1: Gee, that's really interesting. And as you say, the thing 262 00:15:40,230 --> 00:15:44,870 Speaker 1: is that the factors you outline behind this aren't going 263 00:15:44,910 --> 00:15:50,230 Speaker 1: to change anytime soon. They're quite established. 264 00:15:51,270 --> 00:15:54,880 Speaker 2: That's right. Well, we've got this problem of shortage. The 265 00:15:55,150 --> 00:15:59,540 Speaker 2: recent federal budget has made some commitments and repeated some 266 00:15:59,560 --> 00:16:05,000 Speaker 2: earlier published ones to generate construction, they hope, of a 267 00:16:05,040 --> 00:16:06,960 Speaker 2: certain number of dwellings over the next five years. But 268 00:16:06,980 --> 00:16:11,480 Speaker 2: that's a longer-term solution and one which the building industry 269 00:16:12,000 --> 00:16:14,860 Speaker 2: continually argues they can't deliver on because of all the 270 00:16:15,800 --> 00:16:19,870 Speaker 2: structural problems within the dwelling construction industry at the moment, 271 00:16:19,880 --> 00:16:24,250 Speaker 2: shortages of everything, builders going broke. It seems like it's... 272 00:16:24,990 --> 00:16:28,250 Speaker 2: a target that cannot realistically be achieved. So in the 273 00:16:28,290 --> 00:16:31,510 Speaker 2: short term, we're going to continue to have shortages of 274 00:16:31,710 --> 00:16:36,550 Speaker 2: dwellings generally, but in particular, shortages of dwellings for rental. 275 00:16:36,690 --> 00:16:38,070 Speaker 2: And that's the big problem. 276 00:16:38,230 --> 00:16:40,790 Speaker 1: Gee, that's fascinating. So, folks, I may say that is 277 00:16:41,070 --> 00:16:43,810 Speaker 1: something that is a really fresh piece of insight from 278 00:16:43,850 --> 00:16:46,750 Speaker 1: Terry there. It's always been that thing, you know, that 279 00:16:46,770 --> 00:16:50,000 Speaker 1: the apartment market would take a Docklands in Melbourne or 280 00:16:50,080 --> 00:16:54,930 Speaker 1: South Bank in Melbourne, you think of Alexandria area. in Sydney, 281 00:16:56,180 --> 00:16:58,820 Speaker 1: many other parts of Sydney, along the river in Brisbane. 282 00:16:58,840 --> 00:17:01,479 Speaker 1: Every time the apartments start to come right, the developers 283 00:17:01,520 --> 00:17:05,480 Speaker 1: come in, they build many more apartments. They're able to 284 00:17:05,600 --> 00:17:08,740 Speaker 1: do that. But as Terry's outlining, economically, that is not 285 00:17:08,780 --> 00:17:12,740 Speaker 1: stacking up for them now. And that means it's a 286 00:17:12,800 --> 00:17:16,700 Speaker 1: different investment climate and scenario for apartments. It's a very 287 00:17:17,280 --> 00:17:21,679 Speaker 1: interesting rationale for apartment investing that we haven't had for 288 00:17:21,700 --> 00:17:22,300 Speaker 1: quite some time. 289 00:17:22,359 --> 00:17:22,740 Speaker 2: And I think. 290 00:17:23,410 --> 00:17:27,100 Speaker 1: this could really be significant if you are an active investor. 291 00:17:27,420 --> 00:17:29,260 Speaker 1: All right, we will leave it there for the moment 292 00:17:29,280 --> 00:17:32,020 Speaker 1: with that very interesting observation from Terry. We'll take a 293 00:17:32,040 --> 00:17:33,740 Speaker 1: break and we will be back with some very interesting 294 00:17:33,960 --> 00:17:40,140 Speaker 1: property questions. Hello, welcome back to the Australian's Money Puzzle Podcast. 295 00:17:40,180 --> 00:17:43,159 Speaker 1: James Kirby, Wealth Editor at The Australian, talking to Terry 296 00:17:43,220 --> 00:17:47,869 Speaker 1: Ryder of Hotspotting. Hotspotting, of course, a very established organization 297 00:17:47,900 --> 00:17:49,889 Speaker 1: that Terry's been running for some years and he is 298 00:17:49,930 --> 00:17:53,990 Speaker 1: an expert on locales, if you like, across the property 299 00:17:54,030 --> 00:17:56,629 Speaker 1: market and what's happening in different spots, which is exactly 300 00:17:56,670 --> 00:18:00,129 Speaker 1: what we've been talking about. Okay, question from Steven. Noting 301 00:18:00,170 --> 00:18:04,619 Speaker 1: the existence of property restricted to older people, is it 302 00:18:04,680 --> 00:18:07,940 Speaker 1: time that we have a certain location or properties that 303 00:18:08,000 --> 00:18:11,179 Speaker 1: are restricted to those aged 20 to 35 instead? The 304 00:18:11,280 --> 00:18:14,560 Speaker 1: idea would be that subsidized living is provided for younger 305 00:18:14,600 --> 00:18:16,960 Speaker 1: folk where they try to build up their own deposit. 306 00:18:17,430 --> 00:18:22,220 Speaker 1: to purchase when they are 35 plus. I only smile, Stephen, 307 00:18:22,260 --> 00:18:26,900 Speaker 1: because it's such a novel, radical idea. Whatever the opposite 308 00:18:27,080 --> 00:18:30,180 Speaker 1: of an old folks village would be, a young folks village. 309 00:18:31,050 --> 00:18:38,230 Speaker 1: I won't say it's utopian, but it's ambitious. What do 310 00:18:38,250 --> 00:18:38,770 Speaker 1: you think, Terry? 311 00:18:39,770 --> 00:18:44,490 Speaker 2: Yeah, yeah, ambitious, definitely. I mean, there are specific reasons 312 00:18:44,530 --> 00:18:51,030 Speaker 2: why we have... developments specifically for older people. And those 313 00:18:51,109 --> 00:18:54,540 Speaker 2: arguments don't necessarily apply to younger people. They can plonk 314 00:18:54,580 --> 00:18:58,220 Speaker 2: themselves anywhere that they like the lifestyle or can afford 315 00:18:58,260 --> 00:19:03,140 Speaker 2: the rents or the buying prices. I'm not quite sure 316 00:19:03,220 --> 00:19:05,930 Speaker 2: how that would work. Is he suggesting that perhaps there's 317 00:19:06,230 --> 00:19:09,580 Speaker 2: some kind of subsidy He is. Yes, indeed. Yes. 318 00:19:09,980 --> 00:19:15,379 Speaker 1: Subsidized living is provided for the younger folk. I it's 319 00:19:15,400 --> 00:19:18,670 Speaker 1: such a novel idea, Stephen, that that will will will 320 00:19:18,730 --> 00:19:20,810 Speaker 1: just leave it out there for the for the listeners 321 00:19:20,850 --> 00:19:24,170 Speaker 1: to ponder. And thank you very much. I love these 322 00:19:24,369 --> 00:19:30,650 Speaker 1: creative ideas that often come through from from the listeners. Okay, Russell. Russell, this, 323 00:19:30,690 --> 00:19:32,970 Speaker 1: by the way, is slightly off beam here. But Russell 324 00:19:32,990 --> 00:19:35,879 Speaker 1: wants to make a point. The standard Australian passport at 325 00:19:35,880 --> 00:19:38,320 Speaker 1: $ 346 is one of the most expensive in the world. 326 00:19:38,340 --> 00:19:43,290 Speaker 1: The second most expensive in the world. Trailing only Liechtenstein. 327 00:19:44,770 --> 00:19:47,950 Speaker 1: And he complains in various ways about that. And here's 328 00:19:47,970 --> 00:19:52,340 Speaker 1: an interesting thing. In the budget line... week, among the measures, many, 329 00:19:52,400 --> 00:19:54,700 Speaker 1: many measures, as I say, there's always interesting things if 330 00:19:54,720 --> 00:19:59,240 Speaker 1: you borrow through the budget. They introduced a new facility 331 00:19:59,260 --> 00:20:03,270 Speaker 1: for passports. They did not reduce the passport price. I'm afraid, Russell, 332 00:20:03,290 --> 00:20:05,810 Speaker 1: but they introduced, don't you know, an extra fee. You 333 00:20:05,850 --> 00:20:08,619 Speaker 1: could pay an extra $ 100 for And they'd give it 334 00:20:08,640 --> 00:20:11,510 Speaker 1: to you faster. So it's that old trick of raising 335 00:20:11,550 --> 00:20:17,090 Speaker 1: your prices and then saying, and basically the service gets 336 00:20:17,190 --> 00:20:19,250 Speaker 1: slower and not as impressive. But what you do is 337 00:20:19,270 --> 00:20:20,770 Speaker 1: you say, we can get the service back to where 338 00:20:20,790 --> 00:20:22,659 Speaker 1: it was if you pay more. And that's what the 339 00:20:22,700 --> 00:20:25,060 Speaker 1: Australian passport office has just done in the budget the 340 00:20:25,100 --> 00:20:30,160 Speaker 1: other day. So thanks for that observation, Russell. Andrew, this 341 00:20:30,520 --> 00:20:33,620 Speaker 1: is an interesting question. He says, this is a very 342 00:20:33,660 --> 00:20:36,320 Speaker 1: interesting question. Is there any other business in Australia which 343 00:20:36,359 --> 00:20:40,199 Speaker 1: has something comparable to lender's mortgage insurance? It's easy to 344 00:20:40,260 --> 00:20:43,020 Speaker 1: see this as nothing more than a cash grab and 345 00:20:43,060 --> 00:20:48,280 Speaker 1: a kickback, especially when the loan default rate is negligible. Now, Andrew, 346 00:20:48,300 --> 00:20:51,820 Speaker 1: you really are onto something there. It's true the default 347 00:20:51,840 --> 00:20:55,869 Speaker 1: rates are absolutely microscopic. And so lender's mortgage insurance, you 348 00:20:55,890 --> 00:20:59,209 Speaker 1: would think, is a great game for everybody involved. And 349 00:20:59,230 --> 00:21:03,550 Speaker 1: you do wonder why it's so institutionalized. What do you think, Terry? 350 00:21:04,050 --> 00:21:07,030 Speaker 2: Look, I think we could eliminate it and not much 351 00:21:07,050 --> 00:21:14,310 Speaker 2: would change. I think I agree with your question. Yeah. Yeah. Look, 352 00:21:14,730 --> 00:21:17,070 Speaker 2: I think that's a rip-off. I think that's unnecessary. Look, 353 00:21:17,590 --> 00:21:20,540 Speaker 2: the hoops you have to jump through to get a 354 00:21:20,580 --> 00:21:22,720 Speaker 2: home loan or a loan to buy an investment property 355 00:21:22,740 --> 00:21:24,580 Speaker 2: in this country. I mean, I've just been through the 356 00:21:24,600 --> 00:21:31,370 Speaker 2: process again. I've got, you know, great income, great track record, great– 357 00:21:31,830 --> 00:21:35,040 Speaker 2: credit rating, et cetera, et cetera, yet the process to 358 00:21:35,080 --> 00:21:38,280 Speaker 2: go through to satisfy the bank that you're an acceptable 359 00:21:38,420 --> 00:21:42,460 Speaker 2: risk to lend to, I don't think any kind of 360 00:21:42,540 --> 00:21:45,500 Speaker 2: insurance is necessary. I mean, I think the bank, they're 361 00:21:45,520 --> 00:21:48,320 Speaker 2: in the business of lending. There's an element of risk 362 00:21:48,619 --> 00:21:51,080 Speaker 2: for any loan that they put out there, but to 363 00:21:51,119 --> 00:21:54,719 Speaker 2: not only have this insurance policy system but to force 364 00:21:55,180 --> 00:21:58,640 Speaker 2: the borrower to pay for it is just another massive 365 00:21:58,720 --> 00:22:04,090 Speaker 2: cost that is imposed on people who don't have a 20% deposit. 366 00:22:04,490 --> 00:22:07,930 Speaker 2: And for young people, it's increasingly hard to get together 367 00:22:08,230 --> 00:22:11,609 Speaker 2: a 20% deposit. You don't need 20% to get a loan. But, 368 00:22:11,650 --> 00:22:13,290 Speaker 2: of course, if you have less than 20%, you've got 369 00:22:13,310 --> 00:22:16,879 Speaker 2: to pay this damn hideously expensive insurance policy, which is 370 00:22:17,320 --> 00:22:21,040 Speaker 2: often capitalised into the loan, just adding to the length 371 00:22:21,080 --> 00:22:22,560 Speaker 2: of time they have to pay the damn thing off. 372 00:22:22,900 --> 00:22:25,780 Speaker 2: I'd like to see politicians step up and say, what 373 00:22:25,859 --> 00:22:28,820 Speaker 2: is this for? It doesn't serve any purpose. As Andrew 374 00:22:28,880 --> 00:22:33,060 Speaker 2: points out, Mortgage delinquency rates in Australia are really small. 375 00:22:33,080 --> 00:22:37,680 Speaker 2: They hover around 1% to 1.5% usually, and that's minor. 376 00:22:38,760 --> 00:22:40,480 Speaker 2: There's not a great deal of risk for the big 377 00:22:40,540 --> 00:22:44,720 Speaker 2: lenders there. I think they're having a lender-vis, no pun intended, 378 00:22:45,760 --> 00:22:50,440 Speaker 2: and they're making a lot of money by imposing this 379 00:22:51,240 --> 00:22:55,080 Speaker 2: massive extra cost on particularly young borrowers who just don't 380 00:22:55,119 --> 00:22:57,239 Speaker 2: need it and it doesn't serve a purpose. Get rid 381 00:22:57,290 --> 00:22:57,399 Speaker 2: of it. 382 00:22:57,760 --> 00:23:01,260 Speaker 1: For some, it's demonstrably low risk. Okay, we know that 383 00:23:01,280 --> 00:23:04,020 Speaker 1: from the figures. Hey, terrific. Thank you very much for that, Andrew. 384 00:23:04,440 --> 00:23:07,699 Speaker 1: And as always, folks, none of this is advice. It 385 00:23:07,780 --> 00:23:10,880 Speaker 1: is simply information. All right, we'll take a final break 386 00:23:10,940 --> 00:23:13,750 Speaker 1: and we will be back with a question from Angus 387 00:23:13,810 --> 00:23:16,570 Speaker 1: about the downsizing program, which is, of course, so, so popular. 388 00:23:16,950 --> 00:23:22,220 Speaker 1: All right, back in a moment. Hello and welcome back 389 00:23:22,280 --> 00:23:25,399 Speaker 1: to The Australian's Money Puzzle, James Kirby with Terry Ryder 390 00:23:25,460 --> 00:23:27,979 Speaker 1: from Hotspotting. Well, we've had quite a few questions regularly 391 00:23:28,060 --> 00:23:31,919 Speaker 1: all the time on the Downsizer program. I'm sure you're 392 00:23:31,940 --> 00:23:36,430 Speaker 1: familiar with it. Folks, if you're not, once you're over 55, 393 00:23:36,430 --> 00:23:41,030 Speaker 1: you can ignore the super rules or super caps and thresholds, 394 00:23:41,090 --> 00:23:44,090 Speaker 1: et cetera. And if you sell your family home, unless 395 00:23:44,109 --> 00:23:46,649 Speaker 1: you've lived in for 10 years or more, as your 396 00:23:46,690 --> 00:23:52,210 Speaker 1: primary residence, you can contribute to super, 300,000 per capita. 397 00:23:52,770 --> 00:23:55,640 Speaker 1: And you can basically ignore the caps, which is very 398 00:23:55,700 --> 00:23:57,800 Speaker 1: useful for people who are on the older side for 399 00:23:57,820 --> 00:24:00,140 Speaker 1: the simple reason that if you're on the older side, 400 00:24:00,160 --> 00:24:02,000 Speaker 1: you're not allowed to contribute to super once you reach 401 00:24:02,420 --> 00:24:05,899 Speaker 1: a certain age, can't get that money in. Angus was 402 00:24:05,960 --> 00:24:09,990 Speaker 1: asking basically, how does it work? And what are the 403 00:24:10,010 --> 00:24:13,970 Speaker 1: issues around it? I would just say to anyone interested 404 00:24:13,990 --> 00:24:17,790 Speaker 1: in the Downsizer program that, remarkably, one of the things 405 00:24:17,830 --> 00:24:20,290 Speaker 1: that's sort of unfinished about it is it was all 406 00:24:20,310 --> 00:24:25,040 Speaker 1: designed to get people out of those ambling around semi-empty 407 00:24:25,430 --> 00:24:28,520 Speaker 1: suburban houses and to free up housing stock. It doesn't 408 00:24:28,660 --> 00:24:32,219 Speaker 1: actually demand that you buy a smaller house. Bizarrely, you 409 00:24:32,240 --> 00:24:33,480 Speaker 1: can buy a bigger house. 410 00:24:33,320 --> 00:24:33,760 Speaker 2: If you wish. 411 00:24:34,520 --> 00:24:38,600 Speaker 1: But it's a way of getting the market freed up. Terry, 412 00:24:38,619 --> 00:24:40,879 Speaker 1: I mean, one of the things I see here and 413 00:24:40,920 --> 00:24:44,780 Speaker 1: there is efforts. You mentioned how the governments could do 414 00:24:44,820 --> 00:24:47,540 Speaker 1: a lot more some state governments are some state governments 415 00:24:47,600 --> 00:24:50,140 Speaker 1: are making an effort you might say the victorian government 416 00:24:50,180 --> 00:24:51,980 Speaker 1: are doing the opposite and just keep coming up with 417 00:24:52,000 --> 00:24:55,639 Speaker 1: new taxes west australia has tried some interesting things they 418 00:24:55,680 --> 00:24:59,270 Speaker 1: literally rewarded people who who who turned their property from 419 00:24:59,350 --> 00:25:01,790 Speaker 1: airbnb back onto the rental market and that sort of 420 00:25:01,830 --> 00:25:04,390 Speaker 1: thing have you seen anything that that that you think 421 00:25:04,410 --> 00:25:06,110 Speaker 1: they could do more of in the states. 422 00:25:06,650 --> 00:25:10,030 Speaker 2: Look i think um Western Australia currently is the model 423 00:25:10,070 --> 00:25:11,970 Speaker 2: that all states and territories should be following. 424 00:25:12,030 --> 00:25:13,230 Speaker 1: Oh, that's interesting. Okay. 425 00:25:13,310 --> 00:25:18,320 Speaker 2: Yeah. Look, basically governments, particularly state governments, because residential real 426 00:25:18,340 --> 00:25:22,139 Speaker 2: estate is pretty much their territory, they've got two ways 427 00:25:22,220 --> 00:25:24,760 Speaker 2: to try and engender the sort of behavior they want 428 00:25:24,780 --> 00:25:28,220 Speaker 2: to happen out there, particularly around supply. One is the 429 00:25:28,260 --> 00:25:31,530 Speaker 2: stick approach and one is the carrot approach. Yeah. Victoria 430 00:25:31,550 --> 00:25:33,330 Speaker 2: is very much going with the stick approach. If you 431 00:25:33,350 --> 00:25:35,010 Speaker 2: don't do what we want, we're going to punish you 432 00:25:35,050 --> 00:25:38,230 Speaker 2: with new or high taxes. Yes. And it's quite brutal. 433 00:25:38,630 --> 00:25:40,929 Speaker 2: And the response of most people will be, well, I'll 434 00:25:40,950 --> 00:25:42,879 Speaker 2: just stick up my rent to cover the extra costs 435 00:25:43,100 --> 00:25:45,119 Speaker 2: or I'll sell up and get the hell out of Victoria. 436 00:25:45,640 --> 00:25:47,479 Speaker 2: I don't think it's really going to achieve the ends 437 00:25:47,520 --> 00:25:49,859 Speaker 2: they want. In Western Australia, they have the carrot approach. 438 00:25:49,940 --> 00:25:53,800 Speaker 2: They've introduced a number of measures which are real incentives 439 00:25:53,859 --> 00:25:57,610 Speaker 2: for people who might have an Airbnb approach with their 440 00:25:57,650 --> 00:25:59,980 Speaker 2: property or They get a cash incentive that they put 441 00:26:00,040 --> 00:26:01,340 Speaker 2: in the permanent rental market. 442 00:26:01,420 --> 00:26:02,080 Speaker 1: Yeah. 443 00:26:02,119 --> 00:26:04,609 Speaker 2: There's measures to allow people to build a granny flat 444 00:26:04,770 --> 00:26:08,490 Speaker 2: at the back of their property, provide the property meets 445 00:26:08,530 --> 00:26:12,690 Speaker 2: certain criteria without having to get council approval. There are 446 00:26:12,730 --> 00:26:17,570 Speaker 2: other measures that have been introduced recently to encourage people 447 00:26:17,590 --> 00:26:22,639 Speaker 2: to add to supply, particularly in the rental market. And 448 00:26:22,680 --> 00:26:26,050 Speaker 2: I think that's the intelligent approach. that's the way to 449 00:26:26,090 --> 00:26:30,190 Speaker 2: go because people are more likely to respond positively to 450 00:26:30,330 --> 00:26:34,490 Speaker 2: an incentive than to a punishment. Victoria's called some of 451 00:26:34,530 --> 00:26:37,110 Speaker 2: their measures incentives. They're not. They're punishments. If you don't 452 00:26:37,150 --> 00:26:39,290 Speaker 2: do what we want, even though what you're doing is 453 00:26:39,350 --> 00:26:44,400 Speaker 2: perfectly reasonable and legal, we will punish you with punitive taxes. 454 00:26:46,060 --> 00:26:48,159 Speaker 2: Not an incentive at all, but what they're doing in 455 00:26:48,180 --> 00:26:51,160 Speaker 2: Western Australia is, and I think other states should follow 456 00:26:51,200 --> 00:26:53,600 Speaker 2: that measure, Of course, the advantage they have over there 457 00:26:53,619 --> 00:26:55,619 Speaker 2: is they have a strong budget, and Victoria has a 458 00:26:55,660 --> 00:26:58,340 Speaker 2: very weak one. They've got a real problem with their budget. 459 00:26:58,480 --> 00:27:01,959 Speaker 1: It's interesting, though. That's a really good point. For what 460 00:27:01,980 --> 00:27:06,320 Speaker 1: it's worth, folk, year-to-date Melbourne prices, that is Victorian prices, negative. 461 00:27:06,580 --> 00:27:09,980 Speaker 1: Year-to-date Perth, up 8%. Now, there are other issues around that, 462 00:27:10,040 --> 00:27:11,619 Speaker 1: but there you are. There are the numbers. Just as 463 00:27:11,660 --> 00:27:13,719 Speaker 1: we stand, as Terry was saying, there was a disincentive 464 00:27:13,780 --> 00:27:17,660 Speaker 1: basically baked into Victoria and incentives baked into WA, which 465 00:27:17,700 --> 00:27:22,040 Speaker 1: has probably accelerated existing trends. in both those states. Very interesting. Terry, 466 00:27:22,100 --> 00:27:24,160 Speaker 1: thank you very much for being on the show again. 467 00:27:24,240 --> 00:27:24,720 Speaker 2: Interesting. 468 00:27:24,820 --> 00:27:29,220 Speaker 1: I think, folks, it's time to reassess the apartment market. 469 00:27:29,240 --> 00:27:30,869 Speaker 1: There's one thing you picked up on the show today. 470 00:27:31,150 --> 00:27:33,850 Speaker 1: I thought the argument was put forward and articulated very 471 00:27:33,869 --> 00:27:37,070 Speaker 1: well by Terry Ryder of Hotspotting. Thanks, Terry. 472 00:27:37,730 --> 00:27:39,670 Speaker 2: You're welcome, Jameson. Always great to come on and talk 473 00:27:39,690 --> 00:27:43,100 Speaker 2: to you, particularly about real estate, my favorite subject. As 474 00:27:43,119 --> 00:27:44,940 Speaker 2: I often say to people, the hard part is getting 475 00:27:44,980 --> 00:27:45,820 Speaker 2: me to shut up. 476 00:27:46,600 --> 00:27:49,050 Speaker 1: Thank you very much. OK, folks, well, we will all 477 00:27:49,190 --> 00:27:53,550 Speaker 1: now wrap up. And remember, keep those questions rolling. Great 478 00:27:53,570 --> 00:27:55,550 Speaker 1: to see some questions and all sorts of things coming 479 00:27:55,590 --> 00:27:59,699 Speaker 1: in this week. Keep them coming. The Money Puzzle at theaustralian.com.au. 480 00:28:00,100 --> 00:28:01,300 Speaker 1: Talk to you soon.