1 00:00:10,320 --> 00:00:13,560 Speaker 1: Hello and welcome to the Australians Money Puzzle podcast. I'm 2 00:00:13,600 --> 00:00:16,639 Speaker 1: James Kirkby. Welcome aboard everybody. Now today we're going to 3 00:00:16,680 --> 00:00:21,239 Speaker 1: cover some very interesting issues. Rates obviously look like they're 4 00:00:21,239 --> 00:00:22,880 Speaker 1: going to come down. That's very important to all of 5 00:00:22,960 --> 00:00:26,440 Speaker 1: us property investors and property investing is the theme of 6 00:00:26,480 --> 00:00:30,360 Speaker 1: course today being Tuesday. Later in the week, on Thursday, 7 00:00:30,400 --> 00:00:32,440 Speaker 1: I will do a full because there's been lots of 8 00:00:32,479 --> 00:00:35,919 Speaker 1: questions coming in from you guys, full review of what 9 00:00:36,000 --> 00:00:40,000 Speaker 1: a final picture is on super tax and especially obviously 10 00:00:40,040 --> 00:00:44,040 Speaker 1: as how that affects you as a property investor, but 11 00:00:44,120 --> 00:00:46,280 Speaker 1: as a general investor as well, So we'll get across 12 00:00:46,320 --> 00:00:49,879 Speaker 1: all that on Thursday today. However, do you fancy yourself 13 00:00:49,920 --> 00:00:53,519 Speaker 1: as a shrewd operator that can pick a patch of 14 00:00:53,600 --> 00:00:56,120 Speaker 1: property that's going to bounce in the future, And it 15 00:00:56,120 --> 00:01:00,600 Speaker 1: would be entirely rational if you were to perhaps look 16 00:01:00,640 --> 00:01:04,360 Speaker 1: at the great infrastructure projects that are a foot around 17 00:01:04,400 --> 00:01:07,800 Speaker 1: the nation, even just to think of rail or metro ones. 18 00:01:07,800 --> 00:01:10,240 Speaker 1: You've got that extension of the Gold Coast light rail 19 00:01:10,280 --> 00:01:12,240 Speaker 1: you might be looking at. You might be looking at 20 00:01:12,240 --> 00:01:15,800 Speaker 1: the very ambitious Melbourne metro project due to open New 21 00:01:15,840 --> 00:01:17,800 Speaker 1: Year's Eve. They say, let's put a few more months 22 00:01:17,840 --> 00:01:20,520 Speaker 1: on that, but next year I would think, really, Melbourne 23 00:01:20,520 --> 00:01:23,640 Speaker 1: Metro whole pilot, new suburbs linked in ways they were 24 00:01:23,640 --> 00:01:26,440 Speaker 1: never linked in before. You would think that is a 25 00:01:26,480 --> 00:01:28,960 Speaker 1: license to make money for property investors. But here's an 26 00:01:28,959 --> 00:01:32,120 Speaker 1: interesting thing I guess today is Tim Lawless, head of 27 00:01:32,120 --> 00:01:35,920 Speaker 1: research at Cautality Cutality, you probably know better as core Logic. 28 00:01:35,959 --> 00:01:38,520 Speaker 1: It's changed its name of late. He's just done a 29 00:01:38,680 --> 00:01:44,279 Speaker 1: really interesting deep dive into the Sydney Metro line thirty 30 00:01:44,319 --> 00:01:48,000 Speaker 1: kilometer line if you remember, from Chatswood to banks Down 31 00:01:48,520 --> 00:01:51,960 Speaker 1: thirty kilometers if you like, laid out for the robber 32 00:01:52,000 --> 00:01:55,720 Speaker 1: barons to make their profits. And you would think that 33 00:01:55,840 --> 00:01:58,480 Speaker 1: those suburbs on those lines are doing great, right because 34 00:01:58,480 --> 00:02:03,040 Speaker 1: it opened last year. And here's the thing, Tim discovered 35 00:02:03,200 --> 00:02:05,680 Speaker 1: that every one of those suburbs on that line is 36 00:02:06,280 --> 00:02:09,120 Speaker 1: is not doing as well as the average Sydney suburb. 37 00:02:09,520 --> 00:02:10,520 Speaker 1: Go figure, how are you? 38 00:02:10,560 --> 00:02:13,240 Speaker 2: Tim good a James, thanks to the invitation to join 39 00:02:13,280 --> 00:02:13,720 Speaker 2: you today. 40 00:02:13,919 --> 00:02:17,080 Speaker 1: What prompted you to look at how the suburbs around 41 00:02:17,280 --> 00:02:21,119 Speaker 1: the Sydney Metro were performing. Were you of the opinion 42 00:02:21,680 --> 00:02:23,960 Speaker 1: that you're setting out to prove how weather were going, 43 00:02:24,080 --> 00:02:26,440 Speaker 1: or were you suspiciously that they might not be going 44 00:02:27,200 --> 00:02:29,720 Speaker 1: as well as the general public might reasonably assume. 45 00:02:30,600 --> 00:02:33,400 Speaker 2: Well, the whole idea of doing this analysis was it 46 00:02:34,120 --> 00:02:36,799 Speaker 2: was the one year anniversary of the second things of 47 00:02:36,840 --> 00:02:40,480 Speaker 2: the metro opening up, so Phase two that opened up 48 00:02:40,480 --> 00:02:43,560 Speaker 2: in August twenty twenty four and that ran from Chatswood 49 00:02:43,600 --> 00:02:47,120 Speaker 2: to Sydenham. I thought it was just interesting looking at 50 00:02:47,120 --> 00:02:50,000 Speaker 2: twelve months on what's happened, and of course if for 51 00:02:50,080 --> 00:02:52,640 Speaker 2: anyone's that's not familiar with the Sydney Metro, it was 52 00:02:52,680 --> 00:02:56,639 Speaker 2: over two phases, the first phase which ran from Talawang, 53 00:02:56,680 --> 00:02:59,919 Speaker 2: the Chatswood that's gottening sort of the Hills district mostly 54 00:03:00,440 --> 00:03:02,360 Speaker 2: that opened up quite a while back. It was way 55 00:03:02,400 --> 00:03:05,280 Speaker 2: back in May twenty nineteen, and then we saw the 56 00:03:05,320 --> 00:03:08,600 Speaker 2: face Who open up. So I did speculate that market 57 00:03:08,680 --> 00:03:12,640 Speaker 2: has probably underperformed, just because I'm tracking the trends all 58 00:03:12,639 --> 00:03:15,000 Speaker 2: the time and I can see really clearly the markets 59 00:03:15,000 --> 00:03:17,840 Speaker 2: that are really the strongest around Sydney tend to be 60 00:03:17,880 --> 00:03:20,520 Speaker 2: around the out of West, which have generally much lower 61 00:03:20,520 --> 00:03:24,960 Speaker 2: price tag and that's where we're seeing mainstream demand being deflected, 62 00:03:25,000 --> 00:03:29,399 Speaker 2: mostly because serviceability is quite challenging across a really expensive 63 00:03:29,440 --> 00:03:33,000 Speaker 2: market like Sydney. So to your point, James, it's really 64 00:03:33,040 --> 00:03:35,839 Speaker 2: clear that the catchment along the Sydney Metro line we've 65 00:03:35,840 --> 00:03:39,440 Speaker 2: looked at say one kilometer from the new metro stations 66 00:03:39,480 --> 00:03:41,800 Speaker 2: and five kilometers and then just comparing it back to 67 00:03:41,800 --> 00:03:45,240 Speaker 2: the broader Sydney average. The broader Sydney average, just to 68 00:03:45,240 --> 00:03:47,080 Speaker 2: give you a bit of a benchmark, over the past 69 00:03:47,280 --> 00:03:50,720 Speaker 2: two years, is up eight percent in terms of value growth. 70 00:03:51,360 --> 00:03:54,400 Speaker 2: We saw the Phase one catchments have increased about three 71 00:03:54,440 --> 00:03:58,280 Speaker 2: point six percent in that twenty four month period and 72 00:03:58,840 --> 00:04:02,040 Speaker 2: the Phase two catchments are up about five point two percent, 73 00:04:02,160 --> 00:04:06,240 Speaker 2: So a pretty clear underperformance, but from a relatively high base. 74 00:04:06,320 --> 00:04:08,560 Speaker 2: I mean, the right generally much more expensive. 75 00:04:08,960 --> 00:04:11,640 Speaker 1: So there's two things obviously of interest here. One is 76 00:04:12,480 --> 00:04:15,560 Speaker 1: this story inside Sydney. I always say it's counter intuitive, 77 00:04:15,600 --> 00:04:18,080 Speaker 1: but maybe it is for some people. They'd say, oh, right, okay, 78 00:04:18,120 --> 00:04:21,320 Speaker 1: you know, all those sobows are going to thrive, they've 79 00:04:21,320 --> 00:04:24,480 Speaker 1: got new stations, people get into the city faster than 80 00:04:24,520 --> 00:04:30,240 Speaker 1: they had previously. But your research shows beyond doubt that 81 00:04:31,200 --> 00:04:34,280 Speaker 1: you would have been better off in recent times in 82 00:04:34,279 --> 00:04:37,680 Speaker 1: Sydney owning a property anywhere but on those lines. 83 00:04:38,839 --> 00:04:40,919 Speaker 2: Right, well, yeah, okay, there are other areas that have 84 00:04:41,279 --> 00:04:44,360 Speaker 2: shared a performance, like if you look around Sydney, some 85 00:04:44,400 --> 00:04:47,000 Speaker 2: of the more affluent areas like the eastern suburbs, the 86 00:04:47,000 --> 00:04:50,480 Speaker 2: lower north Shore, the Northern Beaches, that an even softer 87 00:04:50,600 --> 00:04:53,160 Speaker 2: performance or a softer growth dot come and I think 88 00:04:53,279 --> 00:04:56,160 Speaker 2: the real reflection of just the affordability challenges and maybe 89 00:04:56,279 --> 00:04:59,760 Speaker 2: more and more rightly the service ability challenges that have 90 00:05:00,040 --> 00:05:03,880 Speaker 2: I'm very evident, particularly lender is still assess a borrower 91 00:05:03,920 --> 00:05:06,800 Speaker 2: at a three percentage point with a three percentage point buffer. 92 00:05:07,560 --> 00:05:10,600 Speaker 2: It does seem that demand is very much being deflected 93 00:05:10,680 --> 00:05:12,360 Speaker 2: towards the lower quartal. 94 00:05:12,000 --> 00:05:12,560 Speaker 3: Of the market. 95 00:05:12,920 --> 00:05:16,240 Speaker 1: So the rate was highly important here. The higher rates 96 00:05:16,520 --> 00:05:19,080 Speaker 1: that we've experienced in recent years are highly important. But 97 00:05:19,080 --> 00:05:21,599 Speaker 1: what if I said to you, so, what does it 98 00:05:21,680 --> 00:05:23,400 Speaker 1: tell us? This is the thing? I mean, if it's 99 00:05:23,440 --> 00:05:29,279 Speaker 1: the case that the people who bought on those metro regions, 100 00:05:29,320 --> 00:05:32,960 Speaker 1: particularly investors, if it's the case that over the last 101 00:05:33,000 --> 00:05:35,400 Speaker 1: two years they would have been better off in other 102 00:05:35,440 --> 00:05:38,320 Speaker 1: regions Beyond the lines like is it a once off 103 00:05:38,360 --> 00:05:41,520 Speaker 1: Sydney story or I don't know the history. Is it 104 00:05:41,560 --> 00:05:44,600 Speaker 1: the case that people were in much much earlier speculating, 105 00:05:44,640 --> 00:05:46,760 Speaker 1: if you like, and buying an advance along those lines. 106 00:05:47,000 --> 00:05:50,000 Speaker 2: Yeah, this is a really important distinction, and it's really 107 00:05:50,040 --> 00:05:52,480 Speaker 2: clear when you go back historically and you look at 108 00:05:52,520 --> 00:05:56,440 Speaker 2: say when these projects were first announced, which was way 109 00:05:56,480 --> 00:05:59,919 Speaker 2: back in twenty twelve, that the first phase was announced 110 00:06:00,040 --> 00:06:04,040 Speaker 2: and it commenced back in twenty thirteen, it's really clear 111 00:06:04,200 --> 00:06:07,680 Speaker 2: that the suburbs along that catchment well and truly outperformed 112 00:06:07,760 --> 00:06:11,000 Speaker 2: the broader Sydney average. And I think to your point, James, 113 00:06:11,440 --> 00:06:15,560 Speaker 2: that was probably the speculative outcome where we did see 114 00:06:15,560 --> 00:06:19,200 Speaker 2: a lot of people getting into that marketplace well before 115 00:06:19,440 --> 00:06:22,000 Speaker 2: Phase one it opened and before Phase two was even 116 00:06:22,000 --> 00:06:24,839 Speaker 2: really announced, So I think there was an early phase 117 00:06:24,880 --> 00:06:27,000 Speaker 2: of growth and that kind of pushed prices up to 118 00:06:27,040 --> 00:06:30,520 Speaker 2: provide quite a premium for those suburbs along the Metro catchment. 119 00:06:31,120 --> 00:06:33,000 Speaker 2: And then we've seen a bunch of other things happen 120 00:06:33,080 --> 00:06:35,560 Speaker 2: around interest rates going up from the middle of twenty 121 00:06:35,640 --> 00:06:39,440 Speaker 2: twenty two, and affordability challenges becoming a lot worse, and this, 122 00:06:39,600 --> 00:06:42,440 Speaker 2: as I've said before, this real deflection of demand towards 123 00:06:42,760 --> 00:06:44,720 Speaker 2: the more affordable end of the marketplace. 124 00:06:45,560 --> 00:06:49,360 Speaker 1: Yeah, I didn't know that. I did assume that might 125 00:06:49,440 --> 00:06:53,680 Speaker 1: be the case. So it's way back that basically investors 126 00:06:53,720 --> 00:06:59,600 Speaker 1: made money on these areas. It was in the announcement 127 00:06:59,640 --> 00:07:02,599 Speaker 1: and pull announcements phase, even though the risk was there, 128 00:07:02,800 --> 00:07:05,160 Speaker 1: I suppose that these projects might never get done, or 129 00:07:05,200 --> 00:07:07,599 Speaker 1: at the very least they would be very late in 130 00:07:07,720 --> 00:07:12,040 Speaker 1: coming through. Now, one thing is when if you do 131 00:07:12,160 --> 00:07:16,240 Speaker 1: know those parts of Sydney that jumped after the announcement 132 00:07:16,280 --> 00:07:19,120 Speaker 1: and in the early phases of this big metro project 133 00:07:19,520 --> 00:07:22,080 Speaker 1: at that time, were they doing better than the city average? 134 00:07:22,280 --> 00:07:25,760 Speaker 3: Yeah? Absolutely, And it doesn't really work for the podcast. 135 00:07:25,800 --> 00:07:27,520 Speaker 2: But if you look at the graphs and the report, 136 00:07:27,560 --> 00:07:29,240 Speaker 2: which you're going to look at it on our website, 137 00:07:29,640 --> 00:07:32,400 Speaker 2: it's really clear. We just tracked prices historically over the 138 00:07:32,400 --> 00:07:34,880 Speaker 2: past twenty years or so, and there is this really 139 00:07:34,880 --> 00:07:38,360 Speaker 2: clear anomaly where values did rise a lot more substantially 140 00:07:38,400 --> 00:07:41,000 Speaker 2: than the broader Sydney average in that phase one catchment. 141 00:07:41,640 --> 00:07:44,080 Speaker 2: And I think that's probably quite intuitive when you think 142 00:07:44,080 --> 00:07:47,760 Speaker 2: about investors, they probably are looking to get in early 143 00:07:47,920 --> 00:07:50,360 Speaker 2: to ride that wave of capital growth. But of course 144 00:07:50,480 --> 00:07:52,240 Speaker 2: I just say that there is a risk to that 145 00:07:52,240 --> 00:07:55,080 Speaker 2: that some of these major infrastructure projects they don't go 146 00:07:55,120 --> 00:07:57,560 Speaker 2: ahead they take a lot longer, they have massive cost 147 00:07:57,600 --> 00:08:00,320 Speaker 2: blowout as we know, so there is a bit of risk, 148 00:08:00,360 --> 00:08:02,240 Speaker 2: which I think is all. I mean, that's that's the 149 00:08:02,320 --> 00:08:04,080 Speaker 2: thought of investing, isn't it. 150 00:08:04,080 --> 00:08:06,360 Speaker 1: It is. I'm just thinking if you had been gambling 151 00:08:06,360 --> 00:08:08,480 Speaker 1: as such that you were going to make some money 152 00:08:08,480 --> 00:08:11,400 Speaker 1: by the airport link, for instance, in Malbourne, well I 153 00:08:11,440 --> 00:08:14,640 Speaker 1: could take a lifetime really before before that comes to pass. 154 00:08:14,640 --> 00:08:18,920 Speaker 1: And because it remains unclear, it probably remains a speculation 155 00:08:19,480 --> 00:08:23,040 Speaker 1: at this point whether that's ever Actually, that's so much 156 00:08:23,080 --> 00:08:25,200 Speaker 1: that's ever going to be done. Everything gets done eventually, 157 00:08:25,240 --> 00:08:26,920 Speaker 1: but like you know, will it be done, will be 158 00:08:26,960 --> 00:08:29,320 Speaker 1: done when you and I are still around? That's the 159 00:08:29,400 --> 00:08:29,920 Speaker 1: question too. 160 00:08:30,520 --> 00:08:31,240 Speaker 3: Yeah, I think. 161 00:08:31,320 --> 00:08:33,880 Speaker 2: I mean the Melbourne Metro, which is, as you said 162 00:08:33,920 --> 00:08:36,559 Speaker 2: in the introduction, James, that's due to be opened either 163 00:08:36,640 --> 00:08:39,079 Speaker 2: late this year, early next year, sometime around there. It's 164 00:08:39,080 --> 00:08:42,120 Speaker 2: a much smaller project compared to the Sydney Metro, spent 165 00:08:42,160 --> 00:08:45,160 Speaker 2: buying kilometers of track, a couple of tunnels, five stations, 166 00:08:45,800 --> 00:08:48,240 Speaker 2: but it'll be really interesting to see how that pans out. 167 00:08:48,400 --> 00:08:49,959 Speaker 3: We haven't seen the same. 168 00:08:49,800 --> 00:08:52,680 Speaker 2: Level of a speculative response in Melbourne like what we 169 00:08:52,720 --> 00:08:55,560 Speaker 2: saw early in the case of Sydney, and we know 170 00:08:55,640 --> 00:08:58,440 Speaker 2: that Melbourne's been quite a softer market overall through the 171 00:08:58,480 --> 00:09:01,520 Speaker 2: past five years, so it'll be interesting to see if 172 00:09:01,559 --> 00:09:03,040 Speaker 2: there is a bit of a jump once the new 173 00:09:03,080 --> 00:09:06,120 Speaker 2: Metro Melbourne does open up. Given the fact that price 174 00:09:06,160 --> 00:09:08,360 Speaker 2: points are actually pretty low, I don't think we're going 175 00:09:08,400 --> 00:09:12,280 Speaker 2: to see the same affordability barriers that we've seen in 176 00:09:12,360 --> 00:09:14,679 Speaker 2: Sydney that have probably been a big part of the 177 00:09:14,800 --> 00:09:18,200 Speaker 2: underperformance around the Sydney Metro. And then, as you say, 178 00:09:18,400 --> 00:09:20,800 Speaker 2: this project has a long way to go, expanding into 179 00:09:20,840 --> 00:09:21,880 Speaker 2: the suburban. 180 00:09:21,480 --> 00:09:23,040 Speaker 3: Rail loop and the Airport Link. 181 00:09:23,400 --> 00:09:25,400 Speaker 2: There's a lot of discussion around whether or not this 182 00:09:25,600 --> 00:09:27,600 Speaker 2: is money well spent in Melbourne. 183 00:09:27,679 --> 00:09:29,720 Speaker 1: Right, really interesting. I'm going to come back. We're going 184 00:09:29,760 --> 00:09:31,080 Speaker 1: to come back after the break and we're going to 185 00:09:31,080 --> 00:09:34,280 Speaker 1: look at whether the Sydney story is a one off 186 00:09:34,760 --> 00:09:45,520 Speaker 1: or not. Back in a moment. Hello, Welcome back to 187 00:09:45,520 --> 00:09:48,480 Speaker 1: The Australian's Money Puzzle podcast. James Kirby here with Tim 188 00:09:48,559 --> 00:09:52,360 Speaker 1: Lawless of Cautality, head of Research. That's the property research 189 00:09:52,520 --> 00:09:57,439 Speaker 1: group previously known as core Logic. Okay, Tim, the hot seat, 190 00:09:57,600 --> 00:10:02,880 Speaker 1: So you mentioned how the Melbourne Metro U certainly alluding 191 00:10:02,920 --> 00:10:05,160 Speaker 1: to the fact that it could be different than Sydney, 192 00:10:05,160 --> 00:10:06,800 Speaker 1: because the's a couple of things right. First of all, 193 00:10:06,840 --> 00:10:09,079 Speaker 1: the prices are in absolutely trans cheaper. First of all, 194 00:10:09,600 --> 00:10:12,720 Speaker 1: by that they're more accessible. But also isn't it the 195 00:10:12,760 --> 00:10:16,000 Speaker 1: case that we're in a part of the interstrate cycle 196 00:10:16,080 --> 00:10:20,959 Speaker 1: that we should see more cuts. So that would suggest 197 00:10:21,240 --> 00:10:25,040 Speaker 1: that maybe the Melbourne story, and I'd like to deal 198 00:10:25,080 --> 00:10:27,680 Speaker 1: with the Gold Coast as well, but the Melbourne story 199 00:10:27,760 --> 00:10:28,920 Speaker 1: might be different. What do you think? 200 00:10:29,120 --> 00:10:30,680 Speaker 3: Yeah, I think Melbourne could be different. 201 00:10:30,960 --> 00:10:34,240 Speaker 2: And when you look at the historical trends, big infrastructure 202 00:10:34,280 --> 00:10:39,040 Speaker 2: projects and large amounts of capital investment generally have led 203 00:10:39,080 --> 00:10:41,480 Speaker 2: capital growth or at least been the catalyst for capital 204 00:10:41,520 --> 00:10:44,000 Speaker 2: growth and housing markets. I mean, you can look at 205 00:10:44,040 --> 00:10:46,920 Speaker 2: any number of projects around the country historically, be it 206 00:10:47,040 --> 00:10:50,199 Speaker 2: big transport projects like the M one connecting Brisbane of 207 00:10:50,240 --> 00:10:53,680 Speaker 2: the Gold Coast, or the major gas projects in Wa 208 00:10:53,880 --> 00:10:58,760 Speaker 2: and the NT really drove employment and investor activity as well. 209 00:10:59,440 --> 00:11:02,160 Speaker 2: So I think the Sydney Metro case is quite the anomaly, 210 00:11:02,240 --> 00:11:04,680 Speaker 2: the fact that we did see a major investment in 211 00:11:04,720 --> 00:11:07,000 Speaker 2: capital flow coming to a big project that hasn't really 212 00:11:07,120 --> 00:11:11,199 Speaker 2: driven prices higher. So Yeah, I think Melbourne is probably 213 00:11:11,200 --> 00:11:13,080 Speaker 2: going to be a market that will stick with the 214 00:11:13,120 --> 00:11:16,280 Speaker 2: trends and we'll probably will see some further growth along 215 00:11:16,320 --> 00:11:18,280 Speaker 2: that those transport investment projects. 216 00:11:18,880 --> 00:11:20,840 Speaker 1: Can I just ask before before we go in something 217 00:11:21,160 --> 00:11:23,439 Speaker 1: things I do want to break down. Did you expect 218 00:11:23,840 --> 00:11:29,240 Speaker 1: as an experienced researcher that the Sydney metro suburbs that 219 00:11:29,360 --> 00:11:31,720 Speaker 1: have lags the market, did you expect it they would 220 00:11:31,720 --> 00:11:33,680 Speaker 1: at least keep up with the market in their first 221 00:11:33,760 --> 00:11:35,439 Speaker 1: years post opening. 222 00:11:36,120 --> 00:11:37,400 Speaker 3: Well, that's a good question. 223 00:11:37,400 --> 00:11:40,000 Speaker 2: I'm not sure how to answer, because I look at 224 00:11:40,040 --> 00:11:42,559 Speaker 2: the trends and it was really clear even before I 225 00:11:42,679 --> 00:11:45,880 Speaker 2: run the numbers that the metro catchments were going to 226 00:11:45,920 --> 00:11:48,800 Speaker 2: underperform the Sydney market because I could see that where 227 00:11:48,800 --> 00:11:51,480 Speaker 2: the growth was very much headed. But if I came 228 00:11:51,520 --> 00:11:55,160 Speaker 2: into this completely naive, absolutely, I'd be very surprised that 229 00:11:55,200 --> 00:11:59,840 Speaker 2: the metro markets underperformed the broader Sydney average. Given productivity improvement, 230 00:12:00,040 --> 00:12:02,960 Speaker 2: the improvements to commutability and liveability, there's a lot of 231 00:12:02,960 --> 00:12:06,040 Speaker 2: amenity along the metro line. All those sort of things 232 00:12:06,040 --> 00:12:08,320 Speaker 2: that a typical investor would be looking for should have 233 00:12:08,360 --> 00:12:09,600 Speaker 2: driven fro the rate of gain. 234 00:12:10,120 --> 00:12:12,559 Speaker 1: And then you said about Melbourne. You said, we haven't 235 00:12:12,600 --> 00:12:16,760 Speaker 1: seen the speculative action there that we saw equivalent in 236 00:12:16,800 --> 00:12:19,880 Speaker 1: those Sydney suburbs. That's very interesting. Can you tell us 237 00:12:19,880 --> 00:12:20,679 Speaker 1: any more about that? 238 00:12:21,440 --> 00:12:23,320 Speaker 2: Well, yeah, I think most of your listeners would be aware. 239 00:12:23,400 --> 00:12:26,400 Speaker 2: Melbourne's been sort of flying under the investment radar for 240 00:12:26,480 --> 00:12:31,400 Speaker 2: some time now, or it's been disincentivizing investment activity through 241 00:12:31,520 --> 00:12:34,040 Speaker 2: a whole bunch of things like higher taxes, that there's 242 00:12:34,080 --> 00:12:39,000 Speaker 2: been demographic trends up until recently as well. So Melbourne 243 00:12:39,000 --> 00:12:41,680 Speaker 2: is simply hasn't seen the level of investment demand that 244 00:12:41,720 --> 00:12:44,360 Speaker 2: we've seen in other really strong markets. But we're starting 245 00:12:44,360 --> 00:12:47,280 Speaker 2: to see some early signs that is changing, you know, 246 00:12:47,360 --> 00:12:51,280 Speaker 2: interstate migrations coming back into positive territory. We're seeing more 247 00:12:51,280 --> 00:12:55,080 Speaker 2: and more positive media headlines that investors are targeting Melbourne 248 00:12:55,120 --> 00:12:57,720 Speaker 2: now because of the low purchase price that strongly yields, 249 00:12:58,120 --> 00:13:00,920 Speaker 2: and probably an outlook for meeting the long term stronger 250 00:13:00,960 --> 00:13:02,800 Speaker 2: capital gains as well. 251 00:13:02,880 --> 00:13:05,079 Speaker 3: So all those things I suppose added. 252 00:13:04,880 --> 00:13:07,720 Speaker 2: Up tell me that those suburbs along that the Melbourne 253 00:13:07,760 --> 00:13:11,360 Speaker 2: Metro and maybe broadly the rail loop are going to 254 00:13:11,400 --> 00:13:15,920 Speaker 2: be fairly reasonable investment options, right. I think the Sydney 255 00:13:16,000 --> 00:13:17,920 Speaker 2: example is probably a bit of an anomaly. 256 00:13:18,240 --> 00:13:21,920 Speaker 1: It's interesting that you say that, and just looking across 257 00:13:22,400 --> 00:13:24,960 Speaker 1: you mentioned that the Sydney one to say you're starting 258 00:13:24,960 --> 00:13:27,480 Speaker 1: to say that it's anomalous, which is so shouldn't you 259 00:13:27,520 --> 00:13:29,680 Speaker 1: would think it shouldn't be repeated. What did you think 260 00:13:29,720 --> 00:13:33,400 Speaker 1: of the theory that the net migration numbers has turned 261 00:13:33,440 --> 00:13:37,520 Speaker 1: positive in Melbourne at last. But there's a working theory 262 00:13:37,520 --> 00:13:41,000 Speaker 1: slash joke that it's because not as many are leaving 263 00:13:41,600 --> 00:13:45,600 Speaker 1: because they can't afford the suburbs they used to go to, 264 00:13:46,040 --> 00:13:51,199 Speaker 1: particularly in Queensland. The numbers actually suggest that there's less departures. 265 00:13:51,440 --> 00:13:51,640 Speaker 3: Yeah. 266 00:13:51,679 --> 00:13:54,120 Speaker 2: Absolutely, they do show that there's definitely more people coming 267 00:13:54,160 --> 00:13:56,439 Speaker 2: back as well, and a bit of a boomerang after 268 00:13:56,720 --> 00:13:57,439 Speaker 2: the pandemic. 269 00:13:57,800 --> 00:14:00,360 Speaker 3: And I mean, here's some context, James. 270 00:14:00,400 --> 00:14:03,160 Speaker 2: If you look at the difference between Sydney and Melbourne prices, 271 00:14:03,280 --> 00:14:05,960 Speaker 2: it's about a fifty four percent different in the median value. 272 00:14:06,000 --> 00:14:09,160 Speaker 2: We haven't seen a gap that wide since about nineteen 273 00:14:09,240 --> 00:14:12,560 Speaker 2: ninety nine. So I think that's reflective of both Sydney 274 00:14:12,640 --> 00:14:17,280 Speaker 2: being extraordinarily expensive, maybe overvalued, but Melbourne being undervalued and 275 00:14:17,320 --> 00:14:20,320 Speaker 2: a real opportunity. I think Ultimately we will see those 276 00:14:20,320 --> 00:14:24,120 Speaker 2: two markets rebalancing a little bit, and that'll be driven 277 00:14:24,160 --> 00:14:27,080 Speaker 2: by Sydney showing maybe a flatter market over the medium 278 00:14:27,120 --> 00:14:30,280 Speaker 2: the long term and Melbourne picking up just to narrow 279 00:14:30,320 --> 00:14:30,720 Speaker 2: that gap. 280 00:14:30,920 --> 00:14:33,640 Speaker 1: Nineteen ninety nine, of course, for those of you who 281 00:14:33,640 --> 00:14:36,840 Speaker 1: can remember, and perhaps some of you were not even born, 282 00:14:37,200 --> 00:14:40,120 Speaker 1: but nineteen ninety nine of course was the super peak 283 00:14:40,840 --> 00:14:44,360 Speaker 1: of the Olympic run up. That's not an event, that's 284 00:14:44,360 --> 00:14:47,920 Speaker 1: a property issue. Basically, Sydney prices went bananas in the 285 00:14:48,040 --> 00:14:50,280 Speaker 1: run up two two thousand and the Olympics were on 286 00:14:50,320 --> 00:14:52,680 Speaker 1: in two thousand and then, if I recalled him, they 287 00:14:52,760 --> 00:14:55,560 Speaker 1: drifted for quite a few years and to a mid 288 00:14:55,600 --> 00:14:57,400 Speaker 1: two two or five, two or six. 289 00:14:58,040 --> 00:15:00,880 Speaker 2: Yeah, well, well Sydney went for an extra ordinary growth run. 290 00:15:01,000 --> 00:15:03,560 Speaker 2: It actually pecks in two and two thousand and three, 291 00:15:03,800 --> 00:15:06,280 Speaker 2: and then it went through a period of just where 292 00:15:06,280 --> 00:15:09,480 Speaker 2: Sydney prices were flat right, and that was a real 293 00:15:09,520 --> 00:15:10,000 Speaker 2: catch up. 294 00:15:09,960 --> 00:15:12,680 Speaker 3: For the market. Sydney again, I think it probably. 295 00:15:12,400 --> 00:15:14,600 Speaker 2: Just overshot the mark of what you might describe as 296 00:15:14,600 --> 00:15:17,480 Speaker 2: fair value and it languished for a long time. I 297 00:15:17,560 --> 00:15:21,360 Speaker 2: wasn't really until about twenty and twelve, well, two thousand 298 00:15:21,360 --> 00:15:23,680 Speaker 2: and nine after the GFC we saw a pretty decent 299 00:15:23,680 --> 00:15:27,680 Speaker 2: bounce from first home buyers twenty twelve to twenty seventeen. 300 00:15:27,800 --> 00:15:29,560 Speaker 2: It was a real change for Sydney and that's where 301 00:15:29,640 --> 00:15:30,720 Speaker 2: price is really rocketed. 302 00:15:31,360 --> 00:15:34,520 Speaker 1: So it kept going right past the Olympics for a 303 00:15:34,560 --> 00:15:36,800 Speaker 1: year or two. It kept going after the Olympics. Do 304 00:15:36,880 --> 00:15:39,600 Speaker 1: you think I'm just thinking up loud, but about Brisbane 305 00:15:39,600 --> 00:15:42,120 Speaker 1: do you think they might have a similar performance. 306 00:15:42,360 --> 00:15:45,320 Speaker 2: Well, Brisbane's a really strong market and a big part 307 00:15:45,320 --> 00:15:48,240 Speaker 2: of that absolutely is just strength of the economy, really 308 00:15:48,280 --> 00:15:51,160 Speaker 2: strong migration rates from inter state and of course all 309 00:15:51,200 --> 00:15:53,920 Speaker 2: the big infrastructure projects that they've got a pretty hard 310 00:15:54,120 --> 00:15:57,440 Speaker 2: due date that I don't think we'll see Brisbane canceling 311 00:15:57,640 --> 00:16:01,720 Speaker 2: the Olympics game. It's going to go ahead. We need 312 00:16:01,720 --> 00:16:03,680 Speaker 2: to build the stadiums, we need to build the roads 313 00:16:03,680 --> 00:16:06,040 Speaker 2: and the infrastructure, and it's going to happen by a 314 00:16:06,080 --> 00:16:08,880 Speaker 2: certain date. We can already see some of the retric 315 00:16:08,960 --> 00:16:11,240 Speaker 2: coming out of the Queensland government about you know, the 316 00:16:11,360 --> 00:16:13,280 Speaker 2: language is what we're going to be stealing workers from 317 00:16:13,280 --> 00:16:14,840 Speaker 2: other states and that type of thing. 318 00:16:14,920 --> 00:16:17,240 Speaker 3: Right, So, yeah, without a doubt that. 319 00:16:17,160 --> 00:16:18,520 Speaker 2: This is going to be a market that I think 320 00:16:18,600 --> 00:16:22,000 Speaker 2: overperforms over the coming years as we see the strong 321 00:16:22,080 --> 00:16:26,560 Speaker 2: economic conditions and strong migration fueling that market, albeit against 322 00:16:26,560 --> 00:16:29,920 Speaker 2: a backdrop of affordability. That's it's nowhere near as as 323 00:16:29,960 --> 00:16:33,000 Speaker 2: expensive as Sydney. But it's a lot more expensive than 324 00:16:33,000 --> 00:16:33,840 Speaker 2: Melbourne now. 325 00:16:34,360 --> 00:16:37,080 Speaker 1: Yes it is, and whether Melbourne will ever catch it, 326 00:16:37,120 --> 00:16:39,960 Speaker 1: we don't know. Interesting you say about the about not 327 00:16:40,040 --> 00:16:42,640 Speaker 1: that Melbourne was expected to catch up with Sydney, but 328 00:16:42,720 --> 00:16:45,720 Speaker 1: as you say, the price differential is that its widest. 329 00:16:45,840 --> 00:16:47,720 Speaker 1: I got this right since nineteen ninety nine. It's a 330 00:16:47,720 --> 00:16:50,200 Speaker 1: long time ago. Yeah, that's right again. 331 00:16:50,400 --> 00:16:53,520 Speaker 2: Yeah, I think logically, given this is Australia's second largest 332 00:16:53,560 --> 00:16:56,560 Speaker 2: capital city, it's got a very diverse and large economy, 333 00:16:56,680 --> 00:16:58,120 Speaker 2: it's got migration coming back. 334 00:16:58,640 --> 00:17:00,760 Speaker 3: Yeah, I think there will be a rebalance. It's hard 335 00:17:00,760 --> 00:17:01,800 Speaker 3: to say to see. 336 00:17:01,640 --> 00:17:05,280 Speaker 2: Melbourne overtaking Sydney from a pricing perspective, and maybe even 337 00:17:05,280 --> 00:17:09,239 Speaker 2: Brisbane's seen a structural change. But I think Melbourne at 338 00:17:09,240 --> 00:17:11,080 Speaker 2: the moment is quite undervalued. 339 00:17:11,720 --> 00:17:13,760 Speaker 1: Okay, just before we go to the break, I did 340 00:17:13,800 --> 00:17:17,520 Speaker 1: want to ask you about rates. The theory at least 341 00:17:17,520 --> 00:17:19,480 Speaker 1: the market's not just theory, but the pricing and the 342 00:17:19,520 --> 00:17:22,919 Speaker 1: money markets now is likelihood seventy percent likelihood, up from 343 00:17:22,960 --> 00:17:25,879 Speaker 1: about thirty five percent likelihood that we will have a 344 00:17:25,960 --> 00:17:28,680 Speaker 1: red cut on Melbourne Top Day. Where do you think 345 00:17:28,680 --> 00:17:30,080 Speaker 1: we are on the rate cycle. 346 00:17:30,920 --> 00:17:33,800 Speaker 2: Mate, I think we're getting pretty close to the bottom 347 00:17:33,840 --> 00:17:36,120 Speaker 2: of the cycle. If we see another rate cut in November, 348 00:17:36,240 --> 00:17:38,840 Speaker 2: I mean, that's the great news, but I mean that 349 00:17:39,119 --> 00:17:42,440 Speaker 2: the financial markets are jumping around. There's a lot of 350 00:17:42,480 --> 00:17:45,879 Speaker 2: volatility here as the data flows come through. It was 351 00:17:45,920 --> 00:17:48,080 Speaker 2: only a couple of weeks ago there was hardly any 352 00:17:48,160 --> 00:17:50,520 Speaker 2: chance we'd see a November rate cut, given the high 353 00:17:50,560 --> 00:17:54,920 Speaker 2: inflation indicator we saw for August, with the relatively soft 354 00:17:55,000 --> 00:17:57,840 Speaker 2: labor market out come for September. I think his driven 355 00:17:57,840 --> 00:18:01,000 Speaker 2: Reneeds speculation we'll see a November eighth cut, But if 356 00:18:01,000 --> 00:18:03,119 Speaker 2: we do see a cut in November, that kind of 357 00:18:03,160 --> 00:18:06,119 Speaker 2: probably means we may not see one early next year either. 358 00:18:06,760 --> 00:18:09,359 Speaker 2: So it sounds like the RBA is probably getting pretty 359 00:18:09,359 --> 00:18:11,360 Speaker 2: close to what they might describe as a neutral rate. 360 00:18:11,400 --> 00:18:13,160 Speaker 2: If we get down around that sort of three point 361 00:18:13,160 --> 00:18:15,880 Speaker 2: three percent mark for the cash rate, I don't think 362 00:18:15,880 --> 00:18:18,040 Speaker 2: that the cycle's got much further to go than that. 363 00:18:18,280 --> 00:18:20,520 Speaker 1: And so our listeners should be aware that if you're 364 00:18:20,520 --> 00:18:24,959 Speaker 1: getting a mortgage or an investment mortgage. Perhaps we're getting 365 00:18:25,000 --> 00:18:27,240 Speaker 1: close to as low as they're going to go as well. 366 00:18:27,280 --> 00:18:31,679 Speaker 2: Obviously, Yeah, we're definitely hearing a lot more talk about 367 00:18:31,960 --> 00:18:34,360 Speaker 2: whether or not to fix at the moment as well. 368 00:18:34,520 --> 00:18:36,400 Speaker 1: Haven't her to talk about fixing for a long time. 369 00:18:37,720 --> 00:18:40,560 Speaker 2: You can definitely rate sort of lower than variable rates 370 00:18:41,440 --> 00:18:44,040 Speaker 2: by more than twenty five basis points. So yeah, I 371 00:18:44,359 --> 00:18:46,280 Speaker 2: think more people are starting to do the numbers and 372 00:18:46,720 --> 00:18:48,440 Speaker 2: weighing up the pros and cons. 373 00:18:48,960 --> 00:18:52,919 Speaker 1: Yes, very interesting. Okay, have you any way of is 374 00:18:52,920 --> 00:18:55,760 Speaker 1: that anecdotal or have you any way of quantifying. 375 00:18:55,240 --> 00:19:00,560 Speaker 2: That anecdotal at the moment? James, So definitely observing, observing 376 00:19:00,560 --> 00:19:02,800 Speaker 2: the market and listening to the people that they. 377 00:19:02,800 --> 00:19:05,240 Speaker 3: Travel around the country. So it'll be interesting to set. 378 00:19:05,240 --> 00:19:07,680 Speaker 2: I mean that the housing finance data from the ABS, 379 00:19:07,880 --> 00:19:10,400 Speaker 2: it's pretty lumpy, I think comes out quarterly. Now we're 380 00:19:10,400 --> 00:19:13,440 Speaker 2: looking at June quarter now, so hopefully the September quarter 381 00:19:13,520 --> 00:19:16,680 Speaker 2: data gives us a little bit more really tangible evidence. 382 00:19:16,920 --> 00:19:18,680 Speaker 1: So keep that in mind, folks. We may welcome back 383 00:19:18,680 --> 00:19:20,879 Speaker 1: to that in some form about fixing. It's been a 384 00:19:20,920 --> 00:19:23,119 Speaker 1: long time since people were fixing because it's been a 385 00:19:23,160 --> 00:19:25,639 Speaker 1: fair wire since the start of this cutting cycle. But 386 00:19:25,720 --> 00:19:28,359 Speaker 1: of course logically, if as Tim says, we're coming to 387 00:19:28,359 --> 00:19:31,280 Speaker 1: the end of the cutting cycle, well then it's going 388 00:19:31,320 --> 00:19:33,320 Speaker 1: to stall, and then it's going to history. Was suggest 389 00:19:33,440 --> 00:19:35,680 Speaker 1: goes back up again, and if you fixed at the 390 00:19:35,760 --> 00:19:38,959 Speaker 1: right time, of course you could have a real competitive advantage. 391 00:19:39,280 --> 00:19:41,280 Speaker 1: We'll be back to that, Okay, back in the moment 392 00:19:41,320 --> 00:19:49,840 Speaker 1: with some questions. Hello, welcome back to The Australian's Money 393 00:19:49,880 --> 00:19:54,679 Speaker 1: Puzzle podcast. I'm James Kirby and we're talking property today. 394 00:19:54,760 --> 00:19:58,280 Speaker 1: It's a Tuesday, of course. Now Tim Lawless is with 395 00:19:58,359 --> 00:20:00,560 Speaker 1: us from Cautality. He's been on before or I'm sure 396 00:20:00,560 --> 00:20:05,760 Speaker 1: you know, Tim, very experienced doyen of the property research world. 397 00:20:06,320 --> 00:20:07,919 Speaker 1: There's a male and a female doyen. Did you know 398 00:20:07,960 --> 00:20:10,399 Speaker 1: that you're a doyen with an E N and then 399 00:20:10,400 --> 00:20:12,359 Speaker 1: the female one is E nn E. You'd be a 400 00:20:12,440 --> 00:20:14,679 Speaker 1: doyen after very careful how I pronounced that I got 401 00:20:14,720 --> 00:20:16,560 Speaker 1: it wrong one time and I was corrected by one 402 00:20:16,560 --> 00:20:19,520 Speaker 1: of our listeners. You see they're very quick. This is Billy. 403 00:20:20,119 --> 00:20:22,439 Speaker 1: I love the podcast is Billy, but I must lament 404 00:20:23,240 --> 00:20:26,720 Speaker 1: lament your recent characterization that land tax is a tax 405 00:20:26,760 --> 00:20:30,959 Speaker 1: on realize gains. This is not correct and it muddies 406 00:20:31,000 --> 00:20:35,320 Speaker 1: the water, and by the lengthpece correspondence from him on that, 407 00:20:35,359 --> 00:20:38,159 Speaker 1: but he wraps up by saying property investors should be 408 00:20:38,200 --> 00:20:41,120 Speaker 1: marching in the streets to protest that they are being 409 00:20:41,240 --> 00:20:44,159 Speaker 1: charged both transaction taxes such as stamp duty and an 410 00:20:44,240 --> 00:20:49,040 Speaker 1: acid tax such as land tax, as well as income 411 00:20:49,080 --> 00:20:53,399 Speaker 1: tax on earnings and capital gains. And obviously overhanging all 412 00:20:53,440 --> 00:20:56,560 Speaker 1: this is the new supertax. So just to clarify, and 413 00:20:56,600 --> 00:20:59,080 Speaker 1: I say, we will come to this properly on Thursday, 414 00:20:59,440 --> 00:21:04,080 Speaker 1: but there has almost concluded. He's last and hopefully final 415 00:21:04,600 --> 00:21:08,880 Speaker 1: shape of the super tax, which basically means that over 416 00:21:08,960 --> 00:21:12,320 Speaker 1: three million, it's a new fifteen percent tax. It goes 417 00:21:12,400 --> 00:21:15,679 Speaker 1: higher again as you go through the ranks, but the 418 00:21:15,720 --> 00:21:18,400 Speaker 1: main one for most people most of the time, over 419 00:21:18,440 --> 00:21:20,640 Speaker 1: ten million, obviously it goes higher again. But the main 420 00:21:20,720 --> 00:21:22,800 Speaker 1: one for most of our listeners to be aware of 421 00:21:23,000 --> 00:21:25,840 Speaker 1: is that once you have earnings on assets over three million, 422 00:21:26,000 --> 00:21:29,280 Speaker 1: that tax is going to double from fifteen percent to thirty. 423 00:21:29,520 --> 00:21:32,159 Speaker 1: If you recall, there is a it kicks in or 424 00:21:32,520 --> 00:21:35,320 Speaker 1: tax on super kicks in at the moment at two 425 00:21:36,720 --> 00:21:40,000 Speaker 1: and from July one. Next year, you'll find that it 426 00:21:40,040 --> 00:21:43,120 Speaker 1: doubles over three. That's the bad news. The good news 427 00:21:43,240 --> 00:21:46,600 Speaker 1: is that it's not on realized gains. It's on actual 428 00:21:47,080 --> 00:21:50,800 Speaker 1: changes to prices as opposed to theoretical or paper prices. 429 00:21:51,000 --> 00:21:53,879 Speaker 1: That's the big one. And he also clarified a since 430 00:21:53,960 --> 00:21:57,280 Speaker 1: on capital gains in a very messy way because there 431 00:21:57,280 --> 00:21:59,359 Speaker 1: was no official statement coming out from Jims and drabs, 432 00:21:59,400 --> 00:22:01,879 Speaker 1: but it seems on capital gains. Capital gains will be 433 00:22:01,960 --> 00:22:04,119 Speaker 1: as we might have hopefully assumed. It will be applied 434 00:22:04,160 --> 00:22:07,560 Speaker 1: pro rata in the way that it always has in 435 00:22:07,720 --> 00:22:11,239 Speaker 1: super on large amounts or high wealth amounts, and they 436 00:22:11,280 --> 00:22:13,960 Speaker 1: will be proportionate to the new taxes. What did you 437 00:22:13,960 --> 00:22:15,720 Speaker 1: think of it all, Tim? Where do we stand now? 438 00:22:16,240 --> 00:22:16,440 Speaker 3: Yeah? 439 00:22:16,520 --> 00:22:18,960 Speaker 2: I mean, at least this crazy talk of unrealized capital 440 00:22:19,000 --> 00:22:22,199 Speaker 2: gains is taking off the table. I think the reality James, 441 00:22:22,240 --> 00:22:24,959 Speaker 2: I mean, who has a superannuation find of more than 442 00:22:24,960 --> 00:22:27,320 Speaker 2: three million dollars. It's a pretty small component of the 443 00:22:27,320 --> 00:22:31,720 Speaker 2: Australian population and so I think it's very relevant for 444 00:22:31,760 --> 00:22:36,360 Speaker 2: those very high high end wealth savers. But overall it's 445 00:22:36,359 --> 00:22:38,119 Speaker 2: going to get some certainty at the very least, and 446 00:22:38,160 --> 00:22:41,320 Speaker 2: I think fair enough. Tax reform is going to be 447 00:22:41,320 --> 00:22:44,720 Speaker 2: on the agenda, but some of the suggestions personally, I 448 00:22:44,840 --> 00:22:46,440 Speaker 2: was finding quite difficult to reconcile. 449 00:22:47,160 --> 00:22:49,479 Speaker 1: Yes, I think that was the issue. I mean, people 450 00:22:49,600 --> 00:22:52,520 Speaker 1: who would never have three million are never going to have. 451 00:22:53,280 --> 00:22:55,720 Speaker 1: Didn't like the idea of unrealized gains because that's a 452 00:22:55,720 --> 00:22:59,760 Speaker 1: whole new bowl game and really on paper evaluations. You know, 453 00:23:00,119 --> 00:23:03,479 Speaker 1: if anyone who's a regular investor knows what you make 454 00:23:03,600 --> 00:23:07,480 Speaker 1: on paper unless you sell it, you know, Tim, I 455 00:23:07,480 --> 00:23:10,000 Speaker 1: can evaporate before your eyes. Which leads us to a 456 00:23:10,080 --> 00:23:13,560 Speaker 1: question from Jim, which is where are and how do 457 00:23:13,840 --> 00:23:17,600 Speaker 1: all the people achieving three million superbalance in this new 458 00:23:17,640 --> 00:23:21,520 Speaker 1: tax It's certainly not the low average or middle income 459 00:23:21,760 --> 00:23:26,840 Speaker 1: of Australian says Jim. Yeah, no, absolutely, I mean we're 460 00:23:26,840 --> 00:23:29,720 Speaker 1: talking the average superbalances in the two the three hundred 461 00:23:29,760 --> 00:23:33,040 Speaker 1: thousand area, so a median, I should say, so, so 462 00:23:33,320 --> 00:23:35,960 Speaker 1: miles away from three million. For what it's worth, there's 463 00:23:36,000 --> 00:23:39,879 Speaker 1: eighty thousand people who will be affected with the earnings 464 00:23:39,880 --> 00:23:43,800 Speaker 1: over three million. It's not as much as it sounds 465 00:23:44,720 --> 00:23:46,680 Speaker 1: by that. I mean, if you're living off the income, 466 00:23:47,440 --> 00:23:49,639 Speaker 1: let's say you had that in a very low yielding 467 00:23:49,680 --> 00:23:52,560 Speaker 1: property or cash. Well, you know, the amount you would 468 00:23:52,600 --> 00:23:54,760 Speaker 1: make per year is not is really not an awful 469 00:23:54,800 --> 00:23:59,360 Speaker 1: lot on low yielding, very conservative investments. And I think 470 00:23:59,359 --> 00:24:01,640 Speaker 1: this was the outrage if you like, about that could 471 00:24:01,680 --> 00:24:04,520 Speaker 1: be applied to unrealized gains. At least now it is 472 00:24:04,880 --> 00:24:07,879 Speaker 1: actual realize gains. And hopefully they will stick with that, 473 00:24:07,920 --> 00:24:09,679 Speaker 1: and they will stick with what they've said, and they 474 00:24:09,720 --> 00:24:12,680 Speaker 1: will get through parliament, which is always a risk. You 475 00:24:12,720 --> 00:24:14,679 Speaker 1: would think it would flow through parliament. We don't know 476 00:24:14,760 --> 00:24:18,280 Speaker 1: till it does. It didn't get through before. There's still 477 00:24:18,280 --> 00:24:21,240 Speaker 1: some residual concerns that the Greens will not cooperate because 478 00:24:21,280 --> 00:24:25,159 Speaker 1: they wanted that new tax where the tax doubles in 479 00:24:25,280 --> 00:24:28,639 Speaker 1: super from fifteen to thirty percent on earnings on amounts 480 00:24:28,640 --> 00:24:31,200 Speaker 1: above three million. They wanted that to be two million. 481 00:24:31,359 --> 00:24:33,399 Speaker 1: We'll see where it goes from here or to be 482 00:24:33,400 --> 00:24:36,160 Speaker 1: played out. Okay, Hey, Tim Lawlers, thank you very much. 483 00:24:36,400 --> 00:24:39,840 Speaker 1: Very interesting, I must say, really caught my eye. Great 484 00:24:39,880 --> 00:24:42,280 Speaker 1: that you go off and do pieces of work like that. 485 00:24:42,440 --> 00:24:44,679 Speaker 1: You get a notion, you figure it out and sometimes 486 00:24:44,760 --> 00:24:47,639 Speaker 1: you get a surprise. Certainly that was very interesting on Sydney, 487 00:24:47,680 --> 00:24:49,159 Speaker 1: So thanks Tim. Hope to have you on again. 488 00:24:49,359 --> 00:24:50,280 Speaker 3: Many thanks James. 489 00:24:50,400 --> 00:24:52,919 Speaker 1: That was Tim Lowless, folks head of research at Cautality. 490 00:24:53,200 --> 00:24:57,080 Speaker 1: Always interesting and someone with a piglhicopter view on the market, 491 00:24:57,119 --> 00:25:00,199 Speaker 1: which we love. Okay, let's have some more correspondence the 492 00:25:00,240 --> 00:25:04,280 Speaker 1: Money Puzzle at the Australian dot com dot au. Talk 493 00:25:04,320 --> 00:25:04,800 Speaker 1: to you soon.