Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm
Speaker 1: James Kirby. Now, after more than a year of intense debate,
Speaker 1: the big changes to super tax appear now to finally
Speaker 1: have been settled, and you've probably heard the Treasure has
Speaker 1: put forward a pretty shrewd, politically shrewd solution to the
Speaker 1: whole thing, whereby the very rich in our country, those
Speaker 1: at more than ten million in super will play a
Speaker 1: prohibitive rate of tax and there will be some offset.
Speaker 1: It's part of this package for low income miners, which
Speaker 1: should probably ensure it goes through Arliament. Right now, most
Speaker 1: listeners to the show will not be in either category.
Speaker 1: I expect you're not a low incommner and I expect
Speaker 1: you don't have more than ten million in super. Maybe
Speaker 1: I'm wrong, but I reckon ninety percent of listeners are
Speaker 1: in the category where quite simply, the news is that's
Speaker 1: super tax rates are going to double above three million dollars. Okay,
Speaker 1: so there's no tax up to two it's fifteen percent
Speaker 1: on earnings over two million, and from July one next
Speaker 1: year it's thirty percent on earnings in super over three million.
Speaker 1: I think that this will more than anything else hit
Speaker 1: property investors. And my guest today is ideal for this.
Speaker 1: It's Stuart Williams, property and finance expert. How are you, Stewart.
Speaker 2: I'm really well, James, and welcome back from you all leave.
Speaker 2: It's lovely that the Treasurer waited until you were back
Speaker 2: to make that announcement.
Speaker 1: Very thoughtful lot, I thought too. So yes, that's right.
Speaker 1: He more. I said he was going to redesign us
Speaker 1: a month ago, and folks, I have been. I have
Speaker 1: been away for a month. We had some pre records
Speaker 1: there and I had some great shows thanks to Julia
Speaker 1: Spragg who stood in for a number of shows which
Speaker 1: she recorded on the weeks. So we're back in the
Speaker 1: saddle tod. They try very hard to catch up with everything.
Speaker 1: Glad to have Stuart with me. So Stuart, could you
Speaker 1: spell out from July one next year what are the
Speaker 1: rates of tax on super And also I was crucially
Speaker 1: spell out that the whole thing about on Relo's games
Speaker 1: is got.
Speaker 2: Yes, and that's a really important point. And I think James,
Speaker 2: before we talk about it, my observation would be the
Speaker 2: consultation process has worked like okay, yes, maybe politicians come
Speaker 2: up with silly ideas to begin with, but the whole
Speaker 2: process should be, well, we go out to constituents, the industry,
Speaker 2: we get feedback, and we reflect that feedback in policy.
Speaker 2: So I know that there's a few articles sort of criticizing,
Speaker 2: calling a backflip, all these sorts of things. Of course,
Speaker 2: you know that's true in some sense, but in a way,
Speaker 2: well unto the treasure of fullystening to the feedback and
Speaker 2: coming up with something a little bit more sensible. Because
Speaker 2: SUPER was designed to fund retirement, not to be a
Speaker 2: tax savior. And you know, I think anyone that has
Speaker 2: more than ten million dollars in SUPER, it's no longer
Speaker 2: about retirement, it's about tax saving and a tax haven.
Speaker 2: So I totally support the revised policy. So essentially an accumulation.
Speaker 2: So as we're working, you're right, up to three million dollars,
Speaker 2: we're paying fifteen percent. Between three and ten million were
Speaker 2: paying thirty percent, and then over ten million we're paying
Speaker 2: forty percent. And that's just on realize capital gains and
Speaker 2: any investment income. So there's no tax on unrealized gains.
Speaker 2: And that's particularly important for property investors because a lot
Speaker 2: of people that have used their SUPER to invest in property.
Speaker 2: Are only really thinking about, well, one day I will
Speaker 2: sell this in retirement, and then that's when I crystallize
Speaker 2: the capital gain. So at least we've removed the unrealized
Speaker 2: gains tax. Now, of course, once we enter into retirement,
Speaker 2: the only change there is the first two million dollars
Speaker 2: is now tax free. And so as I said, you know,
Speaker 2: I think, well, SUPER is there to fun retirement, and
Speaker 2: the progressive tax rates I think make a lot of sense.
Speaker 2: And even if you look at say a balance of
Speaker 2: five million dollars in retirement, the average tax rates about
Speaker 2: fifteen percent, So it's still not bad. It's not like
Speaker 2: we're punishing those people with a lot of money inside SUPER.
Speaker 2: And I would argue, anyone five million SUPER, can I
Speaker 2: afford to pay fifteen percent and make a contribution towards
Speaker 2: sort of tax revenue. I think they could have done
Speaker 2: a lot more on the incentives for lower income earners,
Speaker 2: because it's a bit unfair that if you've got someone
Speaker 2: on a very low income with a very low SUPER
Speaker 2: balance and they do want to save for retirement. Sure,
Speaker 2: now about the first five and a half thousand dollars
Speaker 2: in contributions is tax free because of the offset. But
Speaker 2: I would argue that if you're in a low income
Speaker 2: and you have a low SUPER balance, that you shouldn't
Speaker 2: pay any tax to put money into Super because it's
Speaker 2: in the government's best interest because it produces a burden
Speaker 2: on the welfare systems.
Speaker 1: No, you know, you've actually pay fifteen percent as it
Speaker 1: calls in, and it's like, ah, gosh, you know I
Speaker 1: was being encouraged. Okay, now, But for property investors, here's
Speaker 1: the thing. What happens next. So we all know now
Speaker 1: in the property market that there's a new tax rate
Speaker 1: coming in, and we all know that anyone who has
Speaker 1: accumulated property assets in Super the tax rate, assuming they're
Speaker 1: total super assets, and no doubt their total superassets would
Speaker 1: be heavily chunkily if you like, composed of property assets.
Speaker 1: The tax rate's going to double on earnings over from
Speaker 1: the tax lace basically between three and ten is going
Speaker 1: to double. Isn't it used to be fifteen percent and
Speaker 1: now it's going to be thirty percent on the earnings
Speaker 1: on assets above those above the actually shold and that
Speaker 1: would apply to property earnings. What does it mean for
Speaker 1: the property marked.
Speaker 2: Well, they're being a bit silent on how these util
Speaker 2: tax rates will apply to capital gains, because at the moment,
Speaker 2: super funds get a third reduction in capital gains tax rates.
Speaker 2: So income is taxed at fifteen percent, you know, between
Speaker 2: zero and three million dollars in accumulation, whereas capital gains
Speaker 2: are taxed at ten percent, so you get a third
Speaker 2: reduction on the tax rate. I would imagine they're going
Speaker 2: to apply the same principle to the new tax rates.
Speaker 2: So if you're paying, if you've got more than ten
Speaker 2: million dollars and you're paying forty percent, well you'll pay.
Speaker 2: You know, you'll probably get a third discount on that.
Speaker 2: And remember it's marginal as well. So even if you
Speaker 2: look at the average tax rate on say twenty million dollars,
Speaker 2: it's about thirty one percent on income, so it might
Speaker 2: be about twenty percent or so on capital gains. Well
Speaker 2: that's still probably the same more slightly less than what
Speaker 2: you'd pay if the if you crystallize that capital gain
Speaker 2: in your personal name, I'm not sure. I mean for
Speaker 2: someone that crystallizes a huge, huge capital gain, you might say, well,
Speaker 2: it's not worth it being side super and you should
Speaker 2: pull it out before you sell it or now. But
Speaker 2: I think for most people and most people listening to this,
Speaker 2: I don't think it changes very much. I still think
Speaker 2: the tax benefits aren't as great as they used to be,
Speaker 2: but they're still their relative to say, holding it in
Speaker 2: a family trust, to hold me in individual names or
Speaker 2: even in a company name.
Speaker 1: Okay, So you're saying, all right, So the point your
Speaker 1: first point is that in relative terms, compared to outside super,
Speaker 1: though it's not as good as it used to be,
Speaker 1: it remains better than many options outside super. Okay. And
Speaker 1: also then property income does property income coming in? So
Speaker 1: someone has saved has and their key acid in their
Speaker 1: super is let's say a small apartment and that small
Speaker 1: apartment block pays income each year, and the apartment block
Speaker 1: is worth more than three then their tax is going
Speaker 1: to double. Is that right? Yeah?
Speaker 2: It will. But if there's a balance is five million dollars,
Speaker 2: they're paying an average rate of fifteen percent. Well, you're
Speaker 2: probably going to pay more than that if the asset
Speaker 2: was held personally. If it was in a company, you're
Speaker 2: going to pay thirty percent. If it's in a family trust, again,
Speaker 2: it will end up in an individual name, so you're
Speaker 2: going to pay more than fifteen percent. So yes, there's
Speaker 2: a tax hike, but still Super remains attractive. And James,
Speaker 2: this is something that I talk to clients about a
Speaker 2: lot because a lot of people go, well, I don't
Speaker 2: want to concentrate on Super. They're always moving the rules,
Speaker 2: right they are. They will they will always change the
Speaker 2: Super rules. It's been like that since the early nineties
Speaker 2: when Super began, and it's going to be like that
Speaker 2: for the next twenty or thirty years. But it will
Speaker 2: always be concessionally taxed right at the end of the day,
Speaker 2: So it's always going to be an attractive proposition. Now
Speaker 2: that's not to say you put all your money into it,
Speaker 2: because someone with ten million dollars might start thinking about,
Speaker 2: you know, diversifying on your ship structures. But I think
Speaker 2: for most people listening to this podcast, it doesn't change.
Speaker 2: It doesn't really change the outcome. Super is still an
Speaker 2: attractive environment as well.
Speaker 1: Now, what about the impact at the upper end of
Speaker 1: the market. So there is a report already that perhaps
Speaker 1: you know, obviously the family home remains free of allttax
Speaker 1: couple of games exemption, so you would think the top
Speaker 1: end of the market even be juicier basically will even
Speaker 1: be more attractive than it used to be. So we
Speaker 1: may find even more heat coming into the housing market,
Speaker 1: particularly at your brand. What do you think of that
Speaker 1: Hereio it look?
Speaker 2: I think so at ten million dollars, the average traits
Speaker 2: twenty three percent, So if you have more than ten
Speaker 2: million dollars, you start to think about maybe pulling some
Speaker 2: of that money out. It's a little bit of a
Speaker 2: cautionarytail for most people. For some people as well, because
Speaker 2: I've spoken our advice to this day to our clients
Speaker 2: is don't do anything until it's law. We're not going
Speaker 2: to do anything now. I know there's been a lot
Speaker 2: of stories about people pulling money out of Super, giving
Speaker 2: early inheritance, upgrading the family home, all those sorts of things.
Speaker 2: So that's the thing we can learn from this exercise.
Speaker 2: Don't jump at shadows, don't make changes until something is law.
Speaker 2: But I think you're right, James. I think if for
Speaker 2: those people that have super high balances inside Super excuse
Speaker 2: the pun, I think that there's an incentive there to
Speaker 2: start pulling out and maybe the early inheritance, maybe upgrading
Speaker 2: the family home, taking those opportunities to try and avoid
Speaker 2: that tax. But it's only going to impact a small
Speaker 2: proportion of the community, of course. And I don't think anyone,
Speaker 2: I don't think anyone ever criticized right from the beginning
Speaker 2: that you know, someone with a one hundred million inside
Speaker 2: super can afford to pay more tax and it's not great.
Speaker 1: I got the yeah, and I think that was broadly
Speaker 1: accepted across all investment markets. That's fair enough. Nobody was
Speaker 1: Marchmont Streets or indeed to bort of having people having
Speaker 1: enormous amounts and Super tendillion is an enormous amount. Very interesting,
Speaker 1: great to get you on this morning. We take a
Speaker 1: break and we're going to come back with one of
Speaker 1: our favorite topics with the new anger that you may
Speaker 1: not have considered before, which is where they're the big
Speaker 1: in basement of the national property market is turning or
Speaker 1: not Talk to you in a moment. Hello, Welcome back
Speaker 1: to the Australians Money Puzzle podcast. James Kirby here with
Speaker 1: Stuart Weens. Okay, so now we've got you up to date,
Speaker 1: I hope with the new super tax. Folks, if you
Speaker 1: want to know more, send in some questions the Money
Speaker 1: Puzzle at the Australian dot Com Dot I know people
Speaker 1: had any many questions about this during its sort of gestation,
Speaker 1: it's trouble gestation, and they probably have even more questions
Speaker 1: now because it's clear to us because we're watching it
Speaker 1: every day, but it may not be clear to you.
Speaker 1: So send let us know what you need to know
Speaker 1: and we will answer that promptly. Okay. Now, the theme,
Speaker 1: of course that I'm mentioning is Melbourne the bargain basement
Speaker 1: were told of the national property market, and boy, it's
Speaker 1: certainly cheap compared to the other cities, and some historically
Speaker 1: are likely anomalous situations where for instance, it's cheaper than Adelaiding,
Speaker 1: you don't mind, it's cheapid than Brismond, it's cheaper than Perth.
Speaker 1: How can that be? So there are many interstated bests
Speaker 1: who believe that's going to be a bargain and they've
Speaker 1: come into the Melbourne market. Stuart Wins and his circle
Speaker 1: would have been involved in this. Stuart, I've put it
Speaker 1: to you recently. I've looked at the numbers of the
Speaker 1: September quarter. The Melbourne things are still helpless.
Speaker 2: They are, but if you look at the fundamentals, they're
Speaker 2: pretty strong. James, you've got Melbourne, Victoria has the second
Speaker 2: highest population growth in percent each terms, but in absolute
Speaker 2: terms one hundred and twenty five thousand people. That population
Speaker 2: increased one hundred and twenty five thousand people over the
Speaker 2: last twelve months. That's more than double Perth and New
Speaker 2: South Wales is about one hundred thousand. So in absolute terms,
Speaker 2: strongest population growth. Unemployment, I mean, because everyone sort of
Speaker 2: criticizes the economy. Unemployment is four point four percent nationally
Speaker 2: or at four point two percent. There's not a big
Speaker 2: difference there. Vacancy rates over the last twelve months have
Speaker 2: reduced from about one point eight percent to about one
Speaker 2: point three percent. Having said that, those other markets you
Speaker 2: just mentioned in are below one percent now, so the
Speaker 2: fundamentals are very strong. What we're seeing on the ground
Speaker 2: from feedback from buyers agents, the results are patching. So
Speaker 2: if a couple of sales on the weekend, one exceeded
Speaker 2: expectations by about three hundred thousands so sold for one
Speaker 2: to five, they were creating one two. Another property that
Speaker 2: was considered superior failed to sold for one point four
Speaker 2: to five, so failed to even get to one five.
Speaker 2: And even though it was probably worth more.
Speaker 1: Seeing a grounds for just yit so just to put
Speaker 1: the numbers in, like, there is some growth in the
Speaker 1: Melbourne market, but considering it is anomalous in its in
Speaker 1: its law price against all other cities, and considering everyone
Speaker 1: knows this. Now Sydney grew faster than the September quarter
Speaker 1: the national average group if I've got it right, it's
Speaker 1: coming up on six percent of Milduran was over three.
Speaker 1: Is that I know? There was just the biggest Which
Speaker 1: ones do you use?
Speaker 2: I use karality because they are sort of comparing apples
Speaker 2: with apples, So it looks at the attributes of property
Speaker 2: and compares like for like if you like, so five
Speaker 2: capital city aggregates about four point six percent over the
Speaker 2: last year. Melbourne's two point two is half the growth
Speaker 2: you know in yashin the national pace.
Speaker 1: Yeah, and the thing is okay, so you've taken heart
Speaker 1: with some macro facts and so some wider investments specialists
Speaker 1: and experts, and the number you really hang on to
Speaker 1: there was the fact that the population, the net migration,
Speaker 1: the population is growing, which is all very fine. And
Speaker 1: there's two things I think that I the concerns on
Speaker 1: the other side, One is hasn't Melbourne got the best
Speaker 1: supply for us two of all the states, and the
Speaker 1: second is that the net migration figure if we really
Speaker 1: burrow into it. Is it true that the explanation is
Speaker 1: that the Melbournians aren't leaving anymore because they can't afford
Speaker 1: to go the Queen's lab Yeah, possibly, James, although could
Speaker 1: could it be an interpretation of the figures?
Speaker 2: Well, like you and I've spoken about, there's other reasons
Speaker 2: while we stay in Victoria other than you know, our
Speaker 2: ability to move into state, things like family, business, jobs,
Speaker 2: these sorts of things that kind of keep us here.
Speaker 2: I guess given the whole negative sentiment, anyone that doesn't
Speaker 2: have those ties has moved, and you know, there's the
Speaker 2: rest of us are trapped here if you like, because
Speaker 2: of either jobs or family. But it's true, it's really
Speaker 2: the decline in departures rather than and there's been actually
Speaker 2: a small decline in arrivals, but departures are declined by more.
Speaker 2: That's turned the interstate migration positive. So that's kind of
Speaker 2: naturally you should expect that. And the data is very
Speaker 2: noisy over the last five years because of COVID, so
Speaker 2: it's really difficult to draw trends necessary trends that are
Speaker 2: going to repeat themselves. But the other thing, James, you know,
Speaker 2: when we talk about the data, the thing we've got
Speaker 2: to be conscious of is this first home guarantee it
Speaker 2: and its impact on the data because the price caps
Speaker 2: for this guarantee are around about the median value. So therefore,
Speaker 2: if we increase the transactions that are below the median value,
Speaker 2: it's actually going to pull the medium value down because
Speaker 2: we're looking at the midpoint of all that data.
Speaker 1: I see what you're saying, absolutely, anagress. It's unlimited, right universal,
Speaker 1: So anyone bunder Frostco Is entitled to this skin.
Speaker 2: And I'm told an agent was talking to a mortgage
Speaker 2: broker that was based in sin Killary and Melbourne and
Speaker 2: he was saying that there's fifteen he's got fifteen clients
Speaker 2: have been approved to go and buy property that if
Speaker 2: it wasn't for that guarantee, they wouldn't be there. And
Speaker 2: when other buyers agents saying definitely there's first time buyers
Speaker 2: more active out there in terms of bidding and so forth.
Speaker 2: So I think there's going to be an increasing transactions
Speaker 2: that are sort of sub that million dollar mark, and
Speaker 2: that's actually going to pull welling medium values down. And
Speaker 2: that's why I think that coality data is important because
Speaker 2: we need to look at data for houses and apartments separately,
Speaker 2: and we try need to try and marry up some
Speaker 2: sort of comparison, so we're comparing like with like.
Speaker 1: And that's a very interesting point, Stuart. So at one thing,
Speaker 1: it will pull the media down everywhere. Right, So now
Speaker 1: yes say it's a right, yeah, very interesting. I don't
Speaker 1: thought about that. Okay, keep an eye on that, folks.
Speaker 1: We'll take a short break out some great questions I
Speaker 1: have been collecting. I want to catch up on them.
Speaker 1: We haven't had some questions for a while, so back
Speaker 1: in a moment, Hello, Welcome back to the Australians Money
Speaker 1: Puzzle podcast. James Kirby here with Sturet Wims of pro
Speaker 1: Solution on a milestone week when the new super tax,
Speaker 1: which has been a major distraction in the market for
Speaker 1: a long time, seems to have been sorted politically. And
Speaker 1: I don't have to say that there was absolutely white
Speaker 1: it Google or the decision from the treasure to chuck
Speaker 1: away a notion of on realized gains and just to
Speaker 1: have a straight tax on actual earnings and he's basically
Speaker 1: what he's done is he doubled the amount of tax
Speaker 1: you pay in super on earnings between three million and
Speaker 1: ten million. And that's the big news basically, which will
Speaker 1: hit most people. It's got a bit also, it's got lost,
Speaker 1: but it's probably a little bit sort of buried in
Speaker 1: the wider noise around it because he introduced another new
Speaker 1: tax in super. Yes, sir, for the very wealthy group
Speaker 1: who have more than ten million assets and super and
Speaker 1: they will pay in effect of forty percent tax on super.
Speaker 1: That's the news news as it hits listeners. I expect
Speaker 1: this that simple piece of information that on earning is
Speaker 1: about three million, the super tax you pay will move
Speaker 1: to thirty percent. But as Stewart said, see is in
Speaker 1: context still lower than just about anything else out there. Okay,
Speaker 1: some really good questions. Let's have the first one from
Speaker 1: Helena if you want to read that once?
Speaker 2: Sure, yeah, absolutely so. Helena writes, I hope you're having
Speaker 2: a lovely day. You recently hosted James O'Reilly on The
Speaker 2: Money Puzzle, who spoke about buying property through a self
Speaker 2: marrige superfund and that it could leave you a million
Speaker 2: dollars worse off. The problem isn't that the self married
Speaker 2: Superfund underperformed. It's that the calculations when comparing four hundred
Speaker 2: thousand fully invested into shares to only one hundred and
Speaker 2: sixty thousand deployed into property, when you actually modeled out
Speaker 2: both sides correctly, the so called million dollar loss disappears.
Speaker 1: Okay, thank you, Helena. I mean there's one key point
Speaker 1: I think that that that that MOSCIP agree with, which
Speaker 1: is having properly an SMSs, having a property asset in
Speaker 1: an SMSSI, which many people will now be pondering, especially
Speaker 1: if they already have one, because the tax has changed
Speaker 1: on it. The issue is that you pay higher rates
Speaker 1: than other people. And also the negative gearing isn't as
Speaker 1: good right because because it's insight So they're the crucial points.
Speaker 1: Of course, people can make succests out of property in
Speaker 1: an s MESSIVE. But I think James had some very
Speaker 1: valid point about the fundamental sort of hurdles that aren't
Speaker 1: very clear sometimes and certainly it wouldn't be made clear
Speaker 1: to you by someone who was trying to sell you
Speaker 1: the of putting property into your an SMSSI that's why
Speaker 1: we have this show.
Speaker 2: I just add to that. Sorry, if James you know
Speaker 2: that there's I think I have two comments. Firstly, we
Speaker 2: can model comparisons, and it's correct that you should. You know,
Speaker 2: if you if you're modeling sort of two different strategies,
Speaker 2: you should assume the same return on both asset classes,
Speaker 2: because it's about a strategy comparison rather than asset class comparison.
Speaker 2: But also the flip side is that you should strategy,
Speaker 2: you should model your own scenarios. So in James's scenario,
Speaker 2: it was like leave all the super or take some
Speaker 2: put it in as a deposit, and then leave some
Speaker 2: cash left over to investors a bit of a buffer.
Speaker 2: And so what he was modeling is what he would
Speaker 2: actually do, and so I think that's what we need
Speaker 2: to be careful and not saw a drawing conclusions on
Speaker 2: modeling outcomes unless they really apply to our own situation.
Speaker 2: And I think the general theme of what James was saying,
Speaker 2: which I totally agree with, was that not any property
Speaker 2: will work inside Super. If you're going to invest in
Speaker 2: property inside Super, absolutely make sure it's a great property.
Speaker 2: And I totally support that. If you're just going to
Speaker 2: go out and buy any property or be sold any
Speaker 2: property that it's not going to work.
Speaker 1: It's not going to work because it has to be
Speaker 1: very good because it has particular hurdles. As he is
Speaker 1: being at the bomb with the girl. All right, one
Speaker 1: final question which is from Josh, do you know why
Speaker 1: the government brought forward the starting dead for the first
Speaker 1: home buyers five percent? Positive skin and do you really
Speaker 1: need only five percent to buy a home now? Josh, careful.
Speaker 1: This has happened a couple of times, and I've noticed
Speaker 1: on the show people the folks that scheme universal scheme
Speaker 1: getting so much attention, which is changing the numbers, as
Speaker 1: Stewart explained, and it will bring down the medium price,
Speaker 1: believe it or off, because everybody has to buy under
Speaker 1: the cap. If you like, that is allowed rule the scheme,
Speaker 1: the cap on the house price you're allowed by You aren't.
Speaker 1: You'll just have five percent. You it's not just five percent.
Speaker 1: This is how it works. You put down you only
Speaker 1: need a deposit of five percent, but the other ninety
Speaker 1: five percent is paid by your loan, your mortgage. Okay,
Speaker 1: the government is only covering the potential insurance obligation on
Speaker 1: that amount, which you would have had to pay if
Speaker 1: they didn't do this scheme, So keep that in mind.
Speaker 1: You don't have an eighty percent mortgage, but you have
Speaker 1: a ninety five percent mortgage. If you join the first
Speaker 1: home buyer deposit scheme at five percent, it's fine. I
Speaker 1: suppose baricycles for some people, but all those people Stewart
Speaker 1: will be on ninety five percent mortgages. So as a
Speaker 1: whole new class, isn't there a homeowner in Australia being
Speaker 1: encouraged by the government who would sit there on ninety
Speaker 1: five percent mortgages? Probably for the average you know who
Speaker 1: knows they have one hundred persent mortgages and that's going
Speaker 1: to take a long time to pay down.
Speaker 2: Yep, that's right. It's not a solution to housing affordability.
Speaker 2: It's a solution to borrowing capacity. Yeah, that's all it is.
Speaker 2: And but we you know, like anything, borrowing is a
Speaker 2: fantastic servant, but a terrible master. So you must make
Speaker 2: sure that what you're borrowing is affordable and you can
Speaker 2: repay it and all those sorts of things. Having said
Speaker 2: all that, you know, if I had my time again,
Speaker 2: and I was in my twenties buying my first property,
Speaker 2: I would certainly swing for the fences. I think if
Speaker 2: I look back over the last twenty or thirty years
Speaker 2: as a property or an investor, I've probably been two
Speaker 2: conservative times with my decision making. And you know, when
Speaker 2: you ever have a look back, if you're old like
Speaker 2: James and I, you can look back and think about
Speaker 2: property you own twenty or thirty years ago, you go wow,
Speaker 2: you're not sure.
Speaker 1: Oh yeah, And so what you're saying is, yep, you're
Speaker 1: offering me nineteen five percent mortgage. I take it, yeah,
Speaker 1: by five percent deposit on the assumption that you know
Speaker 1: what you're doing, and you'll know what you're doing if
Speaker 1: you keep listening to us. All right, folks, That was
Speaker 1: Stuart Williams of pros Solutions. Thanks Stuart, Thank you James.
Speaker 1: Always great to have you back on the show. Great
Speaker 1: to be back on the show, folks. As I say,
Speaker 1: I am wide open to questions on anything you like
Speaker 1: the money Puzzle at the Australian dot com dot au.
Speaker 1: Talk to you soon.