1 00:00:08,640 --> 00:00:11,480 Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm 2 00:00:11,560 --> 00:00:15,320 Speaker 1: James Kirkby, the Wealth editor at the Australian. Welcome aboard everybody. 3 00:00:15,640 --> 00:00:17,200 Speaker 1: Now before we start the show, you need to know 4 00:00:17,239 --> 00:00:21,480 Speaker 1: a few things in case you missed it. Don't worry 5 00:00:21,680 --> 00:00:26,479 Speaker 1: any longer about the government changing negative gearing or changing 6 00:00:26,480 --> 00:00:30,200 Speaker 1: the rules around capital gains tax. The treasure Jim Chalmers 7 00:00:30,320 --> 00:00:34,600 Speaker 1: has explicitly ruled that out and said that the government 8 00:00:34,640 --> 00:00:36,360 Speaker 1: is not going down that path. There's a bit of 9 00:00:36,360 --> 00:00:38,240 Speaker 1: a cloud over the market about that for some time. 10 00:00:38,600 --> 00:00:40,360 Speaker 1: By the way, when he rules these things out, he 11 00:00:40,400 --> 00:00:42,560 Speaker 1: rules them out until the next election. So let's see 12 00:00:42,880 --> 00:00:45,960 Speaker 1: they're ruled out. They're ruled out for half for six 13 00:00:46,000 --> 00:00:48,440 Speaker 1: months or so, but he has dropped it for the moment. 14 00:00:48,440 --> 00:00:50,720 Speaker 1: To keep that in mind. Similarly, all this talk about 15 00:00:50,720 --> 00:00:53,040 Speaker 1: the mortgage buffer, the three percent extra that you have 16 00:00:53,120 --> 00:00:55,520 Speaker 1: to when you go for a mortgage. You want to 17 00:00:55,520 --> 00:00:57,440 Speaker 1: get a mortgage at six percent, the bank has to 18 00:00:57,480 --> 00:01:00,520 Speaker 1: assess you at nine percent. Because that's the mortgage buffer rule, 19 00:01:00,520 --> 00:01:03,240 Speaker 1: they have to add three percent to the assessment of you. 20 00:01:04,640 --> 00:01:07,840 Speaker 1: There's been an attempt by two banks basically to get 21 00:01:07,920 --> 00:01:11,200 Speaker 1: rid of that and the regulator came out in Parliament 22 00:01:11,200 --> 00:01:14,000 Speaker 1: on Friday and said, no way are they changing that. 23 00:01:14,440 --> 00:01:18,080 Speaker 1: And more than that, John Lonsday, who's the CEO of APRA, 24 00:01:18,640 --> 00:01:20,760 Speaker 1: made the point that it's not linked with rates. The 25 00:01:20,840 --> 00:01:22,760 Speaker 1: argument was greats are going to come down, so that 26 00:01:22,880 --> 00:01:25,280 Speaker 1: buffer should come down, and he's tried to decouple that 27 00:01:25,560 --> 00:01:29,000 Speaker 1: and said no, it's actually got to do with a 28 00:01:29,040 --> 00:01:30,600 Speaker 1: lot more than rates. Has got to do with the 29 00:01:30,600 --> 00:01:33,160 Speaker 1: possibility of economic shocks. So I wouldn't be waiting for 30 00:01:33,200 --> 00:01:35,680 Speaker 1: the mortgage buffer to change, so as you were basically 31 00:01:36,120 --> 00:01:40,080 Speaker 1: on the rules around tax and property. Now, one of 32 00:01:40,080 --> 00:01:42,559 Speaker 1: the things I wanted to talk to you about today 33 00:01:42,640 --> 00:01:46,039 Speaker 1: was the show regularly has buyer's agents on, and I've 34 00:01:46,120 --> 00:01:49,400 Speaker 1: expressed enthusiasm really for buyers agents because I like their 35 00:01:49,440 --> 00:01:52,440 Speaker 1: perspective on the market, which is different than real estate 36 00:01:52,480 --> 00:01:56,480 Speaker 1: agents sometimes or developers or investors. And also I've used 37 00:01:56,520 --> 00:02:00,480 Speaker 1: buyer's agents, which I personally use them every time I 38 00:02:00,520 --> 00:02:03,040 Speaker 1: ever bought anything, and I found them to be terrific, 39 00:02:03,160 --> 00:02:07,120 Speaker 1: particularly at auction, because I'm completely hamp fisted or whatever 40 00:02:07,200 --> 00:02:09,960 Speaker 1: at auctions and you think you can do it, but 41 00:02:10,000 --> 00:02:12,800 Speaker 1: when you stand there on a Saturday morning, you can't 42 00:02:12,800 --> 00:02:14,760 Speaker 1: do it right because you can't do it as well 43 00:02:14,760 --> 00:02:18,840 Speaker 1: as a professional. However, there are issues and our guest 44 00:02:19,040 --> 00:02:22,000 Speaker 1: is though our guest is a buyer's agent, she has 45 00:02:21,400 --> 00:02:23,640 Speaker 1: not a fan of a lot of the things that 46 00:02:23,680 --> 00:02:26,800 Speaker 1: go on inside the industry. She is a buyer's agent 47 00:02:26,840 --> 00:02:29,320 Speaker 1: and she's a real estate educators. It's going to make 48 00:02:29,360 --> 00:02:33,240 Speaker 1: a very interesting exchange. It's Veronica Morgan. How are you, Veronica? 49 00:02:34,040 --> 00:02:34,680 Speaker 2: I'm very good. 50 00:02:34,760 --> 00:02:38,800 Speaker 1: Thank you, James, lovely to have you on. I suppose 51 00:02:38,840 --> 00:02:41,840 Speaker 1: buyers agents we think of them as the assistant that 52 00:02:41,919 --> 00:02:43,960 Speaker 1: stands beside you at the auction, and that's it, at 53 00:02:43,960 --> 00:02:46,600 Speaker 1: their golden moment. That's the mat the very best, isn't it. 54 00:02:46,960 --> 00:02:50,040 Speaker 1: But there's a lot of things you don't like about them. 55 00:02:50,080 --> 00:02:52,840 Speaker 1: They've arrived and they've become almost baked in. Haven't theyated 56 00:02:52,840 --> 00:02:54,920 Speaker 1: the industry? And if you go to an auction and 57 00:02:54,960 --> 00:02:58,360 Speaker 1: there's four bidders and three of them have a buyer's 58 00:02:58,360 --> 00:03:01,200 Speaker 1: agent standing beside them in you don't have one, is 59 00:03:01,200 --> 00:03:03,600 Speaker 1: it probably in trouble? Am I wrong about that? 60 00:03:05,600 --> 00:03:08,520 Speaker 2: I've got a slightly more contrarian view of that, And 61 00:03:09,160 --> 00:03:11,200 Speaker 2: usually when I go to an auction, that's unusual to 62 00:03:11,240 --> 00:03:13,920 Speaker 2: see a buias agent, and I guess that's symptomatic of 63 00:03:13,960 --> 00:03:16,160 Speaker 2: one of the issues in the industry. At the moment, 64 00:03:16,240 --> 00:03:19,840 Speaker 2: we had an influx of new people joining the industry. 65 00:03:19,919 --> 00:03:22,760 Speaker 2: The barrier to entry is very low, and a lot 66 00:03:22,760 --> 00:03:25,680 Speaker 2: of new buias agents are very interested in transactions because 67 00:03:25,680 --> 00:03:27,880 Speaker 2: the more people they buy for, the more money they make. 68 00:03:28,360 --> 00:03:29,960 Speaker 2: And so if you go to an auction where there 69 00:03:29,960 --> 00:03:32,280 Speaker 2: are a lot of buyers agents, I'd be thinking, Oh, 70 00:03:32,400 --> 00:03:35,000 Speaker 2: these bias agents think this is an easy property to buy, 71 00:03:35,520 --> 00:03:37,800 Speaker 2: which is actually problematic because I want to buy a 72 00:03:37,800 --> 00:03:41,920 Speaker 2: property that is a cracker asset. There's actually quite difficult 73 00:03:41,960 --> 00:03:44,920 Speaker 2: to buy because the properties are difficult to buy long term, 74 00:03:45,040 --> 00:03:47,280 Speaker 2: easy to sell. And if I see a lot of 75 00:03:47,280 --> 00:03:51,240 Speaker 2: bias agents, I'm usually worried that I've actually inadvertently chosen 76 00:03:51,280 --> 00:03:52,920 Speaker 2: an asset that's not as good as I thought it was. 77 00:03:53,560 --> 00:03:56,160 Speaker 1: This little barrier to entry. Is it harder to become 78 00:03:56,200 --> 00:03:58,040 Speaker 1: a realisted agent than a bios agent? 79 00:03:58,520 --> 00:04:01,040 Speaker 2: You No, it's exactly the same process. And so we've 80 00:04:01,080 --> 00:04:03,960 Speaker 2: got eight different jurisdictions in this country. Each state and 81 00:04:04,040 --> 00:04:07,720 Speaker 2: territory has its own legislation around the process to becoming 82 00:04:08,160 --> 00:04:11,600 Speaker 2: a licensed real estate agent, so the process is exactly 83 00:04:11,640 --> 00:04:14,280 Speaker 2: the same, and so buyers agents in a way tacked 84 00:04:14,320 --> 00:04:17,360 Speaker 2: on to the process that has been long in place 85 00:04:17,800 --> 00:04:20,560 Speaker 2: to become qualified to become eether a property management or 86 00:04:20,600 --> 00:04:23,800 Speaker 2: a sales agent. And the problem with that is that 87 00:04:24,080 --> 00:04:26,320 Speaker 2: the buyers agent really to do a great job, needs 88 00:04:26,320 --> 00:04:28,200 Speaker 2: to know a hell of a lot more about property 89 00:04:28,480 --> 00:04:30,920 Speaker 2: than a sales agent or a property manager even needs 90 00:04:30,960 --> 00:04:34,120 Speaker 2: to know. And so we're tacked on. Because we're a 91 00:04:34,160 --> 00:04:37,599 Speaker 2: smaller part of the industry. It doesn't seem feasible or 92 00:04:37,640 --> 00:04:42,320 Speaker 2: economical to develop a whole new educational regime or licensing 93 00:04:42,440 --> 00:04:45,920 Speaker 2: regime for buyers agents. It's more more convenient if you're 94 00:04:45,960 --> 00:04:49,040 Speaker 2: like expedient to lump us in with the rest, and 95 00:04:49,320 --> 00:04:53,600 Speaker 2: that whole education and qualification process is woefully and adequate 96 00:04:53,920 --> 00:04:57,120 Speaker 2: for churning out really competent buyers agents. 97 00:04:57,560 --> 00:05:00,279 Speaker 1: Tell me what's the worst stuff that's going on among 98 00:05:00,360 --> 00:05:02,440 Speaker 1: buyers agents? The bad ones, the. 99 00:05:02,320 --> 00:05:07,559 Speaker 2: Worst all right. In Queensland, it's currently the easiest state 100 00:05:07,600 --> 00:05:10,320 Speaker 2: to become licensed, so you need a full license to 101 00:05:10,360 --> 00:05:13,280 Speaker 2: be able to operate a business in real estate. So 102 00:05:13,640 --> 00:05:17,240 Speaker 2: most sales agents would all property managers. They wouldn't go 103 00:05:17,279 --> 00:05:19,799 Speaker 2: and get qualified and then immediately set up an agency. 104 00:05:20,040 --> 00:05:23,599 Speaker 2: They would get qualified and go and work in an agency, 105 00:05:24,120 --> 00:05:25,800 Speaker 2: and that's one of the barriers to entry on that 106 00:05:25,920 --> 00:05:28,120 Speaker 2: side of the equation because it costs quite a lot 107 00:05:28,160 --> 00:05:30,760 Speaker 2: of money to set up a real estate agency and 108 00:05:30,880 --> 00:05:33,159 Speaker 2: they're sort of forced by the nature of the industry 109 00:05:33,240 --> 00:05:35,839 Speaker 2: to go and get experience. And in some states and 110 00:05:35,920 --> 00:05:39,120 Speaker 2: territories that is baked into the qualification process that you 111 00:05:39,200 --> 00:05:42,359 Speaker 2: need to have work experience in order to go up 112 00:05:42,400 --> 00:05:44,480 Speaker 2: the ranks if you're like in terms of your license. 113 00:05:45,080 --> 00:05:48,120 Speaker 2: But in Queensland you can go and get the first qualification, 114 00:05:48,320 --> 00:05:50,599 Speaker 2: which is a certificate for you can get that and 115 00:05:50,640 --> 00:05:53,320 Speaker 2: then you can do one additional subject which is one 116 00:05:53,360 --> 00:05:56,880 Speaker 2: of the Diploma of Agency Management subjects, and with that 117 00:05:57,160 --> 00:06:00,200 Speaker 2: as the most minor qualification in the entire country, you 118 00:06:00,200 --> 00:06:03,840 Speaker 2: can get a full license. And what some operate, some 119 00:06:03,920 --> 00:06:05,960 Speaker 2: new operators in the industry are doing it going and 120 00:06:05,960 --> 00:06:08,880 Speaker 2: getting a service office up there. They're going and finding 121 00:06:08,880 --> 00:06:11,080 Speaker 2: an RTO that has the easiest and cheapest way to 122 00:06:11,440 --> 00:06:13,960 Speaker 2: get the license. They get their life, they get their 123 00:06:13,960 --> 00:06:16,159 Speaker 2: full license up there, and then they apply for mutual 124 00:06:16,200 --> 00:06:19,960 Speaker 2: recognition in another state or territory they don't always get it, 125 00:06:20,000 --> 00:06:20,760 Speaker 2: but they often do. 126 00:06:21,440 --> 00:06:25,279 Speaker 1: Okay, But that in itself is unimpressive, right, that someone 127 00:06:25,279 --> 00:06:27,000 Speaker 1: can get in so easy, And that's always the case. 128 00:06:27,040 --> 00:06:29,280 Speaker 1: There was a time when financial planners could do a 129 00:06:29,360 --> 00:06:33,680 Speaker 1: multiple choice question with another planner helping them and they'd qualify. 130 00:06:34,240 --> 00:06:36,760 Speaker 1: I witnessed that, but I want to ask you, Okay, 131 00:06:36,800 --> 00:06:38,400 Speaker 1: so we'll take it. That's not great. But how was 132 00:06:38,440 --> 00:06:40,400 Speaker 1: it transparent to be a problem? Then? How is it? 133 00:06:40,560 --> 00:06:43,120 Speaker 1: How is that a problem for anyone who uses them? 134 00:06:43,560 --> 00:06:46,080 Speaker 2: The problem for anyone who uses them is that quite often, 135 00:06:46,760 --> 00:06:48,600 Speaker 2: so you go and do that qualification, and even if 136 00:06:48,600 --> 00:06:51,600 Speaker 2: you manage to do it at a reputable RTO or organization, 137 00:06:52,360 --> 00:06:56,000 Speaker 2: there are no modules in that course that teach you 138 00:06:56,120 --> 00:06:59,599 Speaker 2: due diligence, for example, And you would expect if someone 139 00:06:59,720 --> 00:07:02,440 Speaker 2: is going to hire a buyers agent, you would expect 140 00:07:02,520 --> 00:07:06,320 Speaker 2: that buyers agent is equipped and educated and experienced enough 141 00:07:06,600 --> 00:07:08,520 Speaker 2: to know the red flags that you should be avoiding 142 00:07:08,560 --> 00:07:12,360 Speaker 2: when you buy that property. But these people often have 143 00:07:12,880 --> 00:07:16,960 Speaker 2: zero property experience zero, a real sad experience, and particularly 144 00:07:16,960 --> 00:07:18,920 Speaker 2: if they're getting qualified in one state, and then they're 145 00:07:18,960 --> 00:07:20,840 Speaker 2: going to apply that learning, if you want to call 146 00:07:20,880 --> 00:07:23,320 Speaker 2: it that in another state which has a completely different 147 00:07:23,760 --> 00:07:26,640 Speaker 2: regime of vendal disclosure and the documents in which you 148 00:07:26,640 --> 00:07:28,880 Speaker 2: would expect to get from the agent versus those you 149 00:07:28,920 --> 00:07:31,880 Speaker 2: don't get from the agent, and knowing what you get 150 00:07:31,920 --> 00:07:34,160 Speaker 2: and what you need to then go and find out 151 00:07:34,160 --> 00:07:36,720 Speaker 2: yourself and what is discoverable. But if you don't know 152 00:07:36,760 --> 00:07:39,200 Speaker 2: what you don't know, you won't even go through that process. 153 00:07:39,840 --> 00:07:43,880 Speaker 2: So that is very alarming. And I run a mentoring 154 00:07:43,920 --> 00:07:47,240 Speaker 2: program for new buyers agents, and I have a Facebook 155 00:07:47,280 --> 00:07:49,480 Speaker 2: group and I'm talking with people who are in the 156 00:07:49,520 --> 00:07:51,960 Speaker 2: process of becoming bias agents or even that those who 157 00:07:51,960 --> 00:07:55,960 Speaker 2: have set up business and actually taking on paid clients 158 00:07:56,280 --> 00:07:57,840 Speaker 2: and helping them. And I ask them of the most 159 00:07:57,880 --> 00:08:00,440 Speaker 2: basic questions and they don't know how to and to them, 160 00:08:00,800 --> 00:08:02,160 Speaker 2: that is alarming. 161 00:08:02,720 --> 00:08:05,920 Speaker 1: It is alarming, is it because it's a boom business basically, 162 00:08:05,960 --> 00:08:08,480 Speaker 1: and maybe ten fifteen years ago there was a very 163 00:08:08,480 --> 00:08:12,240 Speaker 1: small amount of them, and now there's many more because 164 00:08:12,560 --> 00:08:16,120 Speaker 1: basically trickle down. Basically the people used to buy them 165 00:08:16,120 --> 00:08:18,200 Speaker 1: when they were buying trophy homes, et cetera. But now 166 00:08:18,240 --> 00:08:20,280 Speaker 1: it's like middle of the world exercise. 167 00:08:21,000 --> 00:08:23,360 Speaker 2: Yeah, it's a little bit, you know, on the sales 168 00:08:23,400 --> 00:08:25,800 Speaker 2: side of things. When I first started selling real estate 169 00:08:25,800 --> 00:08:28,200 Speaker 2: twenty five years ago, nobody used a property stylist. Now 170 00:08:28,240 --> 00:08:30,840 Speaker 2: everybody does it. It maybe a little bit similar. 171 00:08:30,640 --> 00:08:33,840 Speaker 1: Exactly same sort of thing, that's right, And then there's 172 00:08:33,840 --> 00:08:36,640 Speaker 1: a sort of you must mustn't you because because that's 173 00:08:36,640 --> 00:08:39,120 Speaker 1: the competition, then isn't it a little bit? 174 00:08:39,160 --> 00:08:42,120 Speaker 2: But I think there's a lot of proponents to say, 175 00:08:42,160 --> 00:08:44,400 Speaker 2: this is the booming industry, this is the future. There's 176 00:08:44,400 --> 00:08:46,720 Speaker 2: so much money to be made by becoming a buyers agent. 177 00:08:47,040 --> 00:08:50,319 Speaker 2: They turned to America and say, look in America, everybody's represented. 178 00:08:50,400 --> 00:08:53,440 Speaker 2: But in America, until very recently, it was that the 179 00:08:53,600 --> 00:08:57,079 Speaker 2: vendor the sales half of that equation. They would charge 180 00:08:57,080 --> 00:08:59,439 Speaker 2: something like six percent commission, and then that was split 181 00:08:59,480 --> 00:09:02,120 Speaker 2: between the brokers for the buyer and the broker for 182 00:09:02,160 --> 00:09:04,480 Speaker 2: the seller. And it's not the same here. It's vendor, 183 00:09:04,559 --> 00:09:07,800 Speaker 2: it's user pays here. And so I think that's that's 184 00:09:07,800 --> 00:09:11,559 Speaker 2: a natural barrier to becoming something everybody would use as 185 00:09:11,559 --> 00:09:14,360 Speaker 2: a buyer's agent. And look, to be honest, I see 186 00:09:14,360 --> 00:09:17,760 Speaker 2: buyers agency in action often at auctions, and I watch 187 00:09:17,800 --> 00:09:19,920 Speaker 2: what they're doing, and I see how there's their processes 188 00:09:19,920 --> 00:09:23,160 Speaker 2: they're going through, and I think that buyer actually has 189 00:09:23,600 --> 00:09:28,320 Speaker 2: lost out because they've employed somebody who knows not enough, 190 00:09:28,480 --> 00:09:29,920 Speaker 2: you know what I mean. I can see that the 191 00:09:29,960 --> 00:09:32,319 Speaker 2: buyer probably would have been better off doing it themselves 192 00:09:32,360 --> 00:09:34,840 Speaker 2: in many cases. So it's pretty horrible. 193 00:09:35,640 --> 00:09:37,480 Speaker 1: Well, I have to change my language on the sill, 194 00:09:37,920 --> 00:09:39,800 Speaker 1: and I have to talk about good buyers agents, right, 195 00:09:39,920 --> 00:09:43,679 Speaker 1: because there's good ones obviously very interesting. Okay, just one 196 00:09:43,720 --> 00:09:46,720 Speaker 1: last thing before we move off from this segment. What 197 00:09:47,000 --> 00:09:50,720 Speaker 1: would be a giveaway of a buyer's agent that is 198 00:09:50,760 --> 00:09:55,120 Speaker 1: not qualified or capable in your eyes to the lead person? 199 00:09:55,840 --> 00:10:00,160 Speaker 1: What would be a signal for someone who was choosing one. 200 00:10:00,840 --> 00:10:03,480 Speaker 2: There's a few things that I encourage people to look for, 201 00:10:03,800 --> 00:10:07,360 Speaker 2: and one is look for a local specialist. Now, I 202 00:10:07,440 --> 00:10:09,720 Speaker 2: know that there's a problem with going to a local 203 00:10:09,760 --> 00:10:12,319 Speaker 2: specialist buyers agent, because if you ask them for investment 204 00:10:12,360 --> 00:10:14,800 Speaker 2: of ice as to where should I invest, they've only 205 00:10:14,840 --> 00:10:16,800 Speaker 2: got one tool they've got and every problem is going 206 00:10:16,840 --> 00:10:18,920 Speaker 2: to be a nail if the only tool they have 207 00:10:19,000 --> 00:10:21,199 Speaker 2: is a hammer. So I get that there's an elementation 208 00:10:21,320 --> 00:10:23,200 Speaker 2: in that, and so that's the wrong question to us 209 00:10:23,280 --> 00:10:26,680 Speaker 2: that type of buyers agent. But a local specialist will 210 00:10:26,720 --> 00:10:29,280 Speaker 2: actually help you buy the best possible asset in that 211 00:10:29,400 --> 00:10:32,240 Speaker 2: area if they really are very good at what they're doing. 212 00:10:32,600 --> 00:10:35,520 Speaker 2: Whereas if you go to one of these we jokingly 213 00:10:35,559 --> 00:10:38,679 Speaker 2: call them fly in flya uts borderless buyers agents. They 214 00:10:38,679 --> 00:10:41,800 Speaker 2: don't fly anywhere anymore. They buy property sight unseen across 215 00:10:41,800 --> 00:10:45,120 Speaker 2: the country. They don't know how to choose good assets 216 00:10:45,160 --> 00:10:47,760 Speaker 2: and in fact, sales agents and I routinely hear the 217 00:10:47,760 --> 00:10:51,319 Speaker 2: story of sales agents in regional areas and other capital 218 00:10:51,360 --> 00:10:54,880 Speaker 2: cities sort of sniggering at the stock that they sell 219 00:10:54,960 --> 00:10:57,760 Speaker 2: to these buyers agents and the prices that they get 220 00:10:57,800 --> 00:11:00,840 Speaker 2: for them. So you need a local specialist. You also 221 00:11:00,960 --> 00:11:03,320 Speaker 2: need to have somebody who I say has got ten 222 00:11:03,400 --> 00:11:06,360 Speaker 2: years experience, and the reason I say ten years or 223 00:11:06,400 --> 00:11:09,360 Speaker 2: they work within a team that has where they're mentored 224 00:11:09,400 --> 00:11:11,440 Speaker 2: by people that have good ten years, because you need 225 00:11:11,480 --> 00:11:15,520 Speaker 2: someone who's seen that market through up cycles and down cycles, 226 00:11:15,880 --> 00:11:19,319 Speaker 2: because the sorts of competition you get in an up cycle, 227 00:11:19,440 --> 00:11:22,120 Speaker 2: everybody competes for everything, and that means that C grade 228 00:11:22,120 --> 00:11:24,800 Speaker 2: properties are getting competition as well as A grade So 229 00:11:24,840 --> 00:11:27,640 Speaker 2: you need discernment to be able to sort that out 230 00:11:27,679 --> 00:11:30,959 Speaker 2: and really behave accordingly in terms of what the market 231 00:11:31,000 --> 00:11:34,840 Speaker 2: conditions are, but also have that healthy regard for the 232 00:11:34,960 --> 00:11:37,720 Speaker 2: risks that you're taking and that healthy yeah, that concern 233 00:11:37,840 --> 00:11:40,320 Speaker 2: for what could happen when the market does turn, and 234 00:11:40,360 --> 00:11:42,880 Speaker 2: you want that. You want somebody who's got more experience 235 00:11:43,000 --> 00:11:45,120 Speaker 2: than you do. And the other thing that I would say, 236 00:11:45,160 --> 00:11:48,439 Speaker 2: you really want them to care and communicate with you 237 00:11:48,559 --> 00:11:52,520 Speaker 2: throughout the entire due diligence process. I would ask any 238 00:11:52,559 --> 00:11:55,160 Speaker 2: bias agent, what is your due diligence process? And you 239 00:11:55,200 --> 00:11:57,440 Speaker 2: want something in that that they disclosed to you, and 240 00:11:57,480 --> 00:12:00,440 Speaker 2: they show you how they actually present that information that 241 00:12:00,600 --> 00:12:02,920 Speaker 2: surprises you. That is not something that you would have 242 00:12:02,960 --> 00:12:04,720 Speaker 2: done or you would have assumed would be done, but 243 00:12:04,800 --> 00:12:05,679 Speaker 2: something beyond that. 244 00:12:06,040 --> 00:12:09,360 Speaker 1: How are they adding value to you as a buyer? 245 00:12:09,559 --> 00:12:12,199 Speaker 1: Really good? Okay, terrific, We'll take short break. That was 246 00:12:12,280 --> 00:12:17,359 Speaker 1: very interesting and dimensioned that I suppose to the problem 247 00:12:17,400 --> 00:12:19,560 Speaker 1: for me has been that the ones I used were good. 248 00:12:20,000 --> 00:12:30,600 Speaker 1: We're talking a minute. Hello, Welcome back to the Australians 249 00:12:30,600 --> 00:12:33,640 Speaker 1: Money Puzzle podcast. I'm James Kirkby talking to Veronica Morgan. 250 00:12:33,760 --> 00:12:35,199 Speaker 1: She hasn't been on the show before. It nice to 251 00:12:35,240 --> 00:12:37,040 Speaker 1: have her on. She's a buyer's agent, she's a properly 252 00:12:37,160 --> 00:12:45,200 Speaker 1: educator podcaster herself, and she has good individual perspective on 253 00:12:45,280 --> 00:12:48,559 Speaker 1: the buyer's agents, which I think perhaps part of the 254 00:12:48,640 --> 00:12:51,800 Speaker 1: problem is they're all too polite and they don't they 255 00:12:51,840 --> 00:12:54,760 Speaker 1: don't actually tell us what they're up against, the good ones, 256 00:12:54,760 --> 00:12:57,320 Speaker 1: because I only have good ones on the show, folks, 257 00:12:57,400 --> 00:12:59,439 Speaker 1: as you would know, and I'm pretty selective as to 258 00:12:59,440 --> 00:13:01,360 Speaker 1: who I have on myself. I think I've only had 259 00:13:01,360 --> 00:13:04,840 Speaker 1: maybe four and I know all four. Okay, Now the 260 00:13:04,880 --> 00:13:06,719 Speaker 1: other thing talking, we're talking about auctions, and I was 261 00:13:06,760 --> 00:13:09,040 Speaker 1: talking about how you haven't a clue. You think you have. 262 00:13:09,200 --> 00:13:10,840 Speaker 1: You think you'd be good at an auction, even if 263 00:13:10,880 --> 00:13:12,600 Speaker 1: you've done it before, you've done it for friends, but 264 00:13:12,600 --> 00:13:15,520 Speaker 1: when you do it for yourself, you go to an auction, 265 00:13:15,640 --> 00:13:18,000 Speaker 1: you think I can do this. I can certainly, I 266 00:13:18,040 --> 00:13:20,240 Speaker 1: know what I want. I'm very clear, I've done my homework. 267 00:13:20,679 --> 00:13:25,280 Speaker 1: But it happens so fast sometimes, and it's such a 268 00:13:25,320 --> 00:13:28,760 Speaker 1: game that if you are up against peple who are 269 00:13:28,920 --> 00:13:32,760 Speaker 1: very good, you're at a disadvantage. You're going to tellus 270 00:13:32,800 --> 00:13:36,320 Speaker 1: about some of the mistakes that people make when bidding 271 00:13:36,320 --> 00:13:39,160 Speaker 1: at auction, and I'm really key to hear what they 272 00:13:39,160 --> 00:13:39,760 Speaker 1: are Ronika. 273 00:13:39,920 --> 00:13:42,760 Speaker 2: Oh, I love going to auctions, not only when I'm bidding. 274 00:13:42,760 --> 00:13:45,000 Speaker 2: In fact, I prefer to go when I'm being a spectator. 275 00:13:45,640 --> 00:13:50,120 Speaker 2: I find them fascinating and you can really put to 276 00:13:50,360 --> 00:13:53,439 Speaker 2: down the entire all the mistakes that buyers make to 277 00:13:53,520 --> 00:13:56,200 Speaker 2: really one core mistake, and that is that they don't 278 00:13:56,280 --> 00:13:59,280 Speaker 2: prepare properly. And the reason they don't prepare properly has 279 00:13:59,280 --> 00:14:01,040 Speaker 2: got no idea what they're in for, or they make 280 00:14:01,120 --> 00:14:04,240 Speaker 2: various assumptions such as, oh, I'm good at public speaking, 281 00:14:04,280 --> 00:14:07,440 Speaker 2: so I'll be fine at auction. It's a completely different 282 00:14:07,480 --> 00:14:10,240 Speaker 2: kettle of fish, particularly when it's your money. As you've 283 00:14:10,280 --> 00:14:13,120 Speaker 2: mentioned in there in the intro. Even I see people 284 00:14:13,200 --> 00:14:15,720 Speaker 2: bidding on behalf of other people, and again they've made 285 00:14:15,760 --> 00:14:18,520 Speaker 2: the assumptions about what it takes to be good at auctions, 286 00:14:18,600 --> 00:14:22,040 Speaker 2: and they've got it all wrong. So the preparation, I say, 287 00:14:22,560 --> 00:14:25,520 Speaker 2: is a number of areas that people really fail to do, 288 00:14:25,920 --> 00:14:28,960 Speaker 2: and one of them is to literally go to auctions 289 00:14:29,800 --> 00:14:33,320 Speaker 2: and observe the amount of times I've met and spoken 290 00:14:33,400 --> 00:14:36,960 Speaker 2: to people. The first time they've actually bid has the 291 00:14:37,000 --> 00:14:39,080 Speaker 2: first time they've been to an auction. So they go 292 00:14:39,160 --> 00:14:41,080 Speaker 2: to an auction for the first ever time and bid 293 00:14:41,160 --> 00:14:46,160 Speaker 2: and they've got no idea what they're in for. So 294 00:14:46,280 --> 00:14:47,120 Speaker 2: that's the first thing. 295 00:14:48,080 --> 00:14:51,120 Speaker 1: Yes, okay, do your homework and get out there and 296 00:14:51,560 --> 00:14:54,040 Speaker 1: witness actions at least several times. 297 00:14:54,120 --> 00:14:58,320 Speaker 2: Yeah, that's exactly right. And there's three different main sort 298 00:14:58,320 --> 00:15:00,440 Speaker 2: of forums for auctions. If you're like, there's in so 299 00:15:00,480 --> 00:15:02,960 Speaker 2: that's where there's a whole lineup. It's usually on an evening. 300 00:15:03,280 --> 00:15:05,880 Speaker 2: The agency will have a whole bunch of properties lined up, 301 00:15:05,880 --> 00:15:08,920 Speaker 2: one auctioneer. Everyone's bundled in a room. If you're in 302 00:15:08,960 --> 00:15:11,120 Speaker 2: the States where you're registered for auction, you'll be lining 303 00:15:11,200 --> 00:15:13,160 Speaker 2: up first to register, but you won't know which property 304 00:15:13,160 --> 00:15:16,440 Speaker 2: you're registering or other people are registering for. And if 305 00:15:16,440 --> 00:15:18,480 Speaker 2: you're in Melbourne or Victoria, of course you don't need 306 00:15:18,480 --> 00:15:21,400 Speaker 2: to register, so you've got Buckley's there. So that's the 307 00:15:21,480 --> 00:15:24,440 Speaker 2: in rooms auction. A very popular one is on site 308 00:15:24,520 --> 00:15:28,880 Speaker 2: and so that's an individual performance if you're like per property, 309 00:15:29,840 --> 00:15:32,760 Speaker 2: usually on a Saturday, and the auctioneer will be in 310 00:15:32,800 --> 00:15:36,200 Speaker 2: the car whizzing around all around the city popping up 311 00:15:36,360 --> 00:15:38,960 Speaker 2: whatever the next thing property is on their agenda. And 312 00:15:39,000 --> 00:15:41,600 Speaker 2: the third one is online, which there's still a little 313 00:15:41,600 --> 00:15:44,200 Speaker 2: bit of a hangover of that from COVID that became 314 00:15:44,240 --> 00:15:47,720 Speaker 2: a thing in COVID. It's not that common, but again 315 00:15:47,840 --> 00:15:49,360 Speaker 2: you need it to work out. If you're going to 316 00:15:49,400 --> 00:15:51,720 Speaker 2: go for a property that is being marketed for auction, 317 00:15:51,840 --> 00:15:55,240 Speaker 2: you need to understand which of those three forums is 318 00:15:55,280 --> 00:15:57,720 Speaker 2: it going to take? Or forums is it going to take, 319 00:15:57,800 --> 00:16:00,520 Speaker 2: and then do some research as to those forms as well, 320 00:16:00,560 --> 00:16:01,720 Speaker 2: because they're all very different. 321 00:16:01,840 --> 00:16:04,920 Speaker 1: Do you think any of the formats is more useful 322 00:16:04,960 --> 00:16:06,000 Speaker 1: to the buyer than another? 323 00:16:07,760 --> 00:16:10,200 Speaker 2: Now, they've all got pros and cons. To be honest, 324 00:16:10,520 --> 00:16:12,920 Speaker 2: they've all got pros and cons, and also a lot 325 00:16:12,920 --> 00:16:15,200 Speaker 2: of it depends on the competition of that particular property 326 00:16:15,240 --> 00:16:18,240 Speaker 2: as well, so you can't necessarily judge that or guess that. 327 00:16:18,720 --> 00:16:21,840 Speaker 2: I know that most auction is actually have a YouTube 328 00:16:21,880 --> 00:16:25,320 Speaker 2: channel now, so you can usually check them and their 329 00:16:25,400 --> 00:16:28,040 Speaker 2: form out. But what you're not going to check for 330 00:16:28,080 --> 00:16:30,240 Speaker 2: that is you're not going to understand what the other 331 00:16:30,280 --> 00:16:33,600 Speaker 2: bidders are doing, because what they that's the the I 332 00:16:33,680 --> 00:16:35,800 Speaker 2: love it when I got to an auction, the auction 333 00:16:35,880 --> 00:16:36,880 Speaker 2: he has got to be able to see me. I 334 00:16:36,880 --> 00:16:38,760 Speaker 2: don't really care what the auctioneer is doing. I care 335 00:16:38,800 --> 00:16:41,000 Speaker 2: what the other bidders are doing. Most buyers will look 336 00:16:41,040 --> 00:16:43,760 Speaker 2: at the auctioneer, not the other bidders, but the other thing. 337 00:16:43,840 --> 00:16:46,960 Speaker 2: And the huge mistake that people make, and this comes 338 00:16:46,960 --> 00:16:50,560 Speaker 2: back to prep as well, is understanding what that property 339 00:16:50,600 --> 00:16:53,440 Speaker 2: is worth in a market sense. So doing your research 340 00:16:53,560 --> 00:16:56,800 Speaker 2: on really what the value should be in terms of 341 00:16:56,880 --> 00:16:59,640 Speaker 2: fair value for that property in the current market. And 342 00:16:59,680 --> 00:17:01,640 Speaker 2: there's a process you need to go through to really 343 00:17:01,680 --> 00:17:04,879 Speaker 2: look at other properties and compare hinge. It don't just 344 00:17:04,920 --> 00:17:07,080 Speaker 2: add ten percent to what the agent is guiding, because 345 00:17:07,080 --> 00:17:09,439 Speaker 2: that is completely the wrong way to work out what 346 00:17:09,480 --> 00:17:12,119 Speaker 2: you should pay for property. So you work out, okay, 347 00:17:12,119 --> 00:17:14,439 Speaker 2: where does that property really sit, And then you've got 348 00:17:14,480 --> 00:17:17,639 Speaker 2: to think where will I push myself if I have 349 00:17:17,760 --> 00:17:21,480 Speaker 2: to with competition in order to buy that property. And 350 00:17:21,520 --> 00:17:24,480 Speaker 2: what I see is that people go into auctions really 351 00:17:24,520 --> 00:17:26,080 Speaker 2: with their limit in their head is what they like 352 00:17:26,160 --> 00:17:29,840 Speaker 2: to buy it for, not what they will pay if 353 00:17:29,880 --> 00:17:32,679 Speaker 2: they have to. And so what actually happens and I 354 00:17:32,680 --> 00:17:34,960 Speaker 2: often see there's really confident bidding up to the point 355 00:17:34,960 --> 00:17:37,240 Speaker 2: where people have reached there, I would like to pay 356 00:17:37,280 --> 00:17:39,840 Speaker 2: it at limit yeap. Then they look at it. If 357 00:17:39,880 --> 00:17:42,040 Speaker 2: they're in a couple, they look at each other absolutely 358 00:17:42,080 --> 00:17:44,000 Speaker 2: give the game away. That's why I look at buyers, 359 00:17:44,080 --> 00:17:46,520 Speaker 2: not at the auctioneer. They give the game away. The 360 00:17:46,520 --> 00:17:49,280 Speaker 2: auctioneer works on that, they play on that, they work 361 00:17:49,320 --> 00:17:52,760 Speaker 2: on that, all that body language and so this and 362 00:17:52,800 --> 00:17:54,840 Speaker 2: this is for me. And then I know when I'm 363 00:17:54,880 --> 00:17:57,359 Speaker 2: bidding against somebody, if they're over there, I wanted to 364 00:17:57,359 --> 00:17:59,280 Speaker 2: pay it limit, then I've got to try. I've got 365 00:17:59,280 --> 00:18:02,280 Speaker 2: my tactics as a bidder will change if I'm against 366 00:18:02,359 --> 00:18:06,000 Speaker 2: somebody like that, And the auctioneer is also working them 367 00:18:06,040 --> 00:18:08,880 Speaker 2: in a certain way. And that's that is the biggest 368 00:18:08,880 --> 00:18:11,840 Speaker 2: mistake that I see buyers make, that lack of preparedness 369 00:18:11,840 --> 00:18:14,960 Speaker 2: to think it's a competition and at what price will 370 00:18:15,000 --> 00:18:17,240 Speaker 2: I go to versus what price will I walk away? 371 00:18:17,680 --> 00:18:19,440 Speaker 2: So yeah, that's the number one mistake. 372 00:18:20,640 --> 00:18:22,560 Speaker 1: Yes, can I ask you one thing, how do you 373 00:18:22,760 --> 00:18:26,680 Speaker 1: what's your assessment of all the games that go on auctions, 374 00:18:26,720 --> 00:18:29,560 Speaker 1: which are as you said, they're fascinating. The person pulls 375 00:18:29,640 --> 00:18:32,639 Speaker 1: up in any type jag and parks it in the 376 00:18:32,920 --> 00:18:35,600 Speaker 1: parks it in the driveway of the house, They're only 377 00:18:35,640 --> 00:18:39,760 Speaker 1: a bidder. I've seen that done. I've seen someone come 378 00:18:39,800 --> 00:18:44,480 Speaker 1: around the corner on a bicycle, start bidding and win 379 00:18:44,520 --> 00:18:47,359 Speaker 1: the auction. I don't know what are there psychological games? 380 00:18:47,400 --> 00:18:50,920 Speaker 1: I think they were, But how does a buyer respond 381 00:18:50,920 --> 00:18:51,880 Speaker 1: to this sort of thing. 382 00:18:51,960 --> 00:18:54,240 Speaker 2: I don't know about the bicycle, but the e type 383 00:18:54,320 --> 00:18:58,640 Speaker 2: jag and such games, I think, what a joke. If 384 00:18:58,680 --> 00:19:00,800 Speaker 2: you need to do that, you probably don't have enough money. 385 00:19:00,880 --> 00:19:03,879 Speaker 2: You know. The real games come in to the actual bidding, 386 00:19:04,000 --> 00:19:06,760 Speaker 2: and there's different sort of avatars I have for different 387 00:19:06,800 --> 00:19:08,760 Speaker 2: types of bitters. And I hate coming up against the 388 00:19:08,800 --> 00:19:11,919 Speaker 2: testosterone bidder because that's where the ego kicks in, and 389 00:19:11,960 --> 00:19:14,199 Speaker 2: that's where it's it's just a desire to win it. 390 00:19:14,280 --> 00:19:17,359 Speaker 2: The price is secondary. That always bothers me when I 391 00:19:17,400 --> 00:19:19,840 Speaker 2: see that sort of behavior. But this sort of posturing 392 00:19:19,960 --> 00:19:22,119 Speaker 2: and fluffing your puffing out your feathers and all that 393 00:19:22,200 --> 00:19:25,320 Speaker 2: sort of p lava, does it not work? It's naive. 394 00:19:25,640 --> 00:19:28,040 Speaker 2: I think most people just think wanka. I don't think. 395 00:19:28,080 --> 00:19:29,119 Speaker 2: I don't think it works. 396 00:19:29,640 --> 00:19:31,600 Speaker 1: Oh it's a thing, right, So there's ten people there. 397 00:19:31,920 --> 00:19:35,240 Speaker 1: Let's say it's a frostal homeoction. The six couples, they 398 00:19:35,240 --> 00:19:37,399 Speaker 1: are more or less to say, and someone very clearly 399 00:19:37,680 --> 00:19:41,200 Speaker 1: arrives with their rich dad. The of that. What would 400 00:19:41,200 --> 00:19:43,440 Speaker 1: you do in that situation? Do you ignore the rich dad? 401 00:19:44,560 --> 00:19:47,880 Speaker 2: Ah, look that I clock everybody. I clock everybody because 402 00:19:48,080 --> 00:19:50,800 Speaker 2: and the rich dad's or even just dad's full stop 403 00:19:51,119 --> 00:19:54,120 Speaker 2: are dangerous at auction. And I've been at auctions where 404 00:19:54,160 --> 00:19:57,840 Speaker 2: I've seen the adult children turned to dad and say, Dad, 405 00:19:58,280 --> 00:19:59,960 Speaker 2: I don't want to pay that. Don't worry. 406 00:20:00,440 --> 00:20:00,760 Speaker 1: I got. 407 00:20:00,840 --> 00:20:03,359 Speaker 2: Yeah, there's an ego and pride that goes on with that, 408 00:20:03,520 --> 00:20:06,040 Speaker 2: and that's way more dangerous than somebody tried to show 409 00:20:06,160 --> 00:20:07,400 Speaker 2: up with the flashy car. 410 00:20:08,160 --> 00:20:10,640 Speaker 1: Yeah right, okay, very interesting. 411 00:20:10,640 --> 00:20:13,840 Speaker 2: Sometimes I think the thing is sometimes you just can't. 412 00:20:13,880 --> 00:20:16,359 Speaker 2: There are some people you cannot compete with. And there's 413 00:20:16,440 --> 00:20:19,360 Speaker 2: luck involved with auctions. That's lucky for the vendor, it's 414 00:20:19,440 --> 00:20:20,879 Speaker 2: unlucky for every other buyer. 415 00:20:21,359 --> 00:20:24,400 Speaker 1: Yeah, okay, information as power is that it's very interesting, 416 00:20:25,119 --> 00:20:27,439 Speaker 1: very interesting. Yes, Yes, I think I told the story 417 00:20:27,480 --> 00:20:30,520 Speaker 1: of an auction in my neighborhood where there was a 418 00:20:31,040 --> 00:20:33,320 Speaker 1: very contested auction, and there was there was basically a 419 00:20:33,359 --> 00:20:37,919 Speaker 1: little old lady and I knew that her daughter and 420 00:20:38,000 --> 00:20:40,520 Speaker 1: family lived around the corner, and I knew that this 421 00:20:40,720 --> 00:20:43,879 Speaker 1: woman was going to pay. It didn't matter, she was 422 00:20:43,880 --> 00:20:46,080 Speaker 1: going to be until she got to the points where 423 00:20:46,119 --> 00:20:48,320 Speaker 1: she was brought. Basically, she was going to take whatever 424 00:20:48,560 --> 00:20:50,440 Speaker 1: that house cast. She was going to buy it because 425 00:20:50,440 --> 00:20:52,440 Speaker 1: she wanted to be there. And if you knew that 426 00:20:53,240 --> 00:20:56,560 Speaker 1: then you would have really changed. Information is so important. Okay, terrific. 427 00:20:56,600 --> 00:20:57,920 Speaker 1: We'll take a short break. We'll be back in a 428 00:20:57,960 --> 00:21:12,960 Speaker 1: moment with some questions. Hello, welcome back to the money Puzzle. 429 00:21:13,119 --> 00:21:16,520 Speaker 1: James Kirby with Veronica Morgan. Now, folks, we had great fun. 430 00:21:16,560 --> 00:21:19,160 Speaker 1: I think fun is probably the right word about the 431 00:21:19,160 --> 00:21:22,399 Speaker 1: Prime Minister and he's ill timed purchase of his beach 432 00:21:22,440 --> 00:21:25,720 Speaker 1: house for four point three million on Copa Cabana Beach 433 00:21:25,760 --> 00:21:27,280 Speaker 1: up there on the Central Coast, and we talked all 434 00:21:27,280 --> 00:21:28,919 Speaker 1: about holiday homes and were they good and were they 435 00:21:28,960 --> 00:21:32,720 Speaker 1: bad last week and whatever else it costs the Prime Minister. 436 00:21:33,080 --> 00:21:35,119 Speaker 1: Do keep in mind that he paid less than the 437 00:21:35,160 --> 00:21:38,560 Speaker 1: person who boarded prior, so he paid three hundred thousand 438 00:21:38,600 --> 00:21:40,080 Speaker 1: less than the person who had bought that house four 439 00:21:40,160 --> 00:21:42,399 Speaker 1: years ago. So as an investor, no problem with the 440 00:21:42,440 --> 00:21:47,000 Speaker 1: PMS moves there at Central Coast. As a politician, it 441 00:21:47,040 --> 00:21:49,480 Speaker 1: was badly tapped as we all know. Okay, Sean says, 442 00:21:49,480 --> 00:21:50,920 Speaker 1: I have a holiday home for twenty five years. I 443 00:21:51,000 --> 00:21:53,680 Speaker 1: use it for children' sool holidays, used by them now 444 00:21:53,720 --> 00:21:56,520 Speaker 1: for free. I rented out to people I know. Six 445 00:21:56,640 --> 00:21:59,680 Speaker 1: hundred percent capital growth. Six hundred percent capital growth, says 446 00:21:59,720 --> 00:22:03,119 Speaker 1: sean sort of place is not being created anymore. I 447 00:22:03,200 --> 00:22:06,440 Speaker 1: use it twice a year, and basically he says, yes, 448 00:22:06,440 --> 00:22:08,240 Speaker 1: but tradees are a problem. So there you are. That's 449 00:22:08,240 --> 00:22:10,600 Speaker 1: one person's view of the holiday home, and that's when 450 00:22:10,600 --> 00:22:13,159 Speaker 1: it goes very well. I imagine nothing like staying in 451 00:22:13,200 --> 00:22:17,879 Speaker 1: the market for a long time. Now. On questions, Carl says, 452 00:22:17,920 --> 00:22:20,040 Speaker 1: I caught up with a mate who is a self 453 00:22:20,080 --> 00:22:23,640 Speaker 1: employed builder and I asked him two questions, how's work 454 00:22:24,000 --> 00:22:26,480 Speaker 1: he said? He answered that he knows some people who 455 00:22:26,480 --> 00:22:28,399 Speaker 1: don't have work and are running out of work. These 456 00:22:28,400 --> 00:22:32,200 Speaker 1: are tradees. And he asked our building products still going 457 00:22:32,280 --> 00:22:35,720 Speaker 1: up and this person said, yes, they are still going 458 00:22:35,800 --> 00:22:38,359 Speaker 1: up in price, and he blamed the price of energy 459 00:22:38,400 --> 00:22:42,800 Speaker 1: for manufacturings, especially concrete, which is very energy and tensive. 460 00:22:43,560 --> 00:22:46,919 Speaker 1: Is he right, that's very simply answered. Actually, yes, he 461 00:22:47,040 --> 00:22:49,359 Speaker 1: is right. You know, the inflation rate's about three and 462 00:22:49,400 --> 00:22:53,440 Speaker 1: a half percent, and the building materials inflation is considerably 463 00:22:53,480 --> 00:22:55,840 Speaker 1: higher than that. It's up at five and six percent. 464 00:22:56,520 --> 00:22:58,160 Speaker 1: The cost of building a new home is up about 465 00:22:58,200 --> 00:23:02,440 Speaker 1: forty percent over four years years according to some builders, 466 00:23:03,040 --> 00:23:07,680 Speaker 1: and I'm quoting the managing director of Garth Chapman Queenslanders, 467 00:23:07,680 --> 00:23:11,879 Speaker 1: Stephen Havas, who has said that the exponential rise in 468 00:23:11,920 --> 00:23:13,679 Speaker 1: the cost of construction. He's not the only one US 469 00:23:13,680 --> 00:23:16,080 Speaker 1: of builders have talked about that. It is particularly to 470 00:23:16,160 --> 00:23:19,679 Speaker 1: do with materials and it must be said topic for 471 00:23:19,720 --> 00:23:25,320 Speaker 1: another day. But regulations and standards, which both environmentally and 472 00:23:25,720 --> 00:23:30,320 Speaker 1: just generally ESG standards are definitely definitely putting extra costs 473 00:23:30,400 --> 00:23:32,479 Speaker 1: on builders, so their inflation rate is much higher than 474 00:23:32,480 --> 00:23:37,720 Speaker 1: the general public. Yes, cal that is how it goes. Okay, Sally, 475 00:23:38,480 --> 00:23:41,280 Speaker 1: you would be dealing mostly, I'm sure Veronica with existing 476 00:23:41,280 --> 00:23:44,440 Speaker 1: properties rather than new ones, aren't you when you work 477 00:23:44,520 --> 00:23:46,879 Speaker 1: in your area, correct, so that issue wouldn't be a 478 00:23:46,880 --> 00:23:47,480 Speaker 1: big thing for you. 479 00:23:48,840 --> 00:23:52,120 Speaker 2: Correct, Although we do have clients that are buying to renovate, 480 00:23:52,200 --> 00:23:53,560 Speaker 2: but yeah, we don't buy brand new. 481 00:23:54,040 --> 00:23:56,720 Speaker 1: Do you find people are more worried than usual or 482 00:23:56,760 --> 00:23:58,800 Speaker 1: scared than usual to renovate at the moment? 483 00:23:59,520 --> 00:24:01,720 Speaker 2: Absolutely, and that's one of the reasons you've seen a 484 00:24:01,720 --> 00:24:05,360 Speaker 2: real disparity with the old renovator's delight. I know we're 485 00:24:05,359 --> 00:24:06,560 Speaker 2: near as popular as I used to be. 486 00:24:07,640 --> 00:24:11,520 Speaker 1: Are they, as a result, potentially better value than they 487 00:24:11,600 --> 00:24:12,080 Speaker 1: used to be? 488 00:24:12,680 --> 00:24:14,880 Speaker 2: Possibly? And I think that if you have the skills 489 00:24:14,920 --> 00:24:17,240 Speaker 2: and know what you're doing with renovating, then there's some 490 00:24:17,280 --> 00:24:20,520 Speaker 2: good opportunities there. But I think the reality is that 491 00:24:20,560 --> 00:24:23,040 Speaker 2: most people are pretty much more aware of the risks 492 00:24:23,080 --> 00:24:26,760 Speaker 2: around that costs blowouts with renovating now than they potentially 493 00:24:26,760 --> 00:24:27,600 Speaker 2: were beforehand. 494 00:24:27,880 --> 00:24:30,280 Speaker 1: Yes, that's right, because there's both the inflation issue that 495 00:24:30,320 --> 00:24:32,639 Speaker 1: we know the building inflation is higher than normal than 496 00:24:32,960 --> 00:24:36,360 Speaker 1: general inflation, and then we know that there is a shortage. Also, 497 00:24:36,600 --> 00:24:40,240 Speaker 1: it would seem of some tradees. Okay, Sally says, My 498 00:24:40,320 --> 00:24:42,360 Speaker 1: partner and I are looking to buy a regional investment 499 00:24:42,400 --> 00:24:45,800 Speaker 1: property with the money that we have saved. My personal 500 00:24:45,880 --> 00:24:48,760 Speaker 1: income is substantially less than my partners is. Around the 501 00:24:48,760 --> 00:24:51,439 Speaker 1: advantage and buying the property in my name only instead 502 00:24:51,440 --> 00:24:54,960 Speaker 1: of having a joint ownership with my partner, and will 503 00:24:55,000 --> 00:24:59,000 Speaker 1: this have an impact tax wise? Okay, we don't answer 504 00:24:59,040 --> 00:25:02,520 Speaker 1: individual questions and it's never advised only information, but I 505 00:25:02,560 --> 00:25:05,840 Speaker 1: did put this to our regular guest financial advisor James 506 00:25:05,840 --> 00:25:08,760 Speaker 1: Gerard sally about this whole thing about what do you 507 00:25:08,800 --> 00:25:10,439 Speaker 1: do if there's a big gap in income between the 508 00:25:10,440 --> 00:25:14,639 Speaker 1: two partners, and he says, on income tax, it generally 509 00:25:14,720 --> 00:25:17,800 Speaker 1: makes sense to purchase investment property in the highest income 510 00:25:17,880 --> 00:25:21,159 Speaker 1: earner's name. Okay, if the property will be negatively geared. 511 00:25:21,320 --> 00:25:24,000 Speaker 1: If the property is neutrallly geared, joint names is common, 512 00:25:24,040 --> 00:25:26,560 Speaker 1: and it is cash flow positive, then the lower income 513 00:25:26,600 --> 00:25:29,119 Speaker 1: earner typically buys the property to minimize the tax on 514 00:25:29,160 --> 00:25:33,000 Speaker 1: the net rent. Okay, hope that's clear. So you can 515 00:25:33,000 --> 00:25:34,800 Speaker 1: see that. Obviously, if someone is making a lot more, 516 00:25:34,840 --> 00:25:36,280 Speaker 1: they pay a lot more tax. So then if it's 517 00:25:36,320 --> 00:25:39,520 Speaker 1: negatively geared, you'd use you with the person with the hiring, 518 00:25:39,600 --> 00:25:42,320 Speaker 1: but would be the buyer. On land tax, it's a 519 00:25:42,359 --> 00:25:45,160 Speaker 1: state based tax, and although the family home is excluded, 520 00:25:45,800 --> 00:25:49,000 Speaker 1: investment property and holiday homes are included. So best to 521 00:25:49,040 --> 00:25:52,000 Speaker 1: go to the state revenue website and see what allowance 522 00:25:52,000 --> 00:25:55,280 Speaker 1: you can have before land tax will apply. And he says, finally, 523 00:25:55,320 --> 00:25:58,080 Speaker 1: this is James Gerard Financial advisor dot com dot you. 524 00:25:58,560 --> 00:26:03,280 Speaker 1: Land tax will be assessed based on the percentage ownership split. Okay, 525 00:26:03,480 --> 00:26:06,800 Speaker 1: very interesting. Keep all that in mind it's not easy 526 00:26:07,400 --> 00:26:12,159 Speaker 1: property investment is. It becomes complex tax wise, particularly complex 527 00:26:12,200 --> 00:26:14,680 Speaker 1: on new regulations, which makes it all dearer. 528 00:26:15,920 --> 00:26:19,120 Speaker 2: Can I add something there, James, Yes, you can. Yeah, 529 00:26:19,200 --> 00:26:22,719 Speaker 2: the borrowing. They said that they're saving using their savings, 530 00:26:22,760 --> 00:26:25,760 Speaker 2: but if unless they've saved up the entire purchase price, 531 00:26:25,760 --> 00:26:27,760 Speaker 2: in which case the cent there won't be negative gearing, 532 00:26:28,040 --> 00:26:31,080 Speaker 2: they will be borrowing and they need income to borrow. 533 00:26:31,359 --> 00:26:34,159 Speaker 2: It's nice to think you can actually set up the ownership, 534 00:26:34,280 --> 00:26:37,080 Speaker 2: the naming of or whoever the owner is based on 535 00:26:37,200 --> 00:26:40,960 Speaker 2: income and tax decisions. But if you can't borrow the 536 00:26:40,960 --> 00:26:44,119 Speaker 2: money because you're setting up with the lower income earners 537 00:26:44,960 --> 00:26:47,639 Speaker 2: as the owner, then that might have an you might 538 00:26:47,680 --> 00:26:49,160 Speaker 2: not be able to buy the property in the first place. 539 00:26:49,840 --> 00:26:52,439 Speaker 1: Very true, Very true. Yes, But Sally and all the 540 00:26:52,480 --> 00:26:54,960 Speaker 1: salies out there, get the structure right, that's for sure. 541 00:26:55,000 --> 00:26:57,920 Speaker 1: Get the structure right before you move. It can really 542 00:26:57,920 --> 00:27:02,240 Speaker 1: make a difference long term. Okay, terrific. But it's been 543 00:27:02,240 --> 00:27:04,800 Speaker 1: really good to talk to you, Veronica, and you got 544 00:27:04,800 --> 00:27:06,840 Speaker 1: a lot in there, you got a lot into the 545 00:27:06,920 --> 00:27:09,359 Speaker 1: thirty minutes. Thank you very much. Great to talk to you, 546 00:27:09,480 --> 00:27:11,520 Speaker 1: Veronica Morgan, my pleasure. 547 00:27:11,600 --> 00:27:11,840 Speaker 2: Thank you. 548 00:27:12,000 --> 00:27:15,480 Speaker 1: James love you to have Veronica on the show. She'd 549 00:27:15,480 --> 00:27:18,160 Speaker 1: be on again for sure. Okay, folks, keep those emails 550 00:27:18,200 --> 00:27:19,400 Speaker 1: rolling in. Talk to you soon.