1 00:00:12,600 --> 00:00:16,040 Speaker 1: Hello, and welcome to the Australians Money Puzzled podcast. I'm 2 00:00:16,079 --> 00:00:17,919 Speaker 1: James Kirkby. Welcome aboard everybody. 3 00:00:18,040 --> 00:00:18,239 Speaker 2: You know. 4 00:00:18,360 --> 00:00:21,960 Speaker 1: We were told to expect immigration levels would cool this 5 00:00:22,079 --> 00:00:24,720 Speaker 1: year and basically the numbers would not be quite so 6 00:00:24,760 --> 00:00:29,120 Speaker 1: attractive for property investors. But this actually has not happened. 7 00:00:29,160 --> 00:00:32,080 Speaker 1: The reverse has happened. Investors are going back into the market. 8 00:00:32,159 --> 00:00:36,120 Speaker 1: Rental prices are going up. It's a major factor. And 9 00:00:36,200 --> 00:00:39,640 Speaker 1: to discuss this with me is Pete Warden of the 10 00:00:39,680 --> 00:00:40,800 Speaker 1: Alan Warden Group. 11 00:00:40,880 --> 00:00:43,320 Speaker 2: Hi, Pete, it's good to be back on. Lots of 12 00:00:43,400 --> 00:00:45,680 Speaker 2: talk about in the housing market as always. 13 00:00:45,360 --> 00:00:48,200 Speaker 1: Well there is and you just caught me by surprise 14 00:00:48,240 --> 00:00:52,040 Speaker 1: really because I had thought the unemployment rate obviously nationally 15 00:00:52,120 --> 00:00:56,560 Speaker 1: is moving up, but also the vacancy rates in property 16 00:00:57,160 --> 00:01:00,160 Speaker 1: we had thought we're moving a back up. That is, 17 00:01:00,200 --> 00:01:01,920 Speaker 1: they were one percent and they were starting to go 18 00:01:02,120 --> 00:01:04,840 Speaker 1: up higher, and that would mean that the sort of 19 00:01:04,920 --> 00:01:10,040 Speaker 1: intense focus on shortage of rental accommodation was there, and 20 00:01:10,080 --> 00:01:13,040 Speaker 1: that meant for investors this notion that they could rent 21 00:01:13,080 --> 00:01:16,760 Speaker 1: anything to anyone anytime might be fading and it wasn't 22 00:01:16,840 --> 00:01:19,560 Speaker 1: quite as good as it used to be. But tell 23 00:01:19,600 --> 00:01:22,200 Speaker 1: me what you've been noticing in the recent stats on 24 00:01:22,240 --> 00:01:24,200 Speaker 1: rentals and what it means for everyone. 25 00:01:25,880 --> 00:01:29,240 Speaker 2: I think everybody sort of knows that the government's target 26 00:01:29,319 --> 00:01:32,119 Speaker 2: of one point two million homes over five years isn't 27 00:01:32,120 --> 00:01:34,080 Speaker 2: going to be achieved. But when you look at the 28 00:01:34,120 --> 00:01:38,280 Speaker 2: ABS figures for immigration, so every month they put out 29 00:01:38,280 --> 00:01:42,160 Speaker 2: these arrivals and departures figures, and the expectation had been 30 00:01:42,240 --> 00:01:45,760 Speaker 2: that immigration would gradually slow back down towards sort of 31 00:01:45,800 --> 00:01:48,520 Speaker 2: the norms. But if you strip out the short term arrivals, 32 00:01:48,560 --> 00:01:51,200 Speaker 2: because we've always got people coming and going for holidays 33 00:01:51,240 --> 00:01:53,400 Speaker 2: and so on. But if you look at the permanent 34 00:01:53,480 --> 00:01:57,680 Speaker 2: and long term immigration on a net basis is back up. 35 00:01:57,760 --> 00:02:00,400 Speaker 2: Over the past five months, it's been accelerating to a 36 00:02:00,440 --> 00:02:02,840 Speaker 2: back up to about or just shy of four hundred 37 00:02:02,840 --> 00:02:06,360 Speaker 2: and fifty k, which is huge. So yeah, Now a 38 00:02:06,400 --> 00:02:09,240 Speaker 2: part of this is it's not just arrivals, it's also 39 00:02:09,320 --> 00:02:12,160 Speaker 2: fewer people leaving. And I think if you look around 40 00:02:12,240 --> 00:02:16,120 Speaker 2: the world, New Zealand's unemployment rate is above five percent 41 00:02:16,240 --> 00:02:19,160 Speaker 2: and rising back in sort of our old neck of 42 00:02:19,200 --> 00:02:23,680 Speaker 2: the woods. The UK's got rising unemployment rate over there. 43 00:02:23,800 --> 00:02:26,360 Speaker 2: Canada's actually six point nine percent and they're having to 44 00:02:26,400 --> 00:02:29,920 Speaker 2: cut back on immigration. So I think for Ozzi's who 45 00:02:30,000 --> 00:02:33,160 Speaker 2: prospectively might have looked to travel overseas well, fewer people 46 00:02:33,240 --> 00:02:36,960 Speaker 2: are going, and against all the expectation, immigration has now 47 00:02:37,040 --> 00:02:41,760 Speaker 2: been accelerating again. The national planning levels for international students 48 00:02:41,800 --> 00:02:45,320 Speaker 2: have been increased for twenty twenty six from two hundred 49 00:02:45,320 --> 00:02:47,680 Speaker 2: and seventy five thousand this year to two hundred and 50 00:02:47,720 --> 00:02:50,840 Speaker 2: ninety five thousand for next year, so that's going to 51 00:02:50,840 --> 00:02:53,440 Speaker 2: add to demand as well. So it seems like things 52 00:02:53,480 --> 00:02:56,280 Speaker 2: will get worse before they get better. In the rental market, 53 00:02:56,440 --> 00:02:59,800 Speaker 2: we've got rental vacancy rates of back near record lows 54 00:02:59,840 --> 00:03:01,000 Speaker 2: now around one percent. 55 00:03:01,360 --> 00:03:05,320 Speaker 1: Just to explain to listeners, they have come back down Basically, 56 00:03:05,360 --> 00:03:07,320 Speaker 1: the lower it is, the tighter it is, the lester 57 00:03:07,440 --> 00:03:09,440 Speaker 1: is to rent. And you're saying it's back down at 58 00:03:09,440 --> 00:03:10,840 Speaker 1: the one percent levels now, is it? 59 00:03:11,440 --> 00:03:13,160 Speaker 2: Yeah? I mean they used to say back in the 60 00:03:13,160 --> 00:03:16,400 Speaker 2: olden days that a balanced rental market had a rental 61 00:03:16,480 --> 00:03:19,639 Speaker 2: vacancy rate of about three percent. I think the way 62 00:03:19,720 --> 00:03:23,160 Speaker 2: things are measured in Australia anyway, I'd say probably around 63 00:03:23,160 --> 00:03:26,360 Speaker 2: two percent is probably more of a balanced market. But 64 00:03:26,440 --> 00:03:28,799 Speaker 2: in five of the capital cities. Now we've got rental 65 00:03:28,880 --> 00:03:32,680 Speaker 2: vacancies below one percent and they're falling again in Sydney. 66 00:03:32,760 --> 00:03:35,280 Speaker 2: So I suppose you've only really got Melbourne where things 67 00:03:35,320 --> 00:03:37,720 Speaker 2: are sort of getting a bit easier for tenants at 68 00:03:37,720 --> 00:03:41,320 Speaker 2: the moment. I think this has some real knock on implications. 69 00:03:41,320 --> 00:03:43,840 Speaker 2: I mean, not least for inflation. I guess you know 70 00:03:43,880 --> 00:03:46,840 Speaker 2: we have We'll talk about this, no doubt in a 71 00:03:46,840 --> 00:03:49,760 Speaker 2: moment when we talk about rate cards. But asking rents 72 00:03:49,760 --> 00:03:52,080 Speaker 2: are now rising again. There tends to be a bit 73 00:03:52,080 --> 00:03:54,200 Speaker 2: of a lug for that to flow through to the 74 00:03:54,240 --> 00:03:57,200 Speaker 2: whole housing market. But that's one of the factors which 75 00:03:57,240 --> 00:03:59,720 Speaker 2: sort of suggests that inflation might not be quite done yet. 76 00:03:59,760 --> 00:04:04,000 Speaker 1: So that's really interesting. Are they asking rents rising nationwide? 77 00:04:05,080 --> 00:04:07,440 Speaker 2: Yes, pretty much everywhere. I think if you look in 78 00:04:07,520 --> 00:04:10,640 Speaker 2: some parts of the country, things have been a bit slower, 79 00:04:10,680 --> 00:04:13,720 Speaker 2: sort of Tasmania, I sat. But like a lot of 80 00:04:13,760 --> 00:04:17,040 Speaker 2: these things, there's a big Sydney Melbourne whiting and if 81 00:04:17,080 --> 00:04:20,000 Speaker 2: asking rents a rising in Sydney and Melbourne, then that 82 00:04:20,040 --> 00:04:22,800 Speaker 2: tends to suggest if is going up. 83 00:04:23,000 --> 00:04:25,239 Speaker 1: So in terms of the factors that really have changed, 84 00:04:25,560 --> 00:04:28,640 Speaker 1: the changing factor, the surprise factor is the bump in immigration. 85 00:04:28,880 --> 00:04:30,800 Speaker 2: Basically, yes, demand is picked. 86 00:04:30,640 --> 00:04:35,120 Speaker 1: Up, which, as you say, people had thought was too soften. 87 00:04:35,480 --> 00:04:37,719 Speaker 1: But in fact, as you say, and it's very interesting 88 00:04:37,760 --> 00:04:40,640 Speaker 1: that you put it in context, rising on employment levels 89 00:04:40,680 --> 00:04:44,520 Speaker 1: in some of the sort of source countries would support 90 00:04:44,600 --> 00:04:47,880 Speaker 1: the notion that they would keep coming if they can. 91 00:04:48,320 --> 00:04:52,479 Speaker 1: I can also add to this that the rentals that 92 00:04:52,720 --> 00:04:56,320 Speaker 1: would be paid in Australia. People might find this hard 93 00:04:56,320 --> 00:04:59,120 Speaker 1: to believe, but it's true the rentals that would be 94 00:04:59,160 --> 00:05:03,480 Speaker 1: paid by those immigrants in the cities coming from New Zealand, 95 00:05:03,600 --> 00:05:08,080 Speaker 1: coming from London, coming from Dublin, they are lower than 96 00:05:08,080 --> 00:05:11,600 Speaker 1: they are used to and so they actually quite happily 97 00:05:11,640 --> 00:05:14,200 Speaker 1: will pay these levels. I'm quite aware of this because 98 00:05:14,360 --> 00:05:17,960 Speaker 1: second generation nieces and nephews the levels they pay. Also, 99 00:05:18,080 --> 00:05:19,800 Speaker 1: my daughter shares a house with a whole bunch of 100 00:05:19,839 --> 00:05:22,400 Speaker 1: New Zealanders. They think this that the rents are terribly 101 00:05:22,400 --> 00:05:26,080 Speaker 1: reasonable compared to Auckland. So the point I'm making is 102 00:05:26,360 --> 00:05:28,720 Speaker 1: that you've got this bump, a surprise bump in immigration 103 00:05:29,440 --> 00:05:32,920 Speaker 1: though that particular immigration cohort is quite willing to pay 104 00:05:32,920 --> 00:05:35,440 Speaker 1: the prices that we have. And then on top of that, 105 00:05:35,560 --> 00:05:38,479 Speaker 1: as you say that many people may not have noticed this, 106 00:05:39,680 --> 00:05:42,599 Speaker 1: that the asking rents are going up, the rental vacancy 107 00:05:42,680 --> 00:05:43,560 Speaker 1: rates are going down. 108 00:05:43,760 --> 00:05:44,520 Speaker 2: That all put. 109 00:05:44,320 --> 00:05:46,760 Speaker 1: Together basically tells you that there's a sort of like 110 00:05:46,800 --> 00:05:50,039 Speaker 1: a second wind here in terms of property of the 111 00:05:50,080 --> 00:05:52,520 Speaker 1: property the man that basically people will be able to 112 00:05:52,839 --> 00:05:56,680 Speaker 1: rent anything basically once again, and that confidence can be 113 00:05:56,720 --> 00:05:57,520 Speaker 1: there for investors. 114 00:05:58,360 --> 00:06:00,520 Speaker 2: Yes, I think so. I mean, I think it's quite 115 00:06:00,520 --> 00:06:03,719 Speaker 2: seasonal in Australia these days because we've got so many 116 00:06:03,760 --> 00:06:07,280 Speaker 2: international students now, what's seven hundred thousand or so, So 117 00:06:07,760 --> 00:06:10,280 Speaker 2: it comes and goes with the university term times, and 118 00:06:10,600 --> 00:06:13,000 Speaker 2: of course the warmer summer months are very popular for 119 00:06:13,440 --> 00:06:16,600 Speaker 2: visitor arrivals. A lot of people come for Christmas as well. 120 00:06:16,640 --> 00:06:20,440 Speaker 2: But I think though in economics, every shortage is ultimately 121 00:06:20,560 --> 00:06:22,360 Speaker 2: will be followed by a glut. It might be two 122 00:06:22,440 --> 00:06:24,719 Speaker 2: or three years down the track, and I think, you know, 123 00:06:24,760 --> 00:06:27,400 Speaker 2: the darkest hours before the dawn. I think in real 124 00:06:27,440 --> 00:06:30,520 Speaker 2: time you're seeing a lot more marginal development projects are 125 00:06:30,520 --> 00:06:35,080 Speaker 2: now increasingly passing feasibility and getting green ticks. I think 126 00:06:35,360 --> 00:06:38,400 Speaker 2: new home sales are what nearly are the three year high. 127 00:06:38,800 --> 00:06:41,600 Speaker 2: We were talking a week or so ago. Cba is 128 00:06:41,680 --> 00:06:44,479 Speaker 2: Keen to lend on things like prefab housing, and I 129 00:06:44,520 --> 00:06:47,320 Speaker 2: think other banks will come into the sector. Build to 130 00:06:47,400 --> 00:06:50,520 Speaker 2: rent in Australia's still quite a nascent sector, but there's 131 00:06:50,520 --> 00:06:53,200 Speaker 2: a thirty billion odd pipeline there and I think there's 132 00:06:53,200 --> 00:06:56,640 Speaker 2: about nearly forty thousand now units either built or planned 133 00:06:56,680 --> 00:06:57,640 Speaker 2: or under construction. 134 00:06:57,920 --> 00:07:00,480 Speaker 1: So you see this as a medium term bomp if 135 00:07:00,520 --> 00:07:04,680 Speaker 1: you like, in in immigration and consequently a medium term 136 00:07:04,920 --> 00:07:10,000 Speaker 1: tightening in rental vacancy riads. But perhaps structurally things are 137 00:07:10,080 --> 00:07:14,560 Speaker 1: getting are changing longer term in terms of the initiatives 138 00:07:14,720 --> 00:07:16,560 Speaker 1: in the economy to build more. 139 00:07:17,680 --> 00:07:20,120 Speaker 2: I think so really it tends to be driven. It's 140 00:07:20,160 --> 00:07:23,600 Speaker 2: a cycle really. As interest rates come down, developers get 141 00:07:23,600 --> 00:07:27,280 Speaker 2: more confidence to build more. People are buying new again now, 142 00:07:27,360 --> 00:07:30,080 Speaker 2: so I think a lot of the supply, particularly built 143 00:07:30,120 --> 00:07:32,760 Speaker 2: to rent, is going to be focused around Melbourne. I 144 00:07:32,760 --> 00:07:36,640 Speaker 2: think medium density supply just seems to be Melbourne seems 145 00:07:36,640 --> 00:07:39,120 Speaker 2: more amenable to that and land prices are a bit 146 00:07:39,200 --> 00:07:41,760 Speaker 2: lower than in Sydney. But yeah, I think in particular, 147 00:07:41,920 --> 00:07:45,280 Speaker 2: investors tend to amplify the cycles now and they're coming 148 00:07:45,320 --> 00:07:47,520 Speaker 2: back into the market, so I think we've got a 149 00:07:47,520 --> 00:07:51,280 Speaker 2: building boom ahead. In fact, the pipeline is already quite reasonable, 150 00:07:51,680 --> 00:07:54,880 Speaker 2: but building times have been very slow in recent years, 151 00:07:54,920 --> 00:07:57,240 Speaker 2: and I think we'll get a marked increase in supply, 152 00:07:57,360 --> 00:08:00,600 Speaker 2: but it might not be until maybe twenty two, only seven, 153 00:08:00,600 --> 00:08:02,640 Speaker 2: and we really start to see that because it's just 154 00:08:02,680 --> 00:08:04,880 Speaker 2: taking so long to get these projects delivered. 155 00:08:06,040 --> 00:08:08,360 Speaker 1: Is there evidence of the investors coming back into the 156 00:08:08,440 --> 00:08:10,200 Speaker 1: market to and where are they coming in? 157 00:08:10,760 --> 00:08:13,520 Speaker 2: Yeah, the ABS puts out they actually shifted from a 158 00:08:13,560 --> 00:08:17,360 Speaker 2: monthly to quarterly figures and lending volumes are up two 159 00:08:17,360 --> 00:08:19,760 Speaker 2: percent in the Dune quarter, so that but that actually 160 00:08:19,840 --> 00:08:22,640 Speaker 2: came off the back of a couple of softer quarters, 161 00:08:22,760 --> 00:08:24,840 Speaker 2: but that was really driven by a three and a 162 00:08:24,880 --> 00:08:28,600 Speaker 2: half percent increase in investor lending. So when you look 163 00:08:28,600 --> 00:08:31,040 Speaker 2: at the cohorts that are coming in, it's actually a 164 00:08:31,080 --> 00:08:35,160 Speaker 2: lot of higher income household so APRA's got the lending 165 00:08:35,200 --> 00:08:38,200 Speaker 2: assessment buffer in place at the moment, so there's a 166 00:08:38,240 --> 00:08:41,959 Speaker 2: three percentage points lending assessment buffer, which is pretty odd 167 00:08:42,000 --> 00:08:44,320 Speaker 2: when you think about it. Interest rates are expected to 168 00:08:44,440 --> 00:08:47,600 Speaker 2: fall and yet people are being stress tested on a 169 00:08:47,679 --> 00:08:50,640 Speaker 2: six percent mortgage right they're being stress tested at nine 170 00:08:50,720 --> 00:08:52,880 Speaker 2: an interest rate. They're effectively never going to. 171 00:08:52,880 --> 00:08:55,760 Speaker 1: Pay drop still doesn't it. I mean it does cascade 172 00:08:55,800 --> 00:09:00,040 Speaker 1: down so that it doesn't change, but it does. It 173 00:09:00,120 --> 00:09:02,959 Speaker 1: used to be assessed are nine for six, You'll be 174 00:09:03,000 --> 00:09:06,640 Speaker 1: assessed on eight for a five, isn't that right? 175 00:09:07,880 --> 00:09:10,319 Speaker 2: Yeah, that's it. So we used to have a smaller buffer. 176 00:09:10,360 --> 00:09:12,880 Speaker 2: Of course, there used to be two percentage points. Now 177 00:09:12,880 --> 00:09:15,760 Speaker 2: it's three. So what it's doing is locking a lot 178 00:09:15,760 --> 00:09:19,280 Speaker 2: of lower income households out of the market completely and 179 00:09:19,360 --> 00:09:22,480 Speaker 2: creating a bit of inequality. So the government is trying 180 00:09:22,480 --> 00:09:26,079 Speaker 2: to counteract this with this low deposit, the deposit guarantee, 181 00:09:26,080 --> 00:09:28,960 Speaker 2: which kicks in on one January twenty twenty six. So 182 00:09:29,240 --> 00:09:30,960 Speaker 2: you've got, on the one hand, you've got the market 183 00:09:31,000 --> 00:09:35,240 Speaker 2: regulator trying to really keep a tight noose on lending standards, 184 00:09:35,240 --> 00:09:37,199 Speaker 2: and then on the other hand, the government saying, well, 185 00:09:37,360 --> 00:09:39,880 Speaker 2: you know, stick in a five percent deposit, will guarantee 186 00:09:39,880 --> 00:09:42,600 Speaker 2: the rest and off you go. So things pulling in 187 00:09:42,600 --> 00:09:44,040 Speaker 2: two different directions. 188 00:09:44,480 --> 00:09:46,280 Speaker 1: We will take a short break and we'll be back 189 00:09:46,320 --> 00:09:48,040 Speaker 1: in a minute because there's some very interesting things that 190 00:09:48,080 --> 00:09:50,520 Speaker 1: wants to develop with pe Books. Back in a moment. 191 00:10:02,480 --> 00:10:05,440 Speaker 1: Hello and welcome back to The Australian's Money Puzzle podcast. 192 00:10:05,480 --> 00:10:08,320 Speaker 1: I'm James Kirby, I'm talking to Pete Warden of Alan Warden. 193 00:10:08,520 --> 00:10:10,760 Speaker 1: Always good to talk to Pete about the market, and 194 00:10:10,800 --> 00:10:14,160 Speaker 1: I think a very distinct inside with an economic grasp 195 00:10:14,400 --> 00:10:17,240 Speaker 1: of property on top of a knowledge of working knowledge 196 00:10:17,280 --> 00:10:19,280 Speaker 1: on day to day on property. One of the things 197 00:10:19,280 --> 00:10:21,880 Speaker 1: that you were alluding to just to cover off for 198 00:10:21,920 --> 00:10:24,439 Speaker 1: anyone who wasn't quite across it. So you know, folks, 199 00:10:24,480 --> 00:10:27,040 Speaker 1: there's a buffer right which isn't advertised. So if you 200 00:10:27,040 --> 00:10:29,800 Speaker 1: see a mortgage, if a mortgage rate on the window 201 00:10:29,840 --> 00:10:31,800 Speaker 1: of the bank is six percent, when you go in 202 00:10:32,280 --> 00:10:35,080 Speaker 1: to apply for that mortgage, day will assess you on 203 00:10:35,120 --> 00:10:38,600 Speaker 1: your ability to pay that rate plus three, which is nine. 204 00:10:39,080 --> 00:10:41,120 Speaker 1: If rates are dropping, as we know they are, let's 205 00:10:41,120 --> 00:10:44,199 Speaker 1: say they settle around five. When you go into the bank, 206 00:10:44,920 --> 00:10:46,880 Speaker 1: you'll be looking for the five percent mortgage, they will 207 00:10:46,960 --> 00:10:49,280 Speaker 1: assess you on plus three. They will assess you on 208 00:10:49,280 --> 00:10:51,880 Speaker 1: your capacity to pay eight. And the point that Pete 209 00:10:52,000 --> 00:10:54,240 Speaker 1: was making said it was very good, which was basically 210 00:10:54,280 --> 00:11:01,040 Speaker 1: that the government regulators are imposing this quite quite severe 211 00:11:01,360 --> 00:11:06,680 Speaker 1: buffer to keep things stable. But the government, that is 212 00:11:06,679 --> 00:11:09,560 Speaker 1: the alban Easy government in Canberra is constantly coming up 213 00:11:09,559 --> 00:11:13,440 Speaker 1: with ways to try and improve affordability for people. The 214 00:11:13,480 --> 00:11:16,240 Speaker 1: big one is the first home guarantee, which is now universal, 215 00:11:16,280 --> 00:11:18,319 Speaker 1: And there's all sorts of other schemes around the place. 216 00:11:18,360 --> 00:11:21,280 Speaker 1: But we end up with this curious situation, Pete, that 217 00:11:22,400 --> 00:11:25,760 Speaker 1: there's all sorts of schemes helping people buy into a 218 00:11:25,840 --> 00:11:29,640 Speaker 1: market where the vacancy rate we've just said is one 219 00:11:29,679 --> 00:11:32,800 Speaker 1: to two percent, And just to put that into perspective, 220 00:11:32,840 --> 00:11:34,720 Speaker 1: you might explain to people what it means one to 221 00:11:34,760 --> 00:11:39,640 Speaker 1: two percent, like what industrial property, what's office property? For instance. 222 00:11:40,440 --> 00:11:44,600 Speaker 2: Yes, the residential rental vacancy, right, it doesn't necessarily mean 223 00:11:44,600 --> 00:11:47,120 Speaker 2: that once two percent of properties are anty. In fact, 224 00:11:47,200 --> 00:11:50,400 Speaker 2: on the census night, you might find that maybe ten 225 00:11:50,440 --> 00:11:53,240 Speaker 2: percent of dwellings don't have somebody in them. But for 226 00:11:53,320 --> 00:11:56,840 Speaker 2: something to be registered as a rental vacancy, it needs 227 00:11:56,840 --> 00:11:59,720 Speaker 2: to be an investment property that's on the market and 228 00:11:59,800 --> 00:12:01,840 Speaker 2: how it's been vacant for a number of weeks. So 229 00:12:02,320 --> 00:12:04,080 Speaker 2: you know, if you were to look at rental vacancy 230 00:12:04,160 --> 00:12:06,720 Speaker 2: rates in other countries, if you're looking at Manhattan, it'd 231 00:12:06,760 --> 00:12:09,320 Speaker 2: be way higher because of the way in which things 232 00:12:09,360 --> 00:12:12,800 Speaker 2: are measured there. Also, I don't think rental vacancy rates 233 00:12:12,960 --> 00:12:15,040 Speaker 2: I think they tend to be understated when you get 234 00:12:15,080 --> 00:12:18,440 Speaker 2: a building boom, because if a big tower block goes up, 235 00:12:18,760 --> 00:12:21,800 Speaker 2: and maybe you might just see an adverse saying properties 236 00:12:21,800 --> 00:12:23,680 Speaker 2: for rent, but it doesn't pick up that there's three 237 00:12:23,720 --> 00:12:26,360 Speaker 2: hundred in the block, you know, So I would say 238 00:12:26,360 --> 00:12:29,120 Speaker 2: it's an indicator and you look at the direction of 239 00:12:29,160 --> 00:12:32,240 Speaker 2: travel more so than the numbers sometimes, but very tight 240 00:12:32,280 --> 00:12:35,160 Speaker 2: and residential. I think with the working from home trend, 241 00:12:35,480 --> 00:12:38,920 Speaker 2: office vacancy rates are well, they're basically at a thirty 242 00:12:39,000 --> 00:12:42,520 Speaker 2: year high. We've seen so many articles over the recent 243 00:12:42,600 --> 00:12:45,560 Speaker 2: years saying the office market's about to pick up, but yeah, 244 00:12:45,600 --> 00:12:50,360 Speaker 2: basically fifteen percent Melbourne CBD eighteen percent vacancy rate for 245 00:12:50,400 --> 00:12:52,280 Speaker 2: office space, so it's almost one empty. 246 00:12:52,920 --> 00:12:56,800 Speaker 1: When I was a baby property reporter, fifteen percent was 247 00:12:56,960 --> 00:12:58,920 Speaker 1: a deep crisis. I mean, fifteen percent was what you 248 00:12:58,920 --> 00:13:02,240 Speaker 1: would see in a full bloe recession. And this is 249 00:13:02,280 --> 00:13:05,119 Speaker 1: a sort of natural level at the moment, isn't it, 250 00:13:05,120 --> 00:13:08,040 Speaker 1: which tells us everything you need to know about working 251 00:13:08,120 --> 00:13:11,200 Speaker 1: from home? There it is in the office vacancy rates 252 00:13:11,240 --> 00:13:14,760 Speaker 1: fifteen percent worse than that in certain corridors where there 253 00:13:14,760 --> 00:13:17,320 Speaker 1: were office only like say saying Killer Road in Melbourne, 254 00:13:17,520 --> 00:13:20,719 Speaker 1: and then I see shopping retails actually improving that it's 255 00:13:20,760 --> 00:13:23,160 Speaker 1: been in the order of ten and it's dropping lower 256 00:13:23,200 --> 00:13:25,319 Speaker 1: than that in some of the cities. So that's sort 257 00:13:25,320 --> 00:13:27,600 Speaker 1: of coming back with the office isn't coming back, which 258 00:13:27,640 --> 00:13:30,320 Speaker 1: tells us the office as we know it isn't coming back, 259 00:13:30,520 --> 00:13:33,560 Speaker 1: and that is full office, everyone coming in nine to 260 00:13:33,640 --> 00:13:35,280 Speaker 1: five on the train or in the car every day 261 00:13:35,320 --> 00:13:39,600 Speaker 1: that is finished. Does it have a bearing in property 262 00:13:39,640 --> 00:13:42,280 Speaker 1: for property investors in terms of the world we know 263 00:13:42,320 --> 00:13:44,120 Speaker 1: the residential side, I. 264 00:13:44,080 --> 00:13:46,400 Speaker 2: Think it does. I mean there's still a gradual pull 265 00:13:46,520 --> 00:13:48,560 Speaker 2: back to the office, but in a lot of cases 266 00:13:48,600 --> 00:13:50,960 Speaker 2: it's only maybe two or three days a week or 267 00:13:50,960 --> 00:13:53,480 Speaker 2: four days a week. So I think a fair amount 268 00:13:53,480 --> 00:13:57,920 Speaker 2: of the housing market demand is gradually centralizing again. But yeah, 269 00:13:57,920 --> 00:14:00,640 Speaker 2: for the office space, it seems like the A grade 270 00:14:01,120 --> 00:14:04,160 Speaker 2: office stock is renting quite easily, and if you go 271 00:14:04,200 --> 00:14:06,839 Speaker 2: to a place like Barangarou fantastic, But it's that BC 272 00:14:07,040 --> 00:14:09,920 Speaker 2: and D grade stock. As he said, people don't really 273 00:14:10,080 --> 00:14:12,440 Speaker 2: want it so much and they don't need it so much, 274 00:14:12,440 --> 00:14:17,480 Speaker 2: and there's some quite significant implications for office rents asset values. 275 00:14:17,920 --> 00:14:21,240 Speaker 2: We talked a lot previously about the potential for offices 276 00:14:21,560 --> 00:14:25,280 Speaker 2: to be converted into apartments, but it's just not really happening. 277 00:14:25,800 --> 00:14:28,440 Speaker 2: I think in practice it's much harder for that to 278 00:14:28,480 --> 00:14:30,920 Speaker 2: be undertaken than in theory, and in a lot of 279 00:14:30,960 --> 00:14:33,560 Speaker 2: cases you end up completely gutting the building and more 280 00:14:33,680 --> 00:14:36,560 Speaker 2: or less starting from scratch, So it's not the same everywhere. 281 00:14:37,760 --> 00:14:40,480 Speaker 1: For the property investor, I wonder is that it is 282 00:14:40,560 --> 00:14:43,280 Speaker 1: part of the outcome of this that the one bedroom 283 00:14:43,320 --> 00:14:45,440 Speaker 1: apartment is weaker even than it used to be as 284 00:14:45,480 --> 00:14:47,720 Speaker 1: a property asset, because people need space because they're going 285 00:14:47,760 --> 00:14:48,440 Speaker 1: to work from home. 286 00:14:49,120 --> 00:14:51,840 Speaker 2: Possibly, I think certainly one of the outcomes of COVID 287 00:14:51,920 --> 00:14:54,480 Speaker 2: is that people wanted more space, and I think even 288 00:14:54,520 --> 00:14:56,680 Speaker 2: if you've got sort of a one plus one type 289 00:14:56,720 --> 00:14:58,960 Speaker 2: of unit set up, that does give you more options 290 00:14:59,000 --> 00:15:01,160 Speaker 2: than just a one bedroom units. And a lot of 291 00:15:01,160 --> 00:15:04,840 Speaker 2: people are also converting space into like a home office, 292 00:15:04,880 --> 00:15:08,040 Speaker 2: and it's certainly been one of the outcomes of the pandemic. 293 00:15:08,200 --> 00:15:11,240 Speaker 2: So yeah, I think it's still still a work in progress. 294 00:15:11,320 --> 00:15:13,400 Speaker 2: A lot of the big banks and big employers are 295 00:15:13,400 --> 00:15:16,080 Speaker 2: trying to get people back into the office with mixed 296 00:15:16,160 --> 00:15:18,440 Speaker 2: race of success. I think at the moment, though, the 297 00:15:18,520 --> 00:15:21,680 Speaker 2: unemployment rate is what four point two percent. The balance 298 00:15:21,720 --> 00:15:24,840 Speaker 2: of power is quite with the employee at the moment, 299 00:15:24,880 --> 00:15:27,160 Speaker 2: but that won't always be the case. If we get back, 300 00:15:27,560 --> 00:15:29,760 Speaker 2: like a lot of those other countries, towards five or 301 00:15:29,800 --> 00:15:33,120 Speaker 2: six percent unemployment, then the balance of power shifts back 302 00:15:33,120 --> 00:15:35,320 Speaker 2: to the employer. So we'll see how that plays out. 303 00:15:35,840 --> 00:15:38,560 Speaker 1: So you clearly are of the opinion that it's the 304 00:15:38,680 --> 00:15:41,560 Speaker 1: stick rather than the currot that will work here. So 305 00:15:42,320 --> 00:15:44,040 Speaker 1: and I don't disagree with you. I think if we 306 00:15:44,120 --> 00:15:46,920 Speaker 1: walk up tomorrow morning and the unemployment rate was fifteen 307 00:15:46,960 --> 00:15:52,480 Speaker 1: percent and everybody was terrified about the future of their jobs, 308 00:15:53,320 --> 00:15:56,000 Speaker 1: and the company they were working for said, we will 309 00:15:56,040 --> 00:15:58,680 Speaker 1: We're going to have to make some serious cuts. Part 310 00:15:58,680 --> 00:16:02,120 Speaker 1: of it will be, you know, tendance in the office. 311 00:16:02,720 --> 00:16:04,280 Speaker 1: I think they will be falling over each other. I 312 00:16:04,320 --> 00:16:06,040 Speaker 1: think they would be. I think they'll be crushed in 313 00:16:06,080 --> 00:16:08,560 Speaker 1: the corridors going in. I might be wrong, that might 314 00:16:08,600 --> 00:16:11,000 Speaker 1: show a bias that I you know that it's that 315 00:16:11,080 --> 00:16:13,720 Speaker 1: has always been the case in my life that when 316 00:16:13,960 --> 00:16:17,120 Speaker 1: a severe recession hits, behavior changes. People start to dress 317 00:16:17,120 --> 00:16:20,360 Speaker 1: more smartly, they turn up more punctually, they go in, 318 00:16:20,520 --> 00:16:23,520 Speaker 1: they get involved because they're worried and does that mean 319 00:16:23,520 --> 00:16:25,960 Speaker 1: will that translated into or move back to the office. 320 00:16:26,040 --> 00:16:28,800 Speaker 1: I think so, I really do, but it would take 321 00:16:28,840 --> 00:16:31,320 Speaker 1: a severe joke in unemployment and we have nothing like that. 322 00:16:31,360 --> 00:16:33,120 Speaker 1: I mean, you're saying, you know, four percent is worse 323 00:16:33,120 --> 00:16:36,120 Speaker 1: than three Yeah, sure, but four percent, three percent, you know, 324 00:16:36,240 --> 00:16:39,200 Speaker 1: they are not anything to worry about. With countries like 325 00:16:39,280 --> 00:16:41,480 Speaker 1: say Spain, where on employment traid it is ten to 326 00:16:41,520 --> 00:16:44,520 Speaker 1: twenty percent, always completely different type of thing. I wonder 327 00:16:44,520 --> 00:16:47,240 Speaker 1: what they'll work from home and there are if only 328 00:16:47,280 --> 00:16:49,120 Speaker 1: we had someone to tell us, we'll take a short 329 00:16:49,120 --> 00:16:51,160 Speaker 1: break and we'll do some really good questions that I 330 00:16:51,240 --> 00:17:00,680 Speaker 1: have been keeping for Pete. Hello and welcome back to 331 00:17:00,680 --> 00:17:04,040 Speaker 1: The Australian's Money Puzzle podcast James Kirby with Pete Warden 332 00:17:04,280 --> 00:17:07,160 Speaker 1: of the Alan Warden Group. I have a question from 333 00:17:07,240 --> 00:17:10,240 Speaker 1: Adam which I think is really interesting and the context here, Pete, 334 00:17:10,280 --> 00:17:13,640 Speaker 1: is that on the show we have moved gradually from 335 00:17:13,960 --> 00:17:17,919 Speaker 1: posing the question whether Victoria is at a discount as 336 00:17:17,920 --> 00:17:20,879 Speaker 1: such for property investors and is the best value to 337 00:17:21,040 --> 00:17:25,000 Speaker 1: a point in recent shows where the guests have clearly 338 00:17:25,119 --> 00:17:28,280 Speaker 1: moved to the point that they are saying confirmed Victoria 339 00:17:28,480 --> 00:17:32,680 Speaker 1: is the best value state for interstate investors orrning investors. 340 00:17:32,760 --> 00:17:35,320 Speaker 1: Just now that the price is the starting prices are 341 00:17:36,200 --> 00:17:39,520 Speaker 1: so much lower state than Sydney, for instance, Brisbane, where 342 00:17:39,920 --> 00:17:44,639 Speaker 1: the gap has completely narrowed and its recent performance has 343 00:17:44,680 --> 00:17:47,320 Speaker 1: been so weak that history would suggest reversion to the 344 00:17:47,320 --> 00:17:50,720 Speaker 1: mean that Melbourne will outperform the other cities in the 345 00:17:50,720 --> 00:17:52,480 Speaker 1: next three to five years. This is something that we're 346 00:17:52,480 --> 00:17:56,240 Speaker 1: putting forward basically as a strong contention and a consensus 347 00:17:56,280 --> 00:17:59,359 Speaker 1: at least among guests in the show. So this leads 348 00:17:59,359 --> 00:18:01,600 Speaker 1: to questions here one from Adam. You have talked with 349 00:18:01,640 --> 00:18:04,159 Speaker 1: a few people about the potential for house prices in 350 00:18:04,200 --> 00:18:07,720 Speaker 1: Melbourne asid has recently underperformed. Is there a good way 351 00:18:07,800 --> 00:18:10,760 Speaker 1: to get exposure to this market without having to purchase 352 00:18:10,840 --> 00:18:15,399 Speaker 1: and enter our house. I'm from New South Wales and 353 00:18:15,600 --> 00:18:18,160 Speaker 1: while this is possible, it would be a big undertaking 354 00:18:20,160 --> 00:18:23,159 Speaker 1: all problem that one. That's why they say property is 355 00:18:23,200 --> 00:18:25,720 Speaker 1: a lumpy acid and a liquid acid. You can buy 356 00:18:25,720 --> 00:18:28,119 Speaker 1: a bit of a house, unfortunately, Adam, not even a 357 00:18:28,119 --> 00:18:30,520 Speaker 1: bit of an apartment. What do you think, Pete? 358 00:18:31,280 --> 00:18:33,280 Speaker 2: Oh, look, there are ways to get exposure to the 359 00:18:33,320 --> 00:18:37,200 Speaker 2: housing market. There's things like fractional investing, there's real estate 360 00:18:37,400 --> 00:18:40,000 Speaker 2: investment trusts. You could even use options if you wanted 361 00:18:40,040 --> 00:18:42,240 Speaker 2: to get really funky. But I think a lot of 362 00:18:42,280 --> 00:18:45,399 Speaker 2: these ideas they forego the use of leverage, which is 363 00:18:45,440 --> 00:18:48,800 Speaker 2: really the point of investing in residential property in the 364 00:18:48,840 --> 00:18:50,920 Speaker 2: first place. Though, if you can't afford a house, take 365 00:18:50,920 --> 00:18:53,800 Speaker 2: a look at units in Melbourne. I think actually our 366 00:18:54,000 --> 00:18:56,680 Speaker 2: mutual friend Sir Williamster in pro Solution talked about this 367 00:18:56,840 --> 00:18:59,440 Speaker 2: maybe a few weeks back on the Money Puzzle, especially 368 00:18:59,480 --> 00:19:02,040 Speaker 2: villa unit it's in Melbourne, So I would say just 369 00:19:02,160 --> 00:19:05,080 Speaker 2: check out unit prices in some of the well located 370 00:19:05,119 --> 00:19:09,640 Speaker 2: suburbs like Elwood or Saint Kilda or Puran. Now there's 371 00:19:09,680 --> 00:19:13,320 Speaker 2: been basically no performance even in nominal terms for a 372 00:19:13,320 --> 00:19:16,080 Speaker 2: decade or a decade and a half in many cases, 373 00:19:16,119 --> 00:19:19,080 Speaker 2: but just very much like Brisbane previously there was maybe 374 00:19:19,119 --> 00:19:21,960 Speaker 2: a dozen years of flat prices, then we saw sixty 375 00:19:22,000 --> 00:19:25,280 Speaker 2: percent increase in three years in Brisbane, and maybe Melbourne 376 00:19:25,359 --> 00:19:27,840 Speaker 2: does something similar. I think if you look at boutique, 377 00:19:28,119 --> 00:19:32,480 Speaker 2: well established unit blocks, you're effectively buying below replacement cost. 378 00:19:32,600 --> 00:19:35,760 Speaker 2: I think one betters maybe start around three hundred k 379 00:19:35,880 --> 00:19:39,000 Speaker 2: for something half decent. Two betters maybe five hundred. So 380 00:19:39,000 --> 00:19:41,520 Speaker 2: it depends on your budget. I've just had one caveat, 381 00:19:41,560 --> 00:19:44,280 Speaker 2: and that's do your due diligence and read the body 382 00:19:44,280 --> 00:19:46,960 Speaker 2: corporate at the strata minutes because they're not always cleaned. 383 00:19:47,000 --> 00:19:49,359 Speaker 2: You don't want to pick up any problems in that regard. 384 00:19:49,400 --> 00:19:51,320 Speaker 2: So if the budget doesn't stretch to a house, maybe 385 00:19:51,320 --> 00:19:53,600 Speaker 2: think about a villa unit or even just a unit. 386 00:19:54,720 --> 00:19:57,520 Speaker 1: Yeah, prety good villa junits. If only they were cool. 387 00:19:57,640 --> 00:19:59,560 Speaker 1: You see, they don't have to They have everything except 388 00:19:59,560 --> 00:20:02,040 Speaker 1: the cool. And I am of the opinion that we 389 00:20:02,119 --> 00:20:06,040 Speaker 1: greatly underestimate the cool factor in property markets among a 390 00:20:06,080 --> 00:20:09,600 Speaker 1: certain age group. Okay, now, as always done of this 391 00:20:09,640 --> 00:20:12,199 Speaker 1: as advice, As you know, folks, it's information only. And 392 00:20:12,200 --> 00:20:15,440 Speaker 1: one of the questions from John. A group of friends 393 00:20:15,920 --> 00:20:18,840 Speaker 1: catch up at the weekend. Most of us have one 394 00:20:19,080 --> 00:20:23,840 Speaker 1: or more investment properties, and they're mostly positively geared, and 395 00:20:23,880 --> 00:20:27,640 Speaker 1: we have small mortgages on them. Okay, we've all been 396 00:20:27,680 --> 00:20:31,920 Speaker 1: told to take money out of super to pay out 397 00:20:31,960 --> 00:20:36,000 Speaker 1: the mortgages on these investment properties when we get to retirement. 398 00:20:37,000 --> 00:20:39,680 Speaker 1: But when we challenge this, the only explanation we can 399 00:20:39,720 --> 00:20:44,200 Speaker 1: find is that it's the done thing to do. Could 400 00:20:44,240 --> 00:20:46,440 Speaker 1: you ask one of your guests what are the pros 401 00:20:46,480 --> 00:20:50,080 Speaker 1: and cons of paying out your investment loan mortgage? That's interesting, 402 00:20:50,320 --> 00:20:54,320 Speaker 1: So let's talk in conceptual terms. If a person owned 403 00:20:54,359 --> 00:20:58,040 Speaker 1: an investment property obviously held outside of super, and they 404 00:20:58,040 --> 00:21:01,239 Speaker 1: were positively geared, which is unusual, would they have much 405 00:21:01,240 --> 00:21:02,600 Speaker 1: of a mortgage to pay out anyway? 406 00:21:02,640 --> 00:21:04,560 Speaker 2: What do you think, Peter, Yeah, it sounds like they're 407 00:21:04,560 --> 00:21:08,360 Speaker 2: modestly leveraged. Well, let's just carvey out the living daylights 408 00:21:08,359 --> 00:21:10,960 Speaker 2: out of it. So first, are you confident you've made 409 00:21:11,040 --> 00:21:14,200 Speaker 2: use of your superannuation allowances? And I think in particularly 410 00:21:14,200 --> 00:21:17,640 Speaker 2: are you confident you'll actually have enough income in retirement 411 00:21:17,640 --> 00:21:20,800 Speaker 2: because properly does have holding costs, so you should probably 412 00:21:20,800 --> 00:21:23,280 Speaker 2: just cover off on those points with an advisor first. 413 00:21:23,280 --> 00:21:26,400 Speaker 2: But assuming you have, then yeah, if you've got quality 414 00:21:26,440 --> 00:21:29,920 Speaker 2: property investments with moderate debt which aren't causing you headaches, 415 00:21:29,960 --> 00:21:33,080 Speaker 2: then sure, why not? Lots of people and increasingly so 416 00:21:33,280 --> 00:21:36,240 Speaker 2: carry mortgage debt into retirement. In fact, I'm planning to 417 00:21:36,280 --> 00:21:39,040 Speaker 2: do exactly that myself. That's really good. 418 00:21:39,080 --> 00:21:42,640 Speaker 1: If you don't mind John the question, maybe I slightly 419 00:21:42,640 --> 00:21:44,840 Speaker 1: reframe and see because this is what I was going 420 00:21:44,920 --> 00:21:48,720 Speaker 1: to see in terms of his quandary, it's about your mindset, 421 00:21:48,880 --> 00:21:51,119 Speaker 1: even your mind you want to be an active investor 422 00:21:51,400 --> 00:21:55,600 Speaker 1: and stay an active investor, then why would you change 423 00:21:55,600 --> 00:22:00,840 Speaker 1: your ways so abruptly on a certain deed because you've retired? 424 00:22:01,359 --> 00:22:03,160 Speaker 1: And I think you were alluding to that too, Pete, 425 00:22:03,160 --> 00:22:07,000 Speaker 1: that everyone thinks differently about this, but certainly the traditional 426 00:22:07,040 --> 00:22:10,200 Speaker 1: notions of that you stop everything for some reason at 427 00:22:10,240 --> 00:22:13,879 Speaker 1: retirement are over. And similarly the idea that you stop 428 00:22:14,160 --> 00:22:16,640 Speaker 1: investing in the method or a manner that you used 429 00:22:16,640 --> 00:22:19,959 Speaker 1: to why should you or you know, sixty forty for instance, 430 00:22:19,960 --> 00:22:22,160 Speaker 1: that was always you know, that whole thing in investment balance, 431 00:22:22,200 --> 00:22:24,400 Speaker 1: and why would you change that once you moved into 432 00:22:24,440 --> 00:22:26,399 Speaker 1: retirement because you don't know how long you're going to live. 433 00:22:26,440 --> 00:22:29,399 Speaker 1: Another great guest on the show had made the point 434 00:22:29,440 --> 00:22:31,399 Speaker 1: that I tried to get him to say, well, if 435 00:22:31,440 --> 00:22:33,439 Speaker 1: I'm estimating for a retirement, how long do I do 436 00:22:33,480 --> 00:22:35,440 Speaker 1: it for? And he refused to do it. He just said, 437 00:22:35,480 --> 00:22:37,119 Speaker 1: it's such a long time, you just don't know, and 438 00:22:37,160 --> 00:22:39,399 Speaker 1: if it's thirty years, then it might as well do 439 00:22:39,440 --> 00:22:42,040 Speaker 1: it into perpetuity. Brings up that whole issue, you know, 440 00:22:42,480 --> 00:22:45,160 Speaker 1: And so a long way around back to your question, John, 441 00:22:45,200 --> 00:22:48,719 Speaker 1: would be you and any of your group depending on 442 00:22:48,760 --> 00:22:51,000 Speaker 1: your view. But if you intend to remain an active 443 00:22:51,040 --> 00:22:54,359 Speaker 1: investor in the foreseeable future, why would you change your ways? 444 00:22:55,240 --> 00:22:58,040 Speaker 1: What do you think, Pete on that principle. 445 00:22:58,080 --> 00:23:00,920 Speaker 2: Yeah, exactly that side. The argument goes, why rush to 446 00:23:00,960 --> 00:23:04,160 Speaker 2: pay down debt on appreciating assets When the debt gets 447 00:23:04,240 --> 00:23:07,800 Speaker 2: inflated away over time, rents generally increase, you're going to 448 00:23:07,840 --> 00:23:10,320 Speaker 2: get the capital growth on top. I mean dusting off 449 00:23:10,320 --> 00:23:13,920 Speaker 2: the old actuararial tables. If a sixty five year old 450 00:23:13,920 --> 00:23:16,960 Speaker 2: man in Australia could expect to live for another twenty years, 451 00:23:17,000 --> 00:23:19,480 Speaker 2: this is abs stats. I mean in the average age 452 00:23:19,520 --> 00:23:22,240 Speaker 2: of death for that group would be approximately eighty five. 453 00:23:22,359 --> 00:23:24,800 Speaker 2: So that's a long time for debt to be inflated 454 00:23:24,840 --> 00:23:28,960 Speaker 2: away and to experience maybe moderately leveraged investment in return. 455 00:23:29,080 --> 00:23:31,800 Speaker 2: So why rush to pay it back just because you're retired? 456 00:23:31,920 --> 00:23:34,840 Speaker 2: I think one other thing, before you actually retire, it 457 00:23:34,920 --> 00:23:37,399 Speaker 2: might be worth sitting down with a mortgage broker and 458 00:23:37,560 --> 00:23:39,520 Speaker 2: just seeing whether you can take out a line of 459 00:23:39,560 --> 00:23:41,960 Speaker 2: credit or similar as it sounds like you've got a 460 00:23:42,000 --> 00:23:44,560 Speaker 2: relatively low level of gearing because once you retire, that 461 00:23:44,600 --> 00:23:45,680 Speaker 2: could be a lot harder to. 462 00:23:45,640 --> 00:23:50,680 Speaker 1: Do, that's right, because a different attitude, of course, because 463 00:23:50,720 --> 00:23:52,800 Speaker 1: you don't have the salary, which is what they look for, 464 00:23:52,920 --> 00:23:56,360 Speaker 1: isn't it. And apparently you can have a lot of assets. 465 00:23:56,960 --> 00:23:59,520 Speaker 1: But if you don't have a salary, can't tick the box. 466 00:23:59,880 --> 00:24:01,919 Speaker 1: The box can't give you the loan an issue for 467 00:24:01,960 --> 00:24:04,520 Speaker 1: another day. Hey, thanks very much, Pete. Great to talk 468 00:24:04,560 --> 00:24:05,000 Speaker 1: to you again. 469 00:24:05,240 --> 00:24:07,280 Speaker 2: Always a pleasure. Thanks James, and. 470 00:24:07,400 --> 00:24:10,239 Speaker 1: That was Pete Warden from Alan Wardens. Let's have some 471 00:24:10,280 --> 00:24:13,680 Speaker 1: more correspondence of good questions there. The show gets better 472 00:24:13,720 --> 00:24:16,280 Speaker 1: if we have better questions, so keep them rolling. The 473 00:24:16,359 --> 00:24:19,960 Speaker 1: money puzzle at the Australian dot com dot au. Talk 474 00:24:20,000 --> 00:24:20,440 Speaker 1: to you soon.