1 00:00:10,200 --> 00:00:13,560 Speaker 1: Hello, and welcome to the Australians Money Puzzle podcast. I'm 2 00:00:13,640 --> 00:00:16,680 Speaker 1: James Kirby Well, the editor at The Australian. You're welcome 3 00:00:16,680 --> 00:00:19,919 Speaker 1: aboard everybody. I think you know, folks, there's an election 4 00:00:20,400 --> 00:00:22,919 Speaker 1: coming down the line. When the government starts coming out 5 00:00:22,920 --> 00:00:29,280 Speaker 1: with politically shrewd, if ultimately arcane news moments like threatening 6 00:00:29,360 --> 00:00:32,960 Speaker 1: only by the way to eliminate debt card charges, which 7 00:00:32,960 --> 00:00:35,880 Speaker 1: seems to be grabbing the headlines all week, probably something 8 00:00:35,960 --> 00:00:39,599 Speaker 1: everyone can relate to. When you really dive into that, 9 00:00:39,880 --> 00:00:42,760 Speaker 1: it's not going to make an awful difference to the 10 00:00:42,800 --> 00:00:45,839 Speaker 1: many people who are aware and irritated by those charges. 11 00:00:45,880 --> 00:00:47,839 Speaker 1: What would make a difference, I think is if they 12 00:00:48,080 --> 00:00:52,040 Speaker 1: started to tackle some of the really big issues in housing. 13 00:00:52,760 --> 00:00:57,600 Speaker 1: And it's not just investors. Every day Australians want to 14 00:00:57,640 --> 00:00:59,760 Speaker 1: be able to buy a home, to know they can, 15 00:01:00,000 --> 00:01:04,720 Speaker 1: particularly younger Australians first home buyers. Every day Australians, millions 16 00:01:04,760 --> 00:01:08,679 Speaker 1: of them, are property investors. They're important, they're actually crucial 17 00:01:09,600 --> 00:01:12,160 Speaker 1: to how the market operates. The market is it's a 18 00:01:12,240 --> 00:01:15,240 Speaker 1: market and it's run by private investors. That is not 19 00:01:15,280 --> 00:01:17,520 Speaker 1: an exaggeration, it's a fact. And they want a balanced 20 00:01:17,920 --> 00:01:22,920 Speaker 1: playing field. My guest today, it's right across this. She's 21 00:01:22,959 --> 00:01:25,959 Speaker 1: Sarah Petty. She's been on the show before. She's a 22 00:01:25,959 --> 00:01:29,360 Speaker 1: real estate reporter at news Court, her son, she's a 23 00:01:29,400 --> 00:01:32,399 Speaker 1: potential i think, first home buyers, so she has multiple 24 00:01:32,440 --> 00:01:36,000 Speaker 1: qualifications to talk to us. How are you, Sarah, I'm good. 25 00:01:36,000 --> 00:01:36,720 Speaker 2: How are you, James? 26 00:01:37,880 --> 00:01:41,080 Speaker 1: Very good? Thank you very good. I was some of 27 00:01:41,120 --> 00:01:44,319 Speaker 1: the things I was alluding to. There was around all 28 00:01:44,360 --> 00:01:46,800 Speaker 1: sorts of ideas being bounced around at the moment, I've 29 00:01:46,840 --> 00:01:49,360 Speaker 1: just seen would you believe? Before? As I walked in 30 00:01:49,400 --> 00:01:53,360 Speaker 1: to do this on the screen, I saw a senator 31 00:01:53,800 --> 00:01:58,320 Speaker 1: and she is on air as we speak, suggesting that 32 00:01:58,960 --> 00:02:04,639 Speaker 1: mothers women single mothers get special early access to Super 33 00:02:04,680 --> 00:02:08,840 Speaker 1: to buy a home. Other people in the Liberal Party, 34 00:02:08,960 --> 00:02:12,839 Speaker 1: Tim Wilson, for instance, pushing hard that anyone can get 35 00:02:12,880 --> 00:02:16,200 Speaker 1: access to Super to buy their first home. And then 36 00:02:16,680 --> 00:02:20,600 Speaker 1: in recent days we've also had the notion that mortgage buffer, 37 00:02:20,760 --> 00:02:23,360 Speaker 1: this is the three percent extra that the bank must 38 00:02:23,400 --> 00:02:27,240 Speaker 1: add on to your rate to assess you accurately, that 39 00:02:27,280 --> 00:02:30,680 Speaker 1: should be removed. If listeners don't understand that, we'd explain 40 00:02:30,680 --> 00:02:32,480 Speaker 1: it to them in a moment. But all these things 41 00:02:32,560 --> 00:02:36,480 Speaker 1: are all efforts to get people into the market. You're 42 00:02:36,560 --> 00:02:40,480 Speaker 1: reporting all the time. Just give me straight off in 43 00:02:40,560 --> 00:02:42,840 Speaker 1: terms of someone on the ground every day on reader 44 00:02:42,919 --> 00:02:45,680 Speaker 1: state what's the tempo in the market, like just at 45 00:02:45,680 --> 00:02:46,440 Speaker 1: the moments heah. 46 00:02:46,960 --> 00:02:49,600 Speaker 2: In my opinion, it's a little bit two speed market. 47 00:02:49,720 --> 00:02:55,120 Speaker 2: So you have capital cities like Melbourne, Dumarwin, Cobot, what 48 00:02:55,360 --> 00:02:58,880 Speaker 2: all have actually seen a drop in prices over the 49 00:02:58,960 --> 00:03:02,600 Speaker 2: last the twelve months to September, but in Perth, Adelaide 50 00:03:02,639 --> 00:03:08,440 Speaker 2: and Brisbane prices are rising. Prices has increased by about 51 00:03:08,480 --> 00:03:11,160 Speaker 2: twenty two from the last I saw, So it's very 52 00:03:11,240 --> 00:03:14,120 Speaker 2: much dependent on where you are. And yeah, I guess 53 00:03:14,120 --> 00:03:15,680 Speaker 2: what kind of buyer you are as well. 54 00:03:15,840 --> 00:03:18,679 Speaker 1: It really is two speed. Melbourne prices are falling right. 55 00:03:19,440 --> 00:03:22,560 Speaker 2: Yes, Melbourne's actually the worst performing market at the moment. 56 00:03:23,040 --> 00:03:25,280 Speaker 2: Last time I saw, I think prices put down about 57 00:03:25,360 --> 00:03:28,120 Speaker 2: around the three percent mark. So yes, there's a lot 58 00:03:28,160 --> 00:03:31,359 Speaker 2: of reasons for that, which I'm sure you're aware of, James. 59 00:03:31,600 --> 00:03:33,679 Speaker 1: They have been echoed on the show. But I think 60 00:03:33,720 --> 00:03:39,000 Speaker 1: it's worth everyone knowing listening that we have this extraordinary 61 00:03:39,000 --> 00:03:42,560 Speaker 1: and extraordinary situation where the second biggest city in the nation, 62 00:03:42,640 --> 00:03:46,000 Speaker 1: which is about to become the biggest quite soon. Is 63 00:03:46,040 --> 00:03:49,000 Speaker 1: the cheapest. It is cheaper than Sydney where that was 64 00:03:49,040 --> 00:03:53,240 Speaker 1: always the case, Cheaper than Canberra relative Nue, Cheaper than Perth, surprise, 65 00:03:53,560 --> 00:03:56,760 Speaker 1: cheaper than Adelaide. Come on, city of five million people 66 00:03:57,280 --> 00:04:01,720 Speaker 1: is cheaper than Adelaide. That doesn't so some things amiss 67 00:04:01,800 --> 00:04:05,080 Speaker 1: And I wonder if we zoning on that, Sarah, is 68 00:04:05,080 --> 00:04:07,800 Speaker 1: it is it telling us something because there's certain issues 69 00:04:07,840 --> 00:04:10,040 Speaker 1: with isn't that they did pilon the taxes in Victoria 70 00:04:10,040 --> 00:04:13,680 Speaker 1: and the property investors certainly they certainly headed for the hills. 71 00:04:13,680 --> 00:04:17,160 Speaker 1: But I just want to ask you whether whether on 72 00:04:17,200 --> 00:04:20,960 Speaker 1: the ground in the market that people are of an 73 00:04:21,000 --> 00:04:24,280 Speaker 1: opinion that they can waste in their prices. Even price 74 00:04:24,360 --> 00:04:27,679 Speaker 1: growth will soften in some cities or in particular cities 75 00:04:27,720 --> 00:04:30,279 Speaker 1: like Melbourne, they're waiting for the prices to actually fall further. 76 00:04:30,320 --> 00:04:31,560 Speaker 1: Do you get people saying that to you? 77 00:04:32,080 --> 00:04:34,240 Speaker 2: Sometimes? I think it's the more supply comes under the 78 00:04:34,279 --> 00:04:38,839 Speaker 2: market because of rental providers or landlords selling up and 79 00:04:38,880 --> 00:04:42,240 Speaker 2: perhaps moving elsewhere. I think property prices could remain either 80 00:04:42,279 --> 00:04:45,760 Speaker 2: flat rub and drop more. I think that could be 81 00:04:45,760 --> 00:04:49,440 Speaker 2: the case nationwide as well, in terms of maybe as 82 00:04:49,480 --> 00:04:52,279 Speaker 2: more supply comes into the market. But I guess prices 83 00:04:52,320 --> 00:04:55,359 Speaker 2: have to hit their peak in some areas at some point, 84 00:04:55,800 --> 00:04:59,560 Speaker 2: so that'll be interesting. But yeah, we'll see whether or not. 85 00:05:00,000 --> 00:05:02,520 Speaker 2: I think the market slows down. I think there's still 86 00:05:02,560 --> 00:05:04,960 Speaker 2: a lot of reasons as to why it could go up, 87 00:05:05,040 --> 00:05:07,800 Speaker 2: especially when interest rates drop. I think a lot of 88 00:05:07,839 --> 00:05:10,320 Speaker 2: buyers will then that may have been waiting to get 89 00:05:10,320 --> 00:05:12,720 Speaker 2: into the market make choose to get into that point. 90 00:05:12,880 --> 00:05:16,160 Speaker 1: You're skeptical about that. All the economists, including property economists, 91 00:05:16,160 --> 00:05:19,400 Speaker 1: saying price growth will slow. We were talking earlier before 92 00:05:19,440 --> 00:05:21,720 Speaker 1: the show about is it paul A Monkton, that chief 93 00:05:21,720 --> 00:05:24,880 Speaker 1: economist stat Bank of Queensland and his support there which 94 00:05:24,960 --> 00:05:29,000 Speaker 1: basically says that, So do you think it won't happen 95 00:05:29,040 --> 00:05:30,360 Speaker 1: at all or do you think it would just be 96 00:05:31,480 --> 00:05:33,679 Speaker 1: a window of opportunity for buyers. 97 00:05:33,800 --> 00:05:35,880 Speaker 2: I mean, I've had a crystal ball that would be 98 00:05:35,960 --> 00:05:38,840 Speaker 2: fantastic in my opinion. I think that maybe as there's 99 00:05:38,880 --> 00:05:41,400 Speaker 2: more of a push to build more properties and more 100 00:05:41,400 --> 00:05:44,320 Speaker 2: pressure placed on Yeah, I guess governments to build more, 101 00:05:44,360 --> 00:05:47,880 Speaker 2: they could be prices maybe begin to slow. But yeah, 102 00:05:47,920 --> 00:05:50,560 Speaker 2: I think it's depending on the market. I think perhaps 103 00:05:50,560 --> 00:05:53,480 Speaker 2: in Perth prices might start to slow down because I've 104 00:05:53,520 --> 00:05:57,480 Speaker 2: been so rapidly increasing, But I think it depending. 105 00:05:57,760 --> 00:06:00,320 Speaker 1: It's amazing, isn't it How cities can How on Earth 106 00:06:00,360 --> 00:06:02,159 Speaker 1: can you have one really going up by twenty percent 107 00:06:03,040 --> 00:06:06,960 Speaker 1: and the other one falling in the same national economic state? 108 00:06:07,920 --> 00:06:11,960 Speaker 1: Has there ever been such divergence between the cities in 109 00:06:12,040 --> 00:06:15,000 Speaker 1: terms of price action? I really don't. I can't remember 110 00:06:15,040 --> 00:06:17,320 Speaker 1: a time. Certainly there was a period. There was another 111 00:06:17,360 --> 00:06:19,640 Speaker 1: time where Perth had a big roll up on the 112 00:06:19,640 --> 00:06:24,400 Speaker 1: commodity boom in the PREGFC and I expected was something 113 00:06:24,480 --> 00:06:27,560 Speaker 1: like that then. So just looking across then in terms 114 00:06:27,640 --> 00:06:31,640 Speaker 1: of how people are viewing property and action in the market, 115 00:06:31,760 --> 00:06:34,400 Speaker 1: you're an unusual situation, aren't you. That you're on properly 116 00:06:34,440 --> 00:06:37,279 Speaker 1: all day, But you're also the very people were You 117 00:06:37,320 --> 00:06:39,080 Speaker 1: are one of the very people we were talking about 118 00:06:39,120 --> 00:06:41,960 Speaker 1: right trying to get into the market. So what do 119 00:06:41,960 --> 00:06:44,600 Speaker 1: you think of these notions of letting you access your 120 00:06:44,640 --> 00:06:48,920 Speaker 1: super early or cutting the assessment rate Basically what they 121 00:06:48,960 --> 00:06:51,840 Speaker 1: call the buffer where the bank's assess you on three 122 00:06:51,880 --> 00:06:54,479 Speaker 1: percent more than your mortgage. So if your mortgage is 123 00:06:54,520 --> 00:06:58,760 Speaker 1: sixth the bank actually assesses you on the basis that 124 00:06:58,800 --> 00:07:01,480 Speaker 1: your mortgage is nine in et cetera. If it's seventy, 125 00:07:01,560 --> 00:07:04,000 Speaker 1: assess you on the fact that it's ten. How does 126 00:07:04,040 --> 00:07:05,920 Speaker 1: that affect you? How do you think affects people in 127 00:07:05,960 --> 00:07:06,440 Speaker 1: your position? 128 00:07:07,240 --> 00:07:09,680 Speaker 2: Well, I'll start with the super. I think that being 129 00:07:09,680 --> 00:07:12,200 Speaker 2: able to access your super, I think, but potentially if 130 00:07:12,200 --> 00:07:14,960 Speaker 2: you're low income earner and essentially you're just looking to 131 00:07:15,000 --> 00:07:16,560 Speaker 2: put a roof over your head, I think it could 132 00:07:16,560 --> 00:07:22,720 Speaker 2: be a great incentive in one way. However, sometimes these incentives, 133 00:07:22,840 --> 00:07:24,880 Speaker 2: if everyone has more cash in their loll can access 134 00:07:24,880 --> 00:07:27,679 Speaker 2: more cash in their pocket, this can drive property prices 135 00:07:27,800 --> 00:07:32,840 Speaker 2: up and negate that bit of extra cash. So I 136 00:07:32,880 --> 00:07:35,400 Speaker 2: think it's definitely dependent on the situation and what type 137 00:07:35,400 --> 00:07:39,200 Speaker 2: of buyer you are. In terms of the service ability 138 00:07:39,240 --> 00:07:42,720 Speaker 2: of the mortgage buffer, I think, in my opinion, could 139 00:07:42,720 --> 00:07:46,760 Speaker 2: be a bit outdated in terms of the bank assessing 140 00:07:46,840 --> 00:07:49,480 Speaker 2: if you could pay what an extra three percent on 141 00:07:49,560 --> 00:07:52,840 Speaker 2: top of that interest rate. I think that I think 142 00:07:52,920 --> 00:07:55,440 Speaker 2: based of how how much money you need to be 143 00:07:55,520 --> 00:07:59,840 Speaker 2: able to put down today, which is a lot, I 144 00:08:00,040 --> 00:08:01,680 Speaker 2: think it can copy a little bit out data. It 145 00:08:01,680 --> 00:08:03,200 Speaker 2: could be at least dropped. 146 00:08:04,280 --> 00:08:07,040 Speaker 1: Okay, it could be dropped because rates are dropping. Yeah, 147 00:08:08,160 --> 00:08:10,679 Speaker 1: So let's say you were really close to buying a house, 148 00:08:10,800 --> 00:08:14,520 Speaker 1: really close. You know you have it, but you need 149 00:08:14,560 --> 00:08:18,040 Speaker 1: an extra, right, I got to pick a number. You 150 00:08:18,080 --> 00:08:21,760 Speaker 1: need an extra eighteen thousand dollars and if you get that, 151 00:08:21,840 --> 00:08:24,080 Speaker 1: you can have it, and you can tap your super 152 00:08:24,120 --> 00:08:28,559 Speaker 1: for it. And it's the one you've been trying for years. 153 00:08:28,560 --> 00:08:30,640 Speaker 1: You've found it. All your ducks are in a row. 154 00:08:30,760 --> 00:08:34,360 Speaker 1: There's no other way you can get this money. Would 155 00:08:34,360 --> 00:08:35,959 Speaker 1: you tap your super? And what first? 156 00:08:35,960 --> 00:08:37,840 Speaker 2: This is almost like you're asking me personally. 157 00:08:38,720 --> 00:08:41,679 Speaker 1: I am asking you personally. I'm asking you with your 158 00:08:41,720 --> 00:08:44,640 Speaker 1: two hats on, as both a buyer of the type 159 00:08:44,640 --> 00:08:49,720 Speaker 1: you're talking about, property, professional, property reporter. I'm asking you, 160 00:08:50,280 --> 00:08:52,160 Speaker 1: would you do it? And what do you think? Then 161 00:08:52,200 --> 00:08:55,040 Speaker 1: the cost to you ultimately would be would it be 162 00:08:55,080 --> 00:08:56,240 Speaker 1: worth it? Do you think? 163 00:08:57,600 --> 00:09:01,480 Speaker 2: I think honestly eighteen thousand In terms of yeah, if 164 00:09:01,480 --> 00:09:05,400 Speaker 2: that's how much I would need to get a specific property, 165 00:09:05,440 --> 00:09:07,640 Speaker 2: it could be a little bit over, But in terms 166 00:09:07,720 --> 00:09:10,160 Speaker 2: of it would be very tempting to do so, because 167 00:09:10,280 --> 00:09:14,000 Speaker 2: especially as your first home, and especially if you think 168 00:09:14,040 --> 00:09:18,000 Speaker 2: it's worth that amount extra, it would be very tempting. 169 00:09:18,040 --> 00:09:20,280 Speaker 2: In terms of the fact that I'll be in the 170 00:09:20,280 --> 00:09:22,560 Speaker 2: workforce as a twenty six year old for the next 171 00:09:23,400 --> 00:09:26,720 Speaker 2: at least I don't know, forty five years or so. Yeah, 172 00:09:26,800 --> 00:09:31,800 Speaker 2: potentially the pros outweigh the cons in my situation. 173 00:09:32,160 --> 00:09:34,360 Speaker 1: It's hard, isn't it. You know that you're pulling the 174 00:09:34,440 --> 00:09:37,040 Speaker 1: legs from under your super basically, and it's all about compounding. 175 00:09:37,360 --> 00:09:39,959 Speaker 1: But then you also know that you're going to get 176 00:09:39,960 --> 00:09:42,040 Speaker 1: into the housing market. It's not just that you're not 177 00:09:42,080 --> 00:09:44,080 Speaker 1: going to be paying rent, and it's not just that 178 00:09:44,600 --> 00:09:51,080 Speaker 1: it's your gateway into the entire tax All the tax privileges, yes, exactly, 179 00:09:51,160 --> 00:09:54,240 Speaker 1: the majority of them are linked with home ownership, aren't they. 180 00:09:54,960 --> 00:09:57,720 Speaker 1: Right through capital against tax exemption is only the start 181 00:09:58,240 --> 00:10:01,600 Speaker 1: in forty five years, when you go to retire, it's 182 00:10:01,640 --> 00:10:05,439 Speaker 1: still a winner. And so I think if turning the question, 183 00:10:05,840 --> 00:10:07,360 Speaker 1: I know I did turn the question on you, and 184 00:10:07,400 --> 00:10:09,160 Speaker 1: it's a difficult question. If you turned it on me, 185 00:10:09,600 --> 00:10:15,000 Speaker 1: I would say, Unfortunately, I agree with you, because unfortunately 186 00:10:15,600 --> 00:10:18,560 Speaker 1: I know that the tax system is so loaded in 187 00:10:18,640 --> 00:10:24,480 Speaker 1: favor of homeowners that unfortunately it's worth taking the money 188 00:10:24,520 --> 00:10:27,240 Speaker 1: out of super in certain circumstances to get the house 189 00:10:27,559 --> 00:10:30,000 Speaker 1: to get the house. So then when do you stop, 190 00:10:30,160 --> 00:10:32,720 Speaker 1: just like the Senator this morning asking for particular issues 191 00:10:32,760 --> 00:10:36,360 Speaker 1: for women that single mothers. I think it was and 192 00:10:36,520 --> 00:10:39,000 Speaker 1: I should be across this, but it literally just broke 193 00:10:39,000 --> 00:10:40,960 Speaker 1: an hour or two ago. But you can see how 194 00:10:41,040 --> 00:10:43,680 Speaker 1: you open the door and it never ends to Super. 195 00:10:43,760 --> 00:10:47,199 Speaker 1: You say, let people buy their homes with Super, let 196 00:10:47,240 --> 00:10:50,520 Speaker 1: people pay their insurance with Super. Where does it end 197 00:10:50,760 --> 00:10:52,520 Speaker 1: the other side of the coin, isn't it? Well take 198 00:10:52,559 --> 00:11:04,840 Speaker 1: short break, we'll be back in a moment. Hello and 199 00:11:04,880 --> 00:11:08,160 Speaker 1: welcome back to the Australians Money Puzzle podcast. I'm James 200 00:11:08,200 --> 00:11:11,200 Speaker 1: Kirby and I'm talking with Sarah Petty of the herd 201 00:11:11,280 --> 00:11:14,840 Speaker 1: Son and New Core property reporter on the ground who 202 00:11:14,920 --> 00:11:17,360 Speaker 1: was regularly on the show and gives us a very 203 00:11:17,360 --> 00:11:21,600 Speaker 1: fresh angle really on the market from her perspective and 204 00:11:21,760 --> 00:11:26,200 Speaker 1: also her perspective as a potential first home buyer. By 205 00:11:26,240 --> 00:11:29,160 Speaker 1: the way, folks, just to clarify, when I was talking 206 00:11:29,160 --> 00:11:32,840 Speaker 1: in the first segment about new ideas around tapping Super, 207 00:11:33,200 --> 00:11:36,040 Speaker 1: the woman I was trying to think of is Maria Kovakik. 208 00:11:36,360 --> 00:11:40,640 Speaker 1: She's a senator and she is a Liberal Party senator 209 00:11:40,679 --> 00:11:44,680 Speaker 1: and just this morning she has come out with a 210 00:11:44,760 --> 00:11:47,720 Speaker 1: suggestion which is getting some attention as well, where single 211 00:11:47,760 --> 00:11:50,559 Speaker 1: and divorced women would get access to their SUPER before 212 00:11:50,559 --> 00:11:54,120 Speaker 1: they retire to buy a home. She argues that such 213 00:11:54,120 --> 00:11:56,840 Speaker 1: women could otherwise be forced to rent forever or be 214 00:11:56,920 --> 00:12:00,360 Speaker 1: left homeless. It's again, just like we were talking working with 215 00:12:00,400 --> 00:12:04,360 Speaker 1: Sarah in the first segment. It's so vexed really in 216 00:12:04,400 --> 00:12:06,719 Speaker 1: some ways that the super is there, the money is there, 217 00:12:06,760 --> 00:12:09,360 Speaker 1: and you can do other things with it. In theory, 218 00:12:09,679 --> 00:12:11,520 Speaker 1: what is the price of that. The price of that 219 00:12:11,720 --> 00:12:15,840 Speaker 1: is that the person, for instance, in this situation would 220 00:12:16,400 --> 00:12:19,000 Speaker 1: have less SUPER than they own their home, and what 221 00:12:19,040 --> 00:12:20,640 Speaker 1: they would really need is a kind of a top 222 00:12:20,679 --> 00:12:23,480 Speaker 1: rank financial advisor to do the numbers for them, and 223 00:12:23,720 --> 00:12:25,920 Speaker 1: they would never be able to afford that. That is 224 00:12:26,000 --> 00:12:29,200 Speaker 1: another part of the issue. Okay, so Sarah on that 225 00:12:29,320 --> 00:12:33,400 Speaker 1: same issue. It just so happens. The first question is 226 00:12:33,520 --> 00:12:38,840 Speaker 1: from Cameron, and he says about using super money and 227 00:12:38,920 --> 00:12:42,960 Speaker 1: getting a first home. Personally, Cameron says, I'm torn. I 228 00:12:43,000 --> 00:12:45,439 Speaker 1: already own a property, so if everyone gets an extra 229 00:12:45,520 --> 00:12:48,199 Speaker 1: fifty k to pile into property, I'm all for it 230 00:12:48,280 --> 00:12:52,800 Speaker 1: because my house price will go up. I don't want 231 00:12:52,800 --> 00:12:55,920 Speaker 1: this to go ahead though, as a future property investor, 232 00:12:55,960 --> 00:12:59,600 Speaker 1: I'd like prices to stay reasonable. Looking at it from 233 00:13:00,000 --> 00:13:02,920 Speaker 1: diment point of view, I wholly agree that not owning 234 00:13:02,960 --> 00:13:07,000 Speaker 1: your home in old age is a significant disadvantage, and 235 00:13:07,120 --> 00:13:09,840 Speaker 1: overall I think it probably should be allowed with a 236 00:13:09,880 --> 00:13:16,080 Speaker 1: few caveats. There you go. That's interesting about that. Do 237 00:13:16,080 --> 00:13:19,079 Speaker 1: you think any of these claims, if you like, will 238 00:13:19,120 --> 00:13:21,920 Speaker 1: come to anything, Sarah. That is we're literally getting every 239 00:13:21,920 --> 00:13:25,720 Speaker 1: other week now ideas for what property, ideas about what 240 00:13:25,760 --> 00:13:28,640 Speaker 1: you can do, which is super. Do you think this 241 00:13:28,679 --> 00:13:32,040 Speaker 1: will ever come to pass? We know that the Liberal 242 00:13:32,040 --> 00:13:35,080 Speaker 1: Party has a policy stated now that you can get 243 00:13:35,160 --> 00:13:38,480 Speaker 1: up to fifty grand out from your super. The Labor 244 00:13:38,520 --> 00:13:41,720 Speaker 1: Party is not budging on the issue at all. If 245 00:13:41,760 --> 00:13:44,080 Speaker 1: it came to pass. Do you think people would tap it? 246 00:13:44,440 --> 00:13:47,000 Speaker 2: I think so. I think absolutely. I think be a 247 00:13:47,080 --> 00:13:49,280 Speaker 2: really great way of a first time bias to get 248 00:13:49,320 --> 00:13:51,960 Speaker 2: into the market at a young age and at the 249 00:13:52,000 --> 00:13:55,840 Speaker 2: time they can afford to make. Maybe there's risks or 250 00:13:55,880 --> 00:14:00,400 Speaker 2: take those risks in terms of buying a property. Yeah, 251 00:14:00,480 --> 00:14:02,960 Speaker 2: I think it definitely does depend on your age, though 252 00:14:03,040 --> 00:14:06,000 Speaker 2: I probably wouldn't suggest doing it at the end of 253 00:14:06,040 --> 00:14:09,080 Speaker 2: your working career, as that is your nested but it 254 00:14:09,120 --> 00:14:11,079 Speaker 2: would be yeah, I think depending on your age, I 255 00:14:11,120 --> 00:14:12,360 Speaker 2: think it could be a great Indea. 256 00:14:12,720 --> 00:14:14,520 Speaker 1: What your point is that you've time to catch up. 257 00:14:16,160 --> 00:14:18,000 Speaker 2: Absolutely, it will give you time to catch up, and 258 00:14:18,320 --> 00:14:22,480 Speaker 2: hopefully home prices increase enough that when you do sell 259 00:14:22,520 --> 00:14:25,520 Speaker 2: that property, you've made more money than you would have 260 00:14:25,760 --> 00:14:27,160 Speaker 2: putting it in your super account. 261 00:14:27,560 --> 00:14:30,120 Speaker 1: You wouldn't be paying rent anymore, which is the huge 262 00:14:30,360 --> 00:14:32,920 Speaker 1: issue that you would have to bake into any assumptions. 263 00:14:32,960 --> 00:14:38,800 Speaker 1: And it's a powerful issue that we're underplaying, probably an underestimating. Okay, now, 264 00:14:39,000 --> 00:14:43,280 Speaker 1: question from Donna, Hello Donna. She says, what impact could 265 00:14:43,360 --> 00:14:47,520 Speaker 1: Elon Musks ten thousand dollars box of all houses have 266 00:14:47,640 --> 00:14:50,320 Speaker 1: on the property market. It's interesting what Donna's referring to. 267 00:14:50,360 --> 00:14:52,640 Speaker 1: And she sent us a little video of of Elon Musk, 268 00:14:52,760 --> 00:14:55,440 Speaker 1: who somehow has the time to do this along with 269 00:14:55,520 --> 00:14:59,600 Speaker 1: everything else on Twitter and Tesla and space rockets, not 270 00:14:59,680 --> 00:15:01,520 Speaker 1: to mention the amount of time he must be taking 271 00:15:01,760 --> 00:15:05,280 Speaker 1: appearing beside Trump on his rallies. And it struck me 272 00:15:05,320 --> 00:15:09,160 Speaker 1: that in our own market. Jeff Harris, Now, some listeners 273 00:15:09,200 --> 00:15:11,240 Speaker 1: might be familiar with Jeff Harris. He was the co 274 00:15:11,360 --> 00:15:15,800 Speaker 1: founder of flight Center. He was he hit the jackpot twice. 275 00:15:16,080 --> 00:15:18,400 Speaker 1: He was co founder of flight Center and then would 276 00:15:18,440 --> 00:15:22,840 Speaker 1: you believe he was effectively a co founder and co 277 00:15:22,920 --> 00:15:27,520 Speaker 1: investor in boost Juice in the very early days. So 278 00:15:27,560 --> 00:15:30,000 Speaker 1: he's got it right twice in a row, big time. 279 00:15:30,440 --> 00:15:34,240 Speaker 1: And he had a scheme where they would build sixty 280 00:15:34,320 --> 00:15:38,960 Speaker 1: modular homes for homeless people in Melbourne some time ago, 281 00:15:39,040 --> 00:15:42,680 Speaker 1: based in the Footscray area. I didn't catch up as 282 00:15:42,720 --> 00:15:44,800 Speaker 1: to how that went to whether he ever got it done, 283 00:15:44,840 --> 00:15:47,520 Speaker 1: but that was really interesting that it's like the tiny 284 00:15:47,560 --> 00:15:50,600 Speaker 1: houses too. I've had represented us from tiny houses on 285 00:15:51,080 --> 00:15:53,040 Speaker 1: the show. Sarah, do you think people are a bit 286 00:15:53,080 --> 00:15:55,320 Speaker 1: stuck in their ways about when we talk about the 287 00:15:55,400 --> 00:15:58,080 Speaker 1: housing and sorting out housing? This is still a thing 288 00:15:58,080 --> 00:16:02,080 Speaker 1: that everybody wants a housecleaven about apartments, not to mention 289 00:16:02,520 --> 00:16:05,080 Speaker 1: variations on that. Do you think people should be a 290 00:16:05,120 --> 00:16:07,960 Speaker 1: bit more open minded potentially? 291 00:16:08,000 --> 00:16:09,800 Speaker 2: I think it could be one thing. I think it 292 00:16:09,800 --> 00:16:12,680 Speaker 2: could be a great way at less in the meantime, 293 00:16:12,800 --> 00:16:16,480 Speaker 2: as when you continue to build more homes, the government 294 00:16:17,280 --> 00:16:20,520 Speaker 2: continues to build more homes to set up these I 295 00:16:20,520 --> 00:16:23,760 Speaker 2: guess portable homes to house the population as there are 296 00:16:23,800 --> 00:16:27,240 Speaker 2: so many people struggling to keep a roof over their heads. 297 00:16:27,840 --> 00:16:30,440 Speaker 2: But yeah, I think it's actually a really great incent 298 00:16:30,520 --> 00:16:33,520 Speaker 2: You've could be done in the short term, didn't. I 299 00:16:33,520 --> 00:16:38,240 Speaker 2: think these boxable houses only take about an hour to construct, 300 00:16:38,680 --> 00:16:42,120 Speaker 2: if I'm right, which is a lot quicker than building 301 00:16:42,120 --> 00:16:43,120 Speaker 2: a home, that's for sure. 302 00:16:43,880 --> 00:16:47,320 Speaker 1: Yeah. Absolutely, Again, this is a difficult area. But which 303 00:16:47,320 --> 00:16:50,920 Speaker 1: would you prefer in your city? Lines of people homeless 304 00:16:51,960 --> 00:16:55,200 Speaker 1: under bridges or lines of people going into modular homes. 305 00:16:55,280 --> 00:16:57,840 Speaker 1: It's not an easy decision, but I think most people 306 00:16:57,960 --> 00:17:01,040 Speaker 1: would lean in a very clear way. Okay, we have 307 00:17:01,080 --> 00:17:04,479 Speaker 1: some really interesting questions from Paul from Rowan coming up. 308 00:17:04,560 --> 00:17:10,720 Speaker 1: We will back in a moment. Hello, Welcome back to 309 00:17:10,760 --> 00:17:15,719 Speaker 1: the Money Puzzle. I'm James Kirby talking to Sarah Petty. Okay, 310 00:17:15,840 --> 00:17:20,560 Speaker 1: a question from Paul. Hi, guys, love the podcast. Question 311 00:17:20,680 --> 00:17:24,360 Speaker 1: for you. With the government's ambitious objective to get one 312 00:17:24,400 --> 00:17:27,439 Speaker 1: point two million houses built, private developers will have a 313 00:17:27,440 --> 00:17:30,720 Speaker 1: massive role to play. Do you think there is likely 314 00:17:30,800 --> 00:17:33,199 Speaker 1: to be a repeat of the home builder grants that 315 00:17:33,320 --> 00:17:37,200 Speaker 1: were offered when COVID first hit Whoosh requestioned Paul. Yes, 316 00:17:37,240 --> 00:17:44,040 Speaker 1: they absolutely showered the building industry with grants. Home builder 317 00:17:44,080 --> 00:17:47,480 Speaker 1: grants at the time of COVID, and then on top 318 00:17:47,520 --> 00:17:52,000 Speaker 1: of that, of course interest rates were extremely low, and 319 00:17:52,080 --> 00:17:57,200 Speaker 1: so there was a glot really of incentives to build. 320 00:17:57,560 --> 00:17:59,679 Speaker 1: Here we are as some years later, and actually the 321 00:17:59,680 --> 00:18:03,359 Speaker 1: only date that managed to really build a lot is Victoria, 322 00:18:03,480 --> 00:18:06,120 Speaker 1: and that is the only state that has seriously good 323 00:18:06,160 --> 00:18:09,240 Speaker 1: supply coming in, which is, ironically, if you're an investor, 324 00:18:09,480 --> 00:18:13,200 Speaker 1: the state where house prices are falling. It's a significant 325 00:18:13,359 --> 00:18:18,640 Speaker 1: issue about how the affordability is better in Melbourne than 326 00:18:19,119 --> 00:18:22,480 Speaker 1: it is in other cities. And I'm just thinking, even 327 00:18:22,520 --> 00:18:25,520 Speaker 1: in my own world, we are on the Australian newspaper, 328 00:18:25,520 --> 00:18:29,320 Speaker 1: for instance, we are continually getting people replanting themselves from 329 00:18:29,359 --> 00:18:31,560 Speaker 1: city to Melbourne, for instance, where they were that this 330 00:18:31,720 --> 00:18:34,000 Speaker 1: issue of the gap in what you can buy is 331 00:18:34,080 --> 00:18:38,159 Speaker 1: remarkable considering you could have potentially the same job. I 332 00:18:38,240 --> 00:18:40,359 Speaker 1: don't know about more at home. I think they might 333 00:18:40,359 --> 00:18:43,880 Speaker 1: have learned their lesson about going too quick on home 334 00:18:43,920 --> 00:18:47,600 Speaker 1: builder grants the last time post, so I don't think 335 00:18:47,920 --> 00:18:50,439 Speaker 1: they will be showering us with more. I think they 336 00:18:50,480 --> 00:18:54,880 Speaker 1: will try other things, even if it's a pretty hard 337 00:18:55,280 --> 00:18:59,600 Speaker 1: knuckle stuff like finding and shaming councils that are slow 338 00:18:59,720 --> 00:19:02,200 Speaker 1: in proving I see that as, for instance, a weapon 339 00:19:02,240 --> 00:19:05,320 Speaker 1: that's been considered at the moment. Have you come across 340 00:19:05,359 --> 00:19:07,359 Speaker 1: that story, Sarah, Yes, I've. 341 00:19:07,200 --> 00:19:10,280 Speaker 2: Heard that they're I think in Victoria they've that's one 342 00:19:10,280 --> 00:19:12,320 Speaker 2: of the things that the old government's trying to do 343 00:19:12,400 --> 00:19:15,040 Speaker 2: is cut all that red tape and turn off all 344 00:19:15,040 --> 00:19:19,000 Speaker 2: the nimbi's from development, slowing down development. Yes, I think 345 00:19:19,040 --> 00:19:23,080 Speaker 2: in some areas that's definitely going to be an important 346 00:19:23,760 --> 00:19:27,320 Speaker 2: aspect for building more homes, and it's already underway. So 347 00:19:27,359 --> 00:19:29,240 Speaker 2: in terms of the home builder grands, I'm pretty sure 348 00:19:29,320 --> 00:19:34,160 Speaker 2: the Northern Territory has just started accepting applications for its 349 00:19:34,240 --> 00:19:39,600 Speaker 2: Homegrown Territory and Fresh Start New Home programs, which has 350 00:19:39,880 --> 00:19:43,359 Speaker 2: grants ranging from ten thousand to fifty thousand dollars. It'll 351 00:19:43,400 --> 00:19:45,800 Speaker 2: be interesting to see whether what that does for the 352 00:19:45,920 --> 00:19:49,200 Speaker 2: building industry over there and if we try and emulate 353 00:19:49,240 --> 00:19:49,920 Speaker 2: something similar. 354 00:19:51,000 --> 00:19:54,000 Speaker 1: So yeah, so they're still coming, Paul. The States of course, 355 00:19:54,680 --> 00:19:58,120 Speaker 1: can move on these things autonomously, so you will find 356 00:19:58,160 --> 00:20:02,119 Speaker 1: there are home builder grants programs, as Sarah's finding out, 357 00:20:02,280 --> 00:20:05,520 Speaker 1: literally being being signed off new ones as we speak. 358 00:20:05,560 --> 00:20:07,560 Speaker 1: So there you are. I had that one. I also 359 00:20:07,680 --> 00:20:10,000 Speaker 1: had that one wrong, but the state governments will do 360 00:20:10,040 --> 00:20:12,919 Speaker 1: what they want to do. And as Sarah said at 361 00:20:12,920 --> 00:20:17,159 Speaker 1: the start, it's a too it's a two speed market. 362 00:20:17,400 --> 00:20:19,920 Speaker 1: So what one state government needs to do in housing, 363 00:20:20,000 --> 00:20:22,959 Speaker 1: say in Wa where prices are going up by twenty percent, 364 00:20:23,280 --> 00:20:25,760 Speaker 1: and another stake government might need to do in Victoria 365 00:20:25,920 --> 00:20:29,840 Speaker 1: where prices are falling, will be completely different. Okay, final 366 00:20:29,960 --> 00:20:34,120 Speaker 1: question from Rowan, I'd be interested to hear your thoughts 367 00:20:34,160 --> 00:20:38,240 Speaker 1: on whether capital gains tax is holding back residential development 368 00:20:38,760 --> 00:20:43,480 Speaker 1: and contributing to the housing crisis. And he then talks 369 00:20:43,520 --> 00:20:48,280 Speaker 1: about various twists and turns around that I really don't 370 00:20:48,320 --> 00:20:53,160 Speaker 1: know the capital gains tax for property investors anyone who's 371 00:20:53,200 --> 00:20:58,680 Speaker 1: interested properly investment. Obviously, there are two huge tax issues 372 00:20:58,760 --> 00:21:01,600 Speaker 1: which are accessible to the every day Australian and which 373 00:21:01,640 --> 00:21:03,760 Speaker 1: is one of the reasons that the entire market is 374 00:21:03,920 --> 00:21:08,439 Speaker 1: dominated by private investors. Negative gearing where you can deduct 375 00:21:08,600 --> 00:21:12,040 Speaker 1: the losses or excess costs of your investment from your 376 00:21:12,040 --> 00:21:14,720 Speaker 1: income tax, and then the day you sell your property 377 00:21:14,760 --> 00:21:17,080 Speaker 1: if you hold it for more than a year, you 378 00:21:17,160 --> 00:21:21,480 Speaker 1: get a discount fifty percent discount on capital gains tax. 379 00:21:21,520 --> 00:21:24,280 Speaker 1: And capital gains tax kind of works out at roughly 380 00:21:24,320 --> 00:21:29,120 Speaker 1: what your tax rate is income tax rate. To simplify it, now, 381 00:21:29,160 --> 00:21:34,359 Speaker 1: what Rowan is suggesting is that we unleash even more 382 00:21:34,520 --> 00:21:37,720 Speaker 1: private investors into the market. If he says capital against 383 00:21:37,720 --> 00:21:41,720 Speaker 1: taxes holding back residential development, then obviously if you removed it, 384 00:21:41,800 --> 00:21:45,719 Speaker 1: that would mean it would unleash it. I don't know. 385 00:21:45,840 --> 00:21:49,280 Speaker 1: I think that's so unlikely. I think actually labor are 386 00:21:49,320 --> 00:21:52,240 Speaker 1: actually talking. They're reviewing capital gains tax and negative gearing, 387 00:21:52,240 --> 00:21:54,960 Speaker 1: aren't they say? H At the moment at least Treasury is. 388 00:21:55,280 --> 00:21:57,560 Speaker 2: Well, that's why I say, that's quite a contentious issue 389 00:21:57,600 --> 00:21:59,399 Speaker 2: at the moment. Aster what's going to happen with the 390 00:21:59,440 --> 00:22:02,640 Speaker 2: negative gear? I'm sure it's going to That's a really 391 00:22:02,720 --> 00:22:06,119 Speaker 2: fund part about tax system, which is, yes, so heavily 392 00:22:06,200 --> 00:22:09,560 Speaker 2: geared around property investment and the tax incentives. Say yes, 393 00:22:09,640 --> 00:22:11,439 Speaker 2: it'll be interesting to see. I think there would be 394 00:22:11,480 --> 00:22:13,760 Speaker 2: just a massive shake up of the housing market if 395 00:22:13,760 --> 00:22:17,480 Speaker 2: either of these elements will change in any way. 396 00:22:18,200 --> 00:22:21,160 Speaker 1: Do you think people are are worried about this review? 397 00:22:21,200 --> 00:22:25,080 Speaker 1: The review is from is officially Treasury, right, which is 398 00:22:25,119 --> 00:22:29,399 Speaker 1: not officially the government as such, not the Albanese government. 399 00:22:29,440 --> 00:22:32,280 Speaker 1: But hey, it's happening. Do you think people are worried 400 00:22:32,400 --> 00:22:34,879 Speaker 1: and do you think anything will come off this review 401 00:22:34,960 --> 00:22:37,440 Speaker 1: of capital gainst tax and negative gearing? Are people worried 402 00:22:37,480 --> 00:22:38,320 Speaker 1: out there in the market? 403 00:22:39,480 --> 00:22:41,640 Speaker 2: Absolutely? I think a lot of people are. I think 404 00:22:41,800 --> 00:22:45,439 Speaker 2: that I believe or over ninety listening of properties or 405 00:22:45,440 --> 00:22:48,320 Speaker 2: rental properties in the market are owned by investors. So 406 00:22:48,480 --> 00:22:52,200 Speaker 2: if you start to draw back on these tax incentives 407 00:22:52,240 --> 00:22:55,200 Speaker 2: for people to purchase properties, I think we're going to 408 00:22:55,240 --> 00:22:58,479 Speaker 2: have a lot of issues, and especially in Victoria, it'll 409 00:22:58,480 --> 00:23:00,600 Speaker 2: probably be the straw that broke the cap was back. 410 00:23:00,920 --> 00:23:02,400 Speaker 1: Why do you say that? 411 00:23:02,600 --> 00:23:06,960 Speaker 2: Because Victoria is rey hampered by by taxes on property investors, 412 00:23:07,320 --> 00:23:12,040 Speaker 2: from land taxes to now the airbnb taxing even which 413 00:23:12,119 --> 00:23:15,520 Speaker 2: is nationwide. I think that'll be if it becomes too 414 00:23:15,520 --> 00:23:19,320 Speaker 2: costly to own an extra property, I think that'll lead 415 00:23:19,359 --> 00:23:24,080 Speaker 2: more people to sell up, and it won't be good. 416 00:23:24,320 --> 00:23:27,600 Speaker 1: That's a million dollar question, isn't it it? Yeah? Yeah, 417 00:23:27,760 --> 00:23:30,679 Speaker 1: I think because maybe that is that's there is evidence 418 00:23:30,720 --> 00:23:33,359 Speaker 1: of that happening already, isn't there in Victoria even without 419 00:23:33,440 --> 00:23:37,000 Speaker 1: any changes to c GT or negative gearing? Yeah? 420 00:23:37,040 --> 00:23:39,639 Speaker 2: Absolutely, yeah, I think it'll be I think it'll be 421 00:23:39,640 --> 00:23:43,240 Speaker 2: more especially problematic and as a current tenant myself hopefully 422 00:23:43,280 --> 00:23:45,640 Speaker 2: soon to be first time buyer. It would be very 423 00:23:45,640 --> 00:23:48,200 Speaker 2: problematic if I was continuing on as a tenant, that's 424 00:23:48,240 --> 00:23:48,679 Speaker 2: for sure. 425 00:23:48,880 --> 00:23:51,600 Speaker 1: Yeah. Interesting. I'll just leave your listeners with one last thing, 426 00:23:51,600 --> 00:23:55,800 Speaker 1: which is really worth thinking about. The negative gearing. People say, well, 427 00:23:55,840 --> 00:23:58,520 Speaker 1: once upon a time the Labor government tried to close 428 00:23:58,520 --> 00:24:00,840 Speaker 1: it down and it was poor Keating and he didn't 429 00:24:00,840 --> 00:24:03,200 Speaker 1: manage it. And if Paul Keaton couldn't manage it, who could. 430 00:24:03,560 --> 00:24:06,280 Speaker 1: But there's actually a much more recent example. It's New 431 00:24:06,400 --> 00:24:11,440 Speaker 1: Zealand and Jacinta Aardurne, who, by the way, I apologized 432 00:24:11,480 --> 00:24:14,679 Speaker 1: last week I called Justinta a Hearn irish her. I 433 00:24:14,680 --> 00:24:18,160 Speaker 1: didn't mean to. Justin to Ardarn went to close down 434 00:24:18,400 --> 00:24:22,640 Speaker 1: the negative gearing and CGT equivalent tax breaks in New Zealand. 435 00:24:23,359 --> 00:24:28,720 Speaker 1: And they're rentals sowared and narrative Conesby who's been on 436 00:24:28,720 --> 00:24:31,560 Speaker 1: the show at the point that they are now among 437 00:24:31,560 --> 00:24:34,360 Speaker 1: the dearest in the world. And guess what. The new 438 00:24:34,359 --> 00:24:39,480 Speaker 1: government in New Zealand has reversed those changes that the 439 00:24:40,320 --> 00:24:42,640 Speaker 1: ur Durn government tried to bring in. It's very hard 440 00:24:42,640 --> 00:24:46,640 Speaker 1: to go near this issue successfully, but we'll see okay, Hey, 441 00:24:46,920 --> 00:24:48,720 Speaker 1: thank you very much Sarah for coming on the show. 442 00:24:48,760 --> 00:24:49,920 Speaker 1: Great to have you on the show again. 443 00:24:50,080 --> 00:24:51,560 Speaker 2: Thank you, thank you so much. 444 00:24:52,680 --> 00:24:55,240 Speaker 1: Always good to get your point of view on things. 445 00:24:55,359 --> 00:24:57,760 Speaker 1: It's a distinct point of view from people we often 446 00:24:57,800 --> 00:25:00,199 Speaker 1: talk about what we don't actually meet that often on 447 00:25:00,240 --> 00:25:02,280 Speaker 1: the show, and we should do so more often. Thank 448 00:25:02,320 --> 00:25:05,280 Speaker 1: you very much everyone for listening. Do keep those questions 449 00:25:05,320 --> 00:25:07,680 Speaker 1: coming in The email is the Bunny Puzzle at the 450 00:25:07,720 --> 00:25:10,360 Speaker 1: Australian dot com dot au. Talk to you soon.