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Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm

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Speaker 1: Stuart Williams and I'm sitting in for our usual host,

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Speaker 1: James Kirby whilst he's taking a well earned break now.

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Speaker 1: James would normally introduce me as a property friendly financial

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Speaker 1: advisor and I'm also the host of my own podcast, Investopoly,

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Speaker 1: and I'm absolutely thrilled to be hosting today's episode. Last

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Speaker 1: week James interviewed Louis Christopher from SQM Research and they

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Speaker 1: took a deep dive into the Australian property market from

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Speaker 1: a high level perspective. It was a really fascinating episode

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Speaker 1: and the sort of key highlights were that Adelaide, Perth

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Speaker 1: and Brisbane are experiencing very impressive annual growth running at

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Speaker 1: double digits, Sydney is a pretty balanced market around five

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Speaker 1: percent growth, and Melbourne's the outlier slightly in decline in

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Speaker 1: terms of property prices. Since last week's episode went to air,

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Speaker 1: the Real Estate Institute of Australia announced that housing affordability

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Speaker 1: has declined to its lowest point on record since it

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Speaker 1: started monitoring this in nineteen ninety six. The average loan

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Speaker 1: repayment now accounts for forty eight percent of median family income,

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Speaker 1: obviously thanks to higher property prices and higher interest rates.

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Speaker 1: So back to last week's show, Louis touched on a

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Speaker 1: couple of other observations. Firstly, he said that units are

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Speaker 1: starting to outperform houses, and he actually made the comment

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Speaker 1: that that tends to happen in slower markets. Another very

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Speaker 1: interesting point, which I'll ask my guest about today, was

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Speaker 1: that vacancy rates, rental vacancy rates in the regions are

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Speaker 1: starting to decrease again. Obviously, during COVID we have had

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Speaker 1: a very tight rental market and vacancy rates were very

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Speaker 1: very low. Of course, then post lockdown they tended to normalize. Well,

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Speaker 1: they're trending downwards again, which is a bit of a surprise,

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Speaker 1: to be honest. Anyway, if you missed the episode last week,

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Speaker 1: it's certainly worth listening into. But today, what I wanted

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Speaker 1: to do is build on the information that we talked

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Speaker 1: about last week, and I want to focus in particular

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Speaker 1: on the spring property market, which kicked off this this month.

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Speaker 1: It's the peak property season, if you like. I want

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Speaker 1: to talk to my guest about what that means for sellers,

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Speaker 1: what it means if you're a buyer, particularly noting that

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Speaker 1: markets are at different points of the cycle, and I

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Speaker 1: have a perfect guest today to help us do that.

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Speaker 1: He's a friend of the show, he's been on before.

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Speaker 1: He's a very experienced buyer's agent and owner of Wakeland

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Speaker 1: Property Advisory. Jered McKay. Welcome to the show.

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Speaker 2: Thanks very much having me, Stuart, my pleasure.

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Speaker 1: So I'd like to start with what is the spring

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Speaker 1: property market mean for us? Is it just an increase

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Speaker 1: in property listings? And why Spring? Why is that the

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Speaker 1: peak period in the property market?

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Speaker 3: Troad.

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Speaker 2: Yeah, it's a good question.

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Speaker 3: Look, I mean the spring market's always in terms of

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Speaker 3: supplies where things really start to ramp up, and I

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Speaker 3: think that goes back to people feel their properties, probably

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Speaker 3: particularly family homes, look best during spring. The garden starts

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Speaker 3: to really come into bloom and a lot of flowers out,

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Speaker 3: that sort of thing. But also we're coming out of colder,

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Speaker 3: a wetter, more miserable months, particularly for us down in

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Speaker 3: the Southern States, and so the property just presents well

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Speaker 3: and people feel better about themselves at this time of

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Speaker 3: year as well, so it tends to build from there.

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Speaker 3: We also find that from a seller's perspective, there's a

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Speaker 3: bit more competition because there's been a fair amount of

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Speaker 3: pent up demand during the winter months where there hasn't

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Speaker 3: been as much choice around.

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Speaker 2: It can start to.

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Speaker 3: Bring a few more buyers out into the marketplace as well.

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Speaker 3: So you can quite often see a bit of a

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Speaker 3: spike in values coming out of that winter period sort

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Speaker 3: of late August and into September, and as the year

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Speaker 3: builds or the spring it builds, there's more and more choice.

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Speaker 2: Available as well.

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Speaker 1: Yeah, and of course, as I touched on in the introduction,

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Speaker 1: we've got different markets at different stages of the cycle

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Speaker 1: around Australia. Some are very hard markets, particularly Perth for instance,

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Speaker 1: where days on market is very contracted. If you've got

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Speaker 1: a property to sell, it will sell very quickly. And

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Speaker 1: the other end of the scale is Melbourne of course

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Speaker 1: that's a little bit of a softer market. So how

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Speaker 1: do those different markets kind of react to that uptick

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Speaker 1: and in supply.

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Speaker 3: Look, I mean it's in some ways there's similarities to

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Speaker 3: it that Obviously, an increase in supply can quite often

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Speaker 3: lead to either market starting to flatten if they've been

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Speaker 3: on the increase. But if there's a depth of demand

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Speaker 3: that can eat up that increase in supply. Then it

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Speaker 3: can sometimes just fan the flames and it can make

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Speaker 3: it kick on because it just gives buyers more and

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Speaker 3: more confidence that there is a depth of demand and

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Speaker 3: if they don't do something sooner or later, then they're

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Speaker 3: going to get left behind and going to be playing

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Speaker 3: catch up, which is not a good thing to be

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Speaker 3: doing in the property sense when the market is moving,

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Speaker 3: but when it's start to decline, it can also be

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Speaker 3: self fulfilling in that regard that people are seeing it

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Speaker 3: go down and then if there's an increase in supply,

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Speaker 3: and typically in a softening market, the main issue is

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Speaker 3: that the demand isn't there, and so with the lack

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Speaker 3: of demand and increasing supply, it just continues to push

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Speaker 3: things further and further down. So it's a really interesting

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Speaker 3: time of the year. We do always see supply pick up,

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Speaker 3: and if there's not a depth to the demand then

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Speaker 3: it can see some significant changes.

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Speaker 1: Yeah, and so what are you seeing sort of around

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Speaker 1: the country and obviously particularly in Melbourne that where you

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Speaker 1: operate in terms of those listing numbers, does it look

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Speaker 1: like there's a lot of stock coming online?

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Speaker 3: And yeah, it does I mean, not necessarily right across

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Speaker 3: the board, but I mean I looked at recently supply

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Speaker 3: numbers this year for Victoria, particularly compared to last year,

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Speaker 3: and we're certainly up on what we were this time

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Speaker 3: last year. And I think if you look at the

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Speaker 3: clearance rate in Victoria at the moment, it's hovering around

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Speaker 3: the early to mid sixty percent mark. Now, if that's

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Speaker 3: the case at the start of spring, when typically there

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Speaker 3: is a bit more demand around by the time you

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Speaker 3: get to the end of the spring market, where a

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Speaker 3: lot of buyers have left because they've purchased, but many

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Speaker 3: of those buyers then need to sell, so the supply

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Speaker 3: is still quite often quite good through November and into December.

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Speaker 3: With a lack of demand, I'd expect to see that

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Speaker 3: clearance rate come back, and I think it will probably

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Speaker 3: be in the early to mid fifties by the end

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Speaker 3: of the year, which is certainly a buyer's market. Now,

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Speaker 3: you look at, as you said, the other capital cities

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Speaker 3: sort of Adelaide and Perth, particularly in Brisbane as well,

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Speaker 3: I would expect them to keep kicking as the market

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Speaker 3: goes because there is still depth to the demand in

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Speaker 3: those areas. So even with the supply picking up, I

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Speaker 3: think that there'll still be strong interest there. Sydney is

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Speaker 3: a bit more interesting. I think that they're probably more

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Speaker 3: in a level ish type market. You mentioned five percent

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Speaker 3: growth this year, but if it's more of a plateau

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Speaker 3: there on a level then they could start to come

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Speaker 3: off a little bit. I don't think to the same

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Speaker 3: extent as Melbourne, but it certainly could start to come

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Speaker 3: off a little bit.

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Speaker 1: I was talking to a buyers hing yesterday from Perth

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Speaker 1: and he was saying that the listings are really tight,

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Speaker 1: not necessarily reflecting in volume. His observation was that volume

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Speaker 1: is pretty healthy, it's just selling so quickly that the

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Speaker 1: available stock is pretty tight.

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Speaker 2: So if we're.

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Speaker 1: Thinking about then getting into the property market during this

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Speaker 1: sort of spring period, what advice would you have for

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Speaker 1: buyers with respect to that? And I guess that there's

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Speaker 1: probably maybe sort of two different markets. We want to

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Speaker 1: think about the market that's really hot and challenging and

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Speaker 1: buoyant versus a market that may be softening with more

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Speaker 1: supply than there is by a demand.

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Speaker 3: Being prepared and doing your due diligence no matter whether

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Speaker 3: you're in a competitive market or a soft market, is

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Speaker 3: always going to be the most important thing, and I

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Speaker 3: think you need to.

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Speaker 2: Make sure that you're ready.

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Speaker 3: In a hot market, you need to be ready to

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Speaker 3: react because, as you said, Perth being the example, things

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Speaker 3: are moving really quickly.

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Speaker 2: If you're not.

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Speaker 3: Ready, you'll get left behind, and you'll keep getting you'll

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Speaker 3: keep missing out on properties. But in a soft market

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Speaker 3: as well, you still need to be ready to take

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Speaker 3: advantage of something that might be perceived there's being good value,

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Speaker 3: so if you leave it for too long, there'll still

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Speaker 3: be other buyers around that might take advantage of that.

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Speaker 3: So I think, no matter what, being prepared and having

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Speaker 3: yourself organized, whether it's solicitors, financial advice, building inspectors, all

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Speaker 3: that sort of thing, being prepared and ready to move

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Speaker 3: is really important. I think understanding technical value versus market

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Speaker 3: sentiment when assessing property values is a really important thing,

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Speaker 3: both from a growth market but also from a softening market,

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Speaker 3: because when you're in the growth market, understanding market sentiment

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Speaker 3: and being prepared to take a step in front of

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Speaker 3: it is really important. If you're alling on sales that

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Speaker 3: have occurred sort of even a month or two ago,

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Speaker 3: and not taking into account the market's kicking week on week,

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Speaker 3: you won't get in and you'll get left behind, or

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Speaker 3: you'll get caught buying something that's of a secondary nature

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Speaker 3: and isn't going to work longer term. So and that's

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Speaker 3: a real can be a really difficult thing for buyers

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Speaker 3: to get their head around in terms of setting a

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Speaker 3: new benchmark and being prepared to pay that mark. Otherwise

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Speaker 3: you just won't get into the market. I think from

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Speaker 3: a buying perspective and a softening market, I think making

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Speaker 3: sure that you're still buying a high quality asset is

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Speaker 3: really important and not getting caught up on I'm being

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Speaker 3: too cute. Sometimes in a softening market, people can be

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Speaker 3: a little bit too smart by half and then end

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Speaker 3: up missing out on things I only to look back

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Speaker 3: and think I really should have taken advantage of that.

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Speaker 3: So there's different mindsets when going into that sort of market,

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Speaker 3: and I think it's really important to understand what you

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Speaker 3: need to do.

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Speaker 1: Yeah, so if you're in a really soft market looking

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Speaker 1: for a bargain property, something that's selling for well below

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Speaker 1: what you think it's technical or intrinsic value, are you

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Speaker 1: saying if you're going to take that approach that maybe

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Speaker 1: you'll be too cute for yourself, and you'll miss out

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Speaker 1: and some opportunities.

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Speaker 3: Not necessarily if you can still take advantage of that.

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Speaker 3: But you just don't want to be too cute. So

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Speaker 3: if you leave it there too long and you try

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Speaker 3: and get it for too much of a bargain, if

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Speaker 3: it's the right property for the right reasons, obviously, no

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Speaker 3: one wants to overpay, and we all want to buy

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Speaker 3: it for as little possible. But if you sometimes you

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Speaker 3: can be talking five or ten thousand dollars in the

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Speaker 3: scheme of buying a property worth in excess of a

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Speaker 3: million dollars, don't be too smart and not be prepared

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Speaker 3: to pay that. Because if you take a step back

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Speaker 3: and you look at it in five ten years time

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Speaker 3: and that property is worth well, hopefully double if it's

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Speaker 3: over ten years, paying that extra ten to fifteen to

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Speaker 3: twenty thousand dollars, you're not going to look at that

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Speaker 3: and be too concerned.

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Speaker 1: Yeah, and I want to ask you about the reverse.

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Speaker 1: I guess how you behave in a much stronger market.

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Speaker 1: But before we do that, in a soft market like

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Speaker 1: Melbourne in this spring that you expect, do you think

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Speaker 1: there'll be a lot of bargains out there.

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Speaker 2: I think there'll be some good opportunities. Yeah, I do.

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Speaker 3: I think because there's a lot of supply hitting the market.

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Speaker 3: So I think from a buyer's perspective at the moment,

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Speaker 3: if you are about in the softening Victorian market, that

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Speaker 3: there could be some really good opportunities to be had.

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Speaker 2: Yeah.

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Speaker 1: Okay, So for those people listening today that really are

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Speaker 1: contemplating getting into one of those hotter markets like Brisbane,

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Speaker 1: Adelaide and Perth. In such a fast moving market, how

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Speaker 1: do you assess whether you're overpaying? Of course, the prices

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Speaker 1: are moving so quickly, that's the risk, right, No one

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Speaker 1: wants to pay more than we really need to or should.

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Speaker 1: How do we sort of navigate a market like that?

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Speaker 3: So I think it's important to look at it from

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Speaker 3: a historical perspective. And when I say historically, I don't

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Speaker 3: mean going back years and years. I'm all mean looking

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Speaker 3: at the last three to six months and getting a

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Speaker 3: clear understanding as to what similar properties have been doing

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Speaker 3: and sort of monitoring and tracking that. So if you

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Speaker 3: look back six months and you can see that a

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Speaker 3: property sold for X dollars and then within three months

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Speaker 3: it's selling for X plus two and then you get

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Speaker 3: it and you can see a bit of a trend

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Speaker 3: developing by the time you get to seeing the property

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Speaker 3: that you're looking at.

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Speaker 2: Okay, it's been.

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Speaker 3: Moving month by this amount of money, I've got to

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Speaker 3: expect that it could at least do that now compared

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Speaker 3: to the sales that I'm considering. But might I even

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Speaker 3: have to go a little bit further than that. And

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Speaker 3: if you're confident, and particularly those markets that they are

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Speaker 3: still got further to go in terms of their growth,

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Speaker 3: then having the confidence to take that we call the

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Speaker 3: step in front of the market, rather than taking a

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Speaker 3: giant leap out in front of the market. We'll get

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Speaker 3: you in and then you get the market to work

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Speaker 3: for you rather than work against you.

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Speaker 1: I'm putting you on the spot here, Jared, of course,

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Speaker 1: But do you think that there's any just from a

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Speaker 1: a median value level, do you think any of those

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Speaker 1: markets are getting close to being fully valued?

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Speaker 3: I mean, I don't know them as intimately as what

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Speaker 3: others will, but I certainly think they're starting to get

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Speaker 3: closer to But again, I think in a lot of

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Speaker 3: circumstances that'll be getting to a point where they'll then

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Speaker 3: start to Plateau. There's a lot of good fundamentals around

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Speaker 3: all of those. I mean, we're always wary to a

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Speaker 3: certain extent with Perth because it is so reliant on

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Speaker 3: the mining sector, so it can be a little bit

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Speaker 3: more volatile. But I think Brisbane certainly got some really

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Speaker 3: good fundamentals to it. So I think even if it

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Speaker 3: does get to a point where it might be at

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Speaker 3: its premium for the moment, it's more likely to then

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Speaker 3: just level off. It might come back a little bit,

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Speaker 3: but then at some stage over the coming years it's

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Speaker 3: going to kick again.

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Speaker 2: Yeah.

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Speaker 1: Okay, let's talk about it from in terms of the

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Speaker 1: spree market from a seller's perspective. So for those people

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Speaker 1: listening that are contemplating selling a property this spring, if

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Speaker 1: they're doing so, they probably already started that process. But

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Speaker 1: you know, what advice do you have. Obviously, if you're

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Speaker 1: going to sort of term Melbourne as a buyer's market,

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Speaker 1: then of course the implication is it's not a seller's market.

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Speaker 2: Is that right? Yeah, Yeah, that's exactly right.

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Speaker 3: So there's very much opportunities there at the moment from

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Speaker 3: a buying perspective. So if you're looking to sell in

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Speaker 3: that type of market, it's really important that you make

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Speaker 3: your property stand out. I think from a seller's perspective,

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Speaker 3: the big thing is to understand who you're going to

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Speaker 3: be pitching your property to and therefore what do they expect.

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Speaker 3: So if you're looking at it from a first home

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Speaker 3: buyer or perhaps a downside that sort of thing, most

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Speaker 3: of the time people are going to be looking for

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Speaker 3: something that's ready to move in.

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Speaker 2: Turkey's the typical.

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Speaker 3: Phrase, So we want something that is and that's what

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Speaker 3: we're seeing at the moment. Is probably the strongest sector

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Speaker 3: of the market in a softer area like Victoria and Melbourne,

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Speaker 3: is that there's concerns and weariness around dealing with trades

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Speaker 3: and the cost of doing renovations. So having something that

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Speaker 3: people can move straight into is definitely what the market's

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Speaker 3: looking for. So if you're pitching towards that type of market,

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Speaker 3: getting the property in that state so that it's ready

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Speaker 3: to do that and spending a bit of money from

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Speaker 3: a presentation perspective is really important. On the flip side

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Speaker 3: of that, if you've got a property that's likely to

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Speaker 3: be a development site or is likely to have the

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Speaker 3: dwelling demolished and having a new building of some sort

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Speaker 3: put on spending much money on the improvements is going

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Speaker 3: to probably be a waste because you're not necessary. Most

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Speaker 3: people are going to look at that and say, well,

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Speaker 3: I don't need that, And if you go too far,

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Speaker 3: they may look at it and say, well, now the

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Speaker 3: improvements are adding too much value. So I don't want

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Speaker 3: to be pitching towards that. So I think understanding your

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Speaker 3: market is really important. I think understanding, particularly in a

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Speaker 3: softening market and in certain areas, what's the best method

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Speaker 3: of sale is really important too, because it's not going

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Speaker 3: to be and Melbourn, obviously, as an example, in the

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Speaker 3: soft market at the moment, is typically known as the

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Speaker 3: auction capital the country, but that's not going to be

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Speaker 3: across the board in a softening market. So in areas

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Speaker 3: whereby it's possibly a bit more of a sometimes we auction,

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Speaker 3: sometimes we don't. In the softening market, when you're out

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Speaker 3: on some of the outer suburbs where the depth of

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Speaker 3: demand may not be as strong, you may be better

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Speaker 3: off considering a private sale or an expression of interest.

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Speaker 3: And depending upon the need for sell, is there a

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Speaker 3: market for an off market strategy and that might be

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Speaker 3: something to consider as well.

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Speaker 2: So method of sales.

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Speaker 3: Really important in that scenario, and so selection of agent

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Speaker 3: because you need to make sure you've got someone that

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Speaker 3: knows and has got a good market share and so

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Speaker 3: they can tap into that and you work for you

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Speaker 3: in the best way possible.

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Speaker 1: And so for those that own property in markets that

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Speaker 1: are running quite hot, of course logic would tell us

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Speaker 1: no point selling now if the market's going to continue

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Speaker 1: to run. But how do you know is there any

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Speaker 1: sort of signs? So if you held a property in

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Speaker 1: a Brisbane or an Adelaide or a Perth, when do

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Speaker 1: you know when is the right time to sell in

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Speaker 1: terms to maximize value?

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Speaker 3: Well, your personal motivation needs to be taken into account

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Speaker 3: there as to what's the reason. So is it for

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Speaker 3: it because you're looking to upsize an upgrade a home

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Speaker 3: or downsize down grade a home, or is it an

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Speaker 3: investment property that is at that.

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Speaker 2: Point where you no longer require it?

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Speaker 3: So I guess your first things first is what's the

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Speaker 3: personal motivation and is there a strong need or want

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Speaker 3: to sell? And therefore, if there is, then okay, let's

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Speaker 3: look at when does that need to be immediate or

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Speaker 3: does it need to be at some stage in the

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Speaker 3: next three to six to twelve months, and therefore you

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Speaker 3: can set up the timing around that. I think the

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Speaker 3: most important thing once you've determined the need to sell

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Speaker 3: them when is to then look at getting it the

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Speaker 3: most exposure as possible. So, for instance, we talked before

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Speaker 3: about method of sale well, selling off market I think

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Speaker 3: in a really strong market is a real risk because

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Speaker 3: you run the risk of not necessarily there's new buyers

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Speaker 3: coming into the market all the time, and if you

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Speaker 3: sell off market, doesn't matter what agent you've got, they

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Speaker 3: could have the strongest market share.

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Speaker 2: If they don't.

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Speaker 3: If they're not dealing with every single new buyer that

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Speaker 3: comes into the market, they don't know everyone, and you

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Speaker 3: risk risk, sorry, leaving money on the table. So I

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Speaker 3: think making sure you expose the property as much as possible.

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Speaker 3: That doesn't mean going overboard with say two bedroom apartment

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Speaker 3: in print advertising where you're not really going to get

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Speaker 3: new buyers coming in, but it's understanding where your buyers

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Speaker 3: are going to be looking and making sure you get

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Speaker 3: as much exposure as possible, making sure it stands out

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Speaker 3: because it's sometimes in a stronger market, the supply can

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Speaker 3: start to lift and so there'll be more competition, so

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Speaker 3: you need to have a bit more of an understanding

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Speaker 3: as to how the best to make your property stand

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Speaker 3: out in the marketplace.

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Speaker 2: And I think that's really important as well.

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Speaker 1: Yeah, that's really good advice, Jared, for both property buyers

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Speaker 1: and sellers. And i'd like to reiterate your first bit

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Speaker 1: of advice is being prepared, whether you're in a soft

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Speaker 1: market or a very buoyant market. We helped to client

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Speaker 1: just recently buy a property in Brisbane. They're in a

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Speaker 1: position then to sign an initial contract with a thirty

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Speaker 1: days settlement and because they were able to act very

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Speaker 1: quickly and offer that short settlement, they were successful in

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Speaker 1: buying the property. So it's always good to then think

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Speaker 1: about what are the leavers you can pull other than

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Speaker 1: price in order to get a deal done, which is

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Speaker 1: really good. Okay, that's very interesting. We're going to take

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Speaker 1: a short break and we'll be back with you. I'm

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Speaker 1: going to ask Jared when we returned about regional markets

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Speaker 1: and really what else these team's been working on. So

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Speaker 1: we'll be back with you in a moment. Hello, welcome

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Speaker 1: back to the Australians Money Puzzle podcast. I'm Stuart Wellams

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Speaker 1: and I'm talking to Jared McKay, buyer's agent and owner

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Speaker 1: of Wakeland Property Advisory. So at the start of the

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Speaker 1: show we talked about how capital cities are fairing differently,

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Speaker 1: and Jared gay the US some great advice to both

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Speaker 1: buyers and sellers that want to operate in the spring market. Jared,

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Speaker 1: I just want to change speeds now and really leverage

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Speaker 1: off what Louis Christopher was saying last week. His observation

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Speaker 1: were the rental vacancy rates are on the decline in

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Speaker 1: the regions, and that actually really surprised me. So how

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Speaker 1: are you seeing regions but behave or perform compared to

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Speaker 1: capital city markets.

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Speaker 2: Yeah, I agree to you. That surprised me as well.

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Speaker 3: I would have, particularly with the way the capital markets

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Speaker 3: are working in some of the regions at the moment.

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Speaker 3: I was trying to after hearing that, I was trying

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Speaker 3: to think of what may have been driving that, Whether

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Speaker 3: or not it's because of the type vacancy rates in

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Speaker 3: a lot of the capital cities and people are looking

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Speaker 3: for affordable alternatives and perhaps considering some of the regional areas.

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Speaker 3: I'm not sure, but I was really surprised to see that.

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Speaker 3: I think from a capital value perspective, in a lot

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Speaker 3: of the regional areas, we're starting to see or we're

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Speaker 3: certainly seeing a lot more supply in those sorts of

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Speaker 3: markets now. There's been a bit of a change of

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Speaker 3: tax when you go back to pandemic times, as I

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Speaker 3: think you said earlier, and it was hard to even

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Speaker 3: find anything to rent or buy in a lot of

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Speaker 3: the regional markets at the time. The supply was that tight,

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Speaker 3: and people were just looking to get out of capital

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Speaker 3: cities into those sorts of areas. Whereas you move into

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Speaker 3: a lot of those locations now and there's a lot

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Speaker 3: more choice and there's a lot more flexibility. So for

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Speaker 3: buyers that are looking to enter those markets, they are

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Speaker 3: in a much stronger position than perhaps what they were

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Speaker 3: a couple of years ago.

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Speaker 1: Yeah, I mean, there could be a couple of different

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Speaker 1: explanations for it. Of course, because prices have risen so

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Speaker 1: much over the last four or five years in those regions,

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Speaker 1: maybe it pushes a lot of potential buyers out into

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Speaker 1: that rental market, and therefore there's a greater demand from renters.

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Speaker 1: I think in Victoria, like if I was taking guess

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Speaker 1: the land tax and the additional property taxes probably mean

441
00:20:51,080 --> 00:20:55,040
Speaker 1: more investors have sold their properties in those regions, and

442
00:20:55,119 --> 00:20:58,160
Speaker 1: so the supply of rental property in that in those

443
00:20:58,200 --> 00:21:01,600
Speaker 1: locations may be decreasing. You know, you gave some really

444
00:21:01,600 --> 00:21:04,200
Speaker 1: great advice again to buyers and sellers in the spring

445
00:21:04,320 --> 00:21:07,479
Speaker 1: property marketing when we sort of focused on capital cities.

446
00:21:07,720 --> 00:21:11,680
Speaker 1: Does your approach change at all in regional markets, either

447
00:21:11,720 --> 00:21:14,000
Speaker 1: as a buyer or seller, You're.

448
00:21:13,880 --> 00:21:16,760
Speaker 3: Probably in a stronger position as a buyer in a

449
00:21:16,800 --> 00:21:19,720
Speaker 3: lot of the regional markets. Typically you find that supply

450
00:21:19,920 --> 00:21:22,240
Speaker 3: is stronger than demand in most of those areas, and

451
00:21:22,240 --> 00:21:25,000
Speaker 3: it's typically why in a lot of regional areas the

452
00:21:25,040 --> 00:21:27,359
Speaker 3: most common method of sale is private sale as opposed

453
00:21:27,400 --> 00:21:31,359
Speaker 3: to auction. The auction method works best when demand outstrips supply.

454
00:21:31,960 --> 00:21:34,800
Speaker 3: You also find from a buyers perspective, it's far more

455
00:21:34,800 --> 00:21:38,479
Speaker 3: common to be making conditional offers, whether that's in relation

456
00:21:38,560 --> 00:21:42,040
Speaker 3: to finance or building inspections, or even in some circumstances

457
00:21:42,040 --> 00:21:44,720
Speaker 3: condition upon the sale of another property is more common

458
00:21:44,760 --> 00:21:48,119
Speaker 3: as well. So as a buyer, it's a bit like

459
00:21:48,160 --> 00:21:51,600
Speaker 3: you mentioned before, Stuart, there's more leavers that you can

460
00:21:51,600 --> 00:21:54,400
Speaker 3: pull and you can use to your so you work

461
00:21:54,480 --> 00:21:56,919
Speaker 3: things a bit harder. Again, I think you've still got

462
00:21:56,960 --> 00:21:58,920
Speaker 3: to be a little bit careful of being too cute

463
00:21:59,000 --> 00:22:01,240
Speaker 3: in some areas and making sure that you're not pushing

464
00:22:01,280 --> 00:22:05,000
Speaker 3: too hard, but you've certainly got options available to you.

465
00:22:06,600 --> 00:22:09,400
Speaker 1: I think it's property people interested in property, of course,

466
00:22:09,440 --> 00:22:13,080
Speaker 1: that's the listener base for this podcast, and property owners.

467
00:22:13,160 --> 00:22:15,720
Speaker 1: We can kind of learn a little bit from what

468
00:22:15,880 --> 00:22:19,159
Speaker 1: happens in a softer market, particularly those for those wanting

469
00:22:19,240 --> 00:22:22,760
Speaker 1: to get into those other markets that they're running quite hot.

470
00:22:23,280 --> 00:22:26,560
Speaker 1: So are there any sort of property types or sort

471
00:22:26,560 --> 00:22:30,919
Speaker 1: of geographical locations that are performing better in this softer

472
00:22:31,040 --> 00:22:34,399
Speaker 1: market in Melbourne than others? And what I'm thinking is

473
00:22:34,440 --> 00:22:36,720
Speaker 1: can we sort of take those learnings and apply them

474
00:22:36,760 --> 00:22:38,639
Speaker 1: in other markets.

475
00:22:40,280 --> 00:22:42,440
Speaker 3: What we're noticing at the moment it goes back to

476
00:22:42,480 --> 00:22:45,719
Speaker 3: probably what I said earlier about the stronger properties at

477
00:22:45,720 --> 00:22:47,920
Speaker 3: the moment and those that are turnkey that are ready

478
00:22:47,960 --> 00:22:49,280
Speaker 3: for people to move straight into.

479
00:22:49,480 --> 00:22:52,200
Speaker 2: So we're still seeing a reasonable amount.

480
00:22:52,000 --> 00:22:54,439
Speaker 3: Of people or the buyers that are in the market

481
00:22:54,440 --> 00:22:57,520
Speaker 3: are either first home buyers or they're looking to upgrade

482
00:22:57,640 --> 00:23:00,840
Speaker 3: or downsize, and there's a real want for those that

483
00:23:00,880 --> 00:23:04,960
Speaker 3: are upgrading they possibly consider doing a renovation or extension

484
00:23:05,000 --> 00:23:08,160
Speaker 3: on an existing home. But the uncertainty around the building

485
00:23:08,240 --> 00:23:10,919
Speaker 3: sector and things just as it doesn't lend itself to

486
00:23:10,960 --> 00:23:13,560
Speaker 3: that being the preferred option. So we're seeing more so

487
00:23:13,880 --> 00:23:15,920
Speaker 3: and as a result of that, people don't they want

488
00:23:15,960 --> 00:23:18,440
Speaker 3: to buy the property that's already renovated and ready to go.

489
00:23:18,600 --> 00:23:20,880
Speaker 2: So we're seeing a lot more of that. Now.

490
00:23:20,880 --> 00:23:23,520
Speaker 3: That's not necessarily across the board all the time, but

491
00:23:23,520 --> 00:23:25,600
Speaker 3: that is in a softer market, you're finding it, and

492
00:23:25,680 --> 00:23:29,120
Speaker 3: at the moment, with the concerns, that's probably where things

493
00:23:29,160 --> 00:23:30,080
Speaker 3: are a bit stronger.

494
00:23:31,160 --> 00:23:33,320
Speaker 1: I guess if you're a really strong market, that could

495
00:23:33,320 --> 00:23:35,359
Speaker 1: be one way to kind of mitigate risk. Well, I

496
00:23:35,400 --> 00:23:37,960
Speaker 1: mean it's a question rather than the statement that is

497
00:23:38,000 --> 00:23:41,720
Speaker 1: by a property that needs a bit of capital improvement kitchen,

498
00:23:41,760 --> 00:23:44,720
Speaker 1: bathroom and so forth. By doing that, not only do

499
00:23:44,800 --> 00:23:47,280
Speaker 1: you get the depreciation benefits, maybe a bit of an

500
00:23:47,359 --> 00:23:51,840
Speaker 1: uplifting capital value hopefully and then improvement in rental yield.

501
00:23:52,040 --> 00:23:55,240
Speaker 1: Is that the approach you might take in a stronger market.

502
00:23:55,040 --> 00:23:57,280
Speaker 2: Terrek, particularly if you've got the appetite for it.

503
00:23:57,320 --> 00:23:59,240
Speaker 3: I mean, we've got and I'm sure you've had two

504
00:23:59,280 --> 00:24:01,520
Speaker 3: clients that just do not want to have to even

505
00:24:01,560 --> 00:24:04,000
Speaker 3: consider dealing with that space. But those that are even

506
00:24:04,040 --> 00:24:06,800
Speaker 3: remotely open to doing cosmetic works those sorts of things,

507
00:24:06,840 --> 00:24:09,520
Speaker 3: I think that there's absolutely opportunities to take advantage of

508
00:24:09,520 --> 00:24:11,600
Speaker 3: that at the moment, because there's a lot of buyers

509
00:24:11,640 --> 00:24:14,240
Speaker 3: that don't want to so, and even more so, if

510
00:24:14,240 --> 00:24:15,880
Speaker 3: you've got a skill set to be able to add

511
00:24:15,880 --> 00:24:17,640
Speaker 3: to that, whether it's because you're a trade or you've

512
00:24:17,640 --> 00:24:20,239
Speaker 3: got a family member or a friend who is and

513
00:24:20,320 --> 00:24:23,240
Speaker 3: can do things on an ad hoc basis and help out,

514
00:24:23,320 --> 00:24:25,680
Speaker 3: then I think that's certainly an opportunity at the moment.

515
00:24:25,760 --> 00:24:28,280
Speaker 3: And also, as you and I've spoken about plenty of times,

516
00:24:28,720 --> 00:24:31,280
Speaker 3: it means that your purchase price is going to have

517
00:24:31,359 --> 00:24:34,200
Speaker 3: a much higher land to value ratio as well, because

518
00:24:34,240 --> 00:24:36,000
Speaker 3: the improvements are going to be adding less to that

519
00:24:36,040 --> 00:24:39,879
Speaker 3: title component. So the more land component or land value

520
00:24:39,880 --> 00:24:42,080
Speaker 3: you can have in that purchase. If you're buying the

521
00:24:42,160 --> 00:24:44,520
Speaker 3: right property, the growth is going to be stronger, and

522
00:24:44,600 --> 00:24:47,360
Speaker 3: so then you can add value from an improvement's perspective,

523
00:24:47,400 --> 00:24:49,960
Speaker 3: as you said, improve the rental and then it works

524
00:24:49,960 --> 00:24:51,119
Speaker 3: well for you going forward.

525
00:24:51,200 --> 00:24:54,639
Speaker 1: And I'm really interested to know the rise of work

526
00:24:54,880 --> 00:24:56,720
Speaker 1: from home, and I think it's really here to stay.

527
00:24:57,000 --> 00:25:00,960
Speaker 1: Maybe not to the same extent that it was so

528
00:25:01,040 --> 00:25:04,960
Speaker 1: prevalent during the lockdowns, of course, but I think most

529
00:25:05,040 --> 00:25:09,119
Speaker 1: large corporates are getting to mandating three to four days

530
00:25:09,119 --> 00:25:11,560
Speaker 1: in the office, but there's still maybe one day at

531
00:25:11,640 --> 00:25:15,400
Speaker 1: least at home working from home. Does that impact us

532
00:25:15,520 --> 00:25:18,159
Speaker 1: as investors in terms of the types of property we

533
00:25:18,240 --> 00:25:20,280
Speaker 1: might want to invest in, do you think, Jared?

534
00:25:21,280 --> 00:25:23,440
Speaker 3: I think it's probably less from a geographic sense. I

535
00:25:23,480 --> 00:25:27,359
Speaker 3: think the geographical side of things is probably more finding

536
00:25:27,359 --> 00:25:29,800
Speaker 3: a level and people are sort of getting understanding as

537
00:25:29,800 --> 00:25:33,560
Speaker 3: to what is possible and not. But I think from

538
00:25:33,800 --> 00:25:36,520
Speaker 3: an accommodation point of view, I think that certainly starts

539
00:25:36,520 --> 00:25:38,720
Speaker 3: to play in. And I mean it's as simple as

540
00:25:38,840 --> 00:25:43,840
Speaker 3: might helped the client sell a one bedroom apartment recently,

541
00:25:44,200 --> 00:25:46,320
Speaker 3: and it was something that he'd held for a long

542
00:25:46,359 --> 00:25:48,880
Speaker 3: period of time. It had it as a home initially,

543
00:25:49,280 --> 00:25:52,359
Speaker 3: and there was a little alcove in one corner of

544
00:25:52,400 --> 00:25:54,919
Speaker 3: the entry hall and just to be able to and

545
00:25:54,960 --> 00:25:56,880
Speaker 3: it wasn't set up that way, but we were able

546
00:25:56,920 --> 00:25:58,560
Speaker 3: to set up a little desk to put in the

547
00:25:58,600 --> 00:26:01,960
Speaker 3: corner to create a work from home environment, and that

548
00:26:02,119 --> 00:26:03,000
Speaker 3: was the purchaser.

549
00:26:03,119 --> 00:26:03,840
Speaker 2: That was the key.

550
00:26:03,960 --> 00:26:05,679
Speaker 3: One of the keys for them was the fact that

551
00:26:05,680 --> 00:26:08,919
Speaker 3: it had not a massive one bedroom itself, but the

552
00:26:08,960 --> 00:26:11,760
Speaker 3: living space was really good at a nice balcony, but

553
00:26:11,840 --> 00:26:14,280
Speaker 3: that little al cove gave them the feel of Okay, well,

554
00:26:14,280 --> 00:26:16,560
Speaker 3: I've got my own work from home space that i

555
00:26:16,600 --> 00:26:19,439
Speaker 3: can work with and that's really going to give me

556
00:26:19,480 --> 00:26:22,040
Speaker 3: what I need, even though it's onety a one bedroom apartment.

557
00:26:22,040 --> 00:26:25,320
Speaker 3: So I do think that specific accommodation to have that,

558
00:26:25,400 --> 00:26:27,719
Speaker 3: whether it's a proper study, whether it's a studio at

559
00:26:27,800 --> 00:26:31,520
Speaker 3: the back, I think having that dedicated space is certainly

560
00:26:31,520 --> 00:26:33,320
Speaker 3: becoming more and more sought after.

561
00:26:34,680 --> 00:26:36,800
Speaker 1: And unfortunately we're running a bit short of time. But

562
00:26:36,840 --> 00:26:38,959
Speaker 1: I really did want to ask you kind of if

563
00:26:39,000 --> 00:26:41,400
Speaker 1: we split up your time period between sort of pre

564
00:26:41,520 --> 00:26:45,080
Speaker 1: and post COVID, how has it changed your business, Jarry,

565
00:26:45,080 --> 00:26:48,240
Speaker 1: because I think this gives listeners a really good sense

566
00:26:48,280 --> 00:26:50,280
Speaker 1: of what's happening on the ground at the call face

567
00:26:50,359 --> 00:26:52,959
Speaker 1: in terms of the activity in the market.

568
00:26:53,080 --> 00:26:53,199
Speaker 3: Now.

569
00:26:53,240 --> 00:26:56,760
Speaker 1: I know you obviously operate in Melbourne, but has your

570
00:26:56,800 --> 00:26:59,159
Speaker 1: business changed And I guess I'm thinking in terms of

571
00:27:00,119 --> 00:27:04,840
Speaker 1: investors versus own occupiers and purchases versus sales. How has

572
00:27:04,880 --> 00:27:05,800
Speaker 1: it changed over time.

573
00:27:07,080 --> 00:27:08,280
Speaker 2: Yeah, it's a really good question.

574
00:27:08,359 --> 00:27:11,040
Speaker 3: I'd go back, probably even further than the pandemic to

575
00:27:11,160 --> 00:27:13,480
Speaker 3: probably the Royal Commission, and I'd say that's probably when

576
00:27:13,520 --> 00:27:16,080
Speaker 3: it started to switch in terms of the percentage of

577
00:27:16,080 --> 00:27:18,719
Speaker 3: investors that we've been dealing with versus owner occupiers. That's

578
00:27:18,720 --> 00:27:21,119
Speaker 3: from an acquisition point of view, but that's certainly we

579
00:27:21,240 --> 00:27:24,040
Speaker 3: noticed a change from then. Went further during the pandemic

580
00:27:24,119 --> 00:27:26,320
Speaker 3: and Victoria particularly at the moment. We don't need to

581
00:27:26,320 --> 00:27:28,560
Speaker 3: go into too much detail, but there's certainly not a

582
00:27:28,640 --> 00:27:31,720
Speaker 3: lot of encouragement for investors down this way at the moment,

583
00:27:31,760 --> 00:27:34,320
Speaker 3: and I think that's leading to a lot of sales

584
00:27:34,359 --> 00:27:36,679
Speaker 3: at present, and so there's a lot of investors leaving

585
00:27:36,720 --> 00:27:39,159
Speaker 3: the market. I think it will change eventually. As I

586
00:27:39,160 --> 00:27:41,800
Speaker 3: said before, I legitimately do think there's some really good

587
00:27:41,800 --> 00:27:43,960
Speaker 3: opportunities to be had down in Victoria at the moment

588
00:27:43,960 --> 00:27:45,840
Speaker 3: from a buying point of view, but there's not a

589
00:27:45,880 --> 00:27:48,960
Speaker 3: lot of incentives to own investment property. So we've seen

590
00:27:49,000 --> 00:27:52,280
Speaker 3: that from an owner occupier to investor in terms of

591
00:27:52,359 --> 00:27:57,040
Speaker 3: vendor advisory versus buying services. Even in the last twelve months, Steward.

592
00:27:57,040 --> 00:27:59,560
Speaker 3: I've noticed we had I would say that probably of

593
00:27:59,640 --> 00:28:03,040
Speaker 3: our work seventy percent to thirty percent was by to

594
00:28:03,080 --> 00:28:03,640
Speaker 3: sell this.

595
00:28:03,560 --> 00:28:04,280
Speaker 2: Time last year.

596
00:28:04,280 --> 00:28:06,520
Speaker 3: I'd say it's almost the reverse of that at the

597
00:28:06,560 --> 00:28:08,600
Speaker 3: moment in terms of what we're doing. And there's a

598
00:28:08,600 --> 00:28:11,560
Speaker 3: lot more vendor advisory work. And that's not just investors.

599
00:28:11,560 --> 00:28:13,240
Speaker 3: There are a few, but there's a lot of others

600
00:28:13,280 --> 00:28:16,680
Speaker 3: that are just upgrading and downsizing homes as well. So

601
00:28:16,880 --> 00:28:19,480
Speaker 3: I'm not suggesting that it's predominantly, but there are a

602
00:28:19,520 --> 00:28:21,880
Speaker 3: lot of we are seeing investors that are considering their

603
00:28:21,880 --> 00:28:22,879
Speaker 3: position absolutely.

604
00:28:23,600 --> 00:28:23,800
Speaker 2: Yeah.

605
00:28:23,840 --> 00:28:26,840
Speaker 1: Okay, that's really interesting. Okay, we're going to take another

606
00:28:26,880 --> 00:28:29,320
Speaker 1: short break, and when we return, I'm going to ask

607
00:28:29,400 --> 00:28:33,360
Speaker 1: Jared a question from a listener about buying commercial property.

608
00:28:33,840 --> 00:28:45,000
Speaker 1: So we'll be back with you at a moment. Hello, Welcome

609
00:28:45,040 --> 00:28:48,160
Speaker 1: back to the Australians Money Puzzle podcast. I'm Stuart Weens

610
00:28:48,200 --> 00:28:51,480
Speaker 1: talking to Jared McKay, buyers agent and owner of Wakeland

611
00:28:51,520 --> 00:28:55,600
Speaker 1: Property Advisory. If I can be a little cheeky Jared,

612
00:28:55,600 --> 00:28:58,800
Speaker 1: before we get into a listener question from James, I'd

613
00:28:58,840 --> 00:29:01,640
Speaker 1: like to ask you one final question. If you could

614
00:29:01,680 --> 00:29:05,160
Speaker 1: meet yourself fourteen years ago, when you started buying property

615
00:29:05,200 --> 00:29:08,200
Speaker 1: as a buyers agent, what are the two to three

616
00:29:08,400 --> 00:29:11,640
Speaker 1: most important lessons you would tell yourself about buying property?

617
00:29:12,160 --> 00:29:15,560
Speaker 3: I would probably say, And Richard Wakelan and Paul Nugent

618
00:29:15,640 --> 00:29:18,880
Speaker 3: drilled this into me from the very start. The importance

619
00:29:18,880 --> 00:29:22,640
Speaker 3: of asset selection, which everyone knows that buying the right property.

620
00:29:22,880 --> 00:29:25,920
Speaker 3: Everyone wants to do that, but sometimes the emotion can

621
00:29:25,960 --> 00:29:28,760
Speaker 3: get the better of people when buying property. So the

622
00:29:28,800 --> 00:29:32,000
Speaker 3: importance of taking a step back and understanding why you're

623
00:29:32,000 --> 00:29:34,080
Speaker 3: buying it, what's the purpose of buying it, and then

624
00:29:34,160 --> 00:29:36,760
Speaker 3: making sure you buy the right property first and foremost.

625
00:29:36,840 --> 00:29:39,400
Speaker 3: I think that was probably the first thing. I think

626
00:29:39,400 --> 00:29:41,719
Speaker 3: something that's probably come to light a bit more in

627
00:29:41,800 --> 00:29:44,680
Speaker 3: recent times, and again it's something that Richard always has said,

628
00:29:44,800 --> 00:29:48,200
Speaker 3: but is that the things that you can't predict can

629
00:29:48,280 --> 00:29:52,479
Speaker 3: quite often have the greatest impact. So things like the

630
00:29:52,520 --> 00:29:55,400
Speaker 3: GFC you couldn't see that coming. Now again that there

631
00:29:55,600 --> 00:29:58,080
Speaker 3: was the movie about the short selling things. Some will

632
00:29:58,080 --> 00:30:00,800
Speaker 3: claim that they did the Royal Commissi in the pandemic.

633
00:30:00,880 --> 00:30:02,880
Speaker 3: Some of these sorts of things have had the biggest

634
00:30:02,880 --> 00:30:06,560
Speaker 3: influence on the market, as opposed to some of the

635
00:30:06,640 --> 00:30:09,160
Speaker 3: smaller things that we can get quite worked up about

636
00:30:09,280 --> 00:30:11,640
Speaker 3: around negative gearing and how that was going to be

637
00:30:11,680 --> 00:30:14,560
Speaker 3: the biggest risk to everything. I mean, going back further,

638
00:30:14,600 --> 00:30:18,280
Speaker 3: I know from my valuation days that the GST was

639
00:30:18,320 --> 00:30:18,920
Speaker 3: going to be the.

640
00:30:18,920 --> 00:30:19,239
Speaker 2: End of it.

641
00:30:19,320 --> 00:30:21,840
Speaker 3: Then. So there's all these little things that people get

642
00:30:21,880 --> 00:30:24,600
Speaker 3: worked up about. But it's I've typically notice that it's

643
00:30:24,600 --> 00:30:27,120
Speaker 3: the bigger things that cause the biggest issues, and you're

644
00:30:27,160 --> 00:30:29,120
Speaker 3: most likely tart predict them.

645
00:30:29,560 --> 00:30:29,760
Speaker 2: Yeah.

646
00:30:29,880 --> 00:30:32,160
Speaker 1: Yeah, I mean it's the same wins in stock markets.

647
00:30:32,200 --> 00:30:34,880
Speaker 1: The thing that's going to create the next stock market

648
00:30:34,880 --> 00:30:38,959
Speaker 1: crash is by definition unexpected, otherwise the market would price it.

649
00:30:39,000 --> 00:30:41,280
Speaker 1: I think that's really good. Okay, we're going to take

650
00:30:41,320 --> 00:30:44,320
Speaker 1: a question from a listener. Now it's from James. I'll

651
00:30:44,360 --> 00:30:46,320
Speaker 1: read it out Jared, and then I'll give you the

652
00:30:46,360 --> 00:30:49,880
Speaker 1: difficult task of answering it. So, James writes, I love

653
00:30:49,920 --> 00:30:52,440
Speaker 1: the podcast and just had a quick question. I recently

654
00:30:52,440 --> 00:30:55,200
Speaker 1: looked at buying some commercial property in my local area.

655
00:30:55,720 --> 00:30:58,360
Speaker 1: A standard one hundred to two hundred and twenty square

656
00:30:58,400 --> 00:31:02,680
Speaker 1: meter concrete block type property popping up everywhere. Nothing fancy

657
00:31:02,680 --> 00:31:06,120
Speaker 1: about them. I'm assuming James is referring to sort of

658
00:31:06,160 --> 00:31:10,880
Speaker 1: an industrial style shared property anyway, James writes the price

659
00:31:11,040 --> 00:31:13,800
Speaker 1: was around six hundred and forty five thousand dollars, but

660
00:31:13,840 --> 00:31:16,600
Speaker 1: the bank valued at four hundred and fifty thousand dollars,

661
00:31:16,920 --> 00:31:20,120
Speaker 1: which I agree with the bank. How do developers get

662
00:31:20,160 --> 00:31:23,560
Speaker 1: away we're still trying to charge above bank market rates

663
00:31:24,080 --> 00:31:27,280
Speaker 1: if they're not valued at that, especially when we can

664
00:31:27,280 --> 00:31:29,200
Speaker 1: physically see they're not being sold.

665
00:31:30,120 --> 00:31:32,280
Speaker 3: It's a really good question, James, And it's something that

666
00:31:32,320 --> 00:31:35,000
Speaker 3: we discuss a lot and it's not actually really probably

667
00:31:35,040 --> 00:31:37,640
Speaker 3: just a commercial industrial it's really an off the plan

668
00:31:37,920 --> 00:31:41,040
Speaker 3: type question. So the same thing applies with residential property

669
00:31:41,040 --> 00:31:42,880
Speaker 3: in the sense of apartments down now as is that

670
00:31:42,920 --> 00:31:45,640
Speaker 3: sort of thing, and it's really the developer's premium that

671
00:31:45,800 --> 00:31:48,000
Speaker 3: gets put in on top in order for them to

672
00:31:48,040 --> 00:31:48,800
Speaker 3: make their profit.

673
00:31:49,880 --> 00:31:51,080
Speaker 2: The best analogy I can.

674
00:31:51,000 --> 00:31:52,920
Speaker 3: Give you is the buying of a brand new car

675
00:31:53,080 --> 00:31:54,640
Speaker 3: and you drive it out of the door, out of

676
00:31:54,680 --> 00:31:56,920
Speaker 3: the lot, and all of a sudden it depreciates in

677
00:31:57,000 --> 00:31:59,920
Speaker 3: value because if someone wants something similar, they can go

678
00:32:00,160 --> 00:32:02,600
Speaker 3: by the brand new version themselves, so the value is

679
00:32:02,680 --> 00:32:03,960
Speaker 3: dropping straight away.

680
00:32:04,440 --> 00:32:06,520
Speaker 2: The bank's valuation is really interesting too.

681
00:32:06,560 --> 00:32:09,960
Speaker 3: Again, my background before getting into buying services was as

682
00:32:10,000 --> 00:32:14,640
Speaker 3: a valuer. And the valuation assessments won't take into account

683
00:32:14,720 --> 00:32:17,440
Speaker 3: off the planned sales. They will want to see resales

684
00:32:17,440 --> 00:32:20,240
Speaker 3: of similar type properties in and around the area, So

685
00:32:20,280 --> 00:32:24,400
Speaker 3: it's reflecting market forces as opposed to reflecting the developers'

686
00:32:24,400 --> 00:32:28,960
Speaker 3: premium being paid. So the fact, because there's always someone

687
00:32:28,960 --> 00:32:31,960
Speaker 3: that wants the brand new, wants something, wants that type

688
00:32:32,000 --> 00:32:34,480
Speaker 3: of property or car, there's always going to be a

689
00:32:34,520 --> 00:32:37,280
Speaker 3: market for that, and they'll pay the premium for it.

690
00:32:37,840 --> 00:32:40,840
Speaker 3: But those that are smart take that off and don't

691
00:32:40,880 --> 00:32:43,640
Speaker 3: necessarily need to have that, particularly when you're looking at

692
00:32:43,640 --> 00:32:46,960
Speaker 3: it from a long term perspective, you're better off getting

693
00:32:47,200 --> 00:32:50,120
Speaker 3: the property that's on the resale a year or two later,

694
00:32:50,600 --> 00:32:53,640
Speaker 3: getting the same benefits that the other one offers, and

695
00:32:53,720 --> 00:32:55,800
Speaker 3: not having to pay for it in the meantime.

696
00:32:57,080 --> 00:32:59,160
Speaker 1: Yeah, the analogy I would use, Joe, because a lot

697
00:32:59,160 --> 00:33:02,520
Speaker 1: of our listeners invested in both property and shares. The

698
00:33:02,560 --> 00:33:05,680
Speaker 1: analogy I would use is the off the planned property

699
00:33:05,760 --> 00:33:09,040
Speaker 1: sale is like buying an unlisted company, Whereas when you

700
00:33:09,080 --> 00:33:12,040
Speaker 1: buy a listed company, it's got that price discovery. It's

701
00:33:12,080 --> 00:33:15,240
Speaker 1: regularly traded, so you know what the market thinks it's worth,

702
00:33:15,640 --> 00:33:18,440
Speaker 1: whether it's worth that can be a completely different question,

703
00:33:18,920 --> 00:33:21,320
Speaker 1: but something that's never traded before, like an off the

704
00:33:21,360 --> 00:33:26,640
Speaker 1: plan property. It's more difficult, I guess to ascertain value. Well,

705
00:33:26,640 --> 00:33:29,200
Speaker 1: that's been a really great conversation, Jared, thanks so much

706
00:33:29,280 --> 00:33:33,160
Speaker 1: for sharing your years and years of experience with our listeners.

707
00:33:33,240 --> 00:33:36,480
Speaker 1: I'm sure they've enjoyed it. And just a reminder, folks,

708
00:33:36,640 --> 00:33:39,360
Speaker 1: if you have any question or feedback, we'd love to

709
00:33:39,400 --> 00:33:42,600
Speaker 1: hear from you. The email address is the Money Puzzle

710
00:33:42,720 --> 00:33:46,560
Speaker 1: at the Australian dot com dot au. Keep the questions coming.

711
00:33:47,080 --> 00:33:50,920
Speaker 1: We've got James Gerard filling in for James Kirby on Thursday,

712
00:33:51,720 --> 00:33:53,760
Speaker 1: and I'll be back with you next Tuesday, and we

713
00:33:53,840 --> 00:33:57,440
Speaker 1: have another very interesting discussion lined up. I'll be talking

714
00:33:57,440 --> 00:34:00,800
Speaker 1: about the state of the investor market around us. Jared

715
00:34:00,840 --> 00:34:03,840
Speaker 1: and I already sort of touched on this, but surprisingly

716
00:34:04,040 --> 00:34:08,680
Speaker 1: the Australian Bureau Statistics reported that invest alone volume is

717
00:34:08,760 --> 00:34:12,120
Speaker 1: up over thirty five percent over the past year, which

718
00:34:12,160 --> 00:34:15,640
Speaker 1: is pretty surprising given the backdrop of higher interest rates,

719
00:34:16,160 --> 00:34:19,520
Speaker 1: higher property taxes and more stringe and tendency rules. So

720
00:34:19,560 --> 00:34:22,640
Speaker 1: we'll be exploring that. I really hope you've enjoyed today's

721
00:34:22,680 --> 00:34:25,920
Speaker 1: episode and if you have please share it. I've been

722
00:34:25,960 --> 00:34:29,320
Speaker 1: Stuart Wiams and until next week by for now,