Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm
Speaker 1: James Kirby. Welcome aboard everybody. I've had some signals, you
Speaker 1: know that the property prices across the market are turning
Speaker 1: the corner. And we had a soft start to the
Speaker 1: year and of course we didn't get that rate cut
Speaker 1: that all the economists thought we would. But at the
Speaker 1: same time I noticed that some bank economists and I
Speaker 1: always listened to bank economists over everyone else actually, and
Speaker 1: they are becoming more confident that the property market will
Speaker 1: rebound is rebounding. Peter Moncton is the chief economist at
Speaker 1: the Bank of Queensland and he has actually upgraded his
Speaker 1: property forecasts for the bank. Very interesting. I want to
Speaker 1: talk to him about that today. Hi, Peter, how are you?
Speaker 2: But thanks James, Thanks very much for having me on.
Speaker 1: Oh nice to have you on. It's something that we've
Speaker 1: been looking at on the show that there's this sense
Speaker 1: that things are improving. There is improvement. I mean when
Speaker 1: I say improving, what I mean is that the national
Speaker 1: market has been mixed, but the big two market Sydney
Speaker 1: and particularly in Melbourne have been very soft. Melbourne in
Speaker 1: particular and we see clearance rates suddenly suddenly coming up
Speaker 1: to normal or better than normal, even though we didn't
Speaker 1: have a rate cut that we were expecting. Justin could
Speaker 1: you tell the listeners you upgraded your forecast? Why could
Speaker 1: you explain in themen's terms? Why?
Speaker 2: Yeah, thanks chevs. First for was what are the forecasts.
Speaker 2: The forecasts are for the capital cities, stand alone house
Speaker 2: in the Capital cities. So that's what my forecasts are
Speaker 2: in the forecast, what the house, what the stay alone
Speaker 2: house process will increase in twenty twenty five and twenty
Speaker 2: twenty six, and my upgrades. To be honest, it's more
Speaker 2: in the nudge had a degree that I sort of
Speaker 2: a rapid change. Was it to do with indust rates?
Speaker 2: The answer is not really. So when I go through
Speaker 2: and do my forecast, I focus on the monthly data.
Speaker 2: You know, obviously these things that have happened in the
Speaker 2: week's week, But I tend to focus on the monthly
Speaker 2: sort of figures, and so therefore it wasn't so much
Speaker 2: interest rates, because as you noted, it really was this
Speaker 2: month when there was a surprise about the RBA not
Speaker 2: moving the first half of the year. Interest rates broadly
Speaker 2: when alive with what everyone thought to be a ray
Speaker 2: cut in February and a ray cut in May. So
Speaker 2: that didn't have the influence on my forecast. What was
Speaker 2: the cause of my change, and its actually was how
Speaker 2: the market's performing. And it wasn't so much a top
Speaker 2: line how was Australia white house class is going. It
Speaker 2: was a bit more of a bottom up thing actually
Speaker 2: that when I looked at how individual cities are going.
Speaker 2: While there were one or two that may not have
Speaker 2: been performing quite as strongly as I thought, Adelaide and
Speaker 2: Perth probably stood out in that regard, but a number
Speaker 2: of the other cities, and you mentioned Melbourne that was
Speaker 2: one homemark, Canberra, Darwin were others that were doing actually
Speaker 2: better than what I thought the first half the year.
Speaker 2: So there's more a bottom up who's doing well as
Speaker 2: opposed to a top down. It just writes sort of
Speaker 2: reason about what changed my forecast.
Speaker 1: It I'd always be more convinced and comfortable with bottom
Speaker 1: up forecasts anyway. You have to see in any field
Speaker 1: of activity, including property. So tell me what were they then?
Speaker 1: What were those signals that when you talk about bottom
Speaker 1: up signals, what were.
Speaker 2: There of Pretty simple, actually, James, no sort of magic
Speaker 2: about this is just look at what has the momentum
Speaker 2: of house price has been the first half the year.
Speaker 2: And I suppose my thinking going to this year, as
Speaker 2: we know, affordability was an issue afforded the space, afordability
Speaker 2: still is an issue. And I thought that for the
Speaker 2: places where we've seen very strong house price growth in
Speaker 2: recent years, Adelaide, Birth Brisbane really stout out, affordability would
Speaker 2: be a drive concern issue, which I think is play out.
Speaker 2: Then I thought that the places which hasn't experienced very
Speaker 2: strong house broken Melbourne is very much front of mine
Speaker 2: here would start to pick up. But after a number
Speaker 2: of years, as you pointed out where house prices had movement,
Speaker 2: I thought that process would take a bit longer. That
Speaker 2: do doubt that looks like it is. So there was
Speaker 2: more that I looked at the house price changes have
Speaker 2: actually happened. That momentum in some of the cities has
Speaker 2: been stronger than what I thought, which is the reason
Speaker 2: why I sort of nudge my forecast sile.
Speaker 1: Before we go any further, I should just ask what
Speaker 1: they are exactly, What is your forecast for the standardone
Speaker 1: house places in twenty twenty five nationwide and next year
Speaker 1: if you have that to hand.
Speaker 2: Yep, So my numbers starting off was sort of you know,
Speaker 2: I thought it'd be sort of a five and six
Speaker 2: percent nationwide stand alone, how house price to the Capital
Speaker 2: cities year, six percent next and really I've just sort
Speaker 2: of nudged this year up to just be a percent
Speaker 2: or so high. You know, I'd actually done some work
Speaker 2: a few months ago would sort of show that in
Speaker 2: the two years after you get interest rate cutting cycles
Speaker 2: house prices then you go up ten to fifteen toer that. Right,
Speaker 2: There's been the odd time there it's been a lot
Speaker 2: stronger than that, but usually those times are when house
Speaker 2: prices are pretty affordable, and it's hard to make that argument.
Speaker 2: There's been a couple of times when the numbers have
Speaker 2: been a lot lower than that, but invariably they've been
Speaker 2: a time and the jobs market has been pretty weak,
Speaker 2: unemployed rate, you know, a lot higher than where it
Speaker 2: is today. So right now you've got a pretty good
Speaker 2: god jobs market, you've got people clearly wanting homes, but
Speaker 2: you've got an affordability issue. So ten to fifteen percent
Speaker 2: is might sort of feel about where house prices will
Speaker 2: go over the next couple of years, and it's sort
Speaker 2: of a six to six sort of way. We'll get there,
Speaker 2: is Baldcraft.
Speaker 1: So six percent this year, and what was twenty twenty six?
Speaker 2: Yeah, six percent twenty five or six percent twenty six.
Speaker 1: Okay, So looking at very simple six percent a year, okay,
Speaker 1: And how does that look on a long time average, Peter.
Speaker 2: Look not too far away. Actually, So if you look
Speaker 2: at what over the last twenty plus years, what households
Speaker 2: supposed income growth is, it's been around about in the fives,
Speaker 2: and house prices have gone up a little bit higher
Speaker 2: than that. So about five and a half percent is,
Speaker 2: if I remember, right, is where house Bob supposed income
Speaker 2: grows grown and house prices have grown up a little
Speaker 2: bit higher than that. And that's been one of the
Speaker 2: reasons why the affordabilities issue. House prices have grown persistently
Speaker 2: stronger than income growth, which is why I a bit
Speaker 2: of a problem. But yeah, from somewhere between you at
Speaker 2: six percent is not far away from what the sort
Speaker 2: of longer term average.
Speaker 1: Is, right. And when you mentioned that the rates didn't
Speaker 1: what the particular decisions of the RBA were month to
Speaker 1: month weren't crucial to what you're doing. There which is
Speaker 1: really interesting. However, that particular rate call, it was unusual,
Speaker 1: of course, because we've never seen how before how the
Speaker 1: RBA voters, and this was the first time we actually
Speaker 1: got to see how their voters and it was six
Speaker 1: to three, that is, six of them said let's not
Speaker 1: cut and three of them said let's cut. And a
Speaker 1: lot of us met of that at the time that
Speaker 1: they were going their separate wheeze. But we never saw
Speaker 1: these numbers before. So what I'm asking you is whether
Speaker 1: you think there is any question over the trajectory of
Speaker 1: reds that they are going to go lower in the
Speaker 1: rest of the year.
Speaker 2: Yeah. So just to be clear, James, on the terms
Speaker 2: of the interest rates, the fact we're in a lower
Speaker 2: interest rate cycle is one of the reasons why I've
Speaker 2: got my house price walkhast where they are. How if
Speaker 2: we had this rate change from the start of the
Speaker 2: year and say that was the sort of my view
Speaker 2: all throughout the year, then I well strongly suspect that
Speaker 2: house price growth this year and next would be a
Speaker 2: lot lower. So the first vid is interest rate down
Speaker 2: is part of the reasons about why I've got the
Speaker 2: six and six. What didn't change my view is the
Speaker 2: fact that they didn't go in July, So that has
Speaker 2: changed my view because it was the momentum of the
Speaker 2: first half of the year that would have changed things.
Speaker 2: So then it comes to your question James about you know,
Speaker 2: the six to three outlook and war was a better
Speaker 2: There's two things about the July RBA decision that's without
Speaker 2: One was decision not to go. It was very unusual,
Speaker 2: given that there was a very strong chance of financial
Speaker 2: markets and amongst the world of economists, as you pointed
Speaker 2: our board to go, it's very unusual the RBA did
Speaker 2: something so strongly against consensus, So that was all unusual.
Speaker 2: And as you touched on, the second thing that was
Speaker 2: unusual was actually the first time attributed what the voting was,
Speaker 2: and as just mentioned, it was six to hold rates
Speaker 2: unchanged and through for them to go.
Speaker 1: Yeah, we don't normally. This was the first time under
Speaker 1: the new RBA sort of regime that they revealed this
Speaker 1: how they're.
Speaker 2: Volted exactly right. But you know, I strongly suspect it's
Speaker 2: not the first time there's been a bit of a
Speaker 2: disagreement that's been publicly disclosed about what it actually means.
Speaker 2: What are the practical implications from that. So from an
Speaker 2: economist standpoint, the implication is you've now got nine people
Speaker 2: who will we make the decision? Whereas before you sort
Speaker 2: of got to you was really it was the Reserve
Speaker 2: Bank bringing a decision to the board and the board
Speaker 2: deciding about whether that was the right or wrong thing.
Speaker 2: Whereas now it's nine people coming up of a decision.
Speaker 2: And what that might mean is that from a meeting
Speaker 2: to meeting standpoint, it might get a little bit more
Speaker 2: uncertain about what the RBA is up to compared to
Speaker 2: perhaps the past. So that's probably my job a little
Speaker 2: bit harder. But what does it actually mean for your listeners?
Speaker 2: And I think in a big picture practically not a lot.
Speaker 2: I think that the big picture is interest rates will
Speaker 2: be set on where inflation's going, what the unappointment rate is,
Speaker 2: how is the global economy going? What does that mean
Speaker 2: to be interest right?
Speaker 1: And can we as listeners, as investors' listeners, can we
Speaker 1: take it? We can we remain comfortable with the central
Speaker 1: narrative that Australian roads have lowered a girl?
Speaker 2: Yes, And again for the reasons I was touching on,
Speaker 2: if you look through those issues, where's inflation going? What's
Speaker 2: happening with the global economy, how's the domestic economy going,
Speaker 2: all that sort of stuff. When you add up that,
Speaker 2: it does say interest rates you'd be coming down. Financial
Speaker 2: markets have got about another three quarter percentage point of
Speaker 2: great cuts chart priced in as of the July and
Speaker 2: I think that looks not unreasonable. So I think all
Speaker 2: the arguments are that we still have lar regius rights.
Speaker 1: Okay, very good. Now, what we're going to do, folks,
Speaker 1: because I know what everyone's interested in is well, what
Speaker 1: does this mean for prices? What does it mean for
Speaker 1: prices in particular places, particularly in the largest city Sydney,
Speaker 1: in Melbourne, and maybe also a look at the nature
Speaker 1: of property that might if everything is dwellings are expected
Speaker 1: to live by six percent a year, which is a
Speaker 1: pretty good scenario for a property investor. What we want
Speaker 1: to know is which ones we'll be back in a moment. Hello,
Speaker 1: Welcome back to the Australians Money Puzzled podcast. I'm James
Speaker 1: Kirby and I'm talking to Peter Monkton, chief economists at
Speaker 1: the Bank of Queensland. We're talking property prices and where
Speaker 1: they're going, and it's pretty strong tailwind. I think we
Speaker 1: can comfortably say with predictions that property prices across the
Speaker 1: world would lift six percent and that's an average, remember
Speaker 1: or a median, And on top of that you have
Speaker 1: the tailwind of rates being cut. One of the things
Speaker 1: we've discovered on the show recent times, Peter, was big
Speaker 1: difference between standalone houses and everything else. And your forecast
Speaker 1: is for standalone houses, right, and they where once they
Speaker 1: were utterly representative of dwellings in Australia, they are now
Speaker 1: simply one part of the market and there's apartments and units,
Speaker 1: et cetera. And one thing we discovered was that standalone
Speaker 1: houses are just sort of in a world of their own.
Speaker 1: They do very well. The gap between apartments and standardone houses,
Speaker 1: which people thought might improve this with this uptick, hasn't
Speaker 1: improved at all. In fact, it's worsened and a lot
Speaker 1: of people have been losing money on apartments. One in
Speaker 1: five apartments in Melbourne being sold in the last quarter
Speaker 1: was sold at a loss. That was a number from
Speaker 1: the Cautality Group formerly core Logic, and ninety percent of
Speaker 1: the apartments that sold in Sydney were ninety percent of
Speaker 1: the dwellings that sold in Sydney at a loss were apartments.
Speaker 1: Apartments we're often seen as an entry level way into
Speaker 1: the market for people. Were you aware of any of this, Peter,
Speaker 1: have you any views on it?
Speaker 2: No, Ja, the first time I've heard those statistics, and
Speaker 2: they're very interesting. I would probably be of the school
Speaker 2: along the lines that I would have thought that apartments
Speaker 2: at some point times should do well versus standlone houses.
Speaker 2: And the sense of the argument comes down to affordability.
Speaker 2: As you mentioned, it's a great entry point, and I
Speaker 2: would have thought that given where affordability is, more people
Speaker 2: would be looking at apartments as sort of a possibility.
Speaker 2: I suppose we raise the question about why hasn't that
Speaker 2: been made case in places like Sydney in Melbourne, that
Speaker 2: there's been a reasonable supply of apartments coming on. I
Speaker 2: think another one is that we've obviously had very strong
Speaker 2: population growth over the last couple of years now, and
Speaker 2: that population growth has been heavily concentrated in the capital cities.
Speaker 2: And of course there's no change in the supply of land,
Speaker 2: and there's a big change in demand for land. What
Speaker 2: more people is then demanded, supply means rice the land
Speaker 2: goes up, which obviously the more important component of a
Speaker 2: standalone house versus a unit. And probably the other thing
Speaker 2: I've mentioned is that if you look at about how
Speaker 2: capital cities performed versus regions, where regions have actually had
Speaker 2: a better run in recent times, and if you look
Speaker 2: at the housing stock, so the rolling stock in regions,
Speaker 2: there's a bigger standlone house component versus capital city.
Speaker 1: Oh yes, so yeah.
Speaker 2: So I think just compositionally there is that. That's the
Speaker 2: other reason about why I standlone houses have done well,
Speaker 2: but bigger picture in terms of your question about houses
Speaker 2: versus stanline houses versus units, et cetera. You know, essentially,
Speaker 2: if you go back to the last thirty plus years,
Speaker 2: there's been about three times when standlone houses their average
Speaker 2: price increased a lot lessus the average unit price. And
Speaker 2: then what we've got the previous two occasions. At some
Speaker 2: point in time, I think affordability became an issue, and
Speaker 2: then what we got slowly in the following years was
Speaker 2: a period where units did at least as well as houses.
Speaker 2: Standloned houses or maybe someone I'm outperformed, So that was
Speaker 2: sort of we've seen in the in the in history.
Speaker 2: This is the third time we've had a standlone houses
Speaker 2: you know, clearly outperforms standland units, and I suspect at
Speaker 2: some point in time we might get the units outperforming
Speaker 2: again just because of the affordability question.
Speaker 1: When you say that, do you have any they haven't yet, right,
Speaker 1: there is no evidence, There is no evidence, and it's
Speaker 1: been quite a while. Would you be concerned that it's
Speaker 1: not going to happen this time?
Speaker 2: Possibly because you know, one reason might be that you know,
Speaker 2: in Sydney, for example, the government is looking about increasing
Speaker 2: housing density around in particular train stations, and that's not
Speaker 2: going to be by stand their own houses. It's more
Speaker 2: likely by units. And as you correctly pointed out, particularly
Speaker 2: in the capital cities, more and more of the dwelling
Speaker 2: stock is becoming units just because of the lack of
Speaker 2: land and the expensiveness of the land and very strong
Speaker 2: outperformance of the regions versus cities for a long period
Speaker 2: of time. Maybe that sort of outperformance went keep on having.
Speaker 2: So you're one hundred percent right. The fact that it's
Speaker 2: happened two times in the past doesn't mean it's got
Speaker 2: to happen the third time. That's absolutely true. So it
Speaker 2: will clearly depend upon what the supply of units, et
Speaker 2: cetera will be going forward, But I do suspect that,
Speaker 2: you know, the affordability question will weigh on HOURSS. Six percentage,
Speaker 2: you pointed out is sort of a reasonable number, but
Speaker 2: historical standpoints have obviously had a lot stronger price increases
Speaker 2: than that, and the big reason for that is affordability.
Speaker 2: So you know, we'll see how we go, but you
Speaker 2: know there are reasons to think would be. But you know,
Speaker 2: one of the things with the housing market, I've found
Speaker 2: a few times when my forecasts have eventually turned out
Speaker 2: to be right, but they happened for a while. You know,
Speaker 2: things can happen to develop over time and take long
Speaker 2: as you think.
Speaker 1: And inside your foecas only you know this. Obviously they
Speaker 1: don't know to extend you've met this public. But if
Speaker 1: you're expecting six percent across the board, there will be
Speaker 1: deviation around that, and some will do better than six,
Speaker 1: some will do worse than six. Have you any sense
Speaker 1: of which are the patches or locations or even styles
Speaker 1: of homes that will do better and worse.
Speaker 2: Yes, So look, as I's said at the start that
Speaker 2: my forecast of the stand alone houses, and as you said,
Speaker 2: it's the average of those. So I haven't got any
Speaker 2: particular view, even though I've just answered of question about
Speaker 2: houses of US units, I haven't got a particular issue
Speaker 2: view about what units will do over the next couple
Speaker 2: of years. But on capital cities, as I might have
Speaker 2: mentioned earlier on, my theme has been the places that
Speaker 2: have done better over the last two or three years, Brisbane,
Speaker 2: Adelaide and Perth they will start slowing versus everyone else
Speaker 2: because they've done so well. Affordablle is becoming aish in
Speaker 2: those places, and the places that haven't done work as
Speaker 2: well last two or three years. Melbourne's a bit of
Speaker 2: a standout, but also dah and Camera and Hobart they
Speaker 2: will start to do better. So it's almost like a
Speaker 2: you know, the better come back to the pack and
Speaker 2: the laggers are start to pack up a bit to
Speaker 2: pick back up. And so that's my suspicion about what
Speaker 2: will be happening, and that's what my forecasts have been.
Speaker 2: That essentially Melbourne, Adelaide and Hobart Camera of course up
Speaker 2: to pick up, and that sort of keeps the average
Speaker 2: around about stick for the other one. The other of
Speaker 2: cities start the price break moderates.
Speaker 1: It's like a reversion to the mean.
Speaker 2: Exactly right. And look, if you look through the big
Speaker 2: picture about why people, you know, why population growth for example,
Speaker 2: between states, you know what does go up and down.
Speaker 2: One of the factors is the state economy doing well.
Speaker 2: A second one is the affordable housing there. And at
Speaker 2: some point if the economy is doing okay and you've
Speaker 2: got affordable housing there, then people sort of say, well,
Speaker 2: maybe that's a place that I can go to and
Speaker 2: have a good, good standard limit.
Speaker 1: To some extent, the market does its works its best.
Speaker 2: Yeah, and you know, as we were talking about earlier on,
Speaker 2: that can take longer than you think, but eventually the
Speaker 2: things you know, I think you know does come through.
Speaker 1: Okay, very interesting, all right, we'll take a short break.
Speaker 1: I have some very good questions that I want to
Speaker 1: put to Peter. They are from you guys, of course,
Speaker 1: and they're not all of our property. But we'll see
Speaker 1: what he has to see and we will endeavor as
Speaker 1: a dual to give you an answer back in a moment.
Speaker 1: Hello and welcome back to the Australians Money Puzzle Podcast.
Speaker 1: James Kirby with Peter Moncton, Chief Economist, Bank of Queensland
Speaker 1: first time on the show. He has just upgraded or
Speaker 1: nudged his property forecasts forward, which I thought was very
Speaker 1: interesting because there was some a little bit of dampness
Speaker 1: in the market after the interest rates were not cut,
Speaker 1: of course by the RBA, after absolute total consensus that
Speaker 1: they would cut them. But it's reassuring to hear that
Speaker 1: Peter and others believe that there is plenty more to
Speaker 1: come on the raid cuts. I think it was three
Speaker 1: quarters of a percent you thought basically before they resettled,
Speaker 1: Was that right, Peter.
Speaker 2: Yeah, that's my forecast, that's our financial market thinking. So
Speaker 2: we'll see what THEBI ends up doing.
Speaker 1: Yes, yep. Okay. Now, first questions from Tina. I found
Speaker 1: no Whittaker's comments regarding pre to invest in shares over
Speaker 1: property and over negative gearing. I take it his clients
Speaker 1: are all more affluent to have millions dollars lying around
Speaker 1: to invest in shares compared with the average moment dad
Speaker 1: property investor. He is forgetting you can buy your investment
Speaker 1: property literally without any money of your own. Okay, thank you, Tina.
Speaker 1: Here's the thing. Noel was very much, very much pro
Speaker 1: shares and very skeptical yes, I know on property, but
Speaker 1: that's just one view. And the other thing is Tina,
Speaker 1: you say that you can buy a property with very
Speaker 1: little money of your own, you can buy shares with
Speaker 1: very little money of your own. You can negatively gear
Speaker 1: shares just technically as easily as you can negatively gear property. However,
Speaker 1: in our market, everyone is prepared to do that on
Speaker 1: property and take damn big loans as investors, but they're
Speaker 1: not prepared to do so on negative gearing for shares,
Speaker 1: even though the numbers on shares have been better in
Speaker 1: recent Certainly you're getting four and a half percent yield
Speaker 1: basically against what two or three in the cities in property,
Speaker 1: and from extra extremely strong returns. I won't accept to
Speaker 1: say this is not advice information only, but Peter, I
Speaker 1: think behind it all here is the question why do
Speaker 1: we all? Why do you think the Australian every day
Speaker 1: investor is prepared to take big loans on property and
Speaker 1: not on shares when the same terms are available in
Speaker 1: negative gearing.
Speaker 2: As you say, James, you know I'm not providing any
Speaker 2: sort of boss look on you. I'll probably say two things.
Speaker 2: First of all, do people understand shares as well as
Speaker 2: and the second is that you know, every day we
Speaker 2: get to sort of see what the share pross changees
Speaker 2: been these days. You know, obviously we get monthly sort
Speaker 2: of discussions. We've just had one about what ass proces
Speaker 2: are up to.
Speaker 1: We know much more than we used to, yeah, much much,
Speaker 1: much more up to date information.
Speaker 2: I've even saying weekly indicators of house processes somebody. But
Speaker 2: I suppose that the share market apparently just goes up
Speaker 2: down more than the property market. Both. Maybe it's just
Speaker 2: that influencing people and maybe knowledge, but I'm not you know,
Speaker 2: I've got an expert about why people decided to choose
Speaker 2: property a maches or whatever.
Speaker 1: Okay, I think you're right. I think it's a comfort factor, Tina, because,
Speaker 1: as I say, you can buy shares with very little money,
Speaker 1: you can negatively gear them in the same fashion, and
Speaker 1: there's a lot less trouble, to be honest, because well,
Speaker 1: anything's less trouble than owning an investment of property. As
Speaker 1: you probably know that his owning listed shares are. But
Speaker 1: the comfort factor is big with bricks and mortar. Never
Speaker 1: underestimate that, I think. Okay, thanks Tina, Paul. I was
Speaker 1: listening to your podcast in buying units off the Plan.
Speaker 1: I now know that I would be competing against foreign
Speaker 1: investors if I were ever to buy off the Plan.
Speaker 1: I also know that shunky developers can walk away and
Speaker 1: hide in perpetuity, rendering it expensive to call any money
Speaker 1: back if I hit a disaster. Couldn't developers change their
Speaker 1: minds if prices had risen since the contract had been
Speaker 1: so mind and return my deposits so they could sell
Speaker 1: it themselves. Well, very broadly, Paul, the Off the Plan
Speaker 1: show was very interesting. There was a lot of negatives
Speaker 1: in that space about off the Plan. There was a
Speaker 1: lot of risks I think that were unclear maybe initially
Speaker 1: to listeners, and though they have their place, I think
Speaker 1: that the end of the show, I thought it was
Speaker 1: pretty obvious that that it's much riskier than you might
Speaker 1: think to buy off the plan. That's part one. As
Speaker 1: for what developers might do or change their minds, well,
Speaker 1: developers completely control This is the issue. I suppose the
Speaker 1: developer controls the whole thing, and often controls the development
Speaker 1: in the years after you move in as well, which
Speaker 1: causes all sorts of other problems. Peter, I won't again
Speaker 1: because you're in the columnist ida was not fair to
Speaker 1: put that one to you, But I might ask you
Speaker 1: one thing if from an economic and demographic point of view,
Speaker 1: we were talking about how houses run ahead of apartments
Speaker 1: and have done so and are doing it again at
Speaker 1: the moment, and how apartment prices were softer. Have you
Speaker 1: ever looked at the demographics of apartment buyers. It used
Speaker 1: to be all based if the younger people, but I
Speaker 1: believe a substantiate portion now are older people downsizing with
Speaker 1: just a change the market? I wonder, yeah, it.
Speaker 2: Could do, James. You know, obviously if the sort of
Speaker 2: apartments are sort of more high end the people downside,
Speaker 2: and that sort of evolves. I think, you know, one
Speaker 2: of the other points I'd make on this is that
Speaker 2: you know, if you look at cities, the land is
Speaker 2: not getting more land. There's a lot more people. So,
Speaker 2: as you pointed out earlier on the stock of a
Speaker 2: part the overle locker dwellings is increasing. And what that
Speaker 2: will just mean is that over time the composition of
Speaker 2: who's the unit will volt just because of the proportional
Speaker 2: oble golling stock is increasing. So I think that well,
Speaker 2: that would be basically if you look at the big
Speaker 2: cities overseas, you know, didn't you're over five million people.
Speaker 2: If you look at big cities Europe like that, then
Speaker 2: you know you do see more units in the in
Speaker 2: the over going stock, So you know, I think that'll
Speaker 2: be the other big thing that that issue about units
Speaker 2: became having a bigger proportion of the dwelling stock that
Speaker 2: will have impotations.
Speaker 1: Finally, Andrew a question on property inside Super. With superbounces growing,
Speaker 1: I can see that many people close to retirement would
Speaker 1: be in a position where they would be able to
Speaker 1: purchase a residential or commercial property without the need for
Speaker 1: a complicated SMSF loan with all its restrictions. Hypothetically, if
Speaker 1: someone had a million dollars in Super at sixty, would
Speaker 1: it be a strategy to move it into an SMSF
Speaker 1: and purchase a half a million property. It seems like
Speaker 1: that would reduce heavy exposure to the market. Yes, it
Speaker 1: would reduce But Andrew never advice. Hypothetically, if to all
Speaker 1: the Andrews in the world, if you had it doesn't
Speaker 1: matter what the figure is. If you had X in
Speaker 1: your Super at sixty and you just decided to put
Speaker 1: half X into one single acid and that one single acid,
Speaker 1: whether it's property or anything is that would be very
Speaker 1: poor in relation to diversification, and diversification is terribly important
Speaker 1: in super so I think you would find the vast
Speaker 1: majority of advisors, regulators, analysts, and perhaps even chief economists
Speaker 1: at banks would be skeptical about such a move.
Speaker 2: What do you think, Peter, Well, probably anything outside James.
Speaker 2: He said, whever you make investments, it should be do
Speaker 2: your research to understand about what the risks are and
Speaker 2: what the returns are are. And you know, I think
Speaker 2: if you do that, then you know, I think you'd
Speaker 2: be more informal when you make your investment decisions. But
Speaker 2: I have a very particular you about that.
Speaker 1: Very good, and I just would add Andrew that diversification
Speaker 1: is terribly important and you don't have to be a
Speaker 1: math professor to know if fifty percent of your portfolio
Speaker 1: is in one thing, then it's not diversified by any
Speaker 1: I think, by any measure. All Right, very good, Very interesting,
Speaker 1: Thank you Peter for coming on the show. Very interesting
Speaker 1: to hear what you have to say about our property
Speaker 1: market getting better, which is good to hear.
Speaker 2: Thanks very much chairs you having me on, lovely to
Speaker 2: have you on.
Speaker 1: We'll talk to you again. That was Peter Monkton, chief
Speaker 1: eclumnist at the Bank of Queensland. Very good. Let's have
Speaker 1: some questions. Keep that up, folks. That idea of putting
Speaker 1: two or three questions in an email, why not? Are
Speaker 1: you going to take the effort to send in a question?
Speaker 1: Send in a couple. The money puzzle at the Australian
Speaker 1: dot com dot au is the address. Talk to you soon.