1 00:00:06,680 --> 00:00:09,920 Speaker 1: Hello and welcome to The Australian's Money Puzzle Podcast. I'm 2 00:00:09,960 --> 00:00:12,520 Speaker 1: James Kirby, the wealth editor at The Australian. 3 00:00:12,539 --> 00:00:23,290 Speaker 2: Welcome aboard, everybody. On the last time that I had 4 00:00:23,430 --> 00:00:26,410 Speaker 2: Sarah Petty on the show, she's the property reporter on. 5 00:00:26,390 --> 00:00:29,710 Speaker 1: The podcast, so a great response. She gave a particular 6 00:00:29,870 --> 00:00:32,870 Speaker 1: perspective of Gen Z in the property market and she's 7 00:00:32,930 --> 00:00:35,019 Speaker 1: back today And we are going to talk about some 8 00:00:35,320 --> 00:00:38,650 Speaker 1: red hot issues in property for property investors, for anyone 9 00:00:39,270 --> 00:00:43,290 Speaker 1: in the world of property just now. Rentals still rising, 10 00:00:43,430 --> 00:00:47,790 Speaker 1: insurance going through the roof. We're going to look at 11 00:00:48,130 --> 00:00:52,479 Speaker 1: a popular, but I have to tell you, debatable concept 12 00:00:52,520 --> 00:00:54,860 Speaker 1: that you see reported all the time where they say 13 00:00:55,340 --> 00:00:59,840 Speaker 1: you can buy cheaper than rent in certain suburbs. And 14 00:00:59,900 --> 00:01:01,920 Speaker 1: I see that starting to happen again now. I see 15 00:01:01,960 --> 00:01:04,360 Speaker 1: those stories coming through. And I just want to ask 16 00:01:04,459 --> 00:01:07,160 Speaker 1: Sarah about the reality of that and a few other things, 17 00:01:07,280 --> 00:01:11,580 Speaker 1: including the rather spectacular story she had recently where she 18 00:01:12,200 --> 00:01:17,429 Speaker 1: found an apartment that was for sale in Melbourne, metropolitan Melbourne, 19 00:01:17,470 --> 00:01:22,550 Speaker 1: for $ 99, 000. Story behind that one. Story behind all these stories, 20 00:01:22,630 --> 00:01:22,970 Speaker 1: isn't there? 21 00:01:23,010 --> 00:01:24,470 Speaker 2: How are you, Sarah? I'm good. 22 00:01:24,490 --> 00:01:25,209 Speaker 3: How are you, James? 23 00:01:25,530 --> 00:01:28,150 Speaker 2: Good, good. Thanks for coming on the show. Thank you. 24 00:01:28,250 --> 00:01:30,250 Speaker 2: Great to have you on again. I saw where you 25 00:01:30,290 --> 00:01:31,310 Speaker 2: had something recently. 26 00:01:31,330 --> 00:01:34,880 Speaker 1: Rents, we know, are climbing all the time and the 27 00:01:35,060 --> 00:01:37,560 Speaker 1: vacancy rate is still very, very tight and I don't 28 00:01:37,620 --> 00:01:41,200 Speaker 1: see any great changes to that. But when we looked 29 00:01:41,220 --> 00:01:43,980 Speaker 1: at the recent inflation figures and the inflation figures, if 30 00:01:44,000 --> 00:01:46,920 Speaker 1: you recall, folks, were a surprise, a negative surprise. It's 31 00:01:46,980 --> 00:01:48,980 Speaker 1: one of the reasons they're talking about rates staying up 32 00:01:49,020 --> 00:01:53,160 Speaker 1: but not going higher, was that the 4% annualized inflation 33 00:01:53,480 --> 00:01:56,970 Speaker 1: was driven by two things in particular. One was rentals, 34 00:01:57,150 --> 00:01:59,790 Speaker 1: both related to property. One was rentals, rental costs. And 35 00:01:59,810 --> 00:02:05,690 Speaker 1: the other was insurance. And house insurance has really taken 36 00:02:05,890 --> 00:02:10,919 Speaker 1: off on a trajectory that is slightly disconcerting, I imagine, 37 00:02:10,940 --> 00:02:11,420 Speaker 1: for anybody. 38 00:02:11,960 --> 00:02:16,320 Speaker 3: Well, I can say that in Victoria, building insurance has 39 00:02:16,340 --> 00:02:19,800 Speaker 3: been increased. So domestic building insurance is going to go 40 00:02:19,860 --> 00:02:20,660 Speaker 3: up another 65%. 41 00:02:20,660 --> 00:02:22,060 Speaker 1: Essentially.... 42 00:02:24,250 --> 00:02:27,389 Speaker 3: The building insurance already went up 11 months ago by 43 00:02:28,070 --> 00:02:31,630 Speaker 3: about 43%. So you can imagine that this is going 44 00:02:31,650 --> 00:02:33,850 Speaker 3: to have a pretty big effect on those that are 45 00:02:33,889 --> 00:02:35,530 Speaker 3: wanting to build their own home. 46 00:02:35,590 --> 00:02:37,220 Speaker 2: Can you repeat the numbers? What happened last year and 47 00:02:37,260 --> 00:02:38,200 Speaker 2: what's going to happen this year? 48 00:02:38,320 --> 00:02:40,899 Speaker 3: So in September last year, there was already an increase 49 00:02:41,300 --> 00:02:44,859 Speaker 3: to domestic building insurance by 43%. And then this year, 50 00:02:44,880 --> 00:02:48,960 Speaker 3: about a month ago, insurance has been increased by another 65%. 51 00:02:48,960 --> 00:02:54,630 Speaker 2: So extraordinary exactly it's multiples of what inflation is i 52 00:02:55,310 --> 00:02:57,340 Speaker 2: know this is an issue across the nation and i 53 00:02:57,400 --> 00:03:01,600 Speaker 2: know that from the national inflation figures so what's the explanation. 54 00:03:01,740 --> 00:03:04,060 Speaker 3: Essentially i think they're trying to crack down on builders 55 00:03:04,100 --> 00:03:07,060 Speaker 3: i mean there is a lot of talk about there 56 00:03:07,080 --> 00:03:10,110 Speaker 3: being some dodgy building practices out there so that's the 57 00:03:10,310 --> 00:03:15,590 Speaker 3: victorian managed insurance authorities position but in terms of repercussions 58 00:03:15,870 --> 00:03:18,010 Speaker 3: i think is that those that are looking to build 59 00:03:18,030 --> 00:03:20,360 Speaker 3: their own home yeah builders are likely to pass on 60 00:03:20,419 --> 00:03:22,060 Speaker 3: those extra costs to them. 61 00:03:22,120 --> 00:03:25,459 Speaker 1: So they crack down on dodgy builders by charging all 62 00:03:25,500 --> 00:03:27,399 Speaker 1: builders higher insurance. 63 00:03:27,460 --> 00:03:27,720 Speaker 3: Yes. 64 00:03:28,100 --> 00:03:28,860 Speaker 2: Oh, that's terrible. 65 00:03:29,160 --> 00:03:32,090 Speaker 1: I didn't know about that. It hasn't come up before. 66 00:03:32,110 --> 00:03:34,950 Speaker 1: I did notice that the insurance figures were just completely 67 00:03:35,030 --> 00:03:37,670 Speaker 1: out of line. This is an ongoing problem across the 68 00:03:37,830 --> 00:03:41,430 Speaker 1: investment system, really. In an entirely different world, in financial 69 00:03:41,810 --> 00:03:44,660 Speaker 1: planning and financial advice, for instance, they have a new 70 00:03:45,660 --> 00:03:49,440 Speaker 1: scheme of last resort, it's called, where if the company 71 00:03:49,500 --> 00:03:52,580 Speaker 1: that you got advice from goes under, you can now 72 00:03:52,660 --> 00:03:54,100 Speaker 1: get covered on that. 73 00:03:54,680 --> 00:03:57,280 Speaker 2: Basically, it's a form of insurance. But it's the same problem. 74 00:03:57,970 --> 00:04:01,450 Speaker 1: They're charging the existing advisors for the sins, if you like, 75 00:04:01,490 --> 00:04:04,310 Speaker 1: of other advisors. Here they are charging the existing builders 76 00:04:04,390 --> 00:04:07,030 Speaker 1: for sort of the doings of other bad builders. 77 00:04:07,490 --> 00:04:08,150 Speaker 2: Okay, I see. 78 00:04:08,350 --> 00:04:10,850 Speaker 3: I will also add that they're also trying to crack 79 00:04:10,890 --> 00:04:15,450 Speaker 3: down on... There's obviously been insolvencies, Porter Davis... being one 80 00:04:15,490 --> 00:04:19,450 Speaker 3: of them. So, yeah, insolvencies, inflation, and skilled worker shortages 81 00:04:19,830 --> 00:04:22,950 Speaker 3: are also another reason why the premiums have increased. So 82 00:04:22,990 --> 00:04:26,740 Speaker 3: basically to ensure home buyers are protected. That's what they've said. 83 00:04:26,750 --> 00:04:30,180 Speaker 2: But they protect them. They make everything dearer for them. 84 00:04:30,200 --> 00:04:32,540 Speaker 3: But they're going to be the ones that. 85 00:04:32,360 --> 00:04:33,240 Speaker 2: Pay, probably. 86 00:04:33,860 --> 00:04:37,099 Speaker 1: Gee, yeah, that's so difficult. And one of the things 87 00:04:37,600 --> 00:04:40,860 Speaker 1: about that in terms of we also mentioned on the show, 88 00:04:40,940 --> 00:04:42,960 Speaker 1: and a couple of people got very hot under the collar, 89 00:04:43,460 --> 00:04:46,500 Speaker 1: in recent times, about lender's mortgage insurance, a similar thing 90 00:04:46,520 --> 00:04:50,510 Speaker 1: that everybody must pay. But, you know, the figures suggest that, 91 00:04:50,690 --> 00:04:54,630 Speaker 1: in fact, the defaults are tiny on this, even at 92 00:04:54,710 --> 00:04:57,250 Speaker 1: the moment. But just to cover off on that, about 93 00:04:57,270 --> 00:04:59,750 Speaker 1: the builders. So there is a number of builders going under. 94 00:04:59,870 --> 00:05:02,770 Speaker 1: I know that insolvencies are at a record. I know 95 00:05:02,830 --> 00:05:04,550 Speaker 1: that bankruptcies. 96 00:05:03,930 --> 00:05:05,150 Speaker 2: Are at a record. 97 00:05:05,170 --> 00:05:10,099 Speaker 1: They're at the highest since ASIC started collecting figures. And 98 00:05:10,260 --> 00:05:12,440 Speaker 1: I was actually on radio this morning, we were talking 99 00:05:12,620 --> 00:05:16,219 Speaker 1: about How also there's a debt hotline in Sydney and 100 00:05:16,400 --> 00:05:19,100 Speaker 1: the managers of that debt hotline said that they have 101 00:05:19,140 --> 00:05:23,940 Speaker 1: had more complaints and concern calls this year already than 102 00:05:23,960 --> 00:05:25,940 Speaker 1: they had all of last year. 103 00:05:26,420 --> 00:05:28,760 Speaker 2: So for first home buyers. 104 00:05:30,120 --> 00:05:31,789 Speaker 1: Have you any sense of that segment of people who 105 00:05:31,820 --> 00:05:34,330 Speaker 1: go to own, go to build their own house? Was 106 00:05:34,410 --> 00:05:36,370 Speaker 1: it traditionally seen as some sort of a cheaper way. 107 00:05:36,290 --> 00:05:39,710 Speaker 3: To do it? I mean, from my understanding, there has been, 108 00:05:39,730 --> 00:05:43,520 Speaker 3: you know, enticing offers in order for people to, buy 109 00:05:43,560 --> 00:05:45,609 Speaker 3: that sort of piece of land and then build their 110 00:05:46,089 --> 00:05:51,030 Speaker 3: own home. But in terms of increased construction costs, increased 111 00:05:51,410 --> 00:05:56,859 Speaker 3: labour shortages, that isn't at all an enticing option, especially 112 00:05:56,880 --> 00:05:58,479 Speaker 3: for young buyers such as myself. 113 00:05:59,100 --> 00:06:02,180 Speaker 2: Yes, yeah. Or it used to be. So people feel 114 00:06:02,220 --> 00:06:06,480 Speaker 2: it's so sort of ridden with risk. Ridden with risk, yeah, absolutely. 115 00:06:06,580 --> 00:06:09,650 Speaker 3: And even just ensuring that your home is built, you know, 116 00:06:09,690 --> 00:06:11,250 Speaker 3: to the best standard as well. 117 00:06:11,350 --> 00:06:13,500 Speaker 2: Yes, I can imagine. Yeah, I see. 118 00:06:14,240 --> 00:06:16,040 Speaker 1: OK, so that was that one, folks. I wanted to 119 00:06:16,080 --> 00:06:17,839 Speaker 1: just put that on the table because I noticed the 120 00:06:17,880 --> 00:06:19,100 Speaker 1: insurance popping. 121 00:06:18,839 --> 00:06:20,500 Speaker 2: Out, if you like, on the inflation numbers. 122 00:06:20,800 --> 00:06:23,770 Speaker 1: And of course, it turns out, well, the property market 123 00:06:23,810 --> 00:06:27,370 Speaker 1: is at the heart of it, both on rentals and insurance. Now, 124 00:06:27,450 --> 00:06:31,070 Speaker 1: on another issue, the sort of story that we will regularly, 125 00:06:31,470 --> 00:06:35,810 Speaker 1: and mea culpa, I've never actually told this story, but 126 00:06:36,400 --> 00:06:38,920 Speaker 1: the Australian runs stories like this. The Halsan runs stories. 127 00:06:39,000 --> 00:06:41,340 Speaker 1: Everyone runs stories like this. It's a great eye catcher. 128 00:06:42,779 --> 00:06:45,760 Speaker 1: people say, or a reporter says, hey, look, you know, 129 00:06:45,779 --> 00:06:49,260 Speaker 1: some researcher comes out and says, hey, if there's six 130 00:06:49,279 --> 00:06:53,460 Speaker 1: suburbs in Brisbane, or there's 12 suburbs in Melbourne, where 131 00:06:54,020 --> 00:06:54,859 Speaker 1: it's cheaper to. 132 00:06:55,860 --> 00:06:57,020 Speaker 2: Buy than rent. 133 00:06:57,620 --> 00:07:02,640 Speaker 1: And what really caught my eye recently was inner city suburbs. Carlton, 134 00:07:02,930 --> 00:07:08,230 Speaker 1: in the middle of Melbourne, attractive suburb by anyone's estimation, 135 00:07:08,390 --> 00:07:11,670 Speaker 1: is on this list. But I just want to ask you, 136 00:07:11,750 --> 00:07:14,190 Speaker 1: have you ever looked at it and do you find those, 137 00:07:14,710 --> 00:07:16,300 Speaker 1: is it fair actually to put that in front of 138 00:07:16,330 --> 00:07:18,160 Speaker 1: people and get them all excited? I mean, did we 139 00:07:18,180 --> 00:07:21,160 Speaker 1: tell this whole story when we do those stories? 140 00:07:21,500 --> 00:07:22,940 Speaker 3: I recently did a story on this. 141 00:07:23,880 --> 00:07:25,640 Speaker 2: I mean, look, yeah. 142 00:07:25,840 --> 00:07:27,380 Speaker 3: I mean, it's always good to know your options. And 143 00:07:27,420 --> 00:07:30,890 Speaker 3: I guess I think everybody, especially first-time buyers, are looking 144 00:07:30,990 --> 00:07:33,330 Speaker 3: for any positivity that they can find in the market 145 00:07:33,370 --> 00:07:36,830 Speaker 3: at the moment. But I recently wrote a story based 146 00:07:36,890 --> 00:07:39,210 Speaker 3: on some data that we've received. And yeah, Carlton was 147 00:07:39,270 --> 00:07:41,530 Speaker 3: one of them. Something important to note, and there are 148 00:07:41,550 --> 00:07:44,230 Speaker 3: a couple of disclaimers with this, is when we look 149 00:07:44,290 --> 00:07:46,610 Speaker 3: at data like this, you've got to think about the 150 00:07:46,650 --> 00:07:50,730 Speaker 3: composition of these suburbs. So places like Carlton, another couple 151 00:07:50,770 --> 00:07:52,330 Speaker 3: that I had on the list where it would be 152 00:07:52,990 --> 00:07:57,050 Speaker 3: cheaper to buy them rent would be Travencore in Melbourne. So, yeah, 153 00:07:57,090 --> 00:08:01,710 Speaker 3: obviously I'm speaking from a Victoria-centric position here. These are 154 00:08:01,730 --> 00:08:03,770 Speaker 3: all places that are very close to the city and 155 00:08:03,920 --> 00:08:06,490 Speaker 3: have a large amount of units. And when you have 156 00:08:06,500 --> 00:08:09,310 Speaker 3: a large number of units, that drags the median dwelling 157 00:08:09,330 --> 00:08:12,270 Speaker 3: value down. So some of the data I received, yes, 158 00:08:12,610 --> 00:08:16,850 Speaker 3: if a buyer puts down a 20% deposit, these were 159 00:08:17,050 --> 00:08:20,270 Speaker 3: some of the suburbs that would cost less to essentially 160 00:08:20,310 --> 00:08:22,070 Speaker 3: service a mortgage rather than rent. 161 00:08:22,250 --> 00:08:22,530 Speaker 1: Okay. 162 00:08:22,550 --> 00:08:24,150 Speaker 2: Have you got a list of them there? Yeah, I've 163 00:08:24,170 --> 00:08:26,330 Speaker 2: got a few here. Give us your four or five favourites. 164 00:08:26,490 --> 00:08:31,690 Speaker 3: Okay. Again, this is all Victoria, but Abbotsford, Docklands, North Melbourne, Travencore, 165 00:08:32,230 --> 00:08:33,309 Speaker 3: Notting Hill and Box Hill. 166 00:08:33,850 --> 00:08:36,350 Speaker 1: Okay, and this would be mirrored in other cities around 167 00:08:36,370 --> 00:08:38,390 Speaker 1: the country. But the point I'm going to drive at 168 00:08:38,410 --> 00:08:41,910 Speaker 1: here is, so the thing is, when we see these reports, 169 00:08:41,929 --> 00:08:45,270 Speaker 1: what they say is, the interest you would pay on 170 00:08:45,309 --> 00:08:48,360 Speaker 1: your mortgage is less than the rent you would pay 171 00:08:48,500 --> 00:08:50,000 Speaker 1: to the property owner. 172 00:08:50,420 --> 00:08:52,380 Speaker 2: And that is true, as far as it goes. It 173 00:08:52,440 --> 00:08:55,339 Speaker 2: is true. But the thing is, when you own a place, 174 00:08:55,660 --> 00:08:59,240 Speaker 2: it's a lot more cost than interest. Do people fully 175 00:08:59,260 --> 00:09:00,160 Speaker 2: understand that, do you think? 176 00:09:01,870 --> 00:09:03,790 Speaker 3: I mean, it depends if you own a property or not. 177 00:09:04,090 --> 00:09:04,790 Speaker 2: Yeah. 178 00:09:05,270 --> 00:09:07,710 Speaker 3: There's a lot of costs and, yeah, there is quite 179 00:09:07,730 --> 00:09:09,950 Speaker 3: a large priority to entry in terms of actually getting 180 00:09:09,990 --> 00:09:10,710 Speaker 3: into the market. 181 00:09:10,730 --> 00:09:11,430 Speaker 2: Yeah. 182 00:09:11,670 --> 00:09:15,819 Speaker 3: And depending on what government schemes you're eligible for, but, yeah, 183 00:09:15,900 --> 00:09:19,300 Speaker 3: there's SAMG, there's MI, or when there's mortgage insurance. 184 00:09:19,440 --> 00:09:20,740 Speaker 2: Yeah, that's right. 185 00:09:21,120 --> 00:09:23,440 Speaker 1: I would say to people listening, when you see those reports, 186 00:09:23,500 --> 00:09:26,300 Speaker 1: take it on board, but just don't be under the 187 00:09:26,340 --> 00:09:30,059 Speaker 1: impression you can match this very simply, the mortgage repayments 188 00:09:30,100 --> 00:09:33,540 Speaker 1: against the rent payments. You can't, unfortunately, because there are 189 00:09:33,559 --> 00:09:36,160 Speaker 1: running costs. I'm going to pick a number out here. 190 00:09:36,179 --> 00:09:39,110 Speaker 1: The average apartment risk will be 10 to 20 grand 191 00:09:39,130 --> 00:09:42,790 Speaker 1: a year of just costs. There's body corporate costs, there's 192 00:09:42,850 --> 00:09:47,310 Speaker 1: insurance costs, LMI, lender's mortgage insurance, all these various things 193 00:09:47,350 --> 00:09:51,910 Speaker 1: that will come up. I suppose the other thing about that, 194 00:09:52,030 --> 00:09:54,390 Speaker 1: in a way, it's great to see that you can 195 00:09:54,429 --> 00:09:57,179 Speaker 1: do that, And that there are places you can buy 196 00:09:57,420 --> 00:09:59,390 Speaker 1: that cost less than they. 197 00:09:59,270 --> 00:09:59,790 Speaker 2: Do to rent. 198 00:10:00,130 --> 00:10:03,439 Speaker 1: But what the real situation here is that the rent 199 00:10:03,480 --> 00:10:06,479 Speaker 1: is so high yes the rents are so crazy. 200 00:10:06,320 --> 00:10:08,860 Speaker 3: Yes I think on average rents across the nation have 201 00:10:09,120 --> 00:10:11,820 Speaker 3: gone up about 10% in the last 12 months so 202 00:10:12,300 --> 00:10:14,780 Speaker 3: yes that's true and yeah like what you said in 203 00:10:14,800 --> 00:10:17,179 Speaker 3: terms of if you do decide to buy a unit 204 00:10:17,580 --> 00:10:20,339 Speaker 3: yeah you do have all those extra costs like things 205 00:10:20,400 --> 00:10:23,920 Speaker 3: yeah and everything yes rents have skyrocketed so that's the 206 00:10:23,960 --> 00:10:27,719 Speaker 3: main point you know some people are paying 50 extra 207 00:10:27,740 --> 00:10:29,400 Speaker 3: a week that compared to months. 208 00:10:29,260 --> 00:10:31,720 Speaker 1: Ago yes i asked you the last time you were 209 00:10:31,780 --> 00:10:35,870 Speaker 1: on we were talking about the the unreported side of 210 00:10:35,910 --> 00:10:41,230 Speaker 1: the property market where people bid so they go in 211 00:10:41,270 --> 00:10:43,730 Speaker 1: and the person says hey this rental it's so much 212 00:10:43,750 --> 00:10:45,589 Speaker 1: per week and the person catches them in the corridor 213 00:10:45,610 --> 00:10:48,110 Speaker 1: and says what if i toss an extra $ 10, $ 20 214 00:10:47,720 --> 00:10:48,940 Speaker 1: at it per week. 215 00:10:49,120 --> 00:10:51,080 Speaker 2: Does that happen and does it work? 216 00:10:51,440 --> 00:10:54,780 Speaker 3: Yes, it happens all the time. An agent can't say, 217 00:10:54,920 --> 00:10:57,840 Speaker 3: you know, you should add an extra $ 10 onto your offer. 218 00:10:58,460 --> 00:11:02,260 Speaker 3: They can't advise that, but renters are more than willing 219 00:11:02,320 --> 00:11:04,580 Speaker 3: to or more than allowed to add an extra $ 10, 220 00:11:04,520 --> 00:11:07,180 Speaker 3: $ 20 to your week to get ahead of the pack. 221 00:11:07,940 --> 00:11:11,420 Speaker 3: But in Victoria, that in the first housing statement in 222 00:11:11,470 --> 00:11:14,510 Speaker 3: September last year, they are trying to outlaw all types 223 00:11:14,550 --> 00:11:14,890 Speaker 3: of biddings. 224 00:11:15,309 --> 00:11:17,690 Speaker 2: At the moment, you can't solicit it. The agent can't say, hey, 225 00:11:17,710 --> 00:11:19,890 Speaker 2: you want to pay more? What if you volunteer? You 226 00:11:19,910 --> 00:11:21,050 Speaker 2: can volunteer. 227 00:11:21,130 --> 00:11:21,330 Speaker 3: Fine. 228 00:11:21,530 --> 00:11:26,920 Speaker 2: Yeah, I see. Okay, very good. It's really interesting. We'll 229 00:11:26,940 --> 00:11:28,140 Speaker 2: take a short break. Back in a moment. 230 00:11:38,580 --> 00:11:41,520 Speaker 1: Hello and welcome back to the Australian's Money Puzzle podcast. 231 00:11:41,600 --> 00:11:43,500 Speaker 1: I'm James Kirby, the web editor. 232 00:11:43,280 --> 00:11:51,020 Speaker 2: At The Australian. It's Tuesday, I'm talking property, property investment. 233 00:11:51,380 --> 00:11:54,429 Speaker 1: And my guest today is Sarah Petty, property reporter from 234 00:11:54,450 --> 00:11:58,210 Speaker 1: the Harris Sun, who is out there, folks, at the auctions, 235 00:11:58,450 --> 00:12:01,030 Speaker 1: on the street, talking to the agents, the buyers, advocates, 236 00:12:01,090 --> 00:12:04,630 Speaker 1: the buyers, which I find the most interesting aspect of 237 00:12:04,670 --> 00:12:06,429 Speaker 1: a lot of the stories she does. She's talking to 238 00:12:06,450 --> 00:12:08,670 Speaker 1: the people who are actually trying to invest or trying 239 00:12:08,710 --> 00:12:09,989 Speaker 1: to buy at the moment. 240 00:12:10,010 --> 00:12:11,500 Speaker 2: So she's a very good notion of what it's like. 241 00:12:11,960 --> 00:12:15,380 Speaker 1: Sarah, if I said to you, I'm in a position 242 00:12:15,420 --> 00:12:17,680 Speaker 1: to buy my first property anywhere in Australia, any type, 243 00:12:18,980 --> 00:12:20,500 Speaker 1: And I said to you, would you like to advise 244 00:12:20,540 --> 00:12:22,240 Speaker 1: me the nature of that property? 245 00:12:22,679 --> 00:12:24,320 Speaker 2: What would you say? What would you say? 246 00:12:24,340 --> 00:12:28,040 Speaker 3: Okay, well, if you're just buying your first property, what 247 00:12:28,070 --> 00:12:31,130 Speaker 3: I would say is those granny flats, you know, those 248 00:12:31,190 --> 00:12:33,089 Speaker 3: single level dwellings. 249 00:12:33,170 --> 00:12:34,010 Speaker 2: They're. 250 00:12:35,110 --> 00:12:36,030 Speaker 3: A really good buy. 251 00:12:36,050 --> 00:12:39,090 Speaker 1: That's really interesting. You mentioned that Stuart Weems was on 252 00:12:39,130 --> 00:12:42,950 Speaker 1: the show last, maybe last week, and he said the 253 00:12:42,990 --> 00:12:43,510 Speaker 1: same thing. 254 00:12:43,850 --> 00:12:45,570 Speaker 2: He had a villa units. 255 00:12:45,830 --> 00:12:46,550 Speaker 3: Villa units. 256 00:12:46,840 --> 00:12:50,300 Speaker 2: Unfashionable, but perhaps lucrative option. 257 00:12:50,360 --> 00:12:52,780 Speaker 3: Oh, very much so. And actually fashionable, I would say 258 00:12:52,820 --> 00:12:56,120 Speaker 3: at the moment, especially for first home buyers. I've Seen 259 00:12:56,179 --> 00:12:59,540 Speaker 3: at auctions, them going for $ 100, 000 over a certain price. 260 00:13:00,000 --> 00:13:03,510 Speaker 3: So they're just a smaller house, essentially. And some of 261 00:13:03,530 --> 00:13:04,530 Speaker 3: them even have a backyard. 262 00:13:04,570 --> 00:13:06,970 Speaker 1: And they're in every city. Every city in Australia is 263 00:13:07,010 --> 00:13:08,429 Speaker 1: full of them. As you know, folks, they were built 264 00:13:08,450 --> 00:13:09,729 Speaker 1: from the 60s to the 80s. 265 00:13:09,730 --> 00:13:10,850 Speaker 2: We're talking about, you know. 266 00:13:10,870 --> 00:13:13,210 Speaker 1: The suburban street. There are six fillet units, three on 267 00:13:13,270 --> 00:13:15,330 Speaker 1: one side, three on the other. Road down the middle, 268 00:13:15,390 --> 00:13:18,429 Speaker 1: six bins on the front. But Stuart was making the point, 269 00:13:18,450 --> 00:13:19,360 Speaker 1: why don't you buy one? 270 00:13:19,370 --> 00:13:22,270 Speaker 2: You literally get land value. You get a garden. You 271 00:13:22,290 --> 00:13:24,860 Speaker 2: get a garage. You basically get a house. What's wrong 272 00:13:24,880 --> 00:13:26,140 Speaker 2: with them? They're not cool. 273 00:13:27,600 --> 00:13:31,079 Speaker 3: They're not cool, I guess, but I'm 27 and I 274 00:13:31,100 --> 00:13:34,220 Speaker 3: think they're pretty cool as opposed to getting a unit. 275 00:13:34,580 --> 00:13:36,700 Speaker 3: They're actually pretty cool to me. 276 00:13:37,080 --> 00:13:38,040 Speaker 2: Yeah, well, it's funny. 277 00:13:38,300 --> 00:13:41,250 Speaker 1: It might surprise you, but I lived in one for 278 00:13:41,270 --> 00:13:43,189 Speaker 1: a year and a half, just a year and a 279 00:13:43,230 --> 00:13:47,290 Speaker 1: half ago because we built a house on the street 280 00:13:47,650 --> 00:13:52,680 Speaker 1: and we lived on, luckily enough, we rented on the 281 00:13:52,700 --> 00:13:54,809 Speaker 1: street that we were building the house on. And it 282 00:13:54,990 --> 00:13:55,990 Speaker 1: ended up being there for a year and a half 283 00:13:56,030 --> 00:13:59,530 Speaker 1: during COVID, if you don't mind. But it was very 284 00:13:59,570 --> 00:14:02,349 Speaker 1: interesting to me. I'd never been in a villa unit before. 285 00:14:02,690 --> 00:14:06,969 Speaker 2: And they were so trouble-free, first of all. 286 00:14:06,990 --> 00:14:11,550 Speaker 1: And the other people, there was only six in the 287 00:14:11,570 --> 00:14:17,040 Speaker 1: block and it was all very, all terribly, everyone was well-behaved. 288 00:14:17,100 --> 00:14:20,360 Speaker 2: Everyone was very interested in keeping it nice. It wasn't 289 00:14:20,380 --> 00:14:21,620 Speaker 2: particularly good. 290 00:14:21,640 --> 00:14:23,760 Speaker 1: It wasn't particularly bad, but it did strike me, gosh, 291 00:14:24,700 --> 00:14:27,580 Speaker 1: A couple moved in next door, a couple with a. 292 00:14:27,560 --> 00:14:30,240 Speaker 2: Baby, and it struck me like they had absolutely everything. 293 00:14:30,260 --> 00:14:33,220 Speaker 2: A bit of back garden. Front garden tends to be common. 294 00:14:33,720 --> 00:14:36,110 Speaker 2: Back garden tends to be your own. But you get 295 00:14:36,120 --> 00:14:40,210 Speaker 2: a lot back for your buck. And they were keenly priced, 296 00:14:40,270 --> 00:14:43,770 Speaker 2: I thought, compared to apartments and townhouses. Very interesting. Okay, 297 00:14:43,790 --> 00:14:46,250 Speaker 2: I love your answer. Now, tell me, while. 298 00:14:46,050 --> 00:14:50,670 Speaker 1: We have you in the studio, about your recent story 299 00:14:50,700 --> 00:14:54,490 Speaker 1: where you found an apartment in Melbourne, metropolitan Melbourne, and 300 00:14:54,530 --> 00:15:02,330 Speaker 1: it's sold, sold for $ 99, 000. And everyone says, what was 301 00:15:02,350 --> 00:15:03,390 Speaker 1: the issue with that apartment? 302 00:15:03,460 --> 00:15:05,340 Speaker 2: What was the issue and what was the story? 303 00:15:06,480 --> 00:15:10,260 Speaker 3: Well, obviously there's a little asterisk next to this sale, 304 00:15:10,400 --> 00:15:15,340 Speaker 3: but yes, essentially an apartment in Frankston sold for $ 99, 000 305 00:15:14,580 --> 00:15:23,600 Speaker 3: and some in this building have actually sold for even less, $ 70, 000. 306 00:15:19,640 --> 00:15:22,200 Speaker 3: So it's formerly called the Ambassador Hotel, which was a 307 00:15:22,380 --> 00:15:25,800 Speaker 3: ritzy wedding venue back in the 80s and 90s, but 308 00:15:25,850 --> 00:15:29,250 Speaker 3: then later became a bit of a hub for vandalism, 309 00:15:29,530 --> 00:15:34,190 Speaker 3: antisocial behaviour, a couple of incidents, drug-punished incidents. 310 00:15:34,750 --> 00:15:35,490 Speaker 2: That was notorious. 311 00:15:35,730 --> 00:15:41,400 Speaker 3: Paramedics apparently wouldn't go unless they were assisted by police. Wow. However, 312 00:15:41,420 --> 00:15:44,740 Speaker 3: the agent that I spoke to said that it has 313 00:15:45,100 --> 00:15:48,420 Speaker 3: since cleaned up a lot. Another caveat is that there 314 00:15:48,460 --> 00:15:52,220 Speaker 3: is an overlay. We can't technically make one of those 315 00:15:52,400 --> 00:15:56,560 Speaker 3: properties your principal place of residence. However, the agent said 316 00:15:56,620 --> 00:15:57,740 Speaker 3: that that was ridiculous. 317 00:15:57,800 --> 00:15:58,720 Speaker 2: I never heard of such a thing. 318 00:15:58,920 --> 00:16:01,990 Speaker 3: And lots of people were living there and having one 319 00:16:02,010 --> 00:16:04,570 Speaker 3: after 10 years. So, yes, it does have a bit 320 00:16:04,590 --> 00:16:08,370 Speaker 3: of a troubled past. However, the latest one that sold 321 00:16:08,550 --> 00:16:12,000 Speaker 3: was actually to an older gentleman and he And he 322 00:16:12,060 --> 00:16:14,800 Speaker 3: said that they're a great investment and apparently steps from 323 00:16:14,830 --> 00:16:15,520 Speaker 3: the beach as well. 324 00:16:15,810 --> 00:16:16,690 Speaker 2: I know it. 325 00:16:16,770 --> 00:16:19,630 Speaker 1: I cycle past it sometimes. Yes, it's on the main road. 326 00:16:20,370 --> 00:16:23,650 Speaker 1: But the point, folks, is not so much where it 327 00:16:24,210 --> 00:16:25,550 Speaker 1: is because we don't think we'd all. 328 00:16:25,510 --> 00:16:25,970 Speaker 2: Rush to it. 329 00:16:26,050 --> 00:16:31,170 Speaker 1: But it's a market and people will overpay and underpay. 330 00:16:31,470 --> 00:16:33,130 Speaker 1: And I think if there's a theme on the show 331 00:16:33,150 --> 00:16:36,990 Speaker 1: today from Sarah, It's that if you find that property 332 00:16:37,030 --> 00:16:40,630 Speaker 1: that in some way doesn't conventionally fit what everyone else wants, 333 00:16:40,690 --> 00:16:42,360 Speaker 1: then you may actually get value. 334 00:16:42,390 --> 00:16:43,300 Speaker 2: So for instance, on. 335 00:16:43,240 --> 00:16:47,340 Speaker 1: The broad overall team, everyone's running around looking for the, 336 00:16:47,480 --> 00:16:49,860 Speaker 1: they want the pretty house on the beauty street, or 337 00:16:49,880 --> 00:16:51,980 Speaker 1: they want the apartment with the view or whatever. And 338 00:16:52,000 --> 00:16:54,860 Speaker 1: there are these villa units in every suburb in Australia, 339 00:16:55,320 --> 00:16:58,490 Speaker 1: and they have land value, which every investor should know about. 340 00:16:59,090 --> 00:17:02,390 Speaker 2: And they are seen from several guests on our show. 341 00:17:03,070 --> 00:17:05,290 Speaker 2: It's two in a row now. That's great value at 342 00:17:05,310 --> 00:17:06,320 Speaker 2: the moment, so keep that in mind. 343 00:17:06,710 --> 00:17:08,600 Speaker 1: And the other thing is, obviously, if you aren't prepared 344 00:17:08,619 --> 00:17:11,639 Speaker 1: to take a risk, every property is different, and it's 345 00:17:11,680 --> 00:17:13,880 Speaker 1: not like shares. All common bank shares are the same, 346 00:17:13,900 --> 00:17:16,680 Speaker 1: but not all property investments are the same. I thought 347 00:17:16,700 --> 00:17:21,320 Speaker 1: it was amazing that someone actually bought a property for. 348 00:17:20,260 --> 00:17:23,440 Speaker 2: $ 99, 000. 349 00:17:21,320 --> 00:17:25,060 Speaker 1: Lock, stock, and barrel for Metropolitan Melbourne. How wrong can 350 00:17:25,119 --> 00:17:26,260 Speaker 1: you go? You can't go wrong. 351 00:17:26,320 --> 00:17:27,820 Speaker 3: And he even said he doesn't even need to put 352 00:17:27,840 --> 00:17:29,620 Speaker 3: them on the market. I mean, you can imagine why. 353 00:17:29,640 --> 00:17:32,419 Speaker 3: There's a waiting list of people trying to get to 354 00:17:32,460 --> 00:17:33,000 Speaker 3: this block now. 355 00:17:33,980 --> 00:17:37,740 Speaker 2: There you go. In this market? It's fascinating. Absolutely fascinating. 356 00:17:41,180 --> 00:17:42,480 Speaker 1: Okay, we'll be back in a moment with a couple 357 00:17:42,510 --> 00:17:57,880 Speaker 1: of questions. Hello, welcome back to the Australian's Money Puzzle podcast. 358 00:17:57,900 --> 00:18:05,879 Speaker 1: James Grabby with Sarah Petty. We are talking property and 359 00:18:05,900 --> 00:18:08,640 Speaker 1: we are going to have some property questions now. 360 00:18:09,060 --> 00:18:10,400 Speaker 2: Actually, this first one is property. 361 00:18:10,900 --> 00:18:14,980 Speaker 1: It's from Luke and it's about super. The reason I've 362 00:18:15,020 --> 00:18:17,169 Speaker 1: just dropped this in here is just to tell you 363 00:18:17,230 --> 00:18:21,770 Speaker 1: folks that we really did have a big response, needless 364 00:18:21,810 --> 00:18:24,489 Speaker 1: to say, from the show, How Much Should You Have 365 00:18:24,550 --> 00:18:27,370 Speaker 1: in Super? And just like I mentioned on the newspaper, 366 00:18:27,410 --> 00:18:29,090 Speaker 1: I reckon we could run a show called How Much 367 00:18:29,130 --> 00:18:30,969 Speaker 1: Should You Have in Super? I reckon we could run 368 00:18:31,060 --> 00:18:34,790 Speaker 1: one every month and we would probably have endless listeners, 369 00:18:34,850 --> 00:18:38,889 Speaker 1: because it's a question that there is no answer to, unfortunately, 370 00:18:38,950 --> 00:18:42,189 Speaker 1: no simple answer. It's different for every single person, but 371 00:18:42,230 --> 00:18:44,730 Speaker 1: everybody really wants to know. And it was a really 372 00:18:44,770 --> 00:18:46,929 Speaker 1: good show with Ashley Owen, and if you've missed it, 373 00:18:47,530 --> 00:18:50,409 Speaker 1: it would be a good idea to listen back to it. 374 00:18:51,210 --> 00:18:55,020 Speaker 2: Because, as I say, it's a key issue. It's particularly 375 00:18:55,060 --> 00:18:55,610 Speaker 2: a key. 376 00:18:55,430 --> 00:19:00,919 Speaker 1: Issue in our society, in our economy, because super is compulsory. 377 00:19:01,810 --> 00:19:05,010 Speaker 1: and 11.5% of your salary is going into this every year. 378 00:19:05,010 --> 00:19:06,510 Speaker 2: 11.5% of your salary. 379 00:19:06,570 --> 00:19:09,270 Speaker 1: So you want to know as much as you can 380 00:19:09,310 --> 00:19:11,649 Speaker 1: about it. Check out that show with Ashley Owen. One 381 00:19:11,670 --> 00:19:13,760 Speaker 1: of the many questions, we'll deal with the questions on 382 00:19:13,890 --> 00:19:17,000 Speaker 1: Thursday's show, but one of the many questions was from Luke, 383 00:19:17,280 --> 00:19:20,880 Speaker 1: who says, as well as maximizing last financial year's concessional 384 00:19:20,920 --> 00:19:25,820 Speaker 1: contributions to Super, I've accidentally put in about. 385 00:19:24,920 --> 00:19:28,159 Speaker 2: $ 200 more than I was allowed. What will happen next? 386 00:19:29,270 --> 00:19:32,270 Speaker 2: The ATO will come to your house and take you away, Luke. No, 387 00:19:32,350 --> 00:19:32,910 Speaker 2: I'm only kidding. 388 00:19:33,510 --> 00:19:36,149 Speaker 1: This is never advice. This is general information. And I 389 00:19:36,750 --> 00:19:38,429 Speaker 1: don't have a second opinion here on the show. I 390 00:19:38,450 --> 00:19:41,330 Speaker 1: would just say that occasionally over the years in my 391 00:19:41,430 --> 00:19:44,969 Speaker 1: deep enthusiasm to contribute as much as possible to super, 392 00:19:45,630 --> 00:19:48,410 Speaker 1: I have gone over once or twice a tiny bit 393 00:19:49,030 --> 00:19:51,990 Speaker 1: and I'm happy to say I wasn't fined or anything. 394 00:19:52,030 --> 00:19:55,780 Speaker 1: You can be fined, whether it's their benevolence that they 395 00:19:55,820 --> 00:19:58,540 Speaker 1: let you off with small numbers or whether their systems 396 00:19:58,600 --> 00:20:00,120 Speaker 1: are so accurate, I don't know. 397 00:20:00,940 --> 00:20:03,340 Speaker 2: Obviously, you try to avoid it. And I suppose, indeed, 398 00:20:03,380 --> 00:20:04,300 Speaker 2: just a fair play. 399 00:20:05,060 --> 00:20:07,420 Speaker 1: What you could do, obviously, is if you're putting in 400 00:20:07,420 --> 00:20:10,629 Speaker 1: 30,000 a year, And one year you put in 31,000, 401 00:20:10,630 --> 00:20:14,710 Speaker 1: you didn't mean to, then put in 29,000 the next, 402 00:20:14,810 --> 00:20:16,390 Speaker 1: and if it ever should come up with the ATO, 403 00:20:16,430 --> 00:20:19,169 Speaker 1: you could say that I honestly tried to reconcile the 404 00:20:19,210 --> 00:20:19,610 Speaker 1: issue there. 405 00:20:19,810 --> 00:20:26,160 Speaker 2: Okay, now back to the property questions. Marnie, M-A-R-N-I-E. 406 00:20:26,700 --> 00:20:30,820 Speaker 1: On the issue of lenders' mortgage insurance, it seems to 407 00:20:30,859 --> 00:20:35,280 Speaker 1: me the most unfair slug on homebuyers as the default 408 00:20:35,340 --> 00:20:40,070 Speaker 1: rates are tiny. Surely the insurance risks are tiny too. Yeah, 409 00:20:40,090 --> 00:20:41,040 Speaker 1: I'd say they are. 410 00:20:41,910 --> 00:20:44,879 Speaker 2: But because the banks made it compulsory, it's become a 411 00:20:44,920 --> 00:20:49,040 Speaker 2: big business. Lenders' mortgage insurance, you mentioned it a couple 412 00:20:49,060 --> 00:20:49,500 Speaker 2: of times. 413 00:20:49,540 --> 00:20:52,040 Speaker 1: Could you tell readers and business owners what it is 414 00:20:52,200 --> 00:20:56,459 Speaker 1: and why it's a thorn in the shoe of the 415 00:20:56,540 --> 00:20:57,500 Speaker 1: average homebuyer? 416 00:20:57,940 --> 00:21:01,629 Speaker 3: Yeah, so lenders' mortgage insurance is insurance a lender takes 417 00:21:01,790 --> 00:21:05,210 Speaker 3: out to insure itself against the risk of a borrower 418 00:21:05,750 --> 00:21:08,030 Speaker 3: being unable to meet their loan repayments. 419 00:21:08,130 --> 00:21:08,410 Speaker 2: Okay, okay. 420 00:21:09,260 --> 00:21:09,500 Speaker 3: Yes. 421 00:21:09,520 --> 00:21:13,540 Speaker 1: It doesn't happen very often. The records show Australian homebuyers 422 00:21:13,580 --> 00:21:14,740 Speaker 1: don't default very often. 423 00:21:14,880 --> 00:21:16,020 Speaker 2: Very, very, very rarely. 424 00:21:16,160 --> 00:21:19,440 Speaker 3: I think especially in an environment of high interest rates, 425 00:21:19,500 --> 00:21:23,340 Speaker 3: most banks are willing to refinance. It's very much the last. 426 00:21:23,680 --> 00:21:24,100 Speaker 2: Okay. 427 00:21:24,960 --> 00:21:30,710 Speaker 1: Actually, I've been doing some very interesting work of late 428 00:21:31,150 --> 00:21:33,070 Speaker 1: on what's going on with mortgage holders and how they're 429 00:21:33,090 --> 00:21:35,890 Speaker 1: trying to survive through this particular period of what would 430 00:21:35,930 --> 00:21:36,690 Speaker 1: seem to be high interest. 431 00:21:37,580 --> 00:21:40,440 Speaker 2: Relatively high rates. Relatively high. 432 00:21:40,460 --> 00:21:42,660 Speaker 1: They're not sky high, by the way, on a historical basis, 433 00:21:42,680 --> 00:21:45,640 Speaker 1: but they're relatively high. But two things are happening. People 434 00:21:45,720 --> 00:21:49,409 Speaker 1: are flicking to interest-only investors when they can. What I 435 00:21:49,430 --> 00:21:52,669 Speaker 1: thought was really interesting was about mortgage extenders. Have you 436 00:21:52,730 --> 00:21:57,790 Speaker 1: seen that, where an increasing amount of people are extending 437 00:21:57,850 --> 00:22:00,659 Speaker 1: the life of their mortgage? So what you do is 438 00:22:00,700 --> 00:22:04,700 Speaker 1: you say, I cannot find any savings. I've got this mortgage. 439 00:22:04,980 --> 00:22:07,219 Speaker 1: How am I going to manage it? And what they 440 00:22:07,240 --> 00:22:09,719 Speaker 1: do is they renegotiate with the bank and they add 441 00:22:09,760 --> 00:22:13,870 Speaker 1: five years. And then suddenly your payments. So we made 442 00:22:13,900 --> 00:22:16,330 Speaker 1: out that basically for the average person in that position, 443 00:22:16,850 --> 00:22:20,630 Speaker 1: their payments come down about 200 bucks a month. But 444 00:22:20,690 --> 00:22:22,869 Speaker 1: their loan goes up. 445 00:22:23,190 --> 00:22:27,050 Speaker 2: On $ 150, 000 over the fullness of time. But people say, hey, 446 00:22:27,109 --> 00:22:28,250 Speaker 2: you know, I've faced that problem. 447 00:22:29,170 --> 00:22:29,870 Speaker 3: It's a future. 448 00:22:30,369 --> 00:22:33,869 Speaker 2: It's a picking the can down the road exercise. But anyway. 449 00:22:34,340 --> 00:22:35,300 Speaker 2: It is what's happening. 450 00:22:35,340 --> 00:22:37,740 Speaker 1: And if you wonder how are people paying their mortgages 451 00:22:38,420 --> 00:22:42,649 Speaker 1: when there's such rampant inflation, especially at the consumer side 452 00:22:42,710 --> 00:22:45,449 Speaker 1: and the discretionary spending side, well, that's what's going on. 453 00:22:45,490 --> 00:22:47,030 Speaker 1: There's a lot of that going on behind the scenes. 454 00:22:47,490 --> 00:22:47,870 Speaker 3: Okay. 455 00:22:48,270 --> 00:22:51,270 Speaker 1: That was the lender's mortgage insurance, which again, unfortunately, is 456 00:22:51,310 --> 00:22:54,110 Speaker 1: unavoidable for most people unless you've got a fucking huge deposit. 457 00:22:55,030 --> 00:22:56,929 Speaker 1: There's not much you can do about that, folks. But 458 00:22:56,970 --> 00:22:59,620 Speaker 1: you can keep in mind that you can refinance. You 459 00:22:59,680 --> 00:23:02,200 Speaker 1: can fit two interests only if you're an investor, say, 460 00:23:02,240 --> 00:23:04,649 Speaker 1: and you're struggling with the investment you have. And you 461 00:23:04,670 --> 00:23:06,430 Speaker 1: can extend the life of your mortgage if you were 462 00:23:06,470 --> 00:23:11,080 Speaker 1: a home owner struggling with your insurance. I think they're 463 00:23:11,130 --> 00:23:15,540 Speaker 1: useful for people to know, useful for techniques. Okay, final 464 00:23:15,619 --> 00:23:18,419 Speaker 1: question was from Josh. 465 00:23:19,560 --> 00:23:22,480 Speaker 2: Is the government's shared equity scheme up and running? 466 00:23:23,100 --> 00:23:26,520 Speaker 1: Do you recommend it? Thank you, Josh. We don't give advice, 467 00:23:27,380 --> 00:23:31,180 Speaker 1: but the government, to be precise, the Albanese government's shared 468 00:23:31,200 --> 00:23:33,160 Speaker 1: equity scheme is really different than all the other. 469 00:23:33,060 --> 00:23:36,820 Speaker 2: Grants, isn't it? Because the deal is you and the 470 00:23:36,859 --> 00:23:42,490 Speaker 2: government buy the house together. Yes. Does it exist yet? No. 471 00:23:42,510 --> 00:23:45,110 Speaker 3: So it's held up in Senate at the moment, but 472 00:23:45,530 --> 00:23:48,230 Speaker 3: if everything goes to plan, it will pass and be 473 00:23:48,570 --> 00:23:50,390 Speaker 3: up and running by the end of this year. 474 00:23:50,830 --> 00:23:51,169 Speaker 2: Okay. 475 00:23:51,290 --> 00:23:52,050 Speaker 3: All right. I see. 476 00:23:52,070 --> 00:23:54,790 Speaker 2: So it's not actually, okay, not out yet. Not out yet. 477 00:23:55,470 --> 00:23:56,540 Speaker 3: Can you apply? I wonder. 478 00:23:57,080 --> 00:23:57,379 Speaker 2: I think so. 479 00:23:57,400 --> 00:23:59,960 Speaker 3: Well, Queensland is set to be the first to roll 480 00:24:00,100 --> 00:24:03,580 Speaker 3: out the shared equity scheme. So it's not up and 481 00:24:03,600 --> 00:24:05,100 Speaker 3: running yet, but it will be. 482 00:24:05,540 --> 00:24:08,550 Speaker 1: And so how it works is that you and the 483 00:24:08,609 --> 00:24:10,870 Speaker 1: government together will buy the house. And how does the 484 00:24:11,010 --> 00:24:11,450 Speaker 1: deal end? 485 00:24:11,950 --> 00:24:17,850 Speaker 3: Basically, government contributes up to 40% towards your mortgage loan. 486 00:24:18,609 --> 00:24:20,620 Speaker 3: You can put down as little as 2%. However, that 487 00:24:20,740 --> 00:24:22,780 Speaker 3: also means on the other side, when you sell your home, 488 00:24:22,800 --> 00:24:26,500 Speaker 3: they will be able to take the size of the pie. 489 00:24:26,680 --> 00:24:28,419 Speaker 2: Or 20% or whatever. 490 00:24:28,520 --> 00:24:31,480 Speaker 3: Or however much they contribute. Yes, they'll be able to 491 00:24:31,540 --> 00:24:34,380 Speaker 3: take that in terms of your equity. But it also 492 00:24:34,420 --> 00:24:37,470 Speaker 3: works the same way as if the property price goes down. 493 00:24:38,150 --> 00:24:39,750 Speaker 3: So just the amount that they'll be able to take 494 00:24:39,830 --> 00:24:40,340 Speaker 3: from that. 495 00:24:40,780 --> 00:24:41,040 Speaker 2: Yeah. 496 00:24:41,520 --> 00:24:44,360 Speaker 1: Right. I know a lot of the Australians, a lot 497 00:24:44,380 --> 00:24:47,400 Speaker 1: of the readers and commenters did not like sharing anything 498 00:24:47,420 --> 00:24:50,860 Speaker 1: with the government. But again, if you were, you know, 499 00:24:50,880 --> 00:24:53,200 Speaker 1: if you really needed to get to buy that place 500 00:24:53,260 --> 00:24:55,140 Speaker 1: and if you didn't have any other option. 501 00:24:55,540 --> 00:24:55,700 Speaker 3: Yeah. 502 00:24:56,800 --> 00:25:01,240 Speaker 1: I studied it closely because I wrote on it. Interestingly, 503 00:25:01,300 --> 00:25:03,820 Speaker 1: in the UK, they had this game and it was 504 00:25:03,880 --> 00:25:09,660 Speaker 1: actually created by the Conservatives, not the Labour government, because Conservatives, 505 00:25:10,020 --> 00:25:11,500 Speaker 1: as you know, were in for 14 years in a 506 00:25:11,520 --> 00:25:14,720 Speaker 1: row there. And so they introduced this scheme, and then 507 00:25:14,760 --> 00:25:15,199 Speaker 1: they had a. 508 00:25:15,200 --> 00:25:17,280 Speaker 2: House of Lords do a review of the scheme. 509 00:25:17,520 --> 00:25:21,590 Speaker 1: And basically, they came out with a conclusion that it 510 00:25:21,630 --> 00:25:25,650 Speaker 1: didn't do much for the provision of housing in the market. 511 00:25:25,670 --> 00:25:28,090 Speaker 1: You often get that sort of conclusion on a macro level, 512 00:25:28,109 --> 00:25:30,470 Speaker 1: but for an individual, they're just saying, it doesn't work 513 00:25:30,490 --> 00:25:33,909 Speaker 1: for me. So I think for listeners, it's worth checking 514 00:25:33,950 --> 00:25:34,469 Speaker 1: out that. 515 00:25:34,530 --> 00:25:36,629 Speaker 3: Shared equity scheme. Yeah, you know, it depends on what 516 00:25:36,650 --> 00:25:39,369 Speaker 3: you do. If you're just purely trying to find a 517 00:25:39,410 --> 00:25:42,210 Speaker 3: home and get into the market, then it could be 518 00:25:42,230 --> 00:25:45,520 Speaker 3: an option, not giving any advice, of course. 519 00:25:45,540 --> 00:25:48,300 Speaker 2: It could be an option anywhere in the country, as 520 00:25:48,359 --> 00:25:51,719 Speaker 2: long as it's their first home. Is that the deal? Yes, absolutely. 521 00:25:51,780 --> 00:25:52,340 Speaker 3: So, yeah. 522 00:25:52,600 --> 00:25:52,899 Speaker 1: Right. 523 00:25:53,460 --> 00:25:56,399 Speaker 2: So you get perhaps shared equity on a villa unit. 524 00:25:56,680 --> 00:25:57,100 Speaker 1: Yes. 525 00:25:57,560 --> 00:25:59,300 Speaker 2: Somewhere. There you go. 526 00:26:00,310 --> 00:26:01,250 Speaker 3: It's a property. 527 00:26:01,290 --> 00:26:03,430 Speaker 2: The new hot property. So you heard it here first, folks. 528 00:26:03,630 --> 00:26:05,450 Speaker 2: You heard it here, actually. You asked me, too. But 529 00:26:05,470 --> 00:26:07,350 Speaker 2: you're hearing it here quite regularly. 530 00:26:07,750 --> 00:26:08,130 Speaker 1: All right. 531 00:26:08,210 --> 00:26:11,510 Speaker 2: Very good. Hey, thank you very much, Sarah. Very, very interesting, 532 00:26:11,630 --> 00:26:12,230 Speaker 2: as always. 533 00:26:12,750 --> 00:26:17,050 Speaker 1: It's a great round you have out there, and it's 534 00:26:17,310 --> 00:26:21,740 Speaker 1: something that everyone, everybody's interested in. I watch what you do, 535 00:26:21,780 --> 00:26:23,880 Speaker 1: and I find some of the stories really, really interesting. 536 00:26:23,940 --> 00:26:28,100 Speaker 1: I told the one about the $ 99, 000 apartment, particularly so. 537 00:26:33,100 --> 00:26:35,080 Speaker 2: Thanks a lot, Sarah. Great to have you on the show. 538 00:26:35,119 --> 00:26:38,090 Speaker 2: We'll talk again. Thank you, folks. 539 00:26:38,730 --> 00:26:43,250 Speaker 1: Do keep those emails coming. The address is themoneypuzzleattheaustralian.com.au. 540 00:26:43,570 --> 00:26:44,409 Speaker 2: Talk to you soon. 541 00:27:00,380 --> 00:27:00,929 Speaker 1: Thank you.