Speaker 1: Hello, one, Welcome to The Australian's Money Puzzle podcast. I'm
Speaker 1: James Kirkby, the World's editor at The Australian. Welcome aboard everybody.
Speaker 1: And the last time that I had Sarah Petty on
Speaker 1: the show, she's the property reporter on the Great Response
Speaker 1: and she gave a particular perspective of jen Z in
Speaker 1: the property market. And she's back today and we are
Speaker 1: going to talk about some red hot issues in property
Speaker 1: for property investors, for anyone in the world of property.
Speaker 1: Just now, rentals still rising, insurance going through the roof.
Speaker 1: We're going to look at a popular but I have
Speaker 1: to tell you debatable concept that you see reported all
Speaker 1: the time where they say you can buy cheaper than
Speaker 1: rent in certain suburbs, and I see that's starting to
Speaker 1: happen again now. I see those stories coming through and
Speaker 1: I just want to ask Sarah about the reality of
Speaker 1: that and a few other things, including the rather spectacular
Speaker 1: story she had recently where she spawned an apartment that
Speaker 1: was for sale in Melbourne Metropolitan Melbourne for ninety nine
Speaker 1: thousand dollars. H story behind that, one story behind all
Speaker 1: these stories, isn't there? How are you Sarah I'm good.
Speaker 2: How are you, James good good.
Speaker 1: Thanks for coming on the show. Thank you great to
Speaker 1: have me on again. I saw where you had something recently, rents,
Speaker 1: we know are climbing all the time, and the vacancy
Speaker 1: grates still very very tight, and I don't see any
Speaker 1: great changes to that. But when we looked at the
Speaker 1: recent inflation figures and the inflation figures, maybe you recall,
Speaker 1: folks were a surprise, the negative surprise. It's one of
Speaker 1: the reasons that they're talking about staying up. The gloff
Speaker 1: going higher was that the four percent annualized circulation was
Speaker 1: driven by two things in particular. One was rentals, both
Speaker 1: related to properly. One was rentals spental costs. Was insurance
Speaker 1: and house insurance has really taken off on a trajectory
Speaker 1: that is a slightly disconcerting imagined for anybody.
Speaker 2: Well, I can say that in Victoria, building insurance has
Speaker 2: been increased, so domestic building insurance is going to go
Speaker 2: up another sixty five percent. Essentially, the building insurance already
Speaker 2: went up eleven months ago by about forty three percent,
Speaker 2: So you can imagine that this is going to have
Speaker 2: a pretty big effect on those that are wanting to
Speaker 2: build their own hire.
Speaker 1: Can you repeat the numbers? What happened last year, what's
Speaker 1: going to happen this year?
Speaker 2: So in September last year there was already an increase
Speaker 2: to domestic building insurance by forty three percent, and then
Speaker 2: this year, about a month ago, insurance has been increased
Speaker 2: by another sixty five percent.
Speaker 1: So that's extraordinary. Exactly, it's multiple of artentulation is I
Speaker 1: know this is an issue across the nation, and I
Speaker 1: know that from the national inflation figures, So what's the explanation.
Speaker 2: Essentially, I think they're trying to crack down on builders.
Speaker 2: I mean, there is a lot of talk about there
Speaker 2: being some dodgy building practices out there, so that's the
Speaker 2: Victorian Managed Insurance Authorities position. But in terms ofercussions, I
Speaker 2: think is that those that are looking to build their
Speaker 2: own home builders are likely to pass on those extra
Speaker 2: costs to them.
Speaker 1: So they're cracked down on dodgy builders by charging all
Speaker 1: builders higher insurance. Yes, that's terrible. I didn't know about that.
Speaker 1: It hasn't come up before. I did notice that the
Speaker 1: insurance figures were just completely out of line. This is
Speaker 1: an outgoing problem across the investment system. Really in an
Speaker 1: entirely different world. In financial planning and financial advice, for instance,
Speaker 1: they have a new scheme of last resort. It's calle
Speaker 1: where the company that you've got advice from boz under
Speaker 1: you can now get to cover on that. Basically it's
Speaker 1: a form of insurance. But it's the same problem. They're
Speaker 1: charging the existing advisors for the sins of your life
Speaker 1: of other advisors, and here they are charging existing builders
Speaker 1: for sort of the doings of other bad builders. Okay,
Speaker 1: I see.
Speaker 2: I will also add that they're also trying to crack
Speaker 2: down on there's obviously been an insolvencies for the Davis
Speaker 2: being one of them, So yeah, insolvencies, inflation and skilled
Speaker 2: worker shortgages are also another reason why the premiums have increased.
Speaker 2: So basically to ensure home use are protected, that's what
Speaker 2: they say.
Speaker 1: So but they protect they may get anything dearer for them, they're.
Speaker 2: Going to be the ones that pay probably.
Speaker 1: Gee, yeah, that's so difficult. And one of the things
Speaker 1: about that in terms of we also mentioned on the
Speaker 1: show and a couple of people got very hot onto
Speaker 1: the collar in recent times about lenders mortgage insurance. It's
Speaker 1: a similar thing that everybody must pay. But you know,
Speaker 1: the figures suggest that in fact, the defaults are tiny
Speaker 1: on this even at the moment. But just to cover
Speaker 1: off on that about the builders, so there is a
Speaker 1: number of builders going under I I know that insolvencies
Speaker 1: are at a record. I know that bankruptcies are at
Speaker 1: a record. There are the highest since Assets started collecting figures.
Speaker 1: And I was actually on really this morning we were
Speaker 1: talking about how also there's a death hot line in
Speaker 1: Sydney and the managers of that death hotline said that
Speaker 1: they have had more complaints and concern calls this year
Speaker 1: already than they had all of last year. So for
Speaker 1: first time buyers, have the only sense of that segment
Speaker 1: of people who go to own to build their own
Speaker 1: house because the're traditionally seen as some sort of a
Speaker 1: cheaper way to do.
Speaker 2: I mean, from my understanding, there has been you know,
Speaker 2: enticing offers in order for people to buy that sort
Speaker 2: of pizzlind and then build their own home. But in
Speaker 2: terms of increased construction costs, increased labor shortages, that isn't
Speaker 2: at all an enticing option, especially for young buyers such
Speaker 2: as myself.
Speaker 1: Or it used to be. So people feel it's so
Speaker 1: sort of written.
Speaker 2: With risk with written with risky absolutely and even just
Speaker 2: enjoying that your is built you know, to the best
Speaker 2: standard as well.
Speaker 1: So yes, I can imagine, Yeah, I see. Okay, So
Speaker 1: that was that one, folks. I wanted to just put
Speaker 1: that on the table because I noticed the insurance popping out,
Speaker 1: if you like, on the inflation numbers. And of course
Speaker 1: turns out well, the property market is at the heart
Speaker 1: of it built on rentals and insurance. Now on another
Speaker 1: issue and sort of story that we will regularly and
Speaker 1: maya koppa And I've never actually done this story, but
Speaker 1: the Australian run stories like this, there are sun run stories.
Speaker 1: Everyone runs stories like this. It's a bit eye catcher
Speaker 1: where people say or reporter says, hey, look, you know
Speaker 1: some RESEARCHU comes out and says, hey, af there's six
Speaker 1: suburbs in Brisbane, or there's twelve suburbs in Melbourne where
Speaker 1: you it's cheaper to buy than rent. And what really
Speaker 1: cut my eye recently was inner City Carleton in the
Speaker 1: middle of Melbourne. Attractive suburb by anyone's estimation, is on
Speaker 1: this list. But I just want to ask you, have
Speaker 1: you ever looked at it and do you find those
Speaker 1: Is it fair actually to put that in front of
Speaker 1: people and get them more excited. I mean, can we
Speaker 1: tell this the whole story.
Speaker 2: I recently did a story on this. I mean, look, yeah,
Speaker 2: I mean, it's always good to know your options, and
Speaker 2: I guess I think everybody is, especially first time buyers,
Speaker 2: are looking for any positivity that they can find in
Speaker 2: the market at the moment. But I recently wrote a
Speaker 2: story so based on some data that we've received, and yeah,
Speaker 2: Carlton was one of them. Something important to note, and
Speaker 2: there are a couple of disclaims. This is when we
Speaker 2: look at data like this, you've got to think about
Speaker 2: the composition of these suburbs. So places like Carlton. Another
Speaker 2: couple that I had on the list where it would
Speaker 2: be cheaper to buy them would be trave and Core
Speaker 2: in Olburn. So yeah, obviously come speaking from a Victoria centricity.
Speaker 2: These are all places that are very close to the
Speaker 2: city and have a large amount of units. And when
Speaker 2: you have a large number of units, that drags the
Speaker 2: median dwellings down. Yes, so some of the datas yes,
Speaker 2: if a buyer is put down a twenty percent deposit,
Speaker 2: these were some of the suburbs that would cost less
Speaker 2: to essentially serve as a mortgage rather than rent.
Speaker 1: Okay, have you got a list of them there? Yeah,
Speaker 1: I've got a few. Yes, your four or five favorites.
Speaker 2: Okay, again this is a Victoria, but Abbotsford, Chockland, North
Speaker 2: Melbourne trapping for notting Hill and box Hill.
Speaker 1: Okay, and this would be mirrored in other cities around
Speaker 1: the country. But the part I've got to drive that
Speaker 1: here is so the thing is when we see these reports,
Speaker 1: what they say is the interest you would pay on
Speaker 1: your mortgage is less than the rent you would pay
Speaker 1: to the property owner. And that is true as far
Speaker 1: as it goes. It is true. But the thing is,
Speaker 1: when you own a place, develop more cost than interest.
Speaker 1: Do people fully understand that? Think?
Speaker 2: I mean, it depends on you. There's a lot of
Speaker 2: costs and there is quite a large part to intrigue
Speaker 2: in terms of actually getting into the market. So and
Speaker 2: depending on what government schemes you're eligible for. But yeah,
Speaker 2: it's essentially and.
Speaker 3: Why it is I would say to people listening when
Speaker 3: you see those reports, take it on board, but just
Speaker 3: don't be under the oppression that you can match this
Speaker 3: very simply the mortgage repayments against the rent payments.
Speaker 1: You can't unfortunately, because there are running costs and I'm
Speaker 1: going to pick a number on the average apartment's will
Speaker 1: be ten to twenty grand a year of just costs
Speaker 1: this body corporate costs, there's insurance costs LMI, then there's
Speaker 1: mortgage insurance, all these various things that will come up.
Speaker 1: And I suppose the other thing about that. In a way,
Speaker 1: it's great to see that you can't do that, and
Speaker 1: that there are places you can buy that cost list
Speaker 1: and they do to rent. But what the real situation
Speaker 1: here is that the rent is so high. Yes, the
Speaker 1: rents are so crazy.
Speaker 2: Yes, I think on average rents across the nation have
Speaker 2: gone up about ten percent in the last twelve months.
Speaker 2: So yes, that's true. And yeah, like what you said,
Speaker 2: if due to Signify unit, you do have all these
Speaker 2: extra costs, like what you call things, Yeah, everything, Yes,
Speaker 2: rents of skyrocketed, so that's the main point. You know,
Speaker 2: some people are paying fifty dollars extra a week that compared.
Speaker 1: To two months ago. Yes, I asked you. The last
Speaker 1: time you were on, we were talking about the unreported
Speaker 1: the side of the property market where people bid so
Speaker 1: they go win and the person says, hey, this rental
Speaker 1: is so much per week, and the person chupatches them
Speaker 1: in the corridor and say, that's what if I toss
Speaker 1: an extra ten twenty dollars at it per week? And
Speaker 1: does that happen? And does does it work?
Speaker 2: Yes, it happens all the time. An agent can't say,
Speaker 2: you know, you should add an extra ten dollars onto
Speaker 2: your offer, and they kind of advise it that. But
Speaker 2: renters are more than willing to, more than allowed to
Speaker 2: add an extra ten dollars twenty dollars your week to
Speaker 2: get ahead of the pack. But in the area that
Speaker 2: in the first housing statement in September last year, they
Speaker 2: are trying to outraw all types of biding.
Speaker 1: At the moment, you can't solicit it to The agent
Speaker 1: can't say, hey, you want to pay more, but if
Speaker 1: you volunteer, you can volunteer. Fine. I see, okay, very good,
Speaker 1: it's really interesting. Well take short breaks back in a moment.
Speaker 1: Hello and welcome back to The Australian's Money Puzzle podcast.
Speaker 1: I'm James Kirby, the wether editor at The Australian. It's Tuesday.
Speaker 1: I'm talking properly property investment. And my guest today is
Speaker 1: Sarah Petty, property reporter from the hars Son who is
Speaker 1: out there folks at the auctions on the street, talking
Speaker 1: to the agents, the buyer's advocates, the buyers, which I
Speaker 1: find the most interesting aspect of a lot of the
Speaker 1: stories she does. She's talking to the people who are
Speaker 1: actually trying to investor trying to buy at the moment,
Speaker 1: so she's very good notion of what it's like. Sara,
Speaker 1: if I said to you, I'm in a position to
Speaker 1: buy my first property anywhere in Australia, any type, and
Speaker 1: I said to you, would you like to advise me
Speaker 1: the nature of that property? What would you say? What
Speaker 1: would you say?
Speaker 2: Okay, well, if you're just buying your first property, what
Speaker 2: I would say is there's grunny flats, you know, there's
Speaker 2: single level dwellings. They're really good bye.
Speaker 1: That's really interesting. You mentioned that Stuart Williams was on
Speaker 1: the show last maybe last week and he said the
Speaker 1: same thing, and he had a villa units. Villa units
Speaker 1: unfashionable but perhaps lucrative options.
Speaker 2: Oh very much so, and actually fashionable I would say
Speaker 2: at the moment, especially for first time buyers. I've seen
Speaker 2: it options then going for one hundred thousand dollars a price.
Speaker 2: So they're just a smaller house essentially, and some of
Speaker 2: them even have a backyard.
Speaker 1: And they're in every city. Every city in Australia is
Speaker 1: full of them, as you know, folks that were built
Speaker 1: from the sixties to be he's talking about, you know,
Speaker 1: the suburban street there are six billi units, three on
Speaker 1: one side, three and the other roll down the middle
Speaker 1: sixpence front. But Stewart was making body, why do you
Speaker 1: buy one? Get you literally get land value and you
Speaker 1: get a guard and you get a garage. You to
Speaker 1: get a house? What's wrong with them? They're not cool?
Speaker 2: They're not cool, I guess, but I think they're pretty
Speaker 2: cool as opposed to getting in a unit. They're actually
Speaker 2: pretty cool today.
Speaker 1: Yeah, what's funny? I am I surprising. I lived in
Speaker 1: one for a year and a half, just a year
Speaker 1: and a half ago, because we built a house on
Speaker 1: the street and we lived on the Luckily enough, we
Speaker 1: were rent on the street that we're building the house
Speaker 1: on and it ended up in there for a year
Speaker 1: and a half during COVID develop mine. But it was
Speaker 1: very interesting to be I had never been in a villa,
Speaker 1: unit four, and they were so trouble free, first of all,
Speaker 1: and the other people there was only six in the block,
Speaker 1: and it was all very or terbably. Everyone was well behaved,
Speaker 1: everyone was very interested in being it nice. It wasn't
Speaker 1: particularly good, it wasn't particularly bad, but it did strike me, gosh,
Speaker 1: a couple moved in next door, a couple with a baby,
Speaker 1: and it's drumthing like, yeah, absolutely everything a little back guard,
Speaker 1: front garden tends to be common. Back garden tends to
Speaker 1: be your own. But you get a lot for your bank,
Speaker 1: for your book, and they were keenly prized, I thought,
Speaker 1: compared to apartments in townhouses. Very interesting. Okay, I love
Speaker 1: your answer. Now tell me while we have you in
Speaker 1: the studio about your recent story where you found an
Speaker 1: apartment in Melbourne Metropolitan Melbourne and it's sold sod for
Speaker 1: ninety nine thousand dollars. An everyone said, what was the
Speaker 1: issue with that apartment? What was the issue and what
Speaker 1: was the story?
Speaker 2: Well, obviously there's a little asterix next to this sale,
Speaker 2: but yes, essentially, an apartment in Brankstein sold for ninety
Speaker 2: nine thousand dollars and some in this building have actually
Speaker 2: sold even less seventy thousand dollars. So it's formerly called
Speaker 2: the Ambassador Hotel, which was a ritzy wedding venue back
Speaker 2: in the eighties and nineties, but then later became a
Speaker 2: bit of a hub for vandalism, anfi social behavior, a
Speaker 2: couple of incidents, drug foot incidents. Paramedics apparently wouldn't go
Speaker 2: unless they were assisted by police. So, however, the agent
Speaker 2: that I spoke to said that it has since cleaned
Speaker 2: up a lot. Another caveat is that there is a
Speaker 2: bit an overlay. We can't technically make one of those
Speaker 2: properties your principal place of reticidence. However, the agent said
Speaker 2: that that was ridiculous and it was a lot of such
Speaker 2: a thing and lots of people. We're living there ten years,
Speaker 2: so yes, it does have a bit of a troubled past. However,
Speaker 2: the latest one that sold was actually to an older gentleman,
Speaker 2: and yeah, and he said that they're a great investment
Speaker 2: and apparently steps from the beach as well, So.
Speaker 1: I know I cycled past it sometimes. Yes, it's on
Speaker 1: the main road, but the point of focus is not
Speaker 1: so much in particular. We're released because we don't think
Speaker 1: it all rush to it but it's a market and
Speaker 1: people will overpay and under and pay. And I think
Speaker 1: if there's a theme on the show today from Sarah,
Speaker 1: it's that if you find that property that in some
Speaker 1: way doesn't conventionally fit everybody everyone else wants, then you
Speaker 1: may actually get value. So for instance, on the broad
Speaker 1: Overall team, everyone's running around looking for the they want
Speaker 1: the pretty house on the briny street, or they want
Speaker 1: the apartner with the view or whatever. And there are
Speaker 1: these villa units in every suburb in Australia and they
Speaker 1: have land value which every investor should know about, and
Speaker 1: they they are seen from several guests on our show.
Speaker 1: It's two in a row. Now, that's great value at
Speaker 1: the moment. It keeps that in mind. And the other
Speaker 1: thing is, obviously if you aren't prepared to take the risk.
Speaker 1: Every property is different and it's not like shares. All
Speaker 1: Calmonic Bank shares the same, but not on property that
Speaker 1: investments aren't the same. I thought it was amazing that
Speaker 1: someone don't actually bought them the property for ninety nine
Speaker 1: thousand box sock and barrel, Metropolitan Melbourne. How wrong can
Speaker 1: you go?
Speaker 2: You can't go wrong, And you even said you don't
Speaker 2: even need to put them on the market. I mean
Speaker 2: you can imagine why there's a waiting list for people
Speaker 2: trying to get into this block.
Speaker 1: Now there you good in this market. It's fascinating, absolutely fascinating. Okay,
Speaker 1: we'll be back and along a couple of questions. Hello,
Speaker 1: Welcome back to the Australian's Money Puzzle podcast James Gadby
Speaker 1: with Sarah Petty. We are talking property and we are
Speaker 1: going to have some probably questions now. Actually this first
Speaker 1: one is properly it's from Luke and it's about Super.
Speaker 1: The reason I've just dropped this in here is just
Speaker 1: to tell you folks that we really did have a
Speaker 1: big response, needless to say from the show how much
Speaker 1: should you have in Super? And just like I mentioned
Speaker 1: on the newspaper, I reckon we could run a show
Speaker 1: calle how much should you have in Super? I reckon
Speaker 1: we could run one every month and we probably have
Speaker 1: endless listeners because it's because it's a question that there
Speaker 1: is no answer to, unfortunately, no simple answer. It's different
Speaker 1: for every single person, but everybody really wants to know.
Speaker 1: And that was a really good show with Ashley Owned
Speaker 1: and if you've missed it, and it would be a
Speaker 1: good idea to listen back to it because, as I say,
Speaker 1: it's a key issue. It's particularly a key issue in
Speaker 1: our in our society and our economy because because as
Speaker 1: compulsory and the leven and a half said, your salary
Speaker 1: is going into this every every year level and a
Speaker 1: half percent of your salary. So you want to know
Speaker 1: as much as you can about to check out that
Speaker 1: show with ashually on one of the many questions we'll
Speaker 1: do with the questions on Thursday's show, But one of
Speaker 1: the many questions was from Luke, who says, as well
Speaker 1: as maximizing last financial years concessional contributions to Super, I've
Speaker 1: accidentally put in about two hundred dollars more than I
Speaker 1: was allowed. What will happen? The ATO will come to
Speaker 1: your house and take you away, Luke. No, I'm mony kidding.
Speaker 1: This is never advised. This is general information, and I
Speaker 1: don't have a second opinion here on the show. I
Speaker 1: would just say that occasionally, over the years, in my
Speaker 1: deep enthusiasm to contribute as much as possible to Super,
Speaker 1: I have gone over once or twice a tiny bit,
Speaker 1: and I'm happy to say I wasn't fined or anything
Speaker 1: you can be fined. Whether it's their benevolence that they
Speaker 1: let you off with small numbers or whether their systems
Speaker 1: are so accurate, I don't know. Obviously, you try to
Speaker 1: avoid it, and I suppose it's just a fair play.
Speaker 1: What you could do, obviously, is if you're putting in
Speaker 1: thirty thousand a year and one year you put in
Speaker 1: thirty one thousand you didn't mean to, then put in
Speaker 1: twenty nine the next and that ever should come up
Speaker 1: with the ato, you could say that ironestly tried to
Speaker 1: reconcile the issue there. Okay, now back to the property questions.
Speaker 1: Marni Mr ni E on the issue of lenders mortgage
Speaker 1: insurance seemed to me the most unfair slug on home buyers.
Speaker 1: As a default rates are tiny, surely the insurance risks
Speaker 1: are tiny too. Yeah, I'd say there are, but it's
Speaker 1: because the bank's medic composory. It's become a big business
Speaker 1: lender's mortgage insurance. You mentioned it a couple of times, like,
Speaker 1: could you better tell readers at this business what it
Speaker 1: is and why it's why it's a horn in the
Speaker 1: shoe of the average home buyer. Yeah.
Speaker 2: So, lender's mortgage insurance. This insurance and Linda takes out
Speaker 2: to ensure itself against the risks of a borrower being
Speaker 2: unable to meet their loan payments.
Speaker 1: Yes, it doesn't have very often. The records show Australian
Speaker 1: owned buyers don't be fall very often, very very very rarely.
Speaker 2: I think, especially in you know, an environment of igh
Speaker 2: interest rates, most banks are willing to refine it. It's
Speaker 2: very much the last.
Speaker 1: Okay, actually, you know, I've been doing some very I
Speaker 1: have been doing I think some very interesting work of
Speaker 1: Liz on what's going on with mortgage childrens and how
Speaker 1: they're trying to survive through this particular period of what
Speaker 1: would seem to be high relatively high blitz relatively high
Speaker 1: and not sky high by the way, on a historical basis,
Speaker 1: but the relatively high. The two things are happening. People
Speaker 1: are flicking to interest only investors when they can or
Speaker 1: I thought was really interesting was about mortgage extendards. Did
Speaker 1: you have be seen that where people are where an
Speaker 1: increasing amount of people are extending the life of their
Speaker 1: More so, what you do is you say, I cannot
Speaker 1: find any savings, I've got this mortgage. How am I
Speaker 1: going to manage it. And what they do is the
Speaker 1: renegotiate with the bank and they add five years and
Speaker 1: then suddenly your your payments. So we made out that
Speaker 1: basics for the average person in that position, their payments
Speaker 1: come down about two hundred bucks a month, but their
Speaker 1: loan goes up about one hundred and fifty thousand dollars
Speaker 1: over there over the fullness of time. But people say, hey,
Speaker 1: you know, I face that problem. It's a future it's
Speaker 1: a picking the can down the road exercise. But anyway,
Speaker 1: it is what's happening. And if you wonder how are
Speaker 1: people paying their mortgages when there's such rampant inflation, especially
Speaker 1: at the consumer side and the discretioniony spending side, well
Speaker 1: that's what's going on. There's a lot of that going
Speaker 1: on behind the scenes. Okay, that was the lender's mortgage insurance,
Speaker 1: which again, unfortunately is unavoidable for most people unless you
Speaker 1: fucking huge deposit. There's not what you can do there
Speaker 1: about netfolks. But you can keep in mind that you
Speaker 1: can read finance. You can fit too interest only if
Speaker 1: you're an investors, say, and you're struggling with the investment
Speaker 1: you have and you can extend the life of your
Speaker 1: mortgage if you were a home owner struggling with your insurance.
Speaker 1: That's I think they're useful for people to know, useful
Speaker 1: sort of techniques. Okay. Final question, what's from Josh is
Speaker 1: the government's shared equity being up and running? Do you
Speaker 1: recommend it? Thank you, Josh, And we don't, you know,
Speaker 1: we don't give advice, but the government, to be precise,
Speaker 1: the iban as government shared Equity same. It's really different
Speaker 1: than all the inner grants. Is that because the data
Speaker 1: is you and the government buy the house together. It's
Speaker 1: basically yes, does it exist yet and no.
Speaker 2: So it's held up in Senate at the moment, but
Speaker 2: if everything goes to plan, it will pass and be
Speaker 2: up and running by the end of this year.
Speaker 1: Okay, all right, I see. So it's not actually okay
Speaker 1: that out yet? Yes, can you apply?
Speaker 2: I wonder I think the well Queensland is set to
Speaker 2: be the first two role out the shared Equity scheme,
Speaker 2: so it's not up and running yet, but it will be.
Speaker 1: And so how it works is that you and the
Speaker 1: government together were buy the house. And how does the leend?
Speaker 2: Basically, the government contributes after forty percent towards your mortgage loan,
Speaker 2: you can put down as little as two percent. However,
Speaker 2: that also means on the other side, when you sell
Speaker 2: your home, they will be able to ex slice the
Speaker 2: pie whatever or however much they Yes, they'll be able
Speaker 2: to take that in terms of your equity, but it
Speaker 2: also works the same way as it probably down so
Speaker 2: does the amount that they will be able to take
Speaker 2: from that.
Speaker 1: Yeah, right, I know a lot of the Australians of
Speaker 1: the readers and commentaries did not like sharing anything with
Speaker 1: the government. But again, if you were you know, if
Speaker 1: you really needed to get to buy that place and
Speaker 1: if you didn't have any other option, I started closely
Speaker 1: kind of I wrote on it. Interestingly, in the UK
Speaker 1: they had this scheme and it was actually it was
Speaker 1: actually created by the Conservatives, not the Labor government. Conservatives,
Speaker 1: as you know, we're in for fourteen years in a
Speaker 1: rolder and so they introduced this. Then that they had
Speaker 1: a House lords to a review of the scheme and
Speaker 1: basically they came out with a conclusion that it didn't
Speaker 1: do much for the provision of housing and market. You
Speaker 1: often get that sort of conclusion on a macro level,
Speaker 1: but for an individual different thing doesn't work for me,
Speaker 1: so I think for listeners it's worth checking out that
Speaker 1: share scheme.
Speaker 2: Yeah, you know, it depends on what you do. If
Speaker 2: you just purely trying to find her home and get
Speaker 2: into the market, then it could be an option. Not
Speaker 2: give you any advice, of.
Speaker 1: Course, anyone anywhere in the country as long as it's
Speaker 1: their first home is at the deed, yes, absolutely so. Right,
Speaker 1: so you get perhaps shared equity on a bill a unit, yes,
Speaker 1: and is a property the new heart property. So you
Speaker 1: heard it here first, folks, believe you heard it here
Speaker 1: actually last week too. You're hearing it here quite frankly.
Speaker 1: All right, very good, Hey, thank you very much, Sarah.
Speaker 1: Very very interesting as always, it's a great round you
Speaker 1: have out there and it's something that everyone everybody's interested in.
Speaker 1: And I watched show what you do when I find
Speaker 1: some of the story is really really interesting. I told
Speaker 1: you one about the nineteen nine Tells dollar polishes particularly,
Speaker 1: so thanks a lotter. Great to have you on the show.
Speaker 1: We've talked again. Thank you, folks. Do keep those emails
Speaker 1: coming the addresses the Money Puzzle at the Australian dot
Speaker 1: com dot au. Thank you soon.