1 00:00:09,320 --> 00:00:12,520 Speaker 1: Hello and welcome to the Australians Money Becuzzle podcast. 2 00:00:12,680 --> 00:00:15,000 Speaker 2: James Kurty here with the editor at The Australian. 3 00:00:15,080 --> 00:00:18,320 Speaker 1: Welcome aboard everybody, and I have mister week. 4 00:00:18,400 --> 00:00:19,360 Speaker 2: Thank you very much. 5 00:00:20,040 --> 00:00:24,000 Speaker 1: James Girard who handled and ran the show. Two episodes 6 00:00:24,079 --> 00:00:26,280 Speaker 1: last week, very good. I've listened to them both, very 7 00:00:26,360 --> 00:00:30,320 Speaker 1: very interesting. I want to pick up something actually that 8 00:00:30,400 --> 00:00:33,720 Speaker 1: we've been talking about on the show for some time. 9 00:00:34,080 --> 00:00:37,920 Speaker 1: And look, this could be on the show. We talked 10 00:00:38,440 --> 00:00:41,680 Speaker 1: this time last year and for a long time about 11 00:00:41,720 --> 00:00:44,640 Speaker 1: how Perth, for instance, as a property investor, if you 12 00:00:44,680 --> 00:00:47,080 Speaker 1: were prepared to invest. 13 00:00:46,760 --> 00:00:50,159 Speaker 2: Interstate Perth was the market to be in. 14 00:00:50,240 --> 00:00:54,480 Speaker 1: And you know, it really has been an exceptional market 15 00:00:54,640 --> 00:00:58,160 Speaker 1: for anyone who did that, to the point actually that 16 00:00:58,320 --> 00:01:01,720 Speaker 1: this week they're talking about parts of the market in overheating. 17 00:01:02,000 --> 00:01:05,319 Speaker 1: It's a small market in relation to the bigger market 18 00:01:05,360 --> 00:01:08,240 Speaker 1: I'm going to talk about today, which is Melbourne. So 19 00:01:08,319 --> 00:01:11,000 Speaker 1: Melbourne's the second biggest market in the country. It's five 20 00:01:11,040 --> 00:01:15,679 Speaker 1: million people. It's going to be bigger than Sydney relatively soon. 21 00:01:15,959 --> 00:01:18,919 Speaker 1: It's a sort of inexorable march of the housing estates 22 00:01:18,920 --> 00:01:21,360 Speaker 1: at the edges of the city, which can't happen in 23 00:01:21,400 --> 00:01:23,000 Speaker 1: Sydney because of national forests. 24 00:01:23,600 --> 00:01:24,840 Speaker 2: But what it means. 25 00:01:24,640 --> 00:01:28,039 Speaker 1: Is that it should be a hot property market. 26 00:01:28,440 --> 00:01:28,800 Speaker 2: It's not. 27 00:01:28,959 --> 00:01:32,160 Speaker 1: It's the opposite. It's the weakest market in Australia. And 28 00:01:32,480 --> 00:01:34,800 Speaker 1: the question from an investor point of view is now, 29 00:01:34,959 --> 00:01:37,319 Speaker 1: is this the bargain not just of the year, but 30 00:01:37,440 --> 00:01:40,399 Speaker 1: is this one of the real bargains perhaps of the 31 00:01:40,480 --> 00:01:45,680 Speaker 1: decade in property for investors in Australia or actually is 32 00:01:45,959 --> 00:01:50,920 Speaker 1: the state sinking as some would suggest and searching the 33 00:01:51,000 --> 00:01:53,559 Speaker 1: numbers in property are pretty bad. It's the weakest price 34 00:01:53,640 --> 00:01:57,560 Speaker 1: market increases, is the weakest in Australia. It is the 35 00:01:57,600 --> 00:02:01,680 Speaker 1: weakest investment market. And beyond investors are leaving the state. 36 00:02:01,840 --> 00:02:05,360 Speaker 1: And we see that right across all the news media 37 00:02:05,520 --> 00:02:08,040 Speaker 1: reporting there quite faithfully in recent times. 38 00:02:08,120 --> 00:02:09,960 Speaker 2: So I thought, well, let's have a look at that. 39 00:02:10,040 --> 00:02:12,320 Speaker 1: Let's also have a look at immigration cuts, what they 40 00:02:12,400 --> 00:02:16,200 Speaker 1: might do for property or do against property, and a 41 00:02:16,240 --> 00:02:18,000 Speaker 1: few other issues that I want to pick up on 42 00:02:18,080 --> 00:02:20,680 Speaker 1: with our guest today who is a regular on the show, 43 00:02:22,440 --> 00:02:26,600 Speaker 1: Bruce Brammel of Bruce Brammel, Financial Financial Advisor, author and 44 00:02:26,840 --> 00:02:28,080 Speaker 1: operator extraordinaire. 45 00:02:28,200 --> 00:02:31,639 Speaker 3: How are you, Bruce, Well, thanks James yourself. 46 00:02:31,680 --> 00:02:35,720 Speaker 1: Good, thank you. Well, you should know you've written books 47 00:02:35,760 --> 00:02:37,520 Speaker 1: on this area. You're in the thick of it and 48 00:02:37,560 --> 00:02:42,240 Speaker 1: you are in Melbourne based property and financial advisor. So 49 00:02:42,440 --> 00:02:45,600 Speaker 1: Bruce Brammel, I put you on the hot season. I say, 50 00:02:47,000 --> 00:02:50,080 Speaker 1: is this market just slowly thinking or is it actually 51 00:02:50,120 --> 00:02:54,200 Speaker 1: an opportunity for investors all around Australia. It's the second 52 00:02:54,200 --> 00:02:57,120 Speaker 1: biggest city and it's it's hanging behind everybody. Is it 53 00:02:57,200 --> 00:02:57,880 Speaker 1: going to catch up? 54 00:02:59,160 --> 00:02:59,359 Speaker 3: Look? 55 00:02:59,360 --> 00:03:03,440 Speaker 4: I think inevitably it will. I'm probably a straw hats 56 00:03:03,440 --> 00:03:07,760 Speaker 4: in winter sort of guy. It go to investment. I 57 00:03:07,760 --> 00:03:11,560 Speaker 4: think in a relative sense Melbourne is probably undervalued at 58 00:03:11,560 --> 00:03:16,399 Speaker 4: the moment from an investment Since James, I've only ever 59 00:03:17,560 --> 00:03:21,639 Speaker 4: believed that there are three markets worthwhile pursuing because they've 60 00:03:21,639 --> 00:03:25,760 Speaker 4: got economies that are big enough. When they are Sydney, Melbourne, Brisbane. 61 00:03:26,240 --> 00:03:29,679 Speaker 3: At the moment the property prices are Sydney. 62 00:03:31,280 --> 00:03:34,120 Speaker 4: What probably prices should be is Sydney big gap, Melbourne 63 00:03:34,160 --> 00:03:37,000 Speaker 4: reasonable gap, Brisbane, followed by I don't really care too 64 00:03:37,080 --> 00:03:40,760 Speaker 4: much after that but Adelaide. But there are the three 65 00:03:40,760 --> 00:03:43,600 Speaker 4: property markets that I speak to clients about and that 66 00:03:43,600 --> 00:03:45,160 Speaker 4: we are assist clients. 67 00:03:44,880 --> 00:03:45,320 Speaker 3: Buying in. 68 00:03:46,960 --> 00:03:50,440 Speaker 4: At the moment, the gap is Sydney big gap Brisbane 69 00:03:50,560 --> 00:03:55,120 Speaker 4: and Melbourne is sitting third. Now in my opinion, that 70 00:03:55,320 --> 00:03:59,920 Speaker 4: is a pricing error that's against the natural order of the. 71 00:04:01,160 --> 00:04:01,880 Speaker 3: Natural order of things. 72 00:04:01,960 --> 00:04:05,480 Speaker 4: Is Sydney big gap Melbourne gap reason gap to Brisbane. Now, 73 00:04:06,320 --> 00:04:12,880 Speaker 4: back in about twenty fourteen, following the state government up 74 00:04:12,880 --> 00:04:15,840 Speaker 4: there and they closing schools and they're shutting hospitals and 75 00:04:15,880 --> 00:04:19,600 Speaker 4: sacking teachers and nurses, the same as Canada done in Melbourne. 76 00:04:19,640 --> 00:04:24,440 Speaker 4: In the early mid nineties, Brisbane's property price fell to 77 00:04:24,520 --> 00:04:27,680 Speaker 4: about fifth or six That was Sydney Melbourne. I think 78 00:04:27,720 --> 00:04:33,800 Speaker 4: at the time it was sort of Perth, Camera Adelaide wherever. 79 00:04:33,960 --> 00:04:38,400 Speaker 4: But Brisbane was sitting about fifth or sixth, and we said, well, 80 00:04:39,040 --> 00:04:42,080 Speaker 4: there's a pricing are going on here. So through twenty fourteen, fifteen, 81 00:04:42,120 --> 00:04:46,840 Speaker 4: sixteen seventeen, I think into eighteen, we've brought a lot 82 00:04:46,839 --> 00:04:52,440 Speaker 4: of property with clients in Brisbane and that's proved to 83 00:04:52,440 --> 00:04:57,080 Speaker 4: be corrects. Brisbane suddenly subsequently post twenty twenty and twenty 84 00:04:57,120 --> 00:04:59,479 Speaker 4: twenty one started moving back into sort of third spot 85 00:04:59,480 --> 00:05:02,960 Speaker 4: where it should and has now overtaken Melbourne in the 86 00:05:03,000 --> 00:05:03,640 Speaker 4: last six months. 87 00:05:03,720 --> 00:05:06,000 Speaker 3: Or so it is now sitting second. 88 00:05:07,640 --> 00:05:10,800 Speaker 4: The natural order of things is out of Melbourne's Probably 89 00:05:10,839 --> 00:05:14,040 Speaker 4: prices are being impacted by a bunch of things, including 90 00:05:14,920 --> 00:05:19,800 Speaker 4: the land tax increases which have come through in recent time. 91 00:05:19,880 --> 00:05:22,279 Speaker 4: It's only in the last few weeks or a month 92 00:05:22,640 --> 00:05:25,000 Speaker 4: or so I think that the people started being started 93 00:05:25,000 --> 00:05:28,120 Speaker 4: to hit with their bills. But obviously people been known 94 00:05:28,560 --> 00:05:30,359 Speaker 4: have known that this was coming for some time and 95 00:05:30,400 --> 00:05:31,279 Speaker 4: have been reacting to that. 96 00:05:31,640 --> 00:05:34,720 Speaker 1: But you're getting basically you're getting higher interest rates and 97 00:05:34,839 --> 00:05:38,240 Speaker 1: you're getting higher taxes combining the same time. 98 00:05:39,320 --> 00:05:41,159 Speaker 4: I think for a lot of you know, there's a 99 00:05:41,160 --> 00:05:42,960 Speaker 4: lot of people who have been hit with land tax 100 00:05:43,000 --> 00:05:47,000 Speaker 4: for the first time in Melbourne. If you're an investor, 101 00:05:47,040 --> 00:05:50,560 Speaker 4: when they dropped it from land tax from thresholder three 102 00:05:50,600 --> 00:05:52,720 Speaker 4: hundred thousand to fifty thousand, it's just going to pick 103 00:05:52,760 --> 00:05:56,360 Speaker 4: up anybody who has anybody. Yeah, but a lot of 104 00:05:56,400 --> 00:06:00,400 Speaker 4: people who might have were already paying land tax multiple 105 00:06:00,400 --> 00:06:02,840 Speaker 4: properties or something like that. You know, they're probably saying 106 00:06:02,839 --> 00:06:05,080 Speaker 4: a doubling of the land tax that they are paying. 107 00:06:05,160 --> 00:06:08,640 Speaker 4: And land tax is a tax deduction, so the state 108 00:06:08,680 --> 00:06:11,760 Speaker 4: government receives the money, but you get back a portion 109 00:06:11,839 --> 00:06:16,000 Speaker 4: of it from the from the federal government, so you know, 110 00:06:16,160 --> 00:06:18,440 Speaker 4: but it's still it's an extra increase at the time 111 00:06:18,480 --> 00:06:22,159 Speaker 4: of fire, inflation and higher interstrates or normal interest rates or. 112 00:06:22,200 --> 00:06:24,400 Speaker 1: So if you were a marginal, if you were only 113 00:06:24,440 --> 00:06:26,760 Speaker 1: hanging on, it could push you out. 114 00:06:27,880 --> 00:06:28,080 Speaker 3: Yeah. 115 00:06:28,080 --> 00:06:30,400 Speaker 4: Absolutely, I think that's what we're saying in Melbourne at 116 00:06:30,440 --> 00:06:33,640 Speaker 4: the moment, in particular. You know, people who are seeing 117 00:06:33,640 --> 00:06:37,560 Speaker 4: those those higher costs of things. It starts having, it's 118 00:06:37,560 --> 00:06:39,719 Speaker 4: having more. Is it part of having an impact that 119 00:06:39,760 --> 00:06:44,000 Speaker 4: Your question is is it a bargain of our time 120 00:06:44,240 --> 00:06:47,600 Speaker 4: or people who are buying are they are they loss? 121 00:06:48,480 --> 00:06:50,320 Speaker 4: I think sort of medium to long term. I think 122 00:06:50,400 --> 00:06:54,000 Speaker 4: Melbourne is probably underpriced in a relative sense compared to 123 00:06:54,040 --> 00:06:55,960 Speaker 4: the other term markets which we would invest in, which 124 00:06:55,960 --> 00:06:56,640 Speaker 4: is Sydney in Britain. 125 00:06:57,320 --> 00:07:02,120 Speaker 1: Okay, so but you don't TechEd in the way that 126 00:07:02,160 --> 00:07:08,279 Speaker 1: you detected and encouraged investors who were open to investing 127 00:07:08,320 --> 00:07:12,560 Speaker 1: anywhere in the country into Brisbane. Are you at the 128 00:07:12,560 --> 00:07:15,040 Speaker 1: start of that process now or has it even begune 129 00:07:16,240 --> 00:07:20,640 Speaker 1: investing in Brisbane investing in Melbourne? Melbourne on the basis 130 00:07:20,680 --> 00:07:22,440 Speaker 1: that the natural order will restore itself. 131 00:07:22,840 --> 00:07:24,800 Speaker 4: Yeah, yep, that's that's one of the reasons. So there 132 00:07:24,840 --> 00:07:27,480 Speaker 4: was a period back I think it was two. 133 00:07:27,280 --> 00:07:30,760 Speaker 3: Thousand and one, two three, somewhere around there where. 134 00:07:32,320 --> 00:07:33,840 Speaker 4: The city or might have been the late nineties. I 135 00:07:33,840 --> 00:07:36,760 Speaker 4: think it was early noughties where where Melbourne got within 136 00:07:36,880 --> 00:07:40,600 Speaker 4: three thousand dollars of Sydney. Yeah, I think it was 137 00:07:40,600 --> 00:07:42,440 Speaker 4: three hundred and six versus surrounding and three or maybe 138 00:07:42,440 --> 00:07:44,679 Speaker 4: thro round and three versus three hundred for median property price. 139 00:07:44,720 --> 00:07:47,720 Speaker 4: And that was another signal that the natural order things 140 00:07:47,720 --> 00:07:51,360 Speaker 4: should be Sydney big gap, Melbourne reasonable gap to And 141 00:07:51,360 --> 00:07:55,400 Speaker 4: that was probably a screaming buy time for Sydney property 142 00:07:55,400 --> 00:07:57,960 Speaker 4: prices because in a relative all, in a relative sense, 143 00:07:58,000 --> 00:08:00,880 Speaker 4: so relative sense they had to pick up and sure 144 00:08:00,960 --> 00:08:02,520 Speaker 4: enough for data wasn't a financial law. 145 00:08:02,680 --> 00:08:05,120 Speaker 3: It's almost still still a journalist. 146 00:08:05,160 --> 00:08:08,840 Speaker 4: But there there are times where you just say the 147 00:08:08,920 --> 00:08:11,120 Speaker 4: natural order of things fall out of place, and I 148 00:08:11,200 --> 00:08:13,800 Speaker 4: think we're probably in one of those situations now with Melbourne. 149 00:08:14,040 --> 00:08:15,080 Speaker 2: That's really interesting. 150 00:08:15,200 --> 00:08:18,120 Speaker 1: It's like it's like the property version of the of 151 00:08:18,160 --> 00:08:20,640 Speaker 1: the share market. Isn't this where they have the reversion 152 00:08:20,640 --> 00:08:24,520 Speaker 1: to the mean, and that that can be a very 153 00:08:24,560 --> 00:08:27,840 Speaker 1: reliable way through for value investors and the other thing, 154 00:08:27,880 --> 00:08:32,080 Speaker 1: of course, is that interstate investing is so much easier now. 155 00:08:32,240 --> 00:08:34,800 Speaker 1: I mean, you really had to be quite a sophisticated 156 00:08:34,800 --> 00:08:38,200 Speaker 1: operator once upon time to do that, but these days, 157 00:08:39,000 --> 00:08:42,520 Speaker 1: with everything online and digital, et cetera, it is not 158 00:08:42,800 --> 00:08:45,960 Speaker 1: difficult at all. I have done it, and the difference 159 00:08:46,280 --> 00:08:48,360 Speaker 1: in fact it was Brisbane, and the difference between having 160 00:08:48,440 --> 00:08:51,600 Speaker 1: a properly investment properly in Melbourne and Brisbane was very 161 00:08:51,800 --> 00:08:55,640 Speaker 1: very very little. When I sold that properly, there was 162 00:08:55,679 --> 00:09:00,200 Speaker 1: it was. There was some particular state differences, but they 163 00:09:00,200 --> 00:09:02,760 Speaker 1: were not significant at all. And I think more and 164 00:09:02,840 --> 00:09:05,439 Speaker 1: more people are are doing that and that notion I 165 00:09:05,480 --> 00:09:09,160 Speaker 1: think we can be in the active investor in property books. 166 00:09:09,880 --> 00:09:12,560 Speaker 1: I'm sure a lot of our listeners are of this. 167 00:09:14,080 --> 00:09:15,440 Speaker 2: Frame of mind that they are. 168 00:09:15,400 --> 00:09:17,920 Speaker 1: Agnostic if you like, as to where the property is, 169 00:09:18,679 --> 00:09:22,600 Speaker 1: and if you take that strict investment criteria and that approach, 170 00:09:22,720 --> 00:09:26,120 Speaker 1: then I think it is definitely worth having a look 171 00:09:26,160 --> 00:09:28,679 Speaker 1: at the Melbourne market now in the way that we 172 00:09:28,679 --> 00:09:31,839 Speaker 1: were talking about looking at Earth a year a year 173 00:09:31,880 --> 00:09:34,920 Speaker 1: and a half ago. Okay, one other thing I suppose 174 00:09:34,960 --> 00:09:39,360 Speaker 1: on the big picture, Bruce for property, if you take 175 00:09:39,360 --> 00:09:43,960 Speaker 1: it that the prices how home prices in particular, and 176 00:09:44,000 --> 00:09:46,840 Speaker 1: the entire and the entire economy, if you like, have 177 00:09:46,960 --> 00:09:52,000 Speaker 1: been underpinned by immigration and immigration numbers, and it does 178 00:09:52,080 --> 00:09:56,160 Speaker 1: explain to a significant degree the the one percent vacancy 179 00:09:56,240 --> 00:10:01,880 Speaker 1: rates and the relatively strong price increases in homes, even 180 00:10:01,920 --> 00:10:06,760 Speaker 1: though rates were going up all through that process. Then 181 00:10:06,960 --> 00:10:11,440 Speaker 1: if there's immigration cuts and they are starting now with 182 00:10:11,880 --> 00:10:14,920 Speaker 1: two things, an attempt to bring the broad number back 183 00:10:14,960 --> 00:10:17,720 Speaker 1: to traditional sort of levels rather than from the exceptional 184 00:10:17,800 --> 00:10:20,680 Speaker 1: levels they were at post COVID, and a big cutback, 185 00:10:20,720 --> 00:10:24,920 Speaker 1: big cutback in international students, which is already hitting share market. 186 00:10:24,920 --> 00:10:28,800 Speaker 1: For instance, IDP, the big, the big private education down 187 00:10:28,840 --> 00:10:31,760 Speaker 1: by a third or so, about two thousand jobs already 188 00:10:31,840 --> 00:10:35,000 Speaker 1: lost in that sector of private education. But for a 189 00:10:35,080 --> 00:10:40,360 Speaker 1: property investor, do you think it will hit property prices? 190 00:10:40,360 --> 00:10:43,320 Speaker 1: And where might it hit property prices? 191 00:10:43,360 --> 00:10:44,880 Speaker 2: Immigration reduction? 192 00:10:45,520 --> 00:10:49,520 Speaker 4: Yeah, so you started off this question was talking about 193 00:10:49,520 --> 00:10:54,080 Speaker 4: the big picture, So there's no direct correlation between. 194 00:10:53,760 --> 00:10:55,679 Speaker 3: One thing moving on the next. 195 00:10:55,679 --> 00:11:00,360 Speaker 4: But at the moment, the biggest problem is supply can't 196 00:11:00,360 --> 00:11:03,640 Speaker 4: be increased. They're struggling to increase supply. There there are 197 00:11:04,120 --> 00:11:07,760 Speaker 4: restrictions on supply. Getting you properly on board so what 198 00:11:08,080 --> 00:11:12,200 Speaker 4: can they control asing governments, as in federal government, they 199 00:11:12,240 --> 00:11:15,360 Speaker 4: can control demand, and part of that demand comes from 200 00:11:16,200 --> 00:11:18,440 Speaker 4: bringing in how many hundreds of thousands of people that 201 00:11:18,440 --> 00:11:20,000 Speaker 4: we bring into the country each year. 202 00:11:19,880 --> 00:11:20,200 Speaker 3: So. 203 00:11:22,160 --> 00:11:25,960 Speaker 4: Reducing the number by whatever it is, tens of thousands 204 00:11:26,240 --> 00:11:29,040 Speaker 4: but one hundred thousand, whatever the case may be, will 205 00:11:30,360 --> 00:11:33,720 Speaker 4: slow down the increase in demand for the property. That's 206 00:11:33,760 --> 00:11:34,600 Speaker 4: sort of basic. 207 00:11:34,320 --> 00:11:38,200 Speaker 3: Economics one O one, and that should we should have 208 00:11:38,240 --> 00:11:38,720 Speaker 3: an impact. 209 00:11:38,800 --> 00:11:40,920 Speaker 4: Doesn't mean the properly prices are going to fall, No, 210 00:11:41,080 --> 00:11:43,800 Speaker 4: it doesn't mean that that's going to happen normally. You've 211 00:11:43,800 --> 00:11:45,199 Speaker 4: got to have a couple of things line up to 212 00:11:45,640 --> 00:11:49,439 Speaker 4: forth property prices to fall. But it certainly takes upward 213 00:11:49,440 --> 00:11:52,520 Speaker 4: pressure some of the upward pressure. You take out one 214 00:11:52,600 --> 00:11:55,040 Speaker 4: hundred thousand people a year for the next two years, 215 00:11:55,040 --> 00:11:56,800 Speaker 4: five years, or whatever, then there's you've got an extra 216 00:11:57,720 --> 00:12:02,959 Speaker 4: two thousand and five hundred thousand fewer people needing to 217 00:12:04,320 --> 00:12:08,120 Speaker 4: find a place to live. So it should have an impact. 218 00:12:08,160 --> 00:12:12,000 Speaker 4: It might just slow the rate of growth of probably prices, 219 00:12:12,080 --> 00:12:14,880 Speaker 4: It might make them stagnate, it might make them go backwards, 220 00:12:14,960 --> 00:12:18,200 Speaker 4: But does it hit property prices. It will have an 221 00:12:18,240 --> 00:12:20,520 Speaker 4: impact on property prices. It doesn't mean it's going to 222 00:12:20,559 --> 00:12:23,160 Speaker 4: make it go backwards. It might just having an impact 223 00:12:23,200 --> 00:12:26,240 Speaker 4: on property prices and just slow the what might have 224 00:12:26,360 --> 00:12:30,000 Speaker 4: happened from nine percent growth per year down to six 225 00:12:30,040 --> 00:12:33,000 Speaker 4: percent growth per year, or it might have been negative. 226 00:12:33,800 --> 00:12:38,320 Speaker 4: So yes, you know, you take away some demands. It 227 00:12:38,360 --> 00:12:41,000 Speaker 4: has to have an impact on property prices, but it 228 00:12:41,040 --> 00:12:42,080 Speaker 4: doesn't mean it's going to fall. 229 00:12:42,480 --> 00:12:45,360 Speaker 1: Okay, Now, as an advisor, tell me about your clients, 230 00:12:45,360 --> 00:12:48,040 Speaker 1: do they do they if they're looking at the numbers, 231 00:12:48,080 --> 00:12:52,400 Speaker 1: they see that the property prices are running broadly similar 232 00:12:52,400 --> 00:12:55,360 Speaker 1: to sub prices. At the moment, the ASX is going 233 00:12:55,360 --> 00:12:57,079 Speaker 1: to come in at about nine percent for the year. 234 00:12:57,120 --> 00:13:01,640 Speaker 1: Any chucking dividends and there's you're certainly on thirteen percent. 235 00:13:01,720 --> 00:13:04,280 Speaker 1: So better than property again for the second here in 236 00:13:04,280 --> 00:13:08,000 Speaker 1: a row. But property doing better than most people would 237 00:13:08,040 --> 00:13:11,080 Speaker 1: have fought with the rates and not falling though that 238 00:13:11,160 --> 00:13:14,560 Speaker 1: people had expected that they would. So when you get 239 00:13:14,640 --> 00:13:16,760 Speaker 1: when you get the glance in the door and there 240 00:13:16,760 --> 00:13:20,040 Speaker 1: are active investors, they have a broad portfolio. 241 00:13:19,480 --> 00:13:21,280 Speaker 2: Are they what's the mood? 242 00:13:21,320 --> 00:13:23,960 Speaker 1: Are they inmfessed the fact that property is still is 243 00:13:24,000 --> 00:13:27,520 Speaker 1: still going up onto these conditions, and what did they 244 00:13:27,720 --> 00:13:29,400 Speaker 1: is there any sense of bout outcut they have. 245 00:13:31,120 --> 00:13:35,840 Speaker 4: Yeah, sort of a fewer conversations about I guess about 246 00:13:35,960 --> 00:13:39,920 Speaker 4: new money but going into investment markets than there might 247 00:13:39,960 --> 00:13:44,960 Speaker 4: have been in times gone past or but it seems 248 00:13:45,000 --> 00:13:47,559 Speaker 4: to be picking up again, as in it was quite. 249 00:13:48,960 --> 00:13:52,120 Speaker 3: More about managing what you had and making adjustments to 250 00:13:52,120 --> 00:13:52,880 Speaker 3: what you had. 251 00:13:53,360 --> 00:13:55,280 Speaker 4: Certainly, you know during COVID there was a period there 252 00:13:55,280 --> 00:13:58,200 Speaker 4: with the same don't that's obviously three four what are 253 00:13:58,200 --> 00:14:01,720 Speaker 4: we four years ago now? And coming out of that 254 00:14:01,760 --> 00:14:03,800 Speaker 4: there seem to be some opportunities and there were. 255 00:14:05,320 --> 00:14:07,400 Speaker 3: The same thing straw hats in winter. 256 00:14:09,960 --> 00:14:12,520 Speaker 4: You try to buy assets when they're undervalued rather than 257 00:14:12,920 --> 00:14:15,800 Speaker 4: when they might be a reasonable valuation or even a 258 00:14:15,800 --> 00:14:21,080 Speaker 4: full valuation. And you know, that's what you're constantly trying 259 00:14:21,080 --> 00:14:25,360 Speaker 4: to do as an investor. If you're making active investment decisions, 260 00:14:25,360 --> 00:14:29,960 Speaker 4: which property residential property has to be an active decision. 261 00:14:30,680 --> 00:14:32,400 Speaker 3: You can't index. You can't index it. 262 00:14:33,760 --> 00:14:37,360 Speaker 4: So I think in recent times people are sort of okay, 263 00:14:38,120 --> 00:14:40,680 Speaker 4: you know, I will manage to get through the higher 264 00:14:40,680 --> 00:14:42,880 Speaker 4: industrates for those people that have I'm not saying this 265 00:14:43,000 --> 00:14:45,320 Speaker 4: is everybody by any stretch of the imagination. There's more 266 00:14:45,320 --> 00:14:50,120 Speaker 4: pain out there than there is people seeing things very positively. 267 00:14:50,160 --> 00:14:52,920 Speaker 4: But for those people who are seeing it positively and 268 00:14:52,920 --> 00:14:56,920 Speaker 4: they're looking to to do some investing, property is not 269 00:14:57,000 --> 00:14:59,880 Speaker 4: right for everybody. It scares a lot of people off 270 00:14:59,880 --> 00:15:02,640 Speaker 4: to talking about death and tenants and all the things 271 00:15:02,640 --> 00:15:04,160 Speaker 4: that necessarily. 272 00:15:03,600 --> 00:15:04,360 Speaker 3: Come with property. 273 00:15:04,800 --> 00:15:07,680 Speaker 4: But for those people who are comfortable with the debts 274 00:15:07,720 --> 00:15:11,360 Speaker 4: with dealing with tenants, with constant changes to the laws 275 00:15:11,400 --> 00:15:14,480 Speaker 4: and in regards to what landlords are going to provide, 276 00:15:14,520 --> 00:15:19,440 Speaker 4: then there's the potential to get into property. But anybody 277 00:15:19,480 --> 00:15:22,560 Speaker 4: who's getting into property needs to understand that you really 278 00:15:22,600 --> 00:15:25,360 Speaker 4: have to have a mindset of buying a property for forever, 279 00:15:26,400 --> 00:15:28,240 Speaker 4: or at least having your head ten years. 280 00:15:28,240 --> 00:15:30,960 Speaker 3: Why because the costs of getting into and out of 281 00:15:30,960 --> 00:15:35,120 Speaker 3: property are in Australia fairly obsaane. 282 00:15:35,280 --> 00:15:38,240 Speaker 2: You're talking years ten years as your benchmark. 283 00:15:38,320 --> 00:15:42,160 Speaker 4: Ten years, yeah, percent rough lyag you will take to 284 00:15:42,200 --> 00:15:46,800 Speaker 4: get into a property, particularly in Victoria, South Australia. Surprise 285 00:15:46,880 --> 00:15:49,720 Speaker 4: the other day to time at certain places more expensive 286 00:15:49,720 --> 00:15:52,400 Speaker 4: than Victoria, but get somewhere between sort of four and 287 00:15:52,720 --> 00:15:54,360 Speaker 4: four and six percent stamp. 288 00:15:54,200 --> 00:15:56,760 Speaker 3: Duty is to get in to get out of the property. 289 00:15:56,800 --> 00:15:59,960 Speaker 4: You've got about three percent in agencies and marketing, advertised 290 00:16:00,120 --> 00:16:02,160 Speaker 4: and all those other things there. So the cost you're 291 00:16:02,160 --> 00:16:04,760 Speaker 4: getting into an out of a property is seven to 292 00:16:04,760 --> 00:16:09,680 Speaker 4: ten percent, so you're very difficult back money on that 293 00:16:09,720 --> 00:16:12,040 Speaker 4: in the short term. Property needs to be a medium 294 00:16:12,120 --> 00:16:16,240 Speaker 4: term investment. Well long term it needs to be a 295 00:16:16,240 --> 00:16:18,920 Speaker 4: long term investment. It depends on how you say made 296 00:16:18,960 --> 00:16:22,080 Speaker 4: him a long term But anybody that's going on to properly, 297 00:16:22,120 --> 00:16:23,920 Speaker 4: I say, you've got to have a minimum of ten years, 298 00:16:23,920 --> 00:16:27,280 Speaker 4: but the preferable hole in time for properties forever. 299 00:16:27,960 --> 00:16:30,720 Speaker 2: Okay, we'll hold that thought right there. 300 00:16:31,000 --> 00:16:34,280 Speaker 1: We'll take short break and we'll come back pick up 301 00:16:34,280 --> 00:16:37,880 Speaker 1: on that issue. Hello and welcome back to the Australians 302 00:16:37,880 --> 00:16:40,960 Speaker 1: Money Puzzle podcast. I'm James Kirkby, the Wealth editor at 303 00:16:41,000 --> 00:16:44,520 Speaker 1: The Australian. I'm talking to Bruce Bramble, who is a 304 00:16:44,520 --> 00:16:49,400 Speaker 1: financial advisor and author and regular contributor to news Corps 305 00:16:50,560 --> 00:16:55,040 Speaker 1: in the area of investment and wealth, and we were 306 00:16:55,080 --> 00:16:57,040 Speaker 1: just talking just repeat the number of you would Bruce. 307 00:16:57,120 --> 00:17:02,480 Speaker 1: It was really interesting about buying proper five your costs, 308 00:17:02,520 --> 00:17:06,280 Speaker 1: whatever the cost of the property is, five percent of 309 00:17:06,359 --> 00:17:09,320 Speaker 1: that cost is going to be you need five percent 310 00:17:09,359 --> 00:17:11,480 Speaker 1: of that cost going in and you need about three 311 00:17:11,480 --> 00:17:13,280 Speaker 1: percent going out of the far side, is that what 312 00:17:13,320 --> 00:17:13,879 Speaker 1: you were saying? 313 00:17:14,480 --> 00:17:17,400 Speaker 4: Yeah, roughly, Yeah, somewhere we're going four and six probably 314 00:17:17,480 --> 00:17:21,119 Speaker 4: north about north of five, largely five five and a 315 00:17:21,160 --> 00:17:23,920 Speaker 4: half percent to get in the sand duty's and potentially 316 00:17:23,920 --> 00:17:26,000 Speaker 4: if you're using advis advocate another two percent on top 317 00:17:26,040 --> 00:17:29,480 Speaker 4: of that roughly some of them flat feet, but around 318 00:17:29,480 --> 00:17:30,680 Speaker 4: that five to six percent mark. 319 00:17:30,720 --> 00:17:31,400 Speaker 3: And to get out. 320 00:17:31,560 --> 00:17:35,520 Speaker 4: You know, the cost of selling advertising agents charged about 321 00:17:35,600 --> 00:17:36,400 Speaker 4: one point five. 322 00:17:36,200 --> 00:17:38,280 Speaker 3: To two percent plus JC, so it's a good portion 323 00:17:38,320 --> 00:17:38,480 Speaker 3: of it. 324 00:17:38,560 --> 00:17:41,200 Speaker 4: But then you've got advertising and marketing and some other 325 00:17:41,280 --> 00:17:42,960 Speaker 4: costs and conveyancing and whatever. 326 00:17:42,720 --> 00:17:43,399 Speaker 3: Else on top of that. 327 00:17:43,480 --> 00:17:46,440 Speaker 4: Tope, yes, you you're to get out, you're probably around 328 00:17:46,440 --> 00:17:48,000 Speaker 4: that three somewhere between two and a half and three 329 00:17:48,000 --> 00:17:49,720 Speaker 4: and a half percent most of the time to get 330 00:17:49,760 --> 00:17:51,720 Speaker 4: out of to get out of a property. 331 00:17:51,760 --> 00:17:53,560 Speaker 2: So yeah, that's very very interesting. 332 00:17:53,600 --> 00:17:56,280 Speaker 1: As you said, you can't index it. You it's a 333 00:17:56,359 --> 00:17:58,879 Speaker 1: it's a big ticket acquisition and you have to go 334 00:17:58,960 --> 00:18:00,800 Speaker 1: in boots and all the bass day every time. You 335 00:18:00,880 --> 00:18:02,560 Speaker 1: can't buy a bit of a property as to say, 336 00:18:02,640 --> 00:18:06,000 Speaker 1: or unfortunately it's not a bit of one. So one 337 00:18:06,000 --> 00:18:07,399 Speaker 1: thing that's come up on the show before we go 338 00:18:07,440 --> 00:18:13,320 Speaker 1: to questions is several people who who I do admire 339 00:18:13,560 --> 00:18:17,480 Speaker 1: and respect on the show making the point that the 340 00:18:17,680 --> 00:18:23,879 Speaker 1: units the house prices overshot through COVID and post COVID 341 00:18:24,440 --> 00:18:28,720 Speaker 1: because of that whole thing of space being so exceptionally valued, 342 00:18:29,520 --> 00:18:32,280 Speaker 1: personal space being so exceptionally valued when we were all 343 00:18:32,359 --> 00:18:35,600 Speaker 1: locked in our homes, but that the units fell behind, 344 00:18:36,240 --> 00:18:40,439 Speaker 1: way behind. And in that same theme of reversion to 345 00:18:40,480 --> 00:18:42,119 Speaker 1: the mean that we're talking about, how the sort of 346 00:18:42,240 --> 00:18:47,720 Speaker 1: natural order of things, the units haven't been doing as 347 00:18:47,800 --> 00:18:50,600 Speaker 1: well as units normally do for some years, and there's 348 00:18:50,640 --> 00:18:53,840 Speaker 1: a strong sense that they may catch up looking forward. 349 00:18:53,960 --> 00:18:55,840 Speaker 1: If someone was coming to you and said I can 350 00:18:55,840 --> 00:18:59,040 Speaker 1: buy a property anywhere in the country, I don't mind 351 00:18:59,040 --> 00:19:02,320 Speaker 1: where I'm ready to go. The only thing I want 352 00:19:02,320 --> 00:19:04,959 Speaker 1: to make a decision on is a unit over a house. 353 00:19:05,560 --> 00:19:08,200 Speaker 1: I know the basics. I know that a unit is easier, 354 00:19:09,280 --> 00:19:13,399 Speaker 1: it is costs less to buys is simply because they 355 00:19:13,440 --> 00:19:17,240 Speaker 1: costs less, nothing to do with value. I know that 356 00:19:17,320 --> 00:19:20,000 Speaker 1: they're less maintenance. I know homes are a standard on 357 00:19:20,040 --> 00:19:22,800 Speaker 1: home is a lot more maintenance, and I have been 358 00:19:22,920 --> 00:19:27,199 Speaker 1: hearing that units are set to do better per annum 359 00:19:27,240 --> 00:19:30,840 Speaker 1: for a while than houses. In catching up post called 360 00:19:30,880 --> 00:19:32,560 Speaker 1: but what would you say to that person? 361 00:19:33,320 --> 00:19:35,520 Speaker 4: First of all times, we're going to ask you some 362 00:19:35,640 --> 00:19:40,880 Speaker 4: definitional questions here if you don't mind. So your house 363 00:19:40,960 --> 00:19:42,879 Speaker 4: is pretty simple, ass is a is a you know, 364 00:19:43,600 --> 00:19:47,160 Speaker 4: a property or a building on land. There's no touching 365 00:19:47,600 --> 00:19:52,040 Speaker 4: dale or whatever. Are you suggesting that a unit is 366 00:19:52,200 --> 00:19:54,520 Speaker 4: more like medium density high than city where walls are 367 00:19:54,600 --> 00:19:57,000 Speaker 4: touching and all that sort of stuff, because there's. 368 00:19:56,840 --> 00:19:59,560 Speaker 2: I know that definite definition of units is very messy. 369 00:19:59,560 --> 00:20:02,120 Speaker 2: It includes townhouses. It shouldn't. Let's just talk about apartments. 370 00:20:02,119 --> 00:20:02,720 Speaker 2: Make it sense them. 371 00:20:02,880 --> 00:20:06,360 Speaker 4: Yeah, okay, So I'd separate them into three so houses 372 00:20:07,320 --> 00:20:10,159 Speaker 4: at the other end, apartments or flats, and in the 373 00:20:10,200 --> 00:20:13,479 Speaker 4: middle is what I call units, which might be you know, 374 00:20:13,560 --> 00:20:15,920 Speaker 4: the old quarter acre block that got split in. 375 00:20:15,960 --> 00:20:18,760 Speaker 3: There's three sort of townhouse unity sort. 376 00:20:18,640 --> 00:20:19,840 Speaker 4: Of things on it that might have a bit of 377 00:20:19,840 --> 00:20:22,840 Speaker 4: common common area, but there's no real you know, they've 378 00:20:23,040 --> 00:20:24,760 Speaker 4: got their own yard and they're not. 379 00:20:24,880 --> 00:20:28,720 Speaker 3: They're not. So i'd sort of call those three. 380 00:20:28,800 --> 00:20:34,560 Speaker 4: So from an investment perspective, again, I split property into 381 00:20:34,680 --> 00:20:37,639 Speaker 4: two sorts of property, into a residential property to two 382 00:20:37,640 --> 00:20:39,880 Speaker 4: short one is a home. Home is going to meet 383 00:20:39,880 --> 00:20:41,600 Speaker 4: an emotional need that needs to be where you want 384 00:20:41,640 --> 00:20:44,760 Speaker 4: to live, which might be you know, a lifestyle or 385 00:20:44,840 --> 00:20:47,320 Speaker 4: near schools or near family or your work or something 386 00:20:47,359 --> 00:20:49,720 Speaker 4: like that. That's homes need to meet need to meet 387 00:20:49,800 --> 00:20:53,040 Speaker 4: emotional needs. An investment is about one thing and one 388 00:20:53,040 --> 00:20:56,120 Speaker 4: thing only, and that is making money, and you want 389 00:20:56,160 --> 00:20:57,919 Speaker 4: to maximize new chances of doing that. 390 00:20:58,119 --> 00:21:03,280 Speaker 3: Now, I'm a very strong believer that the single one 391 00:21:03,320 --> 00:21:03,760 Speaker 3: of the. 392 00:21:05,560 --> 00:21:10,359 Speaker 4: Main ways that property appreciates in value is. 393 00:21:10,400 --> 00:21:11,560 Speaker 3: Via land content. 394 00:21:12,880 --> 00:21:15,199 Speaker 4: So minute we have one of the rules that we 395 00:21:15,280 --> 00:21:18,960 Speaker 4: use for purchasing helping clients purchase property is minimum land 396 00:21:19,000 --> 00:21:22,360 Speaker 4: content of thirty percent. That's specifically designed to knock out 397 00:21:23,280 --> 00:21:27,280 Speaker 4: what we're just referring to as flats and apartments. Yes, 398 00:21:27,720 --> 00:21:33,240 Speaker 4: because it is land that appreciates. Buildings depreciate. Buildings literally 399 00:21:33,640 --> 00:21:37,240 Speaker 4: fall apart from the moment that you since before they're built, 400 00:21:37,240 --> 00:21:39,560 Speaker 4: So you've got to spend an ever increasing amount of time. 401 00:21:39,640 --> 00:21:40,440 Speaker 3: So from an. 402 00:21:40,400 --> 00:21:46,199 Speaker 4: Investment perspective, if in a relative sense, if units have 403 00:21:46,400 --> 00:21:50,760 Speaker 4: done poorly or not as well as houses in the past, my. 404 00:21:50,800 --> 00:21:52,760 Speaker 3: Belief is that they will always be the case. 405 00:21:52,800 --> 00:21:56,959 Speaker 4: However, you can a get to a stage where our 406 00:21:57,040 --> 00:21:59,960 Speaker 4: units have underperformed more than they should have under before 407 00:22:01,119 --> 00:22:04,680 Speaker 4: versus house and lane. There might be some relative value there. 408 00:22:04,680 --> 00:22:06,800 Speaker 4: But again, as we're just sort of talking about area 409 00:22:06,840 --> 00:22:09,080 Speaker 4: of the cost of getting into an out property and 410 00:22:09,200 --> 00:22:12,840 Speaker 4: trying to get that coal rights is very diffult. 411 00:22:12,440 --> 00:22:16,560 Speaker 1: So you're skeptical. You're skeptical about whether it's really changed. 412 00:22:16,560 --> 00:22:17,880 Speaker 1: It's interesting just for what it's worth. 413 00:22:17,960 --> 00:22:21,000 Speaker 2: There was two there were two theories. 414 00:22:20,680 --> 00:22:25,159 Speaker 1: You'd be like about why units will outpace standard on 415 00:22:25,240 --> 00:22:28,679 Speaker 1: properties in the immediate future. One was the catch up 416 00:22:28,800 --> 00:22:31,879 Speaker 1: basically reversion to the mean. But the other one was 417 00:22:31,920 --> 00:22:34,240 Speaker 1: that the theory always had been, you know, they don't 418 00:22:34,280 --> 00:22:36,679 Speaker 1: buy apartment because if you buy an apartment doesn't investor. 419 00:22:36,720 --> 00:22:39,240 Speaker 1: The problem is that they can always build more. And 420 00:22:41,320 --> 00:22:45,600 Speaker 1: but the argument this year and next year was they 421 00:22:45,640 --> 00:22:50,159 Speaker 1: can't do more. That the building is approval process in 422 00:22:50,160 --> 00:22:53,000 Speaker 1: Australia's basically ground to a hold. There's less been approved 423 00:22:53,000 --> 00:22:55,560 Speaker 1: this year than last year nationally, and that was an 424 00:22:55,600 --> 00:22:58,120 Speaker 1: interesting argument which I'm sure the listeners will make up 425 00:22:58,280 --> 00:23:00,640 Speaker 1: their own minds about just but just to finish off 426 00:23:00,640 --> 00:23:02,240 Speaker 1: on that one, okay, I why don't we take the 427 00:23:02,280 --> 00:23:06,199 Speaker 1: first question of the day from Ramnish or a M 428 00:23:06,320 --> 00:23:09,120 Speaker 1: n I s h Ti Ramnish, My wife and I 429 00:23:09,160 --> 00:23:11,679 Speaker 1: own an investment property inter state. There you are, you 430 00:23:11,720 --> 00:23:16,000 Speaker 1: see in another state. Agnostic as to where Ramnish bought 431 00:23:16,040 --> 00:23:20,480 Speaker 1: his land with development potential five townhouses. He thinks, by 432 00:23:20,480 --> 00:23:23,000 Speaker 1: the way, any answer here is never advised. Okay, this 433 00:23:23,040 --> 00:23:26,199 Speaker 1: is information only. But here's the killer, he says, we 434 00:23:26,240 --> 00:23:30,639 Speaker 1: don't have development experience. Have you come across arrangements or 435 00:23:30,720 --> 00:23:34,720 Speaker 1: joint ventures between landowners and builders where the landowner contributes 436 00:23:34,760 --> 00:23:38,080 Speaker 1: the land and the developer builds the townhouses. I expect 437 00:23:38,080 --> 00:23:41,320 Speaker 1: that goes on all the time, but I don't know 438 00:23:41,720 --> 00:23:42,800 Speaker 1: the mechanics of it. 439 00:23:42,800 --> 00:23:45,399 Speaker 2: Would could you be familiar with that pose? 440 00:23:47,080 --> 00:23:52,120 Speaker 3: Look, I have sparkled to a few organizations. I guess 441 00:23:52,160 --> 00:23:54,000 Speaker 3: I have a time where. 442 00:23:53,840 --> 00:23:59,520 Speaker 4: They whether they've targeted, you know, the older strivings. Who 443 00:23:59,600 --> 00:24:02,200 Speaker 4: might have you an old house on a big court 444 00:24:02,280 --> 00:24:04,800 Speaker 4: acre block possibly bigger, where the house is built at 445 00:24:04,800 --> 00:24:06,639 Speaker 4: the front of the back, and there's the opportunity to 446 00:24:07,760 --> 00:24:09,960 Speaker 4: release some capital by getting a developer come in and 447 00:24:10,000 --> 00:24:12,000 Speaker 4: develop a second unit or something like that. Or the 448 00:24:12,000 --> 00:24:14,480 Speaker 4: property and the sort of personal owns the land, it 449 00:24:14,240 --> 00:24:16,800 Speaker 4: gets gets paid out so I have no doubt that 450 00:24:16,880 --> 00:24:20,640 Speaker 4: there would be developers out there who would consider doing that. 451 00:24:21,000 --> 00:24:24,400 Speaker 3: They're talking about the actual example that you've given here. 452 00:24:24,920 --> 00:24:27,280 Speaker 4: I don't know any groups that do that, but I'm 453 00:24:27,480 --> 00:24:32,240 Speaker 4: sure somebody would assive warning sign or red flag. If 454 00:24:32,240 --> 00:24:36,120 Speaker 4: you're considering doing this, you need really good legal advice 455 00:24:36,760 --> 00:24:39,639 Speaker 4: to make sure that it's watertight. You're dealing with developers 456 00:24:39,640 --> 00:24:42,120 Speaker 4: and a whole bunch of risks that you wouldn't otherwise 457 00:24:42,160 --> 00:24:45,040 Speaker 4: face if you were doing it yourself, or you would 458 00:24:45,040 --> 00:24:47,480 Speaker 4: still face, but even higher risk I guess in this 459 00:24:47,520 --> 00:24:49,640 Speaker 4: sort of situation here, So make sure you get really 460 00:24:49,640 --> 00:24:54,160 Speaker 4: strong legal advice before entering into any agreement. So, off 461 00:24:54,160 --> 00:24:56,120 Speaker 4: the top of my head, I can't think of any 462 00:24:56,160 --> 00:24:57,840 Speaker 4: that I know that they do this, but there's bound 463 00:24:57,880 --> 00:24:59,480 Speaker 4: to be. There's bound to be. 464 00:25:00,040 --> 00:25:01,960 Speaker 1: So Step one is get your setup a top class 465 00:25:02,040 --> 00:25:05,119 Speaker 1: property lawyer, and no doubt the property lawyer will know 466 00:25:05,160 --> 00:25:06,520 Speaker 1: who's to in the game if. 467 00:25:06,400 --> 00:25:09,800 Speaker 4: They are potentially Yeah, but i'd probably put some feelers out. 468 00:25:12,800 --> 00:25:14,720 Speaker 4: We'll probably put some feelers out and go and speak 469 00:25:14,760 --> 00:25:16,280 Speaker 4: to a few developers who might. 470 00:25:16,200 --> 00:25:18,520 Speaker 3: Want to do it, But do not sign anything without 471 00:25:18,560 --> 00:25:20,480 Speaker 3: having your lawyer do it. Properly. 472 00:25:20,960 --> 00:25:24,000 Speaker 4: Yeah, I'd find somebody who prepent you, potentially prepare to 473 00:25:24,000 --> 00:25:27,040 Speaker 4: do it for you, and then and then get legal advice. 474 00:25:27,119 --> 00:25:28,919 Speaker 3: Really seriously lost signing you. 475 00:25:29,680 --> 00:25:34,159 Speaker 1: Very good information there, and ramnish neither option is easy, 476 00:25:34,680 --> 00:25:37,760 Speaker 1: so another option is easy, and obviously both options can 477 00:25:37,840 --> 00:25:40,040 Speaker 1: be a rewarding long term. 478 00:25:40,200 --> 00:25:42,480 Speaker 2: I hope that was helpful. Okay, we'll take a short break. 479 00:25:42,520 --> 00:25:45,000 Speaker 1: We'll be up with the last two questions in one moment. Hello, 480 00:25:45,080 --> 00:25:47,400 Speaker 1: Welcome back to The Australian's Money Puzzle podcast. 481 00:25:47,680 --> 00:25:50,080 Speaker 2: James Kirby Here, it's Tuesday. We're talking property. 482 00:25:50,160 --> 00:25:55,440 Speaker 1: I'm talking to Bruce Brammel, comncial advisor. Andrew asks if 483 00:25:55,480 --> 00:25:57,560 Speaker 1: I had a mortgage. This is one of these We 484 00:25:57,560 --> 00:26:00,679 Speaker 1: get these sort of ques questions all the time. We 485 00:26:00,720 --> 00:26:05,360 Speaker 1: have awfully clever listeners who are always doing computations. Andrew says, 486 00:26:05,359 --> 00:26:06,800 Speaker 1: if I have the mortgage for a thousand a week 487 00:26:06,840 --> 00:26:09,520 Speaker 1: and interest rates went up so that my payments were 488 00:26:09,680 --> 00:26:12,080 Speaker 1: fifteen hundred per week, what is the end journey of 489 00:26:12,119 --> 00:26:14,440 Speaker 1: my extra five hundred. I don't believe it goes to 490 00:26:14,480 --> 00:26:16,760 Speaker 1: bank profits, but maybe it goes to treasury bonds. In 491 00:26:16,800 --> 00:26:20,880 Speaker 1: other words, is the extra interest that mortgage owners are 492 00:26:20,880 --> 00:26:23,920 Speaker 1: paying off simply going to restore the money printing done 493 00:26:24,080 --> 00:26:29,160 Speaker 1: during COVID. Is it a tax without being called a tax? Well, Andrew, 494 00:26:29,359 --> 00:26:32,119 Speaker 1: I don't see how the banks should give you a 495 00:26:32,240 --> 00:26:35,840 Speaker 1: loan that they don't make any money off, or they'd 496 00:26:35,840 --> 00:26:38,560 Speaker 1: have to close down. So your interest farmers are going 497 00:26:38,600 --> 00:26:42,040 Speaker 1: to have to be bigger than cash. And that's only 498 00:26:42,080 --> 00:26:45,240 Speaker 1: fair that the RBA official rate is there and then 499 00:26:45,240 --> 00:26:50,040 Speaker 1: the rates go from there. But I don't think it's 500 00:26:50,080 --> 00:26:52,840 Speaker 1: avoidable really. I think you just have to take that 501 00:26:53,560 --> 00:26:55,919 Speaker 1: on the chain. The question is which bank I suppose 502 00:26:56,040 --> 00:26:57,760 Speaker 1: is screwing you worth? 503 00:27:00,560 --> 00:27:02,199 Speaker 2: It's much more transparent than it used to be. 504 00:27:02,280 --> 00:27:05,800 Speaker 1: You can go on any of these compare sites. We 505 00:27:05,880 --> 00:27:09,440 Speaker 1: often talk to people in that area, where you can 506 00:27:09,600 --> 00:27:13,400 Speaker 1: simply just take a look at the different rates that 507 00:27:13,440 --> 00:27:18,640 Speaker 1: are out there and either cash or mortgages, and once 508 00:27:18,680 --> 00:27:22,000 Speaker 1: you digest what bells may be attached to bills and 509 00:27:22,040 --> 00:27:25,240 Speaker 1: business are attached to particular deals on both sides, whether 510 00:27:25,280 --> 00:27:28,600 Speaker 1: you have the cash on deposit or whether you're borrowing. 511 00:27:29,760 --> 00:27:31,480 Speaker 1: It's much more transparent than it used to be, isn't 512 00:27:31,520 --> 00:27:33,240 Speaker 1: it Blues? I mean, we used to have no idea 513 00:27:33,280 --> 00:27:35,560 Speaker 1: whatever people used to phone one bank after or another. 514 00:27:35,640 --> 00:27:37,440 Speaker 1: Now you can just go on a site and compare. 515 00:27:38,080 --> 00:27:38,439 Speaker 3: Yeah. 516 00:27:38,640 --> 00:27:42,320 Speaker 4: Well, and the other side of it is the amount 517 00:27:42,359 --> 00:27:44,840 Speaker 4: of business that is written or the proportion of business 518 00:27:44,880 --> 00:27:48,120 Speaker 4: that is written by our mortgage brokers, has increased steadily 519 00:27:48,160 --> 00:27:51,679 Speaker 4: and is now sitting a bit under seventy five percent mortgage. 520 00:27:52,600 --> 00:27:55,000 Speaker 1: There are three quarters, three quarters of the wall banks 521 00:27:55,000 --> 00:27:56,119 Speaker 1: are going through mortgage brokers. 522 00:27:56,119 --> 00:27:56,320 Speaker 2: Wow. 523 00:27:56,359 --> 00:27:59,040 Speaker 4: Yeah, my colleague he called that the normally the other 524 00:27:59,080 --> 00:28:01,040 Speaker 4: diet sort of seventy one and a half percent. 525 00:28:00,760 --> 00:28:02,280 Speaker 3: Of something of all of all lines. 526 00:28:03,760 --> 00:28:07,120 Speaker 4: To deal with sort of Andrew's question in a little 527 00:28:07,119 --> 00:28:09,439 Speaker 4: bit or just on top of what you've said, James, 528 00:28:09,480 --> 00:28:13,040 Speaker 4: is that banks sort of tend to make a reasonably 529 00:28:13,080 --> 00:28:14,440 Speaker 4: concert They're competing. 530 00:28:14,080 --> 00:28:15,320 Speaker 3: And always trying to lift it there. 531 00:28:15,640 --> 00:28:19,240 Speaker 4: But the margin that they make is fairly similar through 532 00:28:19,440 --> 00:28:21,359 Speaker 4: through economic cycles. Goes up a bit and down a bit, 533 00:28:21,400 --> 00:28:23,040 Speaker 4: but they're trying to make let's call it one hundred 534 00:28:23,040 --> 00:28:24,600 Speaker 4: and eighty two hundred basis points. 535 00:28:24,680 --> 00:28:27,280 Speaker 3: Yep is what they need to make known as a 536 00:28:27,320 --> 00:28:28,320 Speaker 3: net interest margin them. 537 00:28:28,800 --> 00:28:31,240 Speaker 2: It doesn't really change an awful lot, does it. 538 00:28:31,320 --> 00:28:34,439 Speaker 4: It's interesting interest rates are three and they've got to 539 00:28:34,440 --> 00:28:36,440 Speaker 4: make you know two percent on it or two hundred 540 00:28:36,480 --> 00:28:40,160 Speaker 4: basis points on it. Then the depositors and bond holders, 541 00:28:40,320 --> 00:28:42,200 Speaker 4: they're not they're not treasury bonds. But there are other 542 00:28:42,240 --> 00:28:47,480 Speaker 4: fixed interest investments where where people who have got money 543 00:28:48,040 --> 00:28:52,600 Speaker 4: to to buy fixing interest securities and essentially lend them 544 00:28:52,600 --> 00:28:55,680 Speaker 4: money to corporates and governments and banks and insurers, but 545 00:28:56,160 --> 00:28:57,560 Speaker 4: are chasing sort of a return there. 546 00:28:57,920 --> 00:29:00,640 Speaker 3: But if they're charging three percent for mortgage, then. 547 00:29:00,560 --> 00:29:04,000 Speaker 4: They're probably paying out about one one percent to fixed 548 00:29:04,040 --> 00:29:04,880 Speaker 4: interest investors. 549 00:29:05,200 --> 00:29:06,720 Speaker 3: If indust rates go from three to. 550 00:29:08,600 --> 00:29:13,280 Speaker 4: Seven, then the generally those fixed interest investors are going 551 00:29:13,320 --> 00:29:16,760 Speaker 4: to be demanding an extra four percent for their money. 552 00:29:16,800 --> 00:29:20,560 Speaker 4: So no, it's not it's not a tax on the 553 00:29:21,000 --> 00:29:24,560 Speaker 4: know on people with mortgages. The return doesn't go to 554 00:29:24,600 --> 00:29:26,480 Speaker 4: the banks, it doesn't go to the government. It tends 555 00:29:26,520 --> 00:29:30,160 Speaker 4: to go to either depositors or fixed interests investors who 556 00:29:30,520 --> 00:29:33,240 Speaker 4: are putting up the money which are fixed interests essentially 557 00:29:33,280 --> 00:29:38,520 Speaker 4: loans to governments and corporates and insurance companies and infrastructure 558 00:29:38,560 --> 00:29:42,440 Speaker 4: projects and all that sort of stuff. So they're the 559 00:29:42,440 --> 00:29:43,840 Speaker 4: ones who tend to be picking up the tends to 560 00:29:43,840 --> 00:29:46,040 Speaker 4: be somebody on the other side. People people need to 561 00:29:46,040 --> 00:29:48,320 Speaker 4: borrow and people have got they need to invest, and 562 00:29:48,320 --> 00:29:49,040 Speaker 4: that's the tent. 563 00:29:49,080 --> 00:29:50,040 Speaker 2: There's very good answer. 564 00:29:50,320 --> 00:29:53,360 Speaker 1: Yeah, all kinds back around a strength dividends, doesn't it really? 565 00:29:53,920 --> 00:29:56,720 Speaker 1: On the banks there was periods for their payout ratio. 566 00:29:56,520 --> 00:29:58,160 Speaker 2: Was unbelievably high. 567 00:29:58,560 --> 00:30:00,320 Speaker 1: There was periits for they were paying out certain eighty 568 00:30:00,360 --> 00:30:04,560 Speaker 1: percent on on that. So so that if you wonder 569 00:30:04,640 --> 00:30:09,120 Speaker 1: what keeps the self the self funded investors taking along 570 00:30:09,440 --> 00:30:13,120 Speaker 1: in Australia, it's there are frank dividends which invariably, I 571 00:30:13,200 --> 00:30:16,280 Speaker 1: might say, and most and most reliably does actually come 572 00:30:16,320 --> 00:30:17,640 Speaker 1: from the banks. 573 00:30:18,040 --> 00:30:20,320 Speaker 2: Okay, I hope that was useful to you. Andrew. 574 00:30:20,760 --> 00:30:26,520 Speaker 1: Similarly, another another colorful, another colorful question from Dave. This 575 00:30:26,600 --> 00:30:31,760 Speaker 1: is this question is funny. I'm a loyal listener since inception. 576 00:30:31,920 --> 00:30:36,240 Speaker 1: Thank you, Dave. Often on my tractors, he said, iPods 577 00:30:36,280 --> 00:30:38,560 Speaker 1: on his tractor, and I don't think I've missed one. 578 00:30:38,720 --> 00:30:39,800 Speaker 2: Good. Seems to me. 579 00:30:40,000 --> 00:30:42,960 Speaker 1: Interest rates are a dumb ass way to reign in inflation. 580 00:30:43,240 --> 00:30:45,800 Speaker 1: That's his first point. We'll take that on board, and 581 00:30:45,840 --> 00:30:48,120 Speaker 1: then and then we'll take his second point, which is 582 00:30:48,240 --> 00:30:53,520 Speaker 1: somewhat idiosyncratic, but he yes, yes, it's generally seeing that 583 00:30:53,800 --> 00:30:57,120 Speaker 1: interest rates are a very crude, rough way to reign 584 00:30:57,200 --> 00:30:59,040 Speaker 1: in inflation, but it's how they do it. 585 00:31:00,440 --> 00:31:02,240 Speaker 2: And I would say to you, Dave, once upon a time. 586 00:31:02,080 --> 00:31:04,600 Speaker 1: A year old enough to remember, they used to do 587 00:31:04,680 --> 00:31:07,400 Speaker 1: in a much more brutal way. And famously the US 588 00:31:07,480 --> 00:31:12,080 Speaker 1: Fed reserve under whole Vulker in the Vulkra regime, I 589 00:31:12,080 --> 00:31:14,400 Speaker 1: think was the seventies, inflation was really out of control. 590 00:31:14,720 --> 00:31:18,720 Speaker 1: He managed to get inflation under control by a brutal 591 00:31:19,000 --> 00:31:24,160 Speaker 1: on signaled interest rate rises where basically the America woke 592 00:31:24,240 --> 00:31:26,280 Speaker 1: up one day in interest rates were like much higher 593 00:31:26,800 --> 00:31:29,280 Speaker 1: and it forced the country intro recession. And yes, it worked. 594 00:31:29,320 --> 00:31:32,120 Speaker 1: But these days banks don't do that. They signal. Do 595 00:31:32,200 --> 00:31:35,280 Speaker 1: you notice they call it what they called it jaw boning, 596 00:31:35,720 --> 00:31:38,160 Speaker 1: and they signal continually, and. 597 00:31:38,120 --> 00:31:41,680 Speaker 2: He noticed it increases in rates. So we had many 598 00:31:41,760 --> 00:31:42,080 Speaker 2: of them. 599 00:31:42,120 --> 00:31:44,680 Speaker 1: Each one was only a quarter of a percent. So 600 00:31:44,720 --> 00:31:47,760 Speaker 1: they don't do that anymore. So it's not as bad 601 00:31:47,760 --> 00:31:50,320 Speaker 1: as it used to be, but it's it's one of 602 00:31:50,360 --> 00:31:53,360 Speaker 1: the least worst options I think available to the bankers, 603 00:31:53,760 --> 00:31:56,720 Speaker 1: to the central bankers. Now, the question, he says, is 604 00:31:56,760 --> 00:32:00,920 Speaker 1: why not leverage supersystem to whack another ten on high 605 00:32:00,960 --> 00:32:03,800 Speaker 1: earners and keep it aside and available when the next 606 00:32:03,800 --> 00:32:07,520 Speaker 1: downturn comes. This protect the heavy lifting from wage earners. 607 00:32:08,920 --> 00:32:12,040 Speaker 1: I start people like me spending with Gay abandon when 608 00:32:12,040 --> 00:32:14,680 Speaker 1: I should be putting my head in. I'm an olive producer, 609 00:32:14,880 --> 00:32:17,080 Speaker 1: though olives are not my main game. That's why he's 610 00:32:17,120 --> 00:32:21,600 Speaker 1: that a tractor obviously right. Well, yes, yes, so Dave's 611 00:32:22,040 --> 00:32:26,240 Speaker 1: suggestion not unusual now in the future or in the past. 612 00:32:26,360 --> 00:32:30,240 Speaker 1: Is PA's the rich somehow yet at them again that 613 00:32:30,440 --> 00:32:34,680 Speaker 1: never stops. The three million super plan is very much 614 00:32:34,720 --> 00:32:37,640 Speaker 1: the latest example of that, Dave. I don't know what 615 00:32:37,800 --> 00:32:40,640 Speaker 1: your particular, your particular idea, Dave is like really on 616 00:32:40,680 --> 00:32:42,400 Speaker 1: the on the far end of the spectrum, I think 617 00:32:42,440 --> 00:32:44,240 Speaker 1: for this sort of thing. But while we're on it, 618 00:32:44,280 --> 00:32:46,040 Speaker 1: and why we have Bruce on the show, Bruce, you 619 00:32:46,120 --> 00:32:48,600 Speaker 1: might just could you explain why there's such a rumpus 620 00:32:48,640 --> 00:32:51,320 Speaker 1: over this new super tax that kicks in a three 621 00:32:51,320 --> 00:32:52,840 Speaker 1: million You would have thold there's not a lot of 622 00:32:52,840 --> 00:32:55,640 Speaker 1: people that have three million and super But have you 623 00:32:55,720 --> 00:32:59,000 Speaker 1: a sense of why the tax is so controversial, what 624 00:32:59,160 --> 00:33:01,320 Speaker 1: your clients think it's. 625 00:33:02,840 --> 00:33:06,560 Speaker 4: I think the legislation came out in recent weeks and 626 00:33:06,640 --> 00:33:08,680 Speaker 4: I haven't. I haven't read it, and I haven't read 627 00:33:08,800 --> 00:33:11,920 Speaker 4: enough about it to make to do it. But the 628 00:33:11,960 --> 00:33:15,440 Speaker 4: reason that there was a lot of consternation about it was, well, 629 00:33:15,440 --> 00:33:17,240 Speaker 4: how exactly is this going to work? You know, is 630 00:33:17,280 --> 00:33:23,440 Speaker 4: a tax only on income of capital above three million 631 00:33:23,480 --> 00:33:26,360 Speaker 4: dollars or that you're going to be paying the thirty 632 00:33:26,360 --> 00:33:27,440 Speaker 4: percent on? 633 00:33:27,640 --> 00:33:28,080 Speaker 3: Exactly? 634 00:33:28,120 --> 00:33:31,360 Speaker 4: How was this going to be done? And the usual 635 00:33:31,400 --> 00:33:34,120 Speaker 4: way of writing new laws and bills is to put 636 00:33:34,160 --> 00:33:36,520 Speaker 4: something out there, go back to industry to find out 637 00:33:36,520 --> 00:33:38,440 Speaker 4: what they think about it, poke holes in it, et cetera. 638 00:33:39,120 --> 00:33:44,360 Speaker 4: And you know, I think that's sort of that will 639 00:33:44,400 --> 00:33:48,160 Speaker 4: continue to happen on this occasion. I'm not sure exactly 640 00:33:48,200 --> 00:33:49,760 Speaker 4: where it's gone. But the reason, yeah, there was so 641 00:33:49,840 --> 00:33:52,440 Speaker 4: much consternation is that it was sort of an announcement 642 00:33:52,480 --> 00:33:55,560 Speaker 4: of this new extra fifteen percent tax going from fifteen 643 00:33:55,640 --> 00:33:57,800 Speaker 4: and thirty percent above three million dollars, but the rules 644 00:33:57,840 --> 00:34:00,120 Speaker 4: were sort of, yeah, we'll fige out the rules later. 645 00:34:00,200 --> 00:34:01,840 Speaker 2: You know, the rules. And what they're. 646 00:34:03,160 --> 00:34:07,120 Speaker 1: Enraged people was the notion that unlike other taxes all 647 00:34:07,160 --> 00:34:10,520 Speaker 1: across the system, even inside super this one would be 648 00:34:10,560 --> 00:34:15,640 Speaker 1: on what they called paper profits, on on realized games. Yeah, 649 00:34:15,680 --> 00:34:18,040 Speaker 1: and if you have unrealized losses, you don't get them back. 650 00:34:18,040 --> 00:34:21,560 Speaker 1: It carries forward like like CGT and I think that's 651 00:34:22,200 --> 00:34:23,600 Speaker 1: but it looks like it's coming down the line. 652 00:34:23,840 --> 00:34:25,680 Speaker 2: It looks to me like nothing's going to stop it. 653 00:34:27,440 --> 00:34:28,600 Speaker 3: I don't I don't think so. 654 00:34:28,800 --> 00:34:31,759 Speaker 4: No, they'll find a way of making it work. They 655 00:34:31,880 --> 00:34:36,160 Speaker 4: generally do, so, Yeah, it's not it's not something that 656 00:34:36,360 --> 00:34:42,320 Speaker 4: is likely to be stopped. The history of super innovation 657 00:34:42,480 --> 00:34:44,880 Speaker 4: and rule changes and law changes over the years is 658 00:34:45,400 --> 00:34:47,120 Speaker 4: you know, something that I've covered. 659 00:34:46,880 --> 00:34:50,520 Speaker 3: At nauseam in various ways over over a long period 660 00:34:50,560 --> 00:34:56,920 Speaker 3: of time. But they're constantly juggling around a little bit 661 00:34:56,960 --> 00:34:59,040 Speaker 3: in order to try to make it fairer. And you know, 662 00:34:59,120 --> 00:35:01,480 Speaker 3: when this particular rule came out. 663 00:35:03,920 --> 00:35:07,120 Speaker 4: Was announced that they're going to be moving towards it, 664 00:35:07,120 --> 00:35:09,760 Speaker 4: it's probably only impacting one or two percent of the population, 665 00:35:10,200 --> 00:35:13,000 Speaker 4: was I think roughly the number. And even the people 666 00:35:13,040 --> 00:35:16,520 Speaker 4: who were in that situation were you were understanding, Okay, 667 00:35:16,560 --> 00:35:20,200 Speaker 4: well you know, I probably nobody's going to cry for 668 00:35:20,280 --> 00:35:20,960 Speaker 4: me about this. 669 00:35:21,080 --> 00:35:23,320 Speaker 2: So no one's going to march to the streets for you. 670 00:35:23,560 --> 00:35:26,040 Speaker 4: Yeah, no one's going to march the stratos. You sort 671 00:35:26,080 --> 00:35:28,040 Speaker 4: of got to move it and deal deal with it. 672 00:35:28,080 --> 00:35:33,000 Speaker 4: I do remember this, James, back in in another time 673 00:35:33,040 --> 00:35:35,320 Speaker 4: in place when you and I were doing some things together. 674 00:35:36,200 --> 00:35:39,600 Speaker 4: There was when they announced the transfer balance cap at 675 00:35:39,640 --> 00:35:43,400 Speaker 4: one point six billion dollars the time, who had he 676 00:35:43,440 --> 00:35:46,759 Speaker 4: and his wife about thirty million dollars in a. 677 00:35:46,840 --> 00:35:49,680 Speaker 3: Self manage super fun in a pension. 678 00:35:49,880 --> 00:35:52,200 Speaker 4: So they were earning, you know, they had thirty million dollars, 679 00:35:52,200 --> 00:35:54,560 Speaker 4: probably more than that a little bit later on that 680 00:35:54,680 --> 00:35:57,120 Speaker 4: was earning let's say seven to ten percent a year. 681 00:35:57,200 --> 00:36:00,560 Speaker 4: It was sort of, you know, a a very large 682 00:36:00,600 --> 00:36:03,439 Speaker 4: amount of money that they were earning off this two 683 00:36:03,440 --> 00:36:06,279 Speaker 4: to three million dollars a year on which absolutely zero 684 00:36:06,480 --> 00:36:09,640 Speaker 4: tax was being paid, and reduced the transfer balance cap. 685 00:36:09,680 --> 00:36:11,839 Speaker 4: They had to roll back all but one point six 686 00:36:11,880 --> 00:36:15,000 Speaker 4: million each, so three point two million, so about twenty 687 00:36:15,000 --> 00:36:16,560 Speaker 4: seven million that had to go back, and it was 688 00:36:16,560 --> 00:36:20,520 Speaker 4: then taxed to ten or fifteen percent, and that so 689 00:36:21,000 --> 00:36:23,359 Speaker 4: that that two to three million roughly that they were earning, 690 00:36:23,400 --> 00:36:25,040 Speaker 4: they were going to start paying ten or fifteen cent. 691 00:36:25,840 --> 00:36:27,640 Speaker 4: I had a chat chats with him about it at 692 00:36:27,680 --> 00:36:29,640 Speaker 4: the time, and it was just sort of, you know, look, 693 00:36:29,680 --> 00:36:31,520 Speaker 4: we had a pretty good run there for for a 694 00:36:31,560 --> 00:36:34,879 Speaker 4: long time. We paid no tax on a very Chancela said, 695 00:36:35,520 --> 00:36:39,840 Speaker 4: And I think I think ultimately most of the people 696 00:36:39,840 --> 00:36:42,359 Speaker 4: who were in that band of having more than three 697 00:36:42,400 --> 00:36:44,520 Speaker 4: million dollars, which can be six million for a couple, 698 00:36:44,560 --> 00:36:47,759 Speaker 4: it's three million dollars each for a couple of Super time, 699 00:36:48,920 --> 00:36:53,560 Speaker 4: I sort of understand that, Yeah, okay, well there's there's We. 700 00:36:53,560 --> 00:36:55,080 Speaker 3: Probably had a pretty good run for a pretty good 701 00:36:55,120 --> 00:36:55,719 Speaker 3: period of time. 702 00:36:55,760 --> 00:37:01,640 Speaker 4: And I don't see many people sort of mining heavily 703 00:37:01,680 --> 00:37:02,160 Speaker 4: about us. 704 00:37:02,280 --> 00:37:04,359 Speaker 1: Yes they are, it's interesting, you say, and it's it's 705 00:37:04,400 --> 00:37:07,040 Speaker 1: actually what I've poked a lots of top advisers about this, 706 00:37:07,160 --> 00:37:09,719 Speaker 1: and they generally say what you're saying, Bruce, that that 707 00:37:09,880 --> 00:37:12,279 Speaker 1: people who are lucky enough to have that level of money, 708 00:37:12,320 --> 00:37:15,839 Speaker 1: and remember for a couple of effectively, once you're over 709 00:37:15,920 --> 00:37:18,080 Speaker 1: six million and super, that's when when the new tax 710 00:37:18,160 --> 00:37:22,440 Speaker 1: comes in. But what they say is, we knew there 711 00:37:22,480 --> 00:37:24,680 Speaker 1: was every chance that taxes have drives on Super. We 712 00:37:24,800 --> 00:37:26,239 Speaker 1: just didn't know that we're going to do it on 713 00:37:26,760 --> 00:37:29,120 Speaker 1: on realize games, on paper games, which does you know 714 00:37:29,600 --> 00:37:32,359 Speaker 1: you could really be caught very very badly if you were, 715 00:37:32,480 --> 00:37:33,160 Speaker 1: especially if you're. 716 00:37:33,040 --> 00:37:35,799 Speaker 2: An earnest investor in startups and all that sort of thing, and. 717 00:37:35,760 --> 00:37:38,359 Speaker 1: You certainly you know you don't have them, you don't 718 00:37:38,360 --> 00:37:39,759 Speaker 1: have the mind that you have in your pocket, but 719 00:37:39,760 --> 00:37:41,960 Speaker 1: you're paying tax on it before you get it. That 720 00:37:42,600 --> 00:37:45,600 Speaker 1: you can see how that would actually plain people on that. 721 00:37:45,640 --> 00:37:48,319 Speaker 1: I think is the residual argument and is not over yet. 722 00:37:48,640 --> 00:37:51,680 Speaker 2: Okay, terrific, Bruce Pick you very much, great to have 723 00:37:51,719 --> 00:37:52,120 Speaker 2: your honors. 724 00:37:52,280 --> 00:37:55,279 Speaker 1: Thanks Chimes, And that was Bruce Brammell of course of 725 00:37:55,360 --> 00:38:00,680 Speaker 1: Bruce Brammel Financial h and he is an advisor regularly 726 00:38:00,760 --> 00:38:04,600 Speaker 1: on the show and contribuser as well to the finance pages. 727 00:38:04,800 --> 00:38:07,520 Speaker 1: All right, folks, thank you, and let's have some more questions, 728 00:38:07,560 --> 00:38:10,400 Speaker 1: you know, the email and money puzzle at the Australian 729 00:38:10,440 --> 00:38:11,800 Speaker 1: dot com dot au. 730 00:38:12,080 --> 00:38:12,879 Speaker 2: Talk to you very soon.