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Speaker 1: Nikki de Reikie. Welcome to Probably Insights.

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Speaker 2: Thanks Mike.

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Speaker 1: Thanks your name right to get the name right?

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Speaker 2: Yes you did, you did it?

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Speaker 1: Is it? It's Dutch?

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Speaker 2: Ya, yes it is.

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Speaker 3: Everyone knows me here as Nikki di Ricky Nigg Australia.

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Speaker 4: I like it. It's got a it's got a good

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Speaker 4: sound to it. So you're a West Australian. That's what

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Speaker 4: we're doing this through Riverside and you're in your the

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Speaker 4: direction licensee of JW Residential Perth.

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Speaker 1: Can you tell me a little bit about JW Residential Perth.

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Speaker 3: So JW Residential will start up four years ago by

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Speaker 3: Jeff Wilmington. I took over JW in twenty twenty three

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Speaker 3: and never since become director licensee.

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Speaker 1: Ah so you it's your it's your gig, It is

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Speaker 1: my gig. Yeah, well done? Well what about that? What

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Speaker 1: about prior to that? What were you doing?

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Speaker 3: So I got my license back in twenty nineteen. Of course,

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Speaker 3: not where a good start to real estate with COVID happening,

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Speaker 3: so all the rookies were let go. So I've done

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Speaker 3: a little bit of sales, been moving out a little bit,

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Speaker 3: trying to figure out where my place was joined a

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Speaker 3: large company and twenty twenty one, just over four years ago,

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Speaker 3: started back in sales and was there for about two

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Speaker 3: years and then that's basically where I launched my sales

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Speaker 3: career and then took over JW Residential.

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Speaker 4: So what's going on in the So we have a

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Speaker 4: lot of Perth listeners and Australian listeners. In fact, we

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Speaker 4: have a lot of these and state listeners who like

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Speaker 4: to buy property or own property in the Western States

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Speaker 4: and a lot of people do that for land tax

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Speaker 4: reasons or just diversification, et cetera.

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Speaker 1: What's going on currently?

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Speaker 4: What's the state of West Australian residential property market?

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Speaker 3: So the Western Australian property market is very hot right now.

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Speaker 3: The historic low stock levels is getting worse and worse.

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Speaker 3: Last year on October we saw a little bit of

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Speaker 3: slow down in the market. Between October and February March

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Speaker 3: this year. Since then, stock levels have dried up again.

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Speaker 3: Buyers knew, investors knew that it wasn't going to crash

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Speaker 3: here in WA. So they had the confidence that regardless,

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Speaker 3: they can invest here and let's not going to crash

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Speaker 3: anytime soon. The stock levels are that low that as

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Speaker 3: soon as we launch a property, everyone is trying to

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Speaker 3: fight for it at the moment and the East goes yeah.

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Speaker 1: Yeah.

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Speaker 3: Last Friday launched a property and the name day I

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Speaker 3: had forty groups through within less than twenty four hours

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Speaker 3: on the market, seventeen offters on the table. Combination of

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Speaker 3: locals and interstate, so that is the most current.

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Speaker 1: I'm a bit fascinated by this.

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Speaker 4: So Nicky, is that you said there's a combination of

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Speaker 4: locals and interstate. So that's a combination of perhaps unoccupiers

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Speaker 4: and investors, probably around the same proportions. But is that

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Speaker 4: because in Perth or in West Australia?

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Speaker 1: Are we talking about Perth? Now, we just went West Australia.

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Speaker 2: Generally mostly Perth.

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Speaker 3: That's where we see most of this happening at the moment.

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Speaker 1: Yep, right, so Perth. So across Perth then.

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Speaker 4: Do you are you suffering the same issue that we

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Speaker 4: have in the Eastern States? That is, as a result

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Speaker 4: of immigration, populations have increased significantly over the last three years,

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Speaker 4: at least in particular significantly, but.

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Speaker 1: The housing supply has not kept.

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Speaker 4: Up with the population growth. Is that what we're talking about?

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Speaker 2: Absolutely?

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Speaker 3: Yes, Back in twenty nineteen we had those higher stock

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Speaker 3: levels rounder seventeen thousand properties when I started back in

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Speaker 3: twenty twenty one, we're sitting about thirteen thousand. We lessened

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Speaker 3: three at the moment, so there is just no stock.

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Speaker 1: Levels and so okay.

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Speaker 4: And is it also a function of developers not being

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Speaker 4: able to produce more because the cost of production is

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Speaker 4: doesn't make sense? Or is it are they planning delays

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Speaker 4: or governmental delays? What's the issue about getting more stock

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Speaker 4: out of the ground because westra it is pretty big joint.

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Speaker 1: You know, you've got plenty of space.

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Speaker 2: Not the land.

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Speaker 3: Yeah, we've got lots of space. We've got lots of land.

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Speaker 3: The builders can't keep up. We phoned for a long time.

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Speaker 3: People didn't want to build either because the rising costs

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Speaker 3: are build. They prefer to just buy something established know

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Speaker 3: is going to be finished. During the COVID times, it

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Speaker 3: took sometimes even three years to finish and build a

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Speaker 3: lot of people in distress because financially they couldn't keep

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Speaker 3: up having a rental as well as the cost of

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Speaker 3: holding the new build that hadn't been finished yet. So

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Speaker 3: a lot of people did not have the confidence to

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Speaker 3: build either. And builders not being able to keep up

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Speaker 3: with demands just everyone snapping up the residential established properties.

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Speaker 4: Is that because people don't want to live, don't want

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Speaker 4: to move to Perth, or people in Perth don't to

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Speaker 4: become builders, or is built is building over here? We

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Speaker 4: have a lot of delays, like council delays, and then

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Speaker 4: we've got people objecting who live around the area. Then

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Speaker 4: there's state government gets involved and you know there's some

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Speaker 4: state significance or there's no transport hubs available. What are

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Speaker 4: the reasons why developers don't find the developments viable enough

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Speaker 4: to entice them to go in boots and all and

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Speaker 4: start developing stuff everywhere?

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Speaker 3: The most common thing we hear is the tradees, the

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Speaker 3: cost for the trades to do the job. There's not

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Speaker 3: enough trades available, not being able to produce the homes

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Speaker 3: that already signed up, that already council approved, development approved,

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Speaker 3: everything is ready to go. They just don't have enough

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Speaker 3: trades just to finish the builds and it's so slow.

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Speaker 4: Yeah, I don't think people understand as well enough, at

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Speaker 4: least over here on the East side of Australia. That

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Speaker 4: and perhaps you could comment on this, but the mining

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Speaker 4: industry sucks a lot of the trades out of the

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Speaker 4: system over there. So like if you're a big mining

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Speaker 4: project and you're a good plumber or you're a good

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Speaker 4: whatever tradesman, trades person, the mining companies will happily take

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Speaker 4: you on, probably pay you more than you're going to

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Speaker 4: get if you're working for a builder on the building side,

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Speaker 4: plus you get you know, two weeks on one week

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Speaker 4: of whatever whatever that process is.

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Speaker 1: Is that still true for Perth?

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Speaker 2: Absolutely? Yeah.

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Speaker 3: Five For workers earn really good money, so it's easier

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Speaker 3: for them to take a job where they work less

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Speaker 3: earn more.

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Speaker 2: Absolutely that's the case.

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Speaker 1: So it's it's sort of like a perfect storm.

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Speaker 4: If you hold land and you want to sell it,

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Speaker 4: or hold real estate and you want to sell, it's

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Speaker 4: a perfect storm for those individuals.

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Speaker 1: And as interest rates come down, what are you seeing?

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Speaker 4: I mean, obviously the demand's increasing because people can now

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Speaker 4: borrow more, But what are you seeing in relation to prices?

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Speaker 4: Is there some sort of correlation between interest rate reductions

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Speaker 4: and price change?

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Speaker 3: I feel there is a bit of a combination of

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Speaker 3: interest rate reductions as well as but most of the

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Speaker 3: low stock levels.

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Speaker 2: Are the issue.

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Speaker 3: Anytime there's an interest rate reduction, we don't see an

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Speaker 3: increase of enquiry all of a sudden. It's more the

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Speaker 3: low stock levels week on week that are more the

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Speaker 3: driver for the growth. People know that if a interest

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Speaker 3: rate reduced by zero point two five, it doesn't make

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Speaker 3: a huge difference on the mortgage. So it's just the

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Speaker 3: fact that they can't find stock. We've got a lot

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Speaker 3: of downsizes. They want to find smaller properties and they

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Speaker 3: can't find it. They're holding onto their properties. They're just

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Speaker 3: sitting there waiting until they can finally buy something. What

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Speaker 3: we see coming soon is the first home buyers are

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Speaker 3: able to buy up to eight fifty in WA with

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Speaker 3: no lenders mortgage insurance. We see a lot of excitement

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Speaker 3: from the first home buyers there at.

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Speaker 1: These moment deposit positive.

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Speaker 3: Yeah, yeah, so we see a lot of first home

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Speaker 3: buyers getting excited that they can save some money and

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Speaker 3: they're fighting for the same price as driving after the

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Speaker 3: same properties, driving the prices up again.

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Speaker 1: So what is the sort of.

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Speaker 4: I think probably be fair to say I don't know

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Speaker 4: about these days because icel in perpot, be fair to

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Speaker 4: say that there's probably more it's more housing stock over

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Speaker 4: there than it is apartment stock, say compared to Sydney here,

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Speaker 4: But what would be the on average, what are you

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Speaker 4: paying there for a house on let's say, you know,

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Speaker 4: eight hundred square meters or whatever whatever.

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Speaker 1: The average is.

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Speaker 4: And what are you paying over there for a two bedroom,

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Speaker 4: two bathroom apartment.

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Speaker 3: If you're on average, if you're looking into the city

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Speaker 3: apartments six to eight hundred, if you're ride in the

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Speaker 3: city homes close to the city, you're sitting into the

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Speaker 3: high nine hundreds of million these days, where I'm an

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Speaker 3: hour from the city and we're sitting at least about

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Speaker 3: eight hundred thousand at the moment to be in a

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Speaker 3: nice home where a few years ago you would be

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Speaker 3: able to buy a Harris for about six hundred. So

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Speaker 3: we're increasing the prices here to about eight hundred to

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Speaker 3: get something decent.

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Speaker 4: And if you're an investor, which obviously a lot of

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Speaker 4: the buying market or demanders coming from investors, particularly they're

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Speaker 4: coming from inter state. If you're an investor, what what

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Speaker 4: are we looking at in terms of vacancy rates? So

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Speaker 4: you know, do places stay vacant very long over there

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Speaker 4: or is it you know, you guys running at high

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Speaker 4: vacancy rate, low vacancy rate.

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Speaker 2: We're still a low vacancy. Yeah, they were still a

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Speaker 2: low I can see.

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Speaker 3: Yes, Yeah, we had extreme low vacancies. It's slightly changed,

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Speaker 3: but it's still a low vacancy rate in.

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Speaker 2: Comparison to a normal Blant market.

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Speaker 3: So people are able to lease are probably property very

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Speaker 3: easily as long as it's advertised nicely not overpriced. People

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Speaker 3: are not silly. They're not paying seven hundred dollars a

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Speaker 3: week for a two by one where normally that which

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Speaker 3: for five hundred per week.

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Speaker 4: Yeah, but you experiencing the same things over those as

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Speaker 4: we get here, like the places open up for inspection

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Speaker 4: for rent and there's a line of twenty or thirty

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Speaker 4: people waiting to go and expect the joint.

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Speaker 3: We personally don't do rent tools, so I don't see

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Speaker 3: it as much on a day to day We are

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Speaker 3: sales only. But what I know from the property management

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Speaker 3: company that we work with is thatead not all of

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Speaker 3: the properties have long lines outside. There's a bit of

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Speaker 3: a misconception sometimes some properties do. Some properties are in

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Speaker 3: a highly sought after pocket, well priced, they do attract

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Speaker 3: a lot of people having lines outside the door, But

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Speaker 3: a difference for.

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Speaker 2: Property so.

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Speaker 4: In just in terms of if I'm an investor, like,

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Speaker 4: what should I be looking at in terms of what

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Speaker 4: type of property I should buy relative defining a tenant,

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Speaker 4: I mean, what do people over in Perth want. They

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Speaker 4: want to be close to the city, They want to

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Speaker 4: be close to the beach, they want to be close

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Speaker 4: to the Swan River. They want to be close to

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Speaker 4: the church I don't know, or close to the footy oval,

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Speaker 4: close to the casino, close to the airport.

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Speaker 1: What do they want?

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Speaker 4: What are they sort of looking for in terms of

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Speaker 4: amenity that I should be thinking about if I want

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Speaker 4: to buy a property in Perth, whether an apartment and

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Speaker 4: or an and or a house.

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Speaker 3: The most sought after properties here in w A are

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Speaker 3: the properties with extra garage space, big workshops, nice blocks

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Speaker 3: of land.

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Speaker 2: We've got a lot of.

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Speaker 3: Car enthusiasts, people that love their boatster caravans.

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Speaker 2: There the cars.

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Speaker 3: So the properties that have space workshops I so sought

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Speaker 3: after corner blocs.

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Speaker 2: In regards to location.

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Speaker 3: Even an hour away from pert city, you can easily

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Speaker 3: get on a train, easily get to the city, so

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Speaker 3: people don't mind traveling to be further out and to

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Speaker 3: be close to the beach as long as they've got

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Speaker 3: the space to live. People don't love to live in

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Speaker 3: a small apartment where they can't have all their toys.

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Speaker 3: We're very known for all the toys that we have here.

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Speaker 4: Yeah, most people don't realize that. I in my memory,

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Speaker 4: in fact, when I live there, I have one too.

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Speaker 4: But they just benefit a person who's to have a

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Speaker 4: boat or access to one. Yeah, and they all go

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Speaker 4: right Nest Island at certain times a year. You know,

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Speaker 4: I don't want to be unfair. In fact, I think

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Speaker 4: this is a great thing. But per sort of a lifestyle,

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Speaker 4: big and lifestyle destination to work and live because I

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Speaker 4: remember at one stage Perth had the most restaurants per

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Speaker 4: capita to any country at twenty city in the world.

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Speaker 1: So people love to socialize. Maybe it give us a

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Speaker 1: bit of.

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Speaker 4: A thumbnail picture of how people live their life in

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Speaker 4: Perth because city is hectic. Okay, it's crazy, Nikki, so

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Speaker 4: but and I know it's a lot different over there.

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Speaker 3: Yeah, it's a lot of people have always said, like

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Speaker 3: why would you live in Paris or w I there's

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Speaker 3: nothing there, But for us it's it's a lifestyle and

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Speaker 3: a lot more people are realizing how amazing it is

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Speaker 3: to live here from the beautiful coast surfing. We don't

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Speaker 3: have the best surf spots here. We still have to

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Speaker 3: go to the East Coast for that. But the lifestyle

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Speaker 3: is it's very it's not as the hacktic life style

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Speaker 3: that you've got in Sydney Melbourne.

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Speaker 2: It's quiet.

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Speaker 3: You've got the fivefold guys and when they're off for

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Speaker 3: two weeks they can go out in that car, travel

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Speaker 3: a couple hours down south and have an incredible like

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Speaker 3: a holiday close to home. It's it's incredible people just

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Speaker 3: living life here. It's amazing.

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Speaker 4: As population increased significantly in Perth, it.

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Speaker 2: Has more recently absolutely.

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Speaker 1: Yeah, so what are we talking like?

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Speaker 4: Because if I'm a if I'm an immigrant, I probably

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Speaker 4: would choose Perth or Canberra first because I know I'm

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Speaker 4: going to get a job.

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Speaker 1: Jobs are fairly plentiful.

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Speaker 4: The unemployment over there in Perth is less than the

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Speaker 4: rest of the country. So like the average the unemployment

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Speaker 4: for the nationally is four point two, but in Perth

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Speaker 4: it's less than four point two. It's league three point

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Speaker 4: ninety five or something like that. So I'm going to

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Speaker 4: get a job. Job security, the education system is very good,

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Speaker 4: transports sort of Okay, you don't have a great train

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Speaker 4: system there as I recall, definitely, but no one lives

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Speaker 4: that far away from town either. I mean, as you know,

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Speaker 4: the most place most people can drive to work or

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Speaker 4: maybe they should walk to a book. But what is

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Speaker 4: it that is the bigg attraction? And do you think

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Speaker 4: as a real estate agent now, and if you're advising people,

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Speaker 4: not that this is advice, but if you were advising people,

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Speaker 4: what is it that you think that they should be

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Speaker 4: considering in relation to investing in Perth as part of

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Speaker 4: their diversification of their portfolio for residential and we're talking

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Speaker 4: about residential only. What are they thinking about they buy

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Speaker 4: a house, buy a department, buy something close to the city,

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Speaker 4: spend go and spend eight hundred or should they be

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Speaker 4: looking to buy spend five hundred, et cetera.

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Speaker 1: What would you do if you lived over here? Where

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Speaker 1: would you invest?

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Speaker 3: I would invest in where there's good infrastructure, good schools,

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Speaker 3: close to shops, as well as the lifestyle as well.

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Speaker 3: But those are the main drivers to be close to

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Speaker 3: where most people need to be. Not everyone wants to

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Speaker 3: drive an hour to work, so close to just infrastructure,

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Speaker 3: making sure you've got good sized land. Most investors are

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Speaker 3: looking for a minimum of that five hundred square meto land.

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Speaker 3: We find that those are the most popular amongst homeowners

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Speaker 3: as well. So if you were to reseal later down

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Speaker 3: the line, you want to hold investment that is attractive

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Speaker 3: to a lot of potential buyers and not just a

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Speaker 3: small pool. So a minimum off this five on a

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Speaker 3: square middle land good bones to the properties as well.

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Speaker 3: Make sure you don't buy anything that needs too much maintenance,

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Speaker 3: depending on what your strategy is in that case, and

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Speaker 3: not everyone wants to buy property and then have the

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Speaker 3: maintenance going on.

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Speaker 2: For years to come.

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Speaker 4: And if just final question, I've always been interested in this,

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Speaker 4: what in terms of returns, I'm just talking about yield now,

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Speaker 4: if it's rented, what sort of yield.

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Speaker 1: Is sort of your average yield over that? Are you

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Speaker 1: talking about.

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Speaker 4: Two percentum on the purchase price or are you talking

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Speaker 4: about five percent panum on the purchase price?

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Speaker 3: We used to be about six percent before the price

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Speaker 3: is started increasing dramatically, the rents weren't keeping up anymore.

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Speaker 3: We're now sitting between the four and five at this moment.

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Speaker 4: That's still pretty good relative to boring costs because boring

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Speaker 4: costs have come down, so you know, you can nearly

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Speaker 4: break even in that regard. And one of the things

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Speaker 4: I remember about Perth is that limes, limestones, a tin

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Speaker 4: roofs and lines. Limestone is a big deal over there,

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Speaker 4: Like you get a surprise how many people have sort

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Speaker 4: of limestone walls, limestone foundations, limestone front fence, and and they.

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Speaker 1: A lot of there's a lot of steel roofs, not

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Speaker 1: ten roofs sto.

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Speaker 2: Yeah, ten roofs absolutely, yeah.

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Speaker 4: Yeah, it's it's And so if you're buying, if you

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Speaker 4: see one of those, and you're a buyer and you think,

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Speaker 4: oh my god, I'm not going to buy tenroof that's

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Speaker 4: actually the norm over there.

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Speaker 1: I don't think many people have tile roofs for some

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Speaker 1: reason or what the dealer is.

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Speaker 4: But I very rarely used to see anyone with a

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Speaker 4: tile roof. And just finally, you're in a very stable environment.

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Speaker 4: And during COVID you sort of kept the rest of

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Speaker 4: the country out and remained. You didn't you didn't really

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Speaker 4: go on lockdown like the rest of us did. What's

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Speaker 4: the political environment like, is it's still stable and well managed?

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Speaker 3: It's still stable, well managed. There's different opinions on that,

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Speaker 3: but we're stable sure.

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Speaker 4: And what about land tax? What is your land tax

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Speaker 4: over there? If you're not not living in a place,

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Speaker 4: do you have to pay land tax?

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Speaker 2: Question?

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Speaker 3: No?

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Speaker 1: No, land tax?

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Speaker 4: And stamp duty? How much stamp duty to pay on

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Speaker 4: it to buy something? Around about percentage wise?

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Speaker 2: Percentage wise.

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Speaker 3: I know it's about twenty grand on six hundred seven

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Speaker 3: hundred k.

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Speaker 1: Yes, that's yeah, it's about three percent.

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Speaker 4: It's about three percent similar similar, similar to than New

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Speaker 4: South Wales, Okay and or Victoria. So the stamp duties,

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Speaker 4: stamp duty is not a prohibitor purchase price relatively as

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Speaker 4: I think cheap. The market, as you're saying now, is

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Speaker 4: going to continue to grow because demand fire out strips

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Speaker 4: outstrips supply. And Perth is, by the way, for those

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Speaker 4: people who are listening to this, one of the things

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Speaker 4: I experienced Perth the cost of living over there slightly

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Speaker 4: more than everywhere else. I do remember the coffee is

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Speaker 4: more expensive in Perth than it is here in Sydney,

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Speaker 4: which is crazy, but I remember walking past I don't

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Speaker 4: know where it was, on Saint George's Terraces, the main

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Speaker 4: road there about three or four years ago a coffee

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Speaker 4: cart like a cart, you know that you buy coffee

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Speaker 4: off this cart, and was outside one of the hotels

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Speaker 4: and I bought a coffee and I had to line

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Speaker 4: up to get the coffee and the coffee was six

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Speaker 4: bucks fifty and in Sydney at that stage coffee was

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Speaker 4: about three dollars fifty and I got a surprise. But

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Speaker 4: there is a lot of wealth in Perth though, and

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Speaker 4: we don't realize it, and it's therefore quite buoyant financially,

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Speaker 4: quite economically, quite buoyant. So it's therefore a pretty solid

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Speaker 4: place to make in investments, particularly when you as you say,

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Speaker 4: you can buy something for Sea seven eight hundred thousand

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Speaker 4: bucks like a house.

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Speaker 1: That's amazing.

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Speaker 4: Yeah, So Niki, Nikki de Ricky, I'll call you by

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Speaker 4: your whatever the name.

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Speaker 1: What do you call that a pet name is? I

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Speaker 1: don know what hell you call that a nickname?

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Speaker 4: But thank you very much for your insights center West

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Speaker 4: Australia and particularly the Perth.

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Speaker 1: And I would I bought a apartment in.

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Speaker 4: Perth in nineteen eighty six in Victoria Road in the

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Speaker 4: Continental Hotel, the Continental Apartment, so they used to call

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Speaker 4: it the CONTI or something like that. But I sold

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Speaker 4: it at something I say, because I lived there for

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Speaker 4: a couple of years and I sold it. But I

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Speaker 4: don't even know if the apartment building is still there

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Speaker 4: these days. But I have to tell it did very

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Speaker 4: well have it. It was very cheap. I paid eighty

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Speaker 4: grand for it. It was amazing, two bedroom, two bathroom, unbelievable

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Speaker 4: views of the river. I was across the road from

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Speaker 4: Alan Bond's house in dal Keith, so eighty grand like amazing.

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Speaker 4: You know, wish I had a hold on to it.

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Speaker 4: Was probably worth a couple of million dollars today. So

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Speaker 4: thanks very much, Rick, I really appreciate your.

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Speaker 2: Time, my pleasure. Thanks Mike, cheers.

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Speaker 1: You're welcome.