1 00:00:10,000 --> 00:00:12,960 Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm 2 00:00:13,039 --> 00:00:16,599 Speaker 1: James Kirby, the Wealth editor at the Australian. Welcome aboard everybody. 3 00:00:17,239 --> 00:00:19,759 Speaker 1: I have to tell you that the inbox at our 4 00:00:20,000 --> 00:00:23,919 Speaker 1: email here, the Money Puzzle at the Australian dot com 5 00:00:23,960 --> 00:00:28,639 Speaker 1: dot au has something of an imbalance just now. We 6 00:00:28,720 --> 00:00:31,520 Speaker 1: have a lot of questions on property and we have 7 00:00:31,640 --> 00:00:36,519 Speaker 1: less questions, considerably less questions on the investment markets, which 8 00:00:37,000 --> 00:00:39,320 Speaker 1: I find intriguing, I have to say, because I would 9 00:00:39,320 --> 00:00:41,839 Speaker 1: have thought the investment markets were a little bit more 10 00:00:41,840 --> 00:00:46,040 Speaker 1: complicated than property. But it's the property people who have 11 00:00:46,240 --> 00:00:49,559 Speaker 1: been rolling in. So I feel compelled. Really, it being 12 00:00:49,600 --> 00:00:52,920 Speaker 1: a Tuesday show when we have a property focus, I 13 00:00:52,960 --> 00:00:57,200 Speaker 1: feel compelled to do a catch up on this and 14 00:00:57,280 --> 00:01:04,120 Speaker 1: we will devote today's show toquestions from listeners which cover 15 00:01:04,240 --> 00:01:09,160 Speaker 1: all aspects and are quite I've basically selected a handful 16 00:01:09,160 --> 00:01:11,959 Speaker 1: of questions which really represent the sort of questions we're getting, 17 00:01:12,600 --> 00:01:15,120 Speaker 1: and I think you'll find it very interesting to do 18 00:01:15,200 --> 00:01:18,800 Speaker 1: such an exercise. I need someone with me, and I 19 00:01:18,880 --> 00:01:23,760 Speaker 1: have chosen one of our most regular guests on the show, 20 00:01:24,120 --> 00:01:26,280 Speaker 1: who I'm sure you're familiar with. Its Stuart Weams of 21 00:01:26,319 --> 00:01:27,920 Speaker 1: the pro Solution Private Client Group. 22 00:01:28,080 --> 00:01:29,240 Speaker 2: Hi Stuart, how are you? 23 00:01:30,000 --> 00:01:31,920 Speaker 3: I'm really well, James, thanks for having me on. 24 00:01:32,200 --> 00:01:36,880 Speaker 1: I have also had to go as editing these questions because, 25 00:01:36,920 --> 00:01:40,680 Speaker 1: as you can see, some of them are rather lengthy. Look, folks, 26 00:01:40,959 --> 00:01:43,360 Speaker 1: as I always say, keep the questions coming. Love to 27 00:01:43,400 --> 00:01:45,520 Speaker 1: have them. You don't have to tell us your life story. 28 00:01:45,880 --> 00:01:47,840 Speaker 1: If you want to, you can, but I will ed 29 00:01:47,920 --> 00:01:50,280 Speaker 1: us that part of us and I'm going to try 30 00:01:50,320 --> 00:01:53,520 Speaker 1: and zone in on the actual question itself just to 31 00:01:53,600 --> 00:01:57,120 Speaker 1: keep the show rolling. Basically, Okay, well, look, why don't 32 00:01:57,600 --> 00:01:59,680 Speaker 1: we get going? And what I'll do is we'll read 33 00:01:59,680 --> 00:02:03,680 Speaker 1: them more turly. I might kick off with the first one. Interestingly, folks, 34 00:02:04,000 --> 00:02:07,400 Speaker 1: this first question about the forty year mortgage is off 35 00:02:07,400 --> 00:02:10,520 Speaker 1: the back of something I did in The Australian recently, 36 00:02:10,560 --> 00:02:13,760 Speaker 1: which was off the back of a conversation none other 37 00:02:13,919 --> 00:02:16,959 Speaker 1: than Stuart Williams, because he actually said to me a 38 00:02:17,000 --> 00:02:19,360 Speaker 1: few days ago, Listen, you're gonna have a look at this. 39 00:02:19,360 --> 00:02:21,839 Speaker 1: There's a forty year mortgage coming through the system. You've 40 00:02:21,840 --> 00:02:25,160 Speaker 1: always been asking about this and here they are. So 41 00:02:25,520 --> 00:02:30,640 Speaker 1: Andrew's question. Hi, longtime listener fan. The podcast read with 42 00:02:30,800 --> 00:02:34,920 Speaker 1: interest your piece about the forty year mortgage in the Australian. 43 00:02:35,360 --> 00:02:38,720 Speaker 1: I was wondering whether we are entering an era where 44 00:02:38,800 --> 00:02:41,959 Speaker 1: people will not be expected to discharge their mortgages while 45 00:02:41,960 --> 00:02:45,399 Speaker 1: they're working. Rather, they will only increase their equity during 46 00:02:45,440 --> 00:02:49,440 Speaker 1: their working lives and then draw down on it to retire, 47 00:02:49,600 --> 00:02:54,200 Speaker 1: using whatever equity remains until their home is returned almost 48 00:02:54,400 --> 00:02:59,600 Speaker 1: entirely to the institution when they die. Somewhat dystopian, he says, 49 00:03:00,600 --> 00:03:06,400 Speaker 1: but not unrealistic. Oh not onrealistic, Andrew. The figures show 50 00:03:06,639 --> 00:03:09,280 Speaker 1: obviously that the number of people who are retiring with 51 00:03:09,360 --> 00:03:13,919 Speaker 1: a mortgage is going through the roof. And similarly, and 52 00:03:14,520 --> 00:03:16,320 Speaker 1: a kind of a logical link here, the number of 53 00:03:16,320 --> 00:03:19,040 Speaker 1: people who take out a lump sum and use that 54 00:03:19,120 --> 00:03:22,520 Speaker 1: lump sum to pay off the mortgage is increasing too. 55 00:03:22,560 --> 00:03:25,520 Speaker 1: And it's one of the arguments for people say why 56 00:03:25,600 --> 00:03:28,560 Speaker 1: you should be able to use SUPER to. 57 00:03:28,520 --> 00:03:29,040 Speaker 2: Buy a home. 58 00:03:29,120 --> 00:03:32,600 Speaker 1: What is the point of putting it all in SUPER, 59 00:03:32,680 --> 00:03:34,840 Speaker 1: getting to the end of your working life, getting it 60 00:03:34,880 --> 00:03:37,240 Speaker 1: back and putting it into the mortgage that you've for 61 00:03:37,360 --> 00:03:40,520 Speaker 1: the interest rate has been collecting. That's just an argument 62 00:03:40,600 --> 00:03:42,800 Speaker 1: that's out there at the moment. But on the more 63 00:03:42,840 --> 00:03:46,880 Speaker 1: broader topic of this. To be specific, it was Pepper 64 00:03:46,920 --> 00:03:51,120 Speaker 1: Loans that introduced this forty year mortgage. And there's always 65 00:03:51,200 --> 00:03:54,960 Speaker 1: been long term mortgages thirty years or so often offered, 66 00:03:55,240 --> 00:03:57,800 Speaker 1: or thirty five years often offered to doctors and lawyers 67 00:03:57,840 --> 00:04:00,560 Speaker 1: under specialist funds, but not on general release. And I 68 00:04:00,560 --> 00:04:02,600 Speaker 1: think that's what was very interesting. What do you think 69 00:04:02,640 --> 00:04:04,600 Speaker 1: is to your number one? Will we see more of them? 70 00:04:04,680 --> 00:04:08,560 Speaker 1: Number two? What use have there to our listeners? There's 71 00:04:08,560 --> 00:04:09,960 Speaker 1: a forty year mortgage out there. 72 00:04:10,840 --> 00:04:14,000 Speaker 3: I think the main use is really around boring capacity, James, 73 00:04:14,080 --> 00:04:19,279 Speaker 3: rather than necessarily repaying over a forty year term. And 74 00:04:19,360 --> 00:04:22,480 Speaker 3: that's you know, that kind of helps in a way affordability. 75 00:04:22,480 --> 00:04:25,960 Speaker 3: I'm not saying houses become cheaper, but if my boring 76 00:04:25,960 --> 00:04:29,160 Speaker 3: capacity increases and I've got the cash flow to meet it, 77 00:04:29,240 --> 00:04:32,880 Speaker 3: because quite often, in fact, particularly at these interstrate settings, 78 00:04:33,400 --> 00:04:36,800 Speaker 3: what someone is able to borrow in terms of what 79 00:04:36,839 --> 00:04:40,240 Speaker 3: they can afford to borrow is quite often more than 80 00:04:40,279 --> 00:04:43,479 Speaker 3: what the banks will lend them. And the reverses was true, 81 00:04:43,520 --> 00:04:45,520 Speaker 3: you know a few years ago, when interest rates were 82 00:04:45,960 --> 00:04:48,320 Speaker 3: really low and boring capacity was much higher than what 83 00:04:48,360 --> 00:04:53,000 Speaker 3: people should or probably prudently should borrow. So a forty 84 00:04:53,040 --> 00:04:56,800 Speaker 3: year mortgage, particularly when interest rates are at higher settings, 85 00:04:56,920 --> 00:05:00,760 Speaker 3: will extend boring capacity and allow people to borrow more 86 00:05:00,800 --> 00:05:03,160 Speaker 3: if it's safe and prudent for them to do so. 87 00:05:03,160 --> 00:05:05,279 Speaker 3: So I think it's a I think it's a trend. 88 00:05:05,320 --> 00:05:09,600 Speaker 3: We're working longer, we're living longer. And you know, it 89 00:05:09,680 --> 00:05:14,760 Speaker 3: wasn't maybe less than two decades ago, the average mortgage 90 00:05:14,800 --> 00:05:18,000 Speaker 3: term was twenty five years, and so you know, I 91 00:05:18,000 --> 00:05:20,800 Speaker 3: think it will just trend upwards naturally, and I think 92 00:05:20,880 --> 00:05:24,119 Speaker 3: thirty five for the banks will probably be the next stop. 93 00:05:24,160 --> 00:05:26,359 Speaker 3: I think we're going to get there. But I like 94 00:05:26,440 --> 00:05:31,040 Speaker 3: Andrew's observation, and I share Andrew's observation to some degree. 95 00:05:31,440 --> 00:05:34,000 Speaker 3: Whereas you think back a few decades, it was, you know, 96 00:05:34,080 --> 00:05:36,600 Speaker 3: going buy a home, work really hard to pay off 97 00:05:36,640 --> 00:05:39,280 Speaker 3: the mortgage, and you'll probably live there for fifty or 98 00:05:39,320 --> 00:05:43,800 Speaker 3: so years, where these days, I think people tend to 99 00:05:43,800 --> 00:05:47,200 Speaker 3: be a bit more aspirational and understand that we're going 100 00:05:47,240 --> 00:05:49,480 Speaker 3: to buy this home, then I'm going to upgrade, and 101 00:05:49,520 --> 00:05:52,320 Speaker 3: m I upgrade a couple of times during my lifetime 102 00:05:52,360 --> 00:05:55,479 Speaker 3: to league until I get to the location and type 103 00:05:55,520 --> 00:05:58,640 Speaker 3: of property that I really want to occupy. And I 104 00:05:58,680 --> 00:06:03,000 Speaker 3: think then the extension that James is a downsize strategy, 105 00:06:03,240 --> 00:06:05,960 Speaker 3: which I think has a lot of merit. A down 106 00:06:06,400 --> 00:06:09,960 Speaker 3: sized strategy includes going and buying a family home in 107 00:06:10,000 --> 00:06:13,080 Speaker 3: a location that you make friends with, probably that you're 108 00:06:13,120 --> 00:06:15,479 Speaker 3: not going to ever repay the mortgage down to zero. 109 00:06:16,400 --> 00:06:19,360 Speaker 3: You occupy that location when you have children that are 110 00:06:19,400 --> 00:06:22,240 Speaker 3: going to school and you want close proximity, work all 111 00:06:22,279 --> 00:06:25,440 Speaker 3: those sorts of things, and then you sell that asset 112 00:06:26,040 --> 00:06:29,240 Speaker 3: probably when the kids move out a home, reduce your debt, 113 00:06:29,360 --> 00:06:32,680 Speaker 3: repay all your debt, go live somewhere else. And I 114 00:06:32,960 --> 00:06:35,200 Speaker 3: like it because it forces you to buy a high 115 00:06:35,320 --> 00:06:38,279 Speaker 3: quality asset. You're not going to pay any capital gains 116 00:06:38,320 --> 00:06:41,520 Speaker 3: tax on the growth over that asset. And to some degree, 117 00:06:41,560 --> 00:06:44,159 Speaker 3: it's a force savings mechanism. 118 00:06:43,760 --> 00:06:46,760 Speaker 1: Right at its best when the people are using it 119 00:06:46,800 --> 00:06:49,680 Speaker 1: sharply and smartly. Is there a logical end point here? 120 00:06:49,720 --> 00:06:51,640 Speaker 1: Is there a point of which it gets ludicrous? I mean, 121 00:06:52,080 --> 00:06:55,119 Speaker 1: if I'm thirty and I sign up for a forty 122 00:06:55,160 --> 00:06:58,880 Speaker 1: year mortgage, I mean, I'll be seventy when I in theory. 123 00:06:59,200 --> 00:07:01,200 Speaker 1: When I clear it, you're saying you're thinking about the 124 00:07:01,279 --> 00:07:03,919 Speaker 1: wrong way. You're saying you're not going to clear this, 125 00:07:04,240 --> 00:07:05,920 Speaker 1: You're certainly not going to pay it down in this 126 00:07:06,080 --> 00:07:10,080 Speaker 1: sort of gradual way for forty years. That is not 127 00:07:10,200 --> 00:07:14,560 Speaker 1: That is not how to optimize these purposes. Is that 128 00:07:14,920 --> 00:07:15,520 Speaker 1: what you're saying? 129 00:07:16,440 --> 00:07:19,240 Speaker 3: Oh yeah, I'm seeing more people, a greater number of 130 00:07:19,240 --> 00:07:22,280 Speaker 3: people thinking along those lines that, aka, I want to 131 00:07:22,280 --> 00:07:24,520 Speaker 3: go and buy in this blue chip suburb. The house 132 00:07:24,640 --> 00:07:26,400 Speaker 3: is going to cost me a lot. You know, if 133 00:07:26,440 --> 00:07:29,400 Speaker 3: all I did is put every cent towards repaying the mortgage, 134 00:07:29,400 --> 00:07:30,920 Speaker 3: maybe I'm going to get there. But I know I 135 00:07:30,960 --> 00:07:33,560 Speaker 3: want to invest in super and invest in other assets, 136 00:07:34,080 --> 00:07:35,520 Speaker 3: and I know I'm not going to need this big 137 00:07:35,560 --> 00:07:37,800 Speaker 3: family home. You know, when I retire, I don't need 138 00:07:37,840 --> 00:07:42,120 Speaker 3: to be in that location anymore. And there's significant lifestyle 139 00:07:42,160 --> 00:07:45,080 Speaker 3: benefits to you know, living in a prime location that 140 00:07:45,240 --> 00:07:47,840 Speaker 3: is close to work, in school, and then it is 141 00:07:47,880 --> 00:07:50,400 Speaker 3: all these sorts of things. I just think that more 142 00:07:50,440 --> 00:07:52,920 Speaker 3: people are going to be attracted to that, and the 143 00:07:53,000 --> 00:07:54,920 Speaker 3: idea that I'm going to go and buy a home, 144 00:07:55,120 --> 00:07:57,440 Speaker 3: repay the mortgage, and live there for the next fifty years. 145 00:07:57,480 --> 00:08:00,880 Speaker 3: I think that sort of situation's gone doesn't happen as 146 00:08:00,920 --> 00:08:01,440 Speaker 3: much anymore. 147 00:08:01,440 --> 00:08:04,320 Speaker 1: I suppose plain Devil's that's because here the danger is 148 00:08:04,360 --> 00:08:08,960 Speaker 1: that someone says, oh, you know, we're struggling. We never received, 149 00:08:09,040 --> 00:08:12,000 Speaker 1: as someone says, we never save, we're struggling to pay 150 00:08:12,040 --> 00:08:15,560 Speaker 1: our mortgage because gosh, you know there's three cars out 151 00:08:15,600 --> 00:08:19,400 Speaker 1: there that'll cost to bomb and whatever. The holiday homes 152 00:08:19,440 --> 00:08:22,600 Speaker 1: needs a new dream pipe for something. And then they 153 00:08:22,640 --> 00:08:24,520 Speaker 1: find out, oh, you know what, you could just push 154 00:08:24,560 --> 00:08:26,720 Speaker 1: your mortgage out. You could just you know, it was 155 00:08:26,720 --> 00:08:28,720 Speaker 1: supposed to be thirty years, but we can push it 156 00:08:28,760 --> 00:08:32,200 Speaker 1: out of forty. And it's the classic kicking the can 157 00:08:32,240 --> 00:08:34,280 Speaker 1: down the road. Is that the danger here that people 158 00:08:34,320 --> 00:08:35,320 Speaker 1: will play it that way. 159 00:08:36,320 --> 00:08:38,480 Speaker 3: You need to have a strategy, and you need to 160 00:08:38,520 --> 00:08:41,640 Speaker 3: make friends with the worst outcome of that strategy and 161 00:08:41,640 --> 00:08:44,400 Speaker 3: the worst outcome of a downsize the strategy is that 162 00:08:44,480 --> 00:08:46,560 Speaker 3: you have to sell the house when you don't really 163 00:08:46,600 --> 00:08:48,960 Speaker 3: want to, and you have to move to a different 164 00:08:49,000 --> 00:08:51,240 Speaker 3: area if you and you might not really want to 165 00:08:51,320 --> 00:08:53,800 Speaker 3: at that particular time. But if you can make friends 166 00:08:53,840 --> 00:08:55,760 Speaker 3: with that, if you can say, we might be forced 167 00:08:55,760 --> 00:08:58,360 Speaker 3: to sell when we're sixty or sixty five, and we 168 00:08:58,400 --> 00:09:01,760 Speaker 3: would like to reduce our working hours or retire in full, 169 00:09:02,280 --> 00:09:04,400 Speaker 3: and we realize we might have to go into a 170 00:09:04,440 --> 00:09:08,000 Speaker 3: regional area or regional town, but that might be the 171 00:09:08,040 --> 00:09:10,960 Speaker 3: consequence of our desire to sort of live in this 172 00:09:11,080 --> 00:09:13,960 Speaker 3: location while the kids are younger or young I think, 173 00:09:14,080 --> 00:09:16,520 Speaker 3: just make friends with those outcomes and if you can, 174 00:09:16,640 --> 00:09:19,000 Speaker 3: if that's acceptable, if that's an acceptable outcome to you 175 00:09:19,000 --> 00:09:21,520 Speaker 3: and you're willing to make that sacrifice, then great. But 176 00:09:21,559 --> 00:09:24,840 Speaker 3: I think the people get into trouble when they don't 177 00:09:24,840 --> 00:09:26,800 Speaker 3: make friends with that oka and then so then they 178 00:09:26,880 --> 00:09:29,080 Speaker 3: try and force a result that might not be there. 179 00:09:29,120 --> 00:09:29,679 Speaker 2: So if there's a. 180 00:09:29,679 --> 00:09:33,319 Speaker 3: Change in income, change in situation, you have to sell 181 00:09:33,360 --> 00:09:36,280 Speaker 3: before you need to. That's a consequence of this strategy. 182 00:09:36,679 --> 00:09:38,680 Speaker 3: You just need to make friends with it, be rational 183 00:09:38,679 --> 00:09:39,040 Speaker 3: about it. 184 00:09:39,040 --> 00:09:41,480 Speaker 1: Irrationally yeah yeah, and have it as a strategy rather 185 00:09:41,520 --> 00:09:43,760 Speaker 1: than a channel through which you can sort of kick 186 00:09:43,800 --> 00:09:47,120 Speaker 1: obligations and further away. Not that the banks will complain 187 00:09:47,120 --> 00:09:49,400 Speaker 1: about that, but you might find it a problem. Okay, 188 00:09:49,960 --> 00:09:52,360 Speaker 1: very interesting, none of us. This, of course, my friends, 189 00:09:52,440 --> 00:09:54,959 Speaker 1: is advice. It's information only. But thank you Andrew and 190 00:09:55,000 --> 00:09:56,600 Speaker 1: all the Andrews out there. I hope that that was 191 00:09:56,679 --> 00:10:00,320 Speaker 1: useful to you. The next question, which I'll get sure read, 192 00:10:00,800 --> 00:10:03,240 Speaker 1: is about digital and this is really interesting folks. Now, 193 00:10:03,320 --> 00:10:06,000 Speaker 1: this is where property and the share markets are crossover 194 00:10:06,760 --> 00:10:07,640 Speaker 1: or fuse. 195 00:10:07,360 --> 00:10:07,800 Speaker 2: If you like. 196 00:10:08,120 --> 00:10:10,880 Speaker 1: And we don't cover this as much as i'd like to, 197 00:10:11,559 --> 00:10:16,360 Speaker 1: but property listed property in the shape of property trusts 198 00:10:16,440 --> 00:10:18,920 Speaker 1: or what they are now called as RITZ or the 199 00:10:19,000 --> 00:10:21,400 Speaker 1: its is a very interesting area. It's a way that 200 00:10:21,440 --> 00:10:23,719 Speaker 1: you can invest in property, particularly property you might never 201 00:10:23,800 --> 00:10:26,079 Speaker 1: have invested in. I mean, you aren't likely to buy 202 00:10:26,080 --> 00:10:28,560 Speaker 1: an office block. Maybe you will, but it's unlikely. I 203 00:10:28,559 --> 00:10:31,160 Speaker 1: imagine if you're a listener. Similarly, you're probably not going 204 00:10:31,200 --> 00:10:33,280 Speaker 1: to buy a data center. So maybe we'll have the 205 00:10:33,360 --> 00:10:34,560 Speaker 1: question from George Steuart. 206 00:10:35,040 --> 00:10:39,160 Speaker 3: Yeah, absolutely so, George writes. A newly established data center 207 00:10:39,240 --> 00:10:41,680 Speaker 3: Digco is set to float on the AX on the 208 00:10:41,679 --> 00:10:44,959 Speaker 3: twelfth of December twenty twenty four with a capital raising 209 00:10:45,040 --> 00:10:47,640 Speaker 3: of two billion dollars. Its builders one of the biggest 210 00:10:47,640 --> 00:10:52,400 Speaker 3: floats in years given its anticipated market cap based on 211 00:10:52,440 --> 00:10:55,640 Speaker 3: a five to five dollars share price, The company is 212 00:10:55,679 --> 00:10:58,559 Speaker 3: expected to be included in the AX two hundred d nexts. 213 00:10:59,200 --> 00:11:03,200 Speaker 3: The majority of issued shares will be to retail shareholders, 214 00:11:03,200 --> 00:11:07,800 Speaker 3: with an allocation to institutions. Having already closed over subscribed 215 00:11:08,520 --> 00:11:12,080 Speaker 3: on the basis there should be additional demand from funds 216 00:11:12,160 --> 00:11:17,120 Speaker 3: and ETFs index funds that replicate the ASX two hundred index. 217 00:11:17,880 --> 00:11:21,240 Speaker 3: Given this, do you think Digiico will perform similarly to 218 00:11:21,320 --> 00:11:26,319 Speaker 3: other large floats such as Guzman and Gomez. Guzman share 219 00:11:26,320 --> 00:11:29,160 Speaker 3: price peaked at forty two dollars, up ninety percent from 220 00:11:29,200 --> 00:11:34,280 Speaker 3: its twenty twenty two dollars share price offer, only days 221 00:11:34,280 --> 00:11:37,280 Speaker 3: after it was announced that Guzman would be included in 222 00:11:37,320 --> 00:11:38,920 Speaker 3: the AX two hundred index. 223 00:11:39,120 --> 00:11:42,120 Speaker 1: Yes, very interesting to George, All very interesting. Okay, a 224 00:11:42,120 --> 00:11:45,120 Speaker 1: few things there before we get into some details. It 225 00:11:45,440 --> 00:11:49,280 Speaker 1: probably doesn't make much sense to compare Gosvindi Goelmez to 226 00:11:49,760 --> 00:11:53,520 Speaker 1: a property trust like this property trust which is going 227 00:11:53,559 --> 00:11:56,920 Speaker 1: to be the biggest flirt of the year, happening on Thursday, 228 00:11:57,040 --> 00:12:01,040 Speaker 1: the tirth of December, and not far away. Guzmini Gomez 229 00:12:01,120 --> 00:12:06,160 Speaker 1: is a peculiar stock. It seems to be a perfectly 230 00:12:06,200 --> 00:12:08,560 Speaker 1: fine business. I would almost separate the business from the 231 00:12:08,559 --> 00:12:11,480 Speaker 1: stock which is having a life of its own. And 232 00:12:11,679 --> 00:12:14,040 Speaker 1: keep in mind that there is a very small number 233 00:12:14,080 --> 00:12:17,959 Speaker 1: of what they call free shares out there on Guzmini Gomez, 234 00:12:18,000 --> 00:12:20,720 Speaker 1: and when you have that, this share price can be 235 00:12:20,800 --> 00:12:23,520 Speaker 1: very volatile, and it can run up easier or run 236 00:12:23,520 --> 00:12:26,280 Speaker 1: down easier, and it ran up very easily for that 237 00:12:26,360 --> 00:12:31,360 Speaker 1: stock when it happened. Now utterly separately to that, the 238 00:12:31,720 --> 00:12:35,200 Speaker 1: ate that you mentioned, Digico is very interesting because it 239 00:12:35,320 --> 00:12:37,680 Speaker 1: captures what we've been talking about on the show regularly 240 00:12:37,760 --> 00:12:41,360 Speaker 1: for years, which is data centers, a boom area off 241 00:12:41,400 --> 00:12:45,800 Speaker 1: the back of the explosion of data needs, particularly aligned 242 00:12:45,920 --> 00:12:48,800 Speaker 1: with the creation, if you like, of artificial intelligence on 243 00:12:48,880 --> 00:12:53,040 Speaker 1: a mass scale. The man behind Digitico is a guy 244 00:12:53,080 --> 00:12:55,680 Speaker 1: called David de Pilla, who I expect will be a 245 00:12:55,679 --> 00:12:57,680 Speaker 1: household name in a year or two if he keeps 246 00:12:57,720 --> 00:12:59,880 Speaker 1: going at the pace he's going. He's a deal maker. 247 00:13:00,559 --> 00:13:02,440 Speaker 1: He was once upon a time, I think with ubs. 248 00:13:02,600 --> 00:13:04,480 Speaker 1: Is now out there on his own, backed by some 249 00:13:04,600 --> 00:13:09,360 Speaker 1: very wealthy families and doing deals on a weekly basis across. 250 00:13:08,960 --> 00:13:10,000 Speaker 2: All sorts of areas. 251 00:13:10,040 --> 00:13:12,240 Speaker 1: But this is one of his This may be his 252 00:13:12,360 --> 00:13:15,320 Speaker 1: signature dealer, one of them, which is what he captured 253 00:13:15,360 --> 00:13:18,199 Speaker 1: the excitement over data centers, got bought a few of them, 254 00:13:18,240 --> 00:13:19,960 Speaker 1: put them in a trust, put the trust up on 255 00:13:19,960 --> 00:13:22,440 Speaker 1: the share market, and it's the biggest float of the year. 256 00:13:22,720 --> 00:13:25,520 Speaker 1: I do expect it will do quite well. So we 257 00:13:25,600 --> 00:13:28,120 Speaker 1: might talk first of all about that idea of getting 258 00:13:28,120 --> 00:13:32,160 Speaker 1: into property Stewart through a trust. Do you see it 259 00:13:32,200 --> 00:13:34,840 Speaker 1: as a completely different Someone comes into you and says, 260 00:13:34,880 --> 00:13:37,920 Speaker 1: I want to buy property. Do they ever end up 261 00:13:37,960 --> 00:13:39,000 Speaker 1: buying a property trust. 262 00:13:41,240 --> 00:13:43,400 Speaker 3: One of the big one of the great things with 263 00:13:43,559 --> 00:13:47,400 Speaker 3: property is in direct property is control. You have control 264 00:13:47,480 --> 00:13:49,640 Speaker 3: over the asset. You have control. 265 00:13:49,920 --> 00:13:51,840 Speaker 1: You can't paint the data center that you buy on 266 00:13:51,880 --> 00:13:52,679 Speaker 1: the share market. 267 00:13:52,880 --> 00:13:54,520 Speaker 2: Yeah, you can improve it. 268 00:13:55,720 --> 00:13:59,120 Speaker 3: You know, you can assess its value. It's intrinsic value. 269 00:13:59,360 --> 00:14:01,959 Speaker 3: And that makes a lot of people comfortable that you know, 270 00:14:01,960 --> 00:14:04,960 Speaker 3: I'm going to pay million dollars for this residential property 271 00:14:05,040 --> 00:14:07,800 Speaker 3: or commercial property, and you know, I'm pretty confident that 272 00:14:07,840 --> 00:14:11,280 Speaker 3: it's worth a million dollars. Whereas with Reads, I mean 273 00:14:11,360 --> 00:14:14,840 Speaker 3: they can trade at premiums or discounts to net tangible assets. 274 00:14:15,520 --> 00:14:18,760 Speaker 3: You you've got to make some assumptions that the net 275 00:14:18,760 --> 00:14:23,600 Speaker 3: tangible asset valuation is reasonable or realistic. And I mean 276 00:14:23,800 --> 00:14:25,760 Speaker 3: you can put a big sort of question mark there 277 00:14:25,800 --> 00:14:29,040 Speaker 3: and in some situations and they behave more like an 278 00:14:29,080 --> 00:14:32,120 Speaker 3: equity than property. So what happens, and we've seen this 279 00:14:32,200 --> 00:14:35,120 Speaker 3: with Reads perfectly over the last couple of years, particularly 280 00:14:35,160 --> 00:14:40,320 Speaker 3: Australian reads, is that they fell a lot earlier than 281 00:14:40,760 --> 00:14:44,520 Speaker 3: actual property valuations. Fel commercial property valuations fail. 282 00:14:44,560 --> 00:14:47,760 Speaker 2: So you're saying they behave like shares more than direct. 283 00:14:47,440 --> 00:14:51,600 Speaker 3: Property because I move on expectations rather than actual fundamentals. 284 00:14:51,720 --> 00:14:54,280 Speaker 3: Now that there's some pros and cons to that, I'd 285 00:14:54,320 --> 00:14:56,200 Speaker 3: like to address if I could, James, I mean one 286 00:14:56,280 --> 00:14:59,920 Speaker 3: of the observations that George shared in terms of India 287 00:15:01,320 --> 00:15:05,200 Speaker 3: and the potential demand coming from indexes. So there's been 288 00:15:05,240 --> 00:15:07,880 Speaker 3: a lot of work around this in terms of what 289 00:15:07,920 --> 00:15:10,080 Speaker 3: they call index premiums. 290 00:15:10,440 --> 00:15:12,680 Speaker 1: We might just say to people just to give them 291 00:15:13,080 --> 00:15:16,400 Speaker 1: a background on this, folks, It's like, if a company 292 00:15:17,400 --> 00:15:20,880 Speaker 1: gets so big that it enters the top two hundred, 293 00:15:21,240 --> 00:15:23,360 Speaker 1: then the theory is start a theory, it's a fact 294 00:15:23,400 --> 00:15:26,720 Speaker 1: all those index funds that are ASX two hundred funds 295 00:15:27,200 --> 00:15:30,320 Speaker 1: must buy the company, whether it doesn't matter whether it's good, bad, 296 00:15:30,400 --> 00:15:33,960 Speaker 1: or hopeless. They must buy it now. So Stuart, you're 297 00:15:34,000 --> 00:15:35,840 Speaker 1: going to tell us about some research around. 298 00:15:35,600 --> 00:15:39,160 Speaker 3: This, Yes, exactly right. And so of course then the 299 00:15:39,200 --> 00:15:42,520 Speaker 3: index providers announce, you know, two to four weeks before 300 00:15:42,600 --> 00:15:45,160 Speaker 3: a company is added to an index that's going to happen. 301 00:15:45,600 --> 00:15:48,520 Speaker 3: So the whole market knows that AKA Vanguard and Beta 302 00:15:48,560 --> 00:15:50,560 Speaker 3: shares and so forth has to go on by this 303 00:15:50,920 --> 00:15:54,240 Speaker 3: by this stock. So the research is that the stock 304 00:15:54,280 --> 00:15:58,560 Speaker 3: appreciates by between three to seven percent sort of three 305 00:15:58,680 --> 00:16:01,840 Speaker 3: weeks or so prior to being added to an index, 306 00:16:01,880 --> 00:16:05,000 Speaker 3: and loss three to seven percent three weeks or so 307 00:16:05,600 --> 00:16:08,560 Speaker 3: after being added to the index. And so the thesis 308 00:16:08,680 --> 00:16:12,440 Speaker 3: is that index index funds are overpaying for these stocks, 309 00:16:12,480 --> 00:16:16,200 Speaker 3: which I guess in isolation is true. Actually, the index 310 00:16:16,280 --> 00:16:20,760 Speaker 3: funds have got really smart around their trading strategies. And 311 00:16:21,360 --> 00:16:25,480 Speaker 3: when BHP consolidated its listing, it was dual listed in 312 00:16:25,520 --> 00:16:29,000 Speaker 3: London and the AX. On the twenty eighth of January, 313 00:16:29,120 --> 00:16:33,400 Speaker 3: it became solely listed on the AX. On that day 314 00:16:34,040 --> 00:16:37,160 Speaker 3: BHP went from six point six of the ASEX two 315 00:16:37,280 --> 00:16:41,400 Speaker 3: hundred index to eleven percent. So essentially the index funds 316 00:16:41,480 --> 00:16:44,880 Speaker 3: had to buy a substantial amount of BHP on that day. 317 00:16:45,360 --> 00:16:48,240 Speaker 3: In fact, on that day over fifteen billion dollars of 318 00:16:48,240 --> 00:16:49,360 Speaker 3: BHP was traded. 319 00:16:49,560 --> 00:16:50,200 Speaker 2: It's huge. 320 00:16:50,200 --> 00:16:54,040 Speaker 3: It's the biggest day, particularly in one stock on the AX. 321 00:16:55,120 --> 00:16:57,400 Speaker 3: But they didn't miss a beat and Vanguard we're all 322 00:16:57,400 --> 00:17:00,400 Speaker 3: over it. We had a conversation about it a few 323 00:17:00,440 --> 00:17:04,639 Speaker 3: weeks ago. So I you know, sometimes people make or 324 00:17:04,800 --> 00:17:07,920 Speaker 3: have share concerns around these index funds are so big, 325 00:17:08,480 --> 00:17:10,479 Speaker 3: you know how much trading are they doing? Do they 326 00:17:10,520 --> 00:17:13,520 Speaker 3: affect the market, all these sorts of things. So I 327 00:17:13,520 --> 00:17:15,960 Speaker 3: don't know. I wouldn't index arbitrage. I don't think I 328 00:17:16,000 --> 00:17:18,879 Speaker 3: would be attracted to going buying this rate just because 329 00:17:18,880 --> 00:17:21,199 Speaker 3: it's going to be included in the ASEX two hundred. 330 00:17:21,680 --> 00:17:23,560 Speaker 3: But you've got to look at the fundamentals. 331 00:17:23,680 --> 00:17:26,720 Speaker 1: Yes, very good but really good question, George, and a 332 00:17:26,920 --> 00:17:32,040 Speaker 1: very interesting area. And of course David de Pillar has 333 00:17:32,200 --> 00:17:35,679 Speaker 1: put those two things together. The excitement around outa centers 334 00:17:36,200 --> 00:17:39,960 Speaker 1: the attraction of property to us at their best, and 335 00:17:40,000 --> 00:17:42,760 Speaker 1: we'd find out just how good an idea it was 336 00:17:42,920 --> 00:17:45,440 Speaker 1: on Thursday when he lists what's the biggest flout of 337 00:17:45,480 --> 00:18:01,000 Speaker 1: the year on the Essex All Right back in the morning. Hello, 338 00:18:01,119 --> 00:18:04,320 Speaker 1: Welcome back to the Australians Money Puzzle Podcast. I'm James Kirby. 339 00:18:04,359 --> 00:18:07,439 Speaker 1: We're talking to Stuart Weems today of the pro Solution 340 00:18:07,520 --> 00:18:11,159 Speaker 1: Private Clients Group, and I have taken the opportunity on 341 00:18:11,200 --> 00:18:13,320 Speaker 1: this show basically to package up a lot of your 342 00:18:13,400 --> 00:18:19,360 Speaker 1: questions because I want to not have many questions in 343 00:18:19,400 --> 00:18:21,320 Speaker 1: the Christmas break. I'm sure you don't like to have 344 00:18:21,359 --> 00:18:24,800 Speaker 1: your questions finished. Like everything else, everybody wants to have 345 00:18:24,840 --> 00:18:27,080 Speaker 1: everything done by Christmas for some reason. Judging by the 346 00:18:27,080 --> 00:18:31,280 Speaker 1: amount of sheer activity on my street this morning, I mean, 347 00:18:31,320 --> 00:18:33,480 Speaker 1: there must have been someone working at every single and 348 00:18:33,640 --> 00:18:36,960 Speaker 1: every single house seems to me except mine. 349 00:18:37,240 --> 00:18:40,920 Speaker 2: Okay, so we have a question from Simone. Now. 350 00:18:40,960 --> 00:18:45,560 Speaker 1: Simone is very much in the nature of the type 351 00:18:45,600 --> 00:18:50,040 Speaker 1: of question a correspondent I mentioned earlier who gave us 352 00:18:50,040 --> 00:18:51,280 Speaker 1: an awful lot of details, but. 353 00:18:51,240 --> 00:18:52,760 Speaker 2: I have narrowed it down. 354 00:18:53,760 --> 00:18:55,800 Speaker 1: Stewart has read the whole thing, which will be useful, 355 00:18:56,280 --> 00:18:59,280 Speaker 1: and I've narrowed it down to her question. And it's 356 00:18:59,520 --> 00:19:03,359 Speaker 1: interesting questions, very specific in some ways, but also it 357 00:19:03,440 --> 00:19:06,680 Speaker 1: would be something that people come upon. Simone says, Hi, 358 00:19:06,760 --> 00:19:09,919 Speaker 1: I've been listening to the podcast since two sixteen, and 359 00:19:10,000 --> 00:19:12,639 Speaker 1: I wonder if I may ask a question. Of course 360 00:19:12,680 --> 00:19:15,159 Speaker 1: you may. You've been listening for eight years. That is 361 00:19:15,200 --> 00:19:18,399 Speaker 1: really something, and thank you, Simone. She says, no one 362 00:19:18,440 --> 00:19:19,960 Speaker 1: has a clear answer for this, and putting me on 363 00:19:20,000 --> 00:19:22,960 Speaker 1: the spot. Here, Stuart, here we go for the purpose 364 00:19:23,359 --> 00:19:28,800 Speaker 1: of centerlink aged pension asset test. Would adding an adult 365 00:19:29,400 --> 00:19:34,600 Speaker 1: child name in joint tendancy to the title of their 366 00:19:34,640 --> 00:19:39,320 Speaker 1: primary place of residence be deemed a gift? Okay, let's 367 00:19:39,440 --> 00:19:43,120 Speaker 1: run through that again for in terms of accessing the pension. Obviously, 368 00:19:44,080 --> 00:19:46,600 Speaker 1: if she was to put an adult on the title 369 00:19:46,640 --> 00:19:49,359 Speaker 1: of her primary place of residence, is that a gift? 370 00:19:49,760 --> 00:19:53,960 Speaker 1: And secondly, would it impact eligibility for a full pension? 371 00:19:54,000 --> 00:19:57,119 Speaker 1: I noticed for a full pension tricky question, but people 372 00:19:57,119 --> 00:20:00,600 Speaker 1: would have often thought about this, I'm sure, and it's 373 00:20:00,600 --> 00:20:03,280 Speaker 1: a way I suppose of defending themselves long term in 374 00:20:03,400 --> 00:20:06,760 Speaker 1: terms of asset security, etc. We are giving advice here 375 00:20:06,760 --> 00:20:08,639 Speaker 1: as to all the Simons in the world. What do 376 00:20:08,680 --> 00:20:09,840 Speaker 1: you think Stuart. 377 00:20:11,080 --> 00:20:14,440 Speaker 3: Well certainly obviously has an asset test to meet age 378 00:20:14,520 --> 00:20:17,360 Speaker 3: pension limits, whether you get a full pension or part pension, 379 00:20:17,560 --> 00:20:22,800 Speaker 3: and those asset limits are different for homeowners versus non homeowners. 380 00:20:22,840 --> 00:20:25,720 Speaker 3: For single people, if you're a homeowner, you can have 381 00:20:25,840 --> 00:20:29,520 Speaker 3: three hundred and fourteen thousand addition to your family home. 382 00:20:29,680 --> 00:20:31,920 Speaker 3: If you're a non homeowner, you can have five hundred 383 00:20:31,920 --> 00:20:34,800 Speaker 3: and sixty six thousand. Because you don't own a home, 384 00:20:34,840 --> 00:20:36,600 Speaker 3: of course, you're going to have a little bit more 385 00:20:36,640 --> 00:20:40,200 Speaker 3: cash in the bank, hopefully. In this situation, simone talks 386 00:20:40,240 --> 00:20:44,520 Speaker 3: about adding a joint tenant onto a title, I'm going 387 00:20:44,560 --> 00:20:47,560 Speaker 3: to assume that there's no she's not intimating that it's 388 00:20:47,560 --> 00:20:49,399 Speaker 3: going to be sold, that that share is going to 389 00:20:49,400 --> 00:20:51,439 Speaker 3: be sold for cash. Because it's sold for cash, then 390 00:20:51,480 --> 00:20:55,800 Speaker 3: it would add to the asset test. There's rules around 391 00:20:55,840 --> 00:20:59,880 Speaker 3: gifting that limits or have an impact on the pinch. 392 00:21:00,119 --> 00:21:02,280 Speaker 3: So if you make a gift, that will be included 393 00:21:02,280 --> 00:21:04,240 Speaker 3: in the asset base for that asset test. 394 00:21:04,280 --> 00:21:05,760 Speaker 2: Is there a threshold on that gift. 395 00:21:06,720 --> 00:21:09,600 Speaker 3: Yeah, ten thousand per year or thirty thousand over five 396 00:21:09,680 --> 00:21:12,280 Speaker 3: years is the maximum you can give without it being 397 00:21:12,320 --> 00:21:16,480 Speaker 3: added to the asset test. And so in this situation, 398 00:21:16,840 --> 00:21:20,680 Speaker 3: if you were to essentially gift part of your home 399 00:21:20,920 --> 00:21:23,439 Speaker 3: to a family member, that would be what's called a 400 00:21:23,480 --> 00:21:26,680 Speaker 3: deprived asset and will be added to the asset test 401 00:21:26,840 --> 00:21:30,840 Speaker 3: and reduce that person's ability potentially to get an age 402 00:21:30,840 --> 00:21:31,359 Speaker 3: pension or. 403 00:21:31,400 --> 00:21:36,359 Speaker 2: Part pension unless the threshold unless. 404 00:21:36,119 --> 00:21:37,720 Speaker 1: They keep a lot of the threat isn't watching the 405 00:21:37,840 --> 00:21:39,600 Speaker 1: value of a house if you'redding. 406 00:21:39,280 --> 00:21:41,160 Speaker 2: It through many years, Yeah, okay. 407 00:21:41,560 --> 00:21:43,639 Speaker 3: Thirty grand over five years, it's not going to keep 408 00:21:43,680 --> 00:21:46,879 Speaker 3: you very far with property prices in Australia. Okay, So 409 00:21:47,000 --> 00:21:50,520 Speaker 3: the planning opportunities if you do it five years before 410 00:21:50,640 --> 00:21:55,240 Speaker 3: you anticipate applying for an age pension. So if you 411 00:21:55,280 --> 00:21:58,159 Speaker 3: could do it at six when you're sixty two and 412 00:21:58,200 --> 00:22:01,720 Speaker 3: then apply for the age pension it at sixty seven. Seen, 413 00:22:01,760 --> 00:22:04,480 Speaker 3: a link can only go back five years, So that 414 00:22:04,520 --> 00:22:07,960 Speaker 3: would be the planning opportunity in this situation. And I 415 00:22:07,960 --> 00:22:11,480 Speaker 3: guess the loophole they're trying to close, of course, is 416 00:22:11,520 --> 00:22:14,080 Speaker 3: that if I've got a family home, I put my 417 00:22:14,240 --> 00:22:17,040 Speaker 3: son on title, he owns fifty percent, and then I 418 00:22:17,119 --> 00:22:19,560 Speaker 3: eventually sell the family home. Of course, he gets fifty 419 00:22:19,600 --> 00:22:23,160 Speaker 3: percent of the proceeds and I therefore only get fifty 420 00:22:23,200 --> 00:22:25,679 Speaker 3: percent of the proceeds and get a chance to remain 421 00:22:25,720 --> 00:22:28,800 Speaker 3: below that asset test cap. So they're obviously trying to 422 00:22:28,840 --> 00:22:32,600 Speaker 3: close that loophole because some I made an observation, well, 423 00:22:32,720 --> 00:22:34,880 Speaker 3: if the assets not included for the asset test because 424 00:22:34,880 --> 00:22:38,879 Speaker 3: it's occupy home, what's the issue here. But I think 425 00:22:38,960 --> 00:22:41,280 Speaker 3: it's just trying to close that loopholes to get around it. 426 00:22:41,320 --> 00:22:44,560 Speaker 3: But I think, like everything James in finance, it's really 427 00:22:44,600 --> 00:22:47,560 Speaker 3: about forward planning as much as you can possibly do 428 00:22:48,000 --> 00:22:49,919 Speaker 3: to try and achieve the best outcomes. 429 00:22:50,200 --> 00:22:52,879 Speaker 1: I hope that isn't frustrating for our listeners. But the 430 00:22:52,920 --> 00:22:55,760 Speaker 1: five year I think about central's really interesting and for 431 00:22:55,840 --> 00:22:57,760 Speaker 1: what it's worth, folks, the rules are the rules, right, 432 00:22:57,800 --> 00:23:00,359 Speaker 1: so onto the change you are entitled to you in 433 00:23:00,400 --> 00:23:04,160 Speaker 1: any way that you can legitimately, all right. I hope 434 00:23:04,200 --> 00:23:08,280 Speaker 1: that was useful. Simone distressed property? Would you read that question? 435 00:23:08,640 --> 00:23:09,040 Speaker 2: Stuart? 436 00:23:09,440 --> 00:23:12,760 Speaker 3: So the next question is from Jack James. Jack writes, 437 00:23:13,240 --> 00:23:17,520 Speaker 3: there are reports of rises in distress property sales. What's 438 00:23:17,560 --> 00:23:20,240 Speaker 3: the definition of distressed property sales? 439 00:23:20,600 --> 00:23:22,359 Speaker 2: Yes, s Q and Research has done this. 440 00:23:22,560 --> 00:23:27,520 Speaker 1: In fact, just like the person our correspondent there, I 441 00:23:27,640 --> 00:23:30,800 Speaker 1: had the same thing. I said, what is distressed property? 442 00:23:30,920 --> 00:23:33,679 Speaker 1: You know, it's not like there's a dictionary definition of it. 443 00:23:33,800 --> 00:23:37,280 Speaker 1: So I actually went back to Lewis who said, there 444 00:23:37,359 --> 00:23:39,720 Speaker 1: is that they use a whole pile of variables to 445 00:23:39,760 --> 00:23:44,120 Speaker 1: define a distressed listing beyond what you might expect. It's 446 00:23:44,200 --> 00:23:48,080 Speaker 1: very obvious if somebody who was bankrupt or facing insolvency, 447 00:23:48,240 --> 00:23:51,000 Speaker 1: if they have a big sign plastered across the house 448 00:23:51,040 --> 00:23:54,320 Speaker 1: saying must sell, that would fall into it disease the 449 00:23:54,359 --> 00:23:58,040 Speaker 1: states obviously must sell as well, so they're all distressed listings. 450 00:23:58,520 --> 00:24:02,080 Speaker 1: He actually encompasses tag words and search words and all 451 00:24:02,760 --> 00:24:06,720 Speaker 1: sorts of issues to get his particular own in house definition, 452 00:24:06,720 --> 00:24:08,399 Speaker 1: which is not a global definition, if you know what 453 00:24:08,480 --> 00:24:12,119 Speaker 1: I mean. But it's certainly good enough, I thought in 454 00:24:12,359 --> 00:24:15,480 Speaker 1: the way he explained it to me, and it was 455 00:24:15,560 --> 00:24:20,439 Speaker 1: really interesting, as you might expect listeners if you've listened 456 00:24:20,440 --> 00:24:23,119 Speaker 1: to the show at all this year. Melbourne is the 457 00:24:23,400 --> 00:24:30,080 Speaker 1: trouble spot in many ways economically and certainly on house prices. 458 00:24:30,119 --> 00:24:34,440 Speaker 1: It has the softest house price passion in the nation, 459 00:24:34,760 --> 00:24:37,160 Speaker 1: it has the weakest prices. Prices are following by about 460 00:24:37,200 --> 00:24:41,480 Speaker 1: one percent a month. And don't you know that the 461 00:24:41,520 --> 00:24:44,520 Speaker 1: total of distress properties in Melbourne lifted by fifteen point 462 00:24:44,520 --> 00:24:48,320 Speaker 1: four percent in the twelve months to the start of November, 463 00:24:48,400 --> 00:24:51,280 Speaker 1: while Sydney, which has had some bad months, was actually 464 00:24:51,359 --> 00:24:56,840 Speaker 1: overall flat. And to be precise, most of that figure 465 00:24:57,480 --> 00:25:00,520 Speaker 1: his apartments, and most of those apartments are in the 466 00:25:00,560 --> 00:25:03,000 Speaker 1: inner city, which is something I would expect that you 467 00:25:03,080 --> 00:25:05,879 Speaker 1: are not the slightest bit surprised about, Stuart. 468 00:25:06,880 --> 00:25:10,280 Speaker 3: Not really, but James, I mean, I think we have 469 00:25:10,359 --> 00:25:16,240 Speaker 3: to sometimes separate research and reports that are trying to 470 00:25:16,240 --> 00:25:19,200 Speaker 3: find a headline versus what's actually going on. And I 471 00:25:19,280 --> 00:25:21,479 Speaker 3: think if I have a look at CBA, which is 472 00:25:21,520 --> 00:25:24,320 Speaker 3: the most recent lender to report and your results and 473 00:25:24,359 --> 00:25:27,080 Speaker 3: the largest mortgage lender in Australia, so I think it's 474 00:25:27,119 --> 00:25:31,240 Speaker 3: a really good representation. In its financial year twenty four 475 00:25:31,280 --> 00:25:35,560 Speaker 3: results reported a twenty eight percent fall in loan impairment expenses, 476 00:25:35,600 --> 00:25:38,399 Speaker 3: so that's actual bad debts or debts they're expected to 477 00:25:38,480 --> 00:25:42,840 Speaker 3: go bad. Ninety day areas arose, which is a good 478 00:25:42,920 --> 00:25:46,040 Speaker 3: measure of how people are dealing with their mortgages, so 479 00:25:46,240 --> 00:25:49,359 Speaker 3: it rose from one point two percent to one point 480 00:25:49,400 --> 00:25:54,240 Speaker 3: five percent. Huge numbers, but of course that's probably not 481 00:25:54,640 --> 00:25:58,560 Speaker 3: unexpected given interstrates are at thirteen year highs and you 482 00:25:58,560 --> 00:26:00,240 Speaker 3: know you'd have to go back to sort of free 483 00:26:00,320 --> 00:26:03,239 Speaker 3: GFC levels to have higher interest rates than all is there. 484 00:26:03,600 --> 00:26:05,600 Speaker 1: If it's rules from one point two to one point five, 485 00:26:05,640 --> 00:26:07,640 Speaker 1: people might have no idea what that means at all? 486 00:26:07,760 --> 00:26:08,199 Speaker 2: Is that like? 487 00:26:08,920 --> 00:26:11,800 Speaker 1: Is that from nothing to nothing? Is it from small 488 00:26:11,920 --> 00:26:12,760 Speaker 1: to significant? 489 00:26:12,920 --> 00:26:15,680 Speaker 3: Look at ninety day areas rates in the US, for example, 490 00:26:15,680 --> 00:26:17,199 Speaker 3: they have around two and a half percent. 491 00:26:17,680 --> 00:26:19,919 Speaker 1: What would I think, what would you think is a 492 00:26:19,920 --> 00:26:21,760 Speaker 1: point of which the bell rings in our market. 493 00:26:22,280 --> 00:26:24,359 Speaker 3: Maybe if it gets closer to the two, you know, 494 00:26:25,680 --> 00:26:28,280 Speaker 3: high one percent, So I think it starts to look 495 00:26:28,359 --> 00:26:31,720 Speaker 3: like people are distressed. But again, this is people that 496 00:26:31,880 --> 00:26:35,680 Speaker 3: haven't defaulted, they're just behind in their repayments, and banks 497 00:26:35,720 --> 00:26:39,000 Speaker 3: will work with these people to you know, find solutions, 498 00:26:39,000 --> 00:26:42,440 Speaker 3: and those solutions could include selling a property. A lot 499 00:26:42,480 --> 00:26:46,399 Speaker 3: of times these situations include divorces and separations. You know, 500 00:26:46,400 --> 00:26:49,560 Speaker 3: people stop paying their mortgage in that situation. So there's 501 00:26:49,600 --> 00:26:52,080 Speaker 3: a lot going on there. And it's just not unexpected 502 00:26:52,119 --> 00:26:55,320 Speaker 3: when we've come from interesstrates of sub two to now 503 00:26:55,359 --> 00:26:57,639 Speaker 3: interest rates in the sixes. I mean you're going to 504 00:26:57,760 --> 00:27:01,880 Speaker 3: expect a rise in ninety day areas. So these distressed 505 00:27:01,960 --> 00:27:04,440 Speaker 3: listings and so forth, I mean they're always going to exist. 506 00:27:05,440 --> 00:27:08,399 Speaker 3: But is the mortgage market and the property market in 507 00:27:08,440 --> 00:27:12,640 Speaker 3: a situation where people are fire selling assets. I don't 508 00:27:12,680 --> 00:27:15,200 Speaker 3: think it's you know, I think most people that are 509 00:27:15,240 --> 00:27:18,600 Speaker 3: discretionary vendors probably wouldn't sell in this market. I think 510 00:27:18,640 --> 00:27:21,600 Speaker 3: the people that are selling probably are doing so for 511 00:27:21,640 --> 00:27:24,959 Speaker 3: a reason. But are they distressed? Yeah, I just don't know. 512 00:27:25,320 --> 00:27:28,520 Speaker 1: Just throw the classic journalist question at you, which is 513 00:27:28,600 --> 00:27:30,679 Speaker 1: would you rule out which was always one of my 514 00:27:30,720 --> 00:27:33,200 Speaker 1: favorites when somebody was saying, you know, you said, would 515 00:27:33,240 --> 00:27:36,399 Speaker 1: you rule out that there is distress setting going on 516 00:27:36,480 --> 00:27:40,000 Speaker 1: in the inner city of particularly in Melbourne where the 517 00:27:40,000 --> 00:27:40,800 Speaker 1: market is weakest. 518 00:27:42,040 --> 00:27:44,520 Speaker 3: No, I wouldn't rule it out most definitely. I wouldn't 519 00:27:44,560 --> 00:27:47,639 Speaker 3: rule it out. And I think the longer interst rates 520 00:27:47,800 --> 00:27:50,800 Speaker 3: remain at this level, I think we'll see more and 521 00:27:50,960 --> 00:27:53,359 Speaker 3: more distress. But I mean that's the whole point of 522 00:27:53,440 --> 00:27:57,000 Speaker 3: raising interstrates is to create, you know, a contraction in 523 00:27:57,119 --> 00:28:00,680 Speaker 3: terms of monetary supply, and that at the fringes creates 524 00:28:01,200 --> 00:28:03,840 Speaker 3: a lot more distress for some people than others. So 525 00:28:03,880 --> 00:28:05,800 Speaker 3: I think we'll see more of it. But is it 526 00:28:05,840 --> 00:28:08,720 Speaker 3: to the point where you know it's affecting the market 527 00:28:08,760 --> 00:28:11,239 Speaker 3: as a whole. I mean, there might be sectors like 528 00:28:11,280 --> 00:28:15,000 Speaker 3: inner city apartments, but it's a bit strange, these inner 529 00:28:15,000 --> 00:28:18,199 Speaker 3: city apartments because I remember reading maybe you did some 530 00:28:18,240 --> 00:28:21,159 Speaker 3: work on it, James, a few years ago about apartments 531 00:28:21,240 --> 00:28:24,439 Speaker 3: really crashing when COVID hit. Then they had a pretty 532 00:28:24,480 --> 00:28:27,680 Speaker 3: strong recovery because I was selling quite cheaply. And then 533 00:28:27,800 --> 00:28:30,080 Speaker 3: now it looks like, you know, at least on the data. 534 00:28:30,680 --> 00:28:34,160 Speaker 3: It looks like there might be selling cheaply. Again, maybe 535 00:28:34,200 --> 00:28:37,119 Speaker 3: these weren't great assets to begin with and people just 536 00:28:37,160 --> 00:28:39,720 Speaker 3: took some cheap money to buy what they thought was 537 00:28:39,800 --> 00:28:43,080 Speaker 3: a bargain but have now realized actually it's not a bargain. 538 00:28:43,600 --> 00:28:46,239 Speaker 3: You know that it doesn't have the same amenity as 539 00:28:46,320 --> 00:28:47,480 Speaker 3: living in a quiet suburb. 540 00:28:47,880 --> 00:28:50,480 Speaker 1: Okay, And there is that issue always a course jack 541 00:28:50,680 --> 00:28:54,120 Speaker 1: of endless supply or at least you know the supply 542 00:28:54,240 --> 00:28:58,200 Speaker 1: can be You know, you can't build five hundred hours 543 00:28:58,280 --> 00:29:00,959 Speaker 1: as fast, but you can build five hundred apart relatively 544 00:29:01,080 --> 00:29:03,680 Speaker 1: quickly most of the time. All Right, we take a 545 00:29:03,720 --> 00:29:07,719 Speaker 1: short break, some very interesting questions from Sean and Adam 546 00:29:08,320 --> 00:29:26,080 Speaker 1: on their way. Hello, Welcome back to the Australians Money 547 00:29:26,120 --> 00:29:29,160 Speaker 1: Puzzle podcast James Kirby with Stuart Weams, and we are 548 00:29:29,360 --> 00:29:34,760 Speaker 1: galloping through our build up of questions, particularly for property 549 00:29:34,800 --> 00:29:38,400 Speaker 1: issues and property related issues which stretch as far as 550 00:29:38,440 --> 00:29:42,800 Speaker 1: reads and data centers, which we mentioned there earlier. The 551 00:29:43,000 --> 00:29:45,800 Speaker 1: very interesting float, biggest float of the year coming up, 552 00:29:46,520 --> 00:29:48,520 Speaker 1: which is a property flow, don't you know, which is 553 00:29:48,560 --> 00:29:52,200 Speaker 1: the Digico float, and I mentioned also in passing there 554 00:29:52,240 --> 00:29:57,600 Speaker 1: the very very interesting career of David DiPilla dip I La, 555 00:29:57,920 --> 00:30:03,120 Speaker 1: who is emerging as something of a deal maker. Extraordinary 556 00:30:03,440 --> 00:30:05,160 Speaker 1: on the national stage, you might say. 557 00:30:05,200 --> 00:30:06,880 Speaker 2: And we haven't had deal. 558 00:30:06,680 --> 00:30:10,360 Speaker 1: Makers of that scale for a long time, and they 559 00:30:10,400 --> 00:30:13,400 Speaker 1: can be very interesting if he keeps going, as I say, 560 00:30:13,400 --> 00:30:16,000 Speaker 1: at the rate and speed he's going. Okay, we have 561 00:30:16,080 --> 00:30:20,920 Speaker 1: a question which I think I read yes shown Shaun shown. 562 00:30:21,880 --> 00:30:25,000 Speaker 1: Given there's plans for superannuation funds to give members limited 563 00:30:25,040 --> 00:30:29,520 Speaker 1: financial advice, it prompts the question why would this be limited? 564 00:30:29,560 --> 00:30:33,040 Speaker 1: It seems reasonable to extend a person's holistic situation and 565 00:30:33,120 --> 00:30:35,640 Speaker 1: an advisor of their choosing. Surely we now have enough 566 00:30:35,640 --> 00:30:38,200 Speaker 1: confidence in the financial advice sector and we can put 567 00:30:38,200 --> 00:30:42,760 Speaker 1: guardrails in place. No. Shown, we don't have enough confidence 568 00:30:42,800 --> 00:30:43,920 Speaker 1: in the financial. 569 00:30:44,440 --> 00:30:47,480 Speaker 2: Sector at all. I'd love to think we do what 570 00:30:47,560 --> 00:30:48,240 Speaker 2: we don't show. 571 00:30:48,480 --> 00:30:52,120 Speaker 1: So the big funds will get to offer limited advice, 572 00:30:52,680 --> 00:30:55,120 Speaker 1: and I won't get into all the details around that, 573 00:30:55,160 --> 00:30:58,120 Speaker 1: except that they will offer it and charge in the 574 00:30:58,120 --> 00:31:00,760 Speaker 1: way they always charge for everything, which is everyone pays 575 00:31:00,760 --> 00:31:02,760 Speaker 1: the same and no one knows what they're getting for 576 00:31:02,840 --> 00:31:07,560 Speaker 1: their money. But maybe in highly limited circumstances where someone 577 00:31:07,600 --> 00:31:11,560 Speaker 1: knows almost nothing and really need some help, and they 578 00:31:11,560 --> 00:31:13,880 Speaker 1: only want a very limited piece of advice about their 579 00:31:14,000 --> 00:31:18,440 Speaker 1: super then the super fund might well be useful, and 580 00:31:19,080 --> 00:31:22,400 Speaker 1: we really could see some improvement in the provision of 581 00:31:22,480 --> 00:31:26,640 Speaker 1: financial services on a mass scale. That's the best part 582 00:31:26,680 --> 00:31:30,160 Speaker 1: of it. After that, there's all sorts of issues. But 583 00:31:30,360 --> 00:31:33,200 Speaker 1: certainly I think it a way is almost impossible to 584 00:31:33,240 --> 00:31:36,840 Speaker 1: expect the super fund to give full financial advice. Would 585 00:31:36,840 --> 00:31:39,480 Speaker 1: the super fund ever say if I went into I 586 00:31:39,520 --> 00:31:41,920 Speaker 1: won't mention any name, But if I went in and 587 00:31:41,960 --> 00:31:44,800 Speaker 1: I said, I'm very happy with my performance with this fund, 588 00:31:44,840 --> 00:31:46,000 Speaker 1: it's great, but you know, I want to do a 589 00:31:46,000 --> 00:31:47,600 Speaker 1: few things that I want to take a quarter of 590 00:31:47,600 --> 00:31:50,080 Speaker 1: it out and buy it by an apartment down the road, 591 00:31:50,120 --> 00:31:51,840 Speaker 1: and I want to take another quarter of it out, 592 00:31:51,880 --> 00:31:55,000 Speaker 1: and I want to buy some particular investments that you 593 00:31:55,040 --> 00:31:57,479 Speaker 1: aren't doing and I wish you were, but you're not, 594 00:31:57,520 --> 00:31:59,120 Speaker 1: so I got to take that out as well. Do 595 00:31:59,200 --> 00:32:00,840 Speaker 1: you think the fund was see, Yeah, that sounds like 596 00:32:00,880 --> 00:32:03,040 Speaker 1: a good take half your money out of your fond 597 00:32:03,040 --> 00:32:06,200 Speaker 1: off you Gil Stuart. 598 00:32:05,880 --> 00:32:07,920 Speaker 3: Oh, I don't think so. Not if you're a single 599 00:32:07,960 --> 00:32:11,719 Speaker 3: product provider and these people are working for a single 600 00:32:11,880 --> 00:32:14,600 Speaker 3: super fun So you know, it's a little bit like 601 00:32:14,680 --> 00:32:17,200 Speaker 3: walking into a Ford dealership and asking should I buy 602 00:32:17,200 --> 00:32:18,880 Speaker 3: a forward? What do you think their answer. 603 00:32:18,600 --> 00:32:19,080 Speaker 2: Is going to be? 604 00:32:19,200 --> 00:32:23,120 Speaker 3: So I think the idea has merit. 605 00:32:23,160 --> 00:32:23,360 Speaker 2: You know. 606 00:32:23,400 --> 00:32:26,600 Speaker 3: The idea is that if people have questions about SUPER, 607 00:32:26,680 --> 00:32:30,720 Speaker 3: and SUPER is a very complex area of financial planning, 608 00:32:31,240 --> 00:32:33,640 Speaker 3: we should have people there to be able to answer 609 00:32:33,640 --> 00:32:37,000 Speaker 3: those questions and help those people. And at this stage 610 00:32:37,000 --> 00:32:40,200 Speaker 3: they can't do that because that's giving financial advice. So 611 00:32:40,240 --> 00:32:42,600 Speaker 3: the governments then thought, well, we're going to create this 612 00:32:42,720 --> 00:32:46,080 Speaker 3: new type of advisor. Let's call them a qualified advisor. 613 00:32:46,160 --> 00:32:49,800 Speaker 3: They haven't told us really what their education requirements will be, 614 00:32:49,840 --> 00:32:51,520 Speaker 3: but it's going to be a lot less than a 615 00:32:51,560 --> 00:32:55,720 Speaker 3: standard financial advisor that needs a bachelor's degree and does 616 00:32:55,840 --> 00:33:00,360 Speaker 3: forty hours of professional education, etc. Per year. So they're 617 00:33:00,400 --> 00:33:02,600 Speaker 3: not going to have that skill and experience, but let's 618 00:33:02,600 --> 00:33:06,760 Speaker 3: help them answer, you know, some questions about maybe investment options, 619 00:33:06,800 --> 00:33:10,040 Speaker 3: the insurance you have in SUPER, maybe even the contributions 620 00:33:10,080 --> 00:33:13,560 Speaker 3: you're making. And I think I guess in some circumstances 621 00:33:13,560 --> 00:33:15,200 Speaker 3: they might be able to do that when people are 622 00:33:15,240 --> 00:33:18,800 Speaker 3: kind of confused between concession and non concessional and give 623 00:33:18,840 --> 00:33:20,760 Speaker 3: two nine and three tax and all these sorts of things. 624 00:33:20,800 --> 00:33:23,720 Speaker 3: That said, it's a complex area. I think it comes 625 00:33:23,760 --> 00:33:27,600 Speaker 3: in the implementation though, and that's the key, because if 626 00:33:27,640 --> 00:33:30,200 Speaker 3: these people aren't well trained and don't know where those 627 00:33:30,200 --> 00:33:33,920 Speaker 3: guardrails are and don't know that, look, I shouldn't be 628 00:33:33,960 --> 00:33:36,240 Speaker 3: giving this advice because there's a whole bunch of questions 629 00:33:36,320 --> 00:33:39,400 Speaker 3: I should be asking, but I can't ask because my 630 00:33:40,000 --> 00:33:43,480 Speaker 3: advice scope is quite limited. It's going to be problematic. 631 00:33:43,640 --> 00:33:47,360 Speaker 3: I think it makes sense and people need to understand that. 632 00:33:47,680 --> 00:33:49,480 Speaker 3: You know, if you're going to ask a question like 633 00:33:49,560 --> 00:33:53,360 Speaker 3: should I make additional SUPER contributions? For me to answer that, 634 00:33:53,400 --> 00:33:56,400 Speaker 3: As a financial advisor, I need to know about your 635 00:33:56,400 --> 00:33:59,400 Speaker 3: personal situation outside of SUPER, what your cash frow looks like, 636 00:33:59,440 --> 00:34:01,640 Speaker 3: what are the ASTs sets you have, what your home 637 00:34:01,720 --> 00:34:04,440 Speaker 3: mortgage is doing, what your longer term plan is. I 638 00:34:04,480 --> 00:34:07,680 Speaker 3: can't in isolation go, oh, well you'll get a tax deduction, 639 00:34:07,800 --> 00:34:10,040 Speaker 3: so yeah, why not put some more money into SUPER. 640 00:34:10,640 --> 00:34:13,680 Speaker 3: That's not really advice. That's really just explaining how the 641 00:34:13,760 --> 00:34:16,880 Speaker 3: legislation works and what the tax consequences are. So I 642 00:34:16,880 --> 00:34:20,560 Speaker 3: think it's problematic. I like the idea help people because 643 00:34:20,600 --> 00:34:23,200 Speaker 3: it's a complex area. How do you implement it is 644 00:34:23,280 --> 00:34:25,200 Speaker 3: another big question though. 645 00:34:25,360 --> 00:34:28,320 Speaker 2: Okay, okay, very I hope that was used to you. Sean. 646 00:34:28,920 --> 00:34:30,680 Speaker 1: There is this whole thing about what they call them. 647 00:34:30,719 --> 00:34:34,880 Speaker 1: They shouldn't call them qualified advisors. That's absolute nonsense. To 648 00:34:34,920 --> 00:34:38,359 Speaker 1: call them that. In house advisors it might be a 649 00:34:38,360 --> 00:34:41,279 Speaker 1: fair description of what they are, but of course there's 650 00:34:41,280 --> 00:34:43,760 Speaker 1: a big game going on there because you know, everyone 651 00:34:43,800 --> 00:34:45,279 Speaker 1: wants to sound as good as they can. 652 00:34:45,400 --> 00:34:47,239 Speaker 2: Don't They just like job titles, all right? 653 00:34:47,600 --> 00:34:53,239 Speaker 1: Final question is from Adam, and Adam is a Victorian 654 00:34:53,280 --> 00:34:56,680 Speaker 1: based property investor and guess what he's got a couple 655 00:34:56,719 --> 00:34:57,320 Speaker 1: of issues. 656 00:34:57,520 --> 00:34:58,879 Speaker 2: Okay, do you want to read that one? 657 00:34:59,040 --> 00:35:03,520 Speaker 3: Stuart, absolutely so. Adam writes, the Victorian government is introduced 658 00:35:03,520 --> 00:35:06,920 Speaker 3: a retrospective land tax on private land, even if it's 659 00:35:07,000 --> 00:35:09,759 Speaker 3: part of your principal place of residence. When it's on 660 00:35:09,800 --> 00:35:14,040 Speaker 3: a separate title, the solution may be simple merge the titles, 661 00:35:14,680 --> 00:35:17,279 Speaker 3: but this is not always possible when the land was 662 00:35:17,320 --> 00:35:20,760 Speaker 3: bought on at different times or is financed by different banks. 663 00:35:21,000 --> 00:35:24,160 Speaker 3: For example, we bought land at the rear of our 664 00:35:24,320 --> 00:35:28,520 Speaker 3: gardenless house to make a garden several years ago. After 665 00:35:28,560 --> 00:35:31,160 Speaker 3: buying the house and financed it with a different bank 666 00:35:31,320 --> 00:35:35,040 Speaker 3: prior to the new tax. The principles of fairness would 667 00:35:35,120 --> 00:35:38,880 Speaker 3: suggest fairness and the Victorian government. The principles of fairness 668 00:35:38,920 --> 00:35:43,040 Speaker 3: would suggest the Victorian government should make this tax perspective 669 00:35:43,160 --> 00:35:46,360 Speaker 3: and allow people to plan for their finances or apply 670 00:35:46,440 --> 00:35:50,600 Speaker 3: for an exemption for personal gardens, garages, etc. Which no 671 00:35:50,680 --> 00:35:54,000 Speaker 3: one derives income from. I realize this may seem like 672 00:35:54,000 --> 00:35:56,719 Speaker 3: a First world problem to those that are not affected, 673 00:35:56,800 --> 00:36:00,840 Speaker 3: but the sizeable tax goes against the except the principle 674 00:36:01,239 --> 00:36:06,120 Speaker 3: of new taxes being prospective rather than respective. Is there 675 00:36:06,120 --> 00:36:08,960 Speaker 3: any advice from you or your contacts may have. 676 00:36:09,160 --> 00:36:13,520 Speaker 1: Okay, well, we don't have advice, Adam, what observations would be? Yes, 677 00:36:13,560 --> 00:36:18,760 Speaker 1: of course there is a tradition, though somewhat imperiled and 678 00:36:18,840 --> 00:36:22,480 Speaker 1: under threat, if you like that. Taxes should always be grandful. 679 00:36:22,840 --> 00:36:24,600 Speaker 1: In otherwise, you don't give up one morning and find 680 00:36:24,600 --> 00:36:26,879 Speaker 1: there's a tax and you're hit with it. You're giving 681 00:36:26,920 --> 00:36:29,319 Speaker 1: time to plan. And that has always been the case. 682 00:36:29,360 --> 00:36:31,360 Speaker 1: And that was again another one of the problems that 683 00:36:31,960 --> 00:36:34,239 Speaker 1: often comes up when they introduce a new tax. But 684 00:36:34,280 --> 00:36:36,279 Speaker 1: then from the government's point of view, they say, if 685 00:36:36,320 --> 00:36:39,319 Speaker 1: you introduce it fast on the night, you catch all 686 00:36:39,320 --> 00:36:42,239 Speaker 1: the people you want to catch, and that's what I 687 00:36:42,480 --> 00:36:46,200 Speaker 1: expected politically from a real politic point of view, is 688 00:36:46,239 --> 00:36:50,880 Speaker 1: what's going on. We won't talk about the highly individualized 689 00:36:51,040 --> 00:36:55,000 Speaker 1: setting there, except to say, do you think that tax 690 00:36:55,239 --> 00:36:58,320 Speaker 1: was the land tax of Victoria which has caused a 691 00:36:58,320 --> 00:37:02,240 Speaker 1: lot of problems, which has definitely drained confidence from the 692 00:37:02,480 --> 00:37:07,680 Speaker 1: state because of its stature that it was a targeted 693 00:37:07,800 --> 00:37:11,560 Speaker 1: property investor property onerous tax? Do you think that particular 694 00:37:11,600 --> 00:37:13,480 Speaker 1: one did actually follow the wrong side of the line 695 00:37:13,520 --> 00:37:15,719 Speaker 1: in terms of procedure fairness as taxes go. 696 00:37:16,680 --> 00:37:21,480 Speaker 3: This rule relates to contiguous land, which I've never come 697 00:37:21,520 --> 00:37:26,000 Speaker 3: across that word contiguous, but land that is adjoining your 698 00:37:26,080 --> 00:37:29,720 Speaker 3: principal place of residence. It was called the tennis court tax, James, 699 00:37:30,239 --> 00:37:32,720 Speaker 3: and that's really what it was targeting. I guess people 700 00:37:32,960 --> 00:37:35,480 Speaker 3: interact the bought next door and had a tennis court. 701 00:37:35,719 --> 00:37:36,680 Speaker 2: I often wonder if. 702 00:37:36,760 --> 00:37:39,279 Speaker 1: If I had no one ever played tennis on those courts. 703 00:37:39,880 --> 00:37:41,480 Speaker 2: That's right, they do. 704 00:37:41,600 --> 00:37:45,279 Speaker 3: Now I'll properly get their money's with. And so from 705 00:37:45,360 --> 00:37:48,719 Speaker 3: one January twenty twenty they started charging land tax in 706 00:37:48,800 --> 00:37:53,480 Speaker 3: situations like that on metropolitan Melbourne only so regional that's fine. 707 00:37:53,480 --> 00:37:56,480 Speaker 3: If you've got land that adjoins your home on a 708 00:37:56,480 --> 00:37:59,239 Speaker 3: separate title that doesn't have another dwelling and it's used 709 00:37:59,239 --> 00:38:03,320 Speaker 3: for domestic purp, you're still okay. Of course, the Victorian 710 00:38:03,360 --> 00:38:05,880 Speaker 3: government wants to raise taxes, and the quickest way to 711 00:38:05,920 --> 00:38:08,920 Speaker 3: do that is implement it yesterday and don't give people 712 00:38:09,040 --> 00:38:11,440 Speaker 3: an opportunity to plan around these things. I think with 713 00:38:11,600 --> 00:38:14,440 Speaker 3: these sorts of changes, Yeah, it makes sense if you 714 00:38:15,080 --> 00:38:18,279 Speaker 3: are going to allow them to combine the titles, because 715 00:38:18,320 --> 00:38:22,000 Speaker 3: that's one way to obviously circumvent it. Give them time 716 00:38:22,200 --> 00:38:26,080 Speaker 3: in order to do that, including refinances. So I mean 717 00:38:26,320 --> 00:38:29,320 Speaker 3: Adam mentioned that his land is financed by two banks. 718 00:38:30,120 --> 00:38:32,920 Speaker 3: It shouldn't be a big deal to combine those titles. 719 00:38:33,239 --> 00:38:35,479 Speaker 3: You will have to refinance with one of those banks 720 00:38:35,560 --> 00:38:38,400 Speaker 3: or another one in fact, but it should be easy 721 00:38:38,440 --> 00:38:41,840 Speaker 3: to sort of clean that up and therefore avoid the 722 00:38:41,920 --> 00:38:44,520 Speaker 3: land tax. But people need time in order to do that. 723 00:38:45,080 --> 00:38:47,840 Speaker 3: But I think that's probably the government's idea. If you 724 00:38:47,880 --> 00:38:50,759 Speaker 3: don't give them time to sort themselves out, at least 725 00:38:50,800 --> 00:38:52,680 Speaker 3: you'll be able to charge the land tax for at 726 00:38:52,760 --> 00:38:55,720 Speaker 3: least one year maybe two before they come to terms 727 00:38:55,719 --> 00:38:56,160 Speaker 3: with it. 728 00:38:56,320 --> 00:38:58,920 Speaker 1: Yes, which is what I was alluding to I think 729 00:38:59,080 --> 00:39:01,120 Speaker 1: there when I was seeing the political part of this is, 730 00:39:01,120 --> 00:39:04,120 Speaker 1: you know, to grab as much as you can, all right, Okay, 731 00:39:04,320 --> 00:39:07,880 Speaker 1: very good, not advice, of course, observation and information for 732 00:39:07,960 --> 00:39:10,440 Speaker 1: Adam and all the Adams out there. Terrific. Great to 733 00:39:10,480 --> 00:39:12,400 Speaker 1: talk to you, Stuart Williams. Love you to have you 734 00:39:12,400 --> 00:39:13,200 Speaker 1: on the show as usual. 735 00:39:13,920 --> 00:39:16,680 Speaker 3: Thanks, Jans, being fun as always, great questions. 736 00:39:16,920 --> 00:39:19,239 Speaker 1: We'll have you back in the new year and look 737 00:39:19,320 --> 00:39:21,520 Speaker 1: forward to talking to you again and look forward to 738 00:39:21,600 --> 00:39:24,080 Speaker 1: having lots of questions folks. Keep them rolling the money 739 00:39:24,080 --> 00:39:27,319 Speaker 1: puzzle at the Australian dot com dot Au. Today's show 740 00:39:27,480 --> 00:39:31,520 Speaker 1: was produced by Leah Samuel Glue. Talked to you soon.