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Speaker 1: Hello, and welcome to the Australians Money Puzzle podcast. I'm

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Speaker 1: James Kirkby. Welcome aboard, everybody, Welcome aboard to our final

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Speaker 1: property episode of the year, your final Tuesday Property Intelligence bulletin.

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Speaker 1: I'm looking at the numbers for the year and hey,

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Speaker 1: you know, it's fine. I think most people would be

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Speaker 1: pretty happy. Seven point eight percent is what we're looking

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Speaker 1: at as a nation wide house price increase. But as

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Speaker 1: anyone will tell you, what property is local and my

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Speaker 1: guest today will definitely be interested in elaborating on that theme.

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Speaker 1: It's Terry Rider of the Hotspoting Group, a regular on

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Speaker 1: the show.

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Speaker 2: How are you, Terry?

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Speaker 3: I do well, James, and everything I've said so far

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Speaker 3: certainly aligned with everything that we're seeing at the moment.

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Speaker 3: Very strong into the year. But I think particular the

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Speaker 3: momentum we're taking into twenty twenty six is very very

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Speaker 3: powerful for markets right across the country.

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Speaker 1: Yeah, there has been quite a lift. The only thing

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Speaker 1: I suppose hanging over it all is about rates. I

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Speaker 1: see Caitlin Ezzi, the economist that cautality which we all

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Speaker 1: knew once upon a time as core logic. She says

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Speaker 1: that there has been a slow down in these last

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Speaker 1: few weeks, and that she says there is a some

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Speaker 1: clear evidence of slow down in growth consistent with certain

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Speaker 1: conditions happening at the moment, the big issue being, of course,

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Speaker 1: people thought there would be a rate cut. There isn't

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Speaker 1: going to be a rate cut. There is a distinct

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Speaker 1: possibility the money market suggests we'll have rate rises. We

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Speaker 1: could have two rate rises. The other part for investors

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Speaker 1: vacancy rates. There's a little bit of a lift in them,

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Speaker 1: and they are showing what Louis Christopher calls tentative signs

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Speaker 1: of easing, so slow down in the momentum of price

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Speaker 1: increases in the last month or two, a bit of

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Speaker 1: an easing in vacancy rates.

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Speaker 2: Is there a chance that the sort of growth we saw.

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Speaker 1: In twenty twenty five, with pretty chunky seven point percent nationwide,

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Speaker 1: do you think we could have a bit of a

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Speaker 1: still down for us in the early part of the year.

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Speaker 3: I think there's not the remotest possibility of that happening, James.

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Speaker 3: I think there's a tendency to place too much emphasis

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Speaker 3: on short term data like the latest month SOSIA show

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Speaker 3: slow down, and maybe the last two months and that's significant.

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Speaker 3: I think some analysts always overrate short term data way

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Speaker 3: too much and we're looking for longer term trends. In fact,

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Speaker 3: we're seeing the opposite. And one of the things that

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Speaker 3: we do that I don't think anyone else does is

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Speaker 3: that we monitor sales activity figures because we think that's

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Speaker 3: a really forward, really strong forward indicator what will happen

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Speaker 3: in prices. And right now the sales activity figures the volumes,

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Speaker 3: which means by demand is the strongest I think I've

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Speaker 3: ever seen in so many play what we normally see

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Speaker 3: that This is what I do every quarter for our

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Speaker 3: report we published called the Price Predictor Index, and it's

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Speaker 3: based on analysis of sales activity patterns in every suburban

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Speaker 3: town in the country and it's a great forward indicator

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Speaker 3: what will happen with prices, particularly in the short term.

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Speaker 3: And normally what we have is like lots of variations

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Speaker 3: across the country of markets that are rising strongly, some

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Speaker 3: of that are consistent, some of that are falling. I

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Speaker 3: often think we have a full speed market in Australia,

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Speaker 3: boom markets, moderate growth stagnation and the places that are falling.

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Speaker 3: But right now everywhere has got strong by demand, and

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Speaker 3: we could talk about the reasons why I think that's

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Speaker 3: the case. But we're going into twenty twenty six with

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Speaker 3: really strong momentum in terms of by demand at a

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Speaker 3: time of still shortages of everything that matters, and I

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Speaker 3: think it's a formula for prices to rise next year.

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Speaker 3: And I think what they choose to do or not

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Speaker 3: do with interest rate is not going to be particularly relevant.

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Speaker 2: Is that right? You're thinking of investors. It would matter

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Speaker 2: to horn byers, wouldn't it.

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Speaker 3: I mean, I just think that economists and particular completely

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Speaker 3: overrate the impact of interest rate movements when they're analyzing

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Speaker 3: residential property markets. And that's what causes big bank economists

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Speaker 3: to continually get their forecast wrong. What's going to happen

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Speaker 3: with the property prices at the start of every year,

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Speaker 3: they make their forecast. The start of twenty twenty three,

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Speaker 3: interest rates for rising, so they said prices were going

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Speaker 3: to fall everywhere, and they didn't. Process rose. The start

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Speaker 3: of twenty twenty four. They said interest rates were stubbornly high,

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Speaker 3: So prices we're going to fall everywhere, and they didn't.

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Speaker 3: We had prices rising. And they keep making the same

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Speaker 3: mistake that they think that interest rates are the paramount

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Speaker 3: influence on property markets and we think they're not. They

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Speaker 3: may keep interest rates on hold at some point, they

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Speaker 3: may make a cuttle two next year, or they may

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Speaker 3: even have an increase, which some people are speculating will happen.

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Speaker 3: I don't think it matters that much. If we had,

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Speaker 3: say three increases, it would matter, But if we had one,

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Speaker 3: I just think it's kind of irrelevant because there are

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Speaker 3: right now, as there always is, far more powerful forces

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Speaker 3: in the market driving by demand at a time of shortage.

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Speaker 3: That's those are the big factors, and we can talk

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Speaker 3: about what they are.

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Speaker 1: And that demand if you can't just kind of snuffsys

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Speaker 1: for us, what the key elements of that demand is

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Speaker 1: that makes you so confident?

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Speaker 3: Yeah, Well, firstly, we're seeing strength and by demand rising

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Speaker 3: demand in most market jurisdictions. And this analysis we divide

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Speaker 3: Australia into fourteen major jurisdictions, eight capital cities and six

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Speaker 3: state regional markets. And normally in this report we have winners,

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Speaker 3: we have losers, and we have the steady ones in between.

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Speaker 3: And this latest analysis, which we haven't published yet but

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Speaker 3: we will next week, there are no losers and there

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Speaker 3: are only a couple of steady ones everywhere else is

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Speaker 3: what we would classify as a winner because they have

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Speaker 3: such strong momentum in terms of by demand, and we've

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Speaker 3: seen markets which have been a little bit dormant recently,

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Speaker 3: like Melbourne, like Hobart, like regional Tasmania, like regional New

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Speaker 3: South Wales really coming to the four pointing to a

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Speaker 3: very strong performance in twenty twenty six.

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Speaker 1: Right, Okay, we're going to look Obviously we look at

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Speaker 1: this tell us about the year that's just passed. So

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Speaker 1: it seems to me Brisbane and Perth were a knockout

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Speaker 1: in terms of performance, with Sydney and Melbourne actually dragging.

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Speaker 2: Is that how it went?

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Speaker 3: Yeah, And when the figures differ from one source to

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Speaker 3: the next, it's amazing how much they have different numbers

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Speaker 3: whether you look at domain or cotality or prop track,

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Speaker 3: but the general patterns are pretty much the same and

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Speaker 3: actual fact, most of them would have Darwin as number

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Speaker 3: one for house price growth and that's certainly something that

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Speaker 3: we expected because we saw it in that the sales

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Speaker 3: activity patently huge uplifting by demand in Darwin sort of

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Speaker 3: from the start of this year, and it's carried throughout

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Speaker 3: the year to the point where it's now leading on

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Speaker 3: price growth. Brisbane's still very strong. Perth, depending on whose

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Speaker 3: figures you believe, still hanging there quite stubbornly, but you

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Speaker 3: know it was the runaway leader in the past, say

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Speaker 3: two to three years, but certainly not this year. It's

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Speaker 3: sort of starting to come back to the pack, and

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Speaker 3: again depending on whose figures you look at, it's sort

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Speaker 3: of no longer leading. Some of the regional markets doing

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Speaker 3: very well, particularly if you break it down into individual cities.

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Speaker 3: Regional Queensland locations like townsviall have been absolutely extraordinary in

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Speaker 3: the last couple of years. Clean the last twelve months,

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Speaker 3: I'd say Darwin's the capital growth star for the past

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Speaker 3: year across Australia, where just about every suburb's done better

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Speaker 3: than twenty percent, which also doesn't surprise us because we

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Speaker 3: could see the momentum in that market. So yeah, those

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Speaker 3: are the places that have done really well. Sydney and

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Speaker 3: Melbourne have lagged, but I think that will be different

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Speaker 3: in twenty twenty six. Melbourne. It takes a while for

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Speaker 3: the momentum in the market actually translates into the priced

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Speaker 3: data that's published by the usual suspects, and we are

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Speaker 3: seeing and hearing anecdotically that in Melbourne we're seeing extraordinary

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Speaker 3: results happening at auctions and all over greater Melbourne, including

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Speaker 3: in some of the more affordable areas. You might expect

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Speaker 3: the big auction results to be happening in the upmarket areas,

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Speaker 3: but some of the locations like Frankston in the far

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Speaker 3: Southwest and Point Cook in the far Southeast having the

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Speaker 3: most extraordinary upcomes at auctions. But that hasn't really flowed

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Speaker 3: through into the price data yet for Melbourne, but I

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Speaker 3: think we'll see that in twenty twenty six because there's

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Speaker 3: certainly been a massive uplift in by demand in Melbourne

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Speaker 3: markets in the second half.

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Speaker 1: Is that universal first home deposit? Is that relevant to that?

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Speaker 3: Do you think it's certainly playing a part. The reasons

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Speaker 3: why we do have such strong by demand in Melbourne,

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Speaker 3: but also elsewhere include the federal government schemes which are

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Speaker 3: bringing additional demand into that lower end of the market.

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Speaker 3: And what we're seeing across Australia is that it's the

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Speaker 3: affordability rules and it's the affordable parts of markets that

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Speaker 3: are really leading the charge. And that's true in Sydney.

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Speaker 3: It's true in Melbourne, it's true right across the country,

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Speaker 3: and that's certainly been exacerbated by the federal government schemes.

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Speaker 3: We also have a force high population growth fueled by

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Speaker 3: large numbers of overseas migrants coming into Australia in recent years.

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Speaker 3: It's been escapegoaded by some as the cause of the

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Speaker 3: housing crisis. It's not, but it's certainly part of the equation.

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Speaker 3: But the fact that James that's never talked about in media,

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Speaker 3: but we think it's really important. We rate this very highly,

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Speaker 3: is that we have right now in Australia an absolutely

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Speaker 3: unprecedented level of investment in major infrastructure. If you look

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Speaker 3: at all the projects across the country they are currently

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Speaker 3: happening or planning, it's nine hundred billion dollars worth and

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Speaker 3: we've never seen anything that big in Australia. We believe

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Speaker 3: at hot Spotting that infrastructure investment is a huge generation.

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Speaker 3: First Ly, vegan I make activity and therefore jobs and

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Speaker 3: that translates into high demand for real estate. And this

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Speaker 3: has happening right across the country. It's quite massive. Like

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Speaker 3: as I said, unprecedented.

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Speaker 1: Is there a particular project that kind of captures it.

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Speaker 3: Look some of the projects that sort of epitomize it are.

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Speaker 3: The biggest national infrastructure project right now is the inlande

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Speaker 3: rail Link, which is a thirty three billion dollar project

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Speaker 3: well under construction and where it's being built along through

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Speaker 3: regional New South Wales and parts of Queensland and parts

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Speaker 3: of because it's linking Melbourne to Brisbane. We've seen in

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Speaker 3: uplift and property markets with that construction, the Western Sydney

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Speaker 3: Airport and the aertropolis surrounding. That's like feeding steroids for

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Speaker 3: a property market. So when that's completed, that's going to

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Speaker 3: have a massive impact. But probably the thing that we

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Speaker 3: rate the highest is a type of infrastructure has a

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Speaker 3: huge impact and its huge right now, and that is hospitals.

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Speaker 3: When you build like a billion dollar hospital, there's like

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Speaker 3: three or four thousand jobs in building it, and that

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Speaker 3: brings demand into the location where it's happening. But when

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Speaker 3: it's finished, there's five or six thousand jobs in running it,

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Speaker 3: and these people typically want to live close to where

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Speaker 3: they're working and going every day, and that just brings

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Speaker 3: massive impetus to the region in which it sits. And

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Speaker 3: right now in Australia, there are one hundred and forty

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Speaker 3: four hospital projects of at least two hundred million dollars

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Speaker 3: and that total is investment of one hundred and fifteen

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Speaker 3: billion dollars. So these projects are happening all across the

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Speaker 3: country in regional centers like to Woomba and Bunderberg and Queensland.

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Speaker 3: There's a number of them happening in Sydney, there's a

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Speaker 3: number of them happening in Melbourne, like Frankston for example.

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Speaker 3: One of the reasons why that market's really hot. And so, yeah,

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Speaker 3: one hundred whether it's one hundred and forty four major

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Speaker 3: hospital projects right now extraordinary.

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Speaker 1: Does it attract investors as well because they know the

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Speaker 1: excellent rental conditions I imagine in those catchments.

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Speaker 3: Well, that's right, And as we often say to people,

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Speaker 3: you know, if you've got one of these big hospital

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Speaker 3: projects and in the midst of a market on which

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Speaker 3: you own property, you can be assured there's going to

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Speaker 3: be strong rental demand. And one of the things that

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Speaker 3: tends to happen is universities and hospitals tend to cluster

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Speaker 3: together in our major cities and so typically you'll have

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Speaker 3: a region of a city where there's a major university

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Speaker 3: campus and a big hospital's precinct. Like in Melbourne around

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Speaker 3: sort of Carlton Park World there's two university campuses and

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Speaker 3: a big hospitals precinct, huge rental demand around that. So

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Speaker 3: one of these.

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Speaker 4: If you're an unverstor looking for a simple but workable

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Speaker 4: formula to buy in areas that are going to outperform,

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Speaker 4: look at where they're building these big hospital projects and

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Speaker 4: act accordingly.

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Speaker 3: Examples include to Woomboro, a very strong diverse regional economy.

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Speaker 3: In Queensland, we've got a lot happening. It's part of

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Speaker 3: the inland railing. It's the Queensland hup for that, but

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Speaker 3: it's got one point two billion dollar hospital to be

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Speaker 3: built there. Bunderberg and Queensland also has one of these.

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Speaker 3: These are strong regional centers anyway, and they offer affordability

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Speaker 3: to investors and above average rental years. These hospital projects

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Speaker 3: are game changes. They take these markets to another level

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Speaker 3: because it means that thousands of jobs and building them,

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Speaker 3: but when they're finished, there'll be five thousand jobs at

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Speaker 3: least in running them. And you can imagine what goes

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Speaker 3: to a regional city.

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Speaker 1: And I suppose compared to students. It's twelve months of

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Speaker 1: the year, it's not it doesn't have the seasonality after

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Speaker 1: student accommodation from an investment for you.

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Speaker 3: Yeah, So generally speaking, I think this is a factor

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Speaker 3: that it's not talked about in terms of why do

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Speaker 3: we have prices rising everywhere and as quite unusual? James

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Speaker 3: to the latest figures from Totality and prop Track, et cetera,

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Speaker 3: show that every city and every regional market has prices

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Speaker 3: up in the latest month and also in annual terms.

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Speaker 3: That's really unusual. We normally have boom markets and moderate

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Speaker 3: markets and some markets with prices have fallen, but right there,

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Speaker 3: prices are up everywhere. One of the reasons I believe

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Speaker 3: that's the case but not being discussed is this massive

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Speaker 3: infrastructure investment and all the jobs it's generating and all

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Speaker 3: the economic activity it's generating in different parts of the

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Speaker 3: country and therefore demand for real estate it is.

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Speaker 1: Well, you have the facts to your fingertips, so it

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Speaker 1: is a compelling argument. Folks, will take a break, we'll

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Speaker 1: be back in a moment. Hello, welcome back to The

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Speaker 1: Australian's Money Puzzle. I'm talking to Terry Ryder of the

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Speaker 1: Hot Spotting Group, Terry. That was really interesting in the

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Speaker 1: first part. And though I was familiar in isolated examples

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Speaker 1: of exactly what you're talking about where there had been infrastructure,

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Speaker 1: specifically health infrastructure, hospital infrastructure, and where it had lifted

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Speaker 1: the segment around that, I hadn't known that it was

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Speaker 1: literally being repeated across the metropolitan centers at an extraordinary rate,

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Speaker 1: at the rate you've never seen, and you've been in

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Speaker 1: this game a long time. Tell us just looking back

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Speaker 1: on the year then and looking forward, if we put

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Speaker 1: it out at the start of the show that it

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Speaker 1: was everywhere but the big cities where we had some

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Speaker 1: serious growth.

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Speaker 2: So basically last.

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Speaker 1: Year being the year twenty twenty five, last the year two.

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Speaker 1: Now the big cities city in Melbourne did about four

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Speaker 1: or five percent each, but the national figure was closer

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Speaker 1: to eight, right, it was seven point eight percent, and

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Speaker 1: then there's these Perth and Brisbane were in the teens, right,

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Speaker 1: thirteen percent or so. What's your thoughts about whether that

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Speaker 1: pattern will extend into twenty twenty six.

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Speaker 3: I think we're going to see change. Ifact often say

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Speaker 3: that the only constant in real estate is change, And

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Speaker 3: if I'm doing a seminar presentation. One of the things

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Speaker 3: I quite often do is put three slides side by

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Speaker 3: side where the price growth figures were sitting twelve months ago,

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Speaker 3: where they were six months ago, and where they are now.

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Speaker 3: Quite significant differences, and I think we're going to see

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Speaker 3: even or change to the pecking order in terms of

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Speaker 3: price growth in twenty twenty six. Certainly, I think Melbourne's

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Speaker 3: going to be much higher, Perth will be lower. Adelaide

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Speaker 3: is also coming down the packet's been one of the

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Speaker 3: national leaders, has had fantastic growth for five years, but

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Speaker 3: we're now starting to see the numbers get smaller and

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Speaker 3: smaller in terms of Adelaide inevitably, because that kind of

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Speaker 3: growth cannot go on forever. Five years is extraordinary in fact.

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Speaker 3: But I think we're going to see Hobart rising up

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Speaker 3: the picking order. We've seen a big uplift and buy

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Speaker 3: demand there, and in the latter part of this year

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Speaker 3: Melbourne we're seeing extraordinary uplift and by demand. So we

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Speaker 3: think that'll be showing up in the price data as

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Speaker 3: we get into twenty twenty six, and so by this

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Speaker 3: time next year, if we're having this conversation James, I'll

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Speaker 3: expect us to be talking about Melbourne as one of

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Speaker 3: the price gross leaders. I mean, it's offering such good

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Speaker 3: value for money right now. That's why people are looking

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Speaker 3: at People have been reticent to invest in Melbourne and

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Speaker 3: Victoria because the taxes are so much higher and the

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Speaker 3: state government legislation government relationship between landlords and tenants is

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Speaker 3: particularly onerous to landlords. But people are looking at the

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Speaker 3: value for money and noticing that Melbourne is not only

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Speaker 3: much cheaper than Sydney, but it's cheaper now than Brisbane,

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Speaker 3: and it's about on a par with Adelaide and Perth

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Speaker 3: in terms of meeting prices. And people say, well, Melbourne's

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Speaker 3: clearly undervalued. It's overdue for a spurt of growth. The

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Speaker 3: population growth is really strong. There's this huge infrastructure investment happening.

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Speaker 3: Melbourne's time has come, and I think by this time

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Speaker 3: next year that will be shown up quite strongly in

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Speaker 3: the price growth figures. So Melbourne will be a leader.

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Speaker 3: Hobart will be there. We've also seen some considerable life

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Speaker 3: very recently in the Canberra market. Of course, we never

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Speaker 3: seem to talk about Canberra, and no one ever asked

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Speaker 3: me about Canberra, but we've seen massive uplift recently in

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Speaker 3: the unit market in Canberra, and this is a national

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Speaker 3: trend which I know we've talked about in the past,

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Speaker 3: but it's becoming strong and stronger. More and more buying

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Speaker 3: cohorts are opting for attached dwellings, not just for affordability,

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Speaker 3: but all sorts of motivations, and we're seeing much better

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Speaker 3: capital growth performance by units. And of course traditionally houses

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Speaker 3: on land have always outperformed units on capital growth, but

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Speaker 3: that has changed in a majority of local government areas

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Speaker 3: across Australia in the last twelve months, units have actually

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Speaker 3: outperformed houses on price growth and that's becoming a bit

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Speaker 3: of a paradigm shift and a real game changer for

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Speaker 3: people who are looking for affordability. It's becoming harder and

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Speaker 3: harder to find, particularly in the big cities, knowing that

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Speaker 3: units are now starting to perform very strongly on capital

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Speaker 3: growth and also have better rental yields and houses typically,

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Speaker 3: although you do also have higher costs in terms of

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Speaker 3: body corporate charges. But that's a bit of a game

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Speaker 3: changer for people to keep in mind. But Canberra particularly

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Speaker 3: shows out in that regud big uplifted in buyer demand

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Speaker 3: for units and affordability is probably part of the reason

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Speaker 3: for that because the medium price for houses and cameras

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Speaker 3: around a million dollars, but for units there's about six

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Speaker 3: hundred thousand, so quite a differential there.

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Speaker 1: Okay, So just one last thing, Terry on this this

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Speaker 1: looking forward. You mentioned this by buyer demand all the

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Speaker 1: time and it's what convinces you. But what's your indicator

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Speaker 1: of buyer demand? Is there something in particularly you look

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Speaker 1: at it? Is there a couple of indicators, yes, well.

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Speaker 3: Or sales volumes. We look at them quarter by quarter

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Speaker 3: and we look at the pattern. So and in the

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Speaker 3: report I mentioned that we include this information in We

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Speaker 3: have like a like our top fifty supercharged suburbs around

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Speaker 3: the country and these are ones with the strongest pattern

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Speaker 3: of rising sales volumes over four or five six quarters

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Speaker 3: in a row. And I have to later today whittle

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Speaker 3: my very large short list down to just fifty because

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Speaker 3: there's so many candidates at the moment. Unit markets. Unit

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Speaker 3: Market's very prominent in that was house markets showing up

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Speaker 3: in Brisbane, in Hobart, in camera with unit markets and

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Speaker 3: parts of Sydney and parts of Melbourne, and what stands

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Speaker 3: out is that it's the affordable parts of those markets.

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Speaker 3: We know that Sydney is a very expensive market, but

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Speaker 3: the ones that really stand out, the precincts that stand

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Speaker 3: out in Sydney are the ones that are dominated by

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Speaker 3: unit sales and that Paramatta, for example, the Paramatta Local

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Speaker 3: Company are very strong. The inner west of Sydney, the

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Speaker 3: city of Ride is very strong, but those are all

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Speaker 3: markets where units dominate. In Melbourne, we're seeing the outer

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Speaker 3: ring suburbs for houses are the strongest markets, but also

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Speaker 3: the inner city areas for units because those inner city

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Speaker 3: areas like Carlton and Parkville and Kensington have very affordable

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Speaker 3: units on offer, very close to the hospitals, the universities

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Speaker 3: and the cbdotes.

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Speaker 1: So would back into that theme that the hardest part

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Speaker 1: of the market is the entry level, the affordable end

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Speaker 1: out suburbs.

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Speaker 3: Been and that's been pumped up by the federal schemes

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Speaker 3: which are bringing more first home buyers into the market,

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Speaker 3: and of course there's plenty of commentary that they're actually

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Speaker 3: making affordability worse. Taking the short term political view that

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Speaker 3: there's more votes and throwing money at people than actually

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Speaker 3: fixing the affordability problem. So ultimately they're making it harder

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Speaker 3: for more people to get into the market because affordability

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Speaker 3: is of course one of the fundamental issues, and that's

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Speaker 3: becoming more and more so.

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Speaker 1: Yes, so that's the issue. Isn't that that we're all paying.

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Speaker 1: What's going on is we're paying more for the same

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Speaker 1: houses for rather than an expansion of the number of

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Speaker 1: houses that are there to buy. Okay, we'll be back

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Speaker 1: in a moment, folks. Hello, welcome back to the Australian's

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Speaker 1: Money Puzzle. I'm talking to Terry Ryder of the hot

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Speaker 1: Spotting group James Kirby here on the final show of

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Speaker 1: the year. Terry, I've just two questions. Two final questions

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Speaker 1: are for the year from our Property Investment Brigade. Martin asks,

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Speaker 1: can you explain about mortgage buffers? Do they still stand

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Speaker 1: now that the banks have been asked to curtail they're

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Speaker 1: lending to high risk borrowers. Really good question, market, So

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Speaker 1: everybody you would know that the banks have been told

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Speaker 1: to cool it on lending to borrowers who are taking

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Speaker 1: more than six times their income. They can't have more

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Speaker 1: than twenty percent of their book out on that, so

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Speaker 1: that is a targeted attempt to cool the market. But

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Speaker 1: as far as I know, the mortgage buffers are also there.

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Speaker 1: They haven't been that they still stand. Don't They tell

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Speaker 1: you have to you've to add three percent. Basically, if

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Speaker 1: you borrow a mortgage at five percent, you have to

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Speaker 1: or six percent you must add three. As far as

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Speaker 1: testing whether you can repay, the bank adds three percent.

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Speaker 1: That's what the buffer is. So you're not it sounds

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Speaker 1: at start of the show you your projections for the

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Speaker 1: yearhead are so solid that it sounds to me like

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Speaker 1: interest rates or even you know, attempts by regulators to

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Speaker 1: cool the market are not going to cool the market

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Speaker 1: as far as you're concerned.

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Speaker 3: I think what talking about is sensible, but quite moderate.

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Speaker 3: It's not particularly draconian. It's just seeking not so much

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Speaker 3: to call the market, but to curtail the more dangerous

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Speaker 3: end of the lending market, to make sure that they're

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Speaker 3: not lending money to people are over leveraged. So I've

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Speaker 3: had quite a number of conversations with people in the industry,

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Speaker 3: and it's generally felt that it's not going to have

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Speaker 3: a dramatic impact yet unless they go a few steps further.

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Speaker 3: They feel they need to, but what they've been out

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Speaker 3: so far isn't particularly strong. I think it's a good thing.

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Speaker 3: It's a sensible thing, and APRO has taken action in

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Speaker 3: the past, of course, to sort of to prevent property

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Speaker 3: markets getting out of control and lending becoming too risky.

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Speaker 3: And I think it's one of the reasons why realiztate

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Speaker 3: has been so solid in Australia. We don't have collapses

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Speaker 3: and property values except in those sort of high risk

435
00:23:54,760 --> 00:23:58,200
Speaker 3: mining areas, but generally bricks and mortar is very safe

436
00:23:58,200 --> 00:24:00,960
Speaker 3: and solid. And one of the reasons, many reasons why

437
00:24:01,000 --> 00:24:03,040
Speaker 3: I think that's the case in Australia is that we

438
00:24:03,119 --> 00:24:06,880
Speaker 3: do have organizations like EPRA keeping an eye on things,

439
00:24:06,880 --> 00:24:09,800
Speaker 3: making sure that things don't get too heated and that

440
00:24:09,800 --> 00:24:13,240
Speaker 3: the lending doesn't get too risky, and that's been effective

441
00:24:13,480 --> 00:24:14,119
Speaker 3: in the past.

442
00:24:14,320 --> 00:24:17,359
Speaker 1: It's certainly I mean, the delinquency rates et cetera at

443
00:24:17,359 --> 00:24:21,960
Speaker 1: the banks remain almost insignificant. There is uptick of late,

444
00:24:22,000 --> 00:24:25,000
Speaker 1: but we've seen these little uptics regularly. We have no

445
00:24:25,080 --> 00:24:27,880
Speaker 1: idea whether this one's different, folks, but there's no evidence

446
00:24:28,760 --> 00:24:32,080
Speaker 1: so far that is Thank you, Martin, they were that

447
00:24:32,160 --> 00:24:35,080
Speaker 1: this is never advice, of course information. On the final question, Adam,

448
00:24:35,119 --> 00:24:37,080
Speaker 1: I love the show. Can we have more shows on

449
00:24:37,160 --> 00:24:41,600
Speaker 1: industrial property investing for mom and dad investors? Yes, well

450
00:24:42,080 --> 00:24:44,240
Speaker 1: it's almost a different world. I bet Do you ever

451
00:24:44,280 --> 00:24:45,160
Speaker 1: go near that area?

452
00:24:45,240 --> 00:24:46,600
Speaker 2: Terry? Are you strictly residential?

453
00:24:48,280 --> 00:24:52,960
Speaker 3: Well, we're certainly were right here reports for residential investors,

454
00:24:52,960 --> 00:24:55,240
Speaker 3: but we're we're doing more and more work with people

455
00:24:55,240 --> 00:25:01,160
Speaker 3: who specialize in small commercial and infacted. Earlier this year

456
00:25:01,160 --> 00:25:04,439
Speaker 3: I did three seminars in the three biggest cities with

457
00:25:04,680 --> 00:25:06,840
Speaker 3: a couple of other practitioners, one of whom was a

458
00:25:06,880 --> 00:25:11,440
Speaker 3: bias agent and property advisory specializing in commercial for small investors.

459
00:25:12,000 --> 00:25:14,800
Speaker 3: And what we agreed is that the criteria we use

460
00:25:15,200 --> 00:25:19,720
Speaker 3: for selecting good locations to invest in residential apply equally

461
00:25:20,320 --> 00:25:26,040
Speaker 3: to industrial, commercial, retail, small retail storage units almost. And

462
00:25:26,280 --> 00:25:29,040
Speaker 3: it was really interesting actually being part of the because

463
00:25:29,080 --> 00:25:31,800
Speaker 3: these were live seminars, not wominars, and so we're in

464
00:25:31,800 --> 00:25:34,359
Speaker 3: the room with a couple hundred people at each one

465
00:25:34,600 --> 00:25:36,480
Speaker 3: and a lot of people in the audience. We're talking

466
00:25:36,480 --> 00:25:39,040
Speaker 3: about what they're doing that there is definitely growing interest

467
00:25:39,040 --> 00:25:41,960
Speaker 3: amongst property investors. They want a little bit more than

468
00:25:42,119 --> 00:25:45,359
Speaker 3: passive investment, which is what residential investment tends to be.

469
00:25:45,520 --> 00:25:48,320
Speaker 3: You buy something, I hope it got crows and value.

470
00:25:48,720 --> 00:25:52,160
Speaker 3: More and more people are interested in diverting or pivoting

471
00:25:52,240 --> 00:25:56,200
Speaker 3: into small commercial because it can offer them things that

472
00:25:56,440 --> 00:26:02,320
Speaker 3: residential maybe can't, such as serious cash flow. Yeah yeah, yeah,

473
00:26:02,960 --> 00:26:08,119
Speaker 3: longer leases, much better cash flow, serious net yields on

474
00:26:08,160 --> 00:26:11,400
Speaker 3: which can be positive cash flow. And there's a lot

475
00:26:11,440 --> 00:26:14,560
Speaker 3: of people out there doing interesting things and all kinds

476
00:26:14,560 --> 00:26:21,280
Speaker 3: of things storage units, small industrial workshops, small retail, small

477
00:26:21,320 --> 00:26:25,439
Speaker 3: office buildings. It's generally believed that you don't get the

478
00:26:25,480 --> 00:26:29,080
Speaker 3: same level of capital growth typically with commercial as you

479
00:26:29,119 --> 00:26:33,159
Speaker 3: do with residential, but the commercial specialists actually dispute that.

480
00:26:33,280 --> 00:26:35,960
Speaker 3: They say, if you select the right sort of property

481
00:26:35,960 --> 00:26:38,840
Speaker 3: in the right locations, you can still have excellent capital

482
00:26:38,880 --> 00:26:40,200
Speaker 3: growth as well as the cash flow.

483
00:26:40,560 --> 00:26:42,600
Speaker 1: Of course, the thing is, if you get a vacancy,

484
00:26:42,680 --> 00:26:45,080
Speaker 1: it's a long vacancy, it's ness to risk. It's not

485
00:26:45,160 --> 00:26:47,200
Speaker 1: like if you rent a house and someone leaves for

486
00:26:47,320 --> 00:26:50,760
Speaker 1: someone that's coming pretty quick, but actually so long leases

487
00:26:50,760 --> 00:26:52,840
Speaker 1: in their long gaps. We haven't time to go through

488
00:26:52,960 --> 00:26:55,720
Speaker 1: the show, but I certainly had happy enough to do

489
00:26:55,880 --> 00:26:57,720
Speaker 1: more shows on it. I know we did one or

490
00:26:57,720 --> 00:27:00,359
Speaker 1: two in the recent past, so thank you Adam. Okay,

491
00:27:00,400 --> 00:27:02,560
Speaker 1: and thank you Terry Ryder. Lovely to have you on

492
00:27:02,600 --> 00:27:06,000
Speaker 1: the show. Best of look for the new year, and

493
00:27:06,960 --> 00:27:09,000
Speaker 1: very interesting what you've told us on the show today

494
00:27:09,040 --> 00:27:12,320
Speaker 1: about the big picture patterns out there this year, the

495
00:27:12,359 --> 00:27:15,920
Speaker 1: return of the unit. Very interesting your take that the

496
00:27:16,160 --> 00:27:20,640
Speaker 1: obviously the infrastructure, particularly hospitals across the nation is underpinning

497
00:27:20,720 --> 00:27:26,480
Speaker 1: strong investment conditions and also maybe the return of Melbourne

498
00:27:26,680 --> 00:27:29,280
Speaker 1: to the four in the national and the pecking order

499
00:27:29,320 --> 00:27:29,960
Speaker 1: as you call it.

500
00:27:30,119 --> 00:27:31,680
Speaker 2: All right, terrific, Hey, thank you Terry.

501
00:27:31,680 --> 00:27:34,240
Speaker 3: We'll talk again, okay, Jame's always a pleasure to talk

502
00:27:34,280 --> 00:27:37,359
Speaker 3: to you. All the best for Christmas and my twenty

503
00:27:37,440 --> 00:27:39,840
Speaker 3: twenty sixth Bay everything that you wish for.

504
00:27:40,720 --> 00:27:43,480
Speaker 1: Thank you Terry, and thank you folks. Okay, keep the

505
00:27:43,760 --> 00:27:46,240
Speaker 1: emails rolling. Love to have some more questions or comments

506
00:27:46,320 --> 00:27:48,959
Speaker 1: or anything you wish to add to the debate and

507
00:27:49,119 --> 00:27:52,800
Speaker 1: our chats on the property market the money Puzzle at

508
00:27:52,800 --> 00:27:54,359
Speaker 1: the Australian dot com dot au.

509
00:27:54,480 --> 00:28:17,480
Speaker 2: Talk to you soon at the sh