1 00:00:08,840 --> 00:00:12,040 Speaker 1: Hello and welcome to The Australians Money Puzzle podcast. I'm 2 00:00:12,160 --> 00:00:15,840 Speaker 1: James Kirby, the editor at The Australian. Welcome aboard every body. 3 00:00:16,680 --> 00:00:18,919 Speaker 1: You know, one thing we haven't really spoken of in 4 00:00:18,960 --> 00:00:22,079 Speaker 1: any great detail on the Money Puzzle as been climate 5 00:00:22,160 --> 00:00:25,239 Speaker 1: change and not so much the issue, but what it 6 00:00:25,400 --> 00:00:28,880 Speaker 1: means for you as an investor or for that matter, 7 00:00:28,960 --> 00:00:32,840 Speaker 1: as a property owner. And we're certainly getting a serious 8 00:00:32,880 --> 00:00:38,560 Speaker 1: perspective on the impact of natural disasters fires, obviously in 9 00:00:38,600 --> 00:00:41,800 Speaker 1: the case of the Los Angeles fires that are currently 10 00:00:41,920 --> 00:00:46,160 Speaker 1: in the news so much. Also some fires in Australia, 11 00:00:46,200 --> 00:00:49,279 Speaker 1: as you would have some summers, are worse than others. 12 00:00:49,560 --> 00:00:52,040 Speaker 1: But we still have issues this year. We've had issues 13 00:00:52,040 --> 00:00:56,640 Speaker 1: in Victoria and the Grampians, for instance, and I think 14 00:00:56,800 --> 00:00:59,880 Speaker 1: it's time for us to look as property investors and 15 00:01:00,080 --> 00:01:07,880 Speaker 1: investors at this issue and whether we can also realistically 16 00:01:07,920 --> 00:01:11,160 Speaker 1: expect that this remains something of an issue in coastal 17 00:01:11,240 --> 00:01:14,080 Speaker 1: areas or regional areas or out the bush. Because I 18 00:01:14,120 --> 00:01:16,880 Speaker 1: supposed to extraordinary think about the Los Angeles fires as 19 00:01:16,920 --> 00:01:20,679 Speaker 1: that they were suburban and there is nothing I'm afraid 20 00:01:20,760 --> 00:01:25,440 Speaker 1: to say that we can't have suburban fires in Australia, 21 00:01:25,520 --> 00:01:28,520 Speaker 1: which simply cannot rule that out. Likewise, we can't rule 22 00:01:28,560 --> 00:01:34,279 Speaker 1: out dreadful summers in the future, which will be something 23 00:01:34,360 --> 00:01:36,560 Speaker 1: like dreadful summers we've had in the past, and how 24 00:01:36,600 --> 00:01:40,520 Speaker 1: that might affect properties in various areas, and how we 25 00:01:40,560 --> 00:01:43,080 Speaker 1: will respond to that, and how would investors respond to that. 26 00:01:43,240 --> 00:01:47,240 Speaker 1: So the obvious issue with fires is insurance, but I 27 00:01:47,240 --> 00:01:51,400 Speaker 1: think a deeper issue is property value. Now, on that issue, 28 00:01:51,880 --> 00:01:54,200 Speaker 1: I have been talking on and off for some time 29 00:01:54,360 --> 00:01:57,600 Speaker 1: with Narrati Economsty who is the chief economists at Ray White. 30 00:01:57,640 --> 00:01:59,640 Speaker 1: She's been on the show before, but we talked most 31 00:01:59,640 --> 00:02:04,080 Speaker 1: trees above all this, and she had also been using 32 00:02:04,120 --> 00:02:07,200 Speaker 1: a report which had been done on this issue, an 33 00:02:07,200 --> 00:02:09,359 Speaker 1: academic report which was done on this issue at the 34 00:02:09,440 --> 00:02:15,760 Speaker 1: University of New South Wales, specifically specifically on fires and 35 00:02:15,760 --> 00:02:18,120 Speaker 1: property values. Hi, Narada, how are you? 36 00:02:18,760 --> 00:02:20,000 Speaker 2: Hi? Thanks for having me. 37 00:02:20,360 --> 00:02:22,839 Speaker 1: Great to have you on. As always, look, I think 38 00:02:22,880 --> 00:02:28,520 Speaker 1: most people listening to the show would presume that it's 39 00:02:28,560 --> 00:02:31,880 Speaker 1: basically bad news if there's fire in an area, that 40 00:02:31,880 --> 00:02:34,720 Speaker 1: that area will be damaged, not just in terms of 41 00:02:34,720 --> 00:02:37,400 Speaker 1: it's the natural damage or the insurance damage, but it 42 00:02:37,400 --> 00:02:40,720 Speaker 1: would be damaged as a property zone for some time, 43 00:02:40,760 --> 00:02:44,519 Speaker 1: and so would neighboring zones. What have you found out 44 00:02:44,520 --> 00:02:46,280 Speaker 1: of late from this academic work. 45 00:02:46,840 --> 00:02:49,560 Speaker 2: Yes, so the research that the University of New South 46 00:02:49,600 --> 00:02:53,919 Speaker 2: Wales did show that absolutely there is a negative impact 47 00:02:54,040 --> 00:02:57,360 Speaker 2: on property values. It looks specifically at property values, so 48 00:02:57,480 --> 00:02:59,840 Speaker 2: obviously there's a lot of other damage that takes place, 49 00:03:00,040 --> 00:03:03,399 Speaker 2: but the research found between a six to twenty four 50 00:03:03,440 --> 00:03:08,840 Speaker 2: percent impact on property values. But interestingly that the recovery 51 00:03:09,040 --> 00:03:13,480 Speaker 2: was generally quite quick, So the recovery was between eighteen 52 00:03:13,840 --> 00:03:18,200 Speaker 2: months and two years. So even though the impacts were great, 53 00:03:18,360 --> 00:03:21,839 Speaker 2: things tended to bounce back. But there was a lot 54 00:03:21,880 --> 00:03:25,040 Speaker 2: of nuances and I think this is the key with 55 00:03:25,160 --> 00:03:29,920 Speaker 2: the research, that there was many things which impact influenced 56 00:03:30,040 --> 00:03:34,840 Speaker 2: that impact and as a result is it does make 57 00:03:34,880 --> 00:03:38,080 Speaker 2: it quite difficult to calculate exactly what will happen once 58 00:03:38,080 --> 00:03:40,760 Speaker 2: we do see more natural disasters happening. 59 00:03:42,360 --> 00:03:47,160 Speaker 1: But their work so far came to the conclusion that 60 00:03:47,240 --> 00:03:52,040 Speaker 1: bushfire zilms and there can be anywhere coastal didn't it 61 00:03:52,080 --> 00:03:55,640 Speaker 1: didn't make a difference. In fact, floods and fires as 62 00:03:55,680 --> 00:03:59,360 Speaker 1: I recalled, didn't really make a difference natural disaster in 63 00:03:59,400 --> 00:04:03,080 Speaker 1: an area damages the property value for a short period, 64 00:04:03,160 --> 00:04:06,560 Speaker 1: and this recovers, and it recovers in line with the market. 65 00:04:06,920 --> 00:04:08,920 Speaker 1: Is that right, So if it covers back to where 66 00:04:08,920 --> 00:04:12,120 Speaker 1: it was, so there's no there's no evidence of permanent 67 00:04:12,160 --> 00:04:15,120 Speaker 1: damage to property prices from fires in an area. 68 00:04:15,240 --> 00:04:18,760 Speaker 2: Can we see or that far? No, I don't think 69 00:04:18,800 --> 00:04:21,000 Speaker 2: we can say that far. I mean there are there 70 00:04:21,040 --> 00:04:25,239 Speaker 2: are many influences in terms of how quickly and whether 71 00:04:25,360 --> 00:04:28,360 Speaker 2: whether the era will recover. I guess the first one 72 00:04:28,400 --> 00:04:31,279 Speaker 2: is the desirability of the area. So if you know, 73 00:04:31,320 --> 00:04:34,520 Speaker 2: we know that people love to live near rivers, they 74 00:04:34,640 --> 00:04:36,800 Speaker 2: like to live near beaches, they like to live near 75 00:04:36,880 --> 00:04:40,480 Speaker 2: bush and as a result, if that area is fire 76 00:04:40,560 --> 00:04:43,760 Speaker 2: damaged but it's highly desirable it it does tend to 77 00:04:43,800 --> 00:04:47,520 Speaker 2: recover quicker. Insurance. There's a big one you mentioned insurance earlier. 78 00:04:47,800 --> 00:04:50,240 Speaker 2: If it is an area that is well insured and 79 00:04:50,400 --> 00:04:53,440 Speaker 2: people are able to rebuild, often they will rebuild better, 80 00:04:53,720 --> 00:04:58,880 Speaker 2: better homes, perhaps more flameproof homes or more beautiful homes, 81 00:04:59,040 --> 00:05:03,000 Speaker 2: and that also does impact property values. The wealth of 82 00:05:03,040 --> 00:05:05,840 Speaker 2: an area makes a difference. If people are wealthy, they 83 00:05:05,880 --> 00:05:08,159 Speaker 2: tend to be better and should, but they also do 84 00:05:08,360 --> 00:05:12,560 Speaker 2: tend to build nicer homes when they do rebuild, and 85 00:05:12,600 --> 00:05:16,480 Speaker 2: then nothing important importantly is it's the government response as well. 86 00:05:16,560 --> 00:05:17,880 Speaker 1: So if the. 87 00:05:17,839 --> 00:05:21,719 Speaker 2: Government does make the area more fireproof, if they can 88 00:05:21,760 --> 00:05:25,840 Speaker 2: put in measures to prevent something similar occurring again, then 89 00:05:25,920 --> 00:05:28,960 Speaker 2: that does tend to lead to people feeling more safe 90 00:05:29,040 --> 00:05:33,080 Speaker 2: to rebuild and to buy in these areas. I think, though, 91 00:05:33,120 --> 00:05:36,159 Speaker 2: what the findings did show is that not everywhere recovers, 92 00:05:36,200 --> 00:05:39,279 Speaker 2: and you know, I think that's the key. That there's 93 00:05:39,320 --> 00:05:41,520 Speaker 2: some area, you know, you look at flooding, for example, 94 00:05:41,560 --> 00:05:45,160 Speaker 2: Brisbane River, the flooding of that made little impact of 95 00:05:45,279 --> 00:05:48,200 Speaker 2: property values long term because people in Brisbane love living 96 00:05:48,240 --> 00:05:50,719 Speaker 2: near rivers. But if you have a look at somewhere 97 00:05:50,760 --> 00:05:54,480 Speaker 2: like Lismore, then that has had a much greater negative 98 00:05:54,560 --> 00:05:58,159 Speaker 2: impact and the recovery hasn't been as quick and perhaps 99 00:05:58,160 --> 00:06:01,320 Speaker 2: a little bit to do with the desirability and perhaps 100 00:06:01,360 --> 00:06:04,720 Speaker 2: also because it isn't such a wealthy area as places 101 00:06:04,760 --> 00:06:06,280 Speaker 2: close to the Brisbane River are. 102 00:06:08,240 --> 00:06:10,919 Speaker 1: So would it be fair to say that prime property 103 00:06:11,279 --> 00:06:16,360 Speaker 1: there's no evidence that prime property long term vndues are 104 00:06:16,400 --> 00:06:17,719 Speaker 1: damaged by fire. 105 00:06:17,680 --> 00:06:19,719 Speaker 2: And I think, you know, I think coming back to 106 00:06:19,760 --> 00:06:24,040 Speaker 2: all the influences on the price on prices bouncing back. 107 00:06:24,400 --> 00:06:27,839 Speaker 2: It is prime property and it is insurance related. And 108 00:06:27,920 --> 00:06:31,839 Speaker 2: also I think too there's an element with insurance that 109 00:06:32,120 --> 00:06:35,279 Speaker 2: at some point insurance premiums will be too high for 110 00:06:35,400 --> 00:06:39,120 Speaker 2: people to see these areas as being worthwhile living in, 111 00:06:39,160 --> 00:06:42,440 Speaker 2: and that will definitely have an impact on price on pricing. 112 00:06:42,600 --> 00:06:46,800 Speaker 2: But for now, people are accepting the premiums that are 113 00:06:46,839 --> 00:06:50,600 Speaker 2: put in place, accepting the risk, and as a result, 114 00:06:50,640 --> 00:06:55,520 Speaker 2: prices are coming back following these natural disasters taking place. 115 00:06:56,480 --> 00:07:00,359 Speaker 1: So what would disturb that repeated fires? Is that? Is 116 00:07:00,400 --> 00:07:02,560 Speaker 1: that the issue that might change things? 117 00:07:02,920 --> 00:07:06,599 Speaker 2: Yeah, I think it's I mean, obviously repeated fires. I think, 118 00:07:06,880 --> 00:07:10,040 Speaker 2: you know, price pricing is one thing, and be extremely 119 00:07:10,080 --> 00:07:13,960 Speaker 2: distressing to have to live through multiple fires. But also, 120 00:07:14,280 --> 00:07:18,000 Speaker 2: I mean, premiums will do rise after natural disasters. We 121 00:07:18,280 --> 00:07:21,120 Speaker 2: know that that takes place. But at some point there 122 00:07:21,160 --> 00:07:24,239 Speaker 2: would be for every individual that would be a tipping 123 00:07:24,280 --> 00:07:27,840 Speaker 2: point at which insurance costs are not worth it for 124 00:07:27,880 --> 00:07:30,960 Speaker 2: them to live in these areas, despite them being incredibly 125 00:07:31,000 --> 00:07:33,240 Speaker 2: attractive and desirable areas to live in. 126 00:07:34,160 --> 00:07:37,520 Speaker 1: Okay, have we any data on the level of uninsured 127 00:07:37,560 --> 00:07:40,240 Speaker 1: people in these areas? No? 128 00:07:40,400 --> 00:07:43,240 Speaker 2: I mean, I'm sure the insurance Council would probably have 129 00:07:43,360 --> 00:07:45,680 Speaker 2: some data on that. But you know, we do know 130 00:07:45,680 --> 00:07:48,800 Speaker 2: that there are areas around Australia that, do you know, 131 00:07:48,960 --> 00:07:52,480 Speaker 2: that are very very expensive to ensure, and then these 132 00:07:52,520 --> 00:07:56,240 Speaker 2: areas are often flood prone or bushfire prone, so you know, 133 00:07:56,920 --> 00:07:59,200 Speaker 2: and again coming back to the desirability of the area, 134 00:07:59,200 --> 00:08:02,000 Speaker 2: there's always that between you know, what you're paying on 135 00:08:02,080 --> 00:08:04,800 Speaker 2: insurance and how much you really want to live near 136 00:08:04,840 --> 00:08:08,120 Speaker 2: a beach or a river or a bushfire prine area. 137 00:08:09,560 --> 00:08:12,800 Speaker 1: Okay, so you're the chief economist of very White, So 138 00:08:13,360 --> 00:08:16,840 Speaker 1: tell the listeners, from what you know now and from 139 00:08:16,880 --> 00:08:20,880 Speaker 1: reading these reports, how they should approach property in an 140 00:08:20,880 --> 00:08:24,000 Speaker 1: area where they are knowingly taking the risk of fire 141 00:08:24,080 --> 00:08:27,440 Speaker 1: or flood, which are plenty of areas, and some of 142 00:08:27,640 --> 00:08:31,240 Speaker 1: unfortunately some of the most attractive areas in Australia, like 143 00:08:31,280 --> 00:08:33,880 Speaker 1: Brisbane River a very good, very very very good example. 144 00:08:33,920 --> 00:08:36,199 Speaker 1: You've got areas in Brisbane, like Saint Lucia that are 145 00:08:36,559 --> 00:08:40,840 Speaker 1: literally they are they have been underwater many times in 146 00:08:40,880 --> 00:08:42,839 Speaker 1: their history and it will probably happen again. 147 00:08:43,840 --> 00:08:45,640 Speaker 2: Yeah, so I guess I mean the first point would 148 00:08:45,679 --> 00:08:48,400 Speaker 2: be looking at insurance premiums. I think that would be 149 00:08:48,760 --> 00:08:51,680 Speaker 2: a critical one can you ensure what is it possible 150 00:08:51,720 --> 00:08:55,520 Speaker 2: to ensure for particularly flood. You have different insurance have 151 00:08:55,600 --> 00:08:58,880 Speaker 2: different views as to how they'll ensure for flood and bushfire. 152 00:08:58,960 --> 00:09:01,640 Speaker 2: So that would be my first step. But secondly i'd 153 00:09:01,679 --> 00:09:04,840 Speaker 2: be looking to at the house. You know, how well 154 00:09:04,880 --> 00:09:08,319 Speaker 2: would the property with standard fire, how well would it 155 00:09:08,600 --> 00:09:10,840 Speaker 2: with standard flooding? And what we found on the Brisbane 156 00:09:11,400 --> 00:09:14,200 Speaker 2: River is that following a lot of the flooding that 157 00:09:14,240 --> 00:09:16,680 Speaker 2: took place, people did rebuild and they did put the 158 00:09:16,720 --> 00:09:19,439 Speaker 2: homes on higher still, so you know that that's obviously 159 00:09:19,480 --> 00:09:22,240 Speaker 2: safer than a home that is closer to the ground, 160 00:09:22,280 --> 00:09:25,200 Speaker 2: So that would also be critical. But also looking at 161 00:09:25,240 --> 00:09:27,920 Speaker 2: government what the government has done to prevent a similar 162 00:09:27,960 --> 00:09:30,240 Speaker 2: occurrence happening again. And you know there is a lot 163 00:09:30,240 --> 00:09:33,719 Speaker 2: that government can do in terms of preventing bush fires, 164 00:09:33,760 --> 00:09:36,640 Speaker 2: preventing flooding, and I think that would also be something 165 00:09:36,679 --> 00:09:40,040 Speaker 2: I'd be looking pretty closely to see what's being done 166 00:09:40,040 --> 00:09:40,720 Speaker 2: at that level. 167 00:09:41,720 --> 00:09:43,959 Speaker 1: If I was a buyer of a property, is it 168 00:09:44,160 --> 00:09:46,320 Speaker 1: how hard is it for me to figure out it's 169 00:09:46,679 --> 00:09:51,640 Speaker 1: bush by prawn areas? That's obviously a very clear sort 170 00:09:51,640 --> 00:09:55,720 Speaker 1: of marking of territory across Australia. But more generally, if 171 00:09:55,720 --> 00:09:59,680 Speaker 1: I'm buying a property in a metropolitan or a suburban area, 172 00:09:59,720 --> 00:10:02,360 Speaker 1: can I I find out easy enough it's the propensity 173 00:10:02,679 --> 00:10:04,440 Speaker 1: for flooding or fire in that district. 174 00:10:04,840 --> 00:10:06,680 Speaker 2: Yeah, look, I'd say so. I mean I haven't looked 175 00:10:06,679 --> 00:10:09,199 Speaker 2: in every area across Australia, but you know, most local 176 00:10:09,240 --> 00:10:13,480 Speaker 2: councils do have data on flood prone areas, when state 177 00:10:13,520 --> 00:10:17,680 Speaker 2: government certainly focuses a lot on fire proofing and or 178 00:10:17,800 --> 00:10:21,600 Speaker 2: you know their level of fire risk in in certain areas. 179 00:10:21,840 --> 00:10:23,680 Speaker 2: And then then I think too, you know, there are 180 00:10:23,720 --> 00:10:27,040 Speaker 2: some areas that we know are very flood prone and 181 00:10:28,080 --> 00:10:31,959 Speaker 2: that you know, just understanding places like Brisbane River. We 182 00:10:32,040 --> 00:10:34,760 Speaker 2: know it floods. It doesn't flood everywhere. There certain areas 183 00:10:34,760 --> 00:10:37,720 Speaker 2: that it floods worse than others. But a lot of 184 00:10:37,720 --> 00:10:40,280 Speaker 2: this as well is now well documented. So I think 185 00:10:40,559 --> 00:10:44,280 Speaker 2: really understanding that risk. And also I think too, people's 186 00:10:44,320 --> 00:10:47,000 Speaker 2: attitude to risk is always very different to you know, 187 00:10:47,200 --> 00:10:50,959 Speaker 2: some one person may decide that even a very slight 188 00:10:51,080 --> 00:10:53,800 Speaker 2: risk of bushfires isn't worth it, whereas another person made 189 00:10:53,840 --> 00:10:55,959 Speaker 2: aside that you know, they really want to live in 190 00:10:56,320 --> 00:10:58,920 Speaker 2: a bush fire prone area, and they're prepared to take 191 00:10:58,960 --> 00:10:59,480 Speaker 2: that risk. 192 00:11:00,400 --> 00:11:02,680 Speaker 1: That's a very valid point that your attitude to risk 193 00:11:02,760 --> 00:11:06,120 Speaker 1: and that's obviously relevant to all investors all the time 194 00:11:06,160 --> 00:11:08,200 Speaker 1: on all sorts of issues, and that whole thing of 195 00:11:08,240 --> 00:11:12,240 Speaker 1: your risk profile are your risk disposition and it's something 196 00:11:12,240 --> 00:11:14,400 Speaker 1: I suppose our listeners should keep in mind when they 197 00:11:14,400 --> 00:11:16,760 Speaker 1: are assessing your property. And separately, you could be practical 198 00:11:16,800 --> 00:11:19,080 Speaker 1: and literally look at things like flood maps for your district, 199 00:11:19,160 --> 00:11:21,640 Speaker 1: et cetera, and be aware of the history of the 200 00:11:21,720 --> 00:11:24,560 Speaker 1: area as well. Okay, terrific. And We've got lots of 201 00:11:24,679 --> 00:11:27,960 Speaker 1: questions which I've wanted to have you involved in. Some 202 00:11:28,040 --> 00:11:31,080 Speaker 1: of them I think are absolutely right off your alley, narrator. 203 00:11:31,160 --> 00:11:32,840 Speaker 1: So we'll take a short break and we'll be back 204 00:11:32,880 --> 00:11:44,120 Speaker 1: in a moment. Hello, Welcome back to The Australian's Money 205 00:11:44,120 --> 00:11:46,840 Speaker 1: Positive podcast. I'm James Kirby, the wels editor at The 206 00:11:46,840 --> 00:11:50,600 Speaker 1: Australian talking to Narrati Economy Chief economist Seth Raith White, 207 00:11:50,679 --> 00:11:54,240 Speaker 1: regular on the show, always very good on all issues 208 00:11:54,520 --> 00:11:59,080 Speaker 1: for US property buyers and investors. So, Narrada, I have 209 00:11:59,120 --> 00:12:02,599 Speaker 1: a couple of questions here which I have which I 210 00:12:02,600 --> 00:12:05,720 Speaker 1: have curated especially for you. The first one is from Jeff. 211 00:12:05,800 --> 00:12:09,000 Speaker 1: I'd like to hear some expert advice, and of course 212 00:12:09,120 --> 00:12:13,000 Speaker 1: we don't give advice, Jeff, we are simply giving information here. Nonetheless, 213 00:12:13,280 --> 00:12:17,160 Speaker 1: he asks some property buyers that serve property investors advice 214 00:12:17,240 --> 00:12:21,840 Speaker 1: where to buy based on the same data analytics. Is 215 00:12:22,160 --> 00:12:26,520 Speaker 1: there risk that some markets will be distorted by all 216 00:12:26,640 --> 00:12:29,920 Speaker 1: the investors being coached to look at analytics or to 217 00:12:30,000 --> 00:12:33,120 Speaker 1: move in the same direction. This idea was first raised 218 00:12:33,400 --> 00:12:36,120 Speaker 1: to me on another podcast that I suggest you listen 219 00:12:36,160 --> 00:12:39,280 Speaker 1: to in order to properly understand my hastily written question. 220 00:12:39,880 --> 00:12:42,120 Speaker 1: Unless it is a topic that others have been talking 221 00:12:42,160 --> 00:12:45,400 Speaker 1: about outside my circuit of knowledge, I don't like the 222 00:12:45,440 --> 00:12:49,000 Speaker 1: tone of the hosts. Don't worry about that, Jeff. Okay, 223 00:12:49,800 --> 00:12:51,719 Speaker 1: really good point. I mean, this is your game, right, 224 00:12:51,760 --> 00:12:55,560 Speaker 1: data analytics, property analytics. There was a time, I expect 225 00:12:55,640 --> 00:12:58,520 Speaker 1: that the gulf between what you knew and what the 226 00:12:58,559 --> 00:13:03,280 Speaker 1: average investor, every day property investor new, was enormous, right. 227 00:13:03,320 --> 00:13:04,680 Speaker 1: I mean it used to be a big deal. To 228 00:13:04,760 --> 00:13:06,760 Speaker 1: even find out how much the house that you were 229 00:13:06,760 --> 00:13:08,640 Speaker 1: looking at sold. In the past, you had to go 230 00:13:08,720 --> 00:13:11,520 Speaker 1: down to the titles office. I mean, it's inconceivable to 231 00:13:11,640 --> 00:13:13,640 Speaker 1: someone who was in that market of what you can 232 00:13:13,720 --> 00:13:17,000 Speaker 1: do today in two minutes, name a district in Australia 233 00:13:17,040 --> 00:13:18,719 Speaker 1: and in two minutes I can find out a hell 234 00:13:18,760 --> 00:13:21,040 Speaker 1: of a lot about it, or a single property on 235 00:13:21,080 --> 00:13:24,640 Speaker 1: the internet for free. So what's the flips? Is there 236 00:13:24,640 --> 00:13:26,600 Speaker 1: a flip side of that that that some people are 237 00:13:26,679 --> 00:13:30,800 Speaker 1: running around heavily, perhaps in an amateur fashion, this sitting 238 00:13:31,280 --> 00:13:33,760 Speaker 1: that analyx while you're doing it in a professional fashion. 239 00:13:33,800 --> 00:13:35,839 Speaker 1: I thought you'd like this question. I kept especially for 240 00:13:35,880 --> 00:13:37,360 Speaker 1: you as I say. 241 00:13:38,400 --> 00:13:43,800 Speaker 2: Ah, okay, you know, I suppose even the best experts 242 00:13:43,840 --> 00:13:45,679 Speaker 2: get things wrong. And you know we saw it in 243 00:13:46,160 --> 00:13:49,320 Speaker 2: the most recent optic in house prices that when inter 244 00:13:49,400 --> 00:13:51,880 Speaker 2: straight started to rise, we had a lot of people 245 00:13:51,880 --> 00:13:55,440 Speaker 2: coming out and saying process with crash and I didn't. 246 00:13:55,559 --> 00:13:58,200 Speaker 2: So I think, you know, it does show that even 247 00:13:58,360 --> 00:14:02,080 Speaker 2: people with the best information and don't can often get 248 00:14:02,080 --> 00:14:05,000 Speaker 2: it quite incorrect. The other point, right is is quite 249 00:14:05,000 --> 00:14:09,200 Speaker 2: interesting though around a lot of advisors pushing people into 250 00:14:09,440 --> 00:14:12,880 Speaker 2: certain locations around Australia. And I think this is where 251 00:14:12,920 --> 00:14:18,400 Speaker 2: you do need to look closely at an investment from 252 00:14:18,440 --> 00:14:22,000 Speaker 2: a personal level and look at it in terms of 253 00:14:22,920 --> 00:14:27,960 Speaker 2: what is the rental yield why buying? Is it capital growth? 254 00:14:28,080 --> 00:14:31,920 Speaker 2: Is it rental return? What's your time frame? Also the 255 00:14:32,040 --> 00:14:36,560 Speaker 2: level of also how you would respond if what is 256 00:14:36,600 --> 00:14:39,280 Speaker 2: being claimed doesn't take place. And I think that's particularly 257 00:14:39,360 --> 00:14:43,840 Speaker 2: around capital growth. It is incredibly difficult to predict capital growth. 258 00:14:44,040 --> 00:14:48,640 Speaker 2: So if that property is purchased at seven fifty thousand 259 00:14:48,840 --> 00:14:51,520 Speaker 2: and it stays at seven fifty thousand for five years, 260 00:14:51,680 --> 00:14:54,440 Speaker 2: is it still okay for you to buy at that price, 261 00:14:54,560 --> 00:14:59,119 Speaker 2: because realistically, you know that would be I mean, realistically 262 00:14:59,160 --> 00:15:02,120 Speaker 2: the worst case would be fall in pricing. But if 263 00:15:02,120 --> 00:15:04,640 Speaker 2: someone is claiming the narra will see strong growth, and 264 00:15:04,800 --> 00:15:07,239 Speaker 2: you know, I think I'd be taking that fairly carefully. 265 00:15:08,320 --> 00:15:09,880 Speaker 1: Well, I just just a bit and ask you one thing. 266 00:15:09,920 --> 00:15:11,760 Speaker 1: But it is true, though, isn't it. I mean, if 267 00:15:12,200 --> 00:15:14,840 Speaker 1: a rising tide lifts or boots, and if someone says 268 00:15:14,920 --> 00:15:18,080 Speaker 1: Perth is going to lift, Perth is going to lift, 269 00:15:18,160 --> 00:15:20,720 Speaker 1: right in a way, you could buy the worst house 270 00:15:20,760 --> 00:15:24,360 Speaker 1: on the street in Perth and it lifts. It will 271 00:15:24,480 --> 00:15:28,880 Speaker 1: the data analytics to that extent in the on average 272 00:15:28,960 --> 00:15:29,800 Speaker 1: will work for you. 273 00:15:31,000 --> 00:15:33,920 Speaker 2: Yeah, I mean, I mean, but path does bust, you know, 274 00:15:33,960 --> 00:15:36,280 Speaker 2: I think this is one of the one of the 275 00:15:36,280 --> 00:15:38,320 Speaker 2: things that we have seen. Well, I mean, I think 276 00:15:38,320 --> 00:15:40,360 Speaker 2: this is one of the Perth does come up a 277 00:15:40,400 --> 00:15:43,280 Speaker 2: lot in this discussion because Perth we did see a 278 00:15:43,280 --> 00:15:48,080 Speaker 2: lot of people buy in Perth following you know, finding 279 00:15:48,480 --> 00:15:51,920 Speaker 2: following various mining booms and did become very unstark. Perth's 280 00:15:52,360 --> 00:15:55,280 Speaker 2: property prices dropped for you know, ten fifteen years and 281 00:15:55,360 --> 00:15:58,800 Speaker 2: so it was quite a disasters situation. Also, rents didn't 282 00:15:58,800 --> 00:16:01,880 Speaker 2: grow and then vacancy rates were high. So you know, 283 00:16:01,880 --> 00:16:03,600 Speaker 2: I think a lot of people were very cautious. So 284 00:16:03,640 --> 00:16:06,080 Speaker 2: when we did see a lot of property advisors saying, 285 00:16:06,200 --> 00:16:08,640 Speaker 2: go to Perth, it's a really good idea. You know, 286 00:16:08,680 --> 00:16:11,080 Speaker 2: there was a lot of skepticism as to as to 287 00:16:11,080 --> 00:16:14,320 Speaker 2: what was going to happen there. Personally interesting because it 288 00:16:14,440 --> 00:16:17,640 Speaker 2: has risen. It's it's you know, the strongest price growth 289 00:16:17,640 --> 00:16:20,200 Speaker 2: area over the past five years. So you know, people 290 00:16:20,200 --> 00:16:23,520 Speaker 2: that did buy early stage did do very well. Rents 291 00:16:23,520 --> 00:16:26,400 Speaker 2: have doubled, and you know, it's been a it's been 292 00:16:26,680 --> 00:16:29,720 Speaker 2: a good outcome. But you know, I think, I think, 293 00:16:29,920 --> 00:16:34,320 Speaker 2: I mean, you do need to look at these recommendations carefully. 294 00:16:34,480 --> 00:16:38,240 Speaker 2: You do need to understand understand more broadly what's happening 295 00:16:38,240 --> 00:16:40,840 Speaker 2: in that area. People in Brisbane have done very well 296 00:16:40,880 --> 00:16:42,600 Speaker 2: a lot to do with population growth, So you know, 297 00:16:42,640 --> 00:16:44,880 Speaker 2: I think there's there's certain things that you can look 298 00:16:44,920 --> 00:16:48,640 Speaker 2: at in terms of, you know, why prices are moving 299 00:16:48,680 --> 00:16:51,400 Speaker 2: or why they are expecting to move. But also you 300 00:16:51,440 --> 00:16:54,760 Speaker 2: do need to look at areas like Perth quite carefully, 301 00:16:54,840 --> 00:16:58,240 Speaker 2: like mining towns in Wa quite carefully, because as soon 302 00:16:58,240 --> 00:17:01,520 Speaker 2: as you are in an area that's driven by one 303 00:17:02,000 --> 00:17:06,320 Speaker 2: economics sector, which mining in this case, it does become 304 00:17:06,400 --> 00:17:09,240 Speaker 2: much more susceptible to a boom bus cycle compared to 305 00:17:09,240 --> 00:17:12,880 Speaker 2: someone like seeing in Melbourne, which less likely to say 306 00:17:12,920 --> 00:17:14,480 Speaker 2: such wild swings in pricing. 307 00:17:15,440 --> 00:17:18,560 Speaker 1: Yes, okay, I suppose he's it's always he's alluding to 308 00:17:18,600 --> 00:17:21,000 Speaker 1: that whole issue of which comes across all investing, not 309 00:17:21,119 --> 00:17:23,840 Speaker 1: just property, top down or bottom up. So the top 310 00:17:23,880 --> 00:17:27,320 Speaker 1: down investor would say, buy a house in this town 311 00:17:27,440 --> 00:17:31,040 Speaker 1: because the data suggests that this town is five years 312 00:17:31,040 --> 00:17:33,280 Speaker 1: behind the rest of the country and so if the 313 00:17:33,320 --> 00:17:35,280 Speaker 1: whole town is going to lift. But the bottom up 314 00:17:35,280 --> 00:17:39,080 Speaker 1: investor would say, by this particular property in this town 315 00:17:39,119 --> 00:17:42,640 Speaker 1: where all things aren't neutral, but this is an exceptional property, 316 00:17:42,640 --> 00:17:44,560 Speaker 1: and that's the sort of bottom up approach, right, So 317 00:17:44,840 --> 00:17:47,199 Speaker 1: he's I think, in a way, if I can paraphrase 318 00:17:47,640 --> 00:17:51,240 Speaker 1: or play with Jeff's question, he's kind of saying top 319 00:17:51,280 --> 00:17:53,400 Speaker 1: down investing in property was probably not a big thing 320 00:17:53,400 --> 00:17:56,280 Speaker 1: once upon a time because people didn't have the range 321 00:17:56,280 --> 00:17:59,440 Speaker 1: of the wherewithal to even know what the trends were, 322 00:17:59,640 --> 00:18:02,040 Speaker 1: to dig deep in terms of data analytics, or to 323 00:18:02,119 --> 00:18:05,040 Speaker 1: say or to cherry pick and say, look, I live 324 00:18:05,080 --> 00:18:07,000 Speaker 1: in Brisbane, but I think I'll buy in Perth or 325 00:18:07,119 --> 00:18:11,439 Speaker 1: vice versa. And that's a much stronger theme now for 326 00:18:11,680 --> 00:18:16,080 Speaker 1: property investors. So it does change things. So the data 327 00:18:16,560 --> 00:18:18,480 Speaker 1: just a final thing on Jef down the data, the 328 00:18:18,520 --> 00:18:22,240 Speaker 1: amateur data an analyst. Is it a good thing or 329 00:18:22,280 --> 00:18:22,760 Speaker 1: a bad thing? 330 00:18:23,400 --> 00:18:25,359 Speaker 2: Look, I think it's a good thing. I mean talking 331 00:18:25,359 --> 00:18:28,679 Speaker 2: about the top down, bottom up. I mean people historically 332 00:18:28,760 --> 00:18:31,560 Speaker 2: have only bought in their local area because they understood 333 00:18:31,680 --> 00:18:34,680 Speaker 2: property in their local area, and it did it did 334 00:18:34,800 --> 00:18:37,120 Speaker 2: lead to you know, I mean, I think it has 335 00:18:37,280 --> 00:18:39,199 Speaker 2: created quite a lot of wealth for people that have 336 00:18:39,359 --> 00:18:43,640 Speaker 2: done that top down because people have looked more broadly 337 00:18:43,960 --> 00:18:47,879 Speaker 2: and looked at places like Perth and regional areas and 338 00:18:48,000 --> 00:18:49,960 Speaker 2: have put investment into these areas. 339 00:18:50,000 --> 00:18:52,560 Speaker 1: So that's also helped. So all of those. 340 00:18:52,400 --> 00:18:55,600 Speaker 2: Things have really changed, have really changed property investing? 341 00:18:56,840 --> 00:19:00,600 Speaker 1: Okay, all right, very good, Daniel asks talking to some 342 00:19:00,640 --> 00:19:05,159 Speaker 1: Rediset agents, they've noticed that social media, mostly Instagram, is 343 00:19:05,200 --> 00:19:07,800 Speaker 1: proving a great way to promote and sell property. Do 344 00:19:07,840 --> 00:19:11,119 Speaker 1: you think going forward property marketing will more heavily involve 345 00:19:11,160 --> 00:19:14,960 Speaker 1: social media? Now we have to take this question. Do 346 00:19:15,119 --> 00:19:18,600 Speaker 1: noticing that I happen to be employed by a gigantic 347 00:19:18,640 --> 00:19:21,600 Speaker 1: media company which is not a social media company, and 348 00:19:21,640 --> 00:19:24,359 Speaker 1: you're employed by White which is a real estate agent. 349 00:19:24,400 --> 00:19:27,200 Speaker 1: So I suppose they they can go in any direction, 350 00:19:27,280 --> 00:19:30,360 Speaker 1: but in terms of using social media, and they may 351 00:19:30,400 --> 00:19:33,520 Speaker 1: well use it more than I know. What do you 352 00:19:33,800 --> 00:19:36,879 Speaker 1: think of Daniel's question? Will it become will is it 353 00:19:36,920 --> 00:19:39,000 Speaker 1: become important? And will it become more important? 354 00:19:40,160 --> 00:19:43,240 Speaker 2: Well, it's it's definitely becoming more important in media. I mean, 355 00:19:43,520 --> 00:19:48,080 Speaker 2: the media landscape has changed significantly with social media in 356 00:19:48,160 --> 00:19:51,800 Speaker 2: terms of selling property. That's an agency using it, you know, 357 00:19:51,840 --> 00:19:54,560 Speaker 2: we know that having that a lot of them do 358 00:19:54,680 --> 00:19:58,680 Speaker 2: have very strong social media profiles, they do have followings. 359 00:19:59,280 --> 00:20:02,880 Speaker 2: Luxury it is in particular, there is quite a quite 360 00:20:02,920 --> 00:20:05,640 Speaker 2: a campaign. We've got some of our really top agents 361 00:20:05,720 --> 00:20:09,679 Speaker 2: to pretty good videos that they put on on. 362 00:20:09,840 --> 00:20:14,200 Speaker 1: Oh I've seen these videos. They're extraordinary, and they're extraordinary. Yeah, 363 00:20:14,280 --> 00:20:16,320 Speaker 1: I mean I mean you say you're kidding, Oh, this 364 00:20:16,359 --> 00:20:18,200 Speaker 1: is all for one property. I suppose if the houses 365 00:20:18,200 --> 00:20:21,600 Speaker 1: were fourteen million, you can spend fifty grand on a video. Yeah. 366 00:20:21,640 --> 00:20:24,520 Speaker 1: But what about social media in terms of your work 367 00:20:24,600 --> 00:20:28,040 Speaker 1: and in your trying to understand the market to what 368 00:20:28,119 --> 00:20:30,520 Speaker 1: extent do you tunnel through social media or is it 369 00:20:30,560 --> 00:20:31,480 Speaker 1: relevant to your Yeah? 370 00:20:31,480 --> 00:20:34,400 Speaker 2: Absolutely, I mean we get leads through social media. That's 371 00:20:34,960 --> 00:20:38,840 Speaker 2: an important form of lead generation for us. So it's yeah, 372 00:20:38,840 --> 00:20:41,360 Speaker 2: I mean it is absolutely being used, and it is 373 00:20:42,000 --> 00:20:44,480 Speaker 2: It is something that can be quite experimental as well. 374 00:20:44,480 --> 00:20:46,879 Speaker 2: And I think the nature of social media allows it 375 00:20:46,920 --> 00:20:50,480 Speaker 2: to be quite experimental because you know, if something doesn't work, 376 00:20:50,480 --> 00:20:52,159 Speaker 2: you can pull it off and pull it off the 377 00:20:52,400 --> 00:20:55,280 Speaker 2: social media channel and so but you know, it's just 378 00:20:55,320 --> 00:20:58,960 Speaker 2: a transition. I mean, people used to sell property through ads, 379 00:20:59,200 --> 00:21:03,800 Speaker 2: they then move to portals. Social media gives another way 380 00:21:04,000 --> 00:21:06,359 Speaker 2: of selling property. The other thing too, I mean if 381 00:21:06,400 --> 00:21:08,199 Speaker 2: you have a look at new properties, in particular, if 382 00:21:08,200 --> 00:21:11,560 Speaker 2: you look at apartment projects and house and land projects, 383 00:21:11,600 --> 00:21:15,000 Speaker 2: I mean they sell heavily through social as well. That 384 00:21:15,040 --> 00:21:17,600 Speaker 2: a lot of them will be trying to build communities 385 00:21:17,640 --> 00:21:21,760 Speaker 2: and build their own audience, and by doing so, they 386 00:21:21,840 --> 00:21:26,399 Speaker 2: can more directly target people that like their type of product. 387 00:21:26,440 --> 00:21:29,040 Speaker 2: Maybe look at a really good apartment developer that they 388 00:21:29,080 --> 00:21:33,280 Speaker 2: would have. They would be working heavily in building their 389 00:21:33,320 --> 00:21:36,640 Speaker 2: own audiences to really have a greater influence on their 390 00:21:36,640 --> 00:21:37,960 Speaker 2: buying behavior in the future. 391 00:21:39,160 --> 00:21:43,280 Speaker 1: That's interesting. These these agents, these star agents that have 392 00:21:43,359 --> 00:21:46,560 Speaker 1: a big social media following and sell luxury properties. Do 393 00:21:46,640 --> 00:21:50,280 Speaker 1: you think a large element of that is pure voyeurism 394 00:21:50,480 --> 00:21:52,520 Speaker 1: where people are just watching and looking at it, just 395 00:21:52,520 --> 00:21:55,920 Speaker 1: that they look at television shows rather than de facto 396 00:21:56,520 --> 00:22:01,040 Speaker 1: buyers of those luxury properties every buys. 397 00:22:01,320 --> 00:22:03,720 Speaker 2: I mean, I mean, you're not if you're getting thirty 398 00:22:03,760 --> 00:22:07,160 Speaker 2: thousand views of a video of a beautiful property, that's 399 00:22:07,200 --> 00:22:10,919 Speaker 2: not thirty thousand buyers, obviously, But I think it also is. 400 00:22:11,000 --> 00:22:13,040 Speaker 2: I mean people, you know, we all love looking at property, 401 00:22:13,040 --> 00:22:15,720 Speaker 2: but if you're seeing an agent doing a fun video 402 00:22:15,880 --> 00:22:19,080 Speaker 2: on a beautiful property in a suburb that you're not 403 00:22:19,119 --> 00:22:22,960 Speaker 2: familiar with, then you know, perhaps that would give you 404 00:22:23,000 --> 00:22:25,480 Speaker 2: a little bit more interest in that suburb. So, you know, 405 00:22:25,560 --> 00:22:27,719 Speaker 2: I think there's a lot that goes on in social 406 00:22:27,800 --> 00:22:31,760 Speaker 2: but absolutely the way that they're using it and the 407 00:22:31,920 --> 00:22:36,320 Speaker 2: impact that it's having on their revenue and their their 408 00:22:36,359 --> 00:22:38,600 Speaker 2: ability to build a pipeline, and it does seem to 409 00:22:38,640 --> 00:22:39,480 Speaker 2: be working for them. 410 00:22:40,400 --> 00:22:43,600 Speaker 1: Okay. I saw a video last year on my area 411 00:22:43,720 --> 00:22:46,440 Speaker 1: broad in my area being based at Melbourne, and it 412 00:22:46,560 --> 00:22:50,760 Speaker 1: was this absolutely top range apartment development. It was actually 413 00:22:50,800 --> 00:22:52,520 Speaker 1: I can name what it is. It was the department 414 00:22:52,560 --> 00:22:55,040 Speaker 1: development at the Old Summer. It's called The Summer. It's 415 00:22:55,080 --> 00:22:58,440 Speaker 1: in Saint Kilda in Melbourne, which of course was full 416 00:22:58,480 --> 00:23:02,159 Speaker 1: of all these celebrity buyers and the video for the 417 00:23:02,200 --> 00:23:04,760 Speaker 1: sale of that was so good that I actually said 418 00:23:05,160 --> 00:23:07,800 Speaker 1: to people in other countries just to show that the 419 00:23:07,840 --> 00:23:10,679 Speaker 1: area I lived at its very best. That is. But 420 00:23:10,920 --> 00:23:14,040 Speaker 1: the same block as has since had disputes between these 421 00:23:14,119 --> 00:23:17,960 Speaker 1: various celebrity millionaire owners over various issues, which is all 422 00:23:18,000 --> 00:23:21,280 Speaker 1: great fun for the voyeur, and no doubt it's been 423 00:23:21,400 --> 00:23:24,480 Speaker 1: on social media too, but it is a dimension of 424 00:23:24,520 --> 00:23:26,720 Speaker 1: property that's very interesting. It is growing. Thank you for 425 00:23:26,760 --> 00:23:29,200 Speaker 1: that question, Daniel, really really interesting. I think we could 426 00:23:29,240 --> 00:23:31,000 Speaker 1: come back to that and perhaps we might try and 427 00:23:31,040 --> 00:23:33,959 Speaker 1: find out more for our listeners on that one. All right, 428 00:23:33,960 --> 00:23:35,640 Speaker 1: we'll take a shortbreak. We'll be back in a moment 429 00:23:35,680 --> 00:23:43,639 Speaker 1: with two questions from Ryan and Andrew. Hello, Welcome back 430 00:23:43,640 --> 00:23:46,840 Speaker 1: to the Australians Money Puzzle podcast. James Kirby here with 431 00:23:47,040 --> 00:23:50,439 Speaker 1: Narratorconospy from the Rape White Group. Narrator is a regular 432 00:23:50,480 --> 00:23:52,240 Speaker 1: on the show and I know Nerida for a long 433 00:23:52,320 --> 00:23:55,639 Speaker 1: time in various guises over the years where she's always 434 00:23:55,640 --> 00:23:58,119 Speaker 1: been in properly, always been an economist in that area, 435 00:23:58,200 --> 00:24:01,280 Speaker 1: So she really is someone who has a very knowledge 436 00:24:01,480 --> 00:24:05,720 Speaker 1: of the world we are analyzing every week here. Okay, Ryan, 437 00:24:05,920 --> 00:24:08,440 Speaker 1: I want to get some financial advice on a few 438 00:24:08,440 --> 00:24:11,360 Speaker 1: specific questions relating to selling a property. Is it possible 439 00:24:11,359 --> 00:24:14,840 Speaker 1: to get financial advice on these things alone without a 440 00:24:14,840 --> 00:24:17,560 Speaker 1: financial advisor going through all my finances in charge of 441 00:24:17,640 --> 00:24:20,919 Speaker 1: me for all that, Ryan, I'm sorry, this is not advice, 442 00:24:20,920 --> 00:24:22,919 Speaker 1: it's information, And the information I'm going to give you 443 00:24:22,960 --> 00:24:26,040 Speaker 1: about advice is you can't. That's the whole problem, that's 444 00:24:26,080 --> 00:24:28,840 Speaker 1: the whole debate. You can't get bite sized advice. You 445 00:24:28,880 --> 00:24:31,040 Speaker 1: can't walk into a financial advisor and say I've got 446 00:24:31,040 --> 00:24:35,440 Speaker 1: an issue. I've got an issue I inherited two hundred 447 00:24:35,440 --> 00:24:38,720 Speaker 1: grand I want to buy an apartment for six hundred grand. 448 00:24:39,080 --> 00:24:40,840 Speaker 1: That's all. Nothing else. I don't want to talk about 449 00:24:40,840 --> 00:24:43,440 Speaker 1: anything else. They can't legally do that with you. They 450 00:24:43,520 --> 00:24:47,080 Speaker 1: cannot do bite sized advice. They must take all your 451 00:24:47,359 --> 00:24:50,119 Speaker 1: issues into affair. They must, they must produce statements of 452 00:24:50,160 --> 00:24:53,240 Speaker 1: advice or documents of that ilk and they are so 453 00:24:53,359 --> 00:24:56,400 Speaker 1: petrified by by falling for out of the regulations that 454 00:24:56,560 --> 00:24:59,040 Speaker 1: they will say to you, sorry, take it or leave it. 455 00:24:59,680 --> 00:25:03,040 Speaker 1: So short answer to you, Ryan is that you can't. 456 00:25:03,320 --> 00:25:06,560 Speaker 1: Is there anything you know, Narada that would challenge what 457 00:25:06,640 --> 00:25:12,919 Speaker 1: I said there? Yeah, I mean it's something I'm covering 458 00:25:12,960 --> 00:25:15,679 Speaker 1: all the time, and you know, there's there's there's this 459 00:25:15,760 --> 00:25:18,280 Speaker 1: issue in there's an effort in Parliament at the moment 460 00:25:18,440 --> 00:25:20,800 Speaker 1: to change that. But I wouldn't be waiting for it. 461 00:25:20,880 --> 00:25:24,959 Speaker 1: I gotta tell you, folks, because in a way, at 462 00:25:24,960 --> 00:25:27,639 Speaker 1: a certain point, I don't think that we should have 463 00:25:27,680 --> 00:25:31,919 Speaker 1: a situation like we have where you must literally, you know, 464 00:25:31,960 --> 00:25:36,360 Speaker 1: where you have this absurdly regulated, overregulated framework around advice. 465 00:25:36,440 --> 00:25:40,480 Speaker 1: But at the same time, being realistic about it, you 466 00:25:40,640 --> 00:25:42,920 Speaker 1: probably will never get to the day that you can 467 00:25:43,640 --> 00:25:47,520 Speaker 1: cheaply get advice because you can't get good advice cheaply. 468 00:25:47,600 --> 00:25:49,560 Speaker 1: I think that's something that's kind of at the bottom 469 00:25:49,600 --> 00:25:52,200 Speaker 1: of a lot of these issues and frustrating for everyone. 470 00:25:52,240 --> 00:25:54,560 Speaker 1: But it's true. Making it worse is the fact that 471 00:25:54,600 --> 00:25:58,439 Speaker 1: you can't I get a single chunk of advice, if 472 00:25:58,480 --> 00:26:01,439 Speaker 1: you know what I mean, a sliver of advice. You 473 00:26:01,440 --> 00:26:04,720 Speaker 1: have to get the whole thing. Ryan and I would 474 00:26:04,840 --> 00:26:07,880 Speaker 1: add as an additional warning on that one. Obviously, advice 475 00:26:07,960 --> 00:26:14,359 Speaker 1: from people inside the property industry about property is rarely independent. Okay. 476 00:26:15,040 --> 00:26:18,639 Speaker 1: Final question from Andrew, longtime listener and fatter the podcast. 477 00:26:18,760 --> 00:26:21,040 Speaker 1: I read with the interest your recent article in The 478 00:26:21,040 --> 00:26:25,160 Speaker 1: Australian about the forty year mortgage. As house prices keep 479 00:26:25,200 --> 00:26:28,480 Speaker 1: increasing relative to anual salaries, it seems inevitable that loan 480 00:26:28,520 --> 00:26:33,879 Speaker 1: contracts will extend into retirement. Yes, and then he says 481 00:26:34,440 --> 00:26:36,399 Speaker 1: he really. Then he has a scenario. He says, I 482 00:26:36,440 --> 00:26:39,200 Speaker 1: was wondering whether we are entering an era where people 483 00:26:39,240 --> 00:26:41,840 Speaker 1: will not be expected to discharge their loans while they're 484 00:26:41,880 --> 00:26:44,399 Speaker 1: working during their working lives. Rather, they will only increase 485 00:26:44,440 --> 00:26:47,080 Speaker 1: their equity during their lives and draw on at to 486 00:26:47,200 --> 00:26:51,280 Speaker 1: retire using whatever equity remains such as superannuation, until their 487 00:26:51,280 --> 00:26:55,080 Speaker 1: home is returned almost entirely to the institution when they die. 488 00:26:55,359 --> 00:27:01,360 Speaker 1: Somewhat dystopian, but not unrealistic. Perhaps, Yeah, it's not unrealistic 489 00:27:01,400 --> 00:27:03,919 Speaker 1: at all. Have you any sense of how many people 490 00:27:05,040 --> 00:27:07,119 Speaker 1: now go into retirement with the mortgage and what it 491 00:27:07,240 --> 00:27:07,760 Speaker 1: used to be. 492 00:27:09,240 --> 00:27:11,720 Speaker 2: I mean, I agree, I think it is increasing that 493 00:27:12,040 --> 00:27:15,199 Speaker 2: people do obviously take on bigger debt. They take on 494 00:27:15,320 --> 00:27:18,320 Speaker 2: bigger debt later in life. Banks are quite keen to 495 00:27:19,440 --> 00:27:22,160 Speaker 2: provide debt at any not I mean obviously really old 496 00:27:22,160 --> 00:27:23,760 Speaker 2: people that won't, but they do. 497 00:27:24,520 --> 00:27:27,800 Speaker 1: Yeah, I think that you're onto something. There was there 498 00:27:27,840 --> 00:27:29,720 Speaker 1: was a time I would say to people in their sixties, listen, 499 00:27:29,760 --> 00:27:31,320 Speaker 1: don't bother trying to get the mortgage. I mean, you 500 00:27:31,359 --> 00:27:35,199 Speaker 1: have the chance. That's totally changed, yes, But also it 501 00:27:35,280 --> 00:27:40,560 Speaker 1: means that that people are retiring with mortgages. So what's 502 00:27:40,600 --> 00:27:42,240 Speaker 1: the impact of that on the property market. 503 00:27:42,600 --> 00:27:46,119 Speaker 2: Well, I don't think it's necessarily a bad situation. If 504 00:27:46,280 --> 00:27:49,520 Speaker 2: they are still one still able to pay the mortgage 505 00:27:49,920 --> 00:27:53,000 Speaker 2: through you know, whatever superannuation or whatever they have. I 506 00:27:53,080 --> 00:27:55,320 Speaker 2: mean that that would be one outcome. I think another 507 00:27:55,359 --> 00:27:58,520 Speaker 2: one would be downsizing. And again not a problem that 508 00:27:58,600 --> 00:28:00,760 Speaker 2: if you've got a you know, you've got your big 509 00:28:00,800 --> 00:28:04,280 Speaker 2: family home at that point, you're still owning, owing a 510 00:28:04,280 --> 00:28:07,159 Speaker 2: certain amount of money on it, selling and buying something smaller, 511 00:28:07,160 --> 00:28:09,520 Speaker 2: you could still come out pretty well. 512 00:28:09,600 --> 00:28:11,080 Speaker 1: So I don't think it's. 513 00:28:11,119 --> 00:28:14,359 Speaker 2: I mean, the banks obviously are lending based on the 514 00:28:14,400 --> 00:28:16,760 Speaker 2: fact that people will still have debt in retirement, so 515 00:28:16,800 --> 00:28:20,080 Speaker 2: I mean they've obviously adjusted their views as to how 516 00:28:20,119 --> 00:28:22,480 Speaker 2: this works. But I mean, you think of a forty 517 00:28:22,520 --> 00:28:25,919 Speaker 2: year mortgage, I mean the latest you'd be able to 518 00:28:25,920 --> 00:28:28,199 Speaker 2: get one and pay it off in forties would be, 519 00:28:28,680 --> 00:28:31,560 Speaker 2: you know, in your late twenties, so you know, we 520 00:28:31,640 --> 00:28:34,840 Speaker 2: know that people are getting mortgages at a much later 521 00:28:34,960 --> 00:28:35,960 Speaker 2: date than that. 522 00:28:36,119 --> 00:28:39,840 Speaker 1: So the people are getting longer data mortgages to reduce 523 00:28:39,920 --> 00:28:42,720 Speaker 1: the annual cost of the mortgages that they're taking on, 524 00:28:42,800 --> 00:28:45,240 Speaker 1: and the banks are broadening it all the time, so 525 00:28:45,240 --> 00:28:48,160 Speaker 1: they're getting longer and longer, and these products which are 526 00:28:48,520 --> 00:28:51,520 Speaker 1: very rare one time, are now common forty year mortgages 527 00:28:51,880 --> 00:28:55,040 Speaker 1: in the system. I suppose one of the debates then, 528 00:28:55,840 --> 00:29:01,360 Speaker 1: is why about super is if you are, you know, 529 00:29:01,400 --> 00:29:03,560 Speaker 1: if you are working towards the situation where you finally 530 00:29:03,560 --> 00:29:05,800 Speaker 1: get your super and you're getting it to pay off 531 00:29:05,800 --> 00:29:11,600 Speaker 1: a mortgage, why did you put so much into super 532 00:29:11,640 --> 00:29:13,600 Speaker 1: if it was only going into mortgage in the first place, 533 00:29:13,600 --> 00:29:15,760 Speaker 1: when you could have paid it off years earlier. That's 534 00:29:15,800 --> 00:29:18,400 Speaker 1: a debate for another day. That's a debate for another show. 535 00:29:18,840 --> 00:29:21,360 Speaker 1: All Right, we might have to leave it at that, 536 00:29:21,600 --> 00:29:23,400 Speaker 1: but it's been always good to have you there. The 537 00:29:23,800 --> 00:29:26,200 Speaker 1: terrific Thank you very much. On this aspect of the 538 00:29:26,240 --> 00:29:30,120 Speaker 1: fires is most interesting. I think people would I certainly 539 00:29:30,120 --> 00:29:34,000 Speaker 1: assumed that a fire in an area did enormous damage 540 00:29:34,000 --> 00:29:36,840 Speaker 1: to it long term. Instantly. That's what I assumed, and 541 00:29:36,880 --> 00:29:39,880 Speaker 1: the evidence is not so simple at all, it would 542 00:29:39,920 --> 00:29:42,360 Speaker 1: seem so Thank you very much. We'll talk to you 543 00:29:42,400 --> 00:29:42,920 Speaker 1: again soon. 544 00:29:43,200 --> 00:29:44,000 Speaker 2: Thanks for having me. 545 00:29:44,120 --> 00:29:46,680 Speaker 1: That was never the color species the chief economist at 546 00:29:46,680 --> 00:29:49,600 Speaker 1: the rape Y Group. Thank you everybody for listening today's show. 547 00:29:49,880 --> 00:29:52,680 Speaker 1: Keep those emails rolling. See how interesting even that bunch 548 00:29:52,680 --> 00:29:55,920 Speaker 1: of questions on that specific issue were today. Your questions 549 00:29:56,040 --> 00:29:58,800 Speaker 1: are the lifeblood of the show, so keep them rolling. 550 00:29:59,080 --> 00:30:02,280 Speaker 1: The email is the money puzzle at the Australian dot 551 00:30:02,320 --> 00:30:06,400 Speaker 1: com dot AU. Today show was produced by Leah Summergloo. 552 00:30:07,440 --> 00:30:08,080 Speaker 1: Talk to you soon.