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Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm

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Speaker 1: James Kirby. Welcome aboard, everybody. Welcome aboard to an increasingly

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Speaker 1: lively and lucrative I think residential property investment market. And

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Speaker 1: we've been saying this for some time that it was improving,

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Speaker 1: it was coming and here we go. Lots of reports

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Speaker 1: now you'll see talking about not just the fairly good

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Speaker 1: returns in recent times, but strong prospects across the board.

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Speaker 1: Now when you look at it more closely, it's the

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Speaker 1: strongest prospects are actually outside the metropolitan cities of Sydney

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Speaker 1: and Melbourne, and it is coming down again perhaps to Perth,

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Speaker 1: Adelaide and Brisbane. However, folks, the big market, the market

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Speaker 1: that's really got the volume and probably the outlook long

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Speaker 1: term I think, and it's come up on the show

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Speaker 1: regularly is Queensland, specifically Brisbane and the Gold Coast where

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Speaker 1: we have a lot of action happening. And if you

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Speaker 1: listened last week's show and Missa Cavello talking about how

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Speaker 1: investors are now increasingly willing and it's increasingly easy to

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Speaker 1: invest interstate. My guest today is an expert on the

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Speaker 1: Queensland market, specifically Brisbane. He's based in Brisbane. I know

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Speaker 1: him a long time. It's Sam Price of a Templeton.

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Speaker 1: He's a buyer's advocate in the city. Well, you're doing

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Speaker 1: your own thing for about fifteen years now, aren't you, Sam?

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Speaker 2: I have Jan Yes, yep, doing my own thing. Had

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Speaker 2: the property management for long time as well, and Tim

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Speaker 2: planning before that, but just now it's purely buyas agency

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Speaker 2: in buying throughout Southeast Queensland for mums and dad investors

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Speaker 2: as well as a rocketpaths as well.

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Speaker 1: The reason I mentioned that you're doing at fifteen years

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Speaker 1: is that I want investors to know first of all,

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Speaker 1: before we talk about the specific attractions of Queensland and

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Speaker 1: certain issues that are happening there. Should find very interesting folks.

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Speaker 1: You do need to know that hasn't always been so good,

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Speaker 1: and there was a patch where Brisbane really had it

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Speaker 1: hard as a property investment market due to floods that

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Speaker 1: were quite devastating and spectacular really if you were ever

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Speaker 1: in the city after those floods, and similarly another issue

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Speaker 1: was overbuilding. So just cut to the chase. In terms

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Speaker 1: of Queensland as a distinct market. To me, these are

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Speaker 1: the distinct risks. There are those risks still in place.

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Speaker 1: Has anything changed?

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Speaker 2: The flooding is definitely still in place. So as we know,

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Speaker 2: we had the big floods in twenty eleven in Brisbane,

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Speaker 2: then another one only ten years later in twenty twenty two. Yeah,

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Speaker 2: they were devastating in Brisbane. I think having two in

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Speaker 2: close succession really taught us a big lesson. And although

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Speaker 2: we can't change the flooding and the weather, of course,

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Speaker 2: what we can do is build to accommodate the flooding.

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Speaker 2: And so since that time, all the buildings that have

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Speaker 2: been done that a flood affected, they've kind of taken

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Speaker 2: that into account. So I think we've learned to live

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Speaker 2: with it now, James. So their values have jumped back

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Speaker 2: and people are not as concerned about it these days

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Speaker 2: as they were. However, Brismoo City Council has been excellent

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Speaker 2: in providing information to buyers. They have a like a

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Speaker 2: flood report on every property within Brisbane City Council. They

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Speaker 2: have a flood map as well, so when you're buying,

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Speaker 2: always look at the flood map first of all, then

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Speaker 2: look at the flood report and it will tell you

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Speaker 2: how the different floods and how many meters of centimeters

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Speaker 2: of water when over the property if it wasn't affected

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Speaker 2: at all. So that's a staple check that you do

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Speaker 2: forever property.

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Speaker 1: Would you say that is a distinct feature of the

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Speaker 1: Brisbane market as opposed to see Melbourne.

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Speaker 2: I'm not sure about the flood search in Melbourne, but

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Speaker 2: I know for Morton and Ipswich the Brismoo City Council

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Speaker 2: flood mapping is excellent. It is quite conservative at the moment,

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Speaker 2: like there's a lot of properties that are within the

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Speaker 2: realms of being flood affected that I don't think ever

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Speaker 2: will be, so there is quite a buffer on it. Yeah,

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Speaker 2: but then we're only talking about if twenty percent of

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Speaker 2: the not even twenty percent probably z it might be

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Speaker 2: like ten percent of Brisbane.

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Speaker 1: So it is a small it is, but it tends

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Speaker 1: to be very attractive inner city zones by the river

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Speaker 1: and where all the apartment blocks are too. It's worth

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Speaker 1: listeners knowing. I can remember looking at a property in

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Speaker 1: Brisbane in the Interpilly area after the floods, first floods

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Speaker 1: and a lovely place on a park and then the

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Speaker 1: really state agent said I must buy low Point out

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Speaker 1: where the flood reached here. He put his hand up

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Speaker 1: into the air, you know, about six ft high, speechless.

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Speaker 1: I'll never forget it. So I want to start the

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Speaker 1: show just by putting that on the table separately, that

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Speaker 1: there was an overbuilding, apartment over building. What situation at

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Speaker 1: the moment.

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Speaker 2: Now we're in a start of you know, under supply

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Speaker 2: for sure for apartments. I think we're back to ninety

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Speaker 2: ninety levels of supply coming on line. So it's all

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Speaker 2: that I was supplied the ninety nineties and the two thousand,

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Speaker 2: since that's been all absorbed now and given the cost

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Speaker 2: of construction the last you know, since COVID has been

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Speaker 2: very high and escalating, it hasn't warranted developers to press

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Speaker 2: the trigger on building the quick rise. Since COVID of

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Speaker 2: property values, I think they've got to a stage now

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Speaker 2: where it's economic to build units. Like if replacement of

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Speaker 2: a two bad, two bathroom unit is in excess of

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Speaker 2: you know, one one point two mil, well, now we've

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Speaker 2: reached that point where the market will be happy to

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Speaker 2: pay that. And therefore there's a lot of projects in

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Speaker 2: the pipeline that can now go ahead, which so currently

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Speaker 2: and under supply, everything's selling very quickly. Naturally in these times,

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Speaker 2: they do over react sometimes and build too many. But

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Speaker 2: given it takes three to five years for these buildings

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Speaker 2: to get built, we're not going to see that for

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Speaker 2: some time. But there are our pockets in Brisbane where

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Speaker 2: you know, you could potentially see it. And even now

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Speaker 2: I'm guarded about recommending clients buying those areas for the

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Speaker 2: perceived you know, over building that could happen. They could have.

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Speaker 1: Yes, it could happen. So in terms of investor activity

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Speaker 1: in Brisbane, is it across the old dwellings or is

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Speaker 1: there still a specific action in houses? Are they still

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Speaker 1: within a price range for investors to get access.

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Speaker 2: Yeah, I think a lot of there's two types in

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Speaker 2: the vests. One is the one that wants to buy

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Speaker 2: in Brisbane okay, and then there's for their own reasons

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Speaker 2: and the you know they might live in Brisbane. A

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Speaker 2: lot of people tend to buy where they live. Then

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Speaker 2: you've got a lot of investors that deal with properly

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Speaker 2: like a commodity, and they'll buy anywhere in Australia. They

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Speaker 2: won't need the property and so forth, and those people

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Speaker 2: kind of hunt around. They might be looking in Tansbula,

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Speaker 2: Mackay or Melbourne or Sydney or Perth and so forth.

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Speaker 2: But for the ones that are buying in Brisbane, it's

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Speaker 2: more difficult. If the average buyer Australia wide buying the

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Speaker 2: commodity product is really it's between five and seven hundred thousand,

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Speaker 2: then if you apply that to Brisbane, stock is a

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Speaker 2: bit tight. So you're looking at an inner or middle

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Speaker 2: ring unit for that sort of money. And if we're

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Speaker 2: looking for a house, we're having a look outside of

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Speaker 2: Brisboo City Council into like Ipswich or Morton in areas

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Speaker 2: like that. So yeah, there is a sweet spot in

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Speaker 2: Brisbane for buying investment properties. I believe James which is

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Speaker 2: not a house for five to seven hundred thousand. It's

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Speaker 2: more a middle ring suburb house and land. But for

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Speaker 2: that now you're paying like one point two one point three.

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Speaker 2: But for that it's a six hundred square meter block.

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Speaker 2: It's got a postal house on it, so built after

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Speaker 2: nineteen forty six, which allows you to knock it down

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Speaker 2: in the future. It's eight to ten kilometers from the city.

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Speaker 2: It could be north, it could be south, it could

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Speaker 2: be an area like Stafford heights, Kepera Michellton on the

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Speaker 2: north side, or Macravad's Holland Park SoRs it on the

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Speaker 2: south and that has lent themselves to a high land

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Speaker 2: component of seventy percent of the value at least is

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Speaker 2: in the land, good rent for return. We can knock

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Speaker 2: it down in the future and rebuild, which is starting

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Speaker 2: to happen, or we can renovate it, put on a

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Speaker 2: deck and so forth. So that's kind of a sweet

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Speaker 2: spot for house any right.

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Speaker 1: Tell me compared to when you started in interest and

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Speaker 1: activity in Greater Brisbane Compared to when you started.

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Speaker 2: It's definitely picked up a lot of recent times. The

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Speaker 2: last few years. It's more ouner occupiers that I'm seeing

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Speaker 2: at open homes. The investors are still a little bit

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Speaker 2: light on. I think the ones following the online social

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Speaker 2: media buyas agents are flocking to the different areas throughout Australia.

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Speaker 2: So the ones I'm seeing at the opens primarily owner

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Speaker 2: occupiers and then probably local investors or people buying from

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Speaker 2: into state that have plans to move up here on

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Speaker 2: the short term or the long term.

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Speaker 1: Okay, tell me, just for our listeners who would be

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Speaker 1: considered who don't live in Brisbane, but would like to

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Speaker 1: consider it and knowing that the fundamentals are so good,

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Speaker 1: and knowing that the city has outpeaced the other two,

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Speaker 1: the other the larger cities Sydney and midd some time,

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Speaker 1: and that the forecasts that have just come out this

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Speaker 1: week from SQM suggested that would continue. Knowing that what

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Speaker 1: are the districts? Do you think investors should start looking

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Speaker 1: in this city? You'd have to give us the entire

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Speaker 1: post codelistic because it would take it away. But tell

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Speaker 1: me just the years where you see there's particularly you know,

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Speaker 1: good prospects.

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Speaker 2: Yeah, I like for it's probably two one is the

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Speaker 2: investment unit market, so that's sub a million dollars. So

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Speaker 2: lately there's been good ones on the five K fringe

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Speaker 2: of the city. For seven hundred to tw eighte hundred thousand,

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Speaker 2: that's what you're paying for a solid walk up unit

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Speaker 2: that's had some work done, it's got low body corporates,

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Speaker 2: it's got a good sinking fun there's no lift, there's

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Speaker 2: no pearl. It's a smaller complex of six to ten,

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Speaker 2: six to fifteen. There's a sweet spot and they're kind

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Speaker 2: of the five K ring from the CBD. Then you've

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Speaker 2: got and that can be north to south as well.

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Speaker 2: And then you've got the Middle Ring suburb by I mentioned,

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Speaker 2: which is really it's over a mill now. It used

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Speaker 2: to be like cheaper like everything, but now it's one

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Speaker 2: two to one three for that eight to ten k house.

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Speaker 2: So they're probably the two sweet spots. There's also in

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Speaker 2: the city units. We bought one the other day at

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Speaker 2: Kelvin Grove which is near Victoria Park where the Olympic

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Speaker 2: Stadium is, and that was six ninety. It was a

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Speaker 2: one better but in a small complex of eleven good

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Speaker 2: rent return, good capital growth. Given its proximity to the

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Speaker 2: Olympic Stadium as well, it was like three.

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Speaker 1: Clicks something I really do want to pick up. We're

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Speaker 1: going to take a break, but we've going to talk

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Speaker 1: next about I suppose the big issue, the big theme

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Speaker 1: for Brisbane property folks over the next decade, it's the Olympics,

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Speaker 1: quite simply, and it's going to If Sydney in two

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Speaker 1: thousand is anything to go by, we really have something

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Speaker 1: to talk about. We'd be back in a moment. Hello,

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Speaker 1: welcome back to the Australians Money Puzzled podcast. I'm talking

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Speaker 1: to Sam Price of Templeton Property Group. He is a

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Speaker 1: Brisbane based buyer's advocate and he has been in the

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Speaker 1: market for some time. Sam. It's very easy, I suppose

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Speaker 1: for the analyst to pot out a report and say

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Speaker 1: Sydney Olympics, or at least Brisbane Olympics are coming. It's

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Speaker 1: going to be a huge thing for the city. We

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Speaker 1: have clear evidence that prior to the Olympics, in the

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Speaker 1: run up there is strong residential property price patterns in

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Speaker 1: many cities. Our nearest comparable city is Sydney, which was

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Speaker 1: just twenty five years ago, the Sydney Olympics two thousand,

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Speaker 1: where Sydney had a tremendous run up to two thousand

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Speaker 1: and actually it lasted for a year or two longer,

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Speaker 1: but it then had a real slump because Olympics were over,

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Speaker 1: because there had been an element of prices being pulled forward.

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Speaker 1: Tell me your view about Brisbane and what the Olympics

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Speaker 1: might mean to it for investors.

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Speaker 2: Good question, James. I think Brisbane's very different than Sydney.

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Speaker 2: I know, I don't know exactly where Homebush is, but

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Speaker 2: I know it's some distance from the CBD. Brisbane is

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Speaker 2: very different. Like if you look at Victoria Park, which

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Speaker 2: is where the stadium is going to be built. It's

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Speaker 2: literally two kilometers north of the CBD, close and the

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Speaker 2: spring Hill swimming Pool where it's going to get rendov

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Speaker 2: it's going to get rebuilt is the Aquatic Center that's

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Speaker 2: less than two kilometers and it's going to be a

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Speaker 2: flyer from spring Hill to Hurston and it's going to

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Speaker 2: be really integrated with the CBD. So this infrastructure they're

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Speaker 2: building is not at a remote part of Brisbane. It's

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Speaker 2: actually in the heart of the CBD where it's close

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Speaker 2: to the hospital, close to the rail line. It's really

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Speaker 2: going to change the dynamics of the city, not just

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Speaker 2: for a short term, but will benefit from it from

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Speaker 2: for decades after that as well.

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Speaker 1: So how do you think that would be different then

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Speaker 1: for investors? Do you think there is a I mean,

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Speaker 1: I put it to you, do you really think Brisbane

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Speaker 1: can escape that particular issue that will be a run

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Speaker 1: up and then they'll hangover if you like, after the Olympics.

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Speaker 2: Yeah, it's probably like a good wedding, James, the next

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Speaker 2: morning you'll feel a bit tired and you wonder where

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Speaker 2: the money went and things like that, and wasn't worth it,

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Speaker 2: but so I think there will be a lull after

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Speaker 2: it for a little time. There will be a big

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Speaker 2: run up which people can capitalize on for the next

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Speaker 2: seven years. There may be a little lull when we

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Speaker 2: find our feet, but I think we'll find like even

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Speaker 2: if we need thirty there's talking that we need thirty

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Speaker 2: thousand trades people to help build all this infrastructure. I

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Speaker 2: reckon a lot of them will move to Brisbane for

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Speaker 2: the work, follow the money, but they end up staying

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Speaker 2: here as well. But I think it's going to ramp

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Speaker 2: up the population, build up the right infrastructure to set

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Speaker 2: up for the future. There might be a little bit

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Speaker 2: of a softening after that, but then I think it

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Speaker 2: will just carry on its merry way with these new

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Speaker 2: beautiful stadiums for the cricket and the AFL and football,

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Speaker 2: and it'll be a great injection into the Brisbane economy

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Speaker 2: that will benefit for many years.

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Speaker 1: We've had a real debate on the show abou whether

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Speaker 1: Brisbane's having just a moment in the sun if you like.

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Speaker 1: The natural order of things is that prices should be

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Speaker 1: Sydney first, Melbourne's second, Brisbane third, as it always was

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Speaker 1: for who knows how long. Essentially, some people suggest structurally

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Speaker 1: that might be different that actually it may never go

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Speaker 1: back to that order. What do you think? I'm asking you,

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Speaker 1: as a buyer's advocate putting that on the table for me.

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Speaker 1: I'd fall off my chair if he says no. But

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Speaker 1: what do you have to say now?

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Speaker 2: I do think that I think Brisbane has its place.

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Speaker 2: I don't think it Zebra. Sydney is just magnificent with

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Speaker 2: the harbor and so forth the water. Melbourne has its

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Speaker 2: character and its history that Brisbane can never compete with either.

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Speaker 2: So I think Melbourne will you don't get it sacked

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Speaker 2: together over the next decade and will pick up again.

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Speaker 2: So it probably it's rightful place. But Brisbane will be

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Speaker 2: at that younger brother that's kind of nipping at its heels,

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Speaker 2: and that's setting up the infrastructure. And when people come

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Speaker 2: up here like they did after COVID and experience just

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Speaker 2: the weather even and the opportunities in Brisbane, they like

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Speaker 2: what they see and feel. And the number of people

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Speaker 2: that I've helped buy family homes up here and they

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Speaker 2: haven't the bird up here with work because they've been

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Speaker 2: brought up here for work, but they haven't known a

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Speaker 2: lot of people and they've really done it for their

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Speaker 2: family and for their future. So I think it has

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Speaker 2: its place for that for sure.

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Speaker 1: The flips out of this, of course, is that the

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Speaker 1: prices have drifted up much higher. Unemployment rate's more or

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Speaker 1: less the same in the two states. For nothing in

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Speaker 1: it where was upart of time? The whole thing was,

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Speaker 1: you know, you got a job in Melbourne, you couldn't

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Speaker 1: get one in Queensland as easily. The flips out of that,

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Speaker 1: of course, is that you're not getting the internal migration

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Speaker 1: you used to. Basically, the person is sitting in the

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Speaker 1: suburban bloc and who was ready to retire in the

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Speaker 1: suburbs of the second biggest city they can't move to well,

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Speaker 1: they certainly can't move as easily as they could. I

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Speaker 1: mean that would be a drag on prices, would it not.

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Speaker 1: In the fullness of time.

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Speaker 2: It may well, James, Yeah, because the cost of buying

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Speaker 2: and selling it is huge at the moment, and that's

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Speaker 2: why I think stock levels so low everywhere, because the

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Speaker 2: cost of stamp duty and so forth to such that

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Speaker 2: we we're not as mobile, readily selling and buying as

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Speaker 2: we used to be. I think that well, Melbourne will

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Speaker 2: find its feet. I think there's a lot of investors

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Speaker 2: buying in Melbourne at the moment, but whether that changes

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Speaker 2: the dynamics of some suburbs that there's an influx of

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Speaker 2: investors and you know, you're really mak your money without

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Speaker 2: our occupiers. You know, when they come into an area

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Speaker 2: or rejuvenate it, that's where you get the real growth.

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Speaker 1: That you need, that heft in numbers to transform the

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Speaker 1: investor Obviously, even though we have an obsurge of investor activity,

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Speaker 1: they're not going to transform areas in and by themselves.

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Speaker 1: That's a really good point. Okay, we have some very

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Speaker 1: interesting issues we want to talk to Sam about in

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Speaker 1: the next segment. Have some really good questions and have

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Speaker 1: one on social media influencers, which I think you'll find fascinating, folks,

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Speaker 1: because we've been thinking about them as sort of players

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Speaker 1: in the share market, but they are emerging as players

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Speaker 1: in the property market. We'll tell you all about that

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Speaker 1: in a moment. Hello, Welcome back to The Australian's Money

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Speaker 1: Puzzle podcast. I'm James Kirby with Sam Price.

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Speaker 2: Sam.

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Speaker 1: Yes, so in fact I was on I was actually

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Speaker 1: speaking at an ASCIC whatever get together conference some time ago,

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Speaker 1: and it was all about influencers, influencers that awkward term

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Speaker 1: for social media players who build up a following, invariably

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Speaker 1: with very light credentials, if any, in finance, suggesting how

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Speaker 1: people can make money easily and fast, often suggesting how

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Speaker 1: people can make money without even thinking or taking any risks,

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Speaker 1: and of course that's impossible. But most of the focus

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Speaker 1: has been in the share market, and to be fair,

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Speaker 1: there's good influencers and bad influence. I want to talk

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Speaker 1: about bad ones here. So what surprised me is I

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Speaker 1: didn't really, I really didn't realize that the issue is

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Speaker 1: just as alive in property, and only a few days

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Speaker 1: ago it came to light in a very clear way.

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Speaker 1: There has been a burst of you like of social

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Speaker 1: media influencers in the property market suggesting that people like

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Speaker 1: listeners to the show can get around lending limits, for instance,

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Speaker 1: or LVR limits by creating trusts or family trusts or

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Speaker 1: companies and then going to the bank that way, or

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Speaker 1: going to lend us that way. Macquarie Bank surprised everyone

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Speaker 1: by standing in a few days ago and saying forget it,

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Speaker 1: no more of this, no more, We're closing this whole

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Speaker 1: thing down of lending into companies and trusts. So that

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Speaker 1: was hard evidence actually of both the influencers influence. But

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Speaker 1: I want to ask you what do you think of

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Speaker 1: that whole story and does it concern you?

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Speaker 2: It does Jomes because of what I've learned in life

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Speaker 2: is that sometimes the people that can best sell things

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Speaker 2: and not the best to be listened to with. I

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Speaker 2: tell people they should be, you know, be very careful

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Speaker 2: who they take the advice from. When it's a social

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Speaker 2: media of course, and I often think that the people

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Speaker 2: that are following them can be can sometimes be quite

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Speaker 2: easily led into areas where it is more you're risky

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Speaker 2: than the otherwise would think. And a lot I know

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Speaker 2: a lot of the markets buyers agents are putting people

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Speaker 2: in throughout Australia. I don't think a long term hule,

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Speaker 2: so you do have to treat it like a penny

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Speaker 2: stock where you might jump in for a number of years,

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Speaker 2: but then there is a time in the medium term

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Speaker 2: you do have to sell to get out. They're not

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Speaker 2: buying Hull forever. I think a property in Brisbane, like

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Speaker 2: I think it was Charlie Munger or Warren Bofthet used

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Speaker 2: to say, you want to buy a company or a

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Speaker 2: property that you can put in your bottom drawer and

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Speaker 2: figet about for ten years and pull it out and

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Speaker 2: toust it off and it's in better shape that it

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Speaker 2: was when it went in. And I think property in Sydney,

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Speaker 2: some parts of Melbourne and Brisbane there's properties definitely like

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Speaker 2: that I'd be happy to hold. But some of these

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Speaker 2: other areas that are being sell throughout Australia, I'm a

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Speaker 2: little bit a bit sus on whether they will be

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Speaker 2: that good whole long term that I think you'd have

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Speaker 2: to watch it closely and have an exit strategy for it.

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Speaker 2: So it's a different type of investment completely.

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Speaker 1: Do you think some of these buyers agents are in

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Speaker 1: legue as such with the influencers.

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Speaker 2: A lot of them are the influencers themselves. I think

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Speaker 2: James as agents and they're selling their areas. You know,

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Speaker 2: they normally have a particular patch where they like and

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Speaker 2: they can rent that up and sometimes refer to pump

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Speaker 2: and dump where they can actually change the market because

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Speaker 2: they are literally are buying twenty to fifty per months,

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Speaker 2: so you just have to be aware of that. In

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Speaker 2: Brisbane at the moment, it's in these regional areas and

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Speaker 2: pockets of Melbourne and towns will and down where they're

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Speaker 2: actually changing the whole market with their attention.

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Speaker 1: Yeah, that's really interesting. But let's just let's interrogate what

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Speaker 1: mcquarie implied. They didn't like this, right, So what the

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Speaker 1: influencers are seeing, and let's assume the very best case scenario.

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Speaker 1: Let's assume the listener the reader of the influencer actually

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Speaker 1: has a clue and actually does understand to some extent

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Speaker 1: property market, and then they hear something they've never heard before,

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Speaker 1: which is, you know, you can borrow more and you

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Speaker 1: can be more active, and you can be a bigger

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Speaker 1: investor if you'd go and examine family trust structures or

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Speaker 1: company structures, because it gets around the borrowing limits that

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Speaker 1: you've probably already reached if you are an active investor.

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Speaker 1: What's wrong with that?

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Speaker 2: I've always been told diversification is key, James. So I

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Speaker 2: have to pull out all their money into super and

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Speaker 2: put into a two properties that they'd be very concerned.

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Speaker 2: I think you should have a mix of stock market

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Speaker 2: investments and property. It should almost be fifty to fifty

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Speaker 2: in the perfect world. So I'd be very concerned about

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Speaker 2: pulling out all my money into super and putting into

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Speaker 2: you know on black Oh.

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Speaker 1: Absolutely, well, yeah, I'm not even thinking about taking money

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Speaker 1: out of Super. But obviously this is an issue in

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Speaker 1: that area.

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Speaker 2: Yeah, yeah, but I would seek financial advice on that, James,

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Speaker 2: be very careful. I look at the costs of maintaining

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Speaker 2: that company structure or trust is very expensive per year.

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Speaker 2: It is you also, if you're buying in trust, the

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Speaker 2: ability to inject more money. I know with super you

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Speaker 2: have to When people come to me to buy in

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Speaker 2: a super fund, they need to get a certain return,

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Speaker 2: which means we're often buying it an a an a

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Speaker 2: area where we've got a lower land to value ratio.

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Speaker 2: We're getting a higher rent.

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Speaker 1: You mean to get a they have to get a

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Speaker 1: higher running yield? Do they?

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Speaker 2: Yeah, a higher yield to how to hus renovations to

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Speaker 2: the property are the so all of a sudden, when

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Speaker 2: they want couple of growth and I put them in

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Speaker 2: one suburb, now we're looking at yield and something quite

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Speaker 2: modern with an on sweat and paint and within ten

435
00:22:36,200 --> 00:22:38,679
Speaker 2: years old, I'm buying in a different area where I

436
00:22:38,720 --> 00:22:42,320
Speaker 2: can't guarantee the couple of growth that I could in

437
00:22:42,320 --> 00:22:45,520
Speaker 2: that other area. So you're being restricted in what you buy.

438
00:22:45,680 --> 00:22:48,480
Speaker 1: But back to the trust structure you were seeing, it's expensive.

439
00:22:48,800 --> 00:22:53,400
Speaker 1: I imagine the other issue is that there are investors

440
00:22:54,040 --> 00:23:00,960
Speaker 1: who may not realize that basically cut to the chase,

441
00:23:00,960 --> 00:23:03,280
Speaker 1: they're not worthy enough to use these I mean, if

442
00:23:03,280 --> 00:23:07,120
Speaker 1: they're that expensive, if they were that easy, everyone would

443
00:23:07,119 --> 00:23:09,120
Speaker 1: have used them. There's reasons, isn't there that people don't

444
00:23:09,200 --> 00:23:10,040
Speaker 1: use trust structures.

445
00:23:11,000 --> 00:23:13,480
Speaker 2: She might do it if you've you know, for asset protection,

446
00:23:13,520 --> 00:23:16,000
Speaker 2: if you work for yourself and you secure some money

447
00:23:16,000 --> 00:23:19,000
Speaker 2: away and things like that, or ought to avoid land tax.

448
00:23:19,080 --> 00:23:21,399
Speaker 2: You know, they might put each property in a different

449
00:23:21,960 --> 00:23:25,280
Speaker 2: corporate structure to reduce the amalgamation of the land tax.

450
00:23:25,800 --> 00:23:28,400
Speaker 2: But I think that the costs involve the in and outs.

451
00:23:28,840 --> 00:23:31,720
Speaker 2: I think it's well worth some people considering. I think

452
00:23:31,920 --> 00:23:34,120
Speaker 2: a lot of people that are sold on those ideas

453
00:23:34,200 --> 00:23:37,880
Speaker 2: might not have the gun powder to actually, yeah, pull

454
00:23:37,880 --> 00:23:39,480
Speaker 2: it off successfully.

455
00:23:38,920 --> 00:23:41,800
Speaker 1: Yes, and of course immediately making it harder for themselves.

456
00:23:41,960 --> 00:23:44,840
Speaker 1: The hurdle to success is higher because they've put it

457
00:23:44,840 --> 00:23:47,240
Speaker 1: in a trust structure and there's all the fees attached

458
00:23:47,280 --> 00:23:50,439
Speaker 1: to that and other limitations. Okay, very good. Also, now

459
00:23:50,480 --> 00:23:52,399
Speaker 1: I want to just if you bear with me and

460
00:23:52,440 --> 00:23:55,000
Speaker 1: stay with us. We have one or two questions from

461
00:23:55,520 --> 00:23:59,199
Speaker 1: Ross or Uss. After listening to the podcast recently, I

462
00:23:59,240 --> 00:24:02,520
Speaker 1: told I'd send you an idea. Last month I wrote

463
00:24:02,520 --> 00:24:06,919
Speaker 1: to the Treasure Jim Chalmer's and I can confirm this

464
00:24:07,000 --> 00:24:11,240
Speaker 1: idea is being considered by his policy team. How about that, folks, Okay,

465
00:24:11,240 --> 00:24:14,720
Speaker 1: here's the idea negative gearing should only be available for

466
00:24:14,800 --> 00:24:20,879
Speaker 1: long term rental properties. Yes, indeed, I don't not a

467
00:24:20,880 --> 00:24:24,399
Speaker 1: bad idea, as negative gearing sort of proposes go in

468
00:24:24,480 --> 00:24:27,959
Speaker 1: terms of trimming it. In terms of restricting it, there was,

469
00:24:28,080 --> 00:24:31,159
Speaker 1: of course the two sixteen policy from the ALP that

470
00:24:31,200 --> 00:24:34,760
Speaker 1: it would be restricted only to new properties, but most

471
00:24:34,800 --> 00:24:38,160
Speaker 1: people don't want to negatively gear new properties, just broadly

472
00:24:38,200 --> 00:24:41,080
Speaker 1: in principle. What do you think of Ross's idea?

473
00:24:42,720 --> 00:24:44,679
Speaker 2: I think it has some merit. I think by the

474
00:24:44,720 --> 00:24:46,800
Speaker 2: sands of that the government is looking at different options

475
00:24:46,840 --> 00:24:50,400
Speaker 2: to tweat negative gearing and capital gains tax down the line,

476
00:24:50,440 --> 00:24:53,160
Speaker 2: So I think it might happen, and that I think

477
00:24:53,200 --> 00:24:55,680
Speaker 2: I can. How would that influence my buying decisions now?

478
00:24:55,880 --> 00:24:58,720
Speaker 2: So i'd know I do in the best I want

479
00:24:58,760 --> 00:25:01,000
Speaker 2: to go and have five or ten little investment properties

480
00:25:01,000 --> 00:25:03,880
Speaker 2: throughout Australia or should we focus on one or two

481
00:25:04,920 --> 00:25:08,480
Speaker 2: outside the family home of quality residential properties that set

482
00:25:08,480 --> 00:25:11,200
Speaker 2: them up for the future. Because there's two different directions there.

483
00:25:11,240 --> 00:25:13,240
Speaker 2: So I tend to think they might cap the number

484
00:25:13,240 --> 00:25:15,439
Speaker 2: of properties you can have. Do we need ten or

485
00:25:15,480 --> 00:25:18,800
Speaker 2: twenty investment properties each? Given the rental issues at all?

486
00:25:18,840 --> 00:25:21,720
Speaker 2: So I think they definitely will look into that. Whether

487
00:25:21,760 --> 00:25:24,600
Speaker 2: it's the negative gearing or the percentages or the capital

488
00:25:24,680 --> 00:25:28,720
Speaker 2: gains tax, they will. I think it's inevitable.

489
00:25:29,200 --> 00:25:32,080
Speaker 1: I think, to be honest with personally, I think it's CGT.

490
00:25:32,560 --> 00:25:35,960
Speaker 1: They'll go first, but let's see, Okay. Final question from Grant.

491
00:25:36,640 --> 00:25:40,040
Speaker 1: Thanks so much for the podcast. I love it. Hypothetically speaking,

492
00:25:40,880 --> 00:25:43,639
Speaker 1: given the current stock market is at all times high,

493
00:25:44,400 --> 00:25:49,280
Speaker 1: if you basically he says, you know, he's overexposed to shares.

494
00:25:49,520 --> 00:25:52,200
Speaker 1: Shares have been very good. If you were starting again,

495
00:25:52,440 --> 00:25:55,280
Speaker 1: how would you deploy them money today? This is this

496
00:25:55,359 --> 00:25:58,560
Speaker 1: never advice, it's information for Grant and all the grants

497
00:25:58,560 --> 00:26:02,840
Speaker 1: in the world. Diversification, as you said at the start, Sam,

498
00:26:03,320 --> 00:26:08,160
Speaker 1: is always warranted. And in your world, I imagine people

499
00:26:08,200 --> 00:26:11,680
Speaker 1: have too much property and that enough non property assets.

500
00:26:11,720 --> 00:26:13,440
Speaker 1: But for someone who's had a very good run on

501
00:26:13,480 --> 00:26:14,960
Speaker 1: the market, and the market has been very good for

502
00:26:15,000 --> 00:26:19,520
Speaker 1: a few years, I would suggest to that someone that

503
00:26:19,720 --> 00:26:22,960
Speaker 1: universal type to consider investment property.

504
00:26:23,880 --> 00:26:26,639
Speaker 2: What do you think and I'd agree you would agree

505
00:26:26,680 --> 00:26:29,040
Speaker 2: of course most people. But yeah, as I said, I

506
00:26:29,080 --> 00:26:31,639
Speaker 2: like the fifty to fifty approach. People have a principal place,

507
00:26:31,760 --> 00:26:34,720
Speaker 2: but then when that is well under control, using the

508
00:26:34,720 --> 00:26:37,320
Speaker 2: equity and that property to buy an investment property. I

509
00:26:37,400 --> 00:26:40,359
Speaker 2: do prefer a quality investment property. It still could be

510
00:26:41,000 --> 00:26:43,440
Speaker 2: in inner city unit, but not an apartment of high

511
00:26:43,480 --> 00:26:46,560
Speaker 2: rise it's a particular type of unit, or a townhouse,

512
00:26:46,680 --> 00:26:49,200
Speaker 2: or getting the one as I said, you can put

513
00:26:49,200 --> 00:26:51,040
Speaker 2: in the bottom drawer and keep it for ten or

514
00:26:51,080 --> 00:26:54,439
Speaker 2: twenty years and well it'll be doing wonderfully when you

515
00:26:54,480 --> 00:26:57,040
Speaker 2: pull it out. So I do like quality investment properties

516
00:26:57,240 --> 00:26:59,000
Speaker 2: rather than playing it as a numbers game.

517
00:26:59,160 --> 00:27:01,520
Speaker 1: James, Okay, very good, And of course, I mean the

518
00:27:01,520 --> 00:27:04,399
Speaker 1: issue for folks is just to state the obvious. The

519
00:27:04,400 --> 00:27:08,920
Speaker 1: hard part, of course, is using real property residential bricks

520
00:27:08,920 --> 00:27:13,520
Speaker 1: and mortar as diversification is I completely supported. But the

521
00:27:13,640 --> 00:27:16,200
Speaker 1: hard part is that the high entry costs, it's very

522
00:27:16,200 --> 00:27:19,040
Speaker 1: hard to you'd love to go and buy six houses

523
00:27:19,080 --> 00:27:21,439
Speaker 1: in six states or something. If there was six states

524
00:27:21,480 --> 00:27:23,679
Speaker 1: you'd love to buy. You'd love to diversify your property,

525
00:27:23,720 --> 00:27:25,440
Speaker 1: but it's very hard to do because it's a big

526
00:27:25,440 --> 00:27:28,679
Speaker 1: ticket item. And as you could hear from Sam's earlier

527
00:27:28,680 --> 00:27:30,600
Speaker 1: part of the show, the prices he was talking about

528
00:27:30,720 --> 00:27:33,880
Speaker 1: even across the middle suburbs of Brisbane, they are considerable

529
00:27:33,960 --> 00:27:38,040
Speaker 1: now compared to most people's diversified portfolios. But a point

530
00:27:38,160 --> 00:27:42,800
Speaker 1: really worth thinking about. Sam Price, Templeton Group in Brisbane.

531
00:27:42,800 --> 00:27:44,680
Speaker 1: Lovely to talk to you, Thanks for coming on the show.

532
00:27:44,920 --> 00:27:46,600
Speaker 2: Thank you Jens, thanks for having me. Good to see

533
00:27:46,600 --> 00:27:46,960
Speaker 2: you again.

534
00:27:47,359 --> 00:27:49,360
Speaker 1: Great to have Sam there. I know him a long time.

535
00:27:49,400 --> 00:27:51,440
Speaker 1: As I say, he's been through the ups and downs

536
00:27:51,440 --> 00:27:55,720
Speaker 1: and now enjoying the ups of the Brisbane market, which

537
00:27:55,720 --> 00:27:58,320
Speaker 1: looked like they're going to continue for some time. Okay,

538
00:27:58,480 --> 00:28:01,600
Speaker 1: we have the ACIC Commission Alan Kirkland on the show

539
00:28:01,880 --> 00:28:04,080
Speaker 1: later in the week. If you want to ask him anything.

540
00:28:04,280 --> 00:28:06,800
Speaker 1: He's in charge of all consumer stuff at ACIK. Now

541
00:28:06,840 --> 00:28:09,360
Speaker 1: it's your chance forty eight hours to do it. Until then.

542
00:28:09,760 --> 00:28:12,520
Speaker 1: The money Puzzle at the Australian dot Com dot au

543
00:28:12,840 --> 00:28:14,480
Speaker 1: is the address talked to you soon