Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm
Speaker 1: James Kirby. Welcome aboard, everybody. Welcome aboard to an increasingly
Speaker 1: lively and lucrative I think residential property investment market. And
Speaker 1: we've been saying this for some time that it was improving,
Speaker 1: it was coming and here we go. Lots of reports
Speaker 1: now you'll see talking about not just the fairly good
Speaker 1: returns in recent times, but strong prospects across the board.
Speaker 1: Now when you look at it more closely, it's the
Speaker 1: strongest prospects are actually outside the metropolitan cities of Sydney
Speaker 1: and Melbourne, and it is coming down again perhaps to Perth,
Speaker 1: Adelaide and Brisbane. However, folks, the big market, the market
Speaker 1: that's really got the volume and probably the outlook long
Speaker 1: term I think, and it's come up on the show
Speaker 1: regularly is Queensland, specifically Brisbane and the Gold Coast where
Speaker 1: we have a lot of action happening. And if you
Speaker 1: listened last week's show and Missa Cavello talking about how
Speaker 1: investors are now increasingly willing and it's increasingly easy to
Speaker 1: invest interstate. My guest today is an expert on the
Speaker 1: Queensland market, specifically Brisbane. He's based in Brisbane. I know
Speaker 1: him a long time. It's Sam Price of a Templeton.
Speaker 1: He's a buyer's advocate in the city. Well, you're doing
Speaker 1: your own thing for about fifteen years now, aren't you, Sam?
Speaker 2: I have Jan Yes, yep, doing my own thing. Had
Speaker 2: the property management for long time as well, and Tim
Speaker 2: planning before that, but just now it's purely buyas agency
Speaker 2: in buying throughout Southeast Queensland for mums and dad investors
Speaker 2: as well as a rocketpaths as well.
Speaker 1: The reason I mentioned that you're doing at fifteen years
Speaker 1: is that I want investors to know first of all,
Speaker 1: before we talk about the specific attractions of Queensland and
Speaker 1: certain issues that are happening there. Should find very interesting folks.
Speaker 1: You do need to know that hasn't always been so good,
Speaker 1: and there was a patch where Brisbane really had it
Speaker 1: hard as a property investment market due to floods that
Speaker 1: were quite devastating and spectacular really if you were ever
Speaker 1: in the city after those floods, and similarly another issue
Speaker 1: was overbuilding. So just cut to the chase. In terms
Speaker 1: of Queensland as a distinct market. To me, these are
Speaker 1: the distinct risks. There are those risks still in place.
Speaker 1: Has anything changed?
Speaker 2: The flooding is definitely still in place. So as we know,
Speaker 2: we had the big floods in twenty eleven in Brisbane,
Speaker 2: then another one only ten years later in twenty twenty two. Yeah,
Speaker 2: they were devastating in Brisbane. I think having two in
Speaker 2: close succession really taught us a big lesson. And although
Speaker 2: we can't change the flooding and the weather, of course,
Speaker 2: what we can do is build to accommodate the flooding.
Speaker 2: And so since that time, all the buildings that have
Speaker 2: been done that a flood affected, they've kind of taken
Speaker 2: that into account. So I think we've learned to live
Speaker 2: with it now, James. So their values have jumped back
Speaker 2: and people are not as concerned about it these days
Speaker 2: as they were. However, Brismoo City Council has been excellent
Speaker 2: in providing information to buyers. They have a like a
Speaker 2: flood report on every property within Brisbane City Council. They
Speaker 2: have a flood map as well, so when you're buying,
Speaker 2: always look at the flood map first of all, then
Speaker 2: look at the flood report and it will tell you
Speaker 2: how the different floods and how many meters of centimeters
Speaker 2: of water when over the property if it wasn't affected
Speaker 2: at all. So that's a staple check that you do
Speaker 2: forever property.
Speaker 1: Would you say that is a distinct feature of the
Speaker 1: Brisbane market as opposed to see Melbourne.
Speaker 2: I'm not sure about the flood search in Melbourne, but
Speaker 2: I know for Morton and Ipswich the Brismoo City Council
Speaker 2: flood mapping is excellent. It is quite conservative at the moment,
Speaker 2: like there's a lot of properties that are within the
Speaker 2: realms of being flood affected that I don't think ever
Speaker 2: will be, so there is quite a buffer on it. Yeah,
Speaker 2: but then we're only talking about if twenty percent of
Speaker 2: the not even twenty percent probably z it might be
Speaker 2: like ten percent of Brisbane.
Speaker 1: So it is a small it is, but it tends
Speaker 1: to be very attractive inner city zones by the river
Speaker 1: and where all the apartment blocks are too. It's worth
Speaker 1: listeners knowing. I can remember looking at a property in
Speaker 1: Brisbane in the Interpilly area after the floods, first floods
Speaker 1: and a lovely place on a park and then the
Speaker 1: really state agent said I must buy low Point out
Speaker 1: where the flood reached here. He put his hand up
Speaker 1: into the air, you know, about six ft high, speechless.
Speaker 1: I'll never forget it. So I want to start the
Speaker 1: show just by putting that on the table separately, that
Speaker 1: there was an overbuilding, apartment over building. What situation at
Speaker 1: the moment.
Speaker 2: Now we're in a start of you know, under supply
Speaker 2: for sure for apartments. I think we're back to ninety
Speaker 2: ninety levels of supply coming on line. So it's all
Speaker 2: that I was supplied the ninety nineties and the two thousand,
Speaker 2: since that's been all absorbed now and given the cost
Speaker 2: of construction the last you know, since COVID has been
Speaker 2: very high and escalating, it hasn't warranted developers to press
Speaker 2: the trigger on building the quick rise. Since COVID of
Speaker 2: property values, I think they've got to a stage now
Speaker 2: where it's economic to build units. Like if replacement of
Speaker 2: a two bad, two bathroom unit is in excess of
Speaker 2: you know, one one point two mil, well, now we've
Speaker 2: reached that point where the market will be happy to
Speaker 2: pay that. And therefore there's a lot of projects in
Speaker 2: the pipeline that can now go ahead, which so currently
Speaker 2: and under supply, everything's selling very quickly. Naturally in these times,
Speaker 2: they do over react sometimes and build too many. But
Speaker 2: given it takes three to five years for these buildings
Speaker 2: to get built, we're not going to see that for
Speaker 2: some time. But there are our pockets in Brisbane where
Speaker 2: you know, you could potentially see it. And even now
Speaker 2: I'm guarded about recommending clients buying those areas for the
Speaker 2: perceived you know, over building that could happen. They could have.
Speaker 1: Yes, it could happen. So in terms of investor activity
Speaker 1: in Brisbane, is it across the old dwellings or is
Speaker 1: there still a specific action in houses? Are they still
Speaker 1: within a price range for investors to get access.
Speaker 2: Yeah, I think a lot of there's two types in
Speaker 2: the vests. One is the one that wants to buy
Speaker 2: in Brisbane okay, and then there's for their own reasons
Speaker 2: and the you know they might live in Brisbane. A
Speaker 2: lot of people tend to buy where they live. Then
Speaker 2: you've got a lot of investors that deal with properly
Speaker 2: like a commodity, and they'll buy anywhere in Australia. They
Speaker 2: won't need the property and so forth, and those people
Speaker 2: kind of hunt around. They might be looking in Tansbula,
Speaker 2: Mackay or Melbourne or Sydney or Perth and so forth.
Speaker 2: But for the ones that are buying in Brisbane, it's
Speaker 2: more difficult. If the average buyer Australia wide buying the
Speaker 2: commodity product is really it's between five and seven hundred thousand,
Speaker 2: then if you apply that to Brisbane, stock is a
Speaker 2: bit tight. So you're looking at an inner or middle
Speaker 2: ring unit for that sort of money. And if we're
Speaker 2: looking for a house, we're having a look outside of
Speaker 2: Brisboo City Council into like Ipswich or Morton in areas
Speaker 2: like that. So yeah, there is a sweet spot in
Speaker 2: Brisbane for buying investment properties. I believe James which is
Speaker 2: not a house for five to seven hundred thousand. It's
Speaker 2: more a middle ring suburb house and land. But for
Speaker 2: that now you're paying like one point two one point three.
Speaker 2: But for that it's a six hundred square meter block.
Speaker 2: It's got a postal house on it, so built after
Speaker 2: nineteen forty six, which allows you to knock it down
Speaker 2: in the future. It's eight to ten kilometers from the city.
Speaker 2: It could be north, it could be south, it could
Speaker 2: be an area like Stafford heights, Kepera Michellton on the
Speaker 2: north side, or Macravad's Holland Park SoRs it on the
Speaker 2: south and that has lent themselves to a high land
Speaker 2: component of seventy percent of the value at least is
Speaker 2: in the land, good rent for return. We can knock
Speaker 2: it down in the future and rebuild, which is starting
Speaker 2: to happen, or we can renovate it, put on a
Speaker 2: deck and so forth. So that's kind of a sweet
Speaker 2: spot for house any right.
Speaker 1: Tell me compared to when you started in interest and
Speaker 1: activity in Greater Brisbane Compared to when you started.
Speaker 2: It's definitely picked up a lot of recent times. The
Speaker 2: last few years. It's more ouner occupiers that I'm seeing
Speaker 2: at open homes. The investors are still a little bit
Speaker 2: light on. I think the ones following the online social
Speaker 2: media buyas agents are flocking to the different areas throughout Australia.
Speaker 2: So the ones I'm seeing at the opens primarily owner
Speaker 2: occupiers and then probably local investors or people buying from
Speaker 2: into state that have plans to move up here on
Speaker 2: the short term or the long term.
Speaker 1: Okay, tell me, just for our listeners who would be
Speaker 1: considered who don't live in Brisbane, but would like to
Speaker 1: consider it and knowing that the fundamentals are so good,
Speaker 1: and knowing that the city has outpeaced the other two,
Speaker 1: the other the larger cities Sydney and midd some time,
Speaker 1: and that the forecasts that have just come out this
Speaker 1: week from SQM suggested that would continue. Knowing that what
Speaker 1: are the districts? Do you think investors should start looking
Speaker 1: in this city? You'd have to give us the entire
Speaker 1: post codelistic because it would take it away. But tell
Speaker 1: me just the years where you see there's particularly you know,
Speaker 1: good prospects.
Speaker 2: Yeah, I like for it's probably two one is the
Speaker 2: investment unit market, so that's sub a million dollars. So
Speaker 2: lately there's been good ones on the five K fringe
Speaker 2: of the city. For seven hundred to tw eighte hundred thousand,
Speaker 2: that's what you're paying for a solid walk up unit
Speaker 2: that's had some work done, it's got low body corporates,
Speaker 2: it's got a good sinking fun there's no lift, there's
Speaker 2: no pearl. It's a smaller complex of six to ten,
Speaker 2: six to fifteen. There's a sweet spot and they're kind
Speaker 2: of the five K ring from the CBD. Then you've
Speaker 2: got and that can be north to south as well.
Speaker 2: And then you've got the Middle Ring suburb by I mentioned,
Speaker 2: which is really it's over a mill now. It used
Speaker 2: to be like cheaper like everything, but now it's one
Speaker 2: two to one three for that eight to ten k house.
Speaker 2: So they're probably the two sweet spots. There's also in
Speaker 2: the city units. We bought one the other day at
Speaker 2: Kelvin Grove which is near Victoria Park where the Olympic
Speaker 2: Stadium is, and that was six ninety. It was a
Speaker 2: one better but in a small complex of eleven good
Speaker 2: rent return, good capital growth. Given its proximity to the
Speaker 2: Olympic Stadium as well, it was like three.
Speaker 1: Clicks something I really do want to pick up. We're
Speaker 1: going to take a break, but we've going to talk
Speaker 1: next about I suppose the big issue, the big theme
Speaker 1: for Brisbane property folks over the next decade, it's the Olympics,
Speaker 1: quite simply, and it's going to If Sydney in two
Speaker 1: thousand is anything to go by, we really have something
Speaker 1: to talk about. We'd be back in a moment. Hello,
Speaker 1: welcome back to the Australians Money Puzzled podcast. I'm talking
Speaker 1: to Sam Price of Templeton Property Group. He is a
Speaker 1: Brisbane based buyer's advocate and he has been in the
Speaker 1: market for some time. Sam. It's very easy, I suppose
Speaker 1: for the analyst to pot out a report and say
Speaker 1: Sydney Olympics, or at least Brisbane Olympics are coming. It's
Speaker 1: going to be a huge thing for the city. We
Speaker 1: have clear evidence that prior to the Olympics, in the
Speaker 1: run up there is strong residential property price patterns in
Speaker 1: many cities. Our nearest comparable city is Sydney, which was
Speaker 1: just twenty five years ago, the Sydney Olympics two thousand,
Speaker 1: where Sydney had a tremendous run up to two thousand
Speaker 1: and actually it lasted for a year or two longer,
Speaker 1: but it then had a real slump because Olympics were over,
Speaker 1: because there had been an element of prices being pulled forward.
Speaker 1: Tell me your view about Brisbane and what the Olympics
Speaker 1: might mean to it for investors.
Speaker 2: Good question, James. I think Brisbane's very different than Sydney.
Speaker 2: I know, I don't know exactly where Homebush is, but
Speaker 2: I know it's some distance from the CBD. Brisbane is
Speaker 2: very different. Like if you look at Victoria Park, which
Speaker 2: is where the stadium is going to be built. It's
Speaker 2: literally two kilometers north of the CBD, close and the
Speaker 2: spring Hill swimming Pool where it's going to get rendov
Speaker 2: it's going to get rebuilt is the Aquatic Center that's
Speaker 2: less than two kilometers and it's going to be a
Speaker 2: flyer from spring Hill to Hurston and it's going to
Speaker 2: be really integrated with the CBD. So this infrastructure they're
Speaker 2: building is not at a remote part of Brisbane. It's
Speaker 2: actually in the heart of the CBD where it's close
Speaker 2: to the hospital, close to the rail line. It's really
Speaker 2: going to change the dynamics of the city, not just
Speaker 2: for a short term, but will benefit from it from
Speaker 2: for decades after that as well.
Speaker 1: So how do you think that would be different then
Speaker 1: for investors? Do you think there is a I mean,
Speaker 1: I put it to you, do you really think Brisbane
Speaker 1: can escape that particular issue that will be a run
Speaker 1: up and then they'll hangover if you like, after the Olympics.
Speaker 2: Yeah, it's probably like a good wedding, James, the next
Speaker 2: morning you'll feel a bit tired and you wonder where
Speaker 2: the money went and things like that, and wasn't worth it,
Speaker 2: but so I think there will be a lull after
Speaker 2: it for a little time. There will be a big
Speaker 2: run up which people can capitalize on for the next
Speaker 2: seven years. There may be a little lull when we
Speaker 2: find our feet, but I think we'll find like even
Speaker 2: if we need thirty there's talking that we need thirty
Speaker 2: thousand trades people to help build all this infrastructure. I
Speaker 2: reckon a lot of them will move to Brisbane for
Speaker 2: the work, follow the money, but they end up staying
Speaker 2: here as well. But I think it's going to ramp
Speaker 2: up the population, build up the right infrastructure to set
Speaker 2: up for the future. There might be a little bit
Speaker 2: of a softening after that, but then I think it
Speaker 2: will just carry on its merry way with these new
Speaker 2: beautiful stadiums for the cricket and the AFL and football,
Speaker 2: and it'll be a great injection into the Brisbane economy
Speaker 2: that will benefit for many years.
Speaker 1: We've had a real debate on the show abou whether
Speaker 1: Brisbane's having just a moment in the sun if you like.
Speaker 1: The natural order of things is that prices should be
Speaker 1: Sydney first, Melbourne's second, Brisbane third, as it always was
Speaker 1: for who knows how long. Essentially, some people suggest structurally
Speaker 1: that might be different that actually it may never go
Speaker 1: back to that order. What do you think? I'm asking you,
Speaker 1: as a buyer's advocate putting that on the table for me.
Speaker 1: I'd fall off my chair if he says no. But
Speaker 1: what do you have to say now?
Speaker 2: I do think that I think Brisbane has its place.
Speaker 2: I don't think it Zebra. Sydney is just magnificent with
Speaker 2: the harbor and so forth the water. Melbourne has its
Speaker 2: character and its history that Brisbane can never compete with either.
Speaker 2: So I think Melbourne will you don't get it sacked
Speaker 2: together over the next decade and will pick up again.
Speaker 2: So it probably it's rightful place. But Brisbane will be
Speaker 2: at that younger brother that's kind of nipping at its heels,
Speaker 2: and that's setting up the infrastructure. And when people come
Speaker 2: up here like they did after COVID and experience just
Speaker 2: the weather even and the opportunities in Brisbane, they like
Speaker 2: what they see and feel. And the number of people
Speaker 2: that I've helped buy family homes up here and they
Speaker 2: haven't the bird up here with work because they've been
Speaker 2: brought up here for work, but they haven't known a
Speaker 2: lot of people and they've really done it for their
Speaker 2: family and for their future. So I think it has
Speaker 2: its place for that for sure.
Speaker 1: The flips out of this, of course, is that the
Speaker 1: prices have drifted up much higher. Unemployment rate's more or
Speaker 1: less the same in the two states. For nothing in
Speaker 1: it where was upart of time? The whole thing was,
Speaker 1: you know, you got a job in Melbourne, you couldn't
Speaker 1: get one in Queensland as easily. The flips out of that,
Speaker 1: of course, is that you're not getting the internal migration
Speaker 1: you used to. Basically, the person is sitting in the
Speaker 1: suburban bloc and who was ready to retire in the
Speaker 1: suburbs of the second biggest city they can't move to well,
Speaker 1: they certainly can't move as easily as they could. I
Speaker 1: mean that would be a drag on prices, would it not.
Speaker 1: In the fullness of time.
Speaker 2: It may well, James, Yeah, because the cost of buying
Speaker 2: and selling it is huge at the moment, and that's
Speaker 2: why I think stock levels so low everywhere, because the
Speaker 2: cost of stamp duty and so forth to such that
Speaker 2: we we're not as mobile, readily selling and buying as
Speaker 2: we used to be. I think that well, Melbourne will
Speaker 2: find its feet. I think there's a lot of investors
Speaker 2: buying in Melbourne at the moment, but whether that changes
Speaker 2: the dynamics of some suburbs that there's an influx of
Speaker 2: investors and you know, you're really mak your money without
Speaker 2: our occupiers. You know, when they come into an area
Speaker 2: or rejuvenate it, that's where you get the real growth.
Speaker 1: That you need, that heft in numbers to transform the
Speaker 1: investor Obviously, even though we have an obsurge of investor activity,
Speaker 1: they're not going to transform areas in and by themselves.
Speaker 1: That's a really good point. Okay, we have some very
Speaker 1: interesting issues we want to talk to Sam about in
Speaker 1: the next segment. Have some really good questions and have
Speaker 1: one on social media influencers, which I think you'll find fascinating, folks,
Speaker 1: because we've been thinking about them as sort of players
Speaker 1: in the share market, but they are emerging as players
Speaker 1: in the property market. We'll tell you all about that
Speaker 1: in a moment. Hello, Welcome back to The Australian's Money
Speaker 1: Puzzle podcast. I'm James Kirby with Sam Price.
Speaker 2: Sam.
Speaker 1: Yes, so in fact I was on I was actually
Speaker 1: speaking at an ASCIC whatever get together conference some time ago,
Speaker 1: and it was all about influencers, influencers that awkward term
Speaker 1: for social media players who build up a following, invariably
Speaker 1: with very light credentials, if any, in finance, suggesting how
Speaker 1: people can make money easily and fast, often suggesting how
Speaker 1: people can make money without even thinking or taking any risks,
Speaker 1: and of course that's impossible. But most of the focus
Speaker 1: has been in the share market, and to be fair,
Speaker 1: there's good influencers and bad influence. I want to talk
Speaker 1: about bad ones here. So what surprised me is I
Speaker 1: didn't really, I really didn't realize that the issue is
Speaker 1: just as alive in property, and only a few days
Speaker 1: ago it came to light in a very clear way.
Speaker 1: There has been a burst of you like of social
Speaker 1: media influencers in the property market suggesting that people like
Speaker 1: listeners to the show can get around lending limits, for instance,
Speaker 1: or LVR limits by creating trusts or family trusts or
Speaker 1: companies and then going to the bank that way, or
Speaker 1: going to lend us that way. Macquarie Bank surprised everyone
Speaker 1: by standing in a few days ago and saying forget it,
Speaker 1: no more of this, no more, We're closing this whole
Speaker 1: thing down of lending into companies and trusts. So that
Speaker 1: was hard evidence actually of both the influencers influence. But
Speaker 1: I want to ask you what do you think of
Speaker 1: that whole story and does it concern you?
Speaker 2: It does Jomes because of what I've learned in life
Speaker 2: is that sometimes the people that can best sell things
Speaker 2: and not the best to be listened to with. I
Speaker 2: tell people they should be, you know, be very careful
Speaker 2: who they take the advice from. When it's a social
Speaker 2: media of course, and I often think that the people
Speaker 2: that are following them can be can sometimes be quite
Speaker 2: easily led into areas where it is more you're risky
Speaker 2: than the otherwise would think. And a lot I know
Speaker 2: a lot of the markets buyers agents are putting people
Speaker 2: in throughout Australia. I don't think a long term hule,
Speaker 2: so you do have to treat it like a penny
Speaker 2: stock where you might jump in for a number of years,
Speaker 2: but then there is a time in the medium term
Speaker 2: you do have to sell to get out. They're not
Speaker 2: buying Hull forever. I think a property in Brisbane, like
Speaker 2: I think it was Charlie Munger or Warren Bofthet used
Speaker 2: to say, you want to buy a company or a
Speaker 2: property that you can put in your bottom drawer and
Speaker 2: figet about for ten years and pull it out and
Speaker 2: toust it off and it's in better shape that it
Speaker 2: was when it went in. And I think property in Sydney,
Speaker 2: some parts of Melbourne and Brisbane there's properties definitely like
Speaker 2: that I'd be happy to hold. But some of these
Speaker 2: other areas that are being sell throughout Australia, I'm a
Speaker 2: little bit a bit sus on whether they will be
Speaker 2: that good whole long term that I think you'd have
Speaker 2: to watch it closely and have an exit strategy for it.
Speaker 2: So it's a different type of investment completely.
Speaker 1: Do you think some of these buyers agents are in
Speaker 1: legue as such with the influencers.
Speaker 2: A lot of them are the influencers themselves. I think
Speaker 2: James as agents and they're selling their areas. You know,
Speaker 2: they normally have a particular patch where they like and
Speaker 2: they can rent that up and sometimes refer to pump
Speaker 2: and dump where they can actually change the market because
Speaker 2: they are literally are buying twenty to fifty per months,
Speaker 2: so you just have to be aware of that. In
Speaker 2: Brisbane at the moment, it's in these regional areas and
Speaker 2: pockets of Melbourne and towns will and down where they're
Speaker 2: actually changing the whole market with their attention.
Speaker 1: Yeah, that's really interesting. But let's just let's interrogate what
Speaker 1: mcquarie implied. They didn't like this, right, So what the
Speaker 1: influencers are seeing, and let's assume the very best case scenario.
Speaker 1: Let's assume the listener the reader of the influencer actually
Speaker 1: has a clue and actually does understand to some extent
Speaker 1: property market, and then they hear something they've never heard before,
Speaker 1: which is, you know, you can borrow more and you
Speaker 1: can be more active, and you can be a bigger
Speaker 1: investor if you'd go and examine family trust structures or
Speaker 1: company structures, because it gets around the borrowing limits that
Speaker 1: you've probably already reached if you are an active investor.
Speaker 1: What's wrong with that?
Speaker 2: I've always been told diversification is key, James. So I
Speaker 2: have to pull out all their money into super and
Speaker 2: put into a two properties that they'd be very concerned.
Speaker 2: I think you should have a mix of stock market
Speaker 2: investments and property. It should almost be fifty to fifty
Speaker 2: in the perfect world. So I'd be very concerned about
Speaker 2: pulling out all my money into super and putting into
Speaker 2: you know on black Oh.
Speaker 1: Absolutely, well, yeah, I'm not even thinking about taking money
Speaker 1: out of Super. But obviously this is an issue in
Speaker 1: that area.
Speaker 2: Yeah, yeah, but I would seek financial advice on that, James,
Speaker 2: be very careful. I look at the costs of maintaining
Speaker 2: that company structure or trust is very expensive per year.
Speaker 2: It is you also, if you're buying in trust, the
Speaker 2: ability to inject more money. I know with super you
Speaker 2: have to When people come to me to buy in
Speaker 2: a super fund, they need to get a certain return,
Speaker 2: which means we're often buying it an a an a
Speaker 2: area where we've got a lower land to value ratio.
Speaker 2: We're getting a higher rent.
Speaker 1: You mean to get a they have to get a
Speaker 1: higher running yield? Do they?
Speaker 2: Yeah, a higher yield to how to hus renovations to
Speaker 2: the property are the so all of a sudden, when
Speaker 2: they want couple of growth and I put them in
Speaker 2: one suburb, now we're looking at yield and something quite
Speaker 2: modern with an on sweat and paint and within ten
Speaker 2: years old, I'm buying in a different area where I
Speaker 2: can't guarantee the couple of growth that I could in
Speaker 2: that other area. So you're being restricted in what you buy.
Speaker 1: But back to the trust structure you were seeing, it's expensive.
Speaker 1: I imagine the other issue is that there are investors
Speaker 1: who may not realize that basically cut to the chase,
Speaker 1: they're not worthy enough to use these I mean, if
Speaker 1: they're that expensive, if they were that easy, everyone would
Speaker 1: have used them. There's reasons, isn't there that people don't
Speaker 1: use trust structures.
Speaker 2: She might do it if you've you know, for asset protection,
Speaker 2: if you work for yourself and you secure some money
Speaker 2: away and things like that, or ought to avoid land tax.
Speaker 2: You know, they might put each property in a different
Speaker 2: corporate structure to reduce the amalgamation of the land tax.
Speaker 2: But I think that the costs involve the in and outs.
Speaker 2: I think it's well worth some people considering. I think
Speaker 2: a lot of people that are sold on those ideas
Speaker 2: might not have the gun powder to actually, yeah, pull
Speaker 2: it off successfully.
Speaker 1: Yes, and of course immediately making it harder for themselves.
Speaker 1: The hurdle to success is higher because they've put it
Speaker 1: in a trust structure and there's all the fees attached
Speaker 1: to that and other limitations. Okay, very good. Also, now
Speaker 1: I want to just if you bear with me and
Speaker 1: stay with us. We have one or two questions from
Speaker 1: Ross or Uss. After listening to the podcast recently, I
Speaker 1: told I'd send you an idea. Last month I wrote
Speaker 1: to the Treasure Jim Chalmer's and I can confirm this
Speaker 1: idea is being considered by his policy team. How about that, folks, Okay,
Speaker 1: here's the idea negative gearing should only be available for
Speaker 1: long term rental properties. Yes, indeed, I don't not a
Speaker 1: bad idea, as negative gearing sort of proposes go in
Speaker 1: terms of trimming it. In terms of restricting it, there was,
Speaker 1: of course the two sixteen policy from the ALP that
Speaker 1: it would be restricted only to new properties, but most
Speaker 1: people don't want to negatively gear new properties, just broadly
Speaker 1: in principle. What do you think of Ross's idea?
Speaker 2: I think it has some merit. I think by the
Speaker 2: sands of that the government is looking at different options
Speaker 2: to tweat negative gearing and capital gains tax down the line,
Speaker 2: So I think it might happen, and that I think
Speaker 2: I can. How would that influence my buying decisions now?
Speaker 2: So i'd know I do in the best I want
Speaker 2: to go and have five or ten little investment properties
Speaker 2: throughout Australia or should we focus on one or two
Speaker 2: outside the family home of quality residential properties that set
Speaker 2: them up for the future. Because there's two different directions there.
Speaker 2: So I tend to think they might cap the number
Speaker 2: of properties you can have. Do we need ten or
Speaker 2: twenty investment properties each? Given the rental issues at all?
Speaker 2: So I think they definitely will look into that. Whether
Speaker 2: it's the negative gearing or the percentages or the capital
Speaker 2: gains tax, they will. I think it's inevitable.
Speaker 1: I think, to be honest with personally, I think it's CGT.
Speaker 1: They'll go first, but let's see, Okay. Final question from Grant.
Speaker 1: Thanks so much for the podcast. I love it. Hypothetically speaking,
Speaker 1: given the current stock market is at all times high,
Speaker 1: if you basically he says, you know, he's overexposed to shares.
Speaker 1: Shares have been very good. If you were starting again,
Speaker 1: how would you deploy them money today? This is this
Speaker 1: never advice, it's information for Grant and all the grants
Speaker 1: in the world. Diversification, as you said at the start, Sam,
Speaker 1: is always warranted. And in your world, I imagine people
Speaker 1: have too much property and that enough non property assets.
Speaker 1: But for someone who's had a very good run on
Speaker 1: the market, and the market has been very good for
Speaker 1: a few years, I would suggest to that someone that
Speaker 1: universal type to consider investment property.
Speaker 2: What do you think and I'd agree you would agree
Speaker 2: of course most people. But yeah, as I said, I
Speaker 2: like the fifty to fifty approach. People have a principal place,
Speaker 2: but then when that is well under control, using the
Speaker 2: equity and that property to buy an investment property. I
Speaker 2: do prefer a quality investment property. It still could be
Speaker 2: in inner city unit, but not an apartment of high
Speaker 2: rise it's a particular type of unit, or a townhouse,
Speaker 2: or getting the one as I said, you can put
Speaker 2: in the bottom drawer and keep it for ten or
Speaker 2: twenty years and well it'll be doing wonderfully when you
Speaker 2: pull it out. So I do like quality investment properties
Speaker 2: rather than playing it as a numbers game.
Speaker 1: James, Okay, very good, And of course, I mean the
Speaker 1: issue for folks is just to state the obvious. The
Speaker 1: hard part, of course, is using real property residential bricks
Speaker 1: and mortar as diversification is I completely supported. But the
Speaker 1: hard part is that the high entry costs, it's very
Speaker 1: hard to you'd love to go and buy six houses
Speaker 1: in six states or something. If there was six states
Speaker 1: you'd love to buy. You'd love to diversify your property,
Speaker 1: but it's very hard to do because it's a big
Speaker 1: ticket item. And as you could hear from Sam's earlier
Speaker 1: part of the show, the prices he was talking about
Speaker 1: even across the middle suburbs of Brisbane, they are considerable
Speaker 1: now compared to most people's diversified portfolios. But a point
Speaker 1: really worth thinking about. Sam Price, Templeton Group in Brisbane.
Speaker 1: Lovely to talk to you, Thanks for coming on the show.
Speaker 2: Thank you Jens, thanks for having me. Good to see
Speaker 2: you again.
Speaker 1: Great to have Sam there. I know him a long time.
Speaker 1: As I say, he's been through the ups and downs
Speaker 1: and now enjoying the ups of the Brisbane market, which
Speaker 1: looked like they're going to continue for some time. Okay,
Speaker 1: we have the ACIC Commission Alan Kirkland on the show
Speaker 1: later in the week. If you want to ask him anything.
Speaker 1: He's in charge of all consumer stuff at ACIK. Now
Speaker 1: it's your chance forty eight hours to do it. Until then.
Speaker 1: The money Puzzle at the Australian dot Com dot au
Speaker 1: is the address talked to you soon