1 00:00:09,920 --> 00:00:12,840 Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. 2 00:00:12,880 --> 00:00:15,280 Speaker 2: I'm James Kirby. Welcome aboard everybody. 3 00:00:15,320 --> 00:00:18,960 Speaker 1: While we're sitting at what seems to be the end 4 00:00:19,280 --> 00:00:23,360 Speaker 1: of a rate cutting cycle, and nine times out of 5 00:00:23,480 --> 00:00:28,080 Speaker 1: ten that would be bad news really in terms of 6 00:00:28,120 --> 00:00:31,600 Speaker 1: housing or investor certainly in terms of residential property market, 7 00:00:31,640 --> 00:00:34,199 Speaker 1: because you might find that the momentum may stole a 8 00:00:34,200 --> 00:00:36,920 Speaker 1: little where people can't borrow more than they were. 9 00:00:36,800 --> 00:00:37,760 Speaker 2: Planning to, et cetera. 10 00:00:37,840 --> 00:00:40,320 Speaker 1: That sort of energy that went into the market through 11 00:00:40,400 --> 00:00:43,680 Speaker 1: rate cuts will dissipate. But I think this time around 12 00:00:44,400 --> 00:00:47,440 Speaker 1: it's slightly different. We're not in a conventional housing market. 13 00:00:47,560 --> 00:00:51,240 Speaker 1: We have chronic lack of supply, we have a rental crisis, 14 00:00:52,240 --> 00:00:56,480 Speaker 1: and I think we are into a period where this 15 00:00:56,640 --> 00:01:00,240 Speaker 1: initial rebound we've seen in house prices, particularly apart sort 16 00:01:00,280 --> 00:01:02,760 Speaker 1: of different matter is going to steam on. I might 17 00:01:02,800 --> 00:01:05,679 Speaker 1: be wrong, I could be challenged. My guest today is 18 00:01:05,720 --> 00:01:09,320 Speaker 1: the ideal guest for what's going on right now. It's 19 00:01:09,440 --> 00:01:14,559 Speaker 1: Max Shiffman of the Interpack Group. He's a developer of folks. 20 00:01:14,560 --> 00:01:16,679 Speaker 1: We haven't had many developers, and we had Charlie Buxton 21 00:01:16,720 --> 00:01:18,760 Speaker 1: on a few months ago. It's always interesting to get 22 00:01:18,840 --> 00:01:21,200 Speaker 1: their opinion. How are you, Max, Thanks for coming on 23 00:01:21,240 --> 00:01:21,559 Speaker 1: the show. 24 00:01:22,000 --> 00:01:23,880 Speaker 3: Yeah, great to be here, James, thanks for having me. 25 00:01:24,280 --> 00:01:24,960 Speaker 2: Great to have you. 26 00:01:25,040 --> 00:01:29,319 Speaker 1: It's interesting how quickly the momentum in an investment market 27 00:01:29,520 --> 00:01:33,680 Speaker 1: or the sort of the overriding narrative can change. So 28 00:01:34,160 --> 00:01:37,080 Speaker 1: here's some top economists now I'm thinking of that. Let's 29 00:01:37,120 --> 00:01:42,520 Speaker 1: say Paul Bloxham at HSBC talking about how high rates 30 00:01:42,560 --> 00:01:43,560 Speaker 1: will move from here. 31 00:01:44,000 --> 00:01:45,360 Speaker 2: I want to talk to you specifically. 32 00:01:45,440 --> 00:01:48,200 Speaker 1: Our listeners are as investors, they just want to get 33 00:01:48,200 --> 00:01:51,200 Speaker 1: a picture, a helicopter view of the market, and you, 34 00:01:52,080 --> 00:01:56,040 Speaker 1: as a developer, quite outspoken in public policy, and one 35 00:01:56,080 --> 00:01:59,760 Speaker 1: of the things you're saying is that both housing and 36 00:02:00,080 --> 00:02:03,800 Speaker 1: even apartment promises are not going to be delivered. 37 00:02:03,360 --> 00:02:04,360 Speaker 2: As we expect. 38 00:02:05,240 --> 00:02:09,200 Speaker 1: Just for the general listener, what are the issues that 39 00:02:09,639 --> 00:02:10,680 Speaker 1: you're alluding to there. 40 00:02:11,960 --> 00:02:14,440 Speaker 3: Yeah, so there's been a lot of talk about housing targets. 41 00:02:14,639 --> 00:02:17,520 Speaker 4: Housing has clearly become a major issue for a lot 42 00:02:17,560 --> 00:02:20,920 Speaker 4: of cohorts, particularly younger people, and so you know, the 43 00:02:20,960 --> 00:02:24,400 Speaker 4: politics means that politicians now need to be talking to 44 00:02:24,480 --> 00:02:26,680 Speaker 4: it to be seen to be doing something about it, 45 00:02:26,760 --> 00:02:29,840 Speaker 4: and the best they seem to come up with is 46 00:02:29,880 --> 00:02:33,239 Speaker 4: setting all these lofty housing targets around the place, but 47 00:02:33,400 --> 00:02:35,440 Speaker 4: it at a state level or at a federal level 48 00:02:35,440 --> 00:02:39,320 Speaker 4: with a federal housing accord, and in my view, not 49 00:02:39,360 --> 00:02:42,079 Speaker 4: doing the things you'd actually have to do to reach 50 00:02:42,160 --> 00:02:45,560 Speaker 4: those goals. So there's a disconnect between you know, let's 51 00:02:45,560 --> 00:02:49,720 Speaker 4: be optimistic and call it good intent and the actual result. 52 00:02:50,240 --> 00:02:52,600 Speaker 1: We have a proof already, haven't we really that there 53 00:02:52,680 --> 00:02:56,760 Speaker 1: was this initial housing target, the million houses over five years, 54 00:02:56,800 --> 00:02:59,200 Speaker 1: that was two hundred and forty thousand houses a year. 55 00:03:00,080 --> 00:03:01,920 Speaker 1: Just a few weeks ago we had the first year, 56 00:03:02,320 --> 00:03:05,440 Speaker 1: You're one hundred and seventy thousand built, which means, of 57 00:03:05,440 --> 00:03:09,680 Speaker 1: course it pushes this target out unless they actually accelerate then, 58 00:03:09,800 --> 00:03:11,920 Speaker 1: but they're going to build, I mean, cut of the chase. 59 00:03:11,960 --> 00:03:15,240 Speaker 1: Maybe it's I'm about to have targets at least you 60 00:03:15,360 --> 00:03:16,360 Speaker 1: aspire to something. 61 00:03:17,320 --> 00:03:18,839 Speaker 3: Yeah, look, that's a good thing. 62 00:03:18,880 --> 00:03:21,919 Speaker 4: I mean, I'm supportive of having targets, be it federally 63 00:03:22,000 --> 00:03:23,520 Speaker 4: or at state level or at a local level. 64 00:03:23,560 --> 00:03:24,680 Speaker 3: I think that's a good thing. 65 00:03:25,320 --> 00:03:28,680 Speaker 4: But again, a target without doing the stuff you need 66 00:03:28,760 --> 00:03:31,040 Speaker 4: to do to reach the target is kind of pointless. 67 00:03:31,040 --> 00:03:32,840 Speaker 4: And that's the thing that I've been banging on about 68 00:03:32,880 --> 00:03:35,840 Speaker 4: the last couple of years. I mean from an industry perspective, 69 00:03:36,440 --> 00:03:39,440 Speaker 4: when they first announced, you know, these targets, so you know, 70 00:03:39,480 --> 00:03:41,520 Speaker 4: the big target is the one point two million homes 71 00:03:41,520 --> 00:03:45,520 Speaker 4: federally that was announced as a target back in initially 72 00:03:45,680 --> 00:03:48,640 Speaker 4: October twenty twenty two as a million homes, and they 73 00:03:48,640 --> 00:03:51,480 Speaker 4: opped it to one point two. And my commentary at 74 00:03:51,520 --> 00:03:53,040 Speaker 4: the time was, We're not going to hit a million 75 00:03:53,400 --> 00:03:55,440 Speaker 4: based on what I'm seeing in the data and new 76 00:03:55,520 --> 00:03:57,520 Speaker 4: supply and approvals, let alone one point two. 77 00:03:57,520 --> 00:03:58,760 Speaker 3: And that's proving to be the case. 78 00:03:59,320 --> 00:03:59,920 Speaker 2: Put it to be the case. 79 00:04:00,680 --> 00:04:02,840 Speaker 1: But additionally you're saying, see, I think people are on 80 00:04:03,360 --> 00:04:04,720 Speaker 1: tell me if I'm wrong, But I think a lot 81 00:04:04,760 --> 00:04:07,960 Speaker 1: of investors think, okay, you know, fixed apply of houses 82 00:04:08,480 --> 00:04:12,160 Speaker 1: houses standalone houses going literally twice as well as apartments 83 00:04:12,600 --> 00:04:15,839 Speaker 1: in recent years in terms of price action price increases. 84 00:04:16,800 --> 00:04:19,599 Speaker 1: So the issue then is apartments. And then there's a 85 00:04:19,640 --> 00:04:24,160 Speaker 1: sense that apartments won't quite flood the market, but that 86 00:04:24,200 --> 00:04:27,160 Speaker 1: the state governments around the country are bending over backwards 87 00:04:27,160 --> 00:04:30,440 Speaker 1: to make it happen that there will be more apartments. 88 00:04:30,480 --> 00:04:32,919 Speaker 1: But you're saying the apartments won't come on stream either. 89 00:04:33,160 --> 00:04:35,560 Speaker 1: Tell us your view of things in that area. 90 00:04:35,839 --> 00:04:36,119 Speaker 3: Yeah. 91 00:04:36,160 --> 00:04:40,400 Speaker 4: So the thing about apartments is people assume that apartments 92 00:04:40,440 --> 00:04:42,560 Speaker 4: are cheap. I think that's probably the starting point or 93 00:04:42,680 --> 00:04:46,520 Speaker 4: cheap relative to housing, and in many parts of the 94 00:04:46,560 --> 00:04:49,279 Speaker 4: world that's true. I mean, for example, you go to 95 00:04:49,800 --> 00:04:53,599 Speaker 4: New York City, very dense city, everything is expensive, but 96 00:04:54,120 --> 00:04:58,160 Speaker 4: owning a brownstone in a great part of downtown is 97 00:04:58,400 --> 00:05:01,440 Speaker 4: much much more expensive than buying quiple an apartment. So 98 00:05:01,880 --> 00:05:04,960 Speaker 4: apartments can deliver a relative affordability when you've got a 99 00:05:05,040 --> 00:05:09,080 Speaker 4: very high underlying house price. The disconnect is in an 100 00:05:09,080 --> 00:05:13,520 Speaker 4: Australian context, building apartments is the most expensive type of construction. 101 00:05:14,080 --> 00:05:17,719 Speaker 4: It uses a lot of structural materials because it's very large. 102 00:05:17,760 --> 00:05:19,960 Speaker 4: It's highly regulated because you've got a lot of people 103 00:05:20,000 --> 00:05:21,760 Speaker 4: in the same space. You want to make sure they're 104 00:05:21,760 --> 00:05:26,320 Speaker 4: protected from noise and fires and things like that. There's 105 00:05:26,320 --> 00:05:29,160 Speaker 4: a lot of regulation design that goes into it. There's 106 00:05:29,160 --> 00:05:31,719 Speaker 4: been concerns around the quality of building, especially when you 107 00:05:31,720 --> 00:05:34,560 Speaker 4: go to high rise and then you've got a labor force, 108 00:05:34,760 --> 00:05:38,000 Speaker 4: which is very expensive. And you know, the example I 109 00:05:38,080 --> 00:05:40,360 Speaker 4: give people, and I'll use this here is you go 110 00:05:40,400 --> 00:05:42,360 Speaker 4: to many parts of the world and any reason they're 111 00:05:42,400 --> 00:05:44,320 Speaker 4: building apartments for a lot less than what we are 112 00:05:44,400 --> 00:05:46,960 Speaker 4: is because they effectively have slave labor. Like it's a 113 00:05:47,000 --> 00:05:49,200 Speaker 4: really weird way to look at it, but it's actually 114 00:05:49,200 --> 00:05:52,080 Speaker 4: the truth. You go to Dubai or Singapore or any 115 00:05:52,080 --> 00:05:52,520 Speaker 4: of these. 116 00:05:52,920 --> 00:05:55,000 Speaker 1: People are working seven days a week and they're working 117 00:05:55,040 --> 00:05:56,160 Speaker 1: in all sorts of conditions. 118 00:05:56,800 --> 00:06:00,760 Speaker 4: You could see that from other countries, Yeah, exactly, in 119 00:06:00,760 --> 00:06:03,600 Speaker 4: from other countries living in camps, being worked to the bone, 120 00:06:03,640 --> 00:06:05,839 Speaker 4: and they're making more money than they would at home. 121 00:06:06,160 --> 00:06:09,000 Speaker 4: But it's not exactly what we would call a good 122 00:06:09,000 --> 00:06:11,920 Speaker 4: way of living. And so you contrast that with how 123 00:06:11,960 --> 00:06:14,400 Speaker 4: we're prayed in Australia. We have the CFMU. Has been 124 00:06:14,400 --> 00:06:16,720 Speaker 4: a lot of discussion in the CFMU and labor costs, 125 00:06:17,240 --> 00:06:20,440 Speaker 4: but it's the fact that we have this enormous push 126 00:06:20,440 --> 00:06:24,480 Speaker 4: into infrastructure projects around the country, Victoria being the epicenter, 127 00:06:24,560 --> 00:06:27,039 Speaker 4: but currently that's sort of migrating a little bit north 128 00:06:27,080 --> 00:06:29,840 Speaker 4: with the Olympics happening in Queensland. But every state is 129 00:06:29,880 --> 00:06:33,479 Speaker 4: embarking on huge infrastructure projects. And what that's meant is 130 00:06:33,480 --> 00:06:36,080 Speaker 4: the labor force. The labor pool, because unemployment has been 131 00:06:36,080 --> 00:06:38,880 Speaker 4: so low, has been pulled into all sorts of directions 132 00:06:38,920 --> 00:06:42,320 Speaker 4: and those projects have been paying substantially high on what 133 00:06:42,360 --> 00:06:45,479 Speaker 4: the private sector was paying previously, and so that's just 134 00:06:45,600 --> 00:06:48,280 Speaker 4: elevated the cost of any sort of type of construction 135 00:06:48,400 --> 00:06:51,760 Speaker 4: labor and that's fed straight into housing costs, particularly in apartments. 136 00:06:52,120 --> 00:06:54,960 Speaker 4: We have the most overlap in the sorts of trades 137 00:06:55,000 --> 00:06:57,960 Speaker 4: that would be building the structural components as you might 138 00:06:58,000 --> 00:07:00,680 Speaker 4: do in a tunnel, for example, in the mid of Melbourne. 139 00:07:01,120 --> 00:07:04,200 Speaker 2: Right, So this is and is it true that there are. 140 00:07:05,920 --> 00:07:11,000 Speaker 1: Sites all over the major cities Brisbane, Sydney, Melbourne owned 141 00:07:11,040 --> 00:07:16,440 Speaker 1: by developers ear Marsh for apartment developments that are not happening, 142 00:07:17,040 --> 00:07:19,720 Speaker 1: that there is an exceptional amount of space kind of 143 00:07:19,720 --> 00:07:24,200 Speaker 1: tied up old factories and warehouses, et cetera. Is that true? 144 00:07:24,480 --> 00:07:27,920 Speaker 4: I mean, on its face, yes, So there are tens 145 00:07:27,960 --> 00:07:30,720 Speaker 4: and tens of thousands, if not hundreds of thousands of 146 00:07:31,440 --> 00:07:35,560 Speaker 4: theoretically approved dwellings around the country, across the major cities, 147 00:07:35,920 --> 00:07:39,360 Speaker 4: but there's a big difference between having an approval and 148 00:07:39,400 --> 00:07:40,920 Speaker 4: having a project that's feasible. 149 00:07:41,520 --> 00:07:43,080 Speaker 1: Is the gap between the I mean, there's always a 150 00:07:43,120 --> 00:07:45,360 Speaker 1: bit of a gap between approvals and commencements, But is 151 00:07:45,400 --> 00:07:46,920 Speaker 1: that gap bigger than we're used to. 152 00:07:47,440 --> 00:07:50,560 Speaker 4: Yeah, So the number of approvals that aren't being activated 153 00:07:50,640 --> 00:07:53,640 Speaker 4: is sitting it around record highs, and it's yeah, And 154 00:07:53,680 --> 00:07:58,880 Speaker 4: it's that feasibility equation because when you factor in the 155 00:07:58,920 --> 00:08:02,160 Speaker 4: cost of delivery and then you work out as a 156 00:08:02,200 --> 00:08:05,080 Speaker 4: developer at the end price would need to be the 157 00:08:05,120 --> 00:08:07,880 Speaker 4: cohort that would pay that sort of money for these 158 00:08:07,920 --> 00:08:11,800 Speaker 4: projects is very small, and in many cases you're competing 159 00:08:11,840 --> 00:08:15,280 Speaker 4: with substantial numbers of apartments in and around the same 160 00:08:15,360 --> 00:08:18,320 Speaker 4: area that are costing as listful as half of what 161 00:08:18,360 --> 00:08:20,800 Speaker 4: you'd have to deliver a new dwelling for. So obviously 162 00:08:20,840 --> 00:08:22,960 Speaker 4: the market's not going to pay that sort of premium, 163 00:08:22,960 --> 00:08:26,080 Speaker 4: So those projects will sit there really for quite a 164 00:08:26,080 --> 00:08:28,640 Speaker 4: long time. And that assumes underlying values go up and 165 00:08:28,680 --> 00:08:30,600 Speaker 4: people have more borrowing power, which may not be the 166 00:08:30,640 --> 00:08:31,400 Speaker 4: case with interest rates. 167 00:08:32,000 --> 00:08:34,320 Speaker 1: Why do the apartments you're about to build costs more 168 00:08:34,360 --> 00:08:37,160 Speaker 1: than half the ones that are around the corner. 169 00:08:37,720 --> 00:08:39,680 Speaker 4: Well, look, it's just it's time. We obviously had a 170 00:08:39,679 --> 00:08:42,880 Speaker 4: lot of inflation during that sort of post COVID period, 171 00:08:42,920 --> 00:08:45,199 Speaker 4: So the number that's obviously floated a lot of the 172 00:08:45,240 --> 00:08:48,800 Speaker 4: time is about fifty percent cost increase, and whilst the 173 00:08:48,880 --> 00:08:52,679 Speaker 4: rate of inflation has dropped, it costs aren't dropping. Some 174 00:08:52,760 --> 00:08:58,280 Speaker 4: people sometimes mistake inflation dropping as things going and becoming cheaper. 175 00:08:58,800 --> 00:09:01,840 Speaker 4: It just means they're getting more expensive less quickly. So 176 00:09:02,000 --> 00:09:05,080 Speaker 4: the cost of construction isn't reducing. And so we've got 177 00:09:05,080 --> 00:09:08,040 Speaker 4: this step change in construction costs and it impacts everything. 178 00:09:08,080 --> 00:09:10,840 Speaker 4: It impacts the suburban rail loop Melbourne and impacts every 179 00:09:10,840 --> 00:09:14,000 Speaker 4: apartment building in the country. It impacts our house and 180 00:09:14,080 --> 00:09:16,960 Speaker 4: land package. In the business that I'm in, everything is 181 00:09:17,000 --> 00:09:20,520 Speaker 4: impacted by the increase in construction, which filters into what 182 00:09:20,679 --> 00:09:23,480 Speaker 4: a developer would need to charge to an end consumer. 183 00:09:23,720 --> 00:09:25,840 Speaker 4: And yet you have this glut of apartments in certain 184 00:09:25,880 --> 00:09:29,720 Speaker 4: parts of the country which are because they're not high demand, 185 00:09:29,760 --> 00:09:31,679 Speaker 4: as sort of dragging the whole market backwards. 186 00:09:32,760 --> 00:09:34,440 Speaker 1: I would go to a break because we want to 187 00:09:34,440 --> 00:09:36,600 Speaker 1: talk some specifics which I think our listeners will find 188 00:09:36,600 --> 00:09:38,840 Speaker 1: really interesting, and you're in a great position to answer 189 00:09:38,840 --> 00:09:42,680 Speaker 1: it just quickly. The glot of apartments. Are you thinking 190 00:09:42,720 --> 00:09:44,600 Speaker 1: of some black spots? Basically where are they? 191 00:09:45,080 --> 00:09:48,480 Speaker 4: Well, one that's commonly discussed is in and around the 192 00:09:48,520 --> 00:09:50,760 Speaker 4: South Bank in Victoria and Melbourne, where you've had a 193 00:09:50,800 --> 00:09:55,000 Speaker 4: lot of investor style apartments built and the records that 194 00:09:55,360 --> 00:09:58,600 Speaker 4: I keep seeing. You know, there's circa eight thousand unsold 195 00:09:58,640 --> 00:10:01,360 Speaker 4: apartments across Melbourne. There's a big chunk of them there, 196 00:10:01,400 --> 00:10:03,800 Speaker 4: and so people are still able to buy an apartment 197 00:10:03,840 --> 00:10:07,360 Speaker 4: that's you know, within a decade old. It's not particularly old, 198 00:10:07,920 --> 00:10:11,080 Speaker 4: but that's selling it a possibly a lower price than 199 00:10:11,080 --> 00:10:13,240 Speaker 4: what they originally sold it for when they first built it, 200 00:10:14,080 --> 00:10:16,400 Speaker 4: and then the replacement cost of it is probably double 201 00:10:16,480 --> 00:10:17,559 Speaker 4: what it was ten years ago. 202 00:10:18,400 --> 00:10:20,040 Speaker 2: Interesting. I'm looking out of them right now. 203 00:10:20,080 --> 00:10:20,360 Speaker 3: Max. 204 00:10:20,720 --> 00:10:23,800 Speaker 1: That's where we are, so I think surrounded by perhaps 205 00:10:23,840 --> 00:10:26,840 Speaker 1: thousands of empty apartments, or at least apartments where the 206 00:10:26,920 --> 00:10:29,520 Speaker 1: investors will be taking a long time to make a book. Okay, 207 00:10:29,559 --> 00:10:41,319 Speaker 1: folks back in a moment. Hello, Welcome back to The 208 00:10:41,320 --> 00:10:44,520 Speaker 1: Australian's Money Puzzled podcast and with Max Schiffman. He's the 209 00:10:44,679 --> 00:10:47,880 Speaker 1: CEO of Interpac. It's a developer, an interestate developer. I 210 00:10:47,880 --> 00:10:50,239 Speaker 1: think most of your action is in Victoria and Queensland, 211 00:10:50,280 --> 00:10:51,200 Speaker 1: is that right, Max? 212 00:10:51,280 --> 00:10:52,720 Speaker 3: Yeah? Northern New South Wales? Done? 213 00:10:53,840 --> 00:10:56,760 Speaker 1: Yeah, Okay, I'm going to just kind of throw a 214 00:10:56,800 --> 00:10:59,480 Speaker 1: few random questions which I think our listeners would like 215 00:10:59,679 --> 00:11:02,400 Speaker 1: to hear. What you have to say basically about it, 216 00:11:02,400 --> 00:11:04,000 Speaker 1: and I mean we take it from the first part 217 00:11:04,040 --> 00:11:06,480 Speaker 1: of the show that certainly on the supply side you 218 00:11:06,559 --> 00:11:10,760 Speaker 1: see issues breaks basically on both apartment and standalone houses. 219 00:11:11,120 --> 00:11:13,400 Speaker 1: That's the first thing. From an investor point of view. 220 00:11:13,480 --> 00:11:18,240 Speaker 1: You mentioned some areas that are oversupplied, but then again, 221 00:11:18,320 --> 00:11:20,920 Speaker 1: more generally there's a lot of pent up. There's pent 222 00:11:21,000 --> 00:11:23,680 Speaker 1: up demand and there's also pent up. We should be 223 00:11:23,760 --> 00:11:26,360 Speaker 1: liked by the developers to build, but the numbers aren't 224 00:11:26,360 --> 00:11:27,880 Speaker 1: stacking up for them. Can I ask you a few 225 00:11:27,960 --> 00:11:30,720 Speaker 1: random questions which I've been wondering. One from an investment 226 00:11:30,720 --> 00:11:33,600 Speaker 1: point of view, one bedroom apartment they were once upon 227 00:11:33,600 --> 00:11:35,440 Speaker 1: a time a sort of entry level first step for 228 00:11:35,480 --> 00:11:39,280 Speaker 1: investors into the market. Some have said that with the 229 00:11:39,360 --> 00:11:43,520 Speaker 1: work from home they are finished as an investment. Where 230 00:11:43,520 --> 00:11:44,640 Speaker 1: do you come from on that one? 231 00:11:46,000 --> 00:11:48,640 Speaker 4: Look, they'll always be demand for small dwellings and they 232 00:11:48,640 --> 00:11:51,679 Speaker 4: are as costly as a one bedroom, so I think 233 00:11:52,720 --> 00:11:55,720 Speaker 4: they're not going to disappear entirely. Not everyone works from home, 234 00:11:55,880 --> 00:11:58,520 Speaker 4: even despite some of the conversations being head at a 235 00:11:58,520 --> 00:12:02,120 Speaker 4: state level at the moment abounding train that, but certainly 236 00:12:02,200 --> 00:12:06,160 Speaker 4: from an investment point of view, to maximize the addressable 237 00:12:06,200 --> 00:12:09,080 Speaker 4: market of people you might be attracting. You'd want to 238 00:12:09,080 --> 00:12:11,440 Speaker 4: have a bit more space, So that could be you know, 239 00:12:11,440 --> 00:12:13,719 Speaker 4: at least having some sort of you know, study or 240 00:12:13,760 --> 00:12:16,480 Speaker 4: working in your core, a little zoom room. I'd certainly 241 00:12:16,520 --> 00:12:18,520 Speaker 4: be saying, you know, a two bedroom apartment's going to 242 00:12:18,559 --> 00:12:20,600 Speaker 4: have a lot more flexibility and longevity than a one 243 00:12:20,600 --> 00:12:21,960 Speaker 4: better if I can get. 244 00:12:21,840 --> 00:12:22,680 Speaker 2: It, Okay. 245 00:12:23,240 --> 00:12:27,000 Speaker 1: Also, I was just thinking in terms of natural consequences. 246 00:12:27,280 --> 00:12:32,080 Speaker 1: If it's the case that there are apartments unsold and 247 00:12:32,120 --> 00:12:35,520 Speaker 1: at the same time there's this demand, and in parallel 248 00:12:35,520 --> 00:12:40,000 Speaker 1: we have like oceans of empty office space at record numbers, 249 00:12:40,040 --> 00:12:43,640 Speaker 1: at recession type levels, a natural response people might say, well, 250 00:12:43,679 --> 00:12:45,800 Speaker 1: you know, a lot of those office box are going 251 00:12:45,800 --> 00:12:48,120 Speaker 1: to be turned into apartment towers. Is that pie in 252 00:12:48,160 --> 00:12:50,760 Speaker 1: the sky. Apparently it's very difficult to do so is that? 253 00:12:51,880 --> 00:12:52,080 Speaker 3: Yeah. 254 00:12:52,080 --> 00:12:53,880 Speaker 4: Look, there's been a lot of discussion around that, and 255 00:12:53,920 --> 00:12:56,160 Speaker 4: I know people that have done studies of some of 256 00:12:56,200 --> 00:12:59,199 Speaker 4: the buildings that lie empty or partially empty around the 257 00:12:59,240 --> 00:13:03,520 Speaker 4: major CBD. So there's a couple of challenges with converting 258 00:13:03,520 --> 00:13:07,559 Speaker 4: commercial buildings and retaining the structure and turning it into residential. 259 00:13:08,400 --> 00:13:10,800 Speaker 4: The regulation is a big part of it. So the 260 00:13:10,840 --> 00:13:13,840 Speaker 4: floor plates are usually bigger than what you'd have for 261 00:13:13,920 --> 00:13:16,280 Speaker 4: residential building, which means you don't have a natural light, 262 00:13:16,320 --> 00:13:18,640 Speaker 4: which is very important from a regulatory point of view. 263 00:13:18,920 --> 00:13:22,760 Speaker 4: But it's also things like retrofitting services so you might 264 00:13:22,760 --> 00:13:24,920 Speaker 4: not have enough lifts to service a lot of apartments 265 00:13:25,000 --> 00:13:28,280 Speaker 4: versus say commercial building, but also things like just water 266 00:13:28,440 --> 00:13:31,360 Speaker 4: so all the bits and pieces you need, the heating, cooling. 267 00:13:31,760 --> 00:13:33,440 Speaker 4: So by the time you work out where you have 268 00:13:33,520 --> 00:13:35,640 Speaker 4: the right floorplate, it's going to be limited to certain 269 00:13:35,840 --> 00:13:37,920 Speaker 4: size of buildings, and then you work at how you 270 00:13:38,000 --> 00:13:39,520 Speaker 4: retrofit all these bits and pieces. 271 00:13:39,559 --> 00:13:40,800 Speaker 3: It is just cost prohibitive. 272 00:13:40,880 --> 00:13:43,720 Speaker 4: So you know, it was Hassle that did a study 273 00:13:43,720 --> 00:13:47,040 Speaker 4: of the city of Melbourne and identified several hundred buildings 274 00:13:47,040 --> 00:13:50,280 Speaker 4: that could potentially be converted, but it hasn't happened because again, 275 00:13:50,840 --> 00:13:53,640 Speaker 4: the cost of buying the building, doing all the retrofits, 276 00:13:53,679 --> 00:13:57,560 Speaker 4: beaning all the regulations and working at the end price 277 00:13:57,679 --> 00:13:59,959 Speaker 4: means it would be substantially higher than what the mark 278 00:14:00,080 --> 00:14:02,600 Speaker 4: it would pay for those completed apartments for the most part. 279 00:14:02,840 --> 00:14:05,920 Speaker 1: Okay, interesting, all right, that's a very clear answer on 280 00:14:05,960 --> 00:14:08,000 Speaker 1: that one. I'm bouncing around here. But I think the 281 00:14:08,080 --> 00:14:10,400 Speaker 1: listeners will be keen to see where you're coming from us. 282 00:14:10,440 --> 00:14:13,679 Speaker 2: They say. We had him on the show. 283 00:14:13,520 --> 00:14:18,080 Speaker 1: From core Logic recently and he's a really interesting report 284 00:14:18,120 --> 00:14:21,640 Speaker 1: where he looked at the price action around the Sydney 285 00:14:21,680 --> 00:14:25,360 Speaker 1: Metro line, where you would think logic would suggest that 286 00:14:25,400 --> 00:14:29,880 Speaker 1: the prices along a new line would be doing very well. 287 00:14:30,280 --> 00:14:34,560 Speaker 1: This whole idea of capture land capture along railway lines 288 00:14:34,600 --> 00:14:37,200 Speaker 1: and people similarly in other parts of the country buying 289 00:14:37,240 --> 00:14:40,840 Speaker 1: apartments or houses on the basis of proximity to new 290 00:14:40,880 --> 00:14:44,680 Speaker 1: lines such as the Gold Coast light Rail or the 291 00:14:44,920 --> 00:14:49,080 Speaker 1: Melbourne Metro project. But Tim found they were doing worse 292 00:14:49,120 --> 00:14:52,600 Speaker 1: than the average suburb for the last two years. He 293 00:14:52,640 --> 00:14:54,800 Speaker 1: had an explanation, but I was I'm wondering what you 294 00:14:54,800 --> 00:14:55,880 Speaker 1: your explanation might be. 295 00:14:56,680 --> 00:14:58,680 Speaker 4: Yeah, well, I think because I did read the article 296 00:14:58,720 --> 00:15:00,880 Speaker 4: on I think he's right about the fact there would 297 00:15:00,880 --> 00:15:03,440 Speaker 4: have been some very early speculation, you know, after the 298 00:15:03,440 --> 00:15:08,200 Speaker 4: project was announced. I mean, often property values follow infrastructure investment, 299 00:15:08,480 --> 00:15:11,280 Speaker 4: so you know it can be a sound investment strategy. 300 00:15:11,760 --> 00:15:12,600 Speaker 3: I guess, you know. 301 00:15:12,640 --> 00:15:14,240 Speaker 4: One of the things that I was thinking about was 302 00:15:14,280 --> 00:15:16,200 Speaker 4: just the time frame you'd have to be sitting on 303 00:15:16,240 --> 00:15:17,080 Speaker 4: a piece of land there. 304 00:15:17,080 --> 00:15:20,600 Speaker 3: I mean Metro was announced what twenty twelve, So. 305 00:15:20,560 --> 00:15:22,560 Speaker 1: You want to be buying in two thirteen to get 306 00:15:22,600 --> 00:15:24,440 Speaker 1: the lift, That's what he suggested. 307 00:15:24,520 --> 00:15:26,160 Speaker 4: Really yeah, I mean you want to, but you want 308 00:15:26,160 --> 00:15:28,800 Speaker 4: to be almost there before there's any announcement because you 309 00:15:28,880 --> 00:15:30,480 Speaker 4: get this run up and then you've kind of got 310 00:15:30,480 --> 00:15:33,840 Speaker 4: a weight for the project to happen. And what kills 311 00:15:34,320 --> 00:15:38,960 Speaker 4: feasibilities for development is actually time. So invariably these projects 312 00:15:39,080 --> 00:15:42,040 Speaker 4: run lace, they run over budget. They you know, as 313 00:15:42,080 --> 00:15:45,000 Speaker 4: part of the planning for the precincts around them, they 314 00:15:45,040 --> 00:15:47,320 Speaker 4: start to decide, hey, we want to have more contributions 315 00:15:47,360 --> 00:15:50,600 Speaker 4: towards open space and local infrastructure, all the bits and pieces, 316 00:15:50,600 --> 00:15:54,160 Speaker 4: which ramps up the cost of delivery. And so what 317 00:15:54,200 --> 00:15:56,760 Speaker 4: you find is probably this early ramp up where prices 318 00:15:56,800 --> 00:15:59,040 Speaker 4: get to a point before people have really thought through 319 00:15:59,160 --> 00:16:01,120 Speaker 4: what's actually going to be a acquired Then you get 320 00:16:01,120 --> 00:16:02,800 Speaker 4: a bit of a tapering off and I think that's 321 00:16:02,840 --> 00:16:05,280 Speaker 4: exactly what we've seen and I was thinking about how 322 00:16:05,280 --> 00:16:08,640 Speaker 4: that might apply, for example, with the suburban rail loop 323 00:16:08,800 --> 00:16:10,280 Speaker 4: in Melbourne, because there is going to be a lot 324 00:16:10,320 --> 00:16:13,600 Speaker 4: of discussion around building up those precincts. I've been a 325 00:16:13,600 --> 00:16:17,200 Speaker 4: pretty noted skeptic of the feasibility of the whole project, 326 00:16:17,400 --> 00:16:20,720 Speaker 4: but I'd be surprised if there was a similar dynamic 327 00:16:20,760 --> 00:16:23,880 Speaker 4: in Melbourne because in Victoria they've released or they've got 328 00:16:23,880 --> 00:16:26,880 Speaker 4: this windfall gains tax which takes some of the uplift 329 00:16:27,400 --> 00:16:30,720 Speaker 4: from a reazoning. And so if anything, that's a barrier 330 00:16:31,000 --> 00:16:33,000 Speaker 4: to people wanting to buy into these areas because you 331 00:16:33,040 --> 00:16:35,840 Speaker 4: have this unknowable tax that might be charged at some 332 00:16:36,000 --> 00:16:39,040 Speaker 4: point which takes any sort of uplift from holding the 333 00:16:39,120 --> 00:16:41,960 Speaker 4: land away. So it takes incentive away. And probably one 334 00:16:42,040 --> 00:16:44,760 Speaker 4: last thing on that, I was thinking through the other 335 00:16:44,840 --> 00:16:47,480 Speaker 4: dynamics that might happen in some of these precincts. And 336 00:16:47,560 --> 00:16:50,360 Speaker 4: so obviously developers might want to come in and start 337 00:16:50,680 --> 00:16:53,280 Speaker 4: planning to build apartment buildings, But if you're a person 338 00:16:53,320 --> 00:16:55,400 Speaker 4: who wants to have a home near a train station, 339 00:16:55,520 --> 00:16:57,080 Speaker 4: the last thing you want to do is then buy 340 00:16:57,080 --> 00:16:59,160 Speaker 4: a house when you know you're going to have all 341 00:16:59,160 --> 00:17:03,000 Speaker 4: this development around. So I suspect that's pushing traditional home 342 00:17:03,080 --> 00:17:05,160 Speaker 4: buyers out of these precincts as well, and they're buying 343 00:17:05,240 --> 00:17:08,000 Speaker 4: just on the periphery, which I think showed was performing better. 344 00:17:08,480 --> 00:17:11,199 Speaker 1: That's right, the peripheries of the that's right. So it 345 00:17:11,240 --> 00:17:13,600 Speaker 1: wasn't the immediate catchment area of the lines that were 346 00:17:13,640 --> 00:17:15,359 Speaker 1: doing well. This is the last two years, folks, the 347 00:17:15,400 --> 00:17:16,400 Speaker 1: last two years, it. 348 00:17:16,359 --> 00:17:17,000 Speaker 2: Was beyond that. 349 00:17:17,280 --> 00:17:19,520 Speaker 1: Okay, before we go to questions, I just want to 350 00:17:19,520 --> 00:17:23,879 Speaker 1: ask you, so it seems to me listening to you 351 00:17:23,920 --> 00:17:29,760 Speaker 1: this morning, that if I am interested in investing in property, 352 00:17:29,840 --> 00:17:32,679 Speaker 1: it seems to me I needn't worry an awful lot 353 00:17:33,000 --> 00:17:36,399 Speaker 1: about an oversupply of even apartments coming down the line, 354 00:17:36,480 --> 00:17:39,720 Speaker 1: because the supply seems to be blocked at so many levels. 355 00:17:40,200 --> 00:17:42,000 Speaker 2: And I could make the assumption. 356 00:17:41,600 --> 00:17:46,880 Speaker 1: That the current numbers, being the rental vacancy ratio has 357 00:17:46,920 --> 00:17:50,879 Speaker 1: been you know, one to two percent are going to stay. 358 00:17:51,880 --> 00:17:53,679 Speaker 1: Do you see anything to challenge that notion? 359 00:17:55,119 --> 00:17:57,680 Speaker 4: No, short answer is I think you're spot on. One 360 00:17:57,680 --> 00:18:01,439 Speaker 4: thing we know is population growth is continuing pretty much 361 00:18:01,520 --> 00:18:04,400 Speaker 4: underbated in Australia and that's going to keep putting pressure 362 00:18:04,440 --> 00:18:08,000 Speaker 4: on house prices and rentals and we're just not keeping up. 363 00:18:08,160 --> 00:18:12,119 Speaker 4: And so particularly as we try and shrink wrap the 364 00:18:12,119 --> 00:18:15,639 Speaker 4: city's forced that densification, the more that's going to limit 365 00:18:15,680 --> 00:18:18,680 Speaker 4: how much new housing is put on stream. So yeah, 366 00:18:18,720 --> 00:18:20,400 Speaker 4: I don't think it's going to be a great time 367 00:18:20,520 --> 00:18:22,959 Speaker 4: for renters anytime sooner. Nor do I see there being 368 00:18:23,000 --> 00:18:25,159 Speaker 4: any material reduction in underlying pricing. 369 00:18:25,680 --> 00:18:27,840 Speaker 1: And do you think if rates did start a lift 370 00:18:28,040 --> 00:18:32,879 Speaker 1: with that in any way cool the increase in housing prices. 371 00:18:33,320 --> 00:18:36,000 Speaker 4: Short ans Yes, I mean interest rates are definitely a factor. 372 00:18:36,119 --> 00:18:39,080 Speaker 4: And because we've had that cost dynamic I was speaking 373 00:18:39,119 --> 00:18:44,440 Speaker 4: about previously, we've needed a step change in buyers capacity 374 00:18:44,480 --> 00:18:47,760 Speaker 4: and expectation for what they're prepared to pay for a 375 00:18:47,800 --> 00:18:50,440 Speaker 4: new dwelling of any kind, And so if we start 376 00:18:50,520 --> 00:18:52,960 Speaker 4: seeing interest rates shoot up again, that's just going to 377 00:18:53,000 --> 00:18:56,199 Speaker 4: dampen the entire supply story further. 378 00:18:57,280 --> 00:18:57,879 Speaker 3: Yeah, further. 379 00:18:57,960 --> 00:19:00,359 Speaker 4: I mean we've come off the very bottom, you know, 380 00:19:00,400 --> 00:19:03,280 Speaker 4: we've bottomed out in twenty twenty three, twenty twenty four, 381 00:19:03,320 --> 00:19:06,959 Speaker 4: bally improved. There have been some slide improvements in new 382 00:19:07,000 --> 00:19:11,760 Speaker 4: approvals and starts this year. But I think if we've 383 00:19:11,800 --> 00:19:13,760 Speaker 4: seen straights go back the other way, it's going to 384 00:19:13,760 --> 00:19:14,800 Speaker 4: put a handbrake. 385 00:19:14,480 --> 00:19:14,960 Speaker 3: On it all. 386 00:19:15,200 --> 00:19:18,480 Speaker 1: Does it happen straight away or does it happen gradually? 387 00:19:20,320 --> 00:19:22,080 Speaker 4: I think it's changed. It used to take a bit 388 00:19:22,119 --> 00:19:24,399 Speaker 4: longer for things to sort of filter through. But the 389 00:19:24,480 --> 00:19:27,879 Speaker 4: media cycle now everyone knows the moment, the rbas they do. 390 00:19:28,160 --> 00:19:29,760 Speaker 3: It's true at anything that's. 391 00:19:29,640 --> 00:19:32,920 Speaker 4: Right, So it's very volatile. And even the we've seen, 392 00:19:32,960 --> 00:19:35,720 Speaker 4: even from an inquiry perspective, where even the weeks where 393 00:19:35,720 --> 00:19:38,720 Speaker 4: there might have been an expectation of a rate cut 394 00:19:38,720 --> 00:19:42,280 Speaker 4: and perhaps it was deferred for some reason, that weekend 395 00:19:42,359 --> 00:19:44,760 Speaker 4: straight after tends to be a bit more subdued. Then 396 00:19:44,760 --> 00:19:46,600 Speaker 4: it sort of goes back to bit of normality. But 397 00:19:46,640 --> 00:19:49,720 Speaker 4: people need the time to kind of absorb the news. 398 00:19:50,400 --> 00:19:52,280 Speaker 4: I shudder to think what it'll be like when we 399 00:19:52,359 --> 00:19:55,280 Speaker 4: start seeing straights go up again, particularly when everyone was 400 00:19:55,320 --> 00:19:56,960 Speaker 4: expecting them to keep dropping for so long. 401 00:19:57,320 --> 00:20:01,800 Speaker 1: A rapid impact on sentiment. Really interesting. Okay, we have 402 00:20:01,880 --> 00:20:13,360 Speaker 1: some questions I've saved for Max, so stay with us. Hello, 403 00:20:13,480 --> 00:20:16,440 Speaker 1: Welcome back to the Australian's Money Puzzle. James Kirby here 404 00:20:16,440 --> 00:20:20,280 Speaker 1: with Max shiftman of the Intrapac Group, property development group 405 00:20:20,720 --> 00:20:24,120 Speaker 1: that are active across the country in mostly on the 406 00:20:24,160 --> 00:20:27,680 Speaker 1: East Coast. Okay, I'll try and paraphrase these one from Ben. 407 00:20:28,880 --> 00:20:33,720 Speaker 1: I wonder how important two prices is maintenance or non maintenance, 408 00:20:33,840 --> 00:20:37,040 Speaker 1: as it may be. Of investment property. I have a 409 00:20:37,040 --> 00:20:39,679 Speaker 1: mate who is starting a side hustle of buying a 410 00:20:39,800 --> 00:20:43,040 Speaker 1: rundown houses, fixing them up and flipping them. He isn't 411 00:20:43,080 --> 00:20:46,520 Speaker 1: doing much work just to fix up to jobs that 412 00:20:46,520 --> 00:20:48,679 Speaker 1: should have been done over the last fifteen years and 413 00:20:48,800 --> 00:20:52,160 Speaker 1: haven't been. Is this an issue or just a tiny problem? 414 00:20:52,560 --> 00:20:55,600 Speaker 1: The maintenance and general standard of Australian housing stock a 415 00:20:55,760 --> 00:20:59,119 Speaker 1: broad question. Max flipping every six months, that sounds adventurous 416 00:20:59,160 --> 00:21:01,439 Speaker 1: to me. Yeah, I think you should wait a year 417 00:21:01,480 --> 00:21:01,840 Speaker 1: at least. 418 00:21:01,840 --> 00:21:02,520 Speaker 2: But what do you. 419 00:21:02,440 --> 00:21:04,480 Speaker 3: Think, Oh, you want to get that CGT. 420 00:21:04,600 --> 00:21:05,840 Speaker 2: Don't want to get that discount? 421 00:21:06,000 --> 00:21:06,560 Speaker 3: That's right. 422 00:21:06,680 --> 00:21:10,080 Speaker 4: Look the whole house slipping thing and I sort of 423 00:21:10,080 --> 00:21:12,000 Speaker 4: felt like we'd gotten through that phase. It was a 424 00:21:12,000 --> 00:21:14,720 Speaker 4: big phase when every TV show was about the flippers 425 00:21:14,760 --> 00:21:17,120 Speaker 4: who would paint a wall and suddenly make one hundred 426 00:21:17,160 --> 00:21:21,280 Speaker 4: thousand dollars. Look, my very simple estimation of that is 427 00:21:21,560 --> 00:21:24,840 Speaker 4: it only works in the rising market if the market's flat. 428 00:21:24,960 --> 00:21:26,879 Speaker 4: By the time you work out you're holding costs to 429 00:21:26,920 --> 00:21:30,119 Speaker 4: stamp duty is spending the money, You're unlikely to make 430 00:21:30,160 --> 00:21:33,159 Speaker 4: a big return unless the house was terrible and you 431 00:21:33,280 --> 00:21:37,600 Speaker 4: spend all your labor effectively improving the place. Yeah, I 432 00:21:37,600 --> 00:21:39,560 Speaker 4: think it's a pretty fraught business model. 433 00:21:40,080 --> 00:21:42,920 Speaker 1: Okay, I hope that's clear, Ben. And of course some 434 00:21:43,040 --> 00:21:45,399 Speaker 1: of this is advice. This is information only, as you 435 00:21:45,440 --> 00:21:45,800 Speaker 1: would know. 436 00:21:46,000 --> 00:21:46,240 Speaker 2: Okay. 437 00:21:46,240 --> 00:21:48,280 Speaker 1: The last question is not on property, but it's useful 438 00:21:48,280 --> 00:21:49,880 Speaker 1: and I'd like to just read it. It's from Drew 439 00:21:49,920 --> 00:21:52,760 Speaker 1: Veesh dh or you v s H. I hope I 440 00:21:52,840 --> 00:21:56,680 Speaker 1: pronounced that properly. I am considering dollar cost averaging as 441 00:21:56,720 --> 00:21:59,399 Speaker 1: a strategy, which may be better than investing all my 442 00:21:59,440 --> 00:22:02,399 Speaker 1: money at Well, what is your recommendation for all the 443 00:22:03,000 --> 00:22:05,440 Speaker 1: James's in the world, all the druvsions in the world. 444 00:22:05,440 --> 00:22:07,800 Speaker 1: It would be on how to approach investing. And he 445 00:22:07,840 --> 00:22:11,399 Speaker 1: puts an amount here, and he talks about ETFs dollar 446 00:22:11,440 --> 00:22:13,960 Speaker 1: cost averaging any day of the week at Vision. It's 447 00:22:14,000 --> 00:22:16,879 Speaker 1: extraordinary over a period of time, and I've watched for 448 00:22:16,880 --> 00:22:19,399 Speaker 1: a long time, and I remember, I remember we had 449 00:22:19,440 --> 00:22:22,760 Speaker 1: an investment conference at the absolute bottom of the market 450 00:22:22,800 --> 00:22:25,480 Speaker 1: in two o nine, the most miserable period in my 451 00:22:25,600 --> 00:22:28,320 Speaker 1: personal history ever of the share market. And it was 452 00:22:28,320 --> 00:22:30,240 Speaker 1: done about fifty percent at the time and seemed to 453 00:22:30,280 --> 00:22:33,840 Speaker 1: be going nowhere. And Lawrence Freeman, who once upon a 454 00:22:33,960 --> 00:22:36,520 Speaker 1: time owned Channel ten and once upon a time was 455 00:22:36,520 --> 00:22:38,440 Speaker 1: one of the first fund one of the first real 456 00:22:38,600 --> 00:22:43,080 Speaker 1: contemporary modern fund managers in Australia. He stood on the 457 00:22:43,080 --> 00:22:45,720 Speaker 1: stage and he said, dollar cast averaging always works, and 458 00:22:45,720 --> 00:22:47,840 Speaker 1: I remember thinking, yeah, it does, but gosh, I've never 459 00:22:47,880 --> 00:22:49,280 Speaker 1: worried about it so much. But you know, in the 460 00:22:49,280 --> 00:22:51,959 Speaker 1: fullness of time, it did work. So I would totally 461 00:22:51,960 --> 00:22:55,760 Speaker 1: back it, and I would be very careful putting everything 462 00:22:55,760 --> 00:22:57,879 Speaker 1: in at once to one area except max. For you, 463 00:22:57,960 --> 00:22:59,760 Speaker 1: I want to ask you this one. You can't devote. 464 00:23:00,040 --> 00:23:02,439 Speaker 1: You can't avoid that with property, can you. But I 465 00:23:02,480 --> 00:23:04,600 Speaker 1: can leak up my I can put my one hundred 466 00:23:04,640 --> 00:23:07,880 Speaker 1: grand and split it into four or five and put 467 00:23:07,920 --> 00:23:09,280 Speaker 1: in every month or something. 468 00:23:09,320 --> 00:23:11,760 Speaker 2: But property that's hard, isn't it. For the investor. It's 469 00:23:11,760 --> 00:23:12,199 Speaker 2: a big hit. 470 00:23:12,400 --> 00:23:14,159 Speaker 1: Do it or don't do it. It's a jump or 471 00:23:14,160 --> 00:23:15,600 Speaker 1: don't jump. There's no middle ground. 472 00:23:16,520 --> 00:23:18,960 Speaker 4: You can't sort of dollar cost average on your property. 473 00:23:19,040 --> 00:23:20,920 Speaker 4: You're either in or you're out. I mean maybe if 474 00:23:20,920 --> 00:23:23,240 Speaker 4: you buy the neighboring house and the markets change, perhaps 475 00:23:23,280 --> 00:23:25,560 Speaker 4: you could do it that way. But you don't have 476 00:23:25,600 --> 00:23:28,960 Speaker 4: that liquidity in property obviously. So yeah, yeah, it's unlike 477 00:23:28,960 --> 00:23:31,320 Speaker 4: the share market. You can buy and sell something immediately. 478 00:23:31,400 --> 00:23:33,840 Speaker 4: There's a lot more friction in property, so it needs 479 00:23:33,880 --> 00:23:35,600 Speaker 4: to be a little bit more mid to long term 480 00:23:35,640 --> 00:23:36,679 Speaker 4: in terms of your thinking. 481 00:23:37,000 --> 00:23:39,720 Speaker 1: What's your view, just broadly, before we go for the 482 00:23:39,720 --> 00:23:42,600 Speaker 1: first time investor, the early investor in property, what's the 483 00:23:42,640 --> 00:23:44,119 Speaker 1: minimum period they should be thinking? 484 00:23:44,200 --> 00:23:48,760 Speaker 3: Really, look a year at the minimum? 485 00:23:48,960 --> 00:23:52,520 Speaker 1: Oh yeah, right, okay, Yeah, that's about as short as 486 00:23:52,520 --> 00:23:53,760 Speaker 1: I thought you were going to say short. 487 00:23:54,240 --> 00:23:58,080 Speaker 4: That's the absolute shortest. But yes, property is a long game, 488 00:23:58,320 --> 00:24:02,200 Speaker 4: and especially if you look at the cycles, I think 489 00:24:02,200 --> 00:24:04,280 Speaker 4: we're seeing a lot more volatility than we used to, 490 00:24:04,400 --> 00:24:06,399 Speaker 4: but it's still nothing compared to the share market. 491 00:24:07,080 --> 00:24:08,119 Speaker 2: But you guys would be thinking. 492 00:24:08,359 --> 00:24:10,160 Speaker 1: You guys have be thinking ten years from the day 493 00:24:10,200 --> 00:24:13,480 Speaker 1: you acquire something or even sign the paper on something. 494 00:24:13,480 --> 00:24:15,280 Speaker 1: You're thinking ten years, I imagine, are you? 495 00:24:15,400 --> 00:24:15,560 Speaker 3: Yeah? 496 00:24:15,600 --> 00:24:18,800 Speaker 4: Yeah, some of our projects fifteen twenty years. You have 497 00:24:18,840 --> 00:24:20,440 Speaker 4: to think very long term, and you know that you'll 498 00:24:20,480 --> 00:24:23,280 Speaker 4: go through two three cycles in that and you've got 499 00:24:23,320 --> 00:24:26,159 Speaker 4: to set yourself up accordingly. And so if you'll call 500 00:24:26,240 --> 00:24:29,160 Speaker 4: an investment strategy, it's not being highly leveraged and it's 501 00:24:29,160 --> 00:24:33,639 Speaker 4: not maximizing every dollar. It's taking a reasonable approach to 502 00:24:33,720 --> 00:24:36,480 Speaker 4: debt and having enough equity there to ride through, and 503 00:24:36,600 --> 00:24:39,040 Speaker 4: I think that should apply to any investment. 504 00:24:39,480 --> 00:24:41,600 Speaker 1: Okay, terrific point, and thank you very much, Thanks very 505 00:24:41,640 --> 00:24:42,800 Speaker 1: much Max for coming on the show. 506 00:24:43,240 --> 00:24:45,440 Speaker 3: Thanks for having me. It's great that was. 507 00:24:45,359 --> 00:24:48,880 Speaker 1: Max Shiffman of the Interpack Property Group with some really 508 00:24:48,880 --> 00:24:53,280 Speaker 1: interesting insights there for investors on the market and from 509 00:24:53,280 --> 00:24:56,280 Speaker 1: a whole owner's point of view, that's not great to 510 00:24:56,400 --> 00:24:59,840 Speaker 1: hear some of his observations on supply, especially I thought 511 00:25:00,200 --> 00:25:03,120 Speaker 1: apartments even but obviously from an investment point of view, 512 00:25:03,160 --> 00:25:06,280 Speaker 1: well it would seem to be a green light basically. Okay, 513 00:25:06,359 --> 00:25:08,680 Speaker 1: let's have some more questions the money posit at the 514 00:25:08,720 --> 00:25:10,680 Speaker 1: Australian dot com dot au. 515 00:25:10,960 --> 00:25:11,560 Speaker 2: Talk to you soon.