Check out our new podcast “The Property Trio”

You can listen to all the Property Planner, Buyer and Professor episodes in your podcast feed by subscribing to “The Property Trio” podcast


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Welcome to Australia’s fiercely independent property podcast, where you are provided with the rare opportunity to be a fly on the wall and listen to three pioneers of the property industry, each with diverse areas of expertise in Property Planning, Buying and Education.
Residential property is the only asset class we live in, it is where we raise our family’s, and it is our most expensive investment, yet property advice remains unregulated. Our objective is to educate time poor professionals through deep insights from our experts who have provided thousands of Australians with personalised advice and education spanning two decades. In a climate where we are overloaded with information and one size fits all recommendations from the media, well meaning friends and family and so-called advisers, we will distill the raw truth from the ill-informed.
So join the Property Planner, David Johnston, The Property Buyer, Cate Bakos and the Property Professor, Peter Koulizos as they take you on a journey of discovery through the maze of property, mortgage and money decisions to empower you to create your ideal lifestyle!

Download ‘The Property Planner, Buyer and Professor’ on iTunes and Android.

Click on the link to your preferred podcast platform and subscribe today:

Ep 200+: Our third musketeer’s job interview. Welcome to the Property Trio, Mike Mortlock!

  1. Dave and Cate share with the listeners the appointment of Mike Mortlock to ‘Third Musketeer’ status on The Property Trio.
  2. Mike’s job interview and Cate and Dave’s discussion prior about the key attributes they’re searching for. This little mini-ep taster provides a bit of humour and some insight into Mike’s wit and charm.
  3. We welcome our clever Quantity Surveyor to the show! Congratulations, Mike!

Ep 200+ Show Notes

Ep 200: A special farewell to Pete and some wonderful memories to share of our journey

In this week’s episode, Dave, Cate and Pete take you through:

  1. The trio enjoyed reminiscing about the early days when the concept of the show became a reality.
  2. Dave explains how the show has taken shape over the years with listener questions, case studies and market updates peppered in between unique episodes, taking inspiration from listener feedback over the years.
  3. This episode has some past sound bites from early episodes including some early calls and insights in relation to the inflation challenges the economy is grappling with today, and Cate’s potty mouth during Melbourne’s earthquake gets some laughs from the guys.
  4. Cate shares some special listener reviews and our newest muscateer sends a special shout-out to Pete.
  5. While Cate and Dave are particularly sad to be saying cheerio to Pete, he’s never going to be too far away and this episode was a joy for them all to produce.

Ep 200 Show Notes

Ep 199: The Property Professor’s Memoirs – Part 3: The inspiring journey from family home to investor to developer to helping the kids enter the market

In this week’s episode, Dave, Cate and Pete take you through:

  1. Episode Three hinges on Pete’s growing expertise in relation to subdivision and building.
  2. We look into the various ways that Pete’s skillset and experience have enabled him to achieve success and to have choice as he approaches semi-retirement
  3. Pete touches on his experience post-GFC with his NRAS scheme properties, and the implication of the benefits that have spanned ten years of his investing journey.
  4. The trio ponder the properties they’ve sold, the losses they’ve averted and the reasons why they sold at the time.

Ep 199 Show Notes

Ep 198: The Property Professor’s Memoirs – Part 2: The inspiring journey from family home to investor to developer to helping the kids enter the market

In this week’s episode, Dave, Cate and Pete take you through:

  1. Dave delves into Pete’s ‘mid-journey’ property acquisitions and upgrades
  2. Pete’s motivation to avoid building stemmed from a sloping block representing too many challenges for him to tackle. But block after block, Pete perfected adding value through planning approvals, although he notes that it was easier twenty years ago than it is now.
  3. Cate challenges some of Pete’ approaches and his grip of cashflow.
  4. He also touches on his involvement in his childrens’ wealth creation, endeavouring to be a great role model and actively assisting them with their purchases.
  5. Why did Pete decide to sell his holiday house?

Ep 198 Show Notes

Ep 197: The Property Professor’s Memoirs – Part 1: The inspiring journey from family home to investor to developer to helping the kids enter the market

In this week’s episode, Dave, Cate and Pete take you through:

  1. Cate delves into Pete’s early days and asks all kinds of questions about his early influencers, his savings regime and some of the significant differences that he faced as a first home buyer back in 1984 compared to today’s new starters on the property ladder.
  2. Why does Pete pay full price for a property?
  3. Pete also chatted about a block of flats that he secured some forty years ago that are still in the family (…and it’s a great story!)

Ep 197 Show Notes

Ep 196: When property and money decisions upset relationships, and how to navigate the path to success – Part 2

In this week’s episode, Dave, Cate and Pete take you through:

  1. What are some of the triggers for upgraders, family home buyers and investors when it comes to upsetting a relationship?The trio discuss some of the other tricky aspects, including;
    1. identifying the need for living in a show-home vs enjoying a simpler life
    2. debt comfort level misalignment
    3. investing vs nesting
    4. location preference disharmony

Ep 196 Show Notes

Ep 195: Market update Feb 2023 – The rate of price falls is slowing! But what’s happening in Hobart and Canberra?

In this week’s episode, Dave, Cate and Pete take you through:

  1. Price falls are substantially lower this month, compared to last month
  2. New listings and total listing figures are still substantially under the previous five year average, but the discrepancy is slightly smaller than last month.
  3. Unit rents are looking dire for renters in most cities, but what is going on with Canberra?
  4. Tighter rental vacancy rates – as rents continue to climb, some of our capital cities (for both houses and units) are exhibiting further tightening rental yields.
  5. Sales activity is still low despite an expectation that our emerging autumn markets usually start to demonstrate a peak of activity at this time.
  6. Consumer sentiment has continued to wane, although the trio point out some interesting indices on the latest Westpac Consumer Sentiment chart.
  7. Our bond yields continue to tell us that interest rate equilibrium is getting closer, although money markets indicate that we may have more rate rises than earlier expected.
  8. Unemployment continues to stay at historically low levels.

Ep 195 Show Notes

Ep 194: When property and money decisions upset relationships, and how to navigate the path to success – Part 1

In this week’s episode, Dave, Cate and Pete take you through:

  1. What are some of the triggers for first home buyers when it comes to potentially upsetting a relationship?
  2. How do couples broach pre-nuptial agreements or substantial cash contributions?
  3. What do you do if your partner enjoys ‘living in the moment’ financially more than you?
  4. What is a common trigger than can be avoided?
  5. And of course, our gold nuggets!

Ep 194 Show Notes

Ep 193: Listener questions – will property continue growing at 7% pa on average? Analysing rate cycles, population growth, increases in wealth, foreign investment and government intervention

In this week’s episode, Dave, Cate and Pete take you through:

  1. A great question from Phil about historical average capital appreciation in capital cities
  2. And a fabulous question from an anonymous listener who asks the trio about open home etiquette. To leave your name and number? Or to seek a different approach? Tune in to hear some valuable insights…
  3. And of course, our gold nuggets!

Ep 193 Show Notes


Ep 192: Market update Jan 2023 – Tight listing supply is creating a few buyer challenges!

In this week’s episode, Dave, Cate and Pete take you through:

  1. Nationally a 1% median price reduction was our smallest rate of decline since June last year
  2. Melbourne’s median value may fall to below the pre-pandemic level in the coming month – an interesting one to watch!
  3. Unit rents are still climbing in many cities, and while house asking rents have slowed their pace of growth somewhat, the rate of growth is still positive across the board. Units asking rents in every state remain problematic for renters
  4. Tighter rental vacancy rates – the majority of our capital cities (for both houses and units) are exhibiting further tightening rental yields
  5. New listings are still low after a particularly quiet spring season nationally – what is causing this though?
  6. Sales activity – people are still buying, but sales volumes are low. Pete explores what factors lead vendors to make the decision to sell in this climate.
  7. What’s changed since our last rate increase? Things aren’t quite as dire as some may have guessed they’d be… tune in to hear more
  8. Thirty percent less people are borrowing for housing – no wonder the banks are being so competitive
  9. Our bond yields tell a compelling story – and Dave points out the visibility that these yield overviews enable us
  10. Inflation continues to plague us; particularly house prices
  11. And… our gold nuggets!

Ep 192 Show Notes

Ep 191: How to protect your cash flow while rates are rising via mortgage strategy – Risk Management 101

In this week’s episode, Dave, Cate and Pete take you through:

  1. Seeking the help of a strategic mortgage broker
  2. Tax deductions
  3. Being forced to sell is a sad outcome that can stem from ineffective mortgage strategy
  4. LVR and equity management
  5. Buffers – what is the difference between a cash savings buffer and a cashflow buffer?
  6. To fix or to leave variable – which is best?
  7. One lender or multiple lenders?
  8. And ….. our gold nuggets!

Ep 191 Show Notes

Ep 190: The admin, paperwork and responsibility of running an investment portfolio

In this week’s episode, Dave, Cate and Pete take you through:

  1. Pete and Cate shed some light on how they each manage the administrative tasks for their retrospective portfolios.
  2. Each share the tools and programs they use.
  3. How do they track their deductions?
  4. Working in sync with accountants
  5. Managing property managers
  6. Due diligence applied when choosing between rental applications 
  7. Ownership structuring is a critical aspect to investment administratio
  8. And do the trio go back to their forecasts over time?
  9. And of course, our gold nuggets!

Ep 190 Show Notes

Ep 189: 2022 Review and 2023 Predictions – What did we get right? And what did we not predict?

In this week’s episode, Dave, Cate and Pete take you through:

  1. What will the market do?
  2. Capital city top performers
  3. Regional locations
  4. Investor numbers
  5. Government intervention in the property market
  6. Developers and building
  7. Interest rates –  what do the trio think will happen this year?
  8. Rents and vacancy rates
  9. Sales volumes
  10. Risks which could impact the market
  11. Inflation

Ep 189 Show Notes

Ep 188: Market update December 2022 – Rents are still climbing, and increased net migration now poses a new threat to rental supply

In this week’s episode, Dave, Cate and Pete take you through:

  1. Continued positive signs as home value index results show rate of decline slows
  2. Rents are still climbing in many cities, and while house asking rents have slowed somewhat, the rate of growth is still very tough on tenants. Units in almost every city are still climbing at a strong rate, particularly for Sydney, Brisbane, Melbourne, Adelaide and Perth.
  3. New listings are still low after a particularly quiet spring season nationally
  4. What’s changed since our last rate increase?
  5. External refinancing continues to climb!
  6. Much like the November data showed, the bond yield remains static
  7. Unemployment remains low.

Ep 188 Show Notes

Ep 187: Common terms and acronyms Part 2 – From EOIs to deposit bonds, we unpack them all!

In this week’s episode, Dave, Cate and Pete take you through:

  1. Standard variable rate (SVR), Rate lock fees, P&I, I/O, Owner-occupier lending and EFT
  2. Expressions of interest (EOI), ECOS, and period homes – Cate and Pete delve into these terms
  3. OTP…. not the trio’s favourite type of property, but Cate shares a surprising twist
  4. FHOG… not what you suffer after a big night
  5. FHLDS
  6. DHA and NRAS: Pete doesn’t listen too hard to the negative rhetoric about defence housing.
  7. OFI’s, cooling off periods
  8. Auction quotes
  9. Rental yield and terms contract
  10. Deposit bonds… not common and often misunderstood
  11. EBITDA…

Ep 187 Show Notes

Ep 186: Common terms and acronyms Part 1 – From ROI to VOI, we unpack them all!

In this week’s episode, Dave, Cate and Pete take you through:

  1. The difference between ROI (return on investment) and ROE (return on equity)
  2. Gross lease vs net lease
  3. LVR, LMI, AML, VOI, valuation types (short form, long form, desktop, curbside, AVM, as if complete)
  4. Valuation vs appraisal: why is this critical to understand?
  5. AIP, partial and full drawdowns, and LOO
  6. COC and FTC

Ep 186 Show Notes

Ep 185: Listener questions – Buyer’s agents who are “free”, equity use, build replacement costs and a great beachside dilemma

In this week’s episode, Dave, Cate and Pete take you through:

  1. Our first listener question is a bit of a terrifying one.  Charlotte is looking to buy her first home next year and asked the trio if it is normal for a selling agent to offer a ‘free’ buyer’s agent who receives substantial commission fees from the seller. Charlotte felt it doesn’t seem right…. and the trio agree with her
  2. Matt is keen to access his available equity in his current investment property and asks the trio for some tips
  3. Shashank raises the question of how to manage building insurance with the rapid increase we’re seeing in construction costs and the trio discuss the importance of understanding total rebuild costs, as opposed to relying on an online insurance estimate.
  4. Sarah, a Bayside resident of Melbourne asks the trio for some help with her scenario options. She and her children moved from ‘beachside’ Mentone to the other side of Mentone, yet she’s missing her old neighbourhood and wonders what guidance the trio could offer. Should she rent-vest, buy/sell, or buy/invest? It’s a great dilemma to unpack

Ep 185 Show Notes

Ep 184: Interest only vs Principal & Interest – Why working through the different considerations could add millions to your nest egg at retirement

In this week’s episode, Dave, Cate and Pete take you through:

  1. Why is repayment strategy so important?
  2. Is it a good idea to pay down all of your debt?
  3. Hold while you accumulate!
  4. How do we optimise investment deductions?
  5. The amount of money we have in our offset/savings account is one of quite a few benefits of having a war chest.
  6. Which repayment strategy is RIGHT?

Ep 184 Show Notes

Ep 183: Market update Nov 2022 – Rents are still climbing, stock supply is tight, and bond yields have softened!

In this week’s episode, Dave, Cate and Pete take you through:

  1. Continued positive signs as home value index results show rate of decline slows
  2. Rents are still climbing in many cities, and while house asking rents have slowed somewhat, the rate of growth is still very tough on tenants. Units in almost every city are still climbing at a strong rate, particularly for Sydney, Brisbane, Melbourne and Adelaide.
  3. New listings are the lowest in years and Pete shares a frightening chart that shows our winter volumes exceeded our spring volumes.
  4. What’s the correlation between dwelling sales and consumer confidence?
  5. A lot less people are borrowing money for property and investors’ new loan weighting is declining
  6. Amidst the bleak news, there is a sign of welcome change! The bond traders are demonstrating that they feel we’re getting close to the peak for interest rate movements.
  7. Unemployment remains low and Pete notes that it’s so much easier to find a job today than in previous years. 
  8. The headline inflation rate has come down!

Ep 183 Show Notes

Ep 182: Pets and rentals… the good, the bad and the scary

In this week’s episode, Dave, Cate and Pete take you through:

  1. Pet stats!
  2. Legislation confusion?
  3. What is our biggest fear?
  4. Illegal dog training?
  5. When does saying yes to pets present an advantage to a landlord?
  6. Pet rental application cover letters? You bet!
  7. “Ohhh, THIS cat? It’s my friends cat and it’s just staying this weekend”
  8. How expensive is it to clean up after a bad pet-experience?
  9. What pet situations ring alarm bells?
  10. How do property owners tackle a surprise pet in an investment property?

Ep 182 Show Notes

Ep 181: First Home vs Forever Home; Dream Home vs Investment – What are the trade-offs and key considerations?

In this week’s episode, Dave, Cate and Pete take you through:

  1. This may surprise our listeners, but the first home should be selected with investment potential in mind
  2. Bigger is better when it comes to land size for the first timer, but location counts for everything
  3. How old is too old? Cate and Pete dare to disagree…
  4. Leave the luxe listings off the list!
  5. Dream home versus investment property – why we need to look at each with such different lenses
  6. The best pool is someone else’s pool!
  7. Are larger dwellings the holy grail for capital growth?
  8. Is it ok to luxe-up your dream home?

Ep 181 Show Notes

Ep 180: Listener questions – Is electing a higher priced A-grade property a formula for disappointment long-term? What do you do with an underperforming asset that promised to do more than it has?

In this week’s episode, Dave, Cate and Pete take you through:

  1. Our first listener question is an intriguing one. Our seasoned investor lifts the lid on some of the aspects of asset selection in relation to pinpointing outperformance capital growth.
  2. Blue chip suburbs do in fact outperform over a longer period of time, but it’s all about the time horizon
  3. Money grows where money goes
  4. Show me the money
  5. Data is king
  6. Timing the market versus time IN the market
  7. Should I stay or should I go now?
  8. Why have units in Melbourne been so disappointing? And will they spring back?
  9. Target tenants
  10. Talk to your planner!

Ep 180 Show Notes

Ep 179: Market update Oct 2022 – Regions fall faster than capitals, more pain for renters as yields catch up & construction finance drops off a cliff, YOLO hampers RBA inflation tactics & more!

In this week’s episode, Dave, Cate and Pete take you through:

  1. Positive signs as home value index results show rate of decline slows
  2. Rental market continues to struggle as increasing rents continue, particularly for units
  3. Spring listings still slow, bucking typical seasonal trends
  4. What’s the correlation between dwelling sales and consumer confidence?
  5. How savings and YOLO factor into inflation
  6. How job security is impacting consumer sentiment
  7. New lending continues downward trend, however personal loans on the rise
  8. What does the bond yield say about where interest rates will end up?
  9. RBA revises inflation cap
  10. And of course, our gold nuggets!

Ep 179 Show Notes

Ep 179: Market update Oct 2022 – Regions fall faster than capitals, more pain for renters as yields catch up & construction finance drops off a cliff, YOLO hampers RBA inflation tactics & more!

In this week’s episode, Dave, Cate and Pete take you through:

  1. Positive signs as home value index results show rate of decline slows
  2. Rental market continues to struggle as increasing rents continue, particularly for units
  3. Spring listings still slow, bucking typical seasonal trends
  4. What’s the correlation between dwelling sales and consumer confidence?
  5. How savings and YOLO factor into inflation
  6. How job security is impacting consumer sentiment
  7. New lending continues downward trend, however personal loans on the rise
  8. What does the bond yield say about where interest rates will end up?
  9. RBA revises inflation cap
  10. And of course, our gold nuggets!

Ep 179 Show Notes

Ep 178: Property Planning Case Study #7 – Can we keep our two existing properties, purchase our long-term home, start a family, and still retire on $150K p/a passive income?

In this week’s episode, Dave, Cate and Pete take you through:

  1. The conundrum– Can we purchase the long-term home without selling any of our properties and retire in 20 years relying on passive income?
  2. Their portfolio and goals
  3. Modelling the scenarios
  4. So you’re thinking of starting a family, who is going to scale back work?

Ep 178 Show Notes

Ep 177: The best advice from our own journeys

In this week’s episode, Dave, Cate and Pete take you through:

  1. Reflecting on our own purchasing journeys, what is our most solid-gold nugget of wisdom that we’ve gained and feel compelled to share with others?
  2. What surprised the trio about the simplicity of their retrospective gold nugget?
  3. What positive role models did the trio learn from in their earlier years?
  4. Has the evolution of market conditions, lending conditions and social pressures changed how this gold nugget could work in today’s climate?

Ep 177 Show Notes

Ep 176: Amenities – Which are important and how important are they as an investor vs when buying your own home?

In this week’s episode, Dave, Cate and Pete take you through:

  1. What is classified as an amenity?
  2. How far is “walking distance?”
  3. Walk score – what is it and how to use it
  4. The amenities that you don’t want to be too close to
  5. What to target as an investor – don’t let personal preference get in the way
  6. Which amenities are most important to the trio, personally and from a professional perspective?
  7. Which amenities are the most important in the cities around Australia?

Ep 176 Show Notes

Ep 175: Market update Sep 2022 – Green shoots emerging? Price falls decelerate, auction clearances up, consumer sentiment improves & rates rise by 0.25%; Solving housing policy and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. Property market falls decelerate over September
  2. Peak to trough decline
  3. Brisbane land tax has been repealed, but has the damage already been done?
  4. Where is the big picture on housing?
  5. Listings languish
  6. House price expectations turns around
  7. Investors continue to bow out while first home buyers jump in
  8. Unemployment remains steady

Ep 175 Show Notes

Ep 174: Listener Questions – Bought off the plan- my situation, rates & the market is worse, I need the FHOG, but moved in with my partner, help! Is it a good time to subdivide? Suburb analysis and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. Can I access the First Home Owner Grant if my partner has already accessed government assistance?
  2. How do partners and de facto relationships impact eligibility requirements?
  3. Is there a way you can get around it?
  4. Is now a good time to subdivide and build our dream home?
  5. Getting your ducks in a row – planning for a development
  6. As with any major decision, ensure that you are thinking about the longer-term
  7. What are your thoughts on Point Cook as a location?
  8. Investment and lifestyle analysis for Point Cook

Ep 174 Show Notes

Ep 173: Property Planning Case Study #6 – Listener scenario on the property planning platform! Can we retire in 8 years & live off our portfolio until we hit preservation age?

In this week’s episode, Dave, Cate and Pete take you through:

  1. The conundrum– can we stop work and live off our portfolio before we reach preservation age?
  1. Their portfolio and goals
  1. Modelling the scenarios
  1. The power of mortgage strategy
  1. Should I work longer, scale back sooner but work more days, or just stop all together and everything in between?

Ep 173 Show Notes

Ep 172: The top 7 things property buyers get wrong – Part 2

In this week’s episode, Dave, Cate and Pete take you through:

1. Mixing emotion with pragmatism when it comes to investing

2. Low ball offers and a quest for a bargain

3. Being impatient with time

4. Counting cents instead of dollars

5. DIY’ing the thing that you shouldn’t

Ep 172 Show Notes

Ep 171: Market update Aug 22 – Why Spring may provide the best buying window of the cycle, why Brisbane’s decline increased dramatically & Melbourne’s slowed despite leading negative sentiment & more!

In this week’s episode, Dave, Cate and Pete take you through:

  1. Rate of decline speeds up in most capitals
  2. Rental market – Brisbane land tax is likely to make the rental situation worse
  3. The outlook for vacancy rates
  4. Listings to increase over spring
  5. Consumer sentiment
  6. Finance continues to fall over July
  7. Victoria leads the unemployment decline but wages are not taking flight

Ep 171 Show Notes

Ep 169: Houses vs units – Capital growth performance in capital cities and regions over the last 20 years and which loctaions have units outperformed houses and why?

In this week’s episode, Dave, Cate and Pete take you through:

1. Regional areas vs capital cities. Generally speaking, houses have outperformed units and capital cities have outperformed regional loctions. However this is not the end of the story. Capital cities suffer from greater fluctuation in prices. Which is an important reminder not to get too caught up in the short term. Will regional houses catch up with capital city units? Watch this space
2. Houses vs unit growth in our capital cities from March 2002 to December 2021. Which cities have been the winners and which city bucks the trend of houses outperforming units? Why is unit growth extremely low in Brisbane and Canberra? The trio sink their teeth into the data.
3. How have the Property Professor’s top suburbs performed? Peter revisits the suburbs that he tipped to be top performers. Which ones have outpaced the growth of their city and how have units fared compared with houses?


Ep 169 Show Notes

Ep 167: Property Planning Case Study #5 – Announcing the Property Planning interactive software platform! Do I need a large portfolio to achieve my retirement rental income goal of $100k?

In this week’s episode, Dave, Cate and Pete take you through:

  1. The conundrum. This case study follows the journey of Nick and Rachel, who wanted assistance determining their property pathway and how best to use the cash from the business they have just sold. They wanted to purchase an investment property right away but also want to spend around $400,000 on renovations to evolve their home into one they can enjoy and that will meet their needs in the long-term.
  1. Introducing Nick and Rachel. David shares Nick and Rachel’s key circumstances and of course, their lifestyle and property goals which are driving their decision. Nick and Rachel are a couple in their early 30’s, with two young children, living in one of Australia’s major capital cities. The recent sale of a business has presented some exciting options, and they also expect to receive an inheritance in of around $1,000,000 in around another 10 years which they want to factor into their long-term plan. Finally, they both enjoy working, but they also want to create further flexibility for themselves so they can scale back their employment to 4 and 3 days per week well before retirement.
  1. Modelling the scenarios. Three scenarios were modelled for Nick and Rachel, to provide clarity on their key questions. When do they purchase their investment property? What should the strategy be in terms of price point and location? When could they complete the renovations on their home? Can they achieve their retirement income goal of $100,000 passive income through property? Can they scale back work earlier? The trio unpack the scenarios.
  1. So, what did they choose to do (and what was the compromise)? Tune in to find out which scenario Nick and Rachel went for. Were they successful and what was the compromise? 

Ep 167 Show Notes

Ep 166: Market Update July 22 – Are we entering into the best buying conditions in this cycle? Have we seen the last 0.5% rate increase? Why rents are playing catch up, how median values can be distorted, upgraders remain resilient and more!

In this week’s episode, Dave, Cate and Pete take you through:

  1. The latest home value index results
  2. Median values are not all what they seem
  3. Rental markets remain extremely tight
  4. Distressed listings on the rise
  5. Consumer sentiment continues to dive, but is now the best time to buy a dwelling?
  6. Lending falls at the fastest rate since May 2020
  7. Unemployment reduces again
  8. Are we done with 0.5% monthly rate increases?
  9. Inflation surprises on the upside

Ep 166 Show Notes

Ep 165: The extra mile buyers should go when shortlisting a property – Inspecting like an expert & how to spot red flags, all you can discover for free online, assessing a floorplan, finding nearby developments, and more!

In this week’s episode, Dave, Cate and Pete take you through:

  1. Listener Question: “A glass half full question … as we transition into a Buyer’s market, what steps can investors take to be positioned to take advantage of an opportunity that might present itself”
  2. What are some of the things we can check online before we even book an inspection?
  3. What things should you be looking out for immediately when inspecting in person?
  4. How to assess a ‘workable’ floorplan vs a complete overhaul floorplan
  5. What kind of renovation are you planning?
  6. What you can find out from council about the land or dwelling
  7. Obtaining insurance quotes

Ep 165 Show Notes

Ep 164: Analysing regional locations – What investment principles can be gleaned from the highest performing regions in each state? Comparing capital city vs regional performance from 2003 – before and after covid

In this week’s episode, Dave, Cate and Pete take you through:

  1. Regions vs capital city performance. Pete shares data from the ABS on capital city and regional performance since 2003 to March 2020 (pre-covid) and 2003 to March 2022 (post-covid). So, what has changed and what are the themes that have impacted how each have performed?
  2. What’s driving capital growth in our top performing regions? David shares his research on the top performing regions in each state and the driving force behind property value growth. For any listeners looking to invest in a regional location, there are commonalities between each of the high performing regions and also the fundamentals of property investment which are relevant to capital cities also apply. Tune in to find out.

Ep 164 Show Notes

Ep 163: Predictions for 2022 revisited – Which predictions are on track, where we went wrong, revised expectations & forecasts. Half yearly report on capital cities, regional locations, the top performers & what do we expect in the back half of the year.

In this week’s episode, Dave, Cate and Pete take you through:

  1. A look in the rear view mirror at the first half of 2022. The trio revisit the predictions they made at the beginning of the year. Were they on the money or did they miss the mark? Tune in to find out!
  2. What will the property market do in 2022? What capital growth rates can we expect around the nation this year? The trio review their predictions and lay their predictions down for the rest of 2022.
  3. Which capital cities will be the top performers? The trio look into the crystal ball, pour over the data and explain which capitals are expected to top the charts this year. But remember, property is not an asset class that lends itself to short-term investing. The important thing is to plan and strategise for the long-term.
  4. How will regional locations fare? Regional locations have again outperformed capital cities in the first half of 2022. But will that continue?
  5. Will investors jump back into the market. Investors have shown strong increases in activity over 2021 but only a slight increase in the first 5 months of 2022. Is this trend likely to continue? The trio share their insights.
  6. Will APRA intervene in the property market? The RBA has done all the heavy lifting with increasing interest rates, meaning that APRA hasn’t had to intervene to temper the market. But will the government search for ways to intervene to keep rental prices lower and tempt first home buyers back into the market?
  7. Developers and building. Residential construction costs continue to climb and builders are flat out with projects, exacerbated by labour shortages, materials shortage and supply chain delays. How long will costs continue to remain high and what impact will this have on the property market?
  8. The outlook for interest rates? The trio share their predictions for future cash rate rises by the RBA and at what point they each think will the rate rises end.
  9. Rental market forecasts. Rents have continued to climb and vacancy rates have tightened. The trio discuss the outlook for rental markets for the rest of 2022.
  10. Sales volumes. After a record breaking year in 2021, sales volumes have lost pace and have trended back towards the five-year average. What does the future have in store? Tune in to find out!
  11. Risks which could impact the property market. The trio discuss potential risks on the horizon which could impact the property market this year.
  12. Where is inflation heading? When will inflation peak and what will cause the slow down? The trio discuss and lay their predictions down.

Ep 163 Show Notes

Ep 162: Market Update June 22 – Why the RBA needs to be mindful of going too hard too fast on rate increases, top capital city performers over the last 40 years, why median values can’t be trusted, why consumer sentiment bodes well for reducing inflation, rollercoaster rents and other market cycle trends and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. Markets across Australia dip further over June
  2. Upper quartile feeling the pinch
  3. How capital cities have fared over the last 40 years
  4. Market cycle trends
  5. Taking a critical eye to data and median values
  6. Rollercoaster rents
  7. Listings follow the annual trend and dwelling sales return to normalcy
  8. Consumer sentiment bodes well for inflation
  9. Will the RBA oversteer the ship again on inflation?
  10. Lending indicators and the three-year bond yield

Ep 162 Show Notes

Ep 161: Property Planning Case Study #4 – Do we buy in the capital city or regional centre (we plan to live in both), before or after we have kids, how will parental leave impact our price range, should it be a home OR investment & that can become a home?

In this week’s episode, Dave, Cate and Pete take you through:

  1. The conundrum. This case study follows the journey of Jason and Amy, who wanted assistance deciding whether they should purchase a home or investment, before or after they have kids, how their cash flow would change as they start their family, what cash savings buffers they should have in place, and how much they should spend and which location.
  2. Introducing Jason and Amy. David shares Jason and Amy’s key circumstances and of course, their lifestyle and property goals which are driving their decision. Jason and Amy are a couple in their early 30’s, yet to start a family, living in one of Australia’s major capital cities. Their long-term plan was to continue living in a capital city, but thought they may move to a regional area in the short-term to be close to family and have some additional support as they start having children.
  3. Starting a family with your eyes wide open. The trio discuss the importance of understanding (and being comfortable) with the impact that starting a family will have on your cash flow. This could be the difference between holding on to a property and panic selling when savings start to go backwards.
  4. Modelling the scenarios. Two scenarios were modelled for Jason and Amy, one to purchase their home now for $1.1M or an investment that could become the long-term home for $1.5M.  The trio discuss the pros and cons of each scenario.
  5. So, what did they choose to do (and what was the compromise)? Tune in to find out which scenario Jason and Amy went for. Were they successful and what was the compromise?
  6. The risks of rent-vesting. The trio discuss the dangers of rent-vesting when the desire to get into the long-term family home takes over and some clever ways to work around this proactively.

Ep 161 Show Notes

Ep 160: Top tips for purchasing in a cooling market – Listener question!

In this week’s episode, Dave, Cate and Pete take you through:

  1. A question from our listener. Some questions for the pod about how to approach a flat/cooling market. Cate what should you do when you are the only one to show up to an auction and or bid? Peter, how do you approach comparables when prices are falling? How do you take advantage of seller FOMO? I also think a whole pod on climate risk (BAL levels, flooding, future temperatures in capitals) would be good. Keep up the great podcast.
  2. When you are the only one at the auction, what are the risks that buyer psychology can pose? The trio discuss how buyer psychology can get in the way and cause obstacles for an opportunistic purchase. If the research has been done and the property is a winner, then ignore the white noise in your head that’s saying there’s something wrong with the property. It may just be your lucky day.
  3. How to value properties in a cooling market. Pete explains how valuers actually assess the market value of a property and how comparable sales are used. More importantly, what adjustments valuers make in a rising market vs a falling one. You might apply some decreased percentage overlays to the historical sale prices. The same applies in a rising market, if dealing with a property that had 1% month on month growth, you will need to overlay this growth.
  4. Why falling markets are the best time to buy. Dave touches on market cycles and why in a falling market, you’re likely never to get such a good price on a property ever again.
  5. The fear of over-paying. We can tie ourselves in knots over paying too much for a property. However, if you hold the property for the long-term, this amount will appear to be comparatively miniscule in the end. A reminder to our listeners, to purchase a property, you have to be willing to pay more than anyone else for it!
  6. Why research is the cure all. The trio discuss the worst-case scenario of purchasing a property and paying more than what a lender thinks it’s worth. Cate explains why this is very rare and quite mitigated if the homework and due diligence is done. Now is not the time to cut corners. Roll up the sleeves and get through as many properties as you can.
  7. What do you do if the vendor’s expectation is sky high? Cate shares her best tips on how to manage vendor expectations and how to negotiate in a falling market.
  8. Where can buyers get good information about current climate change risks associated with their property in question? Although we can’t solve climate change in 5 minutes, there are some key considerations and signs to look out for that will indicate whether a property is at risk of fire or flooding. The trio discuss the steps to take and resources to consult to determine the risks associated with the property in question. 

Ep 160 Show Notes

Ep 159: Methods of sale and what do they say about the property and/or the state of the market?

In this week’s episode, Dave, Cate and Pete take you through:

  1. A question from our listener. Hi guys, thank you for such an informative, but entertaining podcast. I’ve just listened to the episode on “off markets”. I am just wondering if you can offer some insights into how to navigate when a property is “on market” but is listed as EOI (expression of interest), rather than a price range? Why might a vendor do this? Do you put your best price forward and declare all your cards, or is there still an opportunity to negotiate? Is it a case of Pete’s rotten apples potentially? Thanks team
  2. What are the typical methods of sale around our nation? Cate takes our listeners through a brief recap of the various different sale methods used and what factors impact the choice of sale method.
  3. Best and highest offer – should you show all of your cards or go for baby steps? The trio discuss what happens when the highest offer is actually really low and the vendor isn’t happy with the outcome and Cate shares her tips on when you should actually submit your best and highest.
  4. Why wouldn’t you auction a property? The trio discuss the market conditions and reasons why a property is selected to be sold via auction. More importantly, when you should not sell a property via auction.
  5. As a vendor, what sort of guidance and rationale should you be looking for with your agent when you are considering the various methods of selling? The trio discuss how to field real estate agents and the key questions to ask.
  6. What does it mean if the price guide changes? Listeners beware! Cate reveals what a reduced price actually means (and it’s not more dollars in your pocket).

Ep 159 Show Notes

Ep 158: How interest rate cycles have impacted the property market since 1990 when the RBA first started targeting the cash rate and some predictions on what will happen this time

In this week’s episode, Dave, Cate and Pete take you through:

  1. Do interest rate movements impact the property market? In this episode, the trio sink their teeth into data going back to 1990 to answer the question whether increases or decreases in interest rates have an impact on the property market.
  2. Floating the Aussie dollar and targeting the cash rate. David sets the scene with a brief history of why the Australian dollar was floated in 1983 and the benefits this brought to our economy. Seven years later in 1990, the RBA started targeting the cash rate of overnight loans between the banks, which has a powerful influence on other rates in our economy, ie: mortgages.
  3. Cash rate cycles since 1990. Since the RBA began targeting the cash rate, Australian’s have lived through five rate lowering cycles, four increasing cycles and we’ve just started rate increasing cycle five. What can be gleaned from history to inform the future? The trio unpack each cycle and most importantly, what happened to property values and the broader economy.
  4. Property predictions. Dave and Pete stick their neck out and make predictions for the property market: how low will values drop and how long will the current rate increasing cycle last?

Ep 158 Show Notes

Ep 157: Market Update May 22 – RBA increases the cash rate but it’s no reason to panic! What is the wage price spiral, why Australian’s are well ahead of their mortgage repayments, the current state of the economy, unemployment, rental market, consumer sentiment and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. Cash rate rises by 50 basis points, but the sky’s not falling in. The RBA raises the cash rate by 50 basis points to 0.85%, with an expectation that rates will increase by the same amount next month as well. However, this is no reason to panic. The cash rate was at 1.50% pre-covid, so there is still some room to move and the reality is that the cash rate was never meant to be as low as 0.10%. This was an extraordinary measure put in place to tackle the challenges that global pandemic brought.
  2. The wage price spiral. The trio discuss the possibility of a wage price spiral caused by high inflation. If wages increase in line with inflation (5-6%), it embeds inflation further and that’s when the probability of job losses is increased, which is a worse outcome than slightly lower wage growth. This is an increased risk if minimum wages are increased, as employment awards and enterprise agreements are raised by the same percentage, effecting a vast amount of wage growth.
  3. The current state of the economy. Whilst many home owners may not like the prospect of increasing interest rates, however the economy is a strong position, which is why the cash rate has been increased. As stated by the RBA, the Australian economy is resilient, growing by 0.8 per cent in the March quarter and 3.3 per cent over the year. Australians are well ahead on their mortgage repayments, with a median of 21 months of repayments in savings, even with a 2% rise in mortgage rates, this would only reduce to 19 months. There is an upswing in business investment underway and a large pipeline of construction work to be completed. The terms of trade are at record highs, the lowest unemployment rate in almost 50 years and jab vacancies at high levels.
  4. The latest home value index results. The trio discuss the index results for May, which show Sydney and Melbourne on the decline, while Canberra went slightly backwards but a negligible amount. Astoundingly, Adelaide is still going strong with 1.8% increase over May. The market is well and truly slowing down for the other capitals and regions alike. As they say, all good things must come to an end, as we enter a period of 6 to 18 months of excellent buying opportunity.
  5. Rentals and vacancies. Rental markets continue to remain tight, with each capital city under 2% for vacancy rates. Those are expected to get tighter with the flow of new migrants to Australia. Builders will not be able to pick up the slack and increase supply to meet the demand, with fixed priced contracts in precarious positions as a few major builders go under. Now that prices are flattening, yields are growing even faster, with Melbourne now leading the charge for units, adding on 10% in the last year for asking prices.
  6. Listing numbers on the decline. Total listings are down for every capital city and in a change of gear, old listings (listings on the market for longer than 180 days) are increasing. This means that the up-take of the less desirable stock has slowed down for much of the nation, only in Brisbane are buyers still snatching up whatever they can. The upshot is that buyers are taking their time, FOMO has lessened and there is not as much pressure from other competing buyers.
  7. Consumer sentiment continues to dive. The house price expectations index, which typically lags behind market movements, is catching up with the market and starting to reduce. The time to buy a dwelling index, which peaked in November 2020, is now the lowest it’s been since the GFC.
  8. What do lending indicators tell us about the property market. In April, the amount of finance fell by 6.4%, coming off a big high. The hardest hit were owner occupiers, which fell 7.3% from the previous month with investors showing more resilience with a drop of 4.8%. This move is largely correlated with property values, which have also seen a decline.  

Ep 157 Show Notes

Ep 156: Property Planning Case Study #3 – Should our ‘Next Purchase’ be the holiday home or an investment and how do the financial outcomes marry up with our short and long-term goals?

In this week’s episode, Dave, Cate and Pete take you through:

  1. The conundrum. This case study follows the journey of Tom and Linda, who wanted assistance with working through the various pros and cons on how to best achieve their long-term financial and lifestyle goals. In terms of their next purchase, they weren’t sure whether they should start building their investment portfolio or purchase a holiday home as they are satisfied that they are living in their long-term home.
  2. Introducing Tom and Linda. Dave shares Tom and Linda’s key circumstances and of course, their lifestyle and property goals which are driving their decision. Tom and Linda are a couple in their late 30’s with two children under 4 years old, living in one of Australia’s major capital cities. Their initial plan was to purchase an investment property now, another investment in two years and a holiday home two years after that – very ambitious! However, the desire for a holiday home now to create life-long memories with their two children were holding them back and delaying their decision.
  3. Modelling the scenarios. Two scenarios were modelled for Tom and Linda, one to purchase their holiday house now at their preferred price-point of $800,000 and the second for one or two investment purchases for a total of $1.8 million. Yes, you read that right, $1.8 million. Can it be done? The trio discuss the pros and cons of each scenario.
  4. So, what did they choose to do (and what was the compromise)? Tune in to find out which scenario Tom and Linda went for, were they successful and what was the compromise?
  5. Critical considerations for wistful holiday home purchasers. The trio discuss the pull and longing for many Australian’s to have a holiday home all of their own. But before taking the plunge, it’s imperative to crunch the numbers and understand the compromises to your bottom line, so you can make the decision with absolute clarity. For further insights, take a listen to episode #81 “Holiday houses – delirium or dream?”

Ep 156 Show Notes

Ep 155: Plotting Australian property market movements from 1970 to now – the impacts of recessions, inflation, financial deregulation, population growth, unemployment rates and analysing what could disrupt the drivers of price increases?

In this week’s episode, Dave, Cate and Pete take you through:

  1. A look at Australia’s price spikes. Since the 1950’s, Australia has seen 3 periods of stellar growth. The most mind-boggling being 1950, where prices grew 111%! What were the drivers of growth and how have these forces changed over time?  
  2. Disrupting the property market. Fast-forward to today’s drivers of capital growth, it seems that proximity to the city will continue to be a key factor for desirability, competition and property price growth. With more households sustained by double incomes, convenience and being close to amenities has been more important than ever. The trio discuss what could shake up the status quo. 
  3. Diving into Australia’s recessions. The trio discuss the recessions from 1970’s to now, what caused them, what were interest rates doing at this time and how these features compare with our nation’s situation today.   
  4. How financial deregulation has impacted the property market. The trio look back to 1980’s which saw an upheaval in banking regulation and how this impacted the economy and property market. After all, Australia held the mantel for the country with the longest period of time without a recession.   
  5. How has population growth impacted capital city prices? Does population growth have a direct correlation to capital growth? The trio dive into the data to answer this question.   
  6. How have capital city prices on the ladder changed over time and which cities displayed more volatility than others? The trio discuss the movements of capital cities from 1970 and how each have performed. Interestingly, Perth has been near the top of the ladder a few times, highlighting the power of employment, natural resources and availability of high-paying jobs. Check out our show notes for a great infographic that shows the growth of capital cities in inflation adjusted dollars.   
  7. Why property is a great asset class to invest in. The trio discuss the history of property prices in relation to inflation and why investing in property is a solid move and a great hedge against inflation. 

Ep 155 Show Notes

Ep 154: Listener questions – How do I recover from early investment decisions that were made without a plan? We have our home and plan to start a family, should we buy an investment property now or wait until after we have kids? And more

In this week’s episode, Dave, Cate and Pete take you through:

  1. A question from our listener – Should I invest in property now or wait until after we have kids? My partner and I are in our late 20s, work full-time and plan on starting a family in the next 3-4 years. We bought our first home in 2019 (Woodcroft Adelaide) which we plan on staying in long term. Since then, with extra repayments and the market we have built up equity (~200k useable). As our incomes will be changing with time off for kids, what advice would you have when weighing up the pros and cons of investing now compared with waiting until our incomes are more more steady (ie kids starting school) and we have paid off more of our mortgage.
  2. Crunching the numbers. The key question to answer is whether our listener will be financially secure if they purchase an investment property now and then go on to start a family, which comes with reduced incomes and additional living expenses. The trio crunch the numbers and discuss what price point would be viable.
  3. Buffers and risk tolerance. A fundamental point to consider when planning for an investment is risk management and whether the available funds buffer will allow our listeners to have a good night’s sleep. Risk tolerance is key here, ask yourself, “would I be comfortable if my net monthly cash flow was very limited, neutral or even going backwards?”. If cash flow will be negative during the period of having children, then maintaining a buffer large enough to support a growing family will be a critical consideration.
  4. How does the family home fit into your investment decision? Our listener has done well for himself to purchase the long-term family home, which is large enough for a family with 2 children. Staying in the current home makes it much easier to build an investment portfolio. However, those who are considering embarking on the journey of having children and also purchasing an investment property must consider how their needs from a family home may change in the future once the kids come into the picture. If upgrading is on the agenda, this may mean selling an investment to achieve lifestyle goals.
  5. A question from our listener – How to recover from early investment decisions that were made without a plan? I made a mistake when I began my investing journey in that I did little to no research, had no idea about investing yet decided to jump in head first and buy a couple of properties. I soon learnt there was a touch more to it than just putting your name on a title. I’m wondering if this a common occurrence in your experience, in that people jump into an investment without really having a strategy at all? While they haven’t been a disaster, they had no strategy behind them and I’m wondering if they can make a good fit for the portfolio, or if it’s better to move them on and target something that’s more suited. I suppose my question is something like: How do you recover from early purchases like this, where there is little to no strategy? (Does one ‘need’ to recover?) Or do you just hang on and wait?
  6. Assessing the investments. The trio analyse the listener’s two investment properties for capital growth, yield and quality of investment.
  7. How does gearing fit into the picture? No doubt having a plan in advance of a purchase and understanding what drives outperformance makes a difference, but (and there is a but), even if the property is not outperforming, there is less of a case to sell once it is positively geared. At this point, the properties are very close to becoming cash flow positive and become a set and forget property.
  8. Property is a forgiving asset. Unless the investment is a total dud, property mistakes are rarely catastrophic. Cate explains the key elements our listener has going for them for a very bright property journey in the future.
  9. We’re all geniuses in hindsight. Half the battle is just getting in and making a decision. Could the property decisions have been better? Yes. But it’s not all bad news. For a young couple in their 20’s with already two properties under the belt, they are already underway to having a comfortable retirement, far ahead of most people.
  10. A question from our listener – Capital growth calculations and suburb growth rate. Is there a way to calculate the 3 month, 6 month, 1 year and 2 year growth of a Suburb using excel (2007)? I know you can probably “google” the growth rate of a suburb, but I am keen on working all this out. And are there any hard and fast rules regarding the growth rate of a suburb? I often hear some commentators say short term growth should ideally be this and long term growth should be that too?
  11. Dealing with data. The trio share with our listeners how they can do their own capital growth calculations, but issue an important warning for calculating capital growth over shorter periods of time as there are many factors which may skew data.

Ep 154 Show Notes

Ep 153: Market Update April 22 – What’s the story with inflation, will rents and vacancy rates prop up the market, what does the 3-year bond yield say about where interest rates are heading, will unit values take flight, capital city market cycles diverge, how will the drop in listings impact property values and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. Adelaide top of the pops
  2. Capital city market cycles diverge
  3. Combined regions continue delivering strong growth
  4. Rents and vacancy rates likely to entice investors back into the market
  5. Melbourne and Sydney unit market recovering
  6. Interest rates rise but the sky is not falling
  7. Listings drop, is the election to blame?
  8. Key insights from lending indicators
  9. What does the 3 year bond yield say about where the cash rate is heading?
  10. Unemployment at a significant long-term low
  11. Inflation 101

Ep 153 Show Notes

Ep 152: Top 10 tips for first time buyers and investors – How to get it right first time

In this week’s episode, Dave, Cate and Pete take you through:

  1. Educate yourself. A sure fire way to get started on the property journey is to take the time to educate yourself. The trio take our listeners through the wealth of resources that are available to build a solid foundation of property knowledge.
  2. Mix with like-minded people. Or should we say, avoid naysayers? Negative Nancy’s can quickly unravel a smart strategy and plant seeds of doubt, causing inaction, which can often be worse than taking half-good action. Mixing with like-minded people provides an environment where ideas are exchanged and much needed support is provided for what can be a stressful decision.
  3. Set your goals. Dave shares with our listeners 10 tips on how to create goals and stick to them. For further insights, take a listen to episode 82, “Goal Setting fundamentals for property success”.
  4. Select where and what to buy. The trio discuss the critical elements of selecting a location and property to purchase. But don’t forget to look ahead and think how the first property could impact future long-term plans.
  5. Visit your areas and do your research. The trio share the best data sources for doing research from the comfort of a laptop at home or in the office. However, that does not negate the need to get out and about and take a stroll through the area you’re interested in purchasing in, particularly if you haven’t lived there before. Yes, property investors, this applies to you too!
  6. Find out how much you can borrow & if there is any assistance. A critical step here is sorting out a budget, taking into account existing cash flow, desired cash flow and available funds post-purchase. Dave shares with our listeners why the lowest interest rate is in fact not the key to success. Ask yourself – is the property or the rate more important?
  7. Save money for a deposit, consider shared equity, joint ownership. Money management! It may seem easy to a first home buyer as often they don’t have children, and/or might not be partnered yet with mortgages and credit cards to juggle. But the sooner you can set up an effective money management system, (and get your partner on the same page) the better! The trio discuss the basics of shared equity schemes and joint ownership.
  8. Crunch the numbers. The trio discuss the fundamentals to factor in when crunching the numbers and how our listeners can shape up to present themselves well to the bank when it’s time to apply for the mortgage. Hot tip – you may have to go without Uber Eats for a while.
  9. Get professional advice. Why is professional advice so important? The trio discuss their strategies when looking for independent advice and who to trust. If the advice is free, get ready to ask some probing questions.
  10. Just do it! Much easier said than done. However, procrastination and the search for perfection can derail the best laid plans. Cate shares with our listeners her hot tip on how to overcome inaction.

Ep 152 Show Notes

Ep 151: Property Planning Case Study #2 – Can we have it all? Purchase a part-time investment Airbnb doubling as a holiday home, and could become our downsizing home, all without compromising our lifestyle despite our low cash flow, and still strive to achieve our rental income goals for retirement?

In this week’s episode, Dave, Cate and Pete take you through:

  1. A mixed bag – investment, holiday house and future long-term home. Can we have it all? This case study follows the journey of James and Amanda who had a number of boxes to tick for their next property. They weren’t sure if they should purchase a straight–forward investment property or if they could achieve an investment property purchase in a beachside location which could double as a holiday house and maybe even eventually become their long-term future home when it comes time to downsize. Another ingredient to add to the pot was that they didn’t want to compromise their current lifestyle and for extra spice, ideally this property would work towards achieving their income goals for retirement.
  2. Introducing James and Amanda – financial overview and goals. Dave shares James and Amanda’s key circumstances and of course, their lifestyle and property goals which are driving their decision. With two teenagers in private school and very little surplus cash flow, the key conundrum to unravel was how to complete the next purchase without compromising their current lifestyle and saving enough cash to have family adventures. Their initial preferred price point was initially determined to sit around $1.2M, however James and Amanda realised that they would be hard–pressed to find a property they would enjoy as a holiday house and a long-term future home.
  3. Modelling the scenarios. Two scenarios were modelled for James and Amanda, one at their preferred purchase price–point of $1.2M and the second for their revised, (and more realistic) price point of $1.4M. Dave explains how, (with some clever mortgage strategy and borrowing capacity finesse), the $1.4M price point was achievable, despite their tight cash flow.
  4. So, what did they choose to do, (and what was the compromise)? Tune in to find out which scenario James and Amanda went for, were they successful and what was the compromise?
  5. How will James and Amanda reach their retirement income goal? James and Amanda had a retirement income goal of $60,000 p/a through property rents. With their preferred scenario chosen, Dave explains the next steps and viable options available to James and Amanda to achieve their retirement income goal.
  6. How to give your kids a leg up. Like many parents, James and Amanda were keen to help their children purchase property when the time is right. The trio discuss the methods they could use and for further insights, take a listen to episode #95 “Security guarantees, co-borrowing, gifts and more – Helping your kids buy their first property

Ep 151 Show Notes

Migration trends – Outlook for population growth, will Melbourne recover from population losses, interstate and intrastate trends, which regions face ageing population risks and high job vacancies, the future for international and internal migration

In this week’s episode, Dave, Cate and Pete take you through:

  1. How has COVID affected population growth? For the last 20 years the Australian population has grown consistently at 1-2.2% year on year. However since the beginning of COVID, this figure has plummeted close to 0% due to international border closures. There is more to the data than migrants and new arrivals, however. Overall population figures also include returning expats, births and deaths. The trio discuss how this has impacted employment, universities and capital city markets.
  2. Melbourne and Sydney the biggest losers in flight to the regions. There are no surprises that the nations’ largest capitals of Sydney and Melbourne were hit the hardest in the great tree and sea change. There are many and varying reasons aside from COVID lockdowns and working from home to explain why this would be the case. A major factor is runaway house prices, which naturally causes migration and investment when housing affordability bites and regional opportunity presents itself as a more cost effective way of life for some households.
  3. The outlook for Melbourne. Melbourne sustained the biggest population losses in 2021, where a total of 32,000 people left for the regions and interstate, while Sydney lost almost 20,000. Prior to this, Melbourne was on the road to overtaking Sydney to be the most populated city in Australia. Dave shares insights from the Centre of Population on the trajectory for Melbourne’s population recovery.
  4. Job vacancies jump in regional Australia. Cate shares the top 5 regions with the biggest increases in job vacancies over the 12 months from February 2022. Job vacancies are putting pressure on businesses in locations and regions that have seen an influx of new arrivals. Interestingly, occupations with the highest demand are professional roles, technicians and trade roles and also clerical and administrative. The trio discuss how this is likely to play out once hybrid work from home models flourish and international migration resumes to pre-COVID levels.
  5. Our ageing population and high-risk regions. Cate shares the regions that have a large population of their work force represented by those aged between 55 and 64. The impending problem for these regions is a decrease in workers as this segment moves into retirement or scaled–back hours. The trio discuss why retiring in a regional location is so attractive, and why state and local governments will have a challenge on their hands to try to encourage mature-aged workers to remain in the workforce for longer.
  6. Each region is an individual market. For the last two years, growth in Australia’s regions have been the headline story, outstripping capital growth in the nation’s capital cities. But is the move to the regions sustainable? As the case of the Gold Coast shows us, regions have a tendency to experience a flatter period of growth after a prolonged period of migration. However, it’s evident that some locations will continue to thrive and grow. For any listeners pondering whether to invest in a regional area, it’s critical to do your research and home work before taking the plunge.

Ep 150 Show Notes

Ep 149: Listener questions – Is it critical for a Buyer’s Advocate to have local expertise and can a “borderless” BA overcome this with data? Should you first know where to invest & then pick a BA that works in the area? How would you know where to invest? And more

In this week’s episode, Dave, Cate and Pete take you through:

  1. Call out to our listeners for questions. In this week’s episode, the trio tackle questions from our listeners on vendor advocates and borderless buyer’s agents. Got a burning question? Submit your question to the trio here.
  2. Should I use a vendor’s advocate? The question from our listener: I am interested to know about vendor advocacy. We are selling a property and have been approached by a known buyer’s advocate in our area who has offered to act as our vendor advocate. This isn’t the first time we have sold, it’s our fourth time and our most important. We haven’t been overly happy with our agents in the past and could see the value this person could bring. The thing I can’t reconcile is why an agent would do more for us at the request of our advocate when they are getting less commission (advocate getting their share). We are open to a new experience and after two discussions with the advocate we can see the knowledge base is high. We just don’t know what to be careful of and if we end up paying a higher commission will it be worth it?
  3. What is a vendors advocate and can they add value? The trio unpack the difference between a vendor’s advocate and a selling agent, plus the benefits and risks of using a vendor’s advocate. Cate shares her expertise on working alongside vendors advocates and Dave shares his thoughts based on when his company had buyer’s agents and vendor advocates in-house. When done well, vendor advocacy can certainly add value, but there are critical considerations in vendor advocate selection to be aware of.
  4. When is engaging a vendor’s advocate the right move? The trio discuss the circumstances that lend well to using a vendor advocate and Cate shares some critical questions that our listeners should ask vendor advocates when choosing one to work with, and in particular, the experience and the credentials they should have.
  5. Borderless vs local buyers agents – the pros and cons. The question(s) from our listener: How important is it for a BA to have local area expertise? Can a “borderless” BA, overcome lack of localised knowledge with data / analytics? Can you trust borderless BAs to recommend different locations to invest and also have them do the buying? Or should you first know where to invest, and then pick a BA that works in the area? If it’s the latter, how would you know where to invest in the first place?
  6. Can local expertise be overcome by data and analytics? The emphatic consensus from the trio is that local knowledge is critical to a successful purchase. But can a lack of locational expertise be counteracted by diligently trawling through the data and ‘doing your homework’?
  7. How do you select a city/region to invest in? Dave shares with our listeners his methodology on how to work out which city or region to target for the next purchase.
  8. Critical considerations around licensing. Cate reminds our listeners that there is more to being an excellent BA than knowing what makes a top quality investment. There is also the painstaking detail of being across the legislation, which is different across each state and can have negative impacts if a BA is not well versed in the laws (and local planning elements) that impact the purchase.

Ep 149 Show Notes

Ep 148: Market Update March 22 – How long does it take each capital city to double in value? Which cities are flatlining vs flying and which have changed trajectory, rental growth is outstripping capital growth resulting in yields increasing, what’s causing consumer sentiment to dive, why fixed and variable rates have swapped places, the forecast for interest rates and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. SA council takes matters into its own hands
  2. How long does it take each capital city to double in value?
  3. Sydney and Melbourne flatlining while Brisbane and Adelaide continue to shine
  4. Rents turning the tide
  5. How do current listings compare with the 5 year average?
  6. Consumer sentiment takes a dive
  7. Turning the tables on fixed rates
  8. Investors back at equilibrium
  9. RBA bites back – the forecast for interest rates
  10. Federal election jitters

Ep 148 Show Notes

Ep 147: How the Federal Budget will impact the Australian property market – who it targets and benefits and why!

In this week’s episode, Dave, Cate and Pete take you through:

  1. How does this budget compare with previous budgets?
    With the federal election looming, no one was expecting to see huge dollars being thrown around in this years’ budget, particularly with the large amounts spent on emergency pandemic measures in the last two years. The trio discuss some key points that were missing, namely: housing affordability, the ongoing rental crisis and returning Australia to surplus.
  2. First Home Guarantee, (formerly known as the First Home Deposit Scheme). Also known as the ‘New Home Guarantee’, the First Home Guarantee allows first home buyers to build or purchase a newly built home with a deposit as low as 5%, without having to pay Lenders Mortgage Insurance (LMI), as the government will guarantee the remaining 15% deposit required to avoid LMI. The scheme has been extended from the 10,000 places promised to 35,000 places per annum. The trio discuss the price caps which apply and eligibility requirements.  They also ponder the alternatives for first home buyers who are sensitive to the concept of lenders mortgage insurance.
  3. Family Home Guarantee. Like the First Home Guarantee, this scheme allows single parents with dependents to purchase a property with an even lower deposit without paying LMI. However, there are some key differences which make it a great initiative. Single parents need only a 2% deposit, (not 5%) and they are also able to purchase established as well as new properties under the scheme. Places in the scheme have been doubled from 2,500 to 5,000 guarantees per year. The trio discuss the benefits of this initiative for single parents who have little cash on hand, which is common when going through a divorce or separation as well as competing with other households that have double incomes.
  4. Regional Home Guarantee. This guarantee is a new initiative introduced, with 10,000 guarantees on offer over the next 3 years. Similar to the First Home Guarantee, the required deposit is as low as 5% and the guarantee is offered for newly built homes only. A key difference is that this scheme is offered to permanent residents, as well as Australian citizens, which the other guarantees are not. Reading between the lines, it seems that the government is attempting to encourage migrants to move to the regions. However, the trio question whether this level of pressure is appropriate for regions already struggling with stock shortages and whether the hardest hit regions will benefit. Another question posed is whether the scheme could be better targeted to the smaller regional towns, with a population of 5,000 or less that have struggled with migration, although the cost of construction and availability of tradespersons is a key question to ask, also.
  5. First Home Super Saver Scheme. The existing scheme which allowed first home owners to make voluntary contributions to their Superannuation of $30,000 for the purpose of saving a deposit for their first property has now been increased to $50,000. This is a great initiative, as the voluntary contributions will be taxed at 15% rather than the marginal tax rate. However, those looking to take advantage of the scheme can only withdraw the funds to purchase a property, which means that if they don’t purchase, the funds will be inaccessible.
  6. Crystal balling interest rates. The forecast for inflation is that it will be under control within the next 12 months. What that means for the fate of interest rates, is that we can expect rates to rise within the next 12 months, but likely not beyond that. The trio discuss their thoughts and predictions on the future of inflation and interest rates. For those listeners concerned about future rate increases, remember that lenders use a bench mark assessment rate to stress test your loan, so there is a buffer there to absorb the impact of rising rates.
  7. How long has it taken property prices to double. Pete shares his research on national property prices and how long it has taken them to double. Tune in to find out!

Ep 147 Show Notes

Ep 146: The U to Z of Property success – “Unconditional” offers, contracts & finance applications, obtaining a positive “Valuation” outcome, “Waivers”, when to be “eXtra” careful, how “Yield” changes over time and all about “Zoning”

In this week’s episode, Dave, Cate and Pete take you through:

  1. U – Unconditional: what does it mean for offers, contracts and mortgage applications? The trio discuss unconditional contracts, when is it appropriate to add conditions and share their hot tips on how to manage the vendor in the event of looming deadlines that are likely to be missed. Dave takes our listeners through the necessary steps before a lender will unconditionally approve a loan application.
  2. V – Valuations: how can you get the best outcome? The trio discuss the difference between valuations conducted by a licensed valuer, appraisals conducted by real estate agents and lender valuations arranged as part of the finance approval process. Listen in for the trio’s expert insights on how to prepare for a valuation in order to get the best results. For further education on valuations, listen to episode #17 “Valuations 101”.
  3. W – Waiver: cooling off period. When purchasing a property, the most common right waived by purchasers is the right to a cooling off period. Buyers who are purchasing interstate, beware! Legislation on cooling off differs from state to state and in many states, cooling off does not apply for auctions. For further insights on cooling off periods, listen to episode #132 “Purchasing laws in each state – Part 1”.
  4. X – eXtra Careful: when to slow down and take the time to avoid critical mistakes. Cate takes our listeners through what they should be extra careful about when reading a contract and the other paperwork associated with buying a property. The key is to have an understanding of what you’re on the hook for. For lending and pre-approvals, Dave shares the key points that purchasers need to be aware of and why it is imperative to speak with your strategic mortgage broker before bidding at auction or putting in an offer on a property, (even with a valid pre-approval in place). For our listener’s who are eyeing off a potential development, Pete outlines the importance of going through zoning restrictions with a fine tooth comb.
  5. Y – Yield: how it’s calculated and how it can change. Pete shares with our listeners how yield is calculated and the important differences when calculating yield on a residential vs commercial property. Dave explains how yield changes over time and why growth in yield is largely aligned with capital growth.
  6. Z – Zoning: why zoning should not be skipped over. The trio discuss the importance of zoning and how zoning restrictions can rapidly change and how lenders mortgage insurance could throw a spanner in the works.

Ep 146 Show Notes

Ep 145: Off-market properties: Part 2 – How to tell if the off-market is genuine, identifying a bad off-market, how market movements impact the number and quality of off-market opportunities and more!

In this week’s episode, Dave, Cate and Pete take you through:

  1. Why do vendors sell off-market? Cate gives a quick summary of the top reasons why a vendor might choose to sell off-market. For further insights listen to episode 85 “Off market properties – everything you need to know”.
  2. What has made off-market opportunities more mainstream? Off-market sales have become more trendy and sought-after because of the perception that buyers will be getting a great deal with some heavy discounting. But is that actually the case? The trio discuss the role that off-market opportunities play in the real estate game.
  3. How do market movements impact the quality and number of off-market opportunities? The trio discuss the ebbs and flows of off-market sales during a seller’s and buyer’s market and what you can expect from a discounting and abundance perspective.
  4. Why you have to do your research. Many prospective purchasers get excited by an off-market opportunity and the assumption that they’ll be taking home a winner at an excellent price. However, that doesn’t mean that buyers can take their foot off the comparable sales pedal. Buyers still need to understand the market and the quality of the property to ensure that they are getting a fair price.
  5. How do you identify a bad off market? Cate takes our listeners through the tell-tale signs of a bad off-market property.
  6. How can you tell if the off-market is genuine, or is it really a pre-market in disguise? A pre-market is a property which is not yet advertised on the market, but the agents are preparing for a sale campaign and are testing the waters before the property is advertised for sale. This can be really frustrating for buyers if they think they’ve come across a fantastic off-market opportunity, with the ability to make an offer without stiff competition from other purchasers. Cate gives some hot tips on how to deal with the selling agents to find out if the off-market is genuine.
  7. How does seasonality change off-market supply? The best off-markets are from vendors who are motivated to sell as they have made a financial commitment (eg: purchased a new home and need to sell) or a distressed landlord with an uncooperative tenant. So, when are these people likely to sell?
  8. Why are buyers so keen to field off-markets? When listings are thin on the ground, an off-market opportunity can be the break that a buyer has been waiting for. However, there are some misconceptions about off-markets which can steer buyers in the wrong direction.

Ep 145 Show Notes

Ep 144: Market Update February 22 – Has the market reached a turning point, are yields in Melbourne and Sydney about to rise, why rents and vacancies are the talk of the town, lending risks for prospective purchases and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. Declining rate of growth for housing values is proving to be the long-term trend
  2. Is the property market at an inflection point?
  3. Regions continue to perform strongly
  4. Rents and vacancy rates will be the story of the year
  5. Rental yields on the rise?
  6. How listings impact housing value growth
  7. Insights from consumer sentiment and the impact on supply
  8. Lending indicators and risks for those looking to purchase
  9. The latest unemployment stats with a pinch of salt
  10. Wage growth, GDP and government stimulus

Ep 144 Show Notes

Ep 143: Property Planning Case Study #1 – What’s our next move? Renovate our home and invest, sell the home and upgrade, or upgrade and convert the home into an investment

In this week’s episode, Dave, Cate and Pete take you through:

  1. Meet Neil and Amy – the conundrum. This case study revolves around clients Neil and Amy (names have been changed), a professional middle-aged couple who live in one of Australia’s major capital cities. Their goal is to achieve a good quality standard of living, both now and into the future. Neil and Amy were stuck on deciding their next move. Do they:
    1. Sell the existing home and buy a new home; or
    2. Keep the existing home as an investment and purchase a new home; or
    3. Keep the existing home, undertake renovations, and purchase an investment?
  2. Unpacking their goals and financial overview. The trio discuss Amy and Neil’s lifestyle and investment goals, their financial circumstances, the level of funds they have to play with for their next decision and Dave explains how he navigated them through their money goals and he asked questions such as; what available funds did they want up their sleave after the purchase?, and how much can they save each month with their surplus cash flow? Setting smart ‘Money Goals’ is a foundational element of effective Property Planning. Money goals are the limit that allows you their clients to rest comfortably at night and these goals are linked heavily to a particular client’s appetite for Risk.
  3. Getting on the same page – risk profile analysis. Neil and Amy both shared a conservative attitude toward risk, however with different approaches on how best to manage their risk. Attitude towards risk is a significant piece of the property strategy puzzle. Inaction or delaying decisions between couples is typically due to the inability of the couple to get on the same page. The trio share how to bridge the divide that holds couples back from making successful decisions.
  4. Reviewing the existing home. If you are thinking about retaining the current PPOR, there are important questions to ask yourself. If your plan is to turn it into an accidental investment property – have you considered whether the property has investment grade qualities, and are you able to optimise your tax deductions? Or if you think you would be happy living in it for the long-term – are you happy with the location and does the dwelling suit your future needs? Or does it need some work? Being honest about your property is critical to seeing clearly.
  5. Modelling the scenarios. The trio unpack the pros and cons of the three scenarios that were presented to Neil and Amy for their next decision and each outlines their preferred scenario. Scenario 1 – purchase the long-term home for $1,600,000 and sell the existing home. Scenario 2 – Purchase the long-term home for $1,300,000 using equity in the existing property which is retained as an investment. Scenario 3 – Keep living in the current home and purchase an investment for $800,000. Which would you pick?
  6. The importance of revising your plan. Sometimes the best laid plans get thrown overboard when there is an unexpected spanner in the works. This is why risk management is critical, via your mortgage strategies, available funds buffer and surplus cash flow. We’re often great at thinking about the worst that could happen and having a plan for that. But risk management is also about giving yourself the ability to say yes to the exciting opportunities that come your way. This could range from acquisition opportunities within a business, taking the opportunity to buy a great asset, being able to take time off work to study, extra parental leave, going on holidays or taking a secondment, (to name a few).

Ep 143 Show Notes

Ep 142: Listener questions – I bought a house and land package, the land AND dwelling have increased in value, how can that be? Pros and cons of purchasing property in a trust. How does the media influence consumer sentiment and the property market?

In this week’s episode, Dave, Cate and Pete take you through:

  1. Why has my dwelling gone up in value when the building is a depreciating asset? The trio sink their teeth into this interesting case study posed by one of our listeners who purchased a house and land package in 2020 and was surprised to find that the value of his dwelling had increased in value since then. How is that possible when the land is the appreciating asset and the dwelling is depreciating? Have we been wrong all this time?
  2. When should you purchase property in a trust? Trusts can be confusing and complex structures to set up and you may get conflicting advice from various professionals on the matter. So, what should you do? The trio discuss the pros and cons of purchasing property within a trust and how to source the advice you receive from your lawyers, accountants and financial planners. Don’t forget to check out our show notes for some more educational material on trusts and property ownership.
  3. The impact of the media on the property market. One of our listeners was keen to open a can of worms and asked the trio “do you think the media is culpable in how they report these days because they impact sentiment, and do you see it as an opportunity to invest because you know your fundamentals and are happy to take advantage of a jittery market?” The trio talk through this ripper of a question and how to vet the media noise that we are bombarded with daily.

Ep 142 Show Notes

Ep 141: The Q to T of property success

In this week’s episode, Dave, Cate and Pete take you through:

  • Q – Qualifications that property professionals (should) have. The trio discuss the qualifications required to become a property investment advisor (you may be surprised at the answer!) and how mandatory qualifications apply to other professionals such as buyer’s agents, real estate agents, financial planners, mortgage brokers and building and pest inspectors. As a consumer it’s important that you choose your trusted advisors wisely and ask them their level of experience before you make a decision on who to partner with. Cate shares a hot tip for our listeners on how to spot the red flags.
  • R – Refinance, when and why should you do it. Dave shares with you the 12 benefits to refinancing and why you should consider reviewing your mortgage strategy. But refinancing is not the best option for everyone, and the trio discuss when refinancing is a bad idea.
  • S – Sale to Settlement, and everything in between. So, you’ve just purchased, what happens next? Cate takes us through the various moving pieces that need to be organised prior to settlement. A word of warning, if your legal representative or mortgage broker asks you to do something, put that at the top of your priority list. The trio discuss what not to do and why you should always clarify the status of your pre-approval and expected settlement timeframe with your mortgage broker before putting in an offer.
  • T – Tax and why you need a great accountant. The trio discuss how capital gains tax is calculated, land tax, GST and margin schemes. Do any of these apply to you? Some are only related to property development and if you’d like to dip your toe into the development pond, finding a good accountant who knows their way around property tax is step number one. Visit the show notes to access our other episodes where the trio dive into tax in more detail.

Ep 141 Show Notes

Ep:140 Market Update January 22 – Why are Brisbane and Adelaide flying, election impact on property prices, are investors on the way out, evidence of how listings numbers is driving capital growth, is inflation here to stay and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. Brisbane and Adelaide show no signs of slowing
  2. Rental conditions easing
  3. Listings and the correlation between property growth rates
  4. Consumer sentiment
  5. Lending indicators
  6. Unemployment drops again
  7. RBA announcement
  8. Inflation
  9. Will the election announcement have an impact on property prices?

Ep 140 Show Notes

Ep 139: Buying your dream home – how viable is your plan, documenting your wish list, how fussy is too fussy, the art of compromise, the risks of chasing a lofty dream and more!

In this week’s episode, Dave, Cate and Pete take you through:

  1. The starting point – how viable is your plan? The trio discuss the two key elements for determining whether your dream is feasible and how to work through these two elements: budget and tenure. If feasibility is an issue, then be prepared with a Plan B, which could require getting clear on compromises or purchasing a stepping-stone home.
  2. How frequently does your dream-home come up for sale? The trio discuss how to find out if your dream home is a needle in a haystack or a more frequently listed proposition. Understanding this is critical, as it will determine your purchasing and negotiation strategy and how quickly, (and strongly) you will need to act if your dream home has just come on the market.
  3. Sometimes you don’t know what your dream home is until you walk into it. If you have so many intricate things that determine up your dream home, then just build it. You will get exactly what you want, as opposed to searching for a product in a moving market that doesn’t exist. We note, however that this is not our advice for investment.
  4. How fussy is too fussy? If you have a long wish list of intricate things that make up your dream home, then you need to ask yourself how viable and realistic your search actually is. However, when considering buying an established property, you may be chasing a mirage if you can’t see any similar properties that have been sold in the last 6 months.
  5. The risks of chasing a lofty or infrequent dream. The trio discuss the risks of searching for a unique property and the implication of delayed decisions. It’s important to remember that properties are like people, they are never perfect, but you should be able to find one that scores high on your wish list.
  6. What is it ok to compromise on and what isn’t? Compromise, that ugly word! The reality is that you’re unlikely to find a home that ticks every single box, so what are you willing to compromise on and is your significant other on the same page? Pete shares a valuable tip on the element that he never suggests compromising on…. Location.
  7. How do you start documenting your wish list and action plan? Determining your must haves and nice to haves is a great place to start. Removing all properties from your search that don’t include your must haves will stop you from wasting precious time. If after searching for comparable sales you find that your brief is not feasible, it may be time to revisit your compromises.
  8. How do you future-proof a purchase? The trio discuss the critical considerations for ensuring that you live happily for a long time in your home, as the costs of purchasing and selling a property can significantly eat into your wealth over your lifetime.

Ep 139 Show Notes

Ep 138: Listener questions – I bought a dud property, can we recover? – Why rushing into an investment can mask other problems, is lack of clarity on the future home the true cause, being clear on long-term goals, analysing the investment qualities of a property, making peace with selling at a loss and more!

In this week’s episode, Dave, Cate and Pete take you through:

  1. A question from our listener. In this week’s episode we dive into a question received from one of our listeners who was concerned that he may have made an investment mistake and purchased the wrong property. The key question as posed by the listener was “is this a situation we can even recover from?”. In this interesting and insightful case study, the trio unpack the listener’s scenario and discuss possible options for his next steps.
  2. Analysingthe investment. The trio apply a critical eye to the property in question and they also assess the other properties owned by the listener to determine the future growth prospects, projected outgoings and anticipated rental yield.
  3. Why did the property seem like a good investment? The bells and whistles attached to a property may make it appear to be a good investment that will likely attract tenants. But often these shiny elements can catch your eye and blind you to what’s important, like the land to asset ratio, which is the primary driver of capital growth. These bells and whistles can also be a drainer on your cash flow and yield in the long-term. The trio discuss some clever marketing tricks that can deceive investors into going down the wrong path.
  4. Peeling back the onion and working on long-term goals. Where many investors trip on their property portfolio journey, is failing to think about their lifestyle goals and long-term home. For most people, getting into the dream home is one of the big rocks that you want to fit in the jar, and this may mean selling one or a number of investment properties to achieve this goal. The trio discuss planning for your home and how this fits into your portfolio strategy, including retirement planning.
  5. Running the numbers. A key component of any investment decision, whether it’s to buy or sell, is to get a clear idea on the different paths you can take and whether you can make that step now. This involves doing the maths and modelling scenarios to make an informed decision. The trio crunch the numbers in this listener scenario – can they get into their long-term home now? Or soon?
  6. Making peace with selling at a loss. Many property owners will need to consider selling a property, whether due to upgrading, offloading a poor performing asset or as part of a debt retirement strategy. With the large in and out costs associated with property transactions, this decision can be an emotional challenge, particularly where a property is sold at a loss. The decision to sell a property should be a serious consideration, if it makes financial sense when considering your long-term goals and opportunity cost.

Ep 138 Show Notes

Ep 137: Predictions for 2022 and a look in the rear-view mirror at 2021

In this week’s episode, Dave, Cate and Pete take you through:

  1. A look in the rear view mirror at 2021. The trio revisit the predictions they made for 2021. Were they on the money or did they miss the mark? Tune in to find out!
  2. What will the property market do in 2022? What capital growth rates can we expect around the nation this year? The trio lay their predictions down for 2022 and how that compares with other forecaster’s.
  3. Which capital cities will be the top performers? The trio look into the crystal ball and explain which capitals are expected to top the charts this year. But remember, property is not an asset class that lends itself to short-term investing. The important thing is to plan and strategise for the long-term.
  4. How will regional locations fare? Will regional locations outperform capital cities again or will capital cities continue to reign?
  5. Investor participation. Investors have shown strong increases in activity over 2021, but is this trend likely to continue? The trio share their insights.
  6. Will APRA intervene in the property market? The trio discuss their predictions for the regulator’s level of intervention and whether or not they feel government policy changes will be prescribed temper the market in 2022.
  7. The outlook for developers and building starts. Residential construction costs have jumped by 7.1% in 2021and builders are flat out with projects, exacerbated by labour shortages. Will this trend continue and what impact will it have on the property market?
  8. Can we expect a rate increase in 2022? The trio share their predictions for a cash rate rise by the RBA and where fixed rates will go this year.
  9. Rental market forecasts. 2021 has been a story of increasing rents and decreasing vacancy rates. The trio discuss the outlook for rental markets in 2022.
  10. Sales volumes. 2021 was a record breaking year for sales volumes, but will 2022 keep pace? Tune in to find out!
  11. Risks which could impact the property market. The trio discuss potential risks on the horizon which could impact the property market this year.

Ep 137 Show Notes

Ep 136: Market update – Top capital cities of 2021, will the stellar rate of growth continue in 2022, is interest in regions here to stay, how rents and vacancy rates continue to entice investors, the outlook for unemployment and inflation and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. Value growth continues to lose steam. Values increased nationally 1% over December, which is the lowest level of monthly growth since January 2021. The trio share a sneak peak of some of their predictions for 2022.
  2. A look at our capital cities. Brisbane and Adelaide were the outperformers for the final month, and each have been gaining pace since October. While Melbourne had a slightly negative month, Sydney growth reduced from prior months to 0.3%, proving again that December can be one of the best times to buy in our two biggest cities.
  3. How regions have performed. For 2 years in a row, regions have outperformed capital cities, reaching a whopping 25.9% growth over 2021.  But is this trend here to stay? The trio share their insights.
  4. Rental markets
    With vacancy rates continuing to tighten, rental markets in just about every city (metro and regional) will become increasingly competitive. This will place pressure on governments to address rental stock shortage, although investor activity may provide some respite as investor numbers have been steadily increasing over 2021.
  5. Investorsgain foothold in the market
    Investor lending is now up to 32.1% in November, climbing steadily from 29.11% in July. With an election looming, it will be interesting to see what policies the incumbent government proposes to walk the tight rope between supporting mum and dad investors and championing for first home buyers. The trio watch this space with keen interest.
  6. New listings flood the market. New stock on the market was the highest since 2016, however the total listings in December were still significantly lower than the five-year average. This indicates that buyers are still heavily active in the market, snapping up new and old stock. Will these competitive conditions continue 2022?
  7. Consumer sentiment on purchasing a property continue to languish? The ‘Time to Buy a Dwelling Index’ shows consumer sentiment dropping to the lowest point at 81.9 over December. However, the house price expectations index is up at 150, indicating that the majority of Australians are optimistic about property prices increasing. This general trend reflects the current state of play, that it’s a bad time to purchase a home because prices are soaring. However, buyers will need to harness their reluctance to compete hard, and balance this with the fear of a market outpacing them.
  8. Unemployment improves but is inflation here to stay? The unemployment rate has decreased back to 4.6%, back in line with September after increasing to 5.2% in October and is expected to keep reducing. Will the Australian story follow the US, (which is now down to 3.9% unemployment with inflation hitting 5.5%) or is our inflation transitory? The trio discuss the early signs of expected US rate increases and how this could impact the property market.

Ep 136 Show Notes

Ep 135: The L to P of property success: “LMI” what is it and how to reduce it, critical “Mortgage” strategies, “Negative” gearing and making it work for you, effectively using “Offset” accounts, “Positive” gearing and stage of life

In this week’s episode, Dave, Cate and Pete take you through:

  • L – Lenders Mortgage Insurance (LMI). LMI is a type of insurance you can expect to pay if you borrow more than 80% of the property value. Although you pay for it, it protects the lender, not the borrower as above 80% lending is seen as higher risk for the lender in the event of mortgage default and subsequent mortgagee sale. The trio discuss how the insurance premium is calculated, what kind of borrower is likely to have to pay this fee and how you can reduce LMI surcharges.
  • M – the critical components of your Mortgage. The Property Planner takes you through the top 6 mortgage strategies that can greatly impact your wealth and ability to hold property as you grow your portfolio.
  • N – Negative and neutral gearing. Negative cashflow simply means that your investment is running at a loss from a cash flow perspective. This is because the rent earnt doesn’t cover property costs, such as interest paid and maintenance. Negative gearing relates to the tax benefit applied to reflect the investor’s cashflow losses. Although you get a tax deduction, negative gearing is not necessarily a positive thing. It should be considered merely a benefit, as opposed to a reason to invest. Negative gearing means you pay a dollar to get 30 cents or slightly more back from the tax man. The trio discuss the dangers of selecting a property based on tax benefits alone.
  • O – Offset accounts, God’s gift to mortgage strategy! The offset account is arguably the banks’ greatest invention. Effective use of offset accounts forms the basis of many of the mortgage strategies that can enhance your wealth creation such as money management, optimising tax deductions, risk management and the ability to hold onto your home when you upgrade. Take a listen to episode #48, a whole episode dedicated to the effective use of offset accounts.
  • P – Positive gearing. Positive gearing is essentially the opposite of negative gearing. It is where income earnt from your property covers more than the expenses.  A positively geared investor will pay additional tax; a nice problem to have. The trio discuss how gearing is not static and can change over time. It is normal for a property to become neutrally and then positively geared over time. Take a listen to find out why.

Ep 135 Show Notes

Ep 134: Behavioural economics 101 – Tackling the biases that impact our property and investment decisions

In this week’s episode, Dave, Cate and Pete take you through:

  • How does bias impact our financial decisions? Behavioural biases are defined as unconscious beliefs that influence our decisions. In the field of finance, behavioural bias is a study that focuses on psychological factors that influence the decisions of investors. There are some 180 recognised biases and unfortunately we can’t unpack them all, however the trio have picked the top 6 biases to investigate.
  • Bias 1 – Mental accounting. Mental accounting refers to the concept where people treat money differently depending on where it came from and what we think it should be used for. The trio discuss the varying ways that this bias can manifest in our financial lives.
  • Bias 2 – Loss aversion. This bias refers to a higher sensitivity to incurring losses than making gains. It impacts investors when the fear of loss is disproportionate to the risk itself, and fear stalls their ability to make a decision. The trio delve into how this bias can hamper investors and how to mitigate the influence of this bias if you are conservative in nature.
  • Bias 3 – Overconfidence bias. This bias is the tendency to see ourselves as better than we are and is common in investing. Overconfident investors generally do not manage and control risk properly; they engage in active investing, (instead of passive investing) and adopt a DIY philosophy. In the property space, we see it most commonly when people assume they can carry out a major renovation or development, when ordinarily this activity should be carried out by a skilled/experienced renovator or builder.
  • Bias 4 – Anchoring bias. Anchoring is a phenomenon where someone values an initial piece of information too much to make subsequent judgments. In investing, this can influence decision-making regarding a security, such as when to sell or buy an investment. The trio discuss how this bias can come about: either through a negative or positive personal experience, (or third party experience). Anchoring bias can also be passed on through generations. The trio discuss how you can effectively tackle this bias and carry out your own assessments.
  • Bias 5 – Familiarity bias. This bias is characterised by investors preferring familiar investments, despite the advantages of diversification.  This can manifest itself in people wanting to purchase investments in their own state, region, city or suburb. To counteract this bias, you need to be prepared to do comprehensive assessments to look at a broad array of options.
  • Bias 6 – Herd behaviour bias. Herd behaviour occurs when investors follow others rather than making their own decisions based on financial data. People follow the herd because it feels safer, which is the opposite of contrarian investing. The trio discuss examples of herd behaviour in property.
  • How can buyers think more rationally and independently? The trio share their insights on how to make informed and successful property decisions, and specifically; to mitigate any biases that may be in play.

Ep 134 Show Notes

Ep 133: Purchasing laws in each state – Part 2: The problems with underquoting and how to solve it. When and why vendor bids are made? Do vendor disclosure obligations cover you? Why some properties go to auction

In this week’s episode, Dave, Cate and Pete take you through:

  1. What is underquoting? Sometimes known as ‘bait pricing’, underquoting is the practice applied by agents knowingly advertising the price of a property for sale on the market at a price lower than the true value of the home, (or worse still, at an advertised price that is lower than the vendor’s asking price). The Property Buyer sheds light on why this practice occurs in Victoria, (and other states).
  2. What is the danger to the buyer of underquoting. Buyers will waste money and time carrying out due diligence and building inspections on a property, only to find out that the property is not within their actual budget and out of reach. Buyers who have been in the market long enough and those who have been burnt enough times will start to cotton on that the quoted range is not representative of the realistic price that the property will go for. So now, there is an expectation that a property will sell for more than the quoted range.
  3. How Queensland has tackled this issue. Agents in the Sunshine state are prohibited from representing a property for sale at a specified price while being aware the vendor will not accept that price. In addition, if a property is going to auction, agents are banned from making any price guide representations at all. While this does effectively deal with the problem of underquoting, it does raise other challenges for buyers. In this case, buyers must carry out the hard task of working out for themselves what a property is worth, when many are not experts in property. Is it better to have no guidance at all on price?… or some (mis)guidance that’s inaccurate?  The trio ponder this question.
  4. How Victoria’s underquoting regime misses the mark. The Property Buyer explains the ‘Statement of Information’ that Victorian agents are required to display at all open homes and online listings, and more importantly, how agents are able to avoid accurate price representations despite their obligations.
  5. Striking the right balance. The trio discuss the different underquoting regimes in each state and the ideal outcome for underquoting laws. There are two sides to the coin and the solution must take into account both the vendor’s and buyer’s point of view.
  6. Vendor disclosure obligations. Be careful not to get stung! Some states place no obligations on the vendor to disclose certain details about the property and the purchaser is required to complete all the due diligence and searches. The trio walk through the disclosure obligations, and in particular they circle in on WA and NT’s disclosure legislation.
  7. Vendor bids. The trio outline the differences between each state of vendor bids, why they are used by the auctioneer and when they shouldn’t be used.
  8. Auctions vs private sales. While auctions are most prevalent in NSW and Vic, they remain in the minority for other states. The trio discuss when is a property more likely to go to auction vs private sale.

Ep 133 Show Notes

Ep 132: Purchasing laws in each state – Part 1: When is a sale legally binding? Cooling off periods. Contract conditions and when to use them. What is gazumping and how do you avoid it?

In this week’s episode, Dave, Cate and Pete take you through:

  1. The starting point – what constitutes a legally binding contract? The commonality between all states and territories in Australia, is that no legally binding contract exists until the contract is signed by both parties. However, some states also hinge on the concept and requirement that contracts must be ‘exchanged’ as well before they are binding. The different approaches here can cause confusion and also leave the door open for gazumping, (which we will explain shortly). The trio discuss the different requirements in each state and how that impacts the purchasing process.
  2. Cooling off periods. The trio discuss the varying statutory cooling off periods in each state, (or absence of cooling off periods in the case of some states), when a cooling off period does not apply and can the cooling off period be waived as a negotiation tactic?
  3. Negotiating ‘subject to’ clauses and contract conditions. While all states allow for ‘subject to’ clauses to be entered into contracts, interestingly, this is not common practice in the states of NSW and ACT. The trio discuss the common conditions that are negotiated between the buyer and the vendor and also why NSW and ACT don’t take this approach.
  4. Gazumping – what is it and why is it legal? Gazumping occurs when an agent or vendor accepts an offer made on a property, but before the contract is signed to formalise the deal, another buyer swoops in with a higher offer or better conditions and the vendor sells to them, leaving the first buyer out in the cold. This occurs because in most states, the buyer and vendor do not sign legally binding contracts at the time of the sale agreement. Before the contract is signed, the agent is legally oblgiated to present to the vendor any further offers received for the property.
  5. Why is gazumping most prevalent in NSW and how do you minimise the risk of being gazumped? The trio discuss why gazumping is most commonly seen in NSW, which no doubt feeds into their reluctance to enter ‘subject to’ clauses in the contract of sale. Although NSW is the king of gazumping, it can occur in most Australian states. The trio explain what you can do to minimise the risk of being gazumped!
  6. Settlement periods. The trio share with you the common settlement periods for each state, most of which range between 30 and 90 days. Speak to your strategic mortgage broker to understand how quickly you can have your finance approved, particularly if your financial situation is complex.

Ep 132 Show Notes

Ep 131: Has the influx of listings dampened the market, why December is a great time to buy, early predictions for 2022, will Hobart and regions continue to grow, is it the best time to buy a unit, how vacancy rates are impacting rents and more – Market update

In this week’s episode, Dave, Cate and Pete take you through:

  1. A look into recent market cycles
  2. Consumer spending and impact on the property market
  3. Property market further softens over November
  4. Rents and vacancy rates
  5. Houses vs units
  6. New listings rise but total stock remains low
  7. Growth in regions continues to burgeon on
  8. People are still pessimistic about now being a good time to buy a dwelling
  9. Investor numbers continue their steady creep higher
  10. Unemployment increases but expected to be temporary
  11. The latest update from the RBA
  12. Predictions for 2022

Ep 131 Show Notes

Ep 130: The F to K of property success: “First” home buyers and how to get your ducks in a row, how to approach “Goal” setting, “Houses” vs apartments, why mortgage strategy is more important than “Interest” rate, “Just” do it & “Knowledge” and how to acquire it

In this week’s episode, Dave, Cate and Pete take you through:

  1. F – First Home Buyers and what do they need to do to be organised. Purchasing your first home can be a daunting task, as you’ve never done it before. Whether you should purchase a home or an investment can be a bigger conundrum as first home buyers are often in an earlier stage of life, where they may not be established or settled yet. The trio discuss arranging and understanding finance, government and parental assistance, what first home buyers often overlook and what can trip up a good strategy.
  2. G – Goal Setting. Taking time out to set goals will help you immensely, not only on your property journey but in your life journey as well. Determining goals will help you gain clarity on your property strategy and selection, whether you want to: retire richer, retire earlier, make a little bit more money right now, or make regular extra money so you can scale back work or give up your day job. The trio discuss how to approach goal setting and some common mistakes to avoid.
  3. H – Houses (not apartments). If capital growth is your aim, buying a property with a good land to asset ratio is essential. The trio discuss what denotes the difference between houses and units, and how the lack of uniformity can cause great confusion. Plus, buyers beware! Houses are not always a superior asset to units. Tune in to find out why.
  4. I – Why mortgage strategy is more important than interest rate. The trio discuss how people can get sucked into focusing on rates, as it’s the easiest aspect of mortgages to understand. There will always be a lower interest rate somewhere in the next week, month or year and you can tie yourself in knots on focusing on the rate. First and foremost, you need to decide on your mortgage strategy. The Property Planner explains how this can make a significant impact to your bottom line at retirement.
  5. J – “Just do it”. What causes analysis paralysis? Inaction can mean that you start your property journey five years later than you could have, making a massive impact to your nest egg due to the power of compound growth. The trio discuss the personality types that are more prone to inaction for fear of making a wrong decision and how to overcome this.
  6. K – Knowledge and where to acquire it. The trio share their gold nuggets on how you can acquire great advice that will help you sleep well knowing that you are on the right path.

Ep 130 Show Notes

Ep 129: What is contrarian investing and how can you make it work for you? Market updates: Melbourne and Sydney move into CBD, covid’s global impact on property and December is a good time to buy

In this week’s episode, Dave, Cate and Pete take you through:

  1. What is contrarian investing? Contrarian investing is an investment style in which investors purposefully go against prevailing market trends by selling when others are buying, and buying when most investors are selling. Contrarians may be seen as courageous, unconventional, counterintuitive thinkers, able to withstand herding pressures from crowd-following conformists. As Warren Buffet has said “”Be fearful when others are greedy, and greedy when others are fearful.” Contrarian investing is often discussed within share trading circles, but it is entirely relevant in property too.
  2. Real examples of contrarian investing in property. The Property Buyer talks through her own personal experience of purchasing property during the GFC, when buying conditions changed dramatically and many were fearful. Also more recently, a client who purchased four properties at the beginning of covid, who saw the opportunity, while others put their purchasing plans on hold.
  3. What would happen if you purchased half-way through a market fall? The Property Planner shares his research on how your assets would have performed if you purchased shares mid-way through the GFC and 2020 covid crash and purchased property during the APRA driven downturn in 2018. When a market is falling, it can be one of the best times to buy. But it is scary, due to the uncertainty of how far the market will drop or how long the decline will last before it swings back up.
  4. Property market downturns. Check out our show notes to see a graph of the last few decades of downturns. The downturns look like blips in the long run. When the market declines, the magnitude is not as great and the length not as long as when the market is on the rise. The most recent downturn lasted 18 months, which felt like a long time when you’re living it, but in the scheme of our lives, is not very long. See the charts below to see the depth and length of downturns vs property price increases.
  5. Segmenting markets – contrarian investing is not just about market timing. Whilst buying when others are fearful of buying is an obviously contrarian approach, there are also other strategies within contrarian investing. This could mean purchasing a less popular dwelling type, (such as an inner-city apartment), selling a property in a coastal or holiday hot spot or purchasing in a less popular area. The Property Buyer shares her tips on purchasing an inner-city apartment, which she just assisted some clients with.
  6. The risks of being a contrarian. Going against market sentiment does carry great risk and simply going against the grain without doing the research and understanding the market will not necessarily yield you good results. The dangers of contrarian investing, if you get it wrong, is difficulty in selling if you’ve chosen an unpopular property or extended days on market when it’s time to sell. We also can’t underestimate the opportunity cost of investing in an underperforming asset versus putting your money in a well-performing asset instead.
  7. Considering commercial property. With the onset of covid, commercial property has taken a hit and could present an opportunity to catch the market while it’s falling.

Ep 129 Show Notes

Ep 128: Upgrading and planning for the long-term home: how to keep a home as an investment, buying or selling first and more. Market updates: inflation 101 and the state of commercial property

In this week’s episode, Dave, Cate and Pete take you through:

  1. How does upgrading fit into your property plan? The earlier you can start planning for your long-term home, the better. However this does come down to stage of life, and often people are not able to picture their future home until they’ve reached a certain level of stability or decided on the location that they want to live in. Understanding how your investment decisions and other lifestyle purchases fit in with your decision to upgrade is also key to making successful long-term purchases. For some, the long-term home may be out of reach due to stage of life or circumstances. For some who aren’t ready to upgrade, rent-vesting or a stepping stone home may be the right choice for you.
  2. Mapping out your future home Many buyers get hamstrung when it comes to the critical decision making because their search criteria is unreasonable. Having a clear plan on which suburbs to target, property types, architectural styles, land size, bedrooms and living spaces, (to name a few) is key to narrow in your search. Then, to ensure that you don’t get bogged down and spin your wheels while the market continues to run away from you, have a plan of what you will be willing to compromise on if your dream home is out of reach.
  3. Purchasing a property that you can grow into. The holy grail of property ownership is only ever owning the one home, because each purchase and sale of a property eats into your wealth. Due to changing commitments and affordability, not many are able to achieve their dream home on the first go. However, you may consider buying a home with a larger block size with a smaller dwelling, where you could extend the home as your family grows, to avoid needing to sell.
  4. Why are money goals so important? Finding a property that you want to live in for the rest of your life can be like finding a needle in a haystack and many are willing to pay an emotional premium to get into their dream home. In this situation, we’re more likely to be stretching ourselves to the largest level of debt that we’ll ever take on. This is why understanding your cash flow and available funds after purchase is critical, so that you remain within your financial comfort zone and risk profile.
  5. The age old question – should you buy first or sell first? The trio discuss whether you should sell your existing home first or purchase your upgraded home and then sell. The scarcity of the property you are looking for, the market conditions and the settlement period are critical considerations. The trio share their tips on how to navigate the transactions simultaneously.
  6. How to keep your current home when you upgrade. The Property Planner explains how mortgage strategy can be utilised so that you are in the best financial position to be able to keep your current home as an investment property when you upgrade. However, you need to get your mortgage strategy right today, or it could be costing you the ability to hold on to that property.
  7. When is the best time to upgrade? The trio discuss when you should look to upgrade and the dangers of trying to time the market.
  8. Arranging license agreements. The Property Buyer shares a hot tip on how you can arrange a licence agreement to occupy the property you’ve purchased prior to settlement, which can make the moving process smoother and less stressful. Similarly, if you’re selling and you’ve already vacated, you can arrange a licence agreement with the vendor and charge either nominal or market rent during this period.

Ep 128 Show Notes

Ep 127: The A to E of property success: “Area” and how location is key, “Bungalows” and other period styles that Australians love, “Capital” growth is key, “Dirt” and how the value is in the land, & how to make the most of “Equity”

In this week’s episode, Dave, Cate and Pete take you through:

  1. A – Area (location is key). Picking a great location is critical! You can change the size of the block and the dwelling on top of it, but you cannot change the location. The trio discuss the features to target if capital growth is your aim. Although the pandemic has changed the way we do business, the CBD will offer the much-desired amenity and being close to a source of water and having a nice view can also increase capital growth prospects. We can’t under-estimate people’s love affair with their city reigniting as things open back up either.
  2. B – Bungalows (and other period styles). The trio discuss the pre-war properties that Australian’s love and can’t get enough of. They are in limited supply and have highly desirable features such as high ceilings, big rooms, timber floors and are solidly built. The scarcity factor drives competition and growth for these properties, and also makes them very difficult to place a ceiling value on. It is for this reason that many of these period stunners fetch record high prices under competition.
  3. C – Capital growth is King (or Queen). When it comes to residential property, most people make more money from capital growth than from yield. The power of compound growth means that a difference in 2% capital growth could equate to a $3M differential over the course of a full working lifetime for your retirement kitty. If you are looking for rental return, commercial property could be an attractive option. However commercial property is not as resilient to economic shocks as residential property, this is because people always need somewhere to live. We may see a shift, particularly in the CBD and other centres where commercial will convert to residential.
  4. D – Dirt (the value is in the land). The appreciating component of the property is in the land and as the trio discussed in episode 125, it’s not about the size of the land but the value of the land. If you’re looking at a development, you need to consider features other than size, like frontage and heritage overlays, (among many other facets).
  5. E – Equity (use it!). The power of capital growth is that the equity built up in your asset can then be used to leverage into further investments, whether that be purchasing another property or shares. Unlike rental return, which could be squandered with bad spending habits, capital growth cannot be spent!

Ep 127 Show Notes

Ep 126: Analysing 30 years of cash rate rises and the impact on property prices, why rents are increasing but yields reducing, what’s happening with Brisbane & Adelaide, impact of listings on supply, national growth rate stabilises and more – Market update

In this week’s episode, Dave, Cate and Pete take you through:

  1. Do cash rate rises slow down house prices?
  2. Housing growth consistent over the last 3 months
  3. Brisbane takes the mantle for highest month on month growth, but Hobart is still going strong
  4. Regionals still outperforming capitals
  5. Holiday locations and the great escape
  6. Will we see a rush of money to the property market?
  7. Rental yields reducing as housing values soar
  8. Listings on the rise but still at extremely low levels
  9. Consumer sentiment in the property market dips
  10. Investors on the rise
  11. Inflation targets met, will interest rates rise sooner?

Ep 126 Show Notes

Ep 125: Does size matter? Should you buy a small block of land in a great location or a bigger block further out?

In this week’s episode, Dave, Cate and Pete take you through:

  1. The trap of bigger equals better. In this week’s episode the trio tackle the misconception that when it comes to capital growth, bigger land size is better. Where you consider properties on the same street with the same orientation, the bigger block of land will be valued higher (provided there are no encumbrances or other physical detractors). But where you are making a decision between a bigger block of land in one location and smaller block of land in a different location, people can make a lot of mistakes by chasing the bigger land.
  2. Where did the idea of bigger is better originate? The great Australian dream of having a quarter acre block, with a hills hoist in the backyard and mowing the lawn on Sundays was the aspirational model for family living. That is not necessarily the case now, where suburbs close to the city where the not-so wealthy historically lived in closer confines are now highly sought after. Magazines and seminars have also created hype around bigger land and development potential, creating the misconception that people can get rich if they subdivide the land.
  3. Land value, not land size! The trio discuss the importance of considering the land value, rather than the land size. Location is particularly important here and will have a significant impact on the land value. A smaller block of land in a location closer to the city with have a higher land value than a bigger block of land on the fringes. Think back to Christmas day with the kids, who would much prefer a giant Santa sack filled with gifts from the reject shop because there’s more of it, but the smaller Tiffany box is much more valuable!
  4. When is the land size too small? If the size of the land is too unworkable or quirky, then it may not have the same capital growth prospects or value as the land around it. If you are planning a development or renovation, then the land size does matter and should be considered carefully along with other planning regulations. The trio discuss the dangers of targeting blocks with future development potential if you are not serious about completing a development now.
  5. Orientation can impact land value. The Property Buyer shares her tips on what orientation to target to have optimised sunlight throughout the day. However, a clever dwelling design can maximise sunlight, even if the property doesn’t have the ideal orientation.
  6. Corner blocks – blessing or curse? Depending on your plans for the property, a corner block can be a positive or a negative. The feeling of exposure and bedrooms against footpaths are generally a reason why people will give corner blocks a wide birth when purchasing, but they can be great development opportunities (if you are serious about being a developer).
  7. How the land to asset ratio drives capital growth. Many people get themselves into trouble when they are looking for capital growth and buy brand new. In this scenario, the majority of the price tag is often in the dwelling component of the property, (which is depreciating) and not the land, (which is appreciating). Similarly, you can go too far in the opposite direction and purchase a property where the land to asset ratio is really high, but because the dwelling is uninhabitable or compromised, the costs of rectifying the dwelling will eat into your yield. Understanding the land value per square metre is important here to work out the land to asset ratio. Once you have that, you can focus on properties with an optimal land to asset ratio rather than land size.

Ep 125 Show Notes

Ep 124: Listener questions – Top investment tips #2 – Selecting a state, city, suburb & dwelling, buying within the bell curve, the role yield plays, debt retirement strategies, median alignment and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. Which state or city should you invest in? The trio discuss the considerations of selecting which state or city to invest in, including diversification, market cycles, land tax that eats into your yield, the plans around your future home purchase and the dangers of hot-spotting.
  2. Your budget should drive the choice. Data confirms that Melbourne and Sydney have outperformed other capital cities over the decades. Selecting an outperforming suburb can make a reasonable difference to your end position over a long period of time. However, it’s critical to select a quality asset and if your price range means that you are purchasing a compromised asset, it may pay to look at investing in a different capital city that better aligns with your budget.
  3. Buying within the bell curve. The Property Buyer shares a hot tip for selecting a state or city, and that’s to look at the median values and compare it with your budget. Staying within 20 to 30% of the median is often a good way to go, as this is where the majority of people can afford to buy and where most of the demand will be. If your aim is to target the lowest quartile and buy a bargain, you are introducing all sorts of risks into your investment strategy.
  4. Selecting a location and how that impacts asset selection – houses vs units. The trio get into the nuts and bolts of selecting a location, and depending on your budget, location choice could impact whether you’re able to purchase a free-standing house or a unit. For example, do you purchase a townhouse closer to the city or a house further away? You must go through this process to work out what you can afford and what is the best choice for your investment strategy. Generally speaking, if your aim is capital growth, the data is clear that houses are generally the way to go.
  5. How the yield, cash flow and your debt retirement strategy feeds into the dwelling selection. Even though interest rates are at all time lows, yield is still important. If your retirement strategy is to hold onto your properties and live off the rent, then a yield that allows you to pay down the debt is a critical consideration. On the other hand, if you plan to sell some of your portfolio to pay off the debt on the rest of your portfolio, then capital growth could be a key factor for you. Generally speaking, houses will have a lower rental yield than units and apartments.
  6. Different strokes for different folks – get the right advice for you. Everyone’s goals and circumstances are different. The right strategy for person A may not be the right strategy for person B. Educating yourself with general information is a great way to go to increase your knowledge, but it’s certainly worthwhile to get qualified property investment advice that is tailored to you.
  7. Strategies for engaging with agents to improve the property buying experience. The Property Buyer shares her top tactics for how to get information from agents and when is the best time to do so. Making yourself memorable for the right reasons is key, as agents can provide a wealth of information to help you on the journey.
  8. Finding a property manager. A quality property manager will have deep knowledge of the area that you are purchasing in and can give you key intel, such as what kind of tenant you are likely to get, what will the likely rent will be, and what tenant tenure you can anticipate for the property in question.

Ep 124 Show Notes

Ep 123: Listener questions – Top investment tips #1 – How price point drives strategy, optimising deductions, financial goal, how the future home factors in, the dangers of buying a bargain and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. How does your future home fit with your investment strategy? One of the biggest pieces of the puzzle, which is often forgotten about, is how your future home plans will fit into your investment pathway. Having a clear understanding of how your investment purchase could impact your ability to purchase your future home is critical. Many end up having to sell properties to secure their dream home and this is one of the biggest killers of wealth that we come across. Happily, this can all be avoided with some planning.
  2. Removing shades of grey – home vs investment. When purchasing a property, it’s important to be clear on whether it’s a home or a an investment. You will make it really hard for yourself and risk missing the mark if you conflate the two. When trying to overlay investment principles on a home, you may end up with something that you don’t love and life is too short!
  3. Set your money goals for surplus cash flow and available funds buffers. To work out what is an ideal price range for a comfortable purchase that won’t break the bank, you need a clear understanding of your cash flow and expenses. This is a difficult exercise in and of itself, however covid has added an extra layer of complexity as people aren’t spending as much as what they typically would have. Go through your expenses and determine what your living expenses are likely to be post-purchase, you may even discover areas in your spending that you can improve on. Set money goals of what you would like your surplus cash flow and available funds buffer to be after the purchase, and this will help you determine what price point you can afford.
  4. The traps of looking for a bargain. Hunting for a bargain at the expense of quality is one of the biggest mistakes that you can make and finding a bargain on an A-grade property is a rarity. If you find that a property is priced on the lower end, you need to ask yourself why? Is the property compromised and how? In a strong market, don’t expect to buy a bargain and remember, to secure a property, you need to be willing to pay more than anyone else!
  5. What is your financial goal for the property? Determining whether you are targeting capital growth, yield or a balance of the two will feed into the location and dwelling type selection. This is not a black and white option, it is a scale with many shades of grey in between. Picking the right shade of grey will depend on your debt retirement strategy and the end game. Do you plan to sell at retirement or pay down the debt and live off the rental income?
  6. Putting in place your mortgage strategy and pre-approval. The Property Planner shares some tips on how you can optimise your tax deductions through your mortgage strategy and reduce your non-deductible debt!

Ep 123 Show Notes

Ep 122: The latest property forecast and overview: rental shortages, housing growth and market trends in Australia, APRA steps in and more – Market update

In this week’s episode, Dave, Cate and Pete take you through:

  1. How long has it taken property prices to double?
  2. September growth posts solid results amid an easing growth rate
  3. Perth and Hobart surprise
  4. Rents continue to rise towards rental crisis
  5. The best cure for rising housing prices is rising housing prices
  6. Consumer confidence – time to buy a dwelling
  7. Growing gap between Melbourne and Sydney medians
  8. Listings – new listings, total listings and monthly sales
  9. Predictions for the rest of the year

Ep 122 Show Notes

Ep 121: How supply and demand dictate market movements – Part #3 Locational drivers – Superstar cities, population paradox, NIMBYism, zoning, development, yields, vacancy rates, heritage overlays, regionals and more!

In this week’s episode, Dave, Cate and Pete take you through:

  1. Heritage listing and heritage overlay. The trio discuss the impact of heritage listings, which protect a particular property. Although the supply of heritage property is relatively limited, so is the demand, due to the restrictions in being able to renovate and update the look of the property. Heritage overlay on the other hand protects the consistency of the properties on a street, normally to preserve the charm and architectural appeal of a property in a place of historical significance. Heritage overlays are varied and the types of heritage overlays range from façade appearance to paint colours to specific attributes of heritage significance, such as chimneys and windows. Many heritage overlays are specific to particular streets and precincts too.
  2. Council zoning and regulations. If you’re purchasing in a developer friendly zone and the houses in the street are 40 years old or more, then you need to consider the future impact this will have on the street scape. Council regulations can limit the amount of property that can be built on a block of land by setting a minimum site area. If the minimum site area is quite large, it will be very difficult to subdivide the land and there is little chance of developments in this area.
  3. NIMBY suburbs – not in my backyard! The state government will give local governments targets on increasing population density. The approach taken by NIMBY suburbs will be to allow for high density dwellings on main roads and near transport hubs, rather than medium density in the streets. The drawcard of these suburbs is not to live in an apartment on the main road, but in a beautiful character home in the side streets. As character or period homes are no longer being built, they are in limited supply and, conversely high demand. OECD data has shown that Australian house values have experienced the fourth highest house price growth over the last 20 years because of development laws.
  4. Purchasing a block with subdivision capability. If you are not set on doing a subdivision, but would like the option to do it at some undefined time down the track, question whether this is the right strategy for you. If your block has the ability to subdivide, then the chances are that the rest of the houses on the street also do. This means that your street can turn into a medium density hot spot of renters and first timebuyers, with lots of cars in the street and cheap built decaying units. If you are thinking of subdividing, then it’s better to be the first on the street and not the 20th!  And in a gentrifying area, a capital growth, buy and hold strategy can be optimized if you can pick the A grade street and watch it beautify over the years.
  5. The population paradox. On the macro or city level, you want to look at purchasing in a city that is attracting more people and experiencing population growth. On the suburb level, look for a stable population, because that implies that there isn’t a high supply of new property. In NIMBY suburbs, there is a high level of demand, but supply remains the same. This is in contrast with new Greenfield estates, where the supply is great, and demand raises to meet the supply before more are built. This is also a skewed sector of the market, where demand could be artificially created by governemnt incentives and grants to purchase new property. And don’t forget to consider the land to asset ratio!
  6. Rural towns and infrastructure. When comparing country towns, mains electricity, water and sewerage can be a key factor. The comforts of city living vs relying on rain water and septic tank maintenance can have a big impact on demand.
  7. Superstar cities – employment, job availability and industries. Superstar cities such as New York, London, Paris, San Francisco, Hong Kong, Melbourne, Sydney and Auckland have a wildly disproportionate share of the world’sleading high-value industries, high tech innovation, start-ups and top talent. For example, London accounts for around 25% of all economic value in the UK. Even more strikingly, when it comes to high tech start ups, globally just 6 city regions of London, San Francisco, New York, Boston, Washington DC and San Diego attracted nearly half of all the high tech venture capital investment across the entire world in 2016. These factors can create an increasing inequality between some cities and others, and within different parts of these cities, which is most obviously reflected in property values.
  8. Rental returns and vacancy rates. In a climate where rents are increasing and vacancy rates are decreasing, there will be more demand for investment properties. If you have a township or a city that is plagued by high vacancy rates, that will have an impact on the desirability of that area as an investment. Especially in smaller towns where there is a limited number of major employers who then leave the market.

Ep 121 Show Notes

Ep 120: How supply and demand dictate market movements – Part #2 Streetscapes, schools, transport, prestige, shops, CBD access, recreation, entertainment and more!

In this week’s episode, Dave, Cate and Pete take you through:

  1. Access to public transport and shops. Access to public transport is a key driver for demand and is increasingly important in larger cities. Access to shops is another key driver, although retail trade analysis shows that the larger the shopping centre, the further people are willing to travel to reach there. What we see now is that the desire to be close to shopping centres has been replaced with a desire to access local shops and nice cafes. Being within walking distance to your transport hub or local shopping precinct is a major draw card.
  2. Quality schools. Proximity to quality schools, particularly prestigious public schools where the perception is that your child will get a private school education at public school prices, is a major driver for many parents when picking a location. This greatly increases demand for properties that are within the zone of a public school or properties within 30 minutes commute of private schools. The Property Buyer shares a tip to do a cost benefit analysis, as many parents will pay extra to get in the zone of a public school, but maybe you’d be better off paying the private school fees and saving on the elevated purchase costs?
  3. How close is too close? Being nearby to great amenities and services can greatly impact the desirability of a location, but being too close can be problematic. Train lines, rubbish tips, industrial areas, petrol stations and shopping precincts are just a few of the things that you need to be mindful of being too close to. Think about the noise, the people and the smells. Is the property too close for comfort?
  4. Proximity to the CBD, are we at the beginning of a new era? The CBD apartment market has been one of the worst hit during covid, but will we see a permanent exodus from the CBD? The trio discuss the elements which still make the CBD or living close to the CBD an attractive prospect. Although the office market may never be the same post-covid, the CBD is still a hub for transport, shopping, sports, social gatherings and a number of prestigious private schools.
  5. Recreation, sports, leisure and the outdoors. Access to sporting fields, clubs, pools, parks and the outdoors play a big part in determining the desirability of a location. Arguably they are appreciated now more than ever because of covid lockdowns. When it comes to the great outdoors, the biggest impact will be proximity to the beach, where it will be more expensive but also have higher prospects for capital growth.
  6. Prestige of the area. A name and post code can make a lot of difference. Prestige is something that matters more to some than others, but it is a real thing. It’s the same reason why some people drive a Mercedes and others are happy to drive a Nissan. The Property Professor shares the example of Angwin Avenue in Adelaide, which divides the suburbs of Prospect and Blair Athol. The Prospect side of the street is valued higher, and it’s all because of the post code.
  7. Visual aspects, geography and climate. The Property Professor compares two regions in Adelaide, both 40km away from the city, but with very different price tags. What sets these locations apart? It comes down to the views, geography and climate. As a general rule, if your location is closer to sea level, there is greater risk of flooding, and the higher you are, the more chance you’ll get a nice view.
  8. Looking for a beautiful streetscape. The trio discuss the four elements that make a desirable streetscape, with the reminder that the best approach is to buy on the best street. Counterintuitively, a lot of people look for sub-division capability to drive capital growth in the future, however in a few years time, your beautiful street may not be so beautiful anymore. It could be lined with new townhouses in a higher density area.
  9. Conducting your reconnaissance missions. When scoping out whether a street is classed as A-Grade or B-Grade, one valuable hint is for buyers to get there at school pick up time or at peak hour and see what’s happening. Do people park on this street because it’s within walking distance of the nearest shopping precinct or train station? Is it a cut through street between two main roads that receives a lot of commuting traffic? This all goes into what makes an A-Grade street and translates into a huge difference to capital growth performance.

Ep 120 Show Notes

Ep 119: How supply and demand dictates property market movements – Part #1 the macro-economic forces at play

In this week’s episode, Dave, Cate and Pete take you through:

  1. Why is supply and demand important? The Property Professor takes us through Economics 101 principles of supply and demand. These forces determine the price of any commodity. That is true of bananas impacted by cyclones, steel, cars, and of course, property!
  2. Consumer confidence and the self-fulfilling prophecy of market sentiment. A great influence on consumer confidence is security of employment. We are more likely to commit to a mortgage when we feel safe in our jobs, which results in more demand and property prices increasing. There was a big dip in consumer confidence from March to June in 2020, largely due to the uncertainty of covid and the economic impact. But when we saw that the sky was not going to fall in (thanks to Government stimulus and lenders offering repayment holidays), consumer confidence lifted and property prices started to increase again. If enough people believe that property prices will rise quickly, more people will jump into the market due to fear of missing out, thus increasing demand and therefore property prices – the self-fulfilling prophecy.
  3. State of the economy, foreign investment and development. When consumer confidence is high and jobs are secure, you get extra foreign investment pouring into the country when the economy is doing well. This goes towards development, whether commercial or residential, and drives business investment. This creates more jobs, lower unemployment and more money in the economy to go towards investing in assets.  Employment and unemployment is a major consideration, with Melbourne now in it’s 6th lockdown, the economy is impacted. But this will create opportunity on the other side, when life returns (somewhat) back to normal. So far, we are yet to see property prices negatively impacted by such concerns but we don’t make assumptions in this unprecedented environment we’re navigating.
  4. The Wealth Effect driving spending. When property values have increased, jobs are secure and confidence is high, people feel wealthier. The more wealthier you feel, the more you spend, which makes you happy and then you spend more! Government stimulus, cash flow boosts, lower interest rates and higher savings booming across businesses and consumers suggests that many people are feeling wealthier and are itching to spend.
  5. Government assistance and stimulus. The trio discuss the impact of government assistance and stimulus, which is often very targeted towards certain buyers or segments of the market. This has a profound influence on demand in those segments. First home buyers are usually prioritised by the government, but these people are not buying $2M homes; they typically buy apartments and villa units, which impacts a particular segment of the market. Similarly with stamp duty concessions, there was a recent rush to the sub-$1M Victorian market to meet the eligibility requirements of the discount.
  6. Cost and availability of finance, interest rates are not everything! The Property Professor takes us through the last 30 years of property price increases and how they relate to interest rates. Lower interest rates do not necessarily equate to more demand, however access to finance has a huge impact. From 2017 to 2019, we had our biggest property dip on record, which was driven by access to finance, government policy and APRA regulation. Coupled with the Banking Royal Commission, lenders were shaking in their boots, afraid that their skeletons would be revealed, and loan assessments turned into a forensic exercise which still remains today. We saw non-bank lenders flourish during this period and gain market share, as they weren’t regulated by APRA in quite the same way and weren’t required to comply with the same stringent measures set on banks.
  7. Existing supply and demand for housing. Developers take into account the existing supply of new apartments. If the market is saturated, why build more? Often developers need to forecast for demand in 2 or 3 years’ time, but if they need to borrow the money, a certain percentage of these must be sold before the lender approves the finance, which confirms the demand, (even before the developer starts building). The percentage is calculated as a function of the developer’s financial position, the risk assessment conducted by the lender and the timeframe required. In many cases this figure is well above 60%, and often 80%. These off the plan sales requirements enforced by the lender are known as “pre-sales”.
  8. Tax and Superannuation. Government policies impacting tax and Superannuation have a great influence in the property market. The trio discuss the Labor party’s proposed changes to negative gearing for our 2019 Federal Election which loomed heavy over investors, causing many to take a back seat to purchasing before the outcome of the election was known. Once the Liberal party was confirmed to have won the election, the investors came rushing back to the market like the boxing day sales and values started to boom again. SMSF is another key area, where changes to SMS funds being able to own property saw billions of dollars, which were previously untapped, flow through to the market.

Ep 119 Show Notes

Ep 118: Property values and rents continue to rise in August as four capitals reach above 20% annual capital growth, new listings take a dive, investor numbers on the rise, and household savings again on the uptick – Market update

In this week’s episode, Dave, Cate and Pete take you through:

  1. Victoria still trading despite lockdown
  2. PIPA investor survey – where do you get your property investment education from?
  3. Value growth in August continues to lose steam, but still going strong
  4. Stand outs for the month
  5. What happened to Perth?
  6. Rental growth drives forward with all capitals on an incline, except Darwin and Perth
  7. New listings take a dive, should you hold off on making a purchase?
  8. The latest on our wages
  9. July lending indicators
  10. Household savings ratio sees an uptick over July

Ep 118 Show Notes

Ep 117: Understanding the real estate agent behaviours that buyers don’t like – Part 2

In this week’s episode, Dave, Cate and Pete take you through:

  1. Extending the negotiation or offer acceptance period. The agent has given you a deadline to submit your offer, you wait with bated breath… Then the acceptance period gets extended. The reality is that there is no obligation for the agent to stick by a specific timeframe and the agent has full control of the process; they call shots. While buyers will be doing their best to shut down competition, it’s the agent’s job to bring extra players to the fold and create competition to bolster prices to great a great result for the vendor. The Property Buyer gives her tips and key questions to explore before you put pen to paper and submit your offer.
  2. Asking if your best offer is actually that. The Property Buyer estimates that 70% of the time when an agent asks you for your best offer, they will come back to you asking if that’s your best. This is common practice. The trio discuss how to navigate this situation.
  3. Not offering private inspections. There may be many reasons why an agent declines a private inspection. They may be related to the vendor’s circumstances or the agent could just be busy, (or lazy). Some reasons may be related to you! The agent may believe that your budget is nowhere close to where it needs to be or that you’re not serious about the property. Strong conditions in a seller’s market, where there is lots of interest in the property may mean that the agent doesn’t have to go the extra mile and give prospective purchasers private inspections. In Victoria, if the property is tenanted, the tenants are entitled to rebates for every open and agents don’t want to rack up a huge bill!
  4. Not returning your phone calls. In this market, agents are being inundated with enquiries and properties are selling in days, not weeks. The trio discuss the fundamentals of providing good service and getting back to people in a timely manner. Those that prosper are the ones that provide good service consistently.
  5. Insisting on a signed contract and a deposit payment. Agency practices can differ widely. One may be ok with an offer submitted via email, while another may insist on a signed contract with deposit. Agents and vendors no doubt have been burned in the past by receiving verbal offers from buyers that have then disappeared over night. The trio talk about the agent obligations in running a trust account, and recommend that buyers always ask for a receipt. Remember, an agent is only legally required to present your offer to a vendor if you’ve submitted a signed contract with a consideration.
  6. Not disclosing sold prices on the internet. This is a huge frustration for buyers and businesses in the property industry. It means that the quality of the data on hand may not be accurate or to the highest standard. However there are no legal requirements for the agents to disclose. The trio discuss the reasons why a sale price may be withheld from public record . They also discuss the side issue of the dangers of purchasing in medium to high density apartment blocks, where the data can be skewed by a number of factors.
  7. Over-quoting the rental potential for a property. Agents are not all on the money with their rental appraisals, particularly if you’ve put them on the spot. This can be a nasty shock when you’ve modelled your cash flows, only to find out that the rental return is far from what was quoted. Some agents will feel a vested interest to over-state the likely rental return in an effort to drum up interest and competition. Always get a second opinion from an independent local property manager or valuer.

Ep 117 Show Notes

Ep 116: How to increase your borrowing power – Learn how investors, first home buyers and upgraders increase capacity

In this week’s episode, Dave, Cate and Pete take you through:

  1. Assessment of variable and rental income. Eight out of ten people have some form of variable income, whether that’s overtime, commissions, bonuses, sub-contracting or self-employed income. This is a key component for lender policy, as lenders have different methods of assessing and more importantly, shading, (moderating) variable income. However, there are second tier lenders who will consider 100% of your variable income, having significant impact on your purchase price, strategy and portfolio planning. Real estate agents are a perfect example, where they are typically on a modest salary and the majority of income earnt is in commission payments.
  2. Rental incomes. Much like variable incomes, lenders will usually shade rental income to 70-80% when assessing your borrowing power. This is to make allowances for rental vacancies and property maintenance. Similarly, to variable there are second tier lenders who will not shade rental income.
  3. Vanilla or rainbow deals. PAYG applicants, with no variations in income are referred to as ‘vanilla deals’ – plain, delicious and easy to get approved. However, if you have variable income, rental income, credit issues or you’re an expat living overseas, (or any other challenging aspects to your application), it pays to have a strategic mortgage broker in your corner, who is an expert in the market and can find you the most favourable lender and product offering to maximise your borrowing power.
  4. Interest only vs principle and interest. When APRA implemented caps to interest only and investment lending, the way interest only loans were assessed also changed. If you elect to have an interest only period, the lender will assess your capacity to repay the loan based on the remaining P&I term. This means that if you have chosen 5 years interest only, you will be assessed based on your ability to repay the loan over a 25 year period, rather than 30 years, having the effect of reducing your borrowing capacity. However, choosing a smaller interest only period of 1 or 2 years, rather than 5, will also increase your borrowing power.
  5. Interest only and future changes in borrowing capacity. Many investors will elect to have interest only periods, with the view to refinancing at the end of the period to secure a further interest only term. However, if your borrowing capacity changes during this time and you cannot refinance, you may be stuck with the principal and interest payments. This is something that all borrowers should consider. Ask yourself if it will be affordable for you to pay principal and interest if you can’t roll over the interest only period or refinance.
  6. Repayment type, strategy and loan to value ratios. When choosing an interest only period, it’s also important to understand how that will interact with your loan to value ratio (LVR). Most of the major lenders will not allow you to borrow higher than 90% LVR on an investment loan, while some non-majors will only allow interest only repayments if the LVR is 80% or under. Other lenders don’t allow interest only repayments on owner occupier debt. These three key factors will either limit or increase the number of lenders that you have access to:
    1. Repayment type – interest only or principal and interest
    2. Strategy – investment or owner occupier
    3. LVR
  7. Lenders mortgage insurance, hurdle or enabler? Lenders mortgage insurance (LMI) is payable on loans with an LVR above 80%. Simply, it allows you to get into the property market with savings of as little as 5%, plus stamp duty costs. For most first time buyers, unless they are getting significant support from parents, LMI is the leg up they need to get into their first property. It’s also helpful for those who have an aggressive property portfolio strategy to accumulate property quickly. For someone who has savings of $100,000, LMI can be the difference between purchasing a property of $500,000 or $1M. For those not wanting to pay LMI, and preferring to save the money for a deposit, ask yourself whether you can save at the same or higher rate than the rate at which property market is moving? There are tips and tricks to use for reducing your LMI bill, but don’t let that get in the way of making a great property decision.
  8. Core difference between banks and non-banks. For those wanting to maximise borrowing capacity, especially property owners with multiple properties in their portfolio or investors with significant debt, non-bank solutions will often provide a superior outcome. They have a certain policy niches that make non-banks more attractive (subject to the complexity of your situation). Non-banks can cater to those who have credit problems, shorter-term employed and larger non-base incomes (bonus, commission, overtime, allowances). The important thing to remember is not to get too caught up if the rate is a bit higher, if it means that it’s costing you achieving your dream home. Be conscious of the lender choices you’re making and how that’s impacting your property strategy and property plan.

Ep 116 Show Notes

Ep 115: How much can I borrow? How borrowing capacity can be impacted, massaged and manipulated (without breaking the rules of course!)

In this week’s episode, Dave, Cate and Pete take you through:

  1. The age-old question – how much can I borrow?Often the first question our strategic mortgage brokers get from eager clients is ‘how much can I borrow?”. Rarely straight forward, it’s a vexed question with various nuances to be worked through. Each lender has their own set of rates and policies, and mind you, there are about 60 lenders out there, all with varying products on offer! Which lender will treat your scenario the most favourably can be broken down into four key factors:
    1. assessment rates.
    2. variable incomes.
    3. interest only vs principal and interest
    4. how lenders mortgage insurance impacts purchase
  1. What are assessment rates?The assessment rate is the rate that lenders use to assess your borrowing capacity and this rate is always higher than the rate you are actually going to pay on your mortgage. The purpose of the assessment rate is to stress test your ability to make repayments to account for future uncertainties such as: future rate rises, reductions in income, unemployment, change of employment, illness, divorce, expected events (having children) or other unexpected events that may happen during the loan term (which is often 30 years).
  2. The floor assessment rate. Floor assessment rates are mandated by APRA for the banks and also one of the tools that APRA used when trying to slow down interest only and investment loans. The floor assessment rate is the lowest rate that a bank will use to assess borrowing power. As an example, Westpac’s floor assessment rate is 5.05%. When assessing borrowing power, most lenders will use the higher of your actual rate + 2.5% OR the floor assessment rate.
  3. Why using online calculators is fraught with danger. There are many different considerations which go into answering the question ‘How much can I borrow?’ Loan to value ratios, lenders mortgage insurance, investment vs owner occupied purpose, fixed vs variable, principleand interest vs interest only are just a few of the considerations which can impact the answer. And that’s just scratching the surface!
  4. Loan to value ratios. Often referred to as LVR, the loan to value ratio is the proportion of the loan against the value of your property. For example, if your property value is $1,000,000 and the loan value is $800,000 – the LVR is 80%. The LVR is a fundamental component of borrowing to purchase property and lenders use this as a key measure to assess risk, when deciding whether to or not to approve a home loan. The general principal is that the higher the LVR the more risk there is to the lender in the event of market fluctuations and in particular, market declines. Each lender is different in their treatment of LVR and the correlation between LVR and assessment rates is an important one to understand.
  5. How will risk be factored in the future?Banks have started to price loans based on risk: the riskier the loan, the higher the rate. With open banking and credit scoring, moving to a system where the products and pricing available are based on your loan to value ratio and credit score will only become more prevalent in the coming years.
  6. The interaction of variable and fixed rates. Lenders often base their assessment rate on the rate that you’re actually going to be paying on the loan. But what happens if a portion of your loan is fixed? Will they take the lower or the higher rate? Will each loan have a different assessment rate? Or the rate that you will pay at the end of the fixed rate period?
  7. How times have changed. Take a stroll with the Property Planner and Professor down the memory lane of how mortgages were approved in the 80’s and 90’s. Much has happened since then,the advent of digitisation and growth of lenders has turned getting a mortgage into a far more complex exercise. Luckily, thanks to Aussie John, you have mortgage brokers that do all the hard work for you!
  8. Stay tuned for part 2 next week!In next week’s episode, the trio will cover variable incomes (which impacts 8 out of 10 people), interest only vs principal and interest and lenders mortgage insurance!

Ep 115 Show Notes

Ep 114: Brisbane Olympics 2032 – is now the time to buy an investment property in Brisbane? Infrastructure upgrades, re-purposed athlete villages, new developments and more!

In this week’s episode, Dave, Cate and Pete take you through:

  1. Property price performance and major sporting events. The trio discuss studies conducted on how major sporting events impact property price performance in host cities. The evidence shows that results are not uniform, and largely depend on the coordination and planning of developments and the scale of total investments. In other words, the development of infrastructure built for the purpose of the event and the longevity and repurposed use post the event.
  2. When can you expect an uplift in prices? The Property Professor shares research conducted on the Sydney Olympics, which revealed that host suburbs experienced substantially higher growth during the bidding and pre-Olympic periods, but not after the Olympics were held in 2000.
  3. Athlete villages across the world and post-Olympic planning. The trio discuss the athlete villages built for London, Rio, Munich, Turin and Tokyo. Athlete accommodation in these cities has been repurposed with varying degrees of success, from selling to private owners, public and refugee housing and student accommodation. The key to understanding whether these dwellings will be a good investment, will largely depend on the post-event plan, execution and desirability.
  4. The story of West Heidelberg and Wendouree after the Melbourne 1956 games. West Heidelberg is on the fringes of Melbourne’s affluent eastern suburbs, yet struggles with considerably higher levels of crime and poverty. Post the Olympic Games, the athletesvillage was converted to public housing, with 2,000 public housing residents living in the Olympic village today. It continues to be a low socio-economic area, similar to Wendouree West in Ballarat which hosted the rowing events.
  5. Longevity of stadiums. Nations hosting major sporting events are getting creative with their building of infrastructure, in particular, building temporary structures which will be demolished after use. For the Winter Olympics, South Korea built a temporary stadium which was used 4 times and immediately torn down. A stadium built out of shipping containers is being built for the Qatar 2022 World Cup. If you are going to invest, be sure that the infrastructure that lures you in the first place is going to stay on!
  6. Infrastructure upgrades that drive values. The trio discuss which infrastructure upgrades will provide the best long-term capital growth prospects for host suburbs. Those which improve transport are the best, (eg. road and rail), and will be there for a long time. For our nation’s largest capitals (Melbourne, Sydney and Brisbane), access to public transport is a key driver of capital growth. The key for investment in Brisbane will be the infrastructure upgrades to better connect the Sunshine Coast with the capital city.
  7. Back to basics – the fundamentals of property investment. Although hosting a major sporting event is an exciting novelty, the tried and trueprinciples of property investment still apply. New developments to house athletes are most likely going to be built on land or locations that typically hasn’t been highly sought-after, which is why there is space available. This lends to properties with low land to asset ratios and brand new dwellings that will depreciate rapidly. At the end of the day, property prices are driven by desirability and competition – how many people want to live there? Which in turn is driven by lifestyle and liveability factors. If those factors will improve, then there will be a flow-on effect on prices. The trio recommend that for long-term growth, buyers should invest in existing locations that will benefit from an infrastructure upgrade, rather than new locations on the fringes of the city.
  8. High risk of vacancies. Where there is an influx of supply, in the case of athlete villages being sold to private owners post the event, there is a risk of high vacancies. This is more likely to occur for the new properties that are built for athletes, in high density living areas. The trio question the likelihood of the number of people who want to move there matching the number of available houses.
  9. The Olympics is not the only factor at play. It’s important to remember that the property market has many inputs and outputs which determine value movements. An area could be experiencing gentrification for reasons other than the Olympics and there may just be a correlation between the two, rather than a causation. We know that newly erected dwellings are sold for a premium, often above market value. This could be skewing median values in that area and giving the impression of capital growth, that’s actually not present.

Ep 114 Show Notes

Ep 108: How to determine property value for your home

In this week’s episode, Dave, Cate and Pete take you through:

  1. Land tax basics.
  2. How land tax works and how to challenge an assessment.
  3. The friendliest land tax states. The trio outline the differences in land tax for each state.
  4. Tax decisions drive investment choices.
  5. The pitfalls of land tax.
  6. Diversification in your property portfolio.
  7. Developing your property strategy. Land tax is important to understand and take into account, as your net income position and retirement nest egg can be greatly impacted by your decisions.
  8. The land tax bomb. The Property Professor goes through the last 10 years of property market data and illustrates how selecting the states with the low-tax environments may not be the best choice for capital growth.

Ep 108 Show Notes

Ep 107: How to determine property value for your home

In this week’s episode, Dave, Cate and Pete take you through:

  1. Using comparable sales refresher. The Property Professor takes you through how to select comparable sales and the elements of the property to rate for valuation purposes. Plus, important details on which properties are NOT comparable and should be removed from your analysis.
  2. How old is too old? The trio discuss when it’s appropriate to use data from a year or more ago. While it may not be helpful in terms of a bank valuation, it can be useful for your own valuation purposes.
  3. Twice the size doesn’t equal twice the value. The Property Professor explains the law of diminishing returns and why land size isn’t always proportionate to the cost per square metre. In essence, the price per square metre reduces, the bigger the land size. These reductions are not linear and are determined by what the market desires, specific to a suburb or micro location.
  4. The art and science of valuing. While comparing apples with apples would make valuation a lot easier, it’s nearly impossible to do. Every property is unique, after all. A great example of this is how street frontage and ‘best and highest use’ could turn two seemingly identical properties, into distant cousins. Overlay subjective perceptions, the psychology of missing out and the mathematical science of valuation quickly turns to a fine art of nuances and finesse.
  5. Live example of valuation. The Property Professor shares his methodology and reasoning behind valuing 20 Allen Avenue in Brooklyn Park which is going to auction the weekend after recording. The trio place their bets on the auction outcome. Stay tuned for our next episode to find out the result!

Ep 107 Show Notes

Ep 106: Australia China relations – what is the risk to the Australian housing market?

In this week’s episode Dave, Cate and Pete take you through an episode dedicated to this question posed from one of our listeners:

“Australia’s economy is highly dependent on China, do you see immediate risk in the housing market should China reduce dependency on Australia’s supply chain?” 

  1. Update from the G7 summit
  2. Foreign investment and Australian property
  3. Why is Australian residential property so attractive to foreign investors?
  4. Cultural based dwelling preferences
  5. Iron ore – mutual dependence on trade between China and Australia
  6. Transitioning to clean energy sources

Ep 106 Show Notes

Ep 105: Property investors and first-time buyers, fixed and variable interest rates, market cycles and more – Listener questions answered #3

In this week’s episode, Dave, Cate and Pete take you through:

  1. The market seems to be at the top of its cycle. Is it a good time to invest in property or should we be waiting for the demand to subside or the chance that govt regulators will step in to curb prices? Whilst prices are undeniably on the rise, the trio firmly believe that we are certainly not yet at the top of the market. Any regulation introduced will be carefully planned so as not to de-stablise the market or cause a downturn, but simply to slow the acceleration of property price growth. The focus for regulators is optimising GDP and bringing unemployment down. The government will be loathe to introduce any measures that could hamper our economic recovery, particularly before the election.
  2. What are the implications of waiting it out? If you would like to purchase property and are waiting for demand to subside or property prices to stop rising, it’s likely that the market will move further away from you. There is great fear in purchasing at the top of a market cycle, however this only poses an issue if you crystalise losses by selling or if you have purchased a poor-quality asset in the first place. If your strategy is to purchase and hold for the long term, you will most likely be able to ride through any downturns.
  3. Is now a good time to refinance? If so, why? The trio discuss the current conditions for refinance, which are fantastic. Property prices have gone up, so it’s likely that property owners have more equity that can be tapped into and interest rates are the lowest they’ve ever been. This environment provides great opportunity to get on to a sharper rate and release some equity to protect and/or build your wealth.
  4. What’s your opinion on where interest rates will go over the next 12-18 months? Should I be fixing some of my debt now while fixed rates are low? The trio discuss the outlook for variable rates, which are linked to the RBA cash rate, while fixed rates which are connected to bond yields. Fixed rates are expected to rise, and even since recording, one major bank has increased their fixed rates by 0.25% and 0.45% for two of their fixed rate terms. This is likely to be the trend in the coming months as the $200B term funding facility that the Government has provided to banks is coming to an end in June. For reasons relating to our economic recovery, the variable rate is expected to remain nailed to the floor for some time to come, as consistently communicated by the RBA.
  5. Considerations for fixing some of your debt. The Property Planner explains why it’s almost always a good idea to have some portion of your debt variable, due to the ability to use offset accounts and make additional repayments. Remember to speak to your strategic mortgage broker to ensure you have the best strategy possible and to avoid making decisions you may later regret!
  6. I’m a first-time buyer, and I’m not sure whether I should buy a stepping stone home, investment or long-term home how do I decide? The trio provide their insights and tips for this nebulous question. Being able to long-term and stretch your thinking to 10 years in the future can be a difficult task, but will help immeasurably to make successful property decisions.

Ep 105 Show Notes

Ep 104: Market update – The Property boom continues, median values, rental demand and RBA minutes

In this week’s episode, Dave, Cate and Pete take you through:

  1. Impact of lockdown #4 in Melbourne
  2. Internal migrations
  3. The return of international students
  4. May property Index results are out!
  5. Capital cities are up on regionals for the month and the quarter
  6. Taking a critical eye to median values
  7. Upper and lower quartile analysis
  8. Rentals – supply is dwindling and demand is increasing
  9. Investor activity picks up
  10. Listings data shows the strength of the market
  11. RBA minutes

Ep 104 Show Notes

Ep 103: Conveyancing 101 – why you need a great solicitor or conveyancer in your corner

In this week’s episode, Dave, Cate and Pete take you through:

  1. What do conveyancers do?Conveyancing is the legal process of moving land or property from one owner to another and conducting the pre-purchase contract review and associated due diligence. The trio discuss the ins and outs of the conveyancing process, what are they responsible for and how you can engage either a solicitor or a licenced conveyancer to do the job. 
  2. What is the difference between a conveyancer and a solicitor?Either are sufficiently equipped to manage a property transfer and in the end, the most important factor is the quality of the service provider, not their official title. However, there are some key differences in the breadth of their advice that you should know before making your selection. 
  3. Can your conveyancing representative work Australia-wide?Property law and the conveyancing process differs state by state, which means a conveyancer must obtain a licence from the state in which they operate and cannot operate in states in which they are not licenced. This can be a huge positive, as you want your property conveyancing representative to be an absolute expert in the law relating to your property transaction. Having to be across one set of property laws and processes is hard enough, let alone seven. A solicitor on the other hand can work across all jurisdictions, although we would recommend working with local experts. 
  4. What are the limitations of your legal representativesdue diligence? The trio discuss the elements of the property purchasing process that your conveyancer or solicitor will not do, which you must be on the look-out for! 
  5. What can go wrong?The Property Buyer takes you through the legal elements and deal-breakers that conveyancers can uncover during the conveyancing process, that buyers often miss. Tune in for the Property Planner’s real-life examples where legal handy work has picked up illegal cladding, a vendor trying to slip through old body corporate minutes and incorrect fence lines, highlighting why it pays to have a great solicitor or conveyancer in your corner. 
  6. How do pre-purchase contract reviews work?Having the contract reviewed by a conveyancer or solicitor before you sign on the dotted line is critical. They will look for any potential errors, zoning, outgoings, unusual clauses, any other red flags and give you advice on any special conditions which could be added into the contract to protect you. In today’s market where there is increased time pressure, it’s important that you communicate to your legal representative ahead of time that you expect contracts to be reviewed prior to purchase and be clear on the turn-around time expectations, as it could be the difference between success and missing out. 
  7. How do you find a great legal representative?There is nothing as reliable as word of m If you’re asking a real estate agent or other professional to point you towards a conveyancer, beware of any kickbacks they may be getting for the referral. Select someone who is a trusted source, that you can rely on to protect your interests, to introduce you to a solicitor or conveyancer who will provide you with great service. 
  8. What does a conveyancer cost?The trio discuss how much money you should set aside for a good conveyancer or solicitor. When you’re making a million-dollar decision on a property, now is not the time to be cheap on your legal assistance. 
  9. And of course, our ‘gold nuggets’

Ep 103 Show Notes

Ep 102: How to determine property market values by using comparable sales

In this week’s episode, Dave, Cate and Pete take you through:

  1. Valuation methods. The Property Professor takes you through 3 of the most common methods of evaluating the price of a property: comparable sales, summation and income/capitalisation. Visit the show notes below to watch the special video presentation.
  2. Finding comparable sales. The main attributes that buyers should itemise to compare the subject property to are: similar location, land size, building size, building condition and the recency of sale. The trio discuss the ins and outs of what to be looking for in order to determine whether a sale is ‘comparable’.
  3. Additional property attributes that can impact value. Other factors that could impact demand for a property (and therefore competition) include: topography, environmental factors, accessibility, utility services, town planning, zoning, other restrictions, improvements to the property, the potential for alternate use (commercial for example), views, orientation and shared ownership of common areas.
  4. How to value a property. Each component of a property can be boiled down to dollars and cents to arrive at an end figure – EG what you are willing to spend! The trio take you through how to attribute monetary value to the various components of the property and which factors are most important. The Property Buyer shares a hot tip when it comes to properties on main roads vs quiet streets. Don’t forget, finding the similarities between properties is easy, the tricky part is identifying the differences and placing a value on those.
  5. Case study….be sure to watch the video to get the most out of this educational experience. In true lecturer style, the Property Professor takes you through a real-life example of finding comparable sales for a property going to auction on Saturday 22nd of May. Cate and Pete value the property and the expected result on auction day, with the disclaimer that there may be additional factors identified after walking through the property.
  6. When is comparable sales methodology a challenge or impossible? The trio discuss the circumstances that may cause some obstacles for comparable sales analysis. The Property Planner issues an important reminder that comparable sales cannot be taken as gospel.
  7. How to deal with anomaly sales results. When you come across a sale that has a surprising result, it is important to understand the reasons behind it and the circumstances of the sale. What bank valuers often don’t take into account is real estate agents with excellent digital marketing skills, irrational bidders and tenants that hinder access to the property. A call to the selling agent can provide clarity behind the anomaly results.
  8. The invisible factors that buyers can miss. The trio outline the facets of evaluating a property that may not be readily apparent through online searches and visiting an open for inspection.
  9. How far back in time can you go before the sales aren’t comparable? This largely depends on whether the market is a buyer’s market, a balanced market, or a seller’s market. The trio share their tips on how to manage comparable sales if you have to go back further than is ideal.

Ep 102 Show Notes and special video

Ep 101: Market update – Australian budget 2021, interest rates, non bank lending and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. Heat in the market is dissipating
  2. Smaller capital cities have been the outperformers of the last 12 months.
  3. What tales are the vacancy rates telling?
  4. The swinging pendulum – investors vs home buyers
  5. Property incentives from the budget announcement
  6. RBA reiterates its commitment to maintaining a low cash rat
  7. APRA intervention
  8. Non-banklenders, the next target of APRA?
  9. Australian’son the spend – a consumer driven recovery
  10. Property market sentiment is shifting

Ep 101 Show Notes

Ep 100: Best property tips in Australia and top episodes – 100th episode special

In this week’s episode, Dave, Cate and Pete take you through:

  1. Walking down memory lane. From the beginning of the podcast journey in March 2019 to now, much has changed in the world of property. The Property Planner, Buyer and Professor discuss the early days of podcast recording and how the podcast and listenership has evolved since then.
  2. Our top 10 episodes, as rated by you!The results are in! After two years of podcast recording, the trio share with you our top 10 episodes with the most listens and the insights gleaned from each. 
  3. Dave, Cate and Pete’s favourite episodes. The Property Planner, Buyer and Professor take you through three of their most favourite episodes to date and why they’re worth a re-listen. The trio each acknowledge that they too are constantly learning from each other.
  4. The Property Planner, Buyer and Professor’s hottest property tips. The trio share their best tips and learnings after decades of experience in the property industry. Their tips include: attitude to taking action, expecting perfection, how to manage property investing on top of a full-time job, how often you should buy property and combining finances with your partner. Don’t miss out on these tips!
  5. A big thank you to our listeners. The trio share the wonderful feedback received over the journey from our listeners. We couldn’t have done it without you! We have some surprise listener engagement in store too.
  6. And of course, our ‘gold nuggets’

Ep 100 Show Notes

Ep 99: Cross collateralisation – Myths busted, best loan structures, mortgagee sales and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. What is cross collateralisation?Also known as cross securitisation, put simply, cross collateralisation is where you have a single loan secured by two or more properties. The Property Planner and Buyer unpack the myths that surround this loan structure strategy. 
  2. Why do people think cross collateralisation should be avoided?The main reason why people are averse to cross collateralisation, is the belief that by having a single property providing security for a loan, you are protecting your other assets from the bank in the event of loan default and forced mortgagee (lender) sale. If the value of property is not enough to extinguish the debt on the loan, the lender may look to your other assets to cover the shortfall. While retaining individual loans for each security property may limit a lender’s ability to access your other assets, it is certainly not impossible and there are other legal means that lenders can use to access your other properties to recoup their losses. 
  3. Beware of spruikers!A large proponent of not crossing securities are property spruikers who are selling properties under the guise of ‘free property advice’. This is because their aim is to convince people to buy multiple properties, with high loan to value ratios which are often poorer quality assets, with low prospects of capital growth. Brand new properties can often decline in value, so the spruiker is actually protecting themselves by advising against cross-collateralisation, and promoting assets are financed across multiple lenders. 
  4. Using mortgage strategy to manage risk and why prevention is better than cure. We see protecting your assets from a lender as the absolute last line of defence in a worst-case scenario. As we always say, prevention is better than cure and there are many mortgage strategies that you can put in place to ensure that you manage risk effectively. The Property Planner talks you through the different strategies to protect your family and build your war chest.
  5. Is your property strategy conservative or aggressive?Your risk tolerance and risk profile are critical in determining what is the right risk management strategy for you and how aggressive your property accumulation strategy should be. 
  6. Should you pick one lender or spread your loans across multiple lenders?The trio discuss the pros and cons of a single lender and multiple lender strategies. Generally speaking, if your property strategy is particularly aggressive or high risk, you may consider loans across different lenders to be appropriate for you. 
  7. Business debt and non-property investments. How cross collateralisation can enable you to do some wonderful things. The Property Planner and Buyer explain the considerations when making decisions about business debt and non-property investments.
  8. Selecting the right strategy for you. In the end, there is no one size fits all approach. To make the right decision for you, you need to get tailored advice based on your goals and circumstances, and work out what your top risk management strategies will be.
  9. And of course, our ‘gold nuggets’

Ep 99 Show Notes

Ep 98: Cooling off period, finance approval, negotiating terms and auction quote ranges – Preparing for auction #2

In this week’s episode, Dave, Cate and Pete take you through:

  1. Can you have a ‘subject to’ clause at auction? A common misconception is that ‘subject to’ clauses cannot be introduced in an auction. The Property Buyer explains that although very rare, everything is negotiable.
  2. Cooling off periods – what are they and when do they apply? A cooling off period is a purchaser’s right to terminate the contract without needing to validate their decision. The cooling off periods and penalties varyState by State, so it’s important to know your legislative rights and any penalties that may follow.
  3. Boardroom auctions vs public auctions. The Property Buyer takes you through the key differences between boardroom auctions and publicly scheduled auctions that you need to know about to put your best foot forward.
  4. Getting yourself finance ready. With turn-around times improving, it’s possible to be finance ready if you plan to go to auction in three weeks’ time. However, it’s incredibly important to move with speed and have your finance arranged as early as possible. The Property Planner shares the critical need to be able to juggle multiple balls at the same time, rather than focusing on one thing at a time.
  5. What prep do you need to do to get ready? If you want any variations to the contract or deposit terms, these need to be arranged before the big day. Doing your market research, planning and setting your bidding price point and strategy is critical and likely to take more than an afternoon. Ensure that you have not left this to the last minute!
  6. What is an auction quote range and why you shouldn’t rely on it. In a moving market, an auction quote range at best can be wrong and unreliable, at worst, it’s misleading. In determining a quote range, the agent is permitted to cover historical sales prices, (in Victoria for example; over the last 6 months), which could be 15-20% lower than the current market. The best thing is to do your own research and collect your own comparable sales.
  7. Where to stand at auction. The Property Buyer shares with you the key vantage points to give yourself the edge over the competition.
  8. The differences between auction campaigns and private sale campaigns. The Property Buyer explains the key differences that you need to be aware of to handle a successful purchase.
  9. Valuation shortfalls.If you know the market and you’re not paying a ridiculous price, it’s unlikely that a valuation will come in short, particularly in a seller’s market where competition is fierce. The Property Planner and Buyer discuss the Plan B strategies to have in place as a safety blanket in case the valuation comes up short.
  10. And of course, our ‘gold nuggets’

Ep 98 Show Notes

Ep 97: What will drive capital growth after interest rates rise? – Listener questions answered #2

In this week’s episode, Dave, Cate and Pete take you through:

  1. Access to finance and consumer confidence. These are two key drivers of the property market. If finance is restricted or there is a lack of consumer confidence, this will have a significant impact on demand, which in turn will affect property prices. Consumer confidence is largely impacted by low unemployment or the wealth effect, which is rising property and to a lesser degree share prices. This is why the RBA are so strong on keeping rates low through to 2024, until we see inflation growth of 2% to 3%.
  2. Immigration. Although we’ve had negative population growth due to Covid, we still find ourselves in the midst of a property boom. Whilst immigration can certainly increase demand, it will be heavily influenced by the number of ‘skilled’ workers that migrate. The Morrison government have spoken about specifically targeting this sector once borders open which is likely to have a positive multiplier effect on the economy.
  3. Interest rate increases may not be significant. Governor Lowe of the RBA has stated that interest rates will remain low for the next 3 years. However, important to remember, when we do see some increases, it won’t happen overnight. Based on the interest rate environments we are seeing for many other first world nations, it’s likely we will see gradual increases spanning years to come – and this will only occur if we have very low unemployment resulting in inflation hitting the target band, which has not been achieved for around a decade.
  4. Mastering renewable energy. Our ability to transition away from creating fossil fuel-based energy and move to more sustainable energy production will have a big bearing on the long-term prospects of our country, economy and therefore the property market. Politically, we may not have adapted quickly enough as this change is being led by the commercial sector.
  5. Our relationship with China. 30% of our tourism and Uni students come from China, whilst Iron Ore amounts to $91billion of our $140billion in exports traded with China, which is a significant risk for Australia, as it is for China. Which means for now, we are somewhat connected at the hip in an increasingly uncomfortable mutual reliance.Our relationship with China and future developments is a potential risk on the horizon
  6. Government stimulus and regulation. The reality is that our property market is not a true free market. Our Government’shave a great ability to impact prices and activity through stimulus packages, incentives that assist a particular segment, such as first-time buyers and macro-prudential measures to take the heat out of the market. Each of which are effectively proven by the record reductions in values from 2017-2019, mostly due to macro-prudential regulation and the maintenance of values and subsequent market rebound during the pandemic.
  7. And of course, our ‘gold nuggets’

Ep 97 Show Notes

Ep 96: Market update – Hot Property – median home values, largest property rise since 1988, stock on the market, capitals vs regionals and more!

In this week’s episode, Dave, Cate and Pete take you through:

  1. Hobart median dwelling values. Despite being the capital city with the smallest population, median home values in Hobart are higher than Brisbane, Perth, Adelaide, and Darwin. The trio explore the reasons behind this surprising statistic. But is it sustainable? The Property Buyer thinks yes!
  2. Melbourne growing at 1% a fortnight. At last,the data is catching up with what we’ve been seeing since the inflection point in the final quarter of 2020. The median price for homes sold at auction has soared 18% since March last year.
  3. Why stock on the market is still so low. In economics 101 we learn that price is a function of supply and demand. With supply still so low, it’s no wonder that we’re seeing the highest monthly rises in value since 1988. The trio discuss why new listing figures have returned to normal levels, but total stock on the market remains at half the usual level.
  4. Escape to the regions. For the first time since covid lockdown, monthly data shows that combined capital cities have come ahead of regions in monthly growth statistics this month. This reflects what we’ve seen anecdotally, with the number of enquiries of people looking to sell up their city homes and move to regional areas decreasing as life returns to ‘normal’.
  5. How long will the frenzy last?The trio make their predictions for the property market in 2021. The consensus is that there is still a lot of steam and heat to go. Until we see some lending or macro prudential changes, we don’t expect to see the buying conditions easing for some time.
  6. Relaxation of responsible lending guidelines. The Property Planner explains the expected impact to the property market if responsible lending laws are amended as planned by the Morrison Government.
  7. Australia the ultimate destination nation. Although it may not happen this year, when boarders open up again allowing for immigration, we expect this will add more entrants into the property market, further fuelling the fire into 2022.
  8. Many purchasers are dropping out for fear of overpaying. Although no one wants to buy at the peak of the market, the risk you take by holding out is that you’re priced out of a market that you could have bought into. Provided that you plan for holding the property for the long-term and it fits within your overall property plans, now is the best time to buy.
  9. Top tip – don’t bypass the properties that have been on the market for longer

Ep 96 Show Notes

Ep 95: Security guarantees, co-borrowing, gifts and more – Helping your kids buy their first property

In this week’s episode, Dave, Cate and Pete take you through:

  1. Monetary gifts (it’s better than Christmas!). One of the primary ways a parent can assist their child is providing a lump sum of money to go towards the deposit. The trio explain how this method can be particularly helpful for many first-time buyers who have a strong borrowing capacity.
  2. The difference between gifts and genuine savings. Despite your generous gift, a lender may still require evidence of genuine savings before they provide the tick of approval. The trio discuss the optimum timing to give your gift, and some of the perils and pitfalls associated with this approach.
  3. Security guarantees – the most popular method of assistance. The Property Planner and Buyer take you through how a security guarantee works, the benefits and why it is the most common way parents help their kids in property.
  4. Going in to a security guarantee with your eyes open. If you’ve got equity available in your property, it may sound like a fantastic idea to offer your home or investment as a security. But as with any major decision, there are risks involved, not to mention a mountain of paperwork. The trio discuss the ins and outs of providing a security guarantee and costs, (and steps) involved.
  5. Co-borrowing with your kids. The Property Buyer and Professor share their first-hand experience of purchasing a property with their children. They cover off on ownership considerations, caveats and the agreements they’ve made with their kids.
  6. The risks of purchasing a property ahead of time on behalf of your kids. Don’t assume you know which direction in life your child will take! They may not want to live on the same street as you, or go to the university you want them to. But that’s all part of life!
  7. Education is key. Aside from gifting your kids money or equity, there are many other ways that you can support your kids and give them a leg up on their property journey. The trio share with you the key insights and education they try to pass on to the next generation. And as any of you with children would know, despite their best efforts, it doesn’t always sink in!
  8. Support comes in all shapes and sizes. Some parents can’t offer financial support – and that is OK too. It’s a very personal decision when it comes to how we can help our children get onto the property ladder. From open conversations about creating wealth, to starting them young with a good savings regime, and all the way to offering moral support with the inspections and shortlisting of property, parents need to work out what their preferred method of assistance is. Some children need to just do it all for themselves too. But when it comes to advice, the best help a parent can give is to steer their kids into GOOD advice.
  9. And of course, our ‘gold nuggets’

Ep 95 Show Notes

Ep 94: Purchasing property in Australia – the winner’s curse and how to avoid it

In this week’s episode, Dave, Cate and Pete take you through:

  1. What is the winner’s curse? Where there’s competition to win an asset that is in limited supply, (eg: a house), there can only be one winner. Typically, the person who wins the property pays the highest price. The winner’s curse can manifest in concern and fear about overpaying.
  2. Why are we prone to the winner’s curse? It stems from our need for social proof to affirm that we’ve made a good decision and if we feel like we did not do enough research and analysis to accurately understand the market and/or our own financial position and goals. The fact that a buyer is willing to pay the highest affirms that no one else was willing to pay a price at that magnitude. This can make a buyer second guess all of the planning and preparation that went in to their decision in the first place.
  3. When is it most likely to strike? The trio share the scenarios where the winner’s curse is most likely to creep up on the successful purchaser.
  4. How to combat the winner’s curse. Planning and preparation is a sure-fire way to avoid feeling concern that you’ve overpaid. The Property Planner and Buyer share their top tips on how to prepare so that you can be confident in your evaluation of the property’s value and when to stretch beyond this price. You also need to understand your financial position, short and long-term goals clearly to buy confidently without regret. But if you can’t help feeling the winner’s curse, it’s important to remember that if you’re in it for the long-haul, the property market is forgiving if the property is held for many years to come. 
  5. The other side of the coin – loser’s regret. Loser’s regret is the feeling of having been too conservative with the limit that you ended at in your bidding or highest offer, when you fail to purchase the property. This is particularly pertinent when you find out the winning bid or the winning offer was both a reasonable market price to pay and affordable for YOU. 
  6. The under-bidder’s remorse. The trio share different examples of situations that cause people to fall short and end up as underbidders for a property and how buyers can put their best foot forward when preparing themselves for auction.
  7. Home buying – where emotions run high. The Property Buyer explains her auction price setting strategy when evaluating what is a suitable limit to adhere to for a property and the team discuss the when, where and why it is worth considering paying an emotional premium for a property.  
  8. And of course, our ‘gold nuggets’! 

Ep 94 Show Notes

Ep 93: Property Investment – The seven secret steps to buying a house

In this week’s episode, Dave, Cate and Pete take you through:

  1. State. Property cycles play a part in determining price increases (and decreases) so when you do buy, you want to ensure that you buy in a state that is about to enter the upward swing of the property cycle. If your plan is to hold for the long-term, the stage of the property cycle diminishes in importance. 
  2. (S)City or Town. Technically, not an ‘S’, but phonetically it works! When selecting a city or a town, understanding the capital growth drivers is paramount, including changing demographics and employment opportunities.  
  3. Suburb. Just like cities, regional towns also have desirable suburbs primed for capital growth and gentrification and those that are best to stear clear of!  The trio share the signs and data to look out for. 
  4. Street. In blue chip suburbs, the A-grade streets are evident. But in a gentrifying suburb, it may not be known yet and you have to go looking. The trio share with you the secret characteristics of spotting an A-grade street.   
  5. Style. The best styles of property, especially in our eastern and southern states are period and character style buildings. Dave, Cate and Pete explore the characteristics and styles of dwellings to target in your property search.  
  6. Size – it matters! The size of the dwelling is of critical importance, but bigger is not always better. The trio discuss the ideal size for an investment property.   
  7. Soil (Land). A common misconception that unravels many investors is that more land is better, regardless of the location or the dwelling. What really matters for capital growth out-performance is the proportionate value of the land. What we coined the land-to-asset-ratio of the property. 
  8. Sentiment. The Property Buyer sneaks in an eighth ‘S‘ for main stream buyer sentiment. Quality properties will always attract competition, if there’s great interest, it could mean that you’re on to a winner.  
  9. And of course, our ‘gold nuggets’ 

Ep 93 Show Notes

Ep 92: Property planning and your next purchase – critical considerations and why modelling financial outcomes is vital to success

In this week’s episode, Dave, Cate and Pete take you through:

  1. Peeling back the onion to determine the pathway forward. The Property Planner shares the layers of steps to be taken and decisions to be made to come to the right outcome for your next property decision and your long-term portfolio plan. The key is to understand that investment decisions are intertwined with your lifestyle and family choices.
  2. Achieving clarity for your long-term goals and your next decision. Keep your binoculars and magnifying glass handy as you go through the journey of seeing your long-term goals with clarity and focusing in detail on your next decision. The pathway in between may change as you go through life, but having one eye on the end outcome and one on the next step will help you get there.
  3. Hold or fold? The trio discuss the considerations, emotions and cognitive bias that factor in to making decisions about property you already own. What holds people back from making these decisions and why might you keep a property that is not performing?
  4. Timing a property divestment. The Property Professor shares key tax considerations to be mindful of when putting together your divestment strategy.
  5. Selling property – two sides of the coin. Understanding whether a property you own is top quality is only one side of the coin. The other side is understanding what you will be able to achieve by selling and is paramount to making successful property decisions.
  6. Planning for the flexibility stage of life. As we’re working for longer, it’s more common now to scale back work, rather than stop abruptly. You’ve still got investment decisions to be made post-retirement, you may not be on the same retirement timeline as your partner and your debt consolidation and divestment strategy need to take that into account.
  7. Modelling your next property decision. The best way to make an informed decision is to fully understand the different options available. The Property Planner shares the key components and moving pieces that need to be considered when determining the strategy for your next decision, including mortgage structure, loan to value ratios, money goals, cash flow considerations, price point and buffers.
  8. Lifestyle v investment. Whether your next decision should be lifestyle v investment is a conundrum faced by many. Modelling scenarios can help you understand the full picture, including how the purchase will impact future decisions, to determine what is the right step for you.
  9. Modelling capital growth. The trio share the key growth rates to use when modelling out the projected performance of your investments. It’s better to be conservative and experience a happy surprise on the upside.
  10. And of course, our “gold nuggets”

Ep 92 Show Notes

Ep 91: Market update – Property values rise at the fastest rate in 17 years, which locations are outperforming, emerging trends and more

In this week’s episode, Dave, Cate and Pete take you through:

  1. The February results are in!Summer might be coming to an end, but the property market is getting hotter by the minute. The national market is up 2.1% just for the month of February, the highest jump in 17 years! It’s a very impressive growth rate for a 28 day period. Annualised that’s a whopping 25.2% growth.
  2. Data skewed further by long settlement dates. In an upwards moving market, we’re seeing many cautious upgraders and downsizers choose to purchase first with a long settlement date, allowing them to comfortably sell after signing the purchase contract. This delay between purchase and settlement is skewing the property data even further, as many sales aren’t officially recognised until they settle.
  3. The perfect storm for a property run. Less people taking time off to go on holiday, the highest savings and borrowing capacity on record and a seasonal stock shortage in January has created a whirlpool of demand outstripping the supply. Even though more stock is coming onto the market, it’s not enough to soak up the demand.
  4. What’s behind the property feeding frenzy?We all know that we have the lowest interest rates on record, but what is not as well known, is the nuances behind the unemployment data. Employment is lower by 3.3% for those aged between 15 to 34. However, for people who are aged 35 plus, which is most property buyers, employment has actually increased by 1.2%.
  5. The update for regional areas. Regional areas are still performing at a great pace, with interest from investors, local home owners and tree/sea changers pushing prices up. Rents do not move as fast as capital growth, so the outcome is a reduction in yield. The Property Buyer shares with you how to tell if a market is heated, by looking at rental yields.
  6. Capital cities v regionals – the gap is closing. Rents have started stabilisingin Melbourne and Sydney and even in the apartment market, which was one of the segments that were hardest hit. Combined capital city growth is catching up to the regional markets, with 2.0% recorded in February v 2.1% in regionals.
  7. The story behind capital city performance. Sydney and Melbourne make up close to 50% of the properties in Australia, so if these markets drag the chain, it brings down the combined capital city data with it. Other capital cities recorded strong growth for the last 12 months, whilst Melbourne and Sydney were the most impacted by Covid. You could almost have 3 data sets: Melbourne & Sydney, other capital cities and regional areas.
  8. Predictions for 2021. The Property Planner and Buyer update their predictions for 2021, in light of the February data. Cate and Dave debate how and when they think regulators are likely to step in to cool the market. Watch this space.
  9. Early market indicators. The trio share with you how to get your hands on the critical data to inform your property purchase.
  10. Painting the picture with lending data. Investors could be muscling their way back into the property market, with investment lending jumping by 9.4% according to the ABS, the fastest rate of growth since 2016. Lending commitments to investors have risen every month for the last 5 months, while loans to upgraders are up by 11.3%.
  11. And of course, our “gold nuggets”!

Ep 91 Show Notes

Ep 90: Property prices – what causes values to fall & how to tackle a rising market

In this week’s episode, Dave, Cate and Pete take you through:

  1. On the flip side. Many of the facets we discussed in the previous episode #71 “Capital growth – what increases property values” have an adverse impact on property values if the opposite occurs so for this episode, we covered some different topics.
  2. Macro prudential regulation. We now have a track record that macro prudential measures have the ability to influence property prices. APRA slammed on the breaks by putting caps on investment lending, LVR’s and interest only loans in an effort to dampen the market and it worked!
  3. Higher and new property taxes. New policy and government announcements do affect buyer behaviour and the beauty is that policy makers can target particular segments of buyers, such as investors, foreign buyers, first home buyers, and so on, (to name a few). The trio touch on some of the changes we have seen and could see in the future.
  4. Negative gearing. Tying in with taxes, the abolition of negative gearing is still on the Labor party agenda. Whether it happens in the 3 years or 10 years is anyone’s guess and the extent of any reduction of negative gearing to a certain number of property V total abolition. The Property Planner share how Labor have not taking this off the table yet and makes his predictions that they will roll it out in some down the track.
  5. Global and political unrest. Our international trade relationships have a large impact on the economic well-being of our nation, and therefore, can directly impact jobs, employment, wages growth and inflation – which all have a bearing on property prices. The Property Planner explores challenges and an example of a left tail or black swan risk that could cause future conflict and severely impact the Australian economy. It wasn’t that long ago a pandemic was scoffed at as a left tail risk!
  6. Natural, environmental or health disasters. As we all understand much more clearly now following the Covid-19 pandemic, these events are significant set-backs for any economy that must manage through these disasters. They often come with a huge cost to governments and can spell increases in unemployment. This event has also increased the willingness for business and consumers to better perceive the risks of climate events also.
  7. Fear of… The trio explain how fear can either be a driver of property values or a wet blanket. During 2020, even people who were stable and confident in their employment chose to wait on the sidelines of the property market, for fear of the unknown. Fast forward to 2021 and the trend playing out now is fear of missing out, causing a feeding frenzy in the property market. Fear plays a large part when it comes to price movement and Cate drills into this, and the immediate affect it can have on local markets.
  8. Doomsday media. One thing living through a pandemic has taught us among many, is take what you read in the media with a grain of salt. The Property Buyer explains how the media can irresponsibly skew consumer confidence, creating self-fulfilling prophecies.
  9. Too many renters. Owner occupiers have a greater ability to drive property prices, as they’re willing to pay extra to get into that lifestyle property they’ve always dreamed of. Where the ratio of owner occupiers to renters is decreasing, can cause dampened competition and buying conditions softening values because owner occupiers are price makers. Be careful of the mix in your selected micro location.
  10. And of course, our “gold nuggets”!

Ep 90 Show Notes

Ep 89: Capital growth – what increases property value?

In this week’s episode, Dave, Cate and Pete take you through:

  1. Consumer confidence. It doesn’t matter how low interest rates are or how easy it is to borrow money. If people are not comfortable and confident, they’re not spending extra or making life-changing investment decisions. Security of employment, community health (pandemics for example!!!), government support and stability and the geo-political environment are all critical factors that feed into consumer confidence.
  2. Interest rate cuts and banking competition. RBA confidential analysis shows that property values could rise by 30% if people believe the cut in interest rates is permanent. Although far from permanent, 4 years is far enough away in the eyes of many, along with lender competition to drive up property demand and speculation.
  3. Availability of credit. Access to funding is one of the most critical elements that can increase property prices whenthe tap is turned on, or deflate the market when it’s switched off. We now have a history of APRA’s macro prudential regulation stalling ‘runaway’ property growth. We also have relaxing of the responsible requirements which will make it less onerous to obtain a loan.  
  4. Business confidence. Just like consumer confidence, when businesses are happy and comfortable with a strong pipeline of sustainable income, they’re more likely to spend more, including upgrading systems and putting on more staff. This all drives up spending, creating more jobs, increasing employment, wages and….you guessed it, property prices.
  5. High employment. When we have high employment, more people are likely to consider leaping out of the rental market and embarking on the quest for home ownership. Reducing unemployment down to below 5% is a core focus of the RBA’s low rates for longer and quantitative easing to drive wages growth.  
  6. Wages growth. The Property Planner explains the RBA’s plan to overstimulate the economy in a bid to push down unemployment, promote spending and increase in wages. The resultant effect of these objectives will drive investment and property growth.  
  7. Population growth. The trio discuss the nuances of population growth on a macro (Country, State, City) and micro (Suburb, location) level. Be careful not to confuse affordability with desirability. Just because an area has had a lot of uptake, does not mean it is desirable and will exhibit capital growth.
  8. Government stimulus. When our politician’s throw money at us, and particularly when it’s enabling a purchase decision, it has a direct impact on asset price growth because of the increase in buyers. This also results in great competition pushing up property values and creating new benchmarks, and potentially meaning that some people overpaying for property because they’re desperate to get the discount.You should never base a property decision on benefits that represent a false economy when contrasted against your intended outcome.
  9. A rare few infrastructure upgrades. The trio share the infrastructure upgrades that are worth paying attention to and those that are capital growth red herrings, which is the lion share of them despite what the media, spruikers, agents and the well-intended friends and family might tell you. 
  10. Increase in overseas buyers. Over the last decade, we’ve seen rapid price increases, partly due to an increase in overseas investors entering the market. Restrictions on the type of asset foreign buyers can purchase and additional fees taxes is just a few of the levers that the government can pull to increase or decrease interest in the property market or dampen demand. The ‘wonder from down under’s ability to manage Covid will only amplify Australia as a destination nation for those who can afford to move here, purchase here or send their children here to study and live.
  11. Migration. Whilst overseas migration has come to a halt, there is still interstate and intrastate migration to take into consideration. Age, education, and other demographic factors shape an area when it comes to comprehending the impact on capital growth from our new arrivals. We have also repatriated around 200,000 Australian’s which essentially has replaced migration. Since the pandemic struck (and particularly for those in lockdown capitals), people are moving domestically, whether it be a move away from a city in favour of regions, or an interstate move. Overseas migration may be on hold for now, but we do need to ensure that when it recommences, we don’t confine our attention only to capital cities and the impact of these new foreign arrivals.
  12. Inflation. Tying in with employment and wages growth, inflation is not an arbitrary consideration. The engine room behind our economic drivers is well-integrated, but it goes without saying that inflation will impact property price growth. Every reserve bank is doing its utmost to stimulate inflation. It will be super-interesting to see the role of inflation in the recovery and if it makes its way back into the target band, and potentially takes off which some wise-heads are concerned about given the extent of the fiscal stimulus.
  13. Higher rental demand. This is a function of population growth, migration, building approvals, household numbers and employment. Lifestyle and overall desirability will discern some areas from others however.
  14. Commodity prices and booms. Other than Iron Ore, fluctuations in commodity industries will not have a significant impact on a big city, but drives demand in regional towns that are reliant on that industry for employment and their economic well-being. At the moment, the price of Iron Ore in particular, is providing significantly tail winds behind the economic recovery of our nation. Our reliance on China remains a risk.
  15. And of course, our “gold nuggets”!

Ep 89 Show Notes

Ep 88: Market update – The early trajectory for 2021

In this week’s episode, Dave, Cate and Pete take you through:

  1. The current property climate. We may be heading towards autumn, but temperatures are going through the roof as the property market heats up. If you don’t want to get burnt on the property hunt, don’t forget to slip, slop, slap – get clear on your strategy, determine your price range and study the comparable sales.
  2. Property values for January are in the books. The national property market has started off the new year on a strong footing, as expected, following the seasonal slowdown. The trio take you through the January highlights.
  3. Beware the data lag. With the market surging forward at this pace, November’s sales won’t cut it anymore. The Property Buyer shares her tips on how recent your collated data needs to be and warns that this data may not be fool proof either.
  4. Regional areas and days (or hours) on the market. Because regional areas are less reliant on auctions, days on market tend to be shorter as a direct reflection of private sale pricing regimes. At the coal face, bullish offers are being made to quickly snap up properties. Remember, the better the quality the property, the faster it is likely to sell. If you’re targeting top-shelf properties, you need to be prepared for competition, and be prepared to make quick decisions.
  5. CBD apartments and expected immigration. The CBD apartment market continues to languish, partly due to the great lifestyle re-evaluation and flight to larger properties and also lack of international students. Mounting pressure to bring in international students and lower-level workers for our agricultural industries may open up boarders in mid to late 2021 – watch this space.
  6. New Zealand and macro prudential measures to cool the market. Kiwi house prices have taken flight and over the last 12 months, resulting in an average capital growth figure of 17.3%. The NZ Central Bank has slapped restrictions on investors and 60%+ LVR lending in a bid to put out the property fire. The trio explain the outlook for Australia and when our regulator is likely to pull the trigger on similar macro prudential measures although they note that unlike NZ, we haven’t really seen investor numbers represented in our market yet.
  7. JobKeeperand JobSeeker coming to an end. The Property Planner, Buyer and Professor share their predictions on the impact to the property market, when both JobKeeper and JobSeeker come to a close at the end of March.
  8. Interest rates won’t rise for 4 years. Governor Lowe has adjusted his expectations for the cash rate to stay at 0.1% from 3 years to 4 years. The Property Planner explains the motivations driving this monetary policy.
  9. Vaccine success in Israel. The global guinea pig for vaccines, Israel, has turned in a positive success story as more than 50% of their population has been vaccinated. Effective vaccines are critical to the success of macro markets and the economy, so far, the outlook is promising.
  10. And of course, our “gold nuggets”!

Ep 88 Show Notes

Ep 87: Optimising tax deductions 2020 and 2021 – top mortgage and loan strategy tips

In this week’s episode, Dave, Cate and Pete take you through:

  1. How can you optimise your tax deductions? Tax optimisation is multi-dimensional and when it comes to a you only have one opportunity to borrow funds to purchase an investment asset. There are many mortgage strategies you can put in place to ensure you’re getting the most bang for your buck.
  2. Using equity to maximise borrowings. Although counter-intuitive, maximising your investment loan can put you in a better financial position. The trio explain why you should consider borrowing the full purchase price plus costs of the investment if you have equity available in an existing property.
  3. Paying principleand interest on your home and interest only on your investment loan. The aim of the game is to pay down your non-deductible debt as fast as possible, while preserving your deductible debt to make holding your investment property more affordable.
  4. Preserving the balance of your home loan if you plan to upgrade. This is a critical point to consider for anyone who has purchased a stepping stone home and has plans to keep their home as an investment when upgrading to the long-term home. The Property Planner outlines the mortgage strategies that can be employed to make the most of your future tax deductions.
  5. Why do so many people get this wrong? Many of us are taught by our parents and grandparents to pay down debt as fast as possible, without realisingthat you may be shooting yourself in the foot and killing wealth. We advocate that everyone should pay down their debt by using the right strategy, which will hold you in great stead when you transition to the flexibility stage of life.
  6. Redraw v offset accounts. The Property Planner explains the difference between redraw and offset accounts, and why the smart use of offset accounts means you could end up with an extra asset or two in your retirement.
  7. Understanding the ATO test for deductibility. Ultimately, the ATO decides what expenses are deductible and what is not and understanding the ATO ‘purpose test’ is key. The trio explain the ‘purpose test’ and how it works in simple terms.
  8. And of course, our “gold nuggets”!

Ep 87 Show Notes

Ep 86: Self-managed super funds (SMSF) in Australia – Pros and Cons

In this week’s episode, Dave, Cate and Pete take you through:

  1. What is an SMSF?The trio take you through a crash course in SMSF basics and who you can turn to for advice.
  2. How does property fit in the picture?Your SMSF can invest in a number of asset classes, including residential or commercial property, provided that the asset meets your documented ‘investment strategy’. Business owners and those short on cash flow, may find it particularly appealing as a way to invest in property. The trio explain why.
  3. What attracts people to invest via an SMSF?Managing your own super gives you a higher degree of control over your investment strategy than you would otherwise have if your super was in a managed investment fund. But don’t be fooled, it takes a village to run a ‘self’-managed super fund.
  4. SMSF game changers. The trio explain how the SMSF landscape has changed over time, including the advent of instalment warrant arrangements, which changed the playing field completely in the SMSF space.
  5. How does SMSF lending stack up?The Property Planner outlines the critical differences between SMSF loans and regular residential mortgages. Do you feel comfortable risking the farm with a personal guarantee?
  6. SMSF property restrictions you need to be aware of. The Property Buyer and Planner explain the key restrictions that relate to your SMSF investment strategy and how your freedom in asset selection could be impacted.
  7. The risks behind purchasing a property in an SMSF. Like the boxing day sales, the unfortunate reality is that whenever a new market opens up, the spruikersare the first to run in and elbow their way to a sale. The SMSF market is no different and many mums and dads have fallen prey to dodgy investments and underperforming assets sold to them under the guise of an ‘investment strategy’. An SMSF may be a great strategy for you, if you’re getting your advice from an independent expert who is tailoring a strategy specifically for you.
  8. Can you hear the alarm bells ringing?The Property Planner and Buyer share the tell-tale signs that a bad SMSF decision is about to be made.
  9. Setting up and running an SMSF, have you got what it takes?So, you want to manage your own super fund? The Property Planner outlines what goes into setting up and maintaining an SMSF. Do you have the time and the cash flow to take on this responsibility?
  10. And of course, our “gold nuggets”!

Ep 86 Show Notes

Ep 85: Off the market properties – everything you need to know

In this week’s episode, Dave, Cate and Pete take you through:

  1. What are off-markets? In a nutshell, off-market properties are properties that are up for sale without public advertising or marketing.
  2. The difference between off-markets and pre-markets. Don’t get sucked into the real estate agent’s ‘pre-market’ vortex. A genuine ‘off market’ is not the same as a ‘pre-market’. The Property Buyer explains the difference.
  3. Why would a vendor choose to sell off-market? The trio discuss the different motivations behind a vendor’s decision to sell their property ‘off-market’.
  4. How do you find off-market opportunities? Anyone can be privy to an off-market opportunity, but if the property is not publicly advertised, how do you know about it? The Property Buyer shares her tips on how to put your best foot forward with real estate agents and get in the know.
  5. The importance of rapid decision making. Off-market opportunities are often time sensitive and require quick and decisive action on the part of purchasers. If a good off-market opportunity lands in your lap, now is not the time to equivocate! The Property Planner and Buyer explain the methods used to make decisions fast.
  6. Are all off-markets good opportunities? A critical mistake is thinking that all off-markets are great opportunities. This is not true. All off-markets are not the holy grail. The Property Buyer shares how to spot the genuine opportunities from the time-wasters.
  7. Off-market discounting. Many purchasers incorrectly believe that an off-market sale is an opportunity to get a discount on a property. But the reality for most off-market’s is that you need to be prepared to pay what the property is worth.
  8. And of course, our “gold nuggets”!

Ep 85 Show Notes

Ep 84: Market update – Property Predictions for 2021

In this week’s episode, Dave, Cate and Pete take you through:

  1. Why the market will rise in 2021. The trio explain the key factors at play that will continue to drive property prices up throughout the year. 
  2.  The risks to our economy and property prices. They outline possible events and market forces that could dampen the economy and property prices, however we believe the factors stimulating the economy and property prices will outweigh any bumps in the road. 
  3.  A detour into rental markets. Although vacancy rates have increased for Sydney and Melbourne, there are particular properties that are outperforming, with rentals being snapped up quickly and above the asking price. The Property Professor explains why.
  4. Predictions for regional activity. Regions have been the top performers for 2020, but will this growth continue in 2021? The Property Buyer makes predictions on what we can expect to see in regional markets.
  5. Capital cities – who will come out on top? The trio agree that all capital cities will see value increases over 2021, but have differing opinions on which capital city will be leading the pack at the end of the year. They explain the drivers putting upward pressure on prices for each capital city.
  6.  Building industry set to take off. With the government throwing money towards the construction of new homes through the HomeBuilder and first-time buyer incentives, we expect that tradies and builders will be flat chat and turning away work in 2021. The desire of many Australian families to add a room or extend their home will further exacerbate this trade shortage issue. This will be a key driver for our economic recovery.
  7.  The outlook for apartments. Apartments and office spaces have been the hardest hit investments during the global pandemic, particularly high density apartments in the Melbourne and Sydney CBD. We predict that penthouses and 3-bedroom apartments will recover quickly and exhibit growth, while bedsits and 1-bedroom apartments will continue to languish.
  8. Investors to return with a vengeance. 2021 is primed with conditions ripe for investors to make a comeback. Debt affordability is the best since 2001, we have the greatest level of savings on record, interest rates are at all-time lows and anticipated relaxation of lending rules to occur in March, all creating the perfect storm of investors to launch back into action.
  9. Abolition of stamp duty. The Property Planner makes a long-term prediction, that if the transition away from stamp duty goes well for NSW in 2021, other states will follow suit. 
  10. Runaway prices and APRA intervention. With investors predicted to return to the market in droves, housing affordabilty will become an issue in the media towards the middle of the year, the government will chime in and APRA will intervene with measures to cool down the market towards late 2021 or 2022.  
  11. And of course, our “gold nuggets”!

Ep 84 Show Notes

Ep 83: Market update – 2020, that’s a wrap! Who were the property outperformers, the under-achievers and why the market remained resilient

In this week’s episode, Dave, Cate and Pete take you through:

  1. 2020, the year of the first home buyer. First home buyers have been entering the market in droves and hitting record numbers in 2020, taking advantage of the many incentives available. First home buyer activity has also propped up the construction industry, which certainly helped the economy. But when will investors return to the market? The trio share their insights.
  2. The outlook for interest rates. Not only are interest rates the lowest they’ve ever been, but fixed rates are also lower than the standard variable rate. What times we live in! The Property Planner explains why fixed rates have dropped so far, how long we can expect interest rates to stay low and potential future issues that may arise due to a sustained low rate
  3. What economic cliff?The levers that the government can pull to prop up the economy and support during downturns are many and varied, and we haven’t seen any sign of the dreaded ‘economic cliff’ trumpeted by doomsayers. Let this be a lesson to the naysayers!
  4. Houses v units. How did houses fare compared with units? It comes as no surprise that units, and particularly small apartments, were the hardest hit during 2020. Downturns often reinforce the weaker areas of the market place and this has played out in 2020.
  5. The great renovation. We’ve lived through the renovation boom and our houses are growing to be the biggest in the world. We are truly the lucky country, but how structural will this change be once people start heading back to the office a couple of times a week?
  6. Regional locations – capital growth and sales volumes. Regional locations have been the star of 2020, outperforming capital cities in both capital growth and sales volumes with some stellar numbers. But will regional locations remain at the front of the pack in 2021? The Property Planner and Buyer make their predictions.
  7. Why did the property market remain resilient?Overall, national property prices increased by 3% throughout the year and the trio share their insights on the key factors that kept the property market chugging along through 2020, driving the quickest recovery we’ve seen in a property downturn over recent decades.
  8. And of course, our ‘gold nuggets’!

Ep 83 Show Notes

Ep 82: Goal setting fundamentals for property success

In this week’s episode, Dave, Cate and Pete take you through:

  1. Why is goal setting important? Cate asks the Property Planner, (Dave) to share his approach that he uses to enable his clients to achieve their property plan goals, from property goals, investing goals, lifestyle goals, to the ’flexibility stage of life goals.’ Pete sheds light on why people set goals, (particularly in January), and why so many people’s goals don’t come to fruition.
  2. You can only manage what you can measure. Dave uncovers the professional approach he guides his clients on when creating goals, setting measurable targets and avoiding procrastination. He shares an interesting psychological study where a study focused on a group of students who were split into two groups; those who visualised the outcome of the goals, and those who visualised the process required to achieve the goals. Visualising the required steps is an integral part of successful goal setting.
  3. Creating an action plan and holding yourself accountable. Setting goals is the vehicle that will drive you to your destination. Dave talks about the adoption of a timeframe map; when, where and how you’ll apply the behaviour.
  4. Five core reasons why people set goals. Pete shares these five core reasons that he has incorporated into his university property investment course. Some can be set in tandem, but ultimately these various reasons for setting goals will determine what you buy, where you buy, and when you buy. Pete also offers some great insights for listeners who are keen to retire richer.
  5. Keeping it simple (and avoid goal competition). Dave speaks candidly about one of his preferred authors, and a great lesson he’s picked up from Jim Collins, (Good to Great, Built to Last). The importance of setting three clear goals; “If you have more than three priorities, you have no priorities”, and he also encourages people to consider three things they should stop doing.
  6. Set your goals for the now and hold yourself accountable. Dave cites Steven Covey (Seven Effective Habits); “Schedule your priorities daily, don’t prioritise your schedule”. The planning fallacy is something that can strike the most organised people – but breaking down goals is critical to success.
  7. Dave breaks down S.M.A.R.T. goals. This is a well-known, clever method that is widely used by organisations and corporates for setting clear employee/team goals. Dave spells out how property investors can adopt this same methodology when setting their own goals.
  8. Write your goals down, share your goals with others and create your action plan. Writing down goals improves recall and allows us to emotionally and intellectually connect with our goals. Sharing our goals with others increases the chances of us being able to keep ourselves accountable and enable us to take the right action with our goals. Re-evaluation and assessment of progress can only be done effectively when goals are clearly documented.
  9. Why do some goals fail? Cate chats about some of the key contributors that block people’s goals from becoming reality. The two main offenders are:
  10. What happens when people buy the wrong thing? Cate chats about the downsides of getting a costly decision wrong, and Pete clarifies the risk of opportunity cost.

Ep 82 Show Notes

Ep 81: Holiday houses – delirium or dream?

In this week’s episode, Dave, Cate and Pete take you through:

  1. Lifestyle, investment or hybrid – what is a holiday house? The trio share whether you should be looking at your holiday home as a lifestyle property, a money-maker or a mix between the two. They shed light on the compromises involved when opting for the hybrid scenario, and the black and white facts that investors need to acknowledge.
  2. The opportunity cost of owning a holiday home. Holiday homes are typically in locations that do not exhibit long-term, outperformance capital growth, and your own use of the home will limit the rent you could receive and the tax advantages you could have gleaned if the property was intended to serve as an investment. To compound the financial impact, if you’re borrowing to make this purchase, your borrowing capacity will be significantly reduced for your next investment. Consider how your retirement goals will be impacted if you purchase a holiday home instead of a pure investment.
  3. Tax deductions. The trio explain the tax implications of leasing out your holiday home, whether it be a long-term, traditional residential lease, a short stay arrangement or an ad hoc approach.
  4. The perils of purchasing with friends or family. Be careful before you dive right in! Purchasing a holiday house with your mates or siblings may seem like a great idea at the time, but the reality of managing the property jointly can be the cause of many strains on the relationship. In addition to a usage roster and the clean-up and provisions protocols, co-owners also need to consider how joint ownership arrangements can change and evolve. The trio talk about the importance of an out-clause and rules around equity access before signing on the dotted line.
  5. Managing a holiday home. If you plan to lease out your holiday home for part of the year, there are differing management fees and service costs that must be factored in, depending on whether your property will be leased ‘hotel style’ like an Airbnb or for longer-term stays. From appointing cleaners to sourcing breakfast provisions, to linen changing and beyond, the trio discuss the various ways that holiday house investors can maximise their profits over a holiday period.
  6. When should you buy a holiday home. Although cash flow, long-term investment and ongoing maintenance are critical factors to consider, the memories and traditions that you’ll create with your family in a holiday home are priceless. The trio share when is a good time to consider purchasing a holiday home, and when running a cost-benefit analysis between renting vs buying is a more sensible approach.
  7. What’s in store for 2021? 2020 has seen some holiday locations take capital growth by storm. But will the tree and sea change trend continue or has the capital growth boat for holiday locations already sailed? The trio reveal their predictions for 2021.
  8. And of course, our ‘gold nuggets’!

Ep 81 Show Notes

Ep 80: How to combat your naysayers and make successful property decisions

In this week’s episode the team discuss:

  1. Why are some people naysayers? 2020 was the year the naysayers and in the end, the sky didn’t fall. The trio explain the drivers that turn people into naysayers.
  2. When is a naysayer doing this out of care? Parents are great at spotting the risks their children may be opening themselves up to. That doesn’t just disappear when the kids reach adulthood. We explain how to manage the people that care about you the most.
  3. When should you listen to your ‘old folks’? You’ll be laughing all the way to the bank with the money management tips you can mine from your parents and grandparents.
  4. What has a naysayer cost you in the past? The Property Buyer shares the opportunities she’s lost from listening to those near and dear.
  5. How to get past the naysayers. The best way to combat the naysayers, is to understand the ‘why’ behind the opinion and make up your own mind. This means doing your research and asking your independent experts great questions.
  6. What role did the media play during our recent downturn? Interestingly, the media’s focus on trumpeting the worst-case scenario may have actually mitigated the impact to the property market. The trio explain how.
  7. How are predictions shaping up now? The sun has come out on the property doomsayers, with many now predicting growth of around 10% in 2021. However, the clouds are still hanging over Melbourne, with predictions that Melbourne will see the lowest growth next year. But we think this is overly pessimistic.
  8. And of course, our ‘gold nuggets’!

Ep 80 Show Notes

Ep 79: Property v Shares – How to strike the right balance in your investment portfolio, which investment strategy is superior, how to get started and should it actually be property AND shares?

In this week’s episode the team discuss:

  1. Share investment lessons from the property experts. The Property Planner, Buyer and Professor share their first-hand experiences and lessons learnt the hard way from their first foray into shares.
  2. What does an investor need to do to be purchase-ready?It’s a lot easier to get your foot onto the share market ladder, than the property ladder. With the ability to invest a few $100 in the share market and low transaction costs to purchase and sell, the trio share with you what you need to do to get purchase-ready.
  3. Leverage and borrowing funds to invest. One key difference between property and shares is bank policy in providing funding, which typically allows for lower loan to value ratios of 50-70% for margin loans. Whereas home buyers can seek loans of up to 95% to purchase a property. This is because of the perceived risk and volatility in the share market and relative stability of the property market. This also means that the value of the investment that you can purchase with your initial capital is greater, and this leveraging bolsters net capital growth, which translates to more opportunity to invest and leverage in the future.
  4. Share trading v share investing. The trio explain the differences between share trading and share investing, and if you’re not a share market expert, why share investing is likely the right strategy for you.
  5. How mortgage strategy applies to shares. The good news is that the same principle of mortgage strategy apply to share investing as property investing. The Property Planner, Buyer and Professor outline the key strategies to implement.
  6. Market volatility. While there is certainly more risk in the share market, there is also more gains to be had when leveraging is not considered. The value of shares can increase by 10 times their original amount and some companies just seem to take off. In contrast, outperformers in property see typically 10% or more capital growth in a year. However, it seems with shares that as quickly as they go up, they can come back down. We highlight the critical reasons why.
  7. How to strike a good balance between asset classes in your portfolio. The trio share their insights on how to structure and diversify your asset portfolio.
  8. And of course, our ‘gold nuggets’!

Ep 79 Show Notes

Ep 78: Setting yourself up to purchase with confidence and why getting your pre-approval in place is more critical than ever

In this week’s episode the team discuss:

  1. The current state of the market. The Property Planner and Buyer shed light on the flood of enquiries and high levels of interest from prospective purchasers looking to get their ducks in a row to make their next property decision.
  2. What’s driving the flurry of activity?Affordability is the best it’s ever been, interest rates are at an all-time low (and will stay that way for a few years according to RBA Governor Philip Lowe), existing properties have held their value and started to increase, which gives people the confidence to take that next step.
  3. How long will it take to get a pre-approval?Trying to get a pre-approval has been difficult since Covid started, banks have had their challenges with an influx of queries from customers looking for repayment pauses, assessment criteria has been stricter than ever before, with new rules implemented for checking (and re-checking) income. The time to have a pre-approval assessed has blown out to 20-30 days with some of the major banks, plus it’s worth noting that pre-approvals are the second-class citizen of the finance world. The upshot – it’s critical to act now and act fast!
  4. Should you get multiple pre-approvals?With the long turn-around times and queues to get an approval, you may be tempted to apply a scattergun approach to lenders. But this is not necessarily helpful and could also harm your credit score. The trio share strategies you can use to get your pre-approval up and running quickly.
  5. What should you be doing right now if you are interested in purchasing?Contact your strategic mortgage broker and buyer’s agent right now! Knowing a ball park range of your borrowing capacity and determining your strategy are the first ducks that need to be herded in line. Getting caught up on the lender can waste precious time!
  6. When is the right time to purchase?It’s easy to get swept up in the FOMO (fear of missing out), but you also need to consider what is the right decision for you and when is the best time to make it. If you can purchase a superior asset if you wait, you could set yourself up for better financial success than if you purchase a poorer quality asset now. Getting quality and independent advice is the key.
  7. What pre-approval should you get? The Property Planner, Buyer and Professor discuss the different types of pre-approvals available and which you can rely on (and which you shouldn’t) to purchase with confidence.
  8. Selecting acceptable security. A pre-approval is never a guarantee for lending and will always be subject to the property being acceptable security for the bank.
  9. And of course, our ‘gold nuggets’!

Ep 78 Show Notes

Ep 77: Understanding the real estate agent behaviours that buyers don’t like

In this week’s episode the team pick apart the behaviours of real estate agents that drive buyers up the wall and shed light on the method behind the madness, as Dave, Cate and Pete discuss:

  1. Why would an agent leave a price tag off the listing? This comes down to understanding what is market centric for the area that you’re purchasing in. The trio reveal the reasons why the listing may not include a price tag and how this could present a hidden opportunity to take advantage of.
  2. What is the psychology behind underquoting auctions? While this may cause endless frustrations for purchasers who repeatedly miss out, there are reasons why agents adopt this practise. The trio discuss some of the quirks of each state, what the legislation dictates, and how buyers can overcome this hurdle if it strikes.
  3. Why do some agents talk in riddles when asked about a price tag? Ultimately, the agent does not work for you, their job is to get the best outcome for the seller. This means that you will be sometimes find yourself on the front line of many well developed, tried and true negotiation tactics.
  4. Why is it naïve to assume an agent will negotiate exclusively with you? Whilst it may be frustrating to think you’ve put in a winning offer, only to find out hours later that another buyer has come over the top of you, this is the agent doing their job. The more people who are involved, interested and willing to purchase, the better outcome the agent will secure. Rather than being sour grapes about competition, buyers should be on the front foot, quizzing the agent prior to submitting their offer to explore how the agent intends to deal with any competing offers.
  5. Why do agents shop around after receiving a firm offer for purchase? Encountering competition from other interested buyers is part and parcel of the home buying process. The trio share with you the tips and tricks you can use to minimise the risk of another buyer submitting a winning offer after you’ve already submitted yours.
  6. What does it mean if an agent doesn’t ask for your offer in writing? The typical way to submit an offer, is by returning a signed contract with consideration. We share with you the reasons why an agent may direct you to hold off on submitting your offer in writing.
  7. Why do buyers sometimes miss out on being notified when an auction property they were interested in gets sold before auction? It’s rare that this is because the agent is no good at their job. If you’re interested in a property, now is not the time to be playing possum! The trio outline what you should do if you’re interested in a property
  8. Why do some properties get sold to someone else in a hurry, even after you’ve told the agent that you’re ready to put in an offer? The reasons are many and varied, ranging from the risk that you present, your past dealings and history with the agent or there are simply other candidates more fiscally desirable than you. The Property Planner, Buyer and Professor unpack what that means and how you can present as a rock-solid buyer with minimal risk.
  9. And of course, our ‘gold nuggets’!

Ep 77 Show Notes

Ep 76: Market update – The state of the market, where we are headed, Bank predictions, the RBA governor speaks, debt servicing at record lows, NSW plans to abolish stamp duty and more!

  1. All aboard as the last of the big banks revise their property forecast UP for 2021! ANZ is the last of the big 4 bank dominos to fall, and revise up their previous gloomy 2021 predictions for the property market. As we shared in April, we expected the market to fall by less than 5% and in early October we predicted 10% + growth in 2021, and more to come in 2022. Now the banks and other economists have adjusted their views.
  2. The peak to trough fall in values from Covid well within our predicted 5% band. The impact of the Covid pandemic on property values from peak to trough was a modest decline of 1.7% for the entire Aussie property market and 2.8% for capital cities. CoreLogic data tells us that the Melbourne market bottomed on Oct 18 and the Aussie market a week earlier. In the Podcast we called the inflection point in late September due to data lag. Once again, many analysts have egg on their face, predicting cataclysmic price falls. Perhaps we need to have a Podcast on why macro- economic experts still do not understand the true drivers of the residential property market!
  3. The Melbourne property market has joined the party. Melbourne property values are surging with CoreLogic showing growth in values since mid to late October, auction clearance rates surpassed Sydney on the weekend and all signs point towards a larger recovery, because of the larger fall and Melbourne was on a tear leading into Covid. This has been playing out at the coal face since the start of October.
  4. The kiwi property market, a look into our future? The New Zealand government went hard and fast locking down to stamp out Covid. The effective eradication of the virus along with significant stimulus and with interest rates has resulted in median property values rising a whopping 11.1%! This trajectory means that the Reserve Bank of NZ is talking about macro prudential measures, such as restricting LVRs to slow down the property market already. We have predicted this kind of intervention will be on the cards for Australia towards the end of 2021 or into 2022 as APRA has proven it works.
  5. We explain some key reasons why we predicted property values would surge. For starters, debt serviceability is the lowest it has been since 2001. Interest repayments as a share of total household incomes are the lowest they have been since March 2002.  The Australian property market has provided zero net capital growth for about four years now. The unfortunate reality is that despite so many people having such a difficult time, many of them were young people in part-time and casual work and not on the property ladder. A larger cohort of people have the greatest level of savings on record and benefited from stimulus which they can now deploy in investments.
  6. The repeal of ASIC’s Responsible Lending obligations is looking increasing likely! At the AFR Banking and Wealth Summit during the week, treasurer Josh Frydenberg ratcheted up the pressure on regulators to ensure they played their part, which acting ASIC chairwoman Karen Chester indicated she had heard loud and clear. The ASIC chairwoman painted the picture of a clear pivot of ASIC’s position and it provided another sign that the Morrison government will ensure that the recovery is not hampered by lack of access to credit.
  7. Why property value increases will not be halted by the end of JobKeeper and loan repayment pauses. The trio explain the critical drivers that will continue to put upward pressure on values.
  8. Explain why the latest cash rate drop was not about reducing interest rates for borrowers. While the low-rate environment is doing wonders for our debt=to-income ratio, it’s not the primary reason why the RBA has been steadily lowering rates. The Property Planner, Buyer and Professor explain the real reason behind the rate cuts which are primarily about keeping our exchange rate lower and creating jobs which are more important than focusing, or worrying about excessive inflation.
  9. Banks forecasting an ever-improving positive outlook for GDP and unemployment. Government stimulus, our proven ability to suppress Covid, successful vaccines, the property market in full rebound mode and the expectation of record-breaking internal tourism all points to updated forecasts for superior GDP growth and reduction of unemployment in 2021, with one major back predicting unemployment to be as low as 5.75%.
  10. We touch on the big news in the NSW budget, with the plan to make stamp duty optional. We take a high-level look at this potential transition from stamp duty to a yearly tax on property and our hosts provide some different perspectives on what this could mean, but it is only early days yet.
  11. Listen to some of our predictions back in April and May. For perspective, we suggest that you listen to our market updates during the early stages of the Covid pandemic where we discuss why a downturn is usually the best time to buy property and a number of the factors that we expected, and have, played out now because history may not repeat, but it sure does rhyme!
  12. And of course, our ‘gold nuggets’!

Ep 76 Show Notes

Ep 75: How to spot an up and coming suburb – understanding demographics and statistics

In this week’s episode of the Property Planner, Buyer and Professor Podcast, the team conduct a crash course on “How to navigate the demographic statistics that will help you identify an up and coming suburb”, as Dave, Cate and Pete take you through:

  1. Occupations, education and incomes. Identify the key data sets the professionals look at, and how to use them to analyse whether gentrification is on the cards. And importantly, which data sets to ignore.
  2. Rental properties. Spotting the trends in tenure and weekly rental payments that will steer you in the right direction.
  3. Mortgage monthly payments. The trio explain what percentage of household income mortgage repayments should make up and why is this an important factor to look at.
  4. Usual address and internal migration. How many people lived at the same address 5 years ago and what does this mean? Who is moving in and who is moving out?
  5. Dwelling growth. How many new dwellings are being built and is this a positive or negative indicator of gentrification?
  6. Population Growth. Taken at face value, population growth is one of the stats that can lead you to believe a location is gearing up for massive capital growth. The trio explain how to treat population growth and what indicative changes to look for.
  7. Going to the suburbs. Don’t forget to take your eyes away from the numbers on the paper and visit the location. What are the signs that a location is attracting attention? Look out for fancy eateries and even fancier pooches on parade.
  8. And of course, our ‘gold nuggets’!

Ep 75 Show Notes

Ep 74: Market update – Responsible lending changes – What this means for property, you, business owners, lenders and mortgage brokers

In this week’s episode of the Property Planner, Buyer and Professor Podcast, the team delve into the planned upcoming changes to responsible lending legislation and what this will mean for the property and mortgage market, as Dave, Cate and Pete take you through:

  1. What is responsible lending and when did it begin? Post the GFC there was a crackdown in high-risk lending, which led to responsible lending obligations being legislated by the Rudd Government in the National Consumer Credit Protection Act 2009 (Credit Act). The trio translate the complicated legalese of the current obligations to simple terms.
  2. The reasoning behind the repeal. The Property Planner, Buyer and Professor delve into the purposes of the repeal and whether it is likely to be effective at meeting the government’s goals.
  3. When did applying for credit get tough and what instigated it? Over the last 10 years a litany of cascading events have resulted in a gradual creep of lenders and borrowers being faced with overly prescriptive, complex and onerous processes, which really gained pace from 2014 when APRA started to put limits on lending and calls began for a Banking Royal Commission.
  4. What are the changes in lender behaviour we’re likely to see? The reduction in red tape is likely to see many positive impacts in speeding up the process of approvals, but be warned, the model will switch from ‘lender beware’ with a ‘borrower responsibility’ principle. What does that mean for your loan application?
  5. Borrowing capacity set to increase. Reduction in assessment rates could see borrowing capacity skyrocket, opening the door for prospective purchasers to up their limits.
  6. Gazing into the property market crystal ball. The Planner and Professor make their predictions 2021 and 2022.
  7. Consumer protections, who will be looking after you? With the litigious ASIC out the door, the APRA watchdog will be the sole enforcer of responsible lending obligations. But never fear, the freshly legislated best interest duty will be picking up the slack. The trio explain how.
  8. How does this relate to mortgage brokers? Interestingly, a significant amount of paperwork that mortgage brokers are currently required to complete and provide to clients could be scrapped entirely. Watch this space.
  9. What other areas are the government targeting?  Key areas of reform that haven’t received as much media spotlight are business loans and non-bank lenders. We cover off on the planned evolutions to streamline business lending and further protect vulnerable consumers by raising standards for the second and third tier lenders.
  10. And of course, our ‘gold nuggets’!

Ep 74 Show Notes

Ep 73: Preparing for auction: Part 1 – Appraising, budget setting, due diligence, reserves, low-ball offers & auction twists

In this week’s episode the team delve into how to prepare for auction so you can put your best foot forward, as Dave, Cate and Pete take you through:

  1. Inspecting and appraising – beware of underquoting! Don’t get unravelled by properties selling above the price guide given by the agent. The trio share how to work out a more accurate understanding of value.
  2. Budget setting – home buyers v investors. There are key differences in the budget setting process for home buyers and investors to be aware of when setting a walkaway price. In the end, it should all come down to the numbers and factoring in ‘emotional premiums’ where appropriate.
  3. Purchase price shouldn’t be determined by borrowing capacity. Many purchasers come undone with buyer’s remorse if they’ve allowed their upper limit to be dictated by borrowing capacity and haven’t appropriately budgeted. The trio share how to work out your purchase limit so that you don’t blow the budget and lose sleep!
  4. When can you find out the reserve? The Planner, Buyer and Professor share the top tips for how to approach an agent to get the insider intel (that they’re not required to give you!).
  5. Auction twists. Pre-auction offers, probate, family law, off the plan and different schedule auctions – find out the twists that can impact how the auction is conducted.
  6. When to kick-off an auction with a low-ball offer. The trio share the psychology behind low-ball offers and when to use them.
  7. Due diligence. Having the contract reviewed by your solicitor and conducting a building and pest inspection are critical steps to ensuring that you make property decisions that you don’t later regret. Buyer beware!
  8. Finalising contract terms. How should you pay the deposit to the agent if you are successful and what is the settlement date?
  9. And of course, our ‘gold nuggets’!

Ep 73 Show Notes

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Ep 72: Property myths busted – Part 2: what deposit you need, bidding skills, first home owners grant, the 6-year CGT exemption & off-market opportunities

In this week’s episode the team dive into more property myths that can lead purchasers down the garden path to poor property decisions. First, they share their market insights, as Dave, Cate and Pete take you through:

  1. Weekly market insights 1 – New home loans see a record jump in August. ABS figures released for August show a jump of 12.6% increase in new home loans (excluding refinances), and the largest month on month increase since 2002. It’s also the first time in 11 years that there’s been more first home buyers than investors purchasing in the market. So, what does that entail for the property market? The trio share their insights.
  2. Weekly market insights 2 – More than 50% of mortgage repayment holidays have ceased. In a really encouraging sign, more than half of the Australian’s who opted for repayment holidays have recommenced their repayments, contributing to a more positive outlook for our economic recovery than the previously reported forecasts.
  3. Weekly market insights 3 – Property prices remain resilient. CoreLogic data for the last quarter reveals that Sydney is down by 0.9% and Melbourne 0.27%, while Adelaide, Brisbane and Perth have increased. As the trio revealed in “Market update #7”, history shows that during previous economic downturns, property prices have remained stable due to low interest rates and reductions in supply as well as demand. This recession is no different, history repeats!
  4. Myth #1: You need a 20% deposit to purchase a property. This is wrong on two levels: the amount that you pay to a real estate agent that you’re not willing to walk away from and your contribution to settlement are two different things (and neither of them are required to equate to 20%). The trio explain why.
  5. Myth #2: A successful auction bidder doesn’t need skill, only the most money. Planning and preparation does the heavy lifting for getting great results. Your strategy and behaviour can knock the competition out of the park, even if their pockets are deeper than yours. We share with you the tactics that will have opponent auction bidders shaking in their boots, (even if you are shaking too).
  6. Myth #3: You lose your First Home Owner’s grant if you purchase an investment property. Many people incorrectly believe that if you purchase an investment property first, you’re no longer eligible for the First Home Owner’s grant when you then go to purchase your home. The Planner, Buyer and Professor reveal how you can access the grant, even if you’re not a first-time buyer.
  7. Myth #4: Eligibility for the 6-year capital gains tax investment exemption. If you’re thinking of moving out of your principle place of residence and renting it out, there are key requirements that are often missed by many in order to claim the capital gains tax exemption. But is this strategy right for you? The property with the highest capital growth prospects is the one you want to be claiming the exemption on.
  8. Myth #5: Off-markets opportunities are all motivated vendors. The reality is that there are 3 different kinds of off-markets and only one that is worth your time. Home buying is a lengthy process as it is, and time is our most precious commodity. Don’t get caught out with time-wasters!
  9. And of course, our ‘gold nuggets’!

Ep 72 show notes

Ep 71: Property myths busted – Part 1: property prices, capital growth, housing affordability and land size

In this week’s episode the team delve into the common property myths that lead property purchasers down the path of making bad property decisions. First, they share their market insights, as Dave, Cate and Pete take you through:

  1. Market update – rate cuts and consumer sentiment. The trio share their thoughts on the whispers of upcoming RBA rate cuts tipped to occur over the Melbourne Cup weekend, the downward pressure on the 3 year bond rate and how long into the future low rates will stay in place. Plus, the recent surge in consumer sentiment, despite being in the thick of a global pandemic.
  2. Myth 1: Property prices always go up. What goes up, must always come down and property markets are no exception, (but they rarely bottom out at the same level that they started). Like any market, property prices will fluctuate on the basis of supply and demand and the institutional intervention that influences these factors. Beware of one trick ponies and cities that are heavily reliant on the success of only one particular industry.
  3. Myth 2: Property values double every 7 to 10 years. This may have been true once upon a time, in a land of high interest rates and strong inflation. But the property landscape is vastly different now. For property to double every 7 years, you’d need annual capital growth of 10.28%. So, how long will it really take for values to double? The trio share their insights.
  4. Myth 3: Picking a good suburb is the key to property success. There is much more to selecting a great asset than simply picking a good suburb and buying whatever you can get your hands on. There are markets within markets, and compromising on quality to get into that blue-chip suburb can lead you astray. Not all property is created equal and that means that not all property in the same suburb increases at the same rate of capital growth.
  5. Myth 4: Housing is unaffordable nowadays. Calling all millennials – put the avocado down and listen up! Housing affordability is more than just looking at current property prices and lamenting that the aspirational, forever-house of your dreams is out of reach. Affordability comes down to the percentage of your wage that goes towards your loan repayments, but what is the hardest part? Getting the money together for a deposit, in order to get your foot on the first rung of the property ladder. Choose wisely and you can leap frog into your ideal home.
  6. Myth 5: All good property opportunities are taken. From capital cities, ‘huburbs’ and regional centres, there are hidden gems everywhere. The location may not be glamourous right now, but that’s the point, each swan started out as an ugly duckling. The Planner, Buyer and Professor share the signs to look out for on the hunt for gentrification.
  7. Myth 6: Big land is more important than location of land. Unless you have a goal of subdividing, this belief is a furphy. Location is the most critical factor that influences capital growth, and a smaller block of land in a great location will often outstrip a full block of land on the fringes of the capital city. Land to asset ratio is key!
  8. And of course, our ‘gold nuggets’

Episode 71 show notes

Ep 70: Renovations – top tips and mistakes to avoid

In this week’s episode of the Property Planner, Buyer and Professor Podcast, the team dive into the nitty gritty of completing a successful renovation, sharing with you the tips to plan for a positive adventure with your home or investment property, plus some learnings from their own experiences, (mostly learnt the hard way). First, they outline key measures announced in the federal budget, as Dave, Cate and Pete take you through:

  1. Budget 2020 and the property market. The trio share their thoughts on key federal budget measures that will drive the economy and property market. From tax cuts, providing perspective on national debt levels, to identifying the market segments that have missed out on further government stimuli.
  2. Homes that you can grow into. Unfortunately it’s often the case that the home we desire and can afford don’t exactly match up. The compromises are normally between the dwelling and the location. To get into your preferred location, considering purchasing a home that you can grow into by extending out or up is a plausible option for many – the trio share with you the key benefits of this strategy.
  3. Top tip – live in your home before you renovate. Get to know your property! After living in your home for some time, you’ll find out what you love and what you would like to change. This will save you from making some renovation decisions that you later regret.
  4. Home renos – how will the renovation impact your ability to sell?When renovating your home, thinking about being able to sell it down the track, (after the kids have grown up and moved out) is not usually the first priority. However, having an understanding on the future saleability and likely buyer pool can help you make critical decisions on your renovation ideas.
  5. Investment renos – understanding your deductions. We always say that tax deductions are the icing on the cake, but you should still have an understanding of the tax implications of the works you plan to complete. Various materials and appliances will have differing depreciation schedules. Speak to a quantity surveyor to find out what tax benefits you are eligible for.
  6. More bedrooms doesn’t equal more value. Proportionality is critical! Adding a few extra bedrooms doesn’t always add up to more value if you don’t have the space to pull it off, or if you don’t have the living areas and bathrooms to boot! The key is to know your market and deliver what tenants or prospective purchaser’s desire.
  7. Speaking of bedrooms, size is important!Hands up who has been to an open house inspection advertising 3 bedrooms, only to find out on arrival that it’s actually 2 bedrooms and a study? Almost everyone. We share with you our tips on minimal bedroom size – anything smaller, is a great home office or a baby’s nursery.
  8. Granny flats. The capital gains tax incentives in the federal budget provide incentives for families to house their elderly parents in a self-contained unit. But do granny flats add value?
  9. And of course, our ‘gold nuggets’

Episode 70 show notes

Ep 69: Market update – Are we at the bottom of the property market? 

In this week’s episode of the Property Planner, Buyer and Professor Podcast, the team analyse the macro economic factors which are pointing to property values being at a pivotal turning point towards an upward trajectory. To balance the conversation, the trio also discuss some of the risks which may hold values back. Dave, Cate and Pete take you through:

  1.  Why property values are likely to rise by 10% in 2021 and into 2022. Weighing up the market forces at play, (and in the absence of a loss of control of COVID case numbers) it’s looking likely that we’re at an inflection point in the market and we’ll be gearing up for a property run.
  2. How property values have remained relatively stable throughout COVID. As we’ve been saying since the beginning of COVID, (and contrary to the property doomsayers and alarmists), due to a reduction in supply, property values had a floor underneath them and Dave, Cate and Pete felt that national median prices were unlikely to drop more than 5-10%. Well, the results are in!
  3. The green shoots emerge. Property values in 6 out of 8 capital cities have recorded an increase in median values over September. The two exceptions have been Sydney and Melbourne; Sydney has recorded a slight decline in values of 0.3%, and the reduction is decelerating from previous months, which is typical before an uptick. Melbourne’s median value has declined by 0.9%, and we know that Melbourne is getting their COVID cases under control from the second wave, so we expect the recovery will be a few steps behind the other capital cities.
  4. How low can interest rates go? Interests rates have been slashed and dashed since mid 2019, with a total drop of 1.25% so far. RBA pre-pandemic modelling suggests that when the cash rate is dropped by 100 basis points, property values will increase by 28%. Yes, you heard right, 28%. With more whispers in the wind about a further rate cut – watch this space.
  5. Responsible lending laws to be axed. Now seen as a ‘handbrake’ on our economic recovery, responsible lending laws are due to be repealed in March 2021, which will open up ease of access to lending. There’s nothing like making it easier to borrow money to heat up the market.
  6. Ready, set..SPEND! With nothing to do and nowhere to go, Australian’s are saving more money than ever. Coupled with the ‘wealth effect’ from rising property values, consumers spending money locally instead of overseas will have an enormous impact on the economy.
  7. Unemployment looms. From our own analysis, led by the Property Professor himself, we discovered somewhat surprisingly that in the recent recessions and hikes in unemployment, property values remained obstinately consistent, barely showing any reductions greater than 5%. This is not to downplay the horrific impact that the pandemic has had on some businesses and Indvidual’s. That remains. The trio believe that the impact on property values is likely to be less than many people imagined.
  8. Vaccines, migration and riding the waves. Towards the back end of 2020, we can expect to see viable vaccines in production, international travel slowly coming back online and better management of COVID breakouts. Practice makes perfect, and by now, we would hope Victorian’s are well versed.
  9. International recovery blueprint. Looking overseas at other Western countries, positive housing stories are playing out in the US, UK, Canada and NZ where values are increasing and we are not far behind.
  10. And of course, our ‘gold nuggets’

Ep 69 show notes

Ep 68: Renovations – top tips and mistakes to avoid

In this week’s episode of the Property Planner, Buyer and Professor Podcast, the team dive into the world of project managing a renovation and they outline the factors to consider before you embark! Dave, Cate and Pete take you through:

  1. The most common mistake; over-capitalisation. It’s very easy to find a property that needs a renovation, but not so easy to find one that will reap a profit. The team take you through the various approaches to renovating that will add value to the property, and those which will not.
  2. Ballooning budget. Unreliable tradesmen, deadlines slipping through your fingers like sand, and alterations to the plan can quickly add up to cause your renovation budget to blow. Planning for delays and allowing for contingencies is critical to a successful renovation.
  3. Unexpected and invisible costs. From finding asbestos to hitting hard stone when excavating, these are just some of the unexpected costs that can come out of the woodwork when your renovation begins. These additional costs burn into your wallet, but removing the issues do not add perceived value to the property. It shouldn’t come as a surprise to hear that prospective purchasers expect to buy a house free of asbestos.
  4. Sharpen your project management skills. Like any major project, a renovation involves multiple moving pieces and parties to corral. The average renovation requires 10,000 decisions to be made. If you do not take the time to plan, arranging your tradesmen, deadlines and budgets can be like herding stray cats.
  5. How do you value your time? Many people do not factor in the cost of their own time and stress when ‘running the numbers’. Be prepared to set aside significant portions of your time for planning, making/taking phone calls, wrangling and negotiating with suppliers, making decisions. If renovating is not your day job, this could mean hours after work and on weekends. Could that time be better spent with your family? Or doing your regular job?
  6. Financing a renovation. The Property Planner shares with you the various ways that you can finance your renovation project. It goes without saying, but the least involvement you can have from the bank, the more freedom you will have.
  7. On the flipside – beware of flipped properties. Purchasing a freshly renovated home can seem like a dream come true, but beware, not all that glitters is gold! If someone is flipping to turn a profit, be weary for potential cut corners.
  8. And of course, our ‘gold nuggets’

Episode 68 show notes

Ep 67: Subdividing – the fundamentals for success

In this week’s episode of the Property Planner, Buyer and Professor Podcast, the team analyse the important considerations for completing a successful subdivision and the risks that small time developers need to be aware of. Dave, Cate and Pete take you through:  

  1. The first step – planning. Ask yourself how does this step fit in with your overall property plan? Start with the big picture and work out what stage of life is the best time for you to complete this project. Is it an acceptable risk to take on now?
  2. Buying well – a critical requirement to success. Selecting the right property and the right block will either make or break your plans. Itcould be the difference between make a profit or ending up with a vacant block and a hole in your wallet.  
  3. Know your market. Is there demand for smaller blocks of land with townhouses in the location that you’re purchasing in? Who is your target buyer and how will the property cater to their desires and price point? And is the project likely to be as profitable as other, similar priced alternatives?
  4. Have an in-depth understanding of council plans. Even if your plan is to subdivide, sell and leave the building project up to the next purchaser, the council still wants to see the plans. If you want to get three townhouses onto a block, be prepared to demonstrate the feasibility of your plans. Each council has their own guidelines, so it is important to understand the sensitivities, likely steps and local town planner’s approach at every step of your process. In particular, it helps to get to know who you will be dealing with.
  5. Consider all costs. From transaction costs, holding costs, tax obligations and the value of your own time – ensure you have an accurate understanding of the true projected cost of your project. Have you modelled what your budget will look like if a few key costs vary by 5%? And will you still make a profit?
  6. Obtaining finance for developments. Development finance is not as straight forward as getting a loan for a purchase. There are many additional hoops to jump through before you get the lenders tick of approval.
  7. Common mistakes and how to avoid them. Just because your neighbourdid a subdivision 5 years ago, doesn’t mean you are bound for success. We outline the common mistakes, misconceptions and unwitting risks we see time and time again, so you can put your best foot forward on your development journey. 
  8. Getting educated. One of the most critical factors to success is to ‘know your stuff’ and learn from the experts. We provide a bonanza of resources in our show notes for you to start learning and work out if subdivision and development is the right move for you. 
  9. And of course, our ‘gold nuggets’

Episode 67 show notes

Ep 66: Top landlord fears, how to tackle them and are we at a turning point in the property cycle?

In this week’s episode of the Property Planner, Buyer and Professor Podcast, the team delve into the top fears that keep landlords up at night and what you can do to safeguard yourself. Dave, Cate and Pete dissect:

  1. The property market dipping. CoreLogic capital city data shows that 5 out of the 8 cities have started growing in value or remained at the same level, while Melbourne and Sydney have dropped slightly further. It appears that we are now at an inflection point. Contrary to the property doomsayers, we haven’t yet seen a gross drop of 5%, which has been our central case since April.
  2. Tenants claiming COVID financial distress. Anecdotally we’ve seen 8% to 14% of tenants looking for reductions in rent, as a result of loss of income due to COVID. There are also areas that have seen a much lower percentage of tenants claiming COVID financial distress – due to location demographics and property features that may attract a particular quality of tenant. Careful tenant selection is critical.
  3. Debt and cash flow management. Treat your investment property like a business! That means understanding how to manage your risk and selecting an appropriate repayment strategy and buffer. Letting your money goals drive strategy and price point will mean that you are prepared and comfortable, when income ebbs and flows.
  4. Repairs and maintenance – does your buffer cover rainy days (and leaks)? Unexpected repairs can burn deep holes in your pockets, but an appropriate risk management strategy will avoid the financial stress of having to carry out major repairs on your property.
  5. Building and pest inspection. Do your due diligence and get a building and pest inspection done before you purchase. This will help guide your negotiations if you know there are maintenance issues lurking.
  6. Tenants from hell. From non-payment of rent to trashing properties, a tenant from hell can be a landlord’s worst nightmare. Starting with a good property manager and selection process can help you avoid a painful tenant. Listen to episode 41 “Tenants from hell” for more education on how to select a quality tenant and property manager.
  7. Protecting yourself with insurance. It is critical to know the difference between accidental, deliberate and malicious damage and how your insurance policy covers you in these situation – it can be difference between a successful claim or not!
  8. And of course, our ‘gold nuggets’

Episode 66 show notes

Ep 65: Bad credit behaviour – What does it mean and how can it be solved before it’s too late?

In this week’s episode of the Property Planner, Buyer and Professor Podcast, the team take a deep dive into the world of credit reporting, debt consolidation and how you can manage your money effectively to get a great credit score. Dave, Cate and Pete dissect:

  1. Credit scores and comprehensive credit reporting. Big brother is watching! The team take you through the new comprehensive credit reporting system, what goes into your credit report, and how your credit score is calculated for a positive or negative outcome.
  2. The traps to avoid that impact your credit score. Even honest mistakes that are rectified quickly can show up on your credit report (and remain there for 5 years). We take you through some careful tips to help you avoid these common errors.
  3. Tips on how you can manage your money effectively. Money management is a critical pillar for success in your property journey. We outline key strategies on how you can keep a handle on your spending habits and build the foundation of your wealth creation journey through an effective money management system.
  4. Money management and a detour into the Australian economy. Australian’s rate of savings is up 20% during Covid. We are saving more money than ever since our lenders have been monitoring the rate of consumers savings. This huge amount of savings will be spent domestically, especially when travel is back on the cards, and it will play a large part of supporting the Australian economy. If you can save now, you can save any time!
  5. Debt consolidation and why prevention is always better than cure! Debt consolidation through refinancing can make it easier when you have multiple, (higher interest/shorter loan term) repayments that are getting out of hand. With tailored assistance, you can consolidate into one loan to reduce your overall monthly repayment(s). The key is to act quickly before the situation unravels – speak to your strategic mortgage broker today about the pros and cons, but the most important part of the equation is changing your spending habits!
  6. Real life bad credit stories. Have you heard the one about the bank that gave a poor unsuspecting consumer a permanent credit default because they were uncontactable, even though they made the payment right away once they were reached? It happens all the time. The same lender 5 years later is now the only lender who will lend money for a new mortgage. Oh, the irony! David and Cate share some of the weird, wonderful, and frightening stories and first-hand experiences, how they could have been prevented, and the different solutions available.
  7. Credit scores are very important, but there are lenders who cater for those getting their finances back on track! There are many niche and non-conforming non-bank lenders that are willing to take on consumers with poor credit ratings – but it comes at a price, normally in the form of higher fees and interest rates. Accessing these lenders can mean that property plans don’t need to be on hold while you clean up your credit rating, and once you get yourself tidied up, you can always refinance to a mainstream lender with lower rates that suit your mortgage strategy!
  8. How to check your credit score. Did you know that you are entitled to access your credit score and credit report for free? There are a number of websites that allow you access, ensure that you choose one that is government recommended. Check below in our show notes for some portals.
  9. And of course, our ‘gold nuggets’

Episode 65 show notes

Ep 64: What would you do differently if you could go back in time 25 years and tips for first time buyers entering the market – Listener questions answered #1

In this week’s episode of the Property Planner, Buyer and Professor Podcast, the team answer burning questions from our listeners. From mortgage strategy and prepping for decisions for first time buyers, to what would you do if you had a time machine and could go back 25 years and start again. 

We put Dave, Cate and Pete in the hot seat to discuss: 

  1. Top tips for first time buyers entering the market during COVID-19. Although we’re currently in a unique time (did someone say pandemic?), there are some fundamentals of property purchasing that always apply, rain hail or shine if you are a first-time buyer. 
  2. What should you focus on if you’re not purchasing your long-term home? Your first purchase can catapult you forward on your wealth creation journey if you get it right. But conversely, it can set your lifestyle and financial goals back if you get it wrong. Each property decision can either help or hinder and should be considered very carefully, but none is more important that your first! 
  3. Getting your mortgage strategy right at the beginning of your journey. In episode 50, Dave, Cate and Pete shared their biggest mistakes and one mistake they all had in common was selling property they could have kept. This is in part due to not understanding mortgage strategy and how it helps you to keep properties during your wealth creation journey. Is your lender or mortgage broker an expert in mortgage strategy? Very few are! 
  4. Have a plan for holding your first purchase. It is unlikely that your first property will be your long-term home, but you will be better off if you can keep it as an investment when your long-term home comes along. 
  5. Rentvesting, a viable option but not everyone’s cup of tea. As a first-time buyer, you often can stretch your budget by purchasing an investment property based on the fact that the projected rent will be added to your income tally. This might allow you to secure a stepping stone home that will meet your requirements for longer, or just purchase a superior quality asset whilst maintaining your lifestyle. Education and understanding your options is the key to successful property decisions.  
  6. Price tag v comparable sales. Adjusting your expectations at the beginning of your search will help you narrow in faster and make any necessary compromises to purchase your property. Make sure you are following the sale prices and not the asking prices! And here’s a little secret, there are always compromises. Shhh! 
  7. If Dave, Cate and Pete and could go back 25 years, what would they do differently? The answer to the first question is they would do many things differently, and yes, they would have a better financial outcome, even if the property market does not perform as strongly as it has over the next 25 years… but it might! 
  8. And would they have a better financial outcome? From buying and holding rather than having less itchy feet, starting earlier, making each property count, to self-education, the advice is varied! 
  9. And of course, our ‘gold nuggets’!

Episode 64 show notes

Ep 63: Commercial property – Part 2: Determining value, Real Estate Investment Trusts, Warehouses, Mixed Use, Leases, and more.

In this week’s episode of the Property Planner, Buyer and Professor Podcast, the team explore the commercial property sector in part two and share with you how to determine the value of a commercial property, what to look for in a tenant, investing in real estate investment trusts and the ins and outs of warehouses – and more!
David Johnston, Cate Bakos and Peter Koulizos discuss:
  1. How to determine the value of commercial property when buying. The Property Professor explains what determines the value of a commercial property and what to look for in a quality commercial investment.
  2. Land tax. Due to the higher cost of getting in and out of commercial real estate, land tax must be considered as part of the ongoing costs and factored into your decision making. For most states and territories, land tax is grouped with residential property. Be sure to do the sums on your land tax bill because the costs grow proportionately to total aggregated land value. Take a listen to Ep#43 “Diversification 101 – How and why to plan for diversification within your property portfolio” for more on this topic.
  3. What should you look for in an ideal tenant? Long-term lease agreements and stable companies or government organisations can be your best friend!
  4. Unpacking warehouses (pun intended!) Everything you need to know about investing in warehouses and logistics. This category has outstripped office and retail for popularity and overall returns with the advent of online shopping, and Covid has only hastened this transition. However, there are some traps for new players!
  5. Real Estate Investment Trusts (REITs) – The pro’s and con’s, and everything in between. REITs are a great way to gain exposure to commercial property without having to outlay millions of dollars on a single asset, which brings huge concentration risk. REIT’s offer instant exposure to commercial real estate in a bite size chunk that suits your investment profile. No need to buy the whole shopping centre or office. You also can get exposure to various properties across office, retail and logistics providing diversification. REIT’s are a great way to provide cash flow as part of your transition to retirement as a trust must distribute all profits, unlike companies.
  6. Publicly listed V unlisted/private Real Estate Investment Trust’s (REIT’s). Unlisted property funds are the closest proxy to direct property investment – but with the benefit of professional management. A major con is that your capital is locked in for the duration of the trust as private units cannot be bought and sold on the ASX in the open market, which usually ensures greater liquidity. If you are selling, you may be required to sell to someone within the private REIT. If you are worried about liquidity, this is not the asset class for you and you would be better off in a listed REIT.
  7. Flexibility of the property to mitigate risk. Investing in commercial property comes with higher risk than residential for many reasons, but you can mitigate that risk by purchasing a property that allows for flexibility of tenant types.
  8. Let’s go in reverse, beep, beep, beep, how about converting a warehouse into a residential property?! The ‘latest’ craze in modern living, well actually this has been happening for two decades as industrial property in inner cities cease being used for their original purpose and transition to residential property. Warehouse conversions can pay off from a lifestyle and financial perspective, but often do not. They are high risk, and are not for the faint hearted (or those with a tight budget). So go in with your eyes open and be sure that the property really is your dream home, or the investment will get a sustainable long-term financial return. Enter at own risk! Caveat emptor!
  9. And of course, our ‘gold nuggets’!

Episode 63 show notes

Ep 62: Dave, Cate and Pete’s biggest regrets on their property journey

In this week’s episode of the Property Planner, Buyer and Professor Podcast, the team intimately share with you some of the most significant mistakes that they have made along their property journeys, and their lessons learnt. 

In this episode David Johnston, Cate Bakos and Peter Koulizos discuss:  

  1. Selling properties they could have held. The Planner, Buyer and Professor have all made this mistake at some point on their journey, along with many other Australians. Selling a property that you could have kept, is one of the most common regrets we see.   
  2. Not having a mortgage strategy in place. Your mortgage strategy allows you to use equity, optimise your tax deductions and plan for holding property into the future as you accumulate more properties in your portfolio. It is critical to help you avoid the first mistake of selling properties that you could have held.   
  3. Keeping track of your Money Management! The way you manage your money is critical to success and ensuring that you have an effective money management system in place will not only give you peace at night, but will allow you to build your cash reserves to take the next step in your property journey.   
  4. Not knowing what makes a good investment. The allure of shiny and new can be tempting, but beware! Not all that glitters is gold.   
  5. Listening to the wrong people. Whilst your friends and family are well meaning and have your best interests at heart, they are most likely not property experts, (unless you are lucky to have a dad like Pete’s who worked in real estate). Ensure that you surround yourself with, (and get advice from) independent experts.  
  6. Buying a ‘bargain’. We all love a good bargain, but when it comes to property, looks can be deceiving. Purchasing a bargain property can attract a poor quality of tenant and you need to ask yourself whether it’s worth the headache and trouble.   
  7. Not purchasing when you could have. Your risk profile may preclude you from taking that critical step in your journey. Whilst most people regret selling a property, you can also regret not taking the risk of purchasing a property that would have performed well. As they say, hindsight is 20/20.  
  8. And of course, our ‘gold nuggets’! 

Episode 62 show notes

Ep 61Commercial property – Part 1: The risks and the rewards!

In this week’s episode of the Property Planner, Buyer and Professor Podcast, the team take you through the ins and outs of investing in commercial property.   

In this episode David Johnston, Cate Bakos and Peter Koulizos discuss: 

  1. How commercial property investment differs from residential, from a higher return on investment, duration and construction of leases, flexibility in lease length, business category of tenant and to ongoing running costs.   
  2. An introduction to the different types of commercial property – industrial, retail and office. 
  3. Higher return also means higher risk, and that risk comes in the form of vacancy rates, rental volatility and higher funding costs. It’s often much easier to find a tenant for your home, than your warehouse or high street shop.  
  4. The high cost of entry and ongoing maintenance. Buying commercial property is often much more expensive than buying residential property, on top of that commercial property investment requires higher deposits as a direct result of lower loan to value ratio constraints, and higher interest rates for commercial lending.  
  5. Real estate investment trusts and how you can invest in commercial property without purchasing the whole building; Dave touches on this exciting purchase pathway, but only scratches the surface. The trio look forward to delving even further into REIT’s.   
  6. Volatility in the commercial market as a result of the Covid-led economic slow-down, with sentiment dropping to unprecedented levels for some categories, dire vacancy rates are the market indicators. 
  7. The economic outlook for retail, office and industrial commercial property including some positive insights for specific subsets of commercial property 
  8. And of course, our ‘gold nuggets’! 

Episode 61 show notes

Ep 60: Why established properties outperform

This week, the Property Planner, Buyer and Professor turn their thoughts to established properties and why they offer superior capital growth prospects.  

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through:   

  1. Established houses tend to be located close to the CBD, and generally the older the property; the closer to the CBD, (being the central location for the majority of jobs and the highest land value per square metre.)   
  1. People want to live close to where they work, but will that be the case going forward as many businesses comfortably shift to ‘working from home’ life?  
  2. Established properties are more likely to have an optimal land to asset ratio, with the majority of the value invested in the appreciating component of the asset – the land! 
  3. New estates may offer larger blocks of land than inner established areas, but that doesn’t equate to a higher land to asset ratio. In fact, the abundance, (and lack of scarcity) of land in these new estates means that they have a lower value per square metre  
  4. You don’t pay a ‘brand new premium’ for established property. Paying for a brand-new property means that you also pay for the developers profits and cost of labour. For established property, you pay only ‘market value’.  
  5. The NIMBY effect (Not in my backyard!) – Long established communities have great influence over councils, (including the implementation of heritage listing and overlays) that make it significantly more challenging to increase supply through development in the preferred pockets and streets. 
  6. Melbourne’s highly sought-after ring of suburbs located 5-20km from the CBD have seen very little growth in population in the last 30 years. This phenomenon has directly impacted property price growth in such areas.  
  7. Period homes have architectural appeal and features that Australian’s love, increasing the demand for those properties due to the irreplaceable nature of these elements.   
  8. And of course, our ‘gold nuggets’! 

Episode 60 show notes

Ep 59: Off the plan purchases – Everything you need to know. Part 2: The financial risks

The Property Planner, Buyer and Professor continue analysing off the plan purchases, and in particular, high rise apartments. This week, in the second of two episodes dedicated to this type of property, their focus is on the financial risks of purchasing off the plan.   

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. The ‘Pros’ of purchasing off the plan. The team start off outlining a number of financial benefits of purchasing off the plan, however many are short-term and what you could call a ‘catch 22’.  
  2. The risks of not being able to access finance (through no fault of your own). Lenders protect themselves by limiting their exposure to off the plans because they understand they are ‘risky’ securities – less likelihood of capital growth and hard to sell in a fire sale. That includes limiting the number of properties in a building or postcode they will take as security, limiting the loan to value ratio (requiring a higher deposit), and working to a minimum limit of the number of square metres in the apartment that they will lend against.  
  3. The contract can limit your re-sale options, with many contracts stipulating that only a particular real estate agent can on-sell your property. This is so the developers can maintain control of the sale prices within the block. 
  4. Homogenous dwellings of identical apartments in a building or houses in a development have significantly reduced scarcity value, and it is likely that sellers will have competition from properties that are similar to theirs. Buyers must consider what makes a property unique and desirable?  
  5. Over-supply can adversely impact the expected rental yield, particularly when many identical properties flood the market at the same time, causing a race to the bottom for landlords to find a tenant.   
  6. Limited capital growth prospects from low land to asset ratios, as the land component which is appreciating can make up only a small percentage of the overall asset value.   
  7. The likelihood that the value of the property will go backwards after you purchase, as the largest component of the asset (the dwelling) is depreciating.  
  8. The cost of management fees that are not certain upfront. Owners corporation and strata fees are not typically specifically outlined at the time of an off the plan sale. To compound the issue, future special levies for maintenance or issues arising out of poor quality builds can quickly eat into your available funds.  
  9. Lost opportunity costs in waiting years for an asset to be finished, that you could have invested in the meantime in an asset with superior capital growth prospects.  
  10. And of course, our ‘gold nuggets’ 

Episode 59 show notes

Ep 58: Off the plan purchases – Everything you need to know. Part 1: purchase through to settlement

The Property Planner, Buyer and Professor take a deep dive into the risks of purchasing off the plan. Because the risks are many and varied, this will be a two-part episode with an episode solely on financial risks to come next week!

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. Pros of purchasing off the plan – for a balanced view, we take you through the advantages of purchasing off the plan.  Following the pro’s, we then detail the risks that buyers need to be aware of. 
  2. Risks of buying a property that doesn’t exist. You may be able to visit a display home, but often you are looking at plans, dioramas and drawings – and unless you are an architect or builder, it can be quite difficult to visualise the end product.  
  3. Alterations to the property without your consent. The contract will normally allow the developer to make changes to the property within a certain percentage of variance, and without your approval. Often this results in unexpected changes/reductions in floor area to the plans, specifications or differences in the quality of the final finishes.  
  4. Lenders may not accept the property as security if the alterations cause the square metreage to fall beneath their prescribed level.   
  5. Contracts often favour the developer and the build completion almost never runs on time.   
  6. The timeline to settlement is uncertain and you could be waiting between 12 to 48 monthsIn the meantime, your lifestyle, financial position, lender policy, property value and the market could change.  The lost opportunity is pertinent if the project is cancelled or builder becomes insolvent. 
  7. The value of the property can fall before settlement, and combined with a large number of off the plan purchases being overpriced from the start, valuations coming in lower than the purchase price can cause significant out of pocket expenses.  
  8. Limited recourse against the builder in the event of a dispute, your contract of purchase is with the developer and not the builder.  
  9. Are you dealing with a spruiker or an independent advisor? Is the person selling the property receiving an income from the developer for the sale? Beware of spruikers masquerading as advisors!  
  10. And of course, our ‘gold nuggets’ 

Episode 58 show notes

Ep 57: Market update – What will the Melbourne lock down mean for the economy and property market? 

In this episode The Property Planner, Buyer and Professor take a deep dive into the impact of the lockdown in Melbourne and Victoria border closures on the property market and broader economy, and how the key indicators were tracking up to this point 

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through

  1. Victoria back into lockdown just as consumer confidence and new listings recover to pre-Covid levels – what does this mean for the property market, economy and what are the differences from the last lockdown? 
  2. Lender scrutiny and efficiencies are clogging up the approval process, how can this impact your ability to snap up the right property? If you’re looking to purchase or refinance, getting your ducks in a row is critical to ensure timely assessment.  
  3. Extension of repayment holidays for an additional 4 months through to 2021 as the liquidity bridge is extended for those who cannot meet their repayments, but how  and who qualifies? 
  4. How does accessing your Super impact your ability to borrow? A little hint, it’s not helpful… 
  5. How the property market has bounced back and is normalising with auction clearance rates steadying and new listings recovering – prior to Melbourne lockdown at least. 
  6. Buyer demand continues to hold up prices, with the combined capital city index showing only a 1% drop since Covid started and 1.3 buyers for every one new listing. 
  7. First time buyer purchases are going through the roof, as many take up Government and State based initiatives to get into their first home.  
  8. Rents continue to fall, particularly for the problem child of property – medium to high-density apartments in Melbourne and Sydney CBD and inner suburbs.  
  9. Will there be an economic or fiscal cliff? Public and private sector institutions continue to build the bridge to the other side with talks of extending JobKeeper and Jobseeker but making it more targeted, and extension of repayment holidays.  
  10. And of course, our ‘gold nuggets’ 

Ep 57 show notes

Ep 56: The great debate! Capital Growth V Cash Flow – Which investment strategy is superior?

The Property Planner, Buyer and Professor dive into the capital growth v cash flow debate when it comes to planning your investment strategy. Who will have their arm raised in victory?

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. The Property Professor makes the case for capital growth, by comparing property value and rental return over 20 years if you had purchased a capital growth v cash flow property for $600,000. 
  2. The Property Buyer explains how you can achieve the same outcome with a cash flow strategy – not everyone can afford to hold a capital growth property, but everyone can make great property decisions that grow your wealth. 
  3. Don’t forget about gearing! Whether the property is positively or negatively geared carries a large bearing on the end results. 
  4. How the cost of holding a capital growth focused property decreases over time – negative gearing is not forever.  
  5. Counter intuitive but true, how the rental yield of a capital growth focused property increases faster than yield on a cash flow property. 
  6. How bank policy and assessment can impact your ability to execute your strategies and why you need a strategic mortgage broker in your corner. 
  7. How your age and stage of life is a critical factor to consider when piecing together your investment strategy. 
  8. Who, I mean which strategy, won? You will need to tune in to find out the Property Planner’s adjudication! 
  9. And of course, our ‘gold nuggets’ 

Episode 56 show notes

Ep 55: All things property tax – how to understand your deductions at tax time

As we come to the end of another financial year, The Property Planner, Buyer and Professor delve into all things property tax and uncover the myths that can lead you astray on your wealth creation journey. 

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. All the deductions you can claim on an investment property so that you do not miss a trick when completing this year’s tax returns. 
  2. Depreciation, what you can claim as a tax deduction on fixtures & fittings, the building and when do you need a depreciation schedule?  With thanks to some great tips from our good friend Mike Mortlock from MCG Quantity Surveyors. 
  3. Capital Gains Tax and how you can avoid nasty tax bills that eat into your wealth if you ‘property plan’ ahead. 
  4. Negative gearing, how it works and why it doesn’t last forever – at some point all properties become positively geared. 
  5. Tax variations and the risks of using this as an investment strategy.   
  6. How your mortgage strategy is the foundation to maximising your tax deductions (good debt) and reducing your non-deductible borrowings (bad debt) if you have the right mortgage strategy and structure in place from the moment you purchase a property.    
  7. Expats, the changing tax landscape and how laws relating to capital gains tax and land tax have changed this year.  
  8. And of course, our ‘gold nuggets’, plus a sneaky third nugget from our host Cate! 

Episode 55 show notes

Ep 54: Market update – Building the bridge (or invisible stairway) across the economic cliff!

The Property Planner, Buyer and Professor unpack the economic cliff. What will happen when JobKeeperHomeBuilder and lender repayment holidays end? 

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through:   

  1. How banks will look to help keep many of the most affected borrowers and businesses to stay afloat with new initiatives such as interest only repayments, lower rates, extended loan terms and pauses, although some zombie businesses will need to be let go. 
  2. What holds for employment, as 124,000 people are re-employed in May and a further 850,000 expected by the end of next month.   
  3. HomeBuilder scheme, the ins and outs of the scheme and questions yet to be answered. 
  4. How state governments will provide further stimulus to support home buyers and builders, beefing up stimulus packages offered to Australians. 
  5. Where to get your information from, and why the Treasury, ABS and RBA are the most trusted sources. 
  6. The effect on buyer behaviour as more people work successfully from their home office and recalibrate what is needed in a home and location as part of their Property Planning. 
  7. And of course, our ‘gold nuggets’! 

Episode 54 show notes

Ep 53: Diversification 101 – How and why to plan for diversification within your property portfolio

The Property Planner, Buyer and Professor discuss all things diversification, from the reasons why you should diversify your portfolio to the many ways you can implement diversification in your investment strategy.  

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through:  

  1. Beware of one size fits all strategies! The suggestion that you should have a 50/50 balance of shares and property (or any other type of investment) is vastly oversimplifying the concept of diversification and neglecting the most important element of the equation, YOU!  
  2. Discussing the different asset classes for diversification, there’s more to consider than just property v shares.  
  3. How you can diversify with property – state, city, regional centres, different suburbs, city segments, property types, growth focused V cash flow and more.  
  4. Tax comes second! Tax benefits should never be a primary reason to invest in a particular asset, it is the icing on the cake. Don’t sacrifice the cake for the icing.   
  5. Considering the macro and micro of diversifying your property portfolio. The macro is the state or the city and the micro is the suburb. Start with a big picture view and work down to suit your property plan, not the location you live or a buyer’s agent. Or worse, where a buyer’s agent is buying, but not based in. Your next purchase could be anywhere in Australia.  
  6. Capital gains v cash flow, how your investment strategy needs to be tailored to you. 
  7. Land tax, an often neglected area of property investment. How and when should land tax factor in to your property decisions? More than two reasonably priced properties in any state will generally start to eat into your returns via land tax. 
  8. Blue chip v gentrification, higher rewards come with higher risks.   
  9. Fractional investing, is it worth getting a fraction of your foot in the property door?  
  10. And of course, our “gold nuggets”! 

Episode 53 show notes

Ep 52: Dissecting 10 years of Core Logic data – capital cities & regional centres

The Property Planner, Buyer and Professor discuss data provided by CoreLogic’s Tim Lawless on Australia’s capital cities and regional areas over the last ten years. Which cities took out the gold, silver and bronze?

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. Dissecting data provided from Core Logic for the last decade for all capital cities and regional areas of each state. You may be surprised by the winners and losers as we hand out the gold, silver and bronze medals.
  2. How regional centres fared compared with their capital city counterparts and why capital growth and rental yield often have an inverse relationship.
  3. The performance of units compared with houses, which are gaining in popularity in some cities. But beware of the data! Metrics surrounding units can very easily lead you astray.
  4. How much $1,000,000 invested 10 years ago in each capital city would be worth today and which cities actually went backwards during that time. Not all property rises in value!
  5. The importance of risk management and mortgage strategies to save yourself stress and hold on to assets when the market inevitably starts to dip.
  6. How your next investment purchase could be anywhere in Australia, depending on your price point, risk profile and stage of life.
  7. Why values based on growth over the last ten years are now on trajectory to double every 15 years,not every 7-10.
  8. Why your specific location and property selection is the key ingredient to financial out-performance as you do not purchase a city, suburb or a street. Every property provides a different financial return to the overall market return which is a formula-based average!
  9. And of course, our “gold nuggets”! 

Episode 52 show notes

Ep 51: Market update – The HomeBuilder stimulus package unpacked – What it means for home buyers, renovators, jobs, economy, and of course, the property market!

The Property Planner, Buyer and Professor met for a ‘breaking news’ recording on the $688 million HomeBuilder stimulus package announced by the federal government yesterday. The new package aims to safeguard the jobs of a million tradies, to prop up the construction industry which was teetering on the edge of oblivion.  

Home owners, first home buyers and renovators will be offered a cash grant of $25,000 for building contracts and purchase of new dwellings signed from 4 June 2020 right through to 31 December 2020. Hear the full story as David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. Setting the scene why this package was initiated by the federal government supporting over one million employees, around 9% of all employees in the country, working in the construction industry, which provides an estimated $100 billion and a whopping 5 per cent of our economic output each year. 
  2. How home building in Australia was collapsing prior to Covid-19 after four boom years to 2017-18, when the industry started around 225,000 homes a year. Starts have since fallen to around 165,000 this financial year due to a cascading set of events from the tightening of finance by APRA, The Banking Royal Commission and the exit of investors, particularly from offshore, and the consequent inability to finance apartment projects. 
  3. Unpack the In’s and Out’s of the scheme, who can take advantage and the criteria for grant approval, how, where, when and why. 
  4. Discuss why the package is well balanced, whilst also dissecting some potential weaknesses.   
  5. How state government has said it will play a role in speeding up council approvals if needed, which must be obtained prior to signing the build contract.  
  6. Why regional areas and first-time buyers may be the big winners due to the lower value entry points, and the state-based grants and stamp duty benefits already on offer. A close second could be those who were about to embark on a major home renovation. 
  7. The impact this could have on the established property market. We could see a resurgence in home buyers wanting to buy a doer upper home. To do this within the almost 7-month time frame is no mean feat.  
  8. How the economic effects of the stimulus will flow through the broader economy and property market on a macro-economic level and this will mostly be a good news story.  
  9. Why Australia continues to build on its international reputation as a safe haven for the flow of overseas investment and capital which is vital to our economic prosperity as a capital importing nation. This has been reflected in the international willingness to purchase our government bonds, the Aussie dollar and ASX share market. The latter two of which hit 5 month and 3 month-high’s respectively this week.  
  10. And of course, our “gold nuggets”! 

Ep 51 show notes

Ep 50: Tenants from hell

A good property manager is worth their weight in gold, and equally, so is a good tenant. A great tenant who is happy and obliging will stay in your property for a long time – avoiding long gaps between tenancies, advertising costs for vacancies and loss of rental income. 

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. What makes a good tenant, it’s more than simply paying on time. 
  2. What does a bad tenant look like? A bad tenant is a liability to avoid at all costs.  
  3. Does your property manager stack up? A bad property manager can be worse than a bad tenant.  
  4. The correlation between the quality of property and the quality of tenant. Low socio-economic areas do not necessarily equate with bad tenants.  
  5. How to capture a great tenant. Pricing your rent, asking great questions, arranging open for inspections and knowing your property inside out.  
  6. And of course, our “gold nuggets”! 

Episode 50 show notes

Ep 49: Market update – The view from the coalface, sentiment and push-pull factors

In the ninth Podcast since Covid-19 took hold, we turned our thoughts to the property market forces at play, how sentiment is increasing as restrictions are easing and what’s on the horizon for property. 

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. Supply of properties on the market continue to remain low, however competition is picking up as more buyers are jumping into the mix.  
  2. The outlook for construction remains uncertain as building and development contracts come to an end, however Government intervention is likely to support new building projects.  
  3. How the downturn has sparked interest in diversification, as we see investors looking for more balance in their portfolios, flocking to assets with a higher yield. Could this be an opportunity to snap up a great capital growth asset while yield focussed properties have higher demand? 
  4. The tried and true fundamentals of property remain the same throughout Covid-19, and that is that quality real estate is holding strong.  
  5. The long-term impact of reduced rents as demand for rentals decreases and supply increases and the sub-markets likely to be impacted the most.  
  6. How the reduction in interest rates is helping to offset many of the negative market forces in play.  

We wish you and your families the best of health and say a big thank you to all our health workers during this time. 

Ep 48: Offset accounts – God’s gift to mortgage strategy

This week we return to our podcast episodes recorded prior to Coronavirus. In this episode, we discuss offset accounts, God’s gift to mortgage strategy!

The effective use of offset accounts is one of our Top 5 strategies for creating wealth through property, it greases the wheels of the other mortgage strategies – optimisng tax deductions, ability to hold and accumulate property, money management system, risk management and offset accounts.

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. Optimising tax deductions, how utislising your offset account will help you to save tens of thousands in future tax deductions over your lifetime. 
  2. How offset accounts can help you to hold property you would have otherwise needed to sell. This alone may add $1,000,000 to your bottom line in retirement.  
  3. Calling all upgraders, how you can put your best foot forward and maximise your ability to keep your current home as an investment when you upgrade. 
  4. Why offset accounts and your mortgage strategy are fundamental to your risk management.  Counter intuitively, as we have said for a long time, a lower forced payment allows you to build up more savings via your offsets without costing extra interest, allowing you to build up savings buffers and have additional surplus monthly cash flow.  
  5. The government and banks targeted mortgages during this crisis to help the economy. Great to see the government and banks get on board with our long-held mortgage strategy during a crisis! 
  6. An offset account is not the same as redraw; and misappropriation could not only cost you tax deductions, you might also get in trouble with the ATO! There is a critical difference which confuses many and could cause you to fail the ‘purpose test’. 
  7. How offset accounts provide the platform for your Money Management System  
  8. Many lenders now offer multiple offset accounts that can be linked to the one loan keeping more dollars in your pocket through interest savings and better tracking of your spending.  
  9. Interest earning accounts V offset accountand why an offset account has greater financial benefits to you.  
  10.  Interest only V principal and interest – How your repayment strategy can provide you with choice and flexibility whilst optimising your tax deductions, managing risk, growing your cash savings buffer, and enhancing your ability to keep and accumulate property. Counter intuitively, sometimes paying less is more in the long run – if you are using offset accounts of course.  
  11. And of course, our ‘gold nuggets’! 

Episode 48 show notes

Ep 47: Market update – What’s ahead – the stabilisers, economic factors and what if’s!

In the eighth Podcast since Covid-19 took hold, we turned our thoughts to the property market and the multitude of forces that determine its trajectory. We look at the stabilisers, head winds and yes, even tail winds, despite what the mass media might have you believe!  

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. The seller’s market, how supply and low interest rates are underpinning property values.  
  2. Why auction clearance rates have improved each week for the last three weeks and one noted property market expert with a proven track record is re-calibrating his previous dire predictions for the market.  
  3. Why access to finance is critical to supporting property values, and how lender policies are adjusting given the changing economic situation.  
  4. The forecast for unemployment what this means for the property market.  
  5. The impact of sustained low interest rates on property values based on RBA modelling. 
  6. How property values remained resilient during the early 90’s recession despite unemployment above 10% and the RBA cash rate peaked at a punishing 17.5 per cent.   
  7. An update on relaxed restrictions as state governments begin the process of easing, with kids returning to school and social gatherings back on the agenda.  
  8. And of course, our ‘gold nuggets’! 

We wish you and your families the best of health and say a big thank you to all our health workers during this time. 

Ep 47 show notes

Ep 46: Market update – Recovery lessons from recent recessions, the great depression, GFC & Spanish Flu – the market forecast

In the seventh Podcast since Covid-19 took hold, we turned our thoughts to the alarmist headlines emerging, warning that the property market will drop by 20-30%. Why in all likelihood that won’t be the case by taking a critical eye to data and forecasting, and jumping in the time machine to look at the economic impact of previous pandemics and recessions on the property market. 

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. Shock headlines that property values will drop by 20-30% and why this is the absolute worst case and unlikely scenario. Why you should be careful what you read, as most headlines are negative clickbait, but the content is positive.  
  2. The view of economists and other respected market forecasters that the property market will only drop by 5-15%. Why we urge you to seek data from credible sources, whose area of expertise and skill set focus on the property market.  
  3. A look at the Spanish Flu, followed by the Great Depression and how the policy and events of the time stack up to our current situation 
  4. Analysing data from Australia’s most recent recessions for insights as to how the property market will fair. The results will surprise you! 
  5. And of course, our ‘gold nuggets’! 

We wish you and your families the best of health and say a big thank you to all our health workers during this time. 

Ep 46 show notes

Ep 45: Market update – Getting your ducks in a row before the economy opens up!

In the sixth Podcast since Covid-19 took hold, we turned our thoughts to focusing on planning for your next property decision, as the governments start planning for, and implementing, the releasing of some restrictions to begin opening up the economy.

Did you know 10 people can attend an open for inspection in Western Australia now?

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through:

  1. Confidence and market sentiment continue to rise with the data telling us more people are walking, driving and working as two states lift restrictions, with case numbers reducing to zero in a number of states and territories.
  2. Property market economics and how they are different to the broader economy. The property market is expected to bounce back faster, there is a different set of factors at play when it comes to property values V the broader economy and job market.
  3. What stimulus will remain after 6 months, what reform agenda will be rolled out, and what new incentives will be added to drive the economy? Many lender and government initiatives have a timeframe of 6 months, but other incentives and reform will be instigated to underpin property values and buyer demand, while some of the stimulus will remain for some time.
  4. Who are the likely sellers and buyers in today’s market? 
  5. How to get clarity on your next property decision so you are ready to take advantage of buying opportunities! Now is a time for introspection and reflection, ultimately you will fall into one of two camps – people who are happy with their current home and those who wished they were in a different property. We will see many motivated home buyers after this experience who have re-evaluated their lifestyle preferences and canny investors looking to buy before prices rise.
  6. How coronavirus has challenged the mindsets of investors, money management, risk management and lifestyle choices – and why it is a great education opportunity for many home owners and investors.
  7. The importance of money management and planning for the future – Covid-19 is a great example of precisely why we have focused for two decades on managing risk via your mortgage strategy, despite many of the strategies being counter intuitive during the good times. Good money management never goes out of fashion, nor does a sizeable war chest. You never know when you may require a liquidity bridge. It may when you start a family, or it may be when Covid-24 strikes in ten years’ time!
  8. Reverse engineering your price point via your money goals – Setting Money Goals which should determine your property price, strategy and selection. Merely borrowing the maximum available that the lender will provide, without any thought to your monthly surplus cash flow and available funds buffer after you purchase is a great way to get you into trouble, as Covid-19 has amplified.
  9. The Property Planner, Buyer and Professor share what advice they would give their kids, staff and students if they were wondering if they should buy now or wait.  
  10. And of course, our ‘gold nuggets’! 

We wish you and your families the best of health and say a big thank you to all our health workers during this time. 

Ep 45show notes

Ep 44: Market update – The green shoots – what are the early signs of market recovery?

In the fifth of our Covid-19 Podcast specials recorded on Monday, we turned our thoughts to focusing on the green shoots, marking the early signs of recovery with the federal and state governments now turning their focus on how we navigate an effective exit of the shutdown, whilst keeping infections low or entirely eradicated. We have seen talk of lifting restrictions, sporting bodies have been working through their plan to get back on the field and elective surgeries are back on the agenda. This adjustment in focus to how we exit successfully has the ability to spur on the initial turn in market sentiment and provide a glimpse into the possibility of opening back up the economy and workplaces.

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through:

  1. What are the tell-tale signs of recovery and a rebound in market sentiment?
  2. Comparing the market forces between last year’s post-election recovery and how the post Covid-19 property market rebound could play out in 2020 and 2021.
  3. Who are the early movers that have the confidence to purchase in a shifting market and are you prepared to take the plunge?
  4. Negative Nellie’s – why the media is focused on predominantly negative outcomes and you should be very selective in who and what you listen to.
  5. The Bull Market of the last two weeks and how the US federal reserve stared down short sellers – how the share markets are a leading indicator of the overall economy (but has the rebound been overly optimistic?), what the US federal reserve did to stave of short selling hedge funds and some education on how the financial markets work.
  6. And of course, our ‘gold nuggets’!

We wish you and your families the best of health and say a big thank you to all our health workers during this time. 

Ep 44 show notes

Ep 43: Market update – The update for residential and commercial landlords & tenants, vendors, Airbnb and your mortgage strategy!

In the fourth Podcast in our Covid-19 specials recorded on Monday we turned our thoughts to focusing on the impact to landlords, tenants and those selling property. NSW and QLD have released their packages for assistance to landlords and the residential market was rocked last week by Consumer Affairs Victoria announcing that open for inspections for occupied homes would be banned. Victoria has since backtracked and reversed these restrictive regulations yesterday.  

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. Restrictions on landlords – as the state governments enact ‘no evictions’ for non-payment of rent, preventions on rental increases and inspections done via video conference.  
  2. What to do if your tenant is unable to pay rent – if you have a stable income, now is the time to refinance to reduce repayments, get on a lower rate, consolidate debt, access equity to increase your liquidity bridge to get you through to the other side. Be clear on your landlord insurance and what it does or does not cover. Get on the phone with your lender and swap to interest only – ASIC has updated their responsible lending guidelines to allow for this. Repayment pauses are available and should be an option of last resort as most lenders are capitalising interest.  
  3. Tenants who are falling through the cracks – international students, those on temporary visas and people casually employed for less than 12 months do not meet JobKeeper and Jobseeker criteria. 
  4. Regulations for commercial rentals – if your business has been impacted by Covid-19, your rent must be decreased by 50% of the revenue lost, if you have lost more than 30% revenue, with 2 years to make up the difference.  
  5. The longer-term impact to the commercial rental market as businesses successfully work from home.  
  6. Lack of regulation for residential rentals as the rental market takes a dip – landlords encouraged to cut a deal with their tenants and real estate agents left to decide how this process is managed. Anecdotally, rents have decreased by 5-15% due to decreasing demand. On the supply side, Airbnb and other properties which were short-stay rentals are set to come onto the market in droves. 
  7. Increasing difficulty to sell – as Consumer Affairs Victoria has quickly revoked their regulation announced last week that occupied homes could not host open for inspections.  
  8. And of course, our ‘gold nuggets’!  

We wish you and your families the best of health and say a big thank you to all our health workers during this time. 

Ep 43 show notes

Ep 42: Market update – How to protect your war chest and the market outlook

In the third Podcast in our Covid-19 specials recorded on Monday we turned our thoughts to focusing on what the property market is doing during this period, what it could look like as we come out the other side, and how to proactively protect your financial position through an effective mortgage strategy.  

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. Why we think property values will have a floor put under them during this period, but rental yields may be more precarious. Airbnb was declared illegal in NSW after going to air. Presciently we covered off on how the demand for Airbnb was being decimated and what this and other supply factors will mean to the rental market.
  2. Gearing up for the property rebound as markets open up and how to get yourself ready to be a first mover.  
  3. Calling all upgraders – if you still have a stable income, now would be a great time to upgrade as the higher value properties will see the biggest discounting.
  4. What you can do to protect your financial position during this period. We once again talk through why ‘risk management’ is one of our 5 core mortgage strategies and how you can proactively protect yourself during the proverbial rainy day or months.
  5. “Hot off the press” ASIC allow switching from principal and interest to interest only without completing a full application and financial assessment.
  6. Property prices in all capital cities except Hobart recorded value increases during March but what are some of the nuances with this data?
  7. Flattening the curve and the light at the end of the tunnel – we’ve gone from a peak of 28% increase in infections, and we are now down at 2%-3% in the last two days. These are the trigger points that economists are looking for to signal economic recovery. Despite some of the horrific news, many of the worst hit nations appear to have reached their peak and the number of infections are starting to decelerate.  As a result, we’ve seen more stability across the share markets over the world in recent days, including USA and Australia.
  8. How agent behaviour will change towards buyers  with agents facilitating inspections individually and how agents will be more particular with who they sell property to.
  9. Be wary of the mortgage repayment pause because your interest could be capitalising which means you will have a greater debt at the of the period.
  10. And of course, our ‘gold nuggets’!  

We wish you and your families the best of health and say a big thank you to all our health workers during this time. 

Ep 42 show notes

Ep 41: Market update – Property, economic and policy implications and ideas, & why now is the best time in history to refinance! 

We recorded the second Podcast in the space of five days of our Covid-19 specials on Monday to keep you updated with some of the latest news, as we assist you to navigate the rapidly changing property, financial and economic landscape. On this day, the share market had its biggest jump in 40 years with the expectation of the $130b government package which was announced that night. Victorian Premier Daniel Andrews also took his state into Stage 3 lockdown.   

In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 

  1. The unaddressed impact to landlords – as the Government announces no evictions for tenants who can’t pay rent but is yet to decide on how to support landlords beyond the bank’s assistance. 
  2. We suggest ideas for how to assist self-funded retirees relying on rental income – whose income level have dropped below the standard pension.    
  3. Why now is the best time in history to refinance to proactively manage risk and cash flow. Risk management has always been one of our five mortgage strategies, well prior to the Covid-19 contagion. The strategies have always been counter intuitive because they include a larger loan limit, lower minimum repayment and using offset accounts for surplus funds. Each strategy amounts to a bigger buffer when supported by an effective money management system. This all leads to flexibility for emergencies, such as right now for many. 
  4. The implications of the pending government stimulus package for businesses and those who have lost their jobs and how business owners can approach the situation of declining revenue. 
  5. Why you should spend (appropriately) if you have a safe job and a large buffer to keep the economy moving and Australian’s in jobs. Every dollar spent helps pay a wage somewhere.  
  6. The problem v the solution – The big philosophical question that has no perfect answer, but everyone has an opinion on. At what point does the economic shutdown leave a longer lasting negative impact from a health and financial perspective than the effects of the virus? 
  7. Flattening the curve – how the daily percentage rate of infections has reduced and what we can do to continue this trajectory. 
  8. Lockdown, what does Stage 3 and Stage 4 actually mean? 
  9. Property market update – how the market is expected to stay relatively consistent for sought after property, as seen at the coal face with a slump in sellers and buyers. But there are sprinklings of opportunities to purchase at a discount as some people are forced to sell.  
  10. And of course, our ‘gold nuggets’ to get you through this period. 

We wish you and your families the best of health and say a big thank you to all our health workers during this time. 

Ep 41 show notes

Ep 40: How to build your liquidity bridge to the other side

We recorded a special Covid-19 Podcast yesterday to keep all of our listeners updated with some of the latest news, as we attempt to navigate the rapidly changing financial and property market landscape.  In this special episode  

Cate, Peter and Dave take you through: 

  1. A detailed update on the status of the financial markets as they are lead indicators for what is ahead and help us to look beyond the near-term. In the last few days, we have seen a significant share market rebound off the back of the US $2trillion (USD) stimulus package, including the single largest day jump in history in the US. 
  2. A historical stock market comparison. We provide perspective as to how well the market is holding up, in comparison to other key periods in history.  
  3. How the Shanghai stock exchange has fallen and recovered. 
  4. Information about the government stimulus package. 
  5. The support being provided to SME’s, the temporarily unemployed and vulnerable consumers.  
  6. The vital role the banks are playing, with great assistance from the RBA, including reducing interest rates and buying up bonds to keep rates low. 
  7. How YOU can build your own bridge of liquidity through to the other side.   
  8. Real-life examples of the impact on landlords and renters. 
  9. And of course, our ‘gold nuggets’ to get you through this period. 

We hasten to say that first and foremost, Covid-19 is a major public health issue, that has severely impacted economic activity, essentially due to the lack of personal mobility.   

The resounding message is that this is temporary. The reality is that Covid-19 will have an end date. Once mobility resumes, the economy will resume, and in all likelihood, at a faster rate than ever in history.  

Let’s each build our liquidity bridge and support one another, SME businesses and owner’s, as the largest employer of Australians, those who are temporarily out of work, and the vulnerable on our way through to the other side.  

We wish you and your families the best of health and say a big thank you to all our health workers during this time. 

Ep 40 show notes

Ep 39: Why Sydney and Melbourne outperform

Today’s episode is all about what the Governor of the Reserve Bank of Australia, Phillip Lowe has called ‘superstar cities’ – Sydney and Melbourne. 

What is it about these two cities that give them ‘superstar’ status, drawing international attention and capital growth acclaim? 

In episode 39, we discuss “Why Sydney and Melbourne outperform” 

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through the reasons why Sydney and Melbourne are leaders in median capital growth, why diversification is still a critical factor in your property strategy and how property selection can put you a cut above the rest.  

Episode 39 show notes

Ep 38: Are you being true to your new year’s resolution?

How are you tracking with your new year’s property resolutions?
Statistics show that less than 1 in 10 people keep their new year’s resolutions.
Sure, after the celebrations and holidays are over, life can get in the way. Getting back to the grind can get you stuck in the mud. But if your resolutions involved an element of property planning or wealth creation, you are doing yourself a disservice by not following through.
In episode 38, we discuss “Are you being true to your new year’s resolution?”
Listen as David Johnston, Cate Bakos and Peter Koulizos take you through why investors make new year’s resolutions, tips for planning and setting your goals, and what you can do to stay on track to achieving them.

Episode 38 show notes

Ep 37: Needing to sell property too soon – No.7 of the top 7 Critical Mistakes

Did you know that purchasing three homes and selling your first two over your property journey can equate to a financial loss of 10% of your lifetime earnings? 

You work too hard to throw away that kind of money!   

In episode 37, we discuss “Needing to sell property too soon” – No. 7 of the top 7 Critical Mistakes.    

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through the causes that trigger a premature decision to sell, how you can maximise your ability to hold property and how selling properties can impact your bottom line during the ‘flexibility stage of life’. 

Episode 37 show notes

Ep 36: Buying the wrong property and/or the wrong location – No.6 of the top 7 Critical Mistakes

It’s time to play a game of “which would you rather?” 

An investment property with a great floor plan and a daggy fit-out or a freshly renovated dwelling with living areas located in places that make you scratch your head?  

A location under a flight path but close to the CBD, or away from a flight path, but further away from the city? 

In episode 36, we discuss “Buying the wrong property and/or the wrong location” – No.6 of the top 7 Critical Mistakes.   

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through what exactly is a ‘wrong’ location and property, tips that will help you spot a winning location, pocket, street and property, and many of the key questions to ask yourself about what you’re willing to compromise on. Because unfortunately, compromise is inevitable. No properties will rate as a 100/100.  

Episode 36 show notes

Ep 35: Emotional decision making – No.5 of the top 7 Critical Mistakes

In this episode, we tackle the art and science of recognising and removing emotions when purchasing a property. When we are not thinking objectively, we risk making poor impulsive decisions. In the property game, this can mean purchasing an under-performing asset, losing money, having to start all over again and regretting the home you have chosen for yourself. 

So how do emotions impact our judgement and decision making?  

This question has been explored in great depth in the last couple of decades, so much so that ‘Judgement and Decision Making’ has now been reduced to an acronym, JDM, in the world of social science.  

Take a listen as David Johnston, Cate Bakos and Peter Koulizos take you through the property related causes of emotional decision making, how you can detach yourself to make objective decisions and the emotional biases that we all have.  

Episode 35 show notes

Ep 34: No mortgage strategy – No.4 of the top 7 Critical Mistakes

How does an extra cool million $$ sound for your retirement?

Or how about a war chest that will get you through any battle life throws at you?

An effective Mortgage strategy can make this difference for you, but it is the least understood discipline of finance professionals.

Why is that, when for most people, it’s your largest expense? Ever.

In episode 34, we discuss “No mortgage strategy” – No.4 of the top 7 Critical Mistakes.

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through why mortgage strategy is vital to create wealth and protect your downside.

Episode 34 show notes

Ep 33: Starting without a plan and end goal – No.3 of the top 7 Critical Mistakes 

Have you ever done a long-distance run with a blindfold on?

It takes longer, you come across bumps and collect some bruises on the way.

Not very effective if you’d like to cross the finish line in one piece Or at all.

Yet many people buy property without a plan or clear idea of where they want to end up. This is the property equivalent of getting into the starting blocks with the blindfold on.

Which brings us to number 3 of our 7 critical mistakes.

In episode 33, we discuss “Starting without a plan and an end goal” – No.3 of the top 7 Critical Mistakes.

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through why planning is critical to success, the mistakes to avoid when putting together your plan and the misconceptions that trap property investors.

Episode 33 show notes

Ep 32: Misunderstanding what makes a good property investment – No.2 of the top 7 Critical Mistakes 

Give me one dollar and I’ll give you 35 cents back. Doesn’t sound like a great deal does it? In fact, it sounds like you’ve been cheated.

Yet property spruikers will point to tax deductions as a reason to invest. In their property. That they are trying to sell you. Which they make a margin on. At your expense.

The ability to claim a tax deduction is certainly a benefit, but it should never be the primary reason for investing.

And it definitely does NOT mean that the property you are purchasing is a quality investment.

In episode 32, we discuss “Misunderstanding what makes a good property investment” – No.2 of the top 7 Critical Mistakes.

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through examples of the wrong reasons behind why some people invest in property.

Episode 32 show notes

Ep 31: Get rich quick schemes – No.1 of the top 7 Critical Mistakes

We all love the idea of a get rich quick scheme. Just imagine planting some money, growing it in abundance and next week you’re off on holiday… indefinitely.

Most of us understand that in reality, that’s not how things work.

In fact, get rich quick schemes are commonly a great way to lose your money.

In episode 31, we discuss “Get rich quick schemes” – No.1 of the top 7 Critical Mistakes.

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through the schemes to look out for, why higher returns demand higher risk and why if it sounds too good to be true, it probably is.

Episode 31 show notes

Ep 30: Money Management – 7 steps to success   

Money – it can be your best friend or your worst nightmare.

Being able to manage your money is not only vital to financial success, it is also critical to your mental well-being. Most research shows that concerns about money are in the top 1 or 2 stressors of our lives.

It only takes a few big bills to make you feel like your credit card or depleting savings is a runaway horse, threatening to buck you further away from your goals. But we aim to get you back in the driver’s seat and on track to achieving your ideal lifestyle.

In episode 30, we discuss “Money Management – 7 steps to success”.

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through the 7 steps to implementing an effective money management system, the critical mistakes to avoid and how you can spend more money on what matters most to you.

Episode 30 show notes

Ep 29: Congenial negotiation tactics and how to apply them in the right situation  

So, you’ve found the property for you and now comes the negotiation battle.  

Get ready and brace yourself! It may be time to put down your shield and sword. 

Not all negotiations are adversarial back and forth matches of strikes and sneaky jabs. Sometimes the softer approach is the winning one.  

In episode 29, we discuss “Congenial negotiation tactics and how to apply them in the right situation”. 

Listen as David Johnston, Cate Bakos and Peter Koulizos take us through how to build trust with real estate agents and get on their good side, why adversarial negotiations are not always desirable and how you can cut the competition off at the knees.  

Episode 29 show notes

Ep 28: 2019, the year that was (and a sneak peek at 2020).  

Jump on the roller coaster as we take a look at 2019 in the rear view mirror.  

If you look to your left you will see the Royal Commission into Banking coming to a close with a slap on the wrist for lenders. On the right we have the LNP with a surprise victory, taking out the election. Back to your left is APRA reducing the assessment rate and caps on lending and the RBA slashing rates.  

Hold on to your hats ladies and gentlemen! We’ve hit the trough and started to climb.  

In episode 28, we discuss “2019, the year that was (and a sneak peek at 2020)”. 

Listen as David Johnston, Cate Bakos and Peter Koulizos take us through the events that shaped the property market as we shut the door on 2019 and some predictions of what’s in store for 2020.  

Episode 28 show notes

Ep 27: How many properties do you need to retire wealthy?  

The magic number.  

There are many voices and opinions which will tell you that you need to amass as much property as you can over your life time.  

We’ll let you in on a secret – in the property game, it’s often the case that less is more!  

In episode 27, we dissect “How many properties do you need to retire wealthy?”. 

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through why 2 to 5 properties is the optimal number for most Australians, why quality trumps quantity and the danger of taking the advice of property spruikers

Episode 27 show notes

Ep 26: The different property types that you can spend your hard earned cash on

Property – it’s a veritable panacea for reaching any of your financial or lifestyle goals.  

But not all property is created equally. Property comes in many different shapes and sizes, purposes and potentials.  

The key is knowing what type of property asset is the smartest buy to align with your long-term goals.  

In episode 26, we dissect “The different property types that you can spend your hard earned cash on”. 

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through the ins and outs of residential property, as well as the risks and rewards of commercial investment opportunities.  

Episode 26 show notes

Ep 25: Why is property a good asset class to invest in?

Leaving aside those who invest in vintage cars or antiques, the vast majority of Australian’s will make a choice between investing in propertyshares or a combination of both.   

There’s no doubt that the key to retiring comfortably is to make good investment choices throughout your working life.  

So, what’s inside your investment portfolio? 

In episode 25, we dissect “Why is property a good asset class to invest in”. 

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through why property is perceived as a reliable investment, the pitfalls that you don’t get with shares and the need for diversification 

Episode 25 show notes

Ep 24: How mortgage strategy shapes your ability to hold property, and grow your wealth for decades into the future!

It’s widely known that getting a low interest rate can save you hundreds and thousands of dollars over your life time. What most people don’t get is how an effective mortgage strategy can make you hundreds of thousands of dollars, or more, over the same period.

In episode 24, we dissect “How mortgage strategy shapes your ability to hold property, and grow your wealth for decades into the future!”.

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through the mortgage strategies that if you get right, will empower you to grow your wealth through holding property rather than selling.

Selling property that could have been held through better planning is the biggest property regret most people have in life!

So, take a listen as the team unpack why your mortgage strategy needs to come first, before selecting the lender and a great interest rate!

Episode 24 show notes

Ep 23: How property and market trends have changed over the decades

Get ready to jump in the time machine and explore Australia’s transition through the decades. Learn how our approach to living has been impacted by the fortunes and growth of our nation.

The team cover Victorians to Edwardian’s, pre—war to post war, art-deco to villa units, toilets separate to the house to alfresco dining, split level living, formal dining rooms, McMansions and everything in between.

It’s clear to see that changes in property trends have mostly boiled down to three things – evolutions in wealth, transport and jobs.

In episode 23, we dissect “How property and market trends have changed over the decades”

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through the changes that have shaped the property market, how our view of ideal living has evolved over time, and we gaze through the crystal ball for a glimpse at the future.

Episode 23 show notes

Ep 22: Why the family home is often the biggest piece of the investment puzzle

We all have a picture in our heads of what our ideal home looks like.  

For most of us, chasing our ideal home can be akin to chasing a unicorn. Unless you have a bottomless pocket, compromises will need to be made (particularly if you’re a first home buyer). 

In episode 22, we dissect “Why the family home is commonly the biggest piece of the investment puzzle. 

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through why you should treat your home as your greatest investment, the compromises you should plan for and the critical mistakes to avoid!  

Episode 22 show notes

Ep 21: Why price point should determine location and strategy

Ever tried to run a race backwards? Reaching your goals is just as hard when you are working back to front.  

We see plenty of purchasers let a bank tell them their price point based on a maximum borrowing capacity and then purchase next door to where they live. This is the investing equivalent of doing a three-legged race with your partner. Blindfolded.  

Set yourself goals, that will determine the appropriate price point. Then work out the best location to purchase from there.  

In episode 21, we dissect “Why price point should determine location and strategy”  

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through how to get at your true price point, the compromises you need to make peace with and the critical mistakes to avoid.  

Episode 21 show notes

Ep 20: Bidding tactics 101

Bidding at auction – for the majority of us, this can feel like stepping into the Thunderdome.  

After all, only one will leave victorious.  

Chances are, all the other bidders are just as nervous as you. So how do you get the upper hand without letting your emotions run away?  

In episode 20, we dissect “Bidding tactics 101”  

Listen as David Johnston, Cate Bakos and Peter Koulizos take you through how to keep a cool head on auction day, reading the play and strategies to add to your arsenal. 

Episode 20 show notes

Ep 19: TIME IN the market v TIMING the market

Should you use the crystal ball to determine where we sit in the economic and market cycle OR 

Should you purchase quality property when it suits your own personal economy? 

In episode 19, we dissect “TIME IN the market v TIMING the market” and the evidence is very clear, the odds are stacked heavily in one direction. Which is it and why? 

Take a listen as the Property Professor takes you through his analysis across each capital city over an extended period of time, and the team dissect it with a fine-tooth comb! 

So, grab your vanilla slice and fruit mince pies (as Peter did before the episode), sit back and relax as David Johnston, Cate Bakos and Peter Koulizos break down the dataexpose the upside, risks and poor outcomes on this age-old topic! 

Episode 19 show notes

Ep 18: When to hold and when to fold!

Making a decision to fold can be a nerve-racking ordeal. And we’re not just talking about playing cards.  

Sometimes you need to make difficult decisions about properties you have purchased. Whether the property hasn’t performed as you had initially hoped or some life event has changed your plans.  

There’s one thing for sure though  the stakes are high! 

In episode 18, the Property Planner, Buyer and Professor dissect “When to hold and when to fold!”  

Listen as David Johnston, Cate Bakos and Peter Koulizos, take you through the considerations before making a decision to sellthe strategies to get right to avoid selling and their own stories of folding too soon.  

PS – Be sure to stick around to hear the trio singing Kenny Roger’s Gambler! 

Episode 18 show notes

Ep 17: Valuations 101 

School’s back in session and this week’s topic includes everything you need to know about valuations. There are many different types, each producing a different result based on the purpose.

In episode 17, the Property Planner, Buyer and Professor dissect the ins and outs of “Valuations 101”.

Listen as David Johnston, Cate Bakos and Peter Koulizos, take you through the different types of valuations, the consequences of falling short and how you can proactively support a valuer with comparables to manage the risk of a conservative lender valuation.

Episode 17 show notes

Ep 16: Unpacking land to asset ratio

Yep – no footy talk in this episode – it’s all Land to asset ratio and what a ripper of an episode this one is.  

In episode 16, we dissect the mystery behind “Unpacking land to asset ratio.”

Listen as David Johnston, Cate Bakos and Peter Koulizos, take you through what is it, why it underpins a good investment strategy, and whether there is a perfect ratio!  

Episode 16 show notes

Ep 15: Why you must keep clear of properties banks don’t like!

Banks – can’t live with them, can’t live without them!

Did you know that lenders limit the amount they will lend against certain properties and they reject some outright as security for a mortgage? Do you know which ones and why?  

In episode 15, the Property Planner, Buyer and Professor dissect “Why you must keep clear of properties banks don’t like!” If we all accept that banks want to make money – we can understand that there is method to their madness. 

Listen as David Johnston, Cate Bakos and Peter Koulizos, take you through what property locations and dwelling types the banks turn down and why the banks put restrictions on certain properties in the first place. It may just save you from making a big mistake. The last thing you want is to be left high and dry without finance and a dud asset 

As if purchasing a property wasn’t stressful enough! 

Episode 15 show notes

Ep 14: How to choose a location for investment – what to look for and what to avoid

Weekend excursions, reconnaissance missions and scoping out an area. While you may not be a secret government agent, you are on the property hunt, looking to make your next big decision.

And did we mention you also need to be a time-traveller? Analysing data to ascertain historical outcomes and looking forward to determine future expectations.

Understanding the key data based fundamentals of a location is part and parcel to making a successful property decision.

In episode 14, the Property Planner, Buyer and Professor dissect “If you’re going to invest in a new area, what in particular are you looking for”

Listen to David Johnston, Cate Bakos and Peter Koulizos, as they take you through the critical considerations when choosing a location for investment.

Episode 14 show notes

Ep 13: How age and stage of life can impact your property plan and selection

The type of property that suits your current needs, will not necessarily meet your long-term needs.

Beware of middle-aged children, pregnant women and dads at an auction or during property negotiation! They have a time deadline and the purchase price is less important.

Where you are competing to purchase a property and you are up against people who are motivated by time – instead of money – the price tag can quickly fly out of reach.

In episode 13, the Property Planner, Buyer and Professor dissect “How age and life stage can impact a property strategy”

Listen to David Johnston, Cate Bakos and Peter Koulizos as they take you through the critical considerations and how they change throughout your life’s journey.

Episode 13 show notes

Ep 12: Property Cycle Management – why now is always the best time to buy if it suits your personal economy and you have a long-term property plan

The media hype around timing the property market can lead to indecisions and paralysis by analysis that can be the huge killer of wealth creation. You may ask yourself what if property prices fall? Do you ask yourself what if they keep going up?

In our 12th episode, the Property Planner, Buyer and Professor dissect “Property cycle management – why now is always the best time to buy if it suits your personal economy and you have a long-term property plan.”

Listen to David Johnston, Cate Bakos and Peter Koulizos as they take you through market cycles, the catalysts behind market movements and how to deal with a downturn.

Episode 12 show notes

Ep 11: Small time development – How it can work for you, but is it a risk worth taking?

Everywhere you go, new townhouses and apartments are springing up in droves. Does that mean you should be getting in on the action and become a small-time developer?

In our 11th episode, the Property Planner, Buyer and Professor dissect “Small time development – how it can work for you, but is it a risk worth taking”?

Listen to David Johnston, Cate Bakos and Peter Koulizos as they take you through where to begin if you’re interested in property development, the inherent risks and of course, setting your strategy before going on the hunt for a viable site.

Episode 11 – show notes

Ep 10: Why your approach and assessment of risk is paramount to property success!

How do you frame risk when making property, mortgage and money decisions?

What risk management strategies do you have in place within your property plan, mortgage and property selection strategies to minimise your downside while optimising the upside?

It can be a tricky balancing act.

In our tenth episode, the Property Planner, Buyer and Professor dissect “Why your approach and assessment of risk is paramount to property success”, and if done poorly, how it can lead you up the garden path!

Episode 10 – show notes

Ep 9: Why your mortgage strategy is more important than your interest rate?

Do you have a mortgage strategy for your largest expense in your lifetime – or have you focused on a short-term win – your interest rate?

What if I told you that you can have the best of both worlds, a great mortgage strategy AND interest rate!

In our ninth episode, the Property Planner, Buyer and Professor dissect “Why your mortgage strategy is more important than your interest rate”.

This isn’t simply about paying down your mortgage faster. Everyone understands that!

Episode 9 – show notes

Ep 8: Interpreting data to uncover an outstanding property and location– and how to sort the gold from the lies, damn lies and statistics!

In our eighth episode, and now on our own Podcast channel, our Property Planner, Buyer and Professor will be discussing how to sort the data ‘gold’ from the lies, when it comes to property and location data analysis.

Data can provide great insights, but it will never give you the full picture.

One of the key errors a property investor can make is hanging your hat on data. You need to be careful that you are not the artist painting the canvas with the data and statistics that tell you the story you want to hear!

Listen to our three experts as they dissect the different types of data, data providers and the way the information can be sliced and diced!

Ep 7: How to assess and select property like an A-grade Buyer’s Agent

In our seventh episode, “How to select property like an A-grade buyer’s agent”, our Property Planner, Buyer and Professor will be discussing:

1.The keys to selecting quality assets – whether you are purchasing a home or investment.
2.Why a bargain may not be all it’s cracked up to be.
3.Critical traps that could mislead you on your property hunt – and how to avoid them!

Ep 6: What determines your Property Strategy

In our sixth episode, “What determines your Property Strategy”, our Property Planner, Buyer and Professor will be discussing:

1. How do you decide whether your next purchase will be lifestyle or investment?
2. What is your financial return focus? And how does this apply to you when purchasing a home?
3. Are you provisioning for future plans?
4. Do you know how many properties will be required in your portfolio to enable you to meet your goals?
5. How your Mortgage Strategy is a critical element in helping you achieve your Property Strategy.
6. Typical mistakes and how to avoid them!

Ep 5: The lifestyle vs Investment conundrum

In this podcast our Property Planner, Buyer and Professor delve beyond the numbers and answer the lifestyle questions behind property strategies and decision-making. Often, it’s not all black and white when it comes to property planning and buying, and the team will show you why.

Ep 4: How to develop your own Property Plan – start with the end in mind!

In this podcast our Property Planner, Buyer and Professor discusses about the three steps to developing a successful Property Plan!

Step 1) Plan
Step 2) Strategy
Step 3) Select.

Ep 3: Meet the Property Professor, Peter Koulizos

This podcast is dedicated to meeting the Property Professor, Peter Koulizos who will provide his insights and philosophy on why Property Selection is so vital to your financial success!

Ep 2: Meet the Property Buyer, Cate Bakos

This podcast is dedicated to meeting the Property Buyer, Cate Bakos who will provide her insights and philosophy on why Property Selection is so vital to your financial success!

Ep 1: Meet the Property Planner, David Johnston

Our first episode provide an insight into the Property Planner, David Johnston, the company he founded in 2004, and why he passionately believes that we all should have a Property Plan to navigate our lifetime’s property decisions so that we all can create our ideal lifestyle.