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?

2. Their portfolio and goals

3. Modelling the scenarios

4. The power of mortgage strategy

5. 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:

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.

2. 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.

3. 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.

4. 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 20^th!  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