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Episode 234 | Have We Bottomed Out Sooner Than We Thought? The Exclusive Data Insights from Louis Christopher from SQM Research

Well, well, well…. Have we hit the bottom of the market folks???

In the shadows of the election — aka the Coalition’s surprise victory — it appears that confidence has returned to the property market!

And now the crystal ball question — “When’s the bottom of the property market happening?”may not be as cryptic (or as distant from us!!) as we first thought!

So. What do we mean by this?

Well, let’s put it another way… We jumped on a plane last week especially to bring you back the insights from today’s guest!!! And you just might recognise him —Louis Christopher the Director of SQM Research and one of Australia’s most respected and impartial Research Property Analysts. He has extensive knowledge and experience of property and is regular quoted in the media on his insights!

And he’s NOT afraid to tell it like it is.

So… what’s his latest data suggesting?

Before you meet the man behind the media and get to hear his forecasts, we just want to remind you that, yes, even though PICA likely had a bit of an impact on the election results, our work on behalf of all Australian property investors is by no means done.

And as Ben talks about in today’s show —- there’s obvious MUCH more PICA’s aiming to achieve, so if you’d like to become a member for as little as $5, please Become a Member Today.

Is something stopping you from joining PICA? Let Ben know here.

Here’s what we discuss in today’s episode:

  • What happened with Louis’s grandma that made him interested in property?
  • What’d he do to make his tenants pay rent on time? (Warning: not for everyone!)
  • What used to happen in the data space?
  • Why was there controversy starting SQM?
  • What data was he desperate to get his hands on? How’d they get it?
  • What does SQM stand for?
  • What else do they measure aside from property data?
  • How do they pick the turning point of the market place?
  • How often do they “get it right”?
  • Are the observations coming out from the election revealing a trend?
  • What does he see happening in the next 2 – 4 years?
  • And what had he modelled if Liberal was re-elected?
  • How has the uncertainty of the market been lifted?
  • How will APRA’s recent changes affect the property market?
  • Will the RBA cut their rate by MORE than 25 basis points next month?
  • What are the issues with Auction Clearance Rates?
  • Can they forecast for Capital Growth?
  • What do they use at a locality level vs the macro level?
  • How does he measure fair market value?
  • Is it a good idea to have a market that’s totally dependent on housing?
  • Is the Australian economy looking up?
  • Why’s it hard to create inflation if there is so much debt?
  • What happened to rents and construction levels in 1985?
  • What makes for a good economy?
  • The First Home Buyers Deposit Scheme: Will it have a material or immaterial impact on the property market?
  • What do we think of the NRAS scheme?
  • Is it time to invest in Perth??
  • Does a rental market predict that capital growth will likely happen?

AND THE BIGGIE…

  • When’s the bottom of the market likely going to happen?

Episode 233 | Is it Tick, Tick… Boom? Post Election & Off the Plan Pain with Angie Zigomanis from BIS Oxford Economics

Well, folks — Australia’s officially had their say after Saturday’s voting spree… and The Coalition are holding tight on their power for another term! Which surprised a lot of us. BUT there is a silver lining…

… Negative Gearing has survived another day!!

Which basically means… NO dumb policy is about to cripple the property market any time soon!!

But the question remains… what are we in for now??

Joining us today is Angie Zigomanis, Senior Manager at BIS Oxford Economics and he’s got his binoculars pointing to the horizon… because the data he’s been scrutinising is exposing a LOT about what we’re about the see unfold in the property market!

The big picture??

Off the Plan properties…. !!!

Resources mentioned in today’s show:

Oh, and if you’re around tonight folks, tune in to Escape From the CityBryce is on ABC TV TONIGHT at 8:00PM!

Here’s what you’re in for…

  • Our election stories: how’d we get the news?
  • Where does BIS Oxford Economics sit in the economic arena?
  • And how many different countries do they analyse?
  • What did they discover about negative gearing changes prior to the election?
  • What happened to the stock market AFTER the election?
  • What’s likely to happen with business confidence as a result?
  • How is the First Home Buyers Deposit going to affect the property market?
  • What’s happening with construction?
  • Will we start to see economic growth?
  • How likely is it that the RBA is going to DROP their cash rate next month?
  • What did Governor Phillip Lowe state in his press conference on Tuesday?
  • What have APRA done with their assessment rate?
  • What’s the latest with the US/China Trade Talks?
  • How might the Australian economy be affected by this?
  • PERILS OF OFF THE PLAN: What is the data revealing about Off the Plan Properties?
  • In Melbourne alone, how many were sold at a loss?
  • Who is most likely to be the second buyer of Off the Plan properties?
  • What may happen to developments in future?

Is affordability a real issue?

Episode 232 | Are All Tenants the Same?

Have you ever thought about WHO will be living in your investment property?

Chances are, you have! Because folks… an investment property is pretty useless without a tenant/s in it!! After all, you need these guys to help pay off your mortgage!

So. Are they all the same??

What TYPES of tenants are out there and what can you expect from each one?

Well, here’s the deal… we think there are FOUR tiers of tenants.

Let’s meet them, shall we?

Oh and FYI: Ben’s “Did You Know” is off the charts… we don’t think we’ve ever seen him this prepared in our podcast history — so make sure you stick around for that!!!

Resources mentioned in today’s show:

Here’s what you’re in for…

Loved the episode? You might also like:

iTunes Top Business Podcast – Episode Ranking | May 2019

Almost half the year is gone and looks like the Pillars of Mastery is the flavour of the month!

Just a few days ago, we were ranking…
#3 in the Top Business Podcast on iTunes!

And today, 10 of our episodes are in the Top 200 Episodes Ranking. And yes, you’ve guessed it right. All four episodes from the Pillars of Mastery is in there!

Thank you once again for your continuous support folks. Before we let you know the trending episodes, we want to highlight that if you’re new to our podcast, make sure to start from Episode 1. Play it on 1.5x speed and you’ll catch up in no time!

And if you’re really REALLY time poor, then download our Binge Guide here. It contains all the must-know tips and foundations from the first 20 Episodes and has been downloaded over 2,000 times!

Lastly, our podcast is also available on Spotify so if you’re not an iPhone user like our producer, Stiggy, is then click here to tune in on Spotify.

Now, let’s get to the Top Podcast Episode for the Month!

We love to have a bit of fun on the show too! Property, Finance and Money Management doesn’t have to be boring. Here’s some behind the scenes footages if you’d like to learn more about us. 🙂

And of course, if you got a question on Property, Finance and Money Management? Just write them in below and we’ll answer them on the podcast! Or you can also let us know on SpeakPipe!

Episode 231 | Q &A: How Will Changes to Negative Gearing Impact Investors?

Have you ever wanted to know how the changes to negative gearing will affect YOU???

Because folks, let’s face it… Labor’s policy to turn the lights out on negative gearing isn’t just going to affect the property market and potentially the ENTIRE Australian economy… the policy IS going to impact property investors, whether we like it or not.

So we want you to be prepared and know what’s coming our way! And that’s why earlier in the week, we asked our Facebook Tribe, “What’s your #1 Question on Negative Gearing?”

And, as you can imagine, today we’re going to be answering as many of these questions (there were LOTS) as humanly possible (well, without having this episode drag on for a day and a half!)

We’ll also be covering WHAT EXACTLY Labor is proposing to change, when these changes are officially kicking in, how it impacts the losses you can claim etc. etc. etc…

(See below for FULL LIST of Questions).

A bit of housekeeping…

*New* ENCORE WEBINAR ANNOUNCED: How to Master The Property Investment Formula That Works in Any Market

When: 2:00PM, Friday 10th May 2019

CLICK HERE to Register & Get FULL Details (Last Chance Encore Webinar)

or go to www.thepropertycouch.com.au/webinar.

.. And PICA is also throwing a webinar TONIGHT at 7:00PM Thursday 9th May including a Market Update from Tim Lawless, Director of Research at CoreLogic as well as a deep dive into Negative Gearing and Labor’s policy. To watch, you need to be a PICA Member (or become a member for $5) — If you want to watch, you can find out more about the PICA webinar HERE.

FREE RESOURCES MENTIONED:

  • To Access Ben’s Negative Gearing Series CLICK HERE
  • To Get Ben’s Latest RBA Cash Rate Announcement CLICK HERE
  • We’ve announced the winner for our Denise Book Giveaway! Brook Lyn, if you’re reading this, please get in touch with us on Facebook or info@thepropertycouch.com.au. And for the rest of you who participated, thank you so much as well! We’d love to give you a copy of our newest best-seller, Make Money Simple Again. Just get in touch with us with your name and best postal address and we’ll send it to you!

THE EXACT QUESTIONS WE ANSWER:

Thank you for sending in your question to our post below as well! Let’s jump in now and of course, if we’ve answered your question, please do get in touch with us on Facebook or info@thepropertycouch.com.au and let us know which book would you like (Make Money Simple Again or The Armchair Guide to Property Investing), your name and best postal address!

Question from Scott
If negative gearing is scrapped and grandfathered what will be the effect on a property you withdraw equity from after the rule is put in place? Will the increased debt on the property keep it negatively geared when you have done the release after the potential rule is put in place?


Question from Pat
If you currently have a PPOR, will you be able to draw equity and use as a negatively geared investment loan AFTER Jan 2020 or whenever they propose the change happens?


Question from Nicholas
If you currently have a PPOR that you plan to change to an investment property in the future, is the grandfathering based on when the property is purchased or when it is switched to investment?


Question from Michelle
Looks like my question is along similar lines to above so no doubt this will be covered. We’ve just purchased PPOR but may look to turn into investment in future. Queries around the timelines for both living in now, then renting out, then selling (6 year rule?) and what impact new government legislation may have?

Question from Jake


Question from Jake
Is it the property or the loan that is grandfathered? (Property I assume.) And what, if any, are the considerations when refinancing, assuming the new changes come in?


Question from Anne
If Negative Gearing is scrapped on established properties and only allowed on new constructions, but the construction industry is already slowly to a halt, and capital growth often in the red, how viable is Property Investment as a means of securing your retirement in the next 30 years?


Question from Martin
What is the experience with this type of tax scheme in other countries? Is there evidence of its impact on the real state bubble?


Question from Karen
Why are there policy attacks on LRBA property borrowing? Apparently based on the evils and risk of negative gearing… however, borrowing does not necessarily mean negative gearing, it just means gearing.

Question from Ray


Question from Ray
Many economists predict an increase in rental prices of negative gearing is abolished. Since only the initial part of the loan is negatively geared (as it is later positively geared and therefore taxable), will this have as much of a negative impact on the property market as predicted? Or is it the combination of the abolishment of negative gearing as well as the reduction in capital gains discount that will cause the knock on effect over time and make property investment less attractive?


Question from Simeon
Are there any other countries without negative gearing that we can compare with to predict the direction of Australia’s investment property market?


Question from Anastasia
I’d be interested to know your thoughts at a more macroeconomic level around what affect you think this might have on the property market over the medium term. One thing that comes to mind is potentially an increase in larger blocks being subdivided/developed into multiple townhouses for tax purposes.


Question from Jillian
Is negative gearing based on a whole portfolio or individual properties? One is positive and one is negative — do they cancel each other out in your tax return or are they assessed individually? And will this continue to be the case is Labor get in?


Question from Timothy
What would be your preferred solution to the problem? Negative gearing capped to % of income? Fixed maximum deduction? Or something else?


Question from Leo
When will the next election be after the upcoming election? For us investors to know how long we have to purchase some properties.


Question from Alex
Love the content guys! In your opinion does the removal of negative gearing make implementing The Four Pillars any more difficult, and would you recommend purchasing my first property before or after January 1st (when the grandfather rules will take place)? Would love to hear your thoughts as this is currently my big block to buying!


Question from Dale
It seems to be argued that negative gearing should not apply to the super wealthy who own 5, 6 or more properties. Should it be based on the $$ value on a property or portfolio rather than the number of houses owned?


Question from Liam
Unfortunately, it seems inevitable that it will happen; is there any positives at all we can take from it? Does it change any fundamental principles when it comes to property investment?


Question from Tom
One thing that has not been made clear in all the discussion is what happens to the investment losses if you were to buy an established property after negative gearing was removed? Are the taxable losses you incur simply lost or do you hold onto the losses and they can be used to offset future investment income once the property moves into a positive geared position down the track? I know this is the case for some countries that do not allow negative gearing and then it just makes it a timing issue as you access these benefits in the longer term.

Question from Matt


Question from Matt
With regards to the grandfathering that is proposed, is it the property that is grandfathered or the loan? How do they determine this? What happens if I refinance etc.


Question from Tania
I would like to understand better the reasons why Labor repealed the cancelled negative gearing in the 80s. Surely there are some lessons there that we can look to. So I guess the question is, What were the outcomes last time Labor cancelled negative gearing that caused them to re-introduce it?


Question from Mustafa
Most experienced property investors have stated that negative gearing is not a property investment strategy, but most property investors rely on it. If negative gearing is not a property investment strategy (not saying it is or isn’t), then why is it such a hot topic of discussion ever since Labor had intentions of removing it if won? Just curious.

Negative Gearing Video Series

Thank you for your interest!

As you know, this is a topic that we are very passionate about. Here’s the video series that we’ve produced to help you understand Labor’s Proposed Negative Gearing a little bit more.

And make sure you tune in to Episode 231 as well where we answered heaps of listeners questions on How Will Changes to Negative Gearing Impact Investors?

Here’s the first video:

And remember folks, we are referring to how BAD this property policy is…

❌ We are NOT against Labor.

❌ We are NOT saying that we should leave Negative Gearing unchanged.

✅ We want the numbers to be reviewed again especially with the new data.

✅ We just want them to include subject matter experts like the Master Builders Association of Victoria, HIA, Real Estate Institute of Australia – REIA, Property Council, Property Investment Professionals of Australia, Property Investors Council of Australia – PICA and others to craft this policy together.

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