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Episode 334 | Bernard Salt: The BIG Shift In Australian Property!

If you listen to just one episode, please make it this one!

Folks, today we are chatting with one of our very own virtual mentors (of all time!)… BERNARD SALT!!

Yep. You’ve probably heard us talking about Bernard on the podcast before – indeed, he has formed a lot of our own views about where the demand for property is heading.

In a nutshell: if there is one person on earth who deeply understands the intricacies of Australians and what drives people 1) to this country, and 2) to make specific property and lifestyle decisions, it is this man!

(And if you know these insights… you’ll begin to see where the property price increases are likely to occur, right?!!)

It obviously goes without saying that over the decades we’ve absolutely read and reread (and dog-eared the pages) of Bernard’s highly-regarded book (just one of many) called “The Big Shift”.

Yep. Big Guest.

Bernard Salt is widely regarded as one of Australia’s leading social commentators by business, the media and the broader community. He draws on a range of data sets to interpret social change now into the future. He argues that social and cultural change are powerful forces that are reshaping the way we live, the way we work and even how we form relationships. He was awarded the Member of the Order of Australia (AM) in the 2017 Australia Day Honours and was a partner of KPMG until his retirement in June 2017, and still acts as a special advisor to the firm. Between 2011 and 2019 he was an adjunct professor at Curtin University Business School.

Now Bernard is the Managing Director of The Demographics Group, and he writes weekly columns for The Australian that deal with social, generational and demographic matters.

Essentially… Bernard is the Go-To Guru on how statistics tell human stories and what the data suggests about key future trends!

Tune in now – ripper episode, folks! 🤸‍♂️

 

 

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Here’s What We Cover…

 

 

 

Episode 333 | Are We Property Spruikers?

Right. Let’s have the uncomfortable conversation – is The Property Couch just a platform for another couple of Spruikers to push property on you!?!

Look, we get it… this is a fair question to ask. One we recently received recently from a listener! And, who knows, maybe it might even be something weighing on the back of your mind as well.

So… Are we Property Spruikers?

Listen now, and you’ll hear our answer… we’ll leave it in your court to decide what you believe to be true.

Just a heads up – this is a Q&A episode, folks! So, while we definitely strip down to the bare bones on whether or not we are Spruikers, we’ve also got a couple of other themes in store for you…

 

 

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The questions we answer…

Question about “Are WE Property Spruikers?” from Daniel/RIPPAA

Massive fan of your show, which leads me to my questions regarding in particular Episode 325 – How to buy on a hot property market.

Listening to your show for quite a while, I’ve found that you guys always seem to advocate for property being an effective means of investing. However, sure you’ve got to be in a point in time where that is not the case. Investing in shares & stocks, generally speaking was probably not the best idea, what about property? You guys have done episodes on warning against spruikers and so I’ve been having concerns about, “What about The Property Couch then – does it fall under that category?”

However, until you guys did this recent episode 325, which to be honest was very refreshing to hear that acknowledgement of you guys just really giving that message of warning of cautioning I should say against buying at this point in time which I really appreciate,

that message of you guys caring about the community really came through. So my question is when do you guys see, at least a minimum point in time, until which the market is gonna change and sort of calm down a bit?

 

Question about Land Tax from Bruce Adkins

Hi Bryce and Ben. My question is about land tax. After starting out with a passive ‘buy any hold’ strategy, and then moving on to some renovations. I have finally landed on a strategy 3 or 4 years ago of buying splitter blocks, knocking down the existing house, subdividing into 2 or 3 lots, and then building new homes on each lot. When I can afford to, I keep the new houses and rent them out I do. Occasionally I need to sell one or more of the houses to assist with cashflow, or to help fund the next project. All my properties are in Brisbane and surrounding areas as I feel the need to touch and feel the sites and keep an eye on construction, etc. Early in my property investing journey I did invest in a location distant from my home. After a little bit of research and a quick flight to inspect, I purchased the property and the whole experience was a disaster, made worse by not being around when things went wrong. This experience convinced me that I need to invest in my own backyard, and my current, more active investment strategy reinforces the need to invest locally.

My current portfolio is now more than a dozen properties with an unimproved land value of around $8 million, and the annual land tax bill is really starting to hurt.

Apart from investing in different States (which I will find hard to get my head around), Do you have any other strategies for minimising the land tax impact of a large and growing portfolio?

I love your podcasts and would love any ideas you have for easing the sting of land tax.

 

 

Question on Lenders Mortgage Insurance (LMI) from  Francis Rivero

Not really a question but I would like to hear your thoughts on the following:

My wife and I bought a PPR in November 2018.

  • Purchase price – $345,000
  • LVR – 90%
  • LMI – $9700

Through making extra repayments and recovering a strong valuation result yesterday ($420,000) we are now sitting at 72% LVR just 2 years later. I realise this is just the way it is but I can’t help feeling like $9700 is a huge amount of money to pay in order to protect the bank for such a short time. Fair enough if we are still 5 years off getting down below 80% but I’m sure this happens to lots of people who buy well and are diligent with their money. Like I said, no specific question but would love to get your take on this.

 

Question on Being Gazumped from Matt Rose

Hi Ben, Bryce and the great Stig. I’m looking for some advice as my wife and I have been left disillusioned by the property system while trying to buy our 2nd investment property, this time in Melbourne.

The sequence of events went like this – we put in an offer on contract and put down 5% deposit, the agent phoned to say the owner has accepted, the agent then proceeded to shop our offer around telling everyone our exact price, the agent then entered into some sort of silent blind auction and sold it to someone else last night without coming back to us on the new price even though they told everyone else our price. Is this illegal or unethical and if not, how do we as a community vote to put better rules in place to protect the consumer?

 

 

 

 

Episode 332 | New Laws To Sting Landlords! – Chat with Hayley Mitchell

Rental Reform is here. And with this comes quite the ‘sting’ for landlords. So we want to make sure our community – in particular those who already own an investment property and also folks who are considering an investment property now or in future – know what to do to prepare for these new laws.

Here’s the deal…

As of March 29th 2021, there have been 132 rental rule changes here in Victoria. And while these laws have NOT (and perhaps won’t) make their way into other states and territories across the county, we recommend all our listeners to tune in to this episode.

Yes… these are Big Changes. And with them come consequences… BOTH to landlords AND tenants. Both Great and Not-So-Great…

At the end of the day… this is Brand New Policy and with that comes new learning and course-correcting along the way. With our advocacy work through PICA, we will continue to advocate for property investors and make sure our collective voice is heard. So, please know that what we are talking about today might not always be the case… and, for the record… we are fully on board with the safety precautions in place for our investment properties. What we struggle with is policy that is short-sighted and regulated down to the 5% of people who are doing the wrong thing.

Here to help us unpack this New Legislation is Hayley Mitchell, Director of Geelong Property Managers and Director and Trainer of Mitchell PT, which provides training and consulting in the property management industry. She is a fully licensed Real Estate Agent and has worked in property management since 1999… and she knows her stuff when it comes to legislation change & how to best prepare landlords for New Policy!

 

Yep. We spoke with Hayley WAY back in Episode 249 when these proposed changes were on the horizon… but now that they are HERE, what do us property investors need to know???

And, most critically, Are these Rental Rules as “Fair” as they appear to be?

Listen now to find out – VERY important episode folks!

 

A Key Message to those who have invested or are looking to invest in Victoria…

Yes – we’re not super happy about all of these new laws, either! But please remember the fundamentals and what attracts people to this State (and hence increases the demand for property!) – we are playing The Long Game here. What might “sting” a bit now needs to be put into context of a 20/30/40-year decision. So, Keep Calm, do your numbers and reach out to your property manager on the best way to navigate these changes.

 

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What’s Covered In The Episode….

  • 02:05 – Start & Build Winners!
  • 03:57 – How to get LocationScore for less!
  • 05:12 – April Fools Pranks!
  • 06:32 – How to spur people on to success
  • 09:05 – Meet Hayley…
  • 10:05 – What was life like as a property manager during COVID-19?
  • 12:34 – They DONT have a copy of the written legislation yet!?!
  • 14:43 – What are the most significant changes?
  • 15:26 – Who is going pay for these changes?
  • 16:16 – What is going to happen to rents as a result?
  • 17:40 – What will happen tenants after lower-priced rents??
  • 19:02 – What changes “snuck” through?
  • 20:30 – New Rental Minimum Standards
  • 21:15 – What are the new ventilation requirements?
  • 25:25 – Unintended consequences of the new electrical standards
  • 27:09 – You have to PAY for the codes to access the minimum standards!
  • 28:26 – Our new name as landlords…
  • 29:00 – How will it change you way you buy property?
  • 30:29 – Will there be a pivot where the vendor needs to make sure these standards are met (as opposed to the buyer)
  • 33:47 – New disclosure requirements
  • 35:11 – What happens to properties that are rented after 29th March?
  • 36:38 – What’s going to happen to the line at VCAT!?!
  • 38:56 – New Urgent Repairs
  • 41:15 – Pest “Infestations”
  • 42:47 – Ben’s story about the tenant and the “ants”
  • 44:15 – Compensation for Sales Inspections
  • 48:36 – Painting!
  • 49:55 – When the website and the legislation don’t match up…
  • 51:51 – The 120 day Rule (Ouch!)
  • 56:50 – Hayley’s Two Worst Changes!
  • 57:17 – What will these changes mean for the industry?
  • 58:35 – The Five Strike Policy!

And…

  • 1:01:11 – Message for landlords
  • 1:07:29 – “Not Happy Jan!!”
  • 1:08:13 – Our Key Message for our Victorian Landlords
  • 1:13:15 – Ben’s Lifestyle Design Update!
  • 1:13:37 – Auction results from the weekend

 

 

Episode 310 | Is Property Just A Ponzi Scheme?

Have you ever questioned if property is as good as it’s cracked up to be? Like, is it really a sure-bet investment?

You’ve seen the headlines… You’ve heard us say certain properties should be in the “no go” zone for investors… And maybe you’ve even seen or heard about other property markets around the world that actually CRASHED – quite literally… some even plummeting in prices overnight.

So… What makes the Australian property market different? Is it guaranteed to NEVER fail? And how do we know “for sure” that your money is as “safe as houses”?!

Here’s the deal… a client of ours recently gave us some feedback after working with us. Feedback that, to be quite frank, made us stop in our tracks.

And we wanted to address that feedback today because, one, it raises a few valid points… and, two, we think this episode will help any of you folks out there who might have some reservations about the property market of your own… and/or you simply want to educate yourself more on the Australian property market, how it works and why investing in it isn’t going to end in tears in a few years down the track…

Suss the feedback we received below & Listen Now to hear our response!

 

The Feedback We Received…

A lot of millennials (including myself), are sceptical about property and put off investing because we read/consume a lot of stuff that is bearish on property. I would also say that I found it difficult to listen to the podcast because it is too ‘normie’ and doesn’t address/contend with a lot of the current zeitgeist outside the mainstream media that people consume nowadays (Zero hedge, Martin North, Real Vision, Jolly Swagman podcast, Nasim Taleb, Steve Keen, the case for crypto).

I put off investing in property for years because of this sort of content saying that property is a pyramid scheme for boomers and that valuations are only maintained due to central bank policy and credit availability. Instead of dismissing this stuff as conspiracy theories – actually take it on and come up with persuasive arguments against it instead of relying on me taking 5 years to find them myself.

  • admit that current immigration levels are unsustainable politically and can’t be a key driver of house prices
  • admit that the majority of growth in house prices is due to credit availability and decreasing interest rates
  • admit that there is nothing inherently different about Australia from say Ireland or Spain and their property crashes (other than maybe the ability to print our own currency). 
  • admit the risk of a Japanese lost decade and drop in consumption and birth rates caused by high levels of household debt.  

I would have felt way better going into this if I’d heard some strong arguments against this stuff. Having said all that – I want to invest in property because it’s a human need and it will never go to zero (wealth preservation). I remain sceptical of continued price growth (or at lease real price growth). However, I acknowledge that yes, the game is rigged for boomers but what choice do I have? Getting a bad return on real estate is better than doing nothing. If you want to get more (smart) millennials on board you need to address this stuff.

 

 

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Episode 308 | Pain & Gain: The Wealth Effect & The Housing Affordability Debate – Chat with Eliza Owen from CoreLogic

When it comes to the current property market… WHERE is the Profit being made? And, just as importantly, WHERE are the Losses happening?

‘Cos let’s be honest folks… it’s been quite the year indeed!! But it looks like we’ve finally reached a turning point in the market…

So, here to discuss the latest housing trends and data coming out from the property market is a very, very special guest and someone who definitely knows her stuff when it comes to property, economics and a big issue almost all first homebuyers face… something called “housing affordability”!

Introducing today’s huge guest… Eliza Owen is Head of Australian Research at CoreLogic! She has a first class honours degree in economics from the University of Sydney and has been a regular economic commentator on FBI Radio and guest speaker on Triple J’s Hack, 702 ABC Radio, Sky News and TEDxSydney! Not to mention, she’s also provided comment for many media outlets including The Guardian Australia, the Australian Financial Review, Pedestrian TV, the Daily Telegraph and plenty more!

PLUS, on top of her first-class knowledge bank, guess what Eliza’s also brought with her today?!

… Nonother than CoreLogic’s most recent Pain & Gain Report – that is, the Quarterly Report that unpacks (in a whole lot of detail!) how different properties, regions and cities are performing across the country. Yep… this includes exactly WHERE the profit and loss is occurring!

So, ready to dive in?!

Listen now to get the latest insights into the Australian property market, including where there’s “Pain” and “Gain”… AND get the tour into The Wealth Effect and The Housing Affordability Debate!

 

P.S. The Pies got slammed last week. Poor Ben. (kinda)

 

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