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484 | Cracking the Code: Mastering the 60% Land to Asset Ratio

 

With soaring immigration and construction hitting historic lows, Australia’s property market faces an accommodation crisis. 

In Bryce’s words, “Disincentives have been happening for over a decade.”   

Kicking off our first Q&A session for 2024, we’re diving into the widespread economic and political factors that have become “the perfect recipe” for today’s housing crisis.  

We also dissect how to master the 60% of land-to-asset ratios and tackle this burning question:   

Is Brisbane a wise choice for investment with the 2032 Olympics on the horizon? Can we anticipate a property surge post-game? 

 Tune in now to find out! 

  

P.S. Happy International Women’s Day! To celebrate all the incredible women in our lives, how far we’ve come, and the work still to be done, we’ve got a special message from some of our great friends and past guests on The Property Couch. 

 

Free Stuff Mentioned

  • Moorr Webinar: Best Tools for the Job – What to Use When?
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  • Previous Episodes mentioned: 480 | How to FAIL to Retire on $2K Per Week 

 

Graphs mentioned

484 - Q2 Land to Value Ratios

 

Questions We Answer 

 Q1) Investment in Brisbane for 2032 Olympics from Jeremy  

“Hey Bryce and Ben, this is Jeremy from Brisbane. 

I’ve been listening to you guys now for approximately five months after I discovered your book. I’m up to episode 95 today, plus the one a week that you release. 

With this level of immersion, I think I’m actually hearing you guys talk in my dreams. I think I’ve finally got past the foreign language sign ups too, which is a big step. 

I really appreciate what you guys are offering with your knowledge and insight based on your experiences and expertise, it’s really helping me personally to make better choices in regards to where I’m coming with my investments. 

Anyway, the question is, what do you think about investing in the areas that are being upgraded for the upcoming Olympics in Brisbane? 

Do you think they will be good up until then and then crash, or at least decline? 

Or you believe that the infrastructure in the area will then support the growth for years to come? 

Thanks boys. Appreciate your help and keep up with work” 

 

Q2) Land to Asset Ratio from Bronwyn 

 “Hi Ben and Bryce, my name is Bronwyn and I just wanted to ask a general question in regards to Land values. We talk about Land to Asset ratios when purchasing property.  

I do have a property, and this doesn’t need to be generally specific to that property, but the council valuations or government valuations on the land are far lower than what land is being sold for in the area.   

I just wanted to understand when you’re looking at land to asset ratios, which land value were we actually utilizing to get our percentages?”  

 

Q3) Challenges in Addressing the Accommodation Crisis from Michael 

“Hi Bryce and Ben, my name is Michael. 

I’m interested in your thoughts on the accommodation crisis gripping our country at the moment. We have record levels of immigration while we are recording all time low levels in building approvals and building completions. Builders are going bankrupt every day and leaving the industry. 

We have a skills shortage with a lack of trades people available to do the work. Material costs keep rising faster than inflation there’s a shortage of land to develop, increasing interest rates are severely limiting the amount borrowers can obtain from the banks and APRA are still insisting bank apply a 3% test on interest rates charged. 

The only solution government seems to be able to come up with is to subsidise build to rent with land tax concessions, and massive investment in public housing. But there are not enough trades to build these dwellings. At the same time, the government punishes property investors with higher taxes, increased compliance costs, expectations of ever increasing standards and accommodation provision, and taxes on short term accommodation. 

With private sector provides 97% of private rental accommodation yet I can’t think of one incentive that is being provided to motivate them to provide more. 40% of the build cost goes to three level of government. I feel this needs to be reduced. I would like to see the removal of stamp duty for purchases buying off the plan in order to feed the pipeline for greater supply. 

This will provide developers and necessary pre-purchases required to obtain construction funding. The development section has been in decline ever since stamp duty concessions for off the plan purchases were removed several years ago. 

I’m interested on your thoughts on this proposal and whether you have any other ideas. Thanks.”  

 

Timestamps

  • 0:00 – Cracking the Code: Mastering the 60% Land to Asset Ratio   
  • 2:47 – Happy International Women’s Day!  
  • 10:07 – Moorr Webinar: The best tools for the job…  
  • 12:34 – Mindset Minute: Gold from Poor Charlie’s Almanack  
  • 21:00 – “The time horizon speak is directly proportional to…” 
  • 23:47 – Q1) Investment in Brisbane for 2032 Olympics 
  • 25:35 – What really matters for economic and property growth  
  • 29:03 – The benefits will actually be spread across Australia…  
  • 31:12 – Olympic-sized successes and failures  
  • 35:38 – What happens after the torch?  
  • 36:03 – Our verdict!  
  • 37:46 Q2) Land to Asset Ratio 
  • 38:48 – How to crack the 60% land-to-asset ratio 
  • 41:39 – Note! There are different costs for different types of builds  
  • 42:27 – Hack for properties that are older than 30 years!  
  • 45:08 – Watch the YouTube video to see this in-depth graph  
  • 46:28 – Why we prefer older over new properties  
  • 47:42 – Talk to your local Buyers Agents!  
  • 48:25 – What happens if you don’t care about land value?  
  • 50:05 Q3) Challenges in Addressing the Accommodation Crisis
  • 52:13 – Why did the builders tap out?  
  • 53:27 – The recipe for short-term disaster  
  • 57:31 – “We’ve Been Disincentivised for Over a Decade” 
  • 1:02:27 – Victoria’s Minimum Standards are a great example of this!  

And… 

  • 1:03:49 – Lifehack: How to improve your sleep quality  
  • 1:06:55 – WMPN 1) Fact-checking the Greens  
  • 1:12:02 – WMPN 2) NSW’s “No-Ground Eviction” up for debate 

 

360 | The XYZ of Property Pricing: Getting The Rules of Engagement Right

Imagine this…

You found your ideal property in the perfect location. You’ve inspected it, you know exactly what the purchase price is going to be AND you’re pre-approved for that budget. You’ve spoken to the selling agent and is crystal clear with the vendor’s motivation. You negotiated some terms and put your best offer forward and BAM!! it got accepted right away. Happy days!

Unfortunately, it’s probably NOT going to happen in the current market.

When it comes to property prices, getting it exactly right would be perfect for buyers. But in a hot market, it’s very very hard for most buyers to nail it right away. Unless of course you’ve got a lot of spare time in your hand or you’ve engaged a professional to help you out. In today’s episode, we will share the XYZ of property pricing that our own buyer’s agent team are practicing and some of the tips that you can implement right away to get as close to the selling price as possible.

But… are you wondering if it’ll work in the current market and with all these new ways of transacting?

On top of that, with lockdown restrictions, how are you going to inspect properties and if you can’t, should you buy sight unseen?

That’s exactly what we are going to unpack today.

PLUS Bryce and Ben will also be addressing the big old Fixed Rate vs Variable Rate question. With the impending lending requirement changes (check it out in Ben’s RBA update), it’s probably best that you get your loan questions answered sooner rather than later!

Tune in now for the gold!

Q’s we answer further below 👇

 

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  • We are also looking for a few talented individuals to join our team! From a Journalist/Copywriter to an Associate Property Investment Advisor and more. If you’re interested, head to our Career Page here to learn more.

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The Questions We Answer

Question from Mark about Buying in Covid Lockdowns

I’m currently looking for a home in Melbourne to live in.
Over the last month because of COVID you haven’t been able to inspect any properties however in the last month there’s been about four properties in the same suburb that have sold sight unseen for about $50 to $100,000 above asking price.
Is there any way you can explain this behaviour and give me any advice on how to could compete against these people.

Recommended episodes for Mark:

 

 

Question from Tracey about Best Questions to ask a Real Estate Agent

Hi Property Couch Team!
Thanks for the podcasts it’s really driven myself and hubby and has given us the confidence to buy investment property, so much now that we’re looking to buy a second one and this one I’m looking at the Gold Coast.
My question is I have a good handful of properties that I’m looking and interested in but they’re nearly all at auction and I live in northern New South Wales.
When contacting a real estate what are the the first best questions to ask when you can’t go to view the property and you wanna see if it’s in your price range.

Recommended episode for Tracey:

 

 

Question about Interest Rates – Fixing Your Loan before buying an IP

Hi guys, first of all thanks for the great podcasts. I’ve been listening for a little while and super inspired with all the informative information.
Just a quick question about interest rates and whether or not I should lock in an interest rate before planning to buy an investment property.
So I’m about to buy an investment property within three months. What are your thoughts on locking in a fixed interest rate today rather than waiting for three months?

Related episodes:

 

 

Question from Rhys about Buying Off the Plan and Co-Living Spaces

Good day Bryce and Benji, Rhys here I just want to ask two questions if that’s OK?
First question relates to property advisors/buyers agents. The guy who I’ve been recommended by a friend I’m a bit skeptical of because he doesn’t charge outright and so he takes Commission from the sale of properties and these properties tend to be building like off the plan from developers or builders.
Second question relates to this, he’s really big on co-living spaces, you know for young professionals or whatever, who are seeking out shared living space just because of the rental yield.
I’d love to hear your thoughts on this. I love your show guys thanks for that

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