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488 | Buying Regional vs. City: Does It Stack Up?

 

When investing in property, choosing WHERE to invest often keeps folks up at night. That’s why, in today’s Q&A Day, we are answering questions that speak to this very issue. 

Here’s what we’re unpacking:  

Why choose to invest regional over city? (Tune in to 1:02:10 to hear Ben poise a riddle to the community. Oh, and send us your replies through our SpeakPipe! 😉)  

From the multi-layered factors to consider BEFORE buying in the country to whether Gary (today’s question asker) has made the right decision to invest in Ballarat, we’re uncovering the one question that investing regional boils down to.   

Plus, we answer what elements make a town a mining town, the biggest risks associated with investing in these “boom and bust” areas, and our case for why we avoid investing in Canberra!  

It’s an episode loaded with nuggets of wisdom, tune in now folks! 😊 

 

P.S. As market conditions change, we’ve been noticing some concerning ads popping up, which is why we’re sitting down to unpack: What does modern-day spruiking look like?  

 

Free Stuff Mentioned

  • Leave us a Q for our next Q&A Day! Reach out to Bryce on Instagram or through our SpeakPipe. (And get a free Start & Build course if your Q is featured!)    
  • Free Money Management Platform: Moorr  
  • Episodes Mentioned:  
    • TPC Binge Guide (First 20 Episodes of our most fundamental lessons!)  
    • 256 | From Gold Mine To Fool’s Gold: How This Property Investor Nearly Lost It All During The WA Mining Boom! – Chat with Rick Hockey 
    • 418 | The Hidden Forces Driving Property Values 
    • 474 | From Childhood Stocks to City Shocks: How He Escaped Bad Investing Advice! – Chat with Bailey 
    • 484 | Cracking the Code: Mastering the 60% Land to Asset Ratio 
  • Graphs from Ben’s “What’s Making Property News”:  

Questions We Answer…

Q1) Investment Property in Canberra from Jenna  

“Love the show. I have listened to every episode. A bit of a fan. I’ve done your property plan through EW. I have used to mortgage broking services, your BA services and your accounting services. 

Thank you for all the information and services that you provide. 

I have two questions today and it is specifically related to my situation, but I think a few of your listeners we’ll have similar questions. 

To begin with the background, my partner and I had our PPOR currently sitting at around 490,000 on our mortgage remaining 300,000 in equity.  That 490 includes a $100,000 equity release, which we used to buy and investment property in the South Brisbane.  

My biggest question is based around the fact that our PPOR is located in Canberra. I’ve listened to you guys for several years and specifically on your more recent podcasts. 

You reiterate that you despise having an investment property in Canberra. 

Our PPOR is not our forever home, but we would be happy here for another four or five years. Our original plan was to transition our PPOR into an IP and I guess my question is, would you still recommend this? 

For more context, our mortgage is currently about $2,400 a month and being very concerned if we could get up to $2,500 even $3,500 a month in rent understanding that there’s a complication for land tax.  

My question is what would you do with this house sell? or turn it into investment property? 

My second question as I believe I know what your answer will be to the first question is what happens to the equity release against our current PPOR if we sell? 

Will we need to pay this off? Or can we leave it as is as the interest is tax deductible? 

Thanks guys.  Love your work.”  

 

Q2) What is considered a mining town? from Jenny 

“Hi Ben and Bryce, Jenny here. 

Thank you for the invaluable content over the years. Without the education provided in your poddies, we would never have embarked on our property investment journey. 

I have a few questions regarding mining towns, which I believe the Community can benefit from. 

We do not invest in mining towns as two wise men have informed us over the years, but which towns are considered mining towns and how do you work this out? 

Is it just the suburb where the mining actually takes place? Or does it extend to surrounding suburbs 

Would you look to ABS data to see the percentage level of residents who are employed in the mining industry? 

And if so, would say anything over 5% of the population working in the mining sector, then make that Suburb a mining town. The wisdom on this will be greatly appreciated.
Thanks boys.”  

 

Q3) Regional Properties from Gary   

“Hi Bryce and Ben, 

My name is Gary I live in Spotswood, West of Melbourne. I’ve just got a question I’d like to ask you about regional properties.  

Two years ago, I went through our financial planner and bought his agent and got a three-bedroom house in Ballarat North just outside Melbourne. And my question was that there’s been a lot of talk regarding regional properties versus sort of properties near the CBD. 

Now, I just wanted to get your thoughts on what you class as a good regional property because especially in Victoria, we have regional areas such as Geelong, Ballarat, and Bendigo a bit and they’re not exactly what I call small, they have a lot of amenities, a lot of industry, and job creation out there.

But I just find that when you read information quite vague about regional properties, they say they don’t do as well as in the city and they obviously at the moment they’re not increased as much as they’re near the inner city. 

But I’m just interested to see your thoughts and maybe have a bit of a deeper look or a deeper dive into the regional market as we like. 

I think we’d like to focus on the inner cities and central CBD’s in Melbourne and Sydney. 

It’ll be good to hear your thoughts on that. 

Thank you.”  

 

Timestamps

  • 0:00 – Buying Regional vs. City: Does It Stack Up? 
  • 1:43 – Ben’s stopped sweating 😉  
  • 3:12 – Warning: THIS is what Modern Day Spruiking looks like   
  • 7:04 – Where modern spruiking happens & why it’s so successful 🙁  
  • 10:18 – What kind of investor are you?  
  • 15:27 – From the Coalface: 8 of 12 tenants moving because landlords are selling up   
  • 18:25 – Mindset Minute: “There is never anything to do, but always action to take.” 
  • 22:36 – As a property investor, what practical action can you take?  
  • 24:13 – Q1) Investment Property in Canberra  
  • 26:29 – Hold or move into another market?   
  • 30:50 – The science behind NOT investing in Canberra  
  • 34:25 – Beware of regulatory risks: How holding costs are disincentivising investors  
  • 37:41 –  If you’ve built a portfolio in Canberra, let us know how you’ve done it!  
  • 38:36 – How is my loan transferred if I sell the property?  
  • 40:55 – The Stand-Alone Scenario 
  • 45:42 – Q2) What is considered a mining town? 
  • 46:43 – The risk with mining towns  
  • 51:10 – Is Perth a mining town?  
  • 53:04 – Why Perth is heading towards a golden era  
  • 58:10 Q3) Regional Properties 
  • 59:40 –  Not all regional properties are created equal 
  • 1:00:57 – We need to acknowledge this for the next generation of investors  
  • 1:02:10 “Will regional land grow higher than the city?” 
  • 1:06:34 –  Ben and Bryce have both bought regional!  
  • 1:09:45 – Historically, regional has been great for yield 
  • 1:10:29 – It comes down to the M___ of S____  
  • 1:12:48 –  Consider these factors when buying regional!  

And… 

  • 1:17:14 – Lifehack: Make Decisions like Jeff Bezos 
  • 1:22:53WMPN: House Price Movements across Australia   

 

363 | Exodus to the Regions – Will this Trend Reverse? – Chat with Dr Nicola Powell

This data is hot off the press folks!! 🔥🔥🔥

It’s no secret that property prices have grown quite a bit lately, but recent data is showing that we’re breaking records!

Here’s a snippet from Domain’s media release just a week ago:

September Quarter 2021 House Price Report shows Australian house prices experiencing a historical rate of growth at 21.9%, the fastest annual rate of growth on record with median house prices at almost $1 million nationally.

But…what does this mean for both sellers and buyers? Is this likely to stay or are we going to see a crash in the new year? Is this growth even sustainable with our current economy?!

AND…

Will the Regional Exodus Backflip?!!

There are heaps of moving parts here and we know it can get a little overwhelming…

So we’ve outsourced and brought in an expert to help us out.

And yes, we’ve been teasing you about her for the past few weeks so bring on the drum roll please…

🥁🥁🥁

Joining us on the show today is none other than Dr Nicola Powell, Chief of Research & Economics for Domain and one of Australia’s leading property market experts!

With more than 15 years’ research experience that spans academic, government and private sector, Nicola is the leading force behind Domain’s regular data reports that keep the Australian public up to date on what’s happening in the market.

Safe to say that we’re in good hands folks.

Tune in to find out more!

 

Free Stuff Mentioned

 

Here’s What We Cover…

  • 1:57 – Mindset minute: It’s better to hang out with people _______ than you, pick out associates whose __________ is better than yours and you’ll _____________.
  • 3:09 – Meet our first-time special guest, Dr Nicola Powell!!
  • 4:00 – How did a science doctorate degree morph into a career in economics?!
  • 5:58 – How she translate hard cold data into behavioural logic and patterns
  • 8:33 – Nicola’s Money Story and what she’s telling her kids now?
  • 11:50 – How did her conservative upbringing shape her money management habits?
  • 13:38 – Where are we RIGHT NOW in our Property Cycle?
  • 14:42 – GROWING AT $1,200 A DAY?!
  • 15:00 – Is this record growth rate expected to continue?
  • 15:46 – Is there any good news from the September Quarter Housing Data?
  • 18:37 – Sydneysiders: Forever Renting or Cross the Borders
  • 20:54 – What has the pandemic accelerated for Sydneysiders?
  • 22:57 – The shift to a different property type…
  • 27:13 – How did the Most Lock-downed City still have a Record Price Growth Rate?!
  • 28:54 – Will the Regional Exodus Backflip?!
  • 30:21 – The biggest social experiment that has proven one key thing…
  • 31:15 – What’s the new buzzword of the pandemic?
  • 32:07 – A little nugget on Price Growth trend!
  • 33:40 – An Aging Population and Its Impact on Supply
  • 36:00 – Areas where they’ll be a risk of a reversal in property price…
  • 39:00 – Is APRA’s Macroprudential changes necessary to influence Demand?
  • 40:53 – When will interest rates start to rise?
  • 42:00 – Which of these two events will trigger the interest rate hike?
  • 43:45 – (HOT) Markets around Australia with still rooms for growth!!
  • 46:08 – Household size and misallocation of housing stocks in Australia…
  • 47:00 – What needs to be disrupted to improve affordability?
  • 48:41 – The Stamp Duty Debate: Lump sum or Annual Repayment?
  • 50:17 – Surprising Find from Domain’s Submission on Housing Affordability…
  • 52:00 – Residential property as an investment class to store family wealth – Yay or Nay?

And of course…

  • 56:37 – A camping trailer life hack that can potentially save your relationship! 😉
  • 59:09  – Ben’s quick update on RBA’s view on their Bond Program

 

 

358 | Too Much Risk? Australian Property & Economic Update – Chat with Nerida Conisbee

Breaking news just in on the property & economic front, folks!

There’s clearly quite a bit going on with the health crisis, soaring property market and… just announced this week… an indication that a tightening of lending might be coming sooner than we think!

Despite price growth in the current market being led primarily by owner-occupiers, the risks around rising household debt may mean that APRA and the financial regulators will step in to prevent the build-up of future risks to the broader economy…

The question is: If they’re going to pull the handbrake, What Would This Look Like and WHEN Would It Happen?

Here to unpack all this, as well as the latest Australian Property & Economic Update is our good friend Nerida Conisbee, Chief Economist at Ray White.

Now, if you’ve heard Nerida’s data-driven insights and wisdom on the show before, you might’ve noticed she’s had a little change in title from Chief Economist at the REA Group… And if you haven’t heard from her before (you’re in for a real treat!) or simply need a refresher: Nerida is a highly regarded economist, with a specific expertise in residential and commercial property. She is currently the MOST quoted property commentator in Australia, the third most quoted economist and a sought-after public speaker, writer and columnist with more than 20 years of property research experience throughout Asia Specific.

So, if you want a PRECISE update on property and economic news here in Australia (and where it’s looking to go from here), then please listen now to get the gold & stay informed.

 

Free Stuff Mentioned

 

Here’s What We Cover…

  • 00:40 – Block your ears non-AFL fans 😉
  • 03:28 – Try this word instead.
  • 05:24 – Meet Nerida…
  • 06:04 – The change & data leak
  • 07:36 – Never Before Revealed: Nerida’s Money Backstory!!
  • 10:46 – Does she carry this through with her own family?
  • 13:24 – Nerida’s property story
  • 14:33 – The current economy – What’s going on?!
  • 16:27 – What will likely unfold in the December quarter?
  • 16:57 – What picks up when we come out of lockdown?
  • 17:12 – The Big Challenge: Iron Ore Prices
  • 17:49 – Where will this show up most in the Aus economy?
  • 18:48 – What might happen if we see higher hospital rates?
  • 21:25 – Australia’s Economy­ – What might happen?
  • 22:38 – The Lack of Migration: How Problematic Is It?
  • 23:39 – The Hot Topic: INFLATION
  • 26:00 – Too Much Risk!?!
  • 26:18 – A Trillion Dollars In Debt: Australia’s Debt Hole
  • 26:47 – How are we going to pay that debt back?
  • 28:15 – Property Update!
  • 29:45 – Breaking News: Josh Frydenberg’s Announcement!
  • 30:08 – Household Debt — Where is it currently at?
  • 31:25 – What does Nerida see happening with the regulations?
  • 35:54 – How do you stop people taking on too much debt?
  • 38:30 – What’s happening with First Home Buyers?
  • 41:46 – What you need to know about immigration
  • 45:04 – The Luxury Market: How is it performing?
  • 46:34 – Listing Volumes – What’s happening now?
  • 49:00 – The Future of Commercial Property in CBDs
  • 52:14 – Unemployment Numbers: The Risk Factors
  • 55:21 – How to NOT save $250! (interesting way to look at things…)
  • 56:28 – Pain & Gain: New Data From CoreLogic

 

 

283 | Buy & Hold vs Buy & Sell – Which Strategy Works Best in WA? – Chat with Damian Collins, President of REIWA

And so our theme of chatting with presidents of property markets across the country continues! 

Here to tell us what’s happening in Bryce’s hometown (Perth 😉and the best strategy a property investor should adopt in WAisDamian Collins, President of REIWA (Real Estate Institute of Western Australia)! 

The last time we checked in with Damian was waaay back in Episode 73…and there’s been more than a few changes in the WA property market between then and now…plus, even more news since COVID-19 came onto the scene! 

A bit about today’s guest…Damian has served on the REIWA Council since 2011 and was elected President of the Institute in 2018. He’s been an active investor for over 25 years and is ALSO the Founder and Managing Director of Momentum Wealth  a Perth-based property investment consultancy. As well as all thishes also the chairman of commercial property funds management business, Mair Property Funds. 

We tackle the big question…should a Buy & Hold Property Investor actually invest in Western Australia? 

This one is for our WA folks… and those interested in what’s happening on the grounds in the Perth property market 

  • Pre-COVID-19 
  • During COVID-19 
  • Post-COVID-19 

 

Free Stuff 

 

What we talk about in today’s episode… 

 

And of course…Additional Helpful Resources on COVID-19

National Update: Click here

State Update:

Bonusisode with Nerida – Coronavirus, Property AND Economy 😷🏡💸

Folks, March hasn’t ended yet but we’ve decided to bring forward our monthly catchup with Nerida Conisbee, Chief Economist at realestate.com.au! We understand that in these uncertain times, all you want is some certainty and information around all the changes that’s been happening.

So today, we had Nerida on Zoom and unpacked these discussions:

👉All the most recent updates to date relating to the real estate industry
👉Which market is being affected the most at the moment?
👉Will there be any tax breaks available for renters?
👉What kind of government incentives might be made available to property investors which in turn, can help them pass on to the renters?
👉What kind of trends are being seen on realestate.com.au?
👉How has this restriction on movement affected the Australian Economy?
👉What’s after this and which industry might take a bit longer to recover than others?
👉What stimulus have been announced so far and what kind of challenges and uncertainties are affecting the government’s decision?
👉With interest rates so low, easy access to money and planned government stimulus, how will the property market perform when this movement restriction ends?
👉Why Western Australia may come out the best?
👉How does wage subsidy works in the UK and will they implement it in Australia?

Hope this helps folks and don’t forget to check out last week’s episode on Coronavirus and Property FAQ here.
p.s. Want more of this? Subscribe to our podcast every Thursday at 3pm on iTunes, Spotify or your favorite podcast app!

And don’t forget last week’s episode folks! We’ve compiled a series of playlists for you during this time. We called it Isolate + Chill! If you’re interested, just leave your details below and we’ll email them to you!

Free resources: Isolate + Chill

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And of course… Additional Helpful Resources on COVID-19

National Update: Click here

State Update:

 

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