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RBA September 2024 | Can We Expect a Rate Cut This Side of Christmas?

The sixth RBA Cash Rate Announcement of 2024 is here!

Join Ben Kingsley and Evan Lucas as they break down the RBA’s latest decision and dig into economic trends from Australia and around the world.

Here’s what they cover: 

  • 📺 The RBA’s Cash Rate Decision: Find out all about the Reserve Bank of Australia’s latest cash rate decision, as announced at 2.30pm (AEST) today! 
  • 🌍 Geopolitical Tensions in the Middle East: How are these events shaking up global inflation and supply chains? 
  • 📉 The Federal Reserve’s Surprise Rate Cut: US inflation might be slowing, but with core inflation still a worry, the Fed’s 50 basis point rate cut caught many economists off guard. 
  • 🌱 China & Eurozone Updates: What’s China doing to deal with slowing GDP, and is the Eurozone bouncing back with better inflation and economic confidence? 
  • 🎙️ Live Q&A: This was our first-ever LIVE session with audience questions! Missed it? No worries, you can watch the replay now. If you’re interested, keep an eye out for when we go live next! 

PSA: If it’s been some time since you last took a look at your home loan, it might be time to hit up your Mortgage Broker and get a review sorted.

If you’re on the lookout for an investment-savvy Mortgage Broker, our award-winning sister company Empower Wealth has you covered! Empower Wealth’s expert team can give your current mortgage a once-over – just fill in the form below to book your free consultation.






TPC Gold | Bank Valuations vs Market Value: What’s the Difference?

What is the best way to assess the value of your investment property?  

In this week’s bonus snippet, we delve into a question from our listener Laura, who wants to know which is the more reliable method for evaluating capital growth: relying on a real estate agent’s sales appraisal or opting for a proper bank valuation?

Join us as we explore the nuances of each approach and discover why the purpose of your valuation—whether it’s for portfolio building or something else—can influence which method to choose. 

For more tips on how to make informed decisions about your property investments, tune in to the full episode here: Episode 122 | Q&A – A Transitioning Market, Money, Habits, Tax Deductions and What It’s Really Costing You. 

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Bank Valuations vs Market Value – Which Do I Rely On? 

Now that you know the difference between bank valuations and market valuations, you are better equipped to know which to rely on when assessing your investment property! 

Here’s something that might also be of interest: our Masterclass on How to Build a Property Portfolio and Retire on $2,000 a Week. Discover how you can avoid making costly investment mistakes and start optimising your wealth.

Have a burning question of your own? 

We’d love to hear from you! If your question is answered, you’ll get our premium Start & Build course (RRP $497) for FREE! 

 

Similar Episodes to TPC Gold | Bank Valuations vs Market Value: What’s the Difference?

 


Transcript

Ben Kingsley
All right, next (question) here from Laura. “Hello. I have a question which you may like to answer on your podcast. When monitoring an existing investment property’s capital growth, and trying to do this in an objective, non-biased, and reliable method, can you please compare and contrast just relying on a real estate agent’s sales appraisal versus a proper bank valuation? Thanks in advance for your time and expertise, love the podcast and have recommended it to numerous people.” Thanks, Laura.  

Bryce Holdaway
There’s a few moving parts in that. I spoke to a real estate agent this week in a suburb that we’re looking to go to find a property (in) this week. I’ve done some deals with him to build up a professional relationship and I just said, “Hey, Smith Street in Smith Suburb, what do you think?” And he goes, “I know it, it’s on 691 square metres, it’s with one of the competitors.” Intimately knew it and goes and gave me an indication of price within sort of a $30,000 price gap, but reckoned he gave me a number. So, when you’ve got the local real estate agent who knows their patch, they know the streets (such) that if I say 22 Smith Street, they can visualize what it looks like and they are subject matter experts in four, five, (or) six suburbs. So they’re at the top of their game (and) if you get an appraisal from a real estate agent who’s not trying to buy the business, they’re usually bang on because they are so on the spot.  

Ben Kingsley
They’re in the market daily.  

Bryce Holdaway
The reason I say it’s got moving parts is because from that perspective, (the agent has) got no agenda to buy the listing.  

Ben Kingsley
Whereas if it’s a listing that I’m chasing… 

Bryce Holdaway
Yeah, he may have a different dialogue. Versus the valuer who quite often has a much larger patch, who then has to go and do the same thing. Now, we’ve probably got some valuers listening to this and going, back off Bryce! But the point is that the valuers are doing a terrific job, but they go out and do some comparable analysis on properties and to determine their market. And they throw in some environmental risks and economic risks and all those sorts of things, and they’re also ultimately responsible to the bank. So for me it depends on what they actually need the valuation for, because if they’re just a portfolio builder and they want an idea, then the local real estate agent would work. If it’s you know, a bit more formal and for bank lending (then go with a valuer). But there are pros and cons for both. Ultimately just the person who’s on the spot does have that intimate local knowledge of knowing exactly what it’s going to be, whereas a valuer might just have to come in a bit more blind.  

Ben Kingsley
I agree. If I wasn’t interested in selling my property and I was just looking to get a fair appraisal, I would front foot that with a couple of agents and say, “Hey, it’s Ben here, I’ve got this property in Flemington, can you give me an indication of what the sort of market’s doing in this area?” Now they’re going to give me a ballpark, and if they know that there’s not a listing behind it, you probably think they’re going to be a little bit more realistic in terms of what they’ve seen and evidence of sales in that area. Coming back to the valuer, if you were to engage a valuer where you paid the professional fee, the reality for that valuer is there is a different bias. And I want to explain this, Bryce mentioned it a minute ago, but if I’m paying $300 or $400 for a valuation on a property (or more depending on the value of the property), I’m getting an independent appraisal, which in a way, the valuer is not technically fully liable for as much as they are when it comes to getting a bank valuation. The bank asks the valuer to value the property subject to a distress sale or a quick sale. So their job is to assess the market. Now naturally, they’re also on the hook for that. Let’s say the valuer says the property’s worth $600,000 and then it sells for $550,000 three months later and the bank doesn’t get their money returned to them, (then) the valuer is on the hook for the difference. They’ll be called in on their professional indemnity. The reality is that even if the valuer is trying to do the best professional job, it’s for bank valuation purposes and they put that down based on the conditions that the bank is asking for that valuation. If I’m getting a valuation based on the market at that time, it might be a relationship separation or whatever, effectively the valuer is sort of saying, “Well, I can be a bit more bullish and subtly bullish on the valuation of that.” So you can potentially get two different valuations from a valuer as well. So that’s why I would do the appraisal with the local market expert, and I would sit on that as a good indication for now. I wouldn’t necessarily pay for a valuer unless I had some need for a contract or a separation or whatever.  

Bryce Holdaway
As you know Ben, when we travel around the country talking to audiences, I ask the question, who’s the most important if you’re a buy-and-hold property investor versus a buy-and-sell? If you’re a buy-and-hold, who is the most important person in the entire equation? I get (answers like) the tenant, the tax man, the property manager, the accountant. But ultimately in my view, the most important person is the valuer. Because if I’m a buy-and-hold, ultimately I’m playing the finance game, I’m playing the harvest equity game, and the valuer is the person that stands in between me and getting my outcomes. So ultimately, think about the valuer being the most important person in the entire equation, and then reverse engineer that every time you make a decision on what to buy. Remember, a person who’s a valuer is going to walk into your property, and they’re going to assess that with comparable sales around the area. They’re going to make a determination, and as you said, send it off to the bank, which will determine how much money you can actually get. So make no mistake, they are, without a doubt in my view, the most critical person for someone who’s building a portfolio for a buy-and-hold strategy.  

Ben Kingsley
100%. And if we are talking about some markets that are coming to the top of their cycle, this is probably a time you need to go back to your mortgage broker or your banker and potentially look to get a valuation on the property at the top of the cycle. So you can lock in that value and potentially release some of that equity for future opportunities. Because as Bryce was saying, the tide is swinging in the buyer’s interests. So over the course of the next couple years, there could be some phenomenal opportunities. You want to be poised to be able to take action on those opportunities.  

Bryce Holdaway
And as Dean said in our training yesterday, Ben, he said, “The question to ask an investor is: do they have a borrowing capacity or do they have a lending strategy?” And the difference is enormous. Because the people coming to our Buyers Agency team (are saying), “Yeah, I’ve got the finance covered.” Well, okay, let’s unpack that a little bit. Do you have a borrowing capacity or do you actually have a strategy that’s looking at the big picture when it comes to lending?  

Ben Kingsley
Dean’s one of our mortgage brokers, just for everyone’s benefit.  

Bryce Holdaway
Very subtle point that Dean made, but a very crucial point. Very, very important point.  

Ben Kingsley
So thank you, Laura, that’s a great question. 

RBA Cash Rate August 2024 | Why Australia is OUT of Cycle with the Rest of the World

Welcome to the fifth RBA Rate Release of 2024 with Ben Kingsley and Evan Lucas!  

Here’s a sneak peek into what our hosts cover in today’s episode: 

📺 RBA’s Cash Rate Decision: Find out all about the Reserve Bank of Australia’s latest cash rate decision, as announced at 2.30pm (AEST) today! 

📈 Australia’s Rising Inflation: Annual inflation in Australia is up to 3.8%, but still within the long-term trend. Property prices are mixed, with Sydney’s growth slowing and Perth and Adelaide showing strong growth. 

🤷 Mixed Signals In the US: The US shows mixed data, with GDP growth driven by consumer and government spending. The Federal Reserve keeps rates steady but is open to possible rate cuts. 

🌱 EU’s Steady Growth: The European Union’s economy shows steady GDP growth at 0.3%, with inflation ticking up to 2.6%. The ECB keeps rates unchanged but hints at possible future rate cuts. 

🌟 Exciting Changes Ahead: We’re shaking things up with our RBA cash rate announcements. Soon, you’ll be able to catch Ben & Evan’s commentary LIVE! Plus, we’ve got a quarterly Property Market Update session with Bryce & Ben in the works. More details to come, so stay tuned. 

PSA: If it’s been some time since you last took a look at your home loan, it might be time to hit up your Mortgage Broker and get a review sorted.

If you’re on the lookout for an investment-savvy Mortgage Broker, our award-winning sister company Empower Wealth has you covered! Empower Wealth’s expert team can give your current mortgage a once-over – just fill in the form below to book your free consultation.






RBA Cash Rate June 2024 | Australia Faces Slowest GDP Growth in Decades

Welcome to the fourth RBA Rate Release of 2024 with Ben Kingsley and Evan Lucas!   

Here’s a sneak peek into what our hosts cover in today’s episode: 

📺 RBA’s Cash Rate Decision: Find out all about the Reserve Bank of Australia’s cash rate decision, as announced at 2.30pm (AEST) today! 

📈 Australia’s GDP Growth Woes: Australia’s economic growth has slowed significantly, with GDP growth hitting its lowest since the early ’90s recession. But population growth is helping to keep the country from a full-blown recession. Meanwhile, the RBA is getting restless with inflation still running high. 

🏅 Employment Market Tightness: Australia’s job market is super tight, with strong demand for workers and a record number of people juggling multiple jobs. This shows some economic strength, but falling household savings amidst rising consumption could mean trouble ahead. 

🏠 Property Market Trends: Property finance is on the rise, with more new loan commitments for owner-occupier housing and investment properties. Ben breaks down land tax and rental yields across different states, giving us key insights into the property market and what it means for investors and policymakers. 

Whether you’re an investor, homeowner, or just curious about economic trends, this episode is packed with valuable insights! 

PSA: If it’s been some time since you last took a look at your home loan, it might be time to hit up your Mortgage Broker and get a review sorted.

If you’re on the lookout for an investment-savvy Mortgage Broker, our award-winning sister company Empower Wealth has you covered! Empower Wealth’s expert team can give your current mortgage a once-over – just fill in the form below to book your free consultation.






RBA Cash Rate May 2024 | The Inflation Psychology Story

Welcome to the third RBA Rate Release of 2024 with Ben Kingsley and Evan Lucas!  

Here’s a sneak peek into what our hosts cover in today’s episode: 

📺 RBA’s Interest Rate Decision: Find out all about the Reserve Bank of Australia’s cash rate decision, as announced at 2.30pm (AEDT) today! 

📈 Australia’s Inflation Challenges: The Q1 inflation rate is at a stubborn 3.6%, which is above the RBA’s comfort zone of 2-3%. Find out why non-tradables like healthcare and rental housing are giving inflation a nudge, as well as the potential interest rate adjustments in light of the upcoming federal budget. 

🏅 Employment Landscape: While there are mixed trends in US and Australia’s employment situations, Australia shows many positive signs with record-high participation rates and an all-time high in female employment. 

🏠 Property Market Dynamics: Despite expectations, property prices in Australia are on the rise. We’ll explore the ups and downs of the market, driven by high demand in some areas and scarcity in others. Get ready for a deep dive into what’s happening now and what it means for future property investments. 

💰 The Inflation Psychology Story: Ever heard of the “buy now or regret later” mindset? It’s a self-fulfilling prophecy where high prices make people rush to buy, which, in turn, keeps prices high. Ben & Evan discuss this consumer mindset and its effects on inflation. 

Whether you’re a seasoned investor, house hunter, or just curious about economic trends, this episode is a must-listen!  

 

 

PSA: If it’s been some time since you last took a look at your home loan, it might be time to hit up your Mortgage Broker and get a review sorted.

If you’re on the lookout for an investment-savvy Mortgage Broker, our award-winning sister company Empower Wealth has you covered! Empower Wealth’s expert team can give your current mortgage a once-over – just fill in the form below to book your free consultation.







 

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