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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?
    7:30pm AEDT, 19 March
    Within Moorr, our money management platform, there are currently over 25 features and tools, providing more than 100 different insights! In our webinar we’ll guide you on the best tools for the job and reveal how all your data comes together to give you meaningful insights through our “track your progress” approach to money management. Find out more or reserve your spot >>  
  • 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 

 

483 | Housing is Undersupplied, So WHY are Home Values Falling? – Chat with Eliza Owen

 

In this week’s episode, we’re welcoming back an incredibly passionate and eloquent data analysis and reporting expert who is ALSO a returning guest. Please welcome back… 

Eliza Owen, Head of Residential Research Australia at CoreLogic!    

With her experience as a housing market researcher spanning nearly a decade, Eliza has reported on many of Australia’s critical housing issues, from affordability and credit conditions to the impact of the COVID-19 pandemic on market performance. 

In this episode, we’ll use her brilliant insights to explore precisely WHY we see the numbers in today’s property market, like…   

🏠 With Australia facing an undersupplied housing crisis, why are some market values still falling?!    

📉 How is the housing market defying economic predictions?    

🔄  And what’s going on with the inverse relationship between property values and interest rates?!    

Listen now to find out!  

  

P.S.  Stay tuned till the end for a sneak peek at CoreLogic’s webinar with Eliza & Effie Zahos, celebrating International Women’s Day and all the women in property. 🎉 

 

Free Stuff Mentioned

 

Graphs mentioned

Timestamps

  • 0:00 – Housing is Undersupplied, So WHY are Home Values Falling?  
  • 1:32 – Our 9th Birthday, can you help us + PICA Webinar Replay  
  • 4:09 – Mindset Minute: The Paradigm for Investors 
  • 9:17 – Welcome back Eliza Owen!  
  • 10:40 – Recap & Money Backstory  
  • 12:05 – Eliza has never used a credit card: Financial conversations & emotional responses to money 
  • 16:48 – Why she decided to buy a unit over a house!  
  • 21:56 – If housing is so undersupplied, why are some markets falling in value? 
  • 24:35 – How does changing family and renter demographics affect demand?  
  • 27:46 – The social problem with housing  
  • 30:18 – What is True Demand?  
  • 31:44 – If interest rates go down, will APRA’s 3% buffer rate go down  
  • 32:50 – How the housing market is defying economic indicators 
  • 33:43 – The inverse relationship of property values and interest rates  
  • 36:48 – 25.6% of properties purchased in cash?!  
  • 38:22 – The masterstroke in Western Australia’s market  
  • 41:24Are we seeing green shoots?  
  • 44:05 – How much of what we saw in 2023 is due to behavioural economics?  
  • 45:31 – If rates don’t pause, will more homeowners be forced to sell?  
  • 48:46 – The changing gap between housing and units 
  • 54:08 – The Substitution Effect: The Buyers of 2015/16 
  • 59:11 – Why CoreLogic’s “Women & Property” report matters 

And…  

  • 1:05:09 – What a fantastic session, thank you Eliza!  
  • 1:07:44 – Lifehack: How to stop feeling overwhelmed when juggling life  
  • 1:10:52 – WMPN: Greens going to vote against Labor’s Home Deposit Scheme 😮  

 

481 | Property Market Outlook 2024

 

It’s everybody’s favourite time of the year…  

(No, it’s not Christmas. Or your birthday. Well, it’s actually OUR birthday month and we’re giving you a present: Our Free Suburb Report 😉) 

It is, however, that time of year when we bring you…  

Our 2024 Property Market Outlook!   

Using expert data from the past 12 months and our own countless years of experience, we’re covering…  

👉 The headlines we saw in 2023 (and the #1 biggest derailer the Gov didn’t expect) 
👉 Why did we see housing prices soar? (With economic insights)
👉 The Big Focus of 2024, plus the one critical number the RBA is waiting to change before interest rates drop

👉 Where will the plane land? Interest rates, inflation figures & the easing cycle  
👉 What investors want to see in business investment data
👉 The Supply Story: What data reveals about future sale and rent volume   
👉 The downside risks and critical upsides in 2024
👉 Will property prices grow over the next 12 months?  
👉 The Rental Story: Will the crisis continue?  
👉 The most challenged markets and what markets we predict to see growth in!  
👉 Rental Rises: Who are the price makers and takers today?      

Tune in now to hear us honestly assess the past predictions and forecast the future of Australia’s housing market! 

  

P.S. The Property Investors Council of Australia (PICA) needs support! As mentioned in “What’s Making Property News”, PICA is a not-for-profit organisation that gives property investors across Australia a voice. Any membership or donation helps. Become a member, donate or find out more today >>   

 

Free Stuff Mentioned

  • Our Birthday Present to You: Free Suburb Report 
    Go one level deeper than our Property Market Outlook. Learn how your suburb has performed and its changing community and properties. ‘Cos it’s our birthday month, we’re also giving it away for $0 (Usually RRP $40)   
  • Share what’s on your mind through our SpeakPipe: Leave us your raving reviews, little lifehacks and burning questions – and if we mention it on the podcast, you’ll get a free Start & Build course as our thank you 😊   

 

Timestamps

  • 0:00 – Property Market Outlook 2024 
  • 1:39 – Free Suburb Report  
  • 5:29 – Thank you, Muzzaaa (Let us know what’s on your mind & get a free Start & Build course!)  
  • 6:27 – Mindset Minute: There are two ways to use money… 
  • 7:14 – What happened in 2023?  
  • 10:07 – Why have housing prices soared?  
  • 11:37 – Last year, we got THIS wrong…  
  • 12:20 – The Water Wheel is slowing 
  • 14:44 – The big headline of 2024 
  • 15:07 – What we want to see in Business Investment data 
  • 17:15 – Are businesses and government still splurging on spending?  
  • 18:45 – The number that needs to change before interest rates drop… 
  • 21:27 – The drivers of demand  
  • 23:51 – Our assumptions  
  • 26:32 – The dangerous derailers  
  • 27:29 – The supply story: What the data reveals about future sales and rent volume  
  • 30:01 – New financing for investors & owner-occupiers 
  • 32:51 – The incoming storm: The #7 downside risks 
  • 35:38 – Here’s the exciting upsides!  
  • 37:06 – Buyer Demand across Australia 
  • 38:59 – Days on Market & Vendor Discounts: What do they signal?  
  • 41:32 – Use THIS sophisticated tool for predicting growth…  
  • 43:53 – Good signs for property prices  
  • 45:31 The rental story: Will the crisis continue?  
  • 48:12 – The most challenged markets 
  • 50:29 – Let’s consolidate: Big 4 bank’s outlook & what markets we predict to see growth 
  • 53:38 – The Commuter Belt is driving… 
  • 54:44 – Why Melbourne is a challenged market  
  • 58:56 – Predictions for Sydney  
  • 1:01:38 – Our advice for 2024  

And… 

  • 1:05:44 – Lifehack: Sleep is the best meditation. Here’s how to ease yourself into it.
  • 1:09:57 – WMPN: Help give investors a voice through supporting PICA 

 

Significant Urban Area (SUA) Tracker Report | April 2019

12 months ago, we released our first-ever Significant Urban Area Tracker report on our location research platform, LocationScore.com.au!

And the response was amazing! There is still much to be done but to celebrate this milestone, we’ve decided to share our most recent SUA Tracker with The Property Couch community!

So fill in the form below to download the Report now to get access to it now.

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p.s. If you have any feedback or if there is a particular data that you would like to see included in this report, please let us know! Send in your feedback to [email protected].

p.p.s: AND we’ve got heaps of other Free Resources on the site! Make sure to check them all out here.

Significant Urban Area (SUA) Tracker Report | October 2018

Spring is definitely in the air and so is hay fever. But are Australia’s Significant Urban Areas affected by it as well?

As mentioned in Episode 193, we are sharing LocationScore’s SUA Tracker Report for October 2018!

Fill in the form below to download the Report now to get access to it now.

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What’s in this SUA Tracker Report?

In this month’s SUA Tracker, we see Ballarat on its 6 consecutive upward trend to a LocationScore of 70. But it’s still slightly behind Hobart which is holding its high score of 74. Meanwhile, the cities of Sydney, Melbourne, Brisbane and Adelaide are still holding their Location Score in the 60s.

What’s also interesting is the rise of Mackay. 3 years ago it had a very low score of 36. Now the LocationScore is up to a very healthy 60. But will it keep going or start levelling out?

But of course, we’re not just focusing on the positives here cause not all of the markets are on an upward trend. Wollongong’s LocationScore for example has slid around 10% in the last year and there are a couple of SUAs that are showing slight downward trends such as: Port Macquarie and Busselton.

Overall, most of the suburbs in this month’s SUA Tracker are maintaining their current LocationScore.

Download the Report now to find out more.

Note: LocationScore’s Top 50 SUA Tracker Report is available to paid LocationScore subscribers every month! Not yet a Subscriber? Subscribe to LocationScore now and get access to this report every month as well as: Suburb Analyser Reports covering thousands of House and Unit markets across Australia; Top 250 Fast Track Filter on each state and more! And since you’re a listener of The Property Couch, use this code for a 20% OFF discount: TPC20

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ps: We’ve got heaps of other Free Resources on the site! Make sure to check them all out here.

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