Q&A Mentor Call - February 2023

Hello, it is February 2023 and gee, there is so much happening in the market now as always, this is your monthly Q and A call for all of you clubbers out there. And I know a lot of you are busy during the middle of the day and you watch this on recording and I really appreciate all your comments and all the information that you share and the feedback that you give. Now I just want to check. Please type in the comments here if I'm coming through loud and clear. We want to make sure that you guys are actually getting, getting this today. And I think the really exciting thing about today is that there's so much going on and I was just, you know, I'd been pulling together my presentation over a period of time and I jumped back into a couple of a bit of it today and I found that there's so many other things that have just come out today. So I've got lots of things to share. I hope that you're all there and you're very, I guess, getting ready for the year ahead. Now if you would like this to be a working session and you have a question about an area or a suburb or a particular property that you'd like me to dive deep into, then I'm more than happy to do that. So please put your suburb or your question into the Q and A. There's been I guess so much happening since we last met and you know, we've now had like nine interest rate rises and it's, it's interesting to read the data around how we are recovering from that and what we have to look forward to in 2023. Now ANZ has just put out their research on the Australian property market and their predictions this morning at 10 o'. Clock. So I've throw on some of that into the presentation. So you are up to date with everything. And I'll just go and jump into the Q and A announcement just to see if anyone has actually put in anything that they would like to have a look at. There's a couple of questions I noticed that were around subdivisions, et cetera. So Steph, thank you so much for that question. Unfortunately I am not a subdivision expert for Brisbane. I see that you've got a DA already and the step stat to subdivide. They're different in every state and I really encourage you to reach out to people who've got experience in that. I can definitely introduce you to the Property Developers Network. Rob and his team up there run monthly get togethers and they are all over that kind of information. So as I said, jump on in if you have. There you are. Thank you for. Thanks for your question, Steph. But as I said, we will get you in contact with Rob and his crew because they will definitely be able to answer the questions and I'll make sure that we get those details to you. So I'll just DM those or put those under your comment here. Now, lots of things have been happening in the market and you know, I really, I think it's important that we really look at that and we, we contemplate how it's going to affect us. So let me just jump into the presentation. Got two screens here and I'm going to show this and hide my pretty self so that you don't get to get distracted by me. But let me know that you can see that screen. This is, I guess, the monthly update. I really wanted this month to be able to have a 10,000 foot view of what's happening in the market because I know that we can really get in deep and get a bit worried about things that aren't necessarily something that we should be stressed about. But there's some opportunities and there are some worries and concerns ahead. So when I looked at what's been happening in the market, obviously there's been some significant effects on people's borrowing capacity. Having had a mortgage business for 17 years, I know sometimes we're chasing purchases. People have pre approvals for three months. When that is expired, they have to go back and get finance again. So there's a lot of people who've got pre approvals. There's not stock on the market and they know that if they go back, they've actually like there's been three rate rises since they've actually had their past approval, which means that their borrowing capacity has come down a lot. So one of the things that's really interesting here and I think one of the things that is most concerning is, you know, APRA in their wisdom trying to protect us. Way back when, when, you know, interest rates were very, very low, they raised the servicing buffer on against the actual rate that people are serviced on. So if you think about this, when you go for it, you've got the cash rate and usually, you know, the banks put on a bit of a premium on that and that's what we actually pay and that's why there's the difference. But what the banks are actually being asked to do by APRA is, well, because the cash rate was so low, the they used to put it at 2.5%. Let's say on top of or 2.25% and for some lenders, at their discretion, on top of what that rate was so that they could service above their rate. So we're going above their rate. So it's not servicing at 3%, it's not servicing at 5%, servicing at 7.5%. Now when rates are really low, APRA essentially said, which makes sense, rates are going to go up at some stage. Long term average they've been about 7% per annum. We need to make sure there's a buffer so if there is rate rises, people aren't caught out. And so that servicing rate was pushed up to 3% but it hasn't come down. But our interest rates have gone up quite considerably, you know, from that 1.5 to 3.25% and will continue. So I think there's going to be a lot of commentary. You probably see a lot of property experts pull out this as a point that APRA should probably reduce the surfacing rate. So not only are people, you know, running up against their pre approval timelines like they've got approved and they can buy the property, but now they're also going to have that extra servicing rate on them again, which may not necessarily be needed. Now I did attend lots of webinars this month. Property buyer Rich had a great webinar earlier in the month and this was a great chart that he pulled up from Proptech and, and so crop track. And I think that what's really interesting around this is that it just kind of shows you when the hikes occurred up until October, what the borrowing capacity was and how much they've dropped. So you can see here that you know, just with those six rate rises there was a drop of borrowing capacity of 20%. So you know, we do know that this is making some significant impact of people. So you can imagine if you were approved way back in October for instance, or even August for instance, for a Property maybe worth 950,000 because your borrowing capacity is 844, you've actually lost quite a significant amount. If your pre approval lapses, you're down to 780. So maybe it's an 850 property value. Now what's happening at the moment is that property values have been coming down as well and we're going to have a look at those stats. So it's not like your borrowing capacity is lost and you're now looking going from a three bedroom house to a two bedroom house in the same area. So the property's values are coming down in some areas, but those blue chip areas are actually starting to perform and go the other way. So just depends on where you're looking. So I know that there's a lot of conversations I'm having with people at the moment who are kind of a bit desperate to buy and there's nothing to to buy. So just be aware, borrowing capacities are reducing quite significantly. And I think we're going to have some conversations around that APRA servicing buffer coming in future months. Now, this is something else that I looked at that I thought was kind of interesting in the sense that, you know, we have got the values have been falling and they've been falling, you know, 1.2% per month to the end of October, but most recent stats show that they slowed. So, so they're falling now, still falling, but they're falling at a slower rate, which often happens when this starts to become a turn. So we get a 4, 4, 4, 4, 4 very quickly. And then we get kind of like it slows down, it plateaus, and then it starts coming up. And what's interesting in the Anz report that came out today, they've got the predictions about when they think those prices will go up. Now, the other thing that you probably heard about and has definitely been hitting the media is, is the fact that, you know, we've gone from that cap of 160,000 immigrants a year to 195,000. Now, the reality shows that we're actually on track for a net migration of more than 300,000 people this year, which is a lot higher than what's been predicted. These people need homes and often they do come over with families. So even if you divide that by 4, for instance, we're still looking at over 80,000 homes that these people are going to have to live in and they're going to have to rent. And so this is a really interesting statistic, but I have dug out something that's even more interesting around the concept of migration that I'll get to in a moment. But just keep this in mind that when we start hearing about we've gone from 160 to 195, that in actual fact, the number is a whole lot more than people who are coming into Australia, which is going to put more pressure on rents and it's going to potentially be one of the drivers that starts turning that, that property price around. Now, the other thing here I've got here, rental vacancies all time low, unemployment is still low. So in actual fact, you know, people, applicants for rents, you know, 20, 30, 40 applicants per property and people are putting their prices up. So, you know, on average, their rents have gone up over 10%. And I know just for some of the properties that I've had vacant last year, they actually jumped up 20%. So it's not like I put people's rents up who were actually in the properties. It was that end of tenancy and new tenants. So, you know, we're already got this huge kind of pressure on our rental market. We start bringing on all these new people. Just expect the fact that that trajectory of rental rises could continue. The Anz report today also shows that construction is coming off, so we're not building that many more properties. Number of reasons around that. But, you know, obviously cost of supply, availability of trades to do the jobs, you know, but approvals are down, so we're going to have to put people somewhere. Rents are going to go up. There's going to be investors that are going to look at the, the rental returns and potential growth ahead and start coming back into the market. And I think that's where we're going to see the price rises come from. Now, as I said, rents are up around 10%, which is quite extraordinary if you think about that. The fact that, you know, we were at vacancy rates around 5% in Sydney and Melbourne only two years ago. So this has been quite a huge turnaround. And this is nationally, not just Canada, capital cities. Now, here's the thing that, you know, stats and numbers fascinate me and I'm always looking at, at things. And I was reading recently that inflation in the last quarter, 2022, was 7.8%. So obviously it's not within that band of where the RBA want us to be, 2 to 3%, but this is the highest it's been since 1987. And then in a completely separate article, I was also reading that this cash rate increase, this huge increase that we've had from 1.5 to 3.25, is the fastest since 1989. And I thought, isn't that interesting? I did a little bit of research. Inflation started going up and it's reached its highest since a certain period of time. But what was happening in that period of time, it took another two years for them to have these rate rises that were to bring inflation down. Now we've done this in less than 12 months. So there's been a very, very fast response to the inflationary pressures. And, you know, arguably a lot of people believe the rba, you know, took too long to make their changes and hence had to go too fast too quickly with those rate changes. But you know, it's interesting just looking back at history and being a student of history, it allows us not to repeat the same mistakes. So what happened after the in the property market since 1989? We'll have to go in to have a look at that at the next, next call. But it's just, it's interesting to see when these kind of situations have happened in the past and we've now had this happen very, very quickly. However, having a chat to a number of buyers, agents and real estate agents in the market at the moment, they're starting to see increased buyer activity. Now I'm going to show you some stats a little bit later. And you know, one of the things that really fascinates me is that we can actually look at history and predict what's happening. And we know that the top end of the market starts responding first, it responds first, going up and it comes down first. And I'll show you the stats to see that. And as a, I guess a student of numbers and like liking to put together these kind of patterns, it's something that we should observe. But it's really interesting that we're seeing that in those blue chips, those higher valued places areas, the agents are starting to see a recovery. So let's have a look at that. Now this is, as I said, this came out at 6:30 this morning. So this is up to date information from the New Daily. But what I find really interesting about this in particular is that this is some statements from the Home Affairs Minister Ms. Claire o' Neill. And, and I was just reading through this story about immigration because as I said to you, I'm interested in the fact that permanent immigration has gone from 160 to 195,000. Some things that I didn't know. Two thirds of the permanent migration slots will be filled by people currently living in Australia. I was like, oh, okay, so this is not new people coming to Australia. But, but if you remember we did have this report from treasury back here. Where did treasury go? Treasury saying that they're expecting a net change of 300,000. So I wanted to dig a little bit into where are they coming from. Now here's an interesting thing. The temporary visa, not the permanent visa, the temporary visa program is uncapped in numbers. Now you know from my last Talk Last month, June 2022, 50 student visas were applied for in a week. That's like you know, 520,000 a year. And in the last two weeks. The Chinese government has said to their students, hey, you can't learn online anymore. You got to go and in person back to the country where you're getting your degree from and get your degree there. So this is going to increase people coming in as well. So this is interesting, right? So I've started to dig a little bit deeper. There are now more than 2 million temporary visa holders. 2 million 2/3 of the 195,000 is going to be filled up with people already living here. That's double the number in 2007 because it's been uncapped. So should there be a review of how we do immigration? I think you're going to see something big coming out. As I said, this is kind of breaking news. 6:30 this morning, but here's another interesting number that is a lot higher than I expected. In the one year period from December 21 to December 22, the number of temporary entrants into Australia jumped by 720,000 people to reach 2.4 million. And this is from another expert. He said the rise was driving an increase in the number of hours worked in Australia. Interesting observation, but also putting pressure on housing and infrastructure. Bureaucratic complexities effectively discourage many kinds of skilled permanent migrants from posing fewer hurdles to unskilled programs. So basically what that means is, hey, we know that we need people who are nurses, but they had to spend three years and $20,000 to get their qualifications recognised. So there's this whole requirement for these skilled workers and we're taking over half what we used to. So, you know, I just know my parents recently they've moved to into a retirement village. You know, they're under the stay at home, don't go to a retirement home kind of home care package. You can apply for some discounts on a cleaning lady coming once a month or fortnight or something and you pay 17 bucks, not whatever they normally charge. You can tell I don't have a cleaning lady, but the interesting thing is they don't have anyone available and people are waiting six to 12 months to be evaluated for this scheme, but also to have someone to turn up and clean or to help them shower or, you know, just to help them around the house or drive them to the appointments. And the nurses are not being kind of nurses in healthcare are going to be the areas that we really need this type of support. But what we're seeing is people already in the country are actually taking up most of these visas and there's an uncap on it. So put all this in Perspective we're bringing in, we've got more permanent visa people coming in. There's a lot more temporary visa people coming in. 750,000 people in the last 12 months. So no wonder we're having a shortage of available rental properties. So this is, this is kind of the underlying things that are happening. So I was not being able to work out my own head how these numbers were making such staggering changes. And especially because the immigration department got rid of $85 million worth of funding during COVID because they didn't need it and they've taken a long time to approve these new visas. So watch this space. I think this is something we need to watch too. It's going to put a lot of pressure on the rental market. So just be aware of that. I think it's something that we have to be aware of. Look, this is out today as well. Peter Switzerland, love his reports. There's been a lot of commentary this week around the super shock and the proposed changes that they're going to put into the May budget. Potentially, you know, there's talking about potentially taxing the rich more. There's I think 15,000 people in that zone that have, you know, self managed super funds over $5 million. If they do tax those people, you know, they don't even vote for the labor so labor doesn't really care taxing them. But there will be about $1.5 billion in revenue from doing that. And the reason that that's important is that there's been a lot of promises made on a lot of spend and I think the government's now trying to find those money, that money. So should the rich richer get taxed more? Possibly not, who knows. But the fact of the matter is that most people have less than $150,000 in their super. And yes, that average is kind of affected by the top end and the bottom end. More older people started a lot later. I know that super only came in when I was in my mid-20s. That was a compulsory super contribution and a lot of younger people don't have any balances. But you know there's a lot of people out there who are doing it tough. And the Grattan Institute says 2/3 of Australians have less than $100,000 in super and there's only 80,000 have more than 2 million. So you know, there is a fact that there's going to be a lot of angry people making Super a big piece in the news. I don't think it's going if all it comes out is they're going to tax, you know, those that top end a lot more then, you know, I don't think it's going to happen. But there are a lot of possible changes that could actually affect the bottom end as well. The ones that are actually a bit more interesting, you know, they did throw in something around inheritance tax, which I think we might need to be watching, watchful for as well. But you know, there are things happening, so who knows? Oh, we got a quick, quick question here and I think it's in relevant to this. So thank you for your question. Does that mean the return of 1992 is coming? Well, you know, we have had price range, price increases that have come off the back of these, these difficult times and we know that this period of time took longer than it's happening now. So could the price ranges come back sooner than, you know, 1992, three years after this? Just wait and see what the Anz Research report says, because I think the answer is yes. And here they are. So it's out today as well. I'm going to put a link underneath this so you guys can have a look at the whole report. I try to grab a couple of screen grabs so that you can see what we're talking about. But they are predicting that rate rises will continue. We've got three more or 0.75 more up to 4.1% in May. So that is going to, you know, create more angst, obviously. But what's the good news is that the people aren't having that many issues in making these repayments. Now I know when I've spoken to a number of clients who. Here we go. Who have asked me about what they should do. They've got multiple properties, they're looking at 60, 70, $80,000 in more interest when their fixed rates come off. Those people are feeling a lot of pain and there's reason to consider potentially looking around their portfolio and on restructuring or even selling. But the reality is that not that many people have that many properties. I think there's only 15,000 people in Australia have over seven properties. So, you know, there's not that many people who will have that huge effect. But you know, even having one or two investment properties in your own home, yes, a huge rate change is going to affect the bottom line. The Anz housing report indicates that we're not going to see an absolute increase in people who are not going to be able to pay their interest bills. So their forecast essentially said, you know, last year that the whole market was going to go up and go down by 18%. They still believe that it's about 10% reduction to come in 2023, but they are looking at a recovery in 24. So to answer your question, the recovery is coming sooner. So we're seeing these time frames of high inflation, high interest rates and then the property market recover actually coming in within almost 18 months. So there is a squish on that timeframe with the cash rate stable and then falling late in the year. So note that they indicate that the interest rates will be falling this year, which we started talking about mid last year. And you know, this is a good thing. You know, you can get through a bit of pain and hold your property, then the property will value. Looks like there will be gains 2.5%. You know, and in relation to what I shared earlier where we were looking at 1.2% falls per month, a 2,5% increase per year. At least it's an increase, it's a slower increase that they're predicting. I've seen other predictions, predictions indicate more but. And obviously there's a disclaimer they have there around recessions and unemployment, yada yada. But you know, this is, this is not as bad as I expected it to see. They did indicate there were some risks though. So they're saying recent housing price data has improved at the margin with Sydney prices recording price gains in recent days. But further lifts in mortgage rates are coming and we expect weakness will dominate. There is a risk that households may manage higher rates better than we expect and housing prices fall by less than we expect. I like that risk, but this would likely translate into too strong consumer demand and prompt further rate hikes because of more inflation, extending the tightening cycle. So you can see this whole cycle goes round in a madness basically. And it's our job to either have time in the market or try to time the market and also protect the downside. So we have a buffering pace in case rates go up and you have vacancies or your rental income goes down. What we are seeing is that there's less likelihood that there will be reduction in the vacancy rates. So you're going to be able to rent your property and you're going to be able to rent it for more. So as long as you can hold your way through this, it does indicate that the experts are saying that property prices will go up and your income will go up to reflect the increase in the demand for properties because of all those immigrants. So good news, just a few really good little I guess graphs to have a look at. You know, they're talking about this fall at 18% year to year. But just note, you know, they're seeing this fall that's in a stop around third quarter 23 and then start coming up again. So, you know, we've been on this trajectory of growth for a long period of time and this is an index, but you know, we've been on this trajectory of growth. We have had a few dips, but we're actually coming back to a price that's probably representative of what your house was valued in 21. So if you bought your property in 2019, 18 or anything less than 2021, the value of your property is probably still higher than what you bought it for. So if it has gone up and you know, you were someone who was sitting down here having bought your property 10 years ago, you know, or even five years ago, there might be a real impetus to talk to your mortgage broker because you may actually now have a loan to value ratio that might have started at 90% or even 80%. It could be at 60%. And I know a lot of, you know, the clients that we've worked with in our mortgage broking business, had we gone back and said, well, you know, when APRA got all really kind of freaky in 2017 and did some interesting things, a lot of the banks, you know, started making discretionary interest rates. So if you were an investor, you paid, you know, 0.5% more. If you were owner occupied on interest only, you paid 0.5% more. And if you had an LBR over 80% or 90%, you paid a little bit more interest. A lot of the lenders actually charge less interest on lower loan to value ratios. So we've gone back to speak to some of our lenders that our clients work with and just requested a lower rate rise rate based on the fact that they've got a lower lbr. So, you know, once again, I encourage you, go to your lender and just say, my current mortgage broker is telling me to have a look at different rates and what can you do for me and see if they can sharpen their pencil. So, you know, just a little tip there. We want to put money back in your pocket. It's my campaign slogan for 2023. And we start with rates and then we go to having your rental reviews done. So this is interesting. This just shows us over a period of time, 2021, we've got, oh, the whole, you know, housing market went a little bit crazy, 22 pulled back a bit, except for Adelaide, 23, we can see that everyone is predicted to have a negative growth. 24. We have most areas except Adelaide, interestingly enough, having an increase return to value. Now one of the things I've shared with you earlier and one of the reasons I called out Adelaide early last year, somewhere to watch was that I was ringing immigration lawyers and agents and I was asking them where they're sending the migrants to live. And they were saying obviously Sydney and the east coast, Sydney and Melbourne and Perth on the west coast were the areas that most migrants come to. But Adelaide I believe was going to have a boom based on the fact that Adelaide was considered regional. And if you're a migrant and you go to a regional area, you get more points to go towards your permanent residency sooner. So that's why I called out Adelaide earlier last year based on once again immigration. And you know, we really saw a huge boom there. So I think that there's, there's still some reasoning around why if Adelaide is still going to be deemed regional, we should assume that it's going to continue having a bit of not as much weakness as anz. Excuse me. Okay. Lower price properties have fallen less. You know how I said to you that I watch the market, Higher price properties are falling more. So they're going from a high to a low. That's more of a decrease than these guys in the mid half and these guys in the smaller half so. Or smaller quarter. So it's interesting to see this. The mid quartile is like the average. When you hear about average prices, this is what the mid looks like. There's also a lower quartile. Lower 25%. Higher 25%. So what's interesting here is we see that usually the drops in the higher quarter are bigger, more significant, that is they're losing more value. Except in Perth, which is interesting. So the Perth property prices may have something to do with this, but I just find that this is interesting. And the other thing is Perth has had negative growth for over 10 years. This is the first growth that they've had. So you know, it's been interesting to actually see what happens here. So these are relative growth points compared to the mid, lower and higher. And you know, when we look at. Actually I think I've got there, look at this. I pulled this in CoreLogic as well as you know, every month I kind of look at this because I try to anticipate where the market's going. So often what happens is that we have the higher quartile start moving up and then the median quartile and then the lower quartile. So when I start seeing this higher quartile coming back from these numbers and start pushing up into positive this is a real indication that the market's about to turn. So watch this graph guys. These are all free data. You can get this from CoreLogic. What's interesting and as I showed you last month, you know I was watching Adelaide's mid quartile was still up here in the positive and I'm saying as soon as this goes negative the next one will come down and we'll be starting to see a significant, you know, negative growth as opposed to what we have been seeing in Adelaide. This has happened. Perth, you know, not big, big moves here hasn't had a lot of moves. I still don't think there's a lot of confidence however I'm speaking to a lot of buyers, agents that are saying that they're you know buying over there which is interesting and we can see here Darwin's lower is coming down. What's going to be the most interesting next move and looking at these dwelling index graph is when we start seeing this 75 percentile start moving up. So when that happens the market is turning. Can you time the market? Anz tells us that the whole market will be moving by the end of next year. Sorry, end of this year I reckon that we're going to start seeing these higher ends moving sooner and that anecdotal evidence those blue chip areas have started moving up. I'm suspecting that we're going to start seeing these higher areas. So are we in the move up space? I think so. It might be hampered by the fact there's not a lot of stock on the market but it also could be hampered by the fact that we got three more interest rate rises. So the higher end of the market is usually less susceptible to those higher interest rate rises. So let's just watch these numbers over the next month or two. But for you know, fortune favors the brave. I just want to give you some indicators what to watch for some other things in the ANZ summary. What's interesting here is they essentially said that you know some people have had to dip into their household savings due to the interest rate rises but and they will have to do more when rise when prices go up but it doesn't hasn't been significant enough. We did build up a lot of savings over 2020 21. There is this big fixed rate roll off and it has started the roll off around 15% of mortgage debt this year from very low Fix who fixed at 2%, 3%. Now I've got a loan that I've got fixed for 3.3% and currently the variable rate is 8.3%. So I know as soon as that loan comes off I'm up for at least a 5% interest rate rise. So this seems significant. You know, unless you've got that buffer in place and you've been able to plan for this, there's going to be some people that are going to feel this but what they have said is that you know, those that could be affected by these interest rate rises like the 70% of people have already been affected by the being on variable rates. So there isn't any evidence of overspend at the moment. People in a lot of pain. But we're going to watch that rising interest rate payments are hurting confidence. The ANZ Roy Morgan Australian Consumer Confidence Index which I usually show it's got very low confidence across the total adult population. But those with owner occupied high mortgages report lower confidence than other cohorts. So you know, this is interesting to watch. You know we've had a lot of people who you know could buy a renovated property rather than renovating the property over 20, 20, 21 because they couldn't access anyone to actually renovate the property and the costs were high. So there was an opportunity. We saw people moving, owner occupied, a lot of owner occupied movement. But you know, it indicates that these are the ones now that are feeling a little less confident. So maybe second guess decision. Our RBA research on non traditional measures of financial stress include Google searches and media also showed that public interest in and concern about interest rates grew in 2020 despite falling arrears rates. So not that people were actually defaulting on their mortgage. RBA analysis shows that offset accounts grew more in 2022 than the average between 2014-2019 despite higher inflation and rising rates. So see our savings also went up in 2022. We know they did in 2020 and 21. So financial stability, real buying power squeeze is hurting confidence more than stability. So there's a perception here and we know that perception creates reality. Let's just jump through some of the numbers. Housing prices are now falling in all capital cities. No one's escaped this. South Australia and Western Australia regional areas are the only ones that are really is still going up. Regional rises, prices are down but not as much as capital cities. But they did take longer to start turning. So just be aware of that. I do, I do stick to my guns and my, my thoughts in the last 18 months that the rise of the regions was going to be a short lived phenomenon. And I think we're seeing that where we, this anecdotal kind of media stuff, which I think is more hype than anything else, which is did you know, a call out for people, did you move to the country and now you're moving back. So there's going to be a bit of that go on. But I do think the regional prices have held well and for longer than we've seen in the capital cities and they're going to start coming down probably for longer as well. So just watch that. You know, we're down 19% which is great. The combined regionals are down more, combined capitals kind of reflect, you know, 18%. So, you know, we're kind of, you know, feeling it and it'll be interesting to see what happens. But this is, this is actually sales volume. Sorry, when I'm, when I was talking about things down. So it's actually the fact that we aren't having the sales but we don't have the properties on the market. Vendor discounting is very interesting to look at too, which means if someone puts their property on the market for a certain amount, how much they're actually accepting. Now this is good information to know because if you've got a property that's, you know, you're interested in buying for 500,000, then you want to know what would be the offer that you put in. You might start at 5% below, you know, so 10% below is 50,000, so we're talking 25,000. You might start at 475 and negotiate up potentially to like the 4.4. But this just gives you an indication that over the last year these vendor discounts have actually increased. So you can, you can ask for less as your initial offer. So just be aware of that. This is how I use that data. As we know, rents have gone up. Rents have gone up considerably in most of the capital cities but also in the regional areas. And as always, I'm always looking at the profit property clock. So what is interesting here is we are having significant amount of properties pushing over into the declining, declining market and approaching the bottom. We'll see more and more come through. There's, I wanted to do a comparison. So this is April last year, February this year, April last year. Now April last year, Southern Highlands was kind of hanging out here and starting to decline. It's been there for a very long period of time and only last month, month before last did it actually come into the decline. But whilst it's been hanging out here, we've seen a huge amount go around this circle. So not every city moves at the same rate. So just be aware of that. You know, we're approaching the market. The yellow orange indicates it's different from last month, approaching the top of the market. Dubbo's been sitting up here at the peak of the market for nearly a year. So, you know, this is really interesting to see. Launceston was up here last April and Launceston is now, you know, moved down into the decline. So I think it's really interesting to look at this Heron, Todd White. They've got thousand valuers every month out there doing valuations around the country. Get your hands on this report. I'll include a link below. But it actually gives you an indication of what's happening now. You don't have to wait a month to hear what is happening in the details. Oh, now I did really like this. And I'll put this link in as well. I'm always looking for new tools and new ways to learn things. And this is how can you, can you predict which parts of Sydney will next gentrify? Now, gentrification is one of the indications of people spending a bit more money, property prices going up. So it's nice to know this stuff. Where are people buying and what are they doing? So this is a really cool little graph that, you know, that you can get into and you can see where there has been a high increase, a low increase, a medium increase. And I would assume that the way that you'd look at this is that you'd look at this in the context. Click here to load the map in a new window. I don't need that. But you look in this and go, okay, so there's been so far a, between the 2016, 2021 census, there has been some increasing gentrification. Maybe you're going to go to these low increase areas and you're going to start looking at these and go, okay, so this had low increase. Is there any suburbs around them that have had medium high increases that I can start looking at and going, oh, okay, maybe there's an opportunity here. So for instance, you know, you've got this, these really dark increases here in Castle Hill. You've got these medium increases and then all of a sudden you've got, you know, these other areas that are coming up. So, you know, I'd just be looking at these kind of maps and just looking at how can you potentially read that? What would I call it? The essentially it's the hotspot. You know, you're looking at a hotspot, you're looking at an opportunity where people could actually take the information from census and go, well, by next census, where would this data be so interesting to look at? You know, it gives, it just gives you a little bit of another tool that you can say, okay, there's been a certain amount of gentrification in Greenacre or in Beverly Hills nawi and there's some areas here that have had, you know, more significant gentrification. So I just really encourage you to look at this information and just see in these sectors or in these sections where there could be opportunity for you. So that's the reason that, you know, I kind of, I threw that in there because I think it's always cool to have a look at new tools to and see how you can use this information. As I said, property buyer, buyer's agents, business across Australia, they had a really great webinar earlier in the month. You know, prices declining slowly. So we know we've already covered that. Rates peaking, borrowing capacity has been reduced. New listings very weak. Buyers are cautious, uncertain, still waiting Waity. We do believe there'll be a migration wave coming, but as I indicated, it would seem that that increase will be actually served by people already living in Australia. But the visas to the that are uncapped to the temporary visas are going to be where we're going to see, I think, a real increase. Rents to continue rise. And remember, house prices are still higher than they were in 2020. And so this net oversees migration. Obviously we had a real lull, but we're expecting this increase. So we've had some real periods of growth, post war, et cetera, and they were driven by immigration. I'm thinking that we possibly have been at war with COVID and potentially we're going to have that real sanctuary of Australia that kind of got through Covid a lot better than most other countries. So there are some interesting forecasts of, you know, where this is going to hit arrivals. So we're saying, you know, the net amount of migrants is going to stay the same, but the arrivals and departures are going to kind of meter that out. But I think we're going to see a whole lot more than that and we should be prepared that there's some opportunities. Okay, just a final little plug. Have a check out my. Your project property success club. This is. I'm putting a lot of focus into this at the moment, having spent a significant amount of time in talking to people over the last 17 years about their finances and their, their hopes and their dreams and what they're trying to achieve in life. It's really hit me that there is such a, a number of stories and patterns that people have running around their relationship with wealth and with money. And one of my frustrating things was often that I couldn't get people to pull the trigger when they had all the information bound them to be able to purchase a property and get down from those 16/2 thousand suburbs to three to five, down to the street level and the type of property that would allow them to purchase and purchase something within a growth area. Understanding the dynamics of being able to read the numbers and it sent me down a path of actually looking into why people weren't actually taking that step. And yeah, so I've created a couple of programs around that. It's something that I really feel very passionate about and you'll hear more of that to come in the future. But as you can see, you know, the, the market at the moment, there's still a lot of mixed messages. There's not a lot of properties on the market. There are people who are starting to read these signs like I am that are saying there is going to be a bit of a turnaround. It might happen by the end of this year. It's not going to be a significant growth rise. But we've still over the last, you know, two years down to 2020, we're still up quite significantly on our, on our value of our properties. So just be aware that, you know, there is going to be some opportunity. It's going to be difficult. You're going to have a lot of people rushing for the good quality properties to come up. We're going to continue watching that top end of the market because it's going to show us that turn. There are predictions that we're going to have two or three more interest rate rises. So be prepared for that, keep the buffer in place. But it looks like we're not going to have a major increase of people going into default, which is great. And as I said, you know, 2023, I'm really going to make my mission about putting money back in your pockets, starting with that little phone script. Bring your lender and just say to them, you know, I'm thinking about refinancing or remortgaging or my loan to value ratios dropped, you know, what can you do with my rate? And you know, I'm getting texts from people all the time telling me that they're saving four $5,000 a year just by having that conversation. Obviously, if you want to have a conversation that has a little bit more integrity to it and speak to a broker DM me, I'll put you in touch with one of my network of brokers that we can help you out with. But you know, for me it's really around having a very mindful call around how you can actually look at what you can do in the future. Keep a buffer in place to protect your downside, but start looking with some degree of positivity. So I'm not always Mr. Unicorn and you know, tinsel, but I'm starting to see the inklings that the market and the lenders and the economists who do this every single day are starting to see some positive effects. So good news. Now I'm going to put a couple of those reports in the links below. Go down there, let me know how I can serve you, what questions you have. I was all here prepared to run my suburb selector software and my secret macro that I run with my mentoring clients around where they want to buy in the suburbs they have, but no one has any questions about suburbs or properties. So I encourage you next month put them in and I'll definitely have a look at them for you. Get involved in the club, ask some questions. Some great engagement this month. A lot of questions. Things around urine soaked floors, how do you fix those? How would you ever know? And where would you ask those questions here in the club? Anyhow, thank you so very much and thank you to everyone who's made those donations because it really looks like there's a lot of, you know, there's a lot of people still in need out there and it's really important that we have an opportunity to look at how we can support them. And the kids help line are doing a really great job and so far we've said we've, you know, raised over $22,000. We've got, you know, two fully trained people in there just because of you guys. So I really, really appreciate that. So anyhow, as always, I really appreciate you, you guys being here. I'm seeing a few little last minute questions around what's happening in the Gold coast and, and what's happening in Tweed Heads. One of the things that I've seen that some of the reports, and if you follow Terry Rider, his hotspotting reports, he has a lot of fantastic information. There's really, he looks at the infrastructure in a way that no one else does in Australia and publicly shares. I'm sure there's a lot of economists sitting in banks and super funds who do this. But there's, I guess there's a real issue at the moment around that Tweed area and there's a couple of things that come to mind. Obviously there's the flooding and the effects of the flooding and the fact that people need to rebuild and they're going to have to rebuild to a certain standard. There's also a lot of, you know, there was a kind of a came to a head in council in Byron recently around the effect of all the Airbnbs and the fact that the service staff and locals can no longer afford to live there. And that seems to be somewhat still going on. So there is some indications that obviously that top end of the market did go up, prices went up, you know, very high in that area. There is not just the Byron, you know, there are areas like Lismore, et cetera that have had their, their ongoing issues. I think obviously looking at areas that have blood and water problems are going to be something that becomes more and more mainstream in the way that we do our researching properties. But if I had an Airbnb in Byron at the moment, I think I'd be concerned about some of the things that would be going up against inter Council which are around the fact that, you know, maybe only the front properties facing the water can actually have, you know, long term Airbnb rental status for the year. The rest can only rent for a short period of time. So, you know, only maybe be able to have the property available for rent for a couple of months. But you know, there's a really good argument why that should happen. And that's because the locals can't live there and there's no one to service those Airbnb properties because no one can afford to live there. So I think this, that area in particular is probably going to be the catalyst of a lot of other tourism areas. So I wouldn't be surprised if Airbnb gets very involved which indicate recent things indicate they have done in actually making, making the decision1, that it benefits Airbnb because it could have a roll on effect everywhere. So just watch that. That's. It's a whole different dynamic up there that we need to be aware of. The Gold Coast, Gold coast is an interesting area, right. Because there's been a lot of announcements that have come out regarding the Olympics. There's been just this week there's been some significant Brisbane announcements around infrastructure on the new stadium in Brisbane. Weird that they're going to rebuild a whole stadium just for the same capacity. But I think that's a question for those guys that they'll be revved up on a bit in the future. The Gold coast has been generally driven by the unit market and the unit market has been, I guess, hit a bit. But we're talking about all of these migrants coming to Australia and we're talking about temporary immigration as well. So I think we'll see some positive effects from the Olympics and the infrastructure and from some of the events being held in that area. My I don't even know if I'm allowed to say this, but I have got some information that indicates that there is a lot of land that could be released to the west of the Gold coast that would make a lot more properties available. So we know that supply and demand often dictates price point. And if a lot of properties are constructed and a lot of areas are opened up out there, then that kind of exclusivity, want of another word or limitation on the amount of properties available could affect prices. But you know, you can't see the sea from way out west. So you know, a lot of people want to have that proximity also and the lifestyle of the Gold Coast. So I think the Gold coast is going to be something to watch. It is an area that is, you know, definitely susceptible to tourism and we're definitely getting more tourism. And you know, with that comes the need for people to actually service the hotels and service, you know, all of the retail and food outlets and all of those things. So there's going to be a rental demand. Rental demand. And the lack of properties to rent usually pushes the price of the rent up. Once the rental yields go up, investors start looking at it and going, wow, I can get 7%, I should jump into this and get out of my shares or whatever else or put it in my self managed super fund. So I think that we're going to see more of a tourism led initiative in the Gold Coast. But as I've shared with you before in my research on the G20 and the Melbourne and the Sydney Olympics, it says there's a price run of properties up until an Olympic event or a major event and then after it there's a decline in value. So I'm conscious that if you're investing for the long term and you're looking at these areas based on the fact that yay, we got the Olympics, it may not be the right investment that you need. But if you're in a short term investment, there is the potential that we have got a lot of people coming to Australia, people like the beach and tourism is always improving, so I hope that helps. Don't see any other questions that I can answer now. But, you know, please, as I said, put your questions in the club. There's a lot of very experienced people there. I jump in and answer questions as well, so really encourage you to get in and participate. And, yeah, I'm really. I'm really keen to hear how everyone's going. Thanks. Appreciate it. And yeah, until next month, here is to your property success. Bye for now.