Q&A Mentor Call - January 2024

Hello, it is January 2024. Please let me know if we're coming through live and strong. We have a incredible guest today and I am so keen to jump straight into the conversation. So it is 2024, can you believe it? And we're already a month through, so let me know if we're coming through and I am just going to check very quickly whilst everyone grabs a quick cup of tea and we get going. Hello everyone, it is Jane Slagsmith and I know a lot of people here watch on recording. So hello to you in the future. I hope you're not watching too far in the future otherwise you are going to miss out on an incredible opportunity. My special guest today has to talk all about now before we get going. What a month it has been. If you set some New Year's resolutions, typically by this time in January you probably have fallen short. So I really encourage you to pay attention because we want you to take action and make a commitment because 2024 is shaping up to be amazing. And as I always do, I do a quick little run around of the information that I've grabbed recently about what's been happening in the market. Haven't had to go that deep this month because I have a special guest who has all of that information at his fingertips and is going to share with us a little bit about it. So check out this, I guess a quick little wrap around what's been happening in the market so that we can have a little conversation and get a little bit. Where's my little pretty picture? There it is. A little bit more information about what's happening. Okay, so as you can see here, market update. I'm getting my information for everywhere, including the TV last night. I have to say, Rob, I know you're probably sitting there listening whilst the camera's turned off going, what is she doing? Well, up to date information. Here we go. I gotta say, I sat here and I had to put the news, SBS news on pause for a while last night while I was looking at this, you know, I remember a couple of opportunities in the past over the last 25 years since my husband and I started investing. And you know, we were always looking at the differential between the capital cities. And I have never seen such a big difference between Sydney and Melbourne. I can't believe Adelaide and Brisbane are almost the same price. Canberra is right up there giving Melbourne a run for the money. And then we've got, you know, Perth and Hobart, you know, coming on behind. Hobart's obviously had a huge run and just incredible to see, you know, what's happened. 2022 we had a, you know, a year, 2023 we kind of come back a little bit and here we are heading into 2024. Once again, a very high quality image of my TV on the unit prices. So it's interesting to see what's been happening in the market. As always we have a quick little look around the property clock and as we know there's markets in markets, but this is just an indicative indication. It's not to say each of these areas is right where it is. Those that are in yellow have moved on since the last month and you know, this is the most up to date information for Heron Todd White. They've got thousands of valuers out there, every single looking and valuing properties not just for those that are going to sell, but for the banks as well for refinances. So they have an interesting insight. And you know, we don't take all this as gospel, but it gives us an indication and more so for me, I try to look at what's been happening in the market since a previous date. So rather than being a specific moment in time, we can actually look at this and see what's been happening. We see here, you know, one of the these from April 2022 that I pulled up, I'm going to make it really big. So you can see it pulled up from April 2022. You know, we were at the beginning of this kind of rising market. It's, it's taken a while though, right? And you know, Southern Highlands is kind of dumped around here and come down the bottom. Dubbo's been hanging up to the top all that time and everyone else has been coming around so, so you know, this just gives us an indication of the direction of the market and there's no one better to talk about the direction of the market than my go to guest who is with me here today. And that is the incredibly talented, the amazing, capable and competent Rob Flux. Hey Rob, how are you going?

Hey Jane, I'm amazing, how are you?

Of course you're amazing.

So I feel amazing. Not just that I am amazing. That's what I meant to say.

There you go. Well, I have to say I'm on my, my third masterclass live for the day. I did an hour and a half on AI in your business this morning at 7:30, at 10:00 clock I did unbuttoning the abundance in your life and now we're talking about abundance in the property market. It is all happening, right?

It is all Happening now. I've got a couple of comments on the stuff that you just shared on the market right there. So firstly, they are market commentators talking about the long term buy and hold view of the world and they're measuring what they call property indicators. Sorry, so probably indicator is something that has already happened, it's already in the past. So we're measuring the past. What I want to talk about is property drivers. What are the things that are moving the market and where are they? Where is it actually going and why is it actually going and understanding what sits there. Because as a property developer, I'm buying in one market and I'm selling in another one. By the time I go through, get my development approvals and construction and sell the finished product could be anywhere up to two years later that I'm actually selling a product. So I'm looking at this to go. It's not just when I buy, but also when I sell. So slightly different answers when we get those two things together.

Yeah. And I mean, gosh, we've known each other for over what, 10 years now. And the reason that I just always go to you for these insights on the tailwinds, the headwinds, the market indicators, the lag indicators, the predictive indicators is because like me, kind of like a data scientist, right? We're into the data or into the information. And it is that basis of the information that allows us to make good decisions. So I'm always signing up for your launchpad sessions every year because I sit there actually. I have to be honest with you, Rob. I go for walks and I watch them for hours on end, but I take screenshots. Oh my God, that was really good. But you're shaping up for another launch pad in just a couple of weeks in February and you're preparing all the data. What are you seeing? What are you going to be sharing with people who are seeing an opportunity at the moment?

Well, I don't want to steal all of my thunder from the day other than to say that I'm, that I am branding this as the year of the property developer. This is. There is a clear opportunity that I've been predicting for the last two years because I'm forward projecting where things are actually going. For two years I've been predicting this moment right now. And so we are finally here. And basically that is the opportunity where we can double down on our profits. So there's the manufactured profit that we're actually going to get out of the property development process and then there's also the market Uplift, that's going to happen from buying low and selling high. And when we combine those two together, that's rather than the perfect storm, because storm's a bad thing. This is the perfect, the perfect wave. The perfect wave. There you go. But I'm not a surfer, so. But this is, this is a moment that I've been saying for a long time to say, get ready for, for now, because this is the time.

So a lot of people in this group obviously are renovators. You know, they've renovated properties. Property development is like a step outside of the comfort zone. And I know that's always been the case for me and why I've referred people to you to teach them about that. But property development doesn't have to be risky if you have the right information, right?

No, as a matter of fact, everything that we do is to teach people how to de risk this because there's. Now I'm going to give a scary stat first. Okay. And then I'm going to kind of debunk it. 90%. 90% of all property development sites are not profitable. And so the thing that makes it risky is by being uneducated and going into a deal and just believing what the real estate agent told you, that it's a cracking opportunity when you actually understand how to interpret and read the market and actually know the 10% that are then you de risk it massively and there's some massive upsides to it.

So if we just look at the, this is the moment in time where there's two ways to make money with that manufactured equity growth. If we can just concentrate on that at the moment. If 90% get it wrong, can you give me a few little fundamentals? I know you can't the hour you're going to do it day in the future, but some fundamentals of what would people be looking for? What specifically? What would be the issues?

Well, in the current market, because of the market uplift, a lot of people are going to attempt it and they won't make money from the manufactured profit, but they'll be saved because of the market uplift. And so they go into a deal, they make some money and they think, oh my goodness, this is so easy. And then the market changes. They don't understand why they got, why they actually made money the first time around. They try to do it again and they, they blow themselves up the second deal. So it is a dangerous time to build your confidence based on the wrong skill set.

Okay, so the right skill set, I imagine one of the indicators that is something that we're all. It's going to actually be part of the success of both of these ways of make equity is immigration. The number of people coming to Australia. Is that something that, you know, you can look at now and predict that in two years time there's going to be enough people, enough people that are going to want the properties that are being developed.

Absolutely. We have, depending upon which government agency you're listening to, somewhere between 400 and 450,000 people per year predicted over the next three years that are coming in, I guess in a wave. Now here's some irony, Jane. Okay. We're bringing in that many people because we have some skill shortages. Now. The skills, skills shortages. She sells seashells by the seashore. The skills shortages are in the housing and construction market. So we are short of houses to house the people that we're going to import in to build the houses.

So we're basically saying come to Australia and build your own house, give or take.

Yeah. Now there's a little bit more to it. They're building other people's houses too. But we've got, because we had a whole bunch of builders that actually went broke during COVID and a whole bunch of tradies that they've just left the industry. So we've got these massive shortages. We have to bring in the skilled migrants to actually I guess plug the gaps. And so those skilled migrants are going to be the ones that are, that are filling, that are actually building the houses. That is the shortfall that they need.

So let's just tap into that. I mean I think I saw a number that said over 2000 builders went belly up, up and I'm not sure over what time frame that was. That's an extraordinary amount of people a to be taken out and all of their crew to be taken out of the market to be constructing things. But why did they go fast?

Okay, so there's, so there's a couple of things to, to pre curse that answer before I go there. So firstly, in any market at any point in time, one in five builders go broke.

Wow.

Okay, so there's a systemic issue in I guess how a builder gets their builder's license. Because and this is an Australia wide issue, it's not any one particular state, but the insistence by all the different relevant building authorities across the country is that you must have been a tradie to become a builder. So you must have picked up a hammer and be able to nail something in in order to. That there is no prerequisite that you're actually good business person, you know how to run your finances, that you know how to. So, so they're not being taught the right skills. Now a great business person will hire a really good tradie to actually do the work. So cash management and business management and all that sort of stuff is not something that they have been, I guess, indoctrinating or training our builders to actually be in the past. And I think they've slowly worked that out and they're making some changes. But it's like turning the titan. So that's in a normal market. Then we had two events that happened back to back that then caused everyone who was going to fall over to fall over at the same time. So they were all, they're going to fall over in the future. But we just escalated that and compressed it down to a short timeline. So firstly we had Covid which created an artificial recession. So artificially we shut everything down. We stopped people crossing borders, we, you know, stopped importing things in. And this was a global thing, right. So it wasn't just us, which then meant, oh my goodness, we've got to recover our economy. And so there's two ways to recover an economy and one of them is to print cash. And so that's what they did. They printed, they printed cash in the form of a building bonus and the building bonus said, hey, you get 25k if you want to build a brand new home. So every single builder got really busy at the exact same time. But because of the recession and because of all the logistical supply chain issues that happened, everyone started building the same time. The, the demand outstripped the supply so the cost of everything went up. And because builders do fixed price building, then they started to get trapped with regards to, hey, we can't afford to finish the build we started. And because we took on so many of them, it just created a domino's effect. Now all of that is bad news. The good news is the builders that are left over made it through. They actually do have the good cash management, they do have the cash flow, but they do have the business sense. So those builders are, I guess tried and true and trusted and been around for a while and the likelihood of a few falling over in the next little while, I think we've kind of, we haven't excluded all of them, but we've minimized it.

Does that mean that, I mean in my naivety of building contracts, does that mean that we go to cost plus rather than cost price?

Sorry, did I say that fast enough?

Go again.

No, no, never. So, firstly, I can't give legal, accounting or financial advice, but never, never, never, never do a cost plus contract unless there are some extremely extraordinary circumstances. Firstly, your funder won't let it happen. So funder wants to know exactly what they're signing up to. But a cost plus contract says that there is no incentive for the builder to actually bring the cost down. As a matter of fact, their incentive is to actually have a more expensive resource or finish. Yep. Right. No justification for them to finish. Because if they get a more expensive tradie, their commission on top of that means that they get more. The builder gets more cash in his pocket. So the incentive is all. But it's all wrong on a cost plus, it's really hard to control. A lot of people go, yeah, but I'll have visibility of that and I'll be able to guide that. No, you can't, because if you do that, then you're taking on the warranty obligation from the builder. Because if the builder is saying, hey, this tradie is going to do a good job and you choose a different tradie because of a different price, the builder's going, well, I didn't do that. You did.

No warranty.

No warranty.

I have to say, the only time I've done a cost plus was at the end of a major renovation that was a fixed price and it was, you know, pulling up floorboards without knowing whether there was termite damage or whatever.

And.

And that kind of. It was just a small project, but every time the builder went to the bathroom and stayed there for half an hour, I was like, it's on my time. It's on my time. Made me feel very uncomfortable.

So that is the only kind of scenario where you would actually take on a cost plus, where there is known issues and challenges, but you can't tell how big that is until you actually break open the wall. Okay, so that kind of problem, yes, cost plus is appropriate, but you want to minimize that to a very confined amount and say, look, I want fixed price for everything else, but I want cost plus for that.

So that kind of brings me to, you know, where we are on approvals and it's not just, you know, for those uninitiated prior to attending your launch pad, that would have been me. They just went, I just have to look at approvals. There's actually a mechanism of different types of approvals and permits and things that we go through now. Where are we in that kind of flow at the moment?

So I don't want to confuse people, but there's different terminology based on who you are. Okay, so, and so for the same thing, somebody's going to say one thing and it's going to mean something else. So I'm going to speak as if I'm a developer. Okay. And then I'm going to try and turn that into if I'm the Australian Bureau of Statistics or if I'm somebody else trying to. So for, for a developer, I need to get a development approval, then I need to get a building approval, then I need to get finance approval, then I get my occupation certificate and then finally I get my titles. Now what I call a development approval, the ABS calls a building approval. Now the difference between them, development approval says, the council says, yes, you can build it, but a building approval says, well, this is the engineering level detail that you actually need in order to do that. So the abs, building approval is not an actual building approval. So it is the potential for supply. A development approval doesn't mean it ever gets constructed, it just means there's potential for constructed. So when you see building approvals from the abs, that just means there's slack in the system and so it may or may not actually get constructed.

So what is the number? What are we looking for to actually see if there's been a commitment to start work?

So the ABS call that a commencement. Building commencements. Okay, so you're looking for a building commencement having occurred. So then the differential between building approval, the potential and the building commencement means how much surplus there is in the system for someone to potentially build something.

So at the moment we went from, what, 250,000 people a year coming to Australia, we closed down the borders. 4, 500,000 people came back every year, you're saying 4 to 500 for the next two, three years. So we've got this huge input of people and to some degree there's already, there was already a lack right. Of accommodation. So has there been a surge in both commencements and approvals?

So this is part of what I'm going to cover on the weekend. And this is, I guess, some of the drivers that go into what's going to happen in the market. So when we look at the true market underlying fundamentals as to what makes a market move, there's 16 different drivers that determine whether or not we are going to go forward or not. So you're just talking about a couple of those. So let's talk to those couple. So the development approval, or what the ABs are calling building approval, is the potential for supply, it's not the actual. Okay. Then you take that through to the building approval, which is then the engineering level details. That means that, hey, somebody is about to pull the trigger, but haven't actually pulled the trigger. Then I get finance approval that then turns into what the ABs are going to call a building commencement, because then I actually can actually pull the trigger on that.

Right. And at the moment, is there an indication you're saying now is the time for people to commence? Are you ahead of the curve or is it already started in the end of 2023?

Look, it's already started, but it's a very big wave. Now the trick to it, the bit that I'm trying to get to, because we had the artificial recession, Covid, if you remember two and a half years ago or two years ago, all of the newspaper articles were saying property market's going to drop anywhere up to 30%. Who remembers that?

Yeah.

Now what developer in their right mind would buy a development site when the market is tanking? None. There was a whole bunch of sites that no developer took up. So there was no additional approvals that were actually put into the system. Then we printed all the money and in a very short period of time, all of the potential that was sitting there already, the pre approved stuff from before that happened, all of that all got consumed in one foul sweep. All of the building approvals all happened at the exact same time and everyone wanted to start building. Now those two meant that the potential for supply and the actual supply all got consumed. So there's no slack in the system. Now before that, before COVID even happened, we were already in a lull with regards to how many development approvals because the market was not doing so great at the time. So we've got a two or three year window where there's been no development approvals or any development approvals that came through got consumed in one hit. So that lack of supply, that window has been getting to us, getting to us and now it's hitting us with regards to now everyone saying, hey, we've got a massive under supply of stock.

So one of the questions that came through from the community was please ask Rob, how do I get finance? So if we've actually now increased our interest rates so much and we know that development finance is higher than residential finance interest rates, for those who are, you know, listening to this, I'm imagining that a first of all finance approval on developments would be an indicator that we could look at as well. But is it getting a whole lot harder to do that or is there private money or some other secret source of people going, here's the opportunity, I've got the cash, let's go.

D All of the above.

Ah.

So look, when it comes to development, there are multiple ways that we actually fund a deal. Now most of your community is probably more familiar with residential finance, okay. And that's where we have to prove the serviceability that we can actually afford the debt of the, of the property and that we are, we need to prove to the bank that, that we're going to pay this off slowly and drip feed it slowly over 30 years. Now the banks will only let you do that from a residential construction perspective if it's a very, very small project, typically two or three dwellings at most. If you're doing anything bigger than that, then residential lending won't work because. And so you need to switch to what they call commercial finance. So commercial finance is not looking at your serviceability, it's not looking at your ability to hold onto that asset forever, but rather it's looking at the deal itself and the profitability of the deal. And so if the deal itself makes money and you have an exit strategy to sell the stock at the end, then the bank knows that they're going to get their money back and so they don't look at how much you earn, but they look at the profit of the deal itself.

So at the moment, I mean, obviously we've got higher interest rates by the fact that we've got less builders out there, I imagine that, you know, and the cost of goods has gone up. Has that really squished the margins or is the upside because they don't take in an assumed upside of growth, but is the upside of, in the current market there for those deals to stack up?

So it's hard to make them look like they stack up. So at this moment in time, it's tricky and let me explain why. Okay, so firstly, we all know that market goes in cycles. You just showed us the property clock. Okay? But I'm looking two years into the future, whereas Joe Public is looking at what has just happened. So as we go through that cycle as, as it's on the upswing, if I get in at the, at the early stage, when I buy, Joe Public thinks it's low, I can buy low, that's great. But I'm looking ahead, going, I'm going to be selling high. Now that's exactly where we're at right now. Now as we get to the top of the cycle, right. Joe Public sees it super High. I see that I'm selling low. So I think it's a really terrible time to be doing that. But Joe Public wants to hold onto their price points. And so we go through this lead and lag cycle all the time. And we've just come off of, I guess, an area where everybody's thinking that their property is worth a gazillion dollars because we went through a mini boom. And then people started to realize, hey, we can't keep doing that. The interest rates got ratcheted, everybody slowed down. The market came back a little bit. Okay. But now the market's starting to take off again. So as it started to come back, Joe Public is a little bit behind in their thinking where we are. Right. So it's just starting to recover right now and we're at the bottom of about to surge. So as we're thinking to look ahead, then I guess that's from a developer's perspective. We know that we're going to get both uplifts.

So it's a time for due diligence, not just finance.

Yeah. But here's the tricky part. Okay. The tricky part is that whilst we know that that's going to happen from our reading of the market, when we go to the bank, the bank does not have a crystal ball.

Yeah.

The bank won't let a valuer crystal ball the valuation of the future. They don't. So they saying, can you make the deal work as if you bought it in today's market and sold it in today's market? They forget the fact that it takes me two years to do it, say, well, right here, right now, if you're in a depressed market, can you buy depressed and sell that same stock depressed? Well, of course, that's really hard to prove. Right. So there are times where the deals look really, really skinny, even though we know that there's fat in the system. But we have to make it work in the current market right here, right now, which makes finding that opportunity tricky, but not equal.

And has that brought out more private money?

Yeah, so lots of private money that comes into this. So we've got residential lending, commercial lending, and private finance. So those three together in the development world and I guess creative acquisition strategies, so low and no money down, ways to control a property rather than owning it so that you don't have to actually cash flow it.

So tell me this where I'm just going to put on the screen, I've got this lovely little crawler. I want people to go ahead and sign up for Launchpad, which is on the Sunday the 11th of February, something at like 8.30am And I don't know, Rob, what's the longest that you've actually run one of these? I think I've seen you go for like 12 hours of Q and A.

So look, the, the end of the Q A, I go for as long as it takes. So I'll take, I'll answer as many questions as humanly possible until I just collapse through exhaustion. We're kicking off 8am Brisbane time. Okay. So that changes depending upon where you are around the country. I think it's 9am in Melbourne, but don't ask me to do the math. Melbourne and Sydney, 9am Everywhere else I can't do the math. But we'll go to probably about 2 o' clock from a pure content perspective. Hey, what can I actually teach you? Then I'll go into the Q and A and you can ask a question at any point during the day, but at 2 o' clock I'll start answering them.

And I have to say I have definitely, you know, tuned in for four or five hours. Come back three hours later and you're still answering questions.

I have been. I've finished at 8 o' clock at night. @ times.

Yeah. And I guess that's the thing, right, is that as investors, we want to know where the opportunity is. And it's nice to say that you found a hot spot and it's nice to say you got into the market early and have those barbecue conversations going. I know, clever. I made some money. But the reality is that, you know, as you said, there is this equity gain. This is an expectation, the crystal ball expectation. There's people coming to Australia. There's a bit of a rental crisis going on, which we'll get to. There's not enough accommodation for everyone. Market goes up when there's a limitation of supply. So there is an expectation that is grounded in kind of past experience. You're going to add in what, 16 other factors to show us where we're going. But that equity increase that we're seeing, it really is doing the due diligence now and finding those opportunities. And even if there's a slim margin, the upside is going to be quite extraordinary if you can get.

In. Yeah.

Agreed. Yeah. Okay. So let's talk about rental.

Crisis. You mentioned.

Hotspots.

Yeah. So there are hotspots for every different strategy, but the hotspot for each strategy is in a different spot. So if you want to do a renovation, then a hotspot for renovation is going to be in one area. But if I want to do a two lot subdivision, the hotspot for that is somewhere else. And if I want to do a duplex, the hotspot for that is somewhere else. And so a lot of people listen to, I guess the media commentators to say, hey, this is the hotspot and they're not listening for what strategy is that hotspot for? And so what you're trying to do determines where it's going to work. And that's the secret sauce is actually go, well, let's get very clear on what we want to do. And then how do I research where that particular opportunity is going to take.

Off? And I guess with any good investing it always comes down to the vision and the strategy first, rather than I found a property, now what can I do with.

It?

Correct. But a lot of people miss that. It sounds so simple. But a lot of people miss that. Hence, I guess why there's been a lot of developers, 90% come up with issues. Just tapping into that, 90% who don't make money. In your experience and you know, I know you've been doing this for over 20 years. Is it something like the timing of the market is that they inherited a property and said, why not give it a go? Is it the fact that they got caught out with building contracts? Is there a kind of, you know, the top three that are the reasons why the developments.

Fail? Absolutely. Let me, let me walk you through a development life cycle of a typical suburb. Absolutely nothing is happening in the area. So we've got a flat line and this follows a bell curve. So flat line. And then the very first person goes, hey, I think I can do something. And they step in and they try to do a deal. Now I'm going to call them the market maker. So they have got no proof what the finished product is going to sell for because there's no evidence of anyone doing it before. So that person is either A, in incredibly well researched, incredibly smart, they know exactly what they're doing, or B, they're rolling the dice, they've got no idea what they're.

Doing.

Yeah. Okay. Then following that one person coming in, we then have a whole bunch of people that saw that person make money and we're going to call them early adopters. So those early adopters jump in and they go, well, they made money, so I can make money as well. Yep. Now those early adopters, Joe Public starts to see all those people doing stuff and Joe Public starts piling in there. Joe Public has not done the Homework. They don't know the research there. They are truly rolling the dice. But they see all this activity and they think, hey, this area is going.

On. It's safe. Have gone.

Before. And so they start paying too much. So the market starts to peak. Now, Joe Public still keeps going in there, and once it's peaked, it starts tapering off and the deal doesn't make sense anymore. And then everyone in there is trying to save their assets as it. As it. And you don't want to be the last one turning the lights out. Okay? So that that bell curve happens, all that's the life cycle of every development of every. Of every suburb, everywhere. So what we're looking for is we're looking for enough evidence of people doing it that we can feel confident that it's actually going to happen without overpaying, because that's what Joe Public has done. Now you're going to see activity on the way up, you're going to see activity on the way down. So activity in an area when you're seeing lots of people doing lots of stu. You want to be very, very careful that you're not on that backwards curve. We want to be just after the early adopters and just before Joe Public starts piling in. Now, we want a few of them to jump in. That's great because they then push up the sale of the finished product. But we don't want too many of them piled in. So there's a sweet window of opportunity where we are very de risked, where we've proven lots of opportunity, lots of. We've proven evidence of other people doing it, we've proven the profitability, and we can see that there's still enough demand to take it.

On. It's interesting, isn't it, people's perception of risk. Obviously, the market makers are considered.

To.

Be highly tolerant to risk because they're in there creating the market. Hasn't been done before. And then we've got Joe Public who sees everyone's done it. So I'm safe because I'm on the coattails. But they've gone in too late and they don't actually realize that they're in the risky situation of all.

Correct. Now, the market maker has probably done their research. They probably know the 16 drivers. They know what's about to happen. They've seen this pattern happen many, many times and they know, yeah, I'm the first one in. But their years of experience have said this is actually a worthwhile exercise in this.

Area. Guys, I just recommend that you follow this link Go and jump into it and make sure that you sign up to the launch pad on the 11th of February. I'm definitely going to be there watching what's going on. Can I just pick up again on hotspots? I know there's a different market and there's different types of strategies in different areas, but obviously during COVID there was a huge move to the regions and I guess that was really, if we're honest, brought about by freedom and having the freedom of choice and not being locked down in the city. And you know, there was rental issues and all of, all of those kind of issues that came with it. However, we're at the point now where potentially people are looking at building developments and they're looking two years in advance. I mean, I've seen numbers that said people have come back to the city. Is there still the, you know, the rage of the regionals going on? Or is that something that you're seeing some of your students and mentoring clients who are looking at.

Developments? There is still some. There's intra state migration and there's interstate migration. So there's still some intrastate, but not a huge amount. So I'm going to say most of that has petered out. People saw that, hey, living regional is not so bad. Work allowed people to work remotely and do zooms and that sort of thing. Some work has said no, no, no, come back. Other workers go, you know what? It seemed to work. Well, let's let that happen. So it's not dead. But I think that outward trend has now kind of flattened.

Out. So it's not a place to go and start building development sites in the regions, hoping that people are still going to be moving.

There. I'm going to give people two Google searches for free right now. And if you do this Google search, this is going to give you a very, very quick litmus test of demand. Okay, so Google test number one. Population of. Insert location. So population of Bundaberg. Okay, now that's going to give you a number and then you then do another Google search. Population growth rate of in search place Bundaberg. And then you're going to see, well, it started at, I don't know.

What the population, 120,000 people and growth.

Population growth rate is 0.015%. Right? And you go, okay, well there's only, I can't do the math, but let's just say 500 people moving there. Well, okay, well if there's only 500 people moving there, on average 2.6 people live per home so divide that number by 2.6 and that'll tell you how many new homes there are. Then go and have a look at the building approvals in the area and that'll tell you how much slack is in the system. And if you know how much slack is in the system, then you can then look at building commencements and see how many people are actually building that slack. That's going to tell you whether or not you're going to be competing with too many people in.

There. And God forbid there's a baby boom and that takes out 300 of those 500 people that are going to be growing. Okay, so let's go to another opportunity that has.

Been. Remember the 0.6 people? We're only getting 0.6 of a baby at the.

Moment. Yes. Oh, that other point for ndis. Now, I know that a lot of people have looked into the opportunity that is seemingly abound by building a specific purpose built building for the NDIS system. Tell me, is there opportunity.

There? Okay, I'm going to start with saying every strategy works, whether it be renovations, whether it be subdivisions, townhouses, NDIs, they all work, but only if you get very, very, very, very, very good at it. Jane. Okay, so is there opportunity? The answer is yes. Here's the challenge to get very good at it. There's not a lot of information that you can do research on for ndis. So where are the participants needed? Find it. Okay. How many people are actually building ndis? Can't find it. So when you start to do it, unless you are actually in the system, actually supplying stock to the participants, so what they call an SDA provider, you don't have visibility of where it's needed. So if you jag it and put it in the right place, huge cash to be made. If you don't know what you're doing and you put it in the wrong location, then there's no participants to take that up. Then you're just rolling the.

Dice. It's about understanding risk again, isn't.

It? Yep. So everyone knows who Warren Buffett is. So Warren Buffett says risk only comes from not knowing what you're doing. Right. So if you want to choose ndis, then choose that. That's the only thing that you're going to do. And get very, very narrow in your focus and very deep in your knowledge. And at that point you'll de risk.

It. He also says if it's exciting, you're doing it.

Wrong. Well, I don't know about.

That. Investing. So immigration, 500,000 people a year, 400, 500,000 depending on who you're chatting to, are going to be turning up on our shores. According to you, a lot of them are going to be the builders who are going to build the properties that they're going to live in. So I'm assuming that we're going to look at the traditional type of areas that these people are going to. Perth, Sydney, Melbourne. Is that the.

Case? What about Port Brisbane? You just kind.

Of. I'm talking about the top three. If I look at all the numbers, Brisbane's a lot lower down of where the immigrants have come in the last 10.

Years. Okay. So I'm just going to say those four areas are going to get, are going to get 80% of all of the population growth. 80%. Now Brisbane and sorry, Sydney and Melbourne have a lot of interstate migration. So a lot of people are leaving Sydney and leaving Melbourne and they're going to Perth and Brisbane. So Perth and Brisbane have huge potential. Sydney and Melbourne also have huge potential. But I guess you're dealing with a different cading with a different demographic as to what you're actually trying to achieve. So it's really putting the right stock in the right place for the right.

Person. So I mean I've always, over the last 10 years, you know, I have to say I've had a soft spot for Brisbane just because she's kind of like the bridesmaid and missed a couple of the booms. She really had a great growth run in the last couple of years. There was a lot of speculation about the Olympics and everything that was going to happen. Development according to, you know, that kind of growth. Is there still that development and opportunity in.

Brisbane? So there's a couple of things that held Brisbane back for a good 10 plus years that were not Brisbane's.

Fault. Okay, where do you live? Again, not.

Parochial. So I've recently relocated to.

Sydney, gotta catch up face to face more.

Often. So I'm in Sydney right now but, but my PPR is in Brisbane. I'm just. This is a temporary kind of shuffle. Look, Brisbane had a few things going against it. So we had I guess two lots of floods. We had a recession that actually happened. We actually had two recessions. So there was that genuine economic recession. Then there was actually, I guess the COVID recession. So there's a whole bunch of things that held Brisbane down for a long period of time that no one else actually had. So there's a 2011 and a 2013 set of floods. And so now Brisbane's kind of Slingshot a little bit and kind of recovered a lot of that lost ground because it was kind of held back. And it's also got the slingshot from what's held it back. And there's also the Olympics, which is pulling it forward. So I think there's a lot of growth to happen in Brisbane in particular, but then most areas that get an Olympics, about a month after the Olympics, it just goes flat. So we've got a window where I think there's going to be a heck of a lot of growth. There's going to be. There is a heck of a lot of people actually moving there. So the Southeast Queensland region in its entirety, they do a. Every state government does a projection on how much population growth that they're going to need and they project 20 to 30 years in advance. Brisbane consumed 10 years worth of population growth in two.

Years.

Wow. And so I guess they're now trying to, hey, we need to bolster. And they've just updated a new Southeast Queensland regional plan to say, where are these people actually going to go? And so they're planning for all of that right now to say, well, how do we. How do we make them.

Fit? Are they making the councils and governments making it easier, therefore, to do this infill kind of development like the townhouses, where in the past some of the regulations have kind of been very constrictive and what could be.

Done? Look, I'm going to be very politically correct here. Most councils, most councils are not that they're not keeping up with the demand. Most of them aren't. The state governments in different jurisdictions are trying to force councils to actually get with the times. Probably the best state government with regards to forward thinking on that is New South Wales. So they're basically trying to push down a whole bunch of changes all across the state to actually say, look, councils, you need to come into line. So New South Wales has a thing called Complying Development Codes cdc, which is their fast track process. Now, they've had that fast track process in place for duplexes, townhouses, small subdivisions and a couple of other things for quite some time. But councils have kind of put these exclusion zones on where that can be applied. New South Wales government has announced that, hey, a lot of those exclusion zones are going to evaporate and we're going to make this happen in a lot more places. Now, the detail of that has not been announced. The intent has been announced. Hey, coming your way, there's going to be more density and it's going to be more kinds of density in these kinds of places. But the detail of that has not yet landed. But the others are still playing catch.

Up. I just want to. Before we wrap, I've got two more questions for you. Infrastructure. I mean, you know, we kind of looked at some of the major impact infrastructure things over the last 10 years and being a student of history, I kind of look at historical stuff, make a speculation and prediction what's going to happen, then go back and check and you know, things like the, you know, Badgery Creek Airport 10 years ago was on the cards, we're almost completed that the developers were in when that was announced, right where they were, they were like, okay, we're going to need.

People, we're going to need one of the 16.

Drivers. So what are the big infrastructures that are approvals that have coming our way or just recently been approved or something that's going to make that type of impact in an.

Area? Look, you've got to understand that there's infrastructure done at multiple layers. There's federal government, there's state government, there's local government. So they're all going to be doing this at slightly different rates. But fundamentally it's going to come down to transportation. So is it roads, highways, is it rail networks, is it underground tunnels, those sorts of things that's going to get people from growth areas to another growth area? So how do I get from home to work? So you've got transport corridors and growth nodes. So transport corridor is how do I move people. And the growth corridor sort of the growth node is where do I want them to actually start to cluster. So I want them to cluster in locations with. Because it's super expensive to build this infrastructure so you can't build it everywhere. So I want people to cluster in areas where it makes it very efficient to actually build. So when you start to understand those two things, you start to look for those projects. So where, where are the transport infrastructure actually going? Because that's going to move someone to somewhere and that somewhere is where the density is going to.

Go. Yeah, well, it's interesting, you know, looking at historical census data, I remember, I think it was like the 2011 census, the greatest growth of anywhere in Australia was in Mount Barker in South Australia. And it was only because they'd made like a tree change, weekender destination, something that was commutable to Adelaide for people between the two censuses. So you know, that transport type of connection can just change an entire demographic and an opportunity. So interesting. Can't wait to see your data on.

That. So they spend billions of dollars on this infrastructure. Billions of billions of dollars. So it's called trickle down economics. So if I spend billions of dollars building something in that area, it's going to create a whole bunch of temporary jobs in that area. Now whilst I'm building that, the people have to live near there and they start spending near there. So now that person starts spending at the local coals, at the local bunnings, at the local news agent, local shopping, the local fish and chip shop. So now those people are starting to generate some money and they start employing staff and so then people start coming into the area and so what they. And so then those people start spending money and so that triple down economics then creates demand in that area so people start moving there. So they. It's a very deliberate ploy. So if you understand where the infrastructure projects are going, you know that it's going to activate an.

Area. Yeah, it's interesting that trickle down economics. I remember back in my mining engineering days in the wee town of Mudgee in central west New South Wales, you know, when we were looking at maybe putting in a note, new long wall development or putting in a new open carpet etc. There was a common held knowledge that for every person that was employed at the mine it's, it supplied six jobs in town. And so it just made, you know, it was, it was part of the feasibility study for the mine side as how it was going to affect the economy because obviously the local government was quite interested in what was going on. So trickle down economics. Interesting. Another thing to watch for. Rent final. I want to finish on this whole rental crisis that we're in. It would make sense that when we rents are going up 10, 20% a year in some instances. And I know just some of my rental managers recently have come back to me and said how about we put rent up 200 bucks a week? And I'm like, I do want to put rent up but I think that's going to be a crazy freezy kind of number. And we've come where somewhere down from that. But you know, people are having difficulties in renting and we have got a limited supply. Do you think the government in whatever form, state or federal is going to step in and have some type of, you know, rental increase restrictions or opportunities for people to build more rental properties or tax breaks? Have you got any indication on.

That? Well before I answer that, I might give people an understanding of why that happens. Okay, so first things first is international migration. A whole bunch of people are coming in that's for granted.

Yes. And they can't borrow money, so they have to.

Rent. And that right there is the linchpin. They need somewhere to live. But I guess until they've actually got residency status, they can't borrow in order to purchase, so they must rent up front so the demand on rent goes up first. So rent is always what skyrockets first. You then add on top of that, inflation. So anyone who actually has a rental property has now got a whole bunch of expenses that they've incurred. They want to break even, so they have to ratchet their prices as well. So rent going through the roof is a leading indicator of everything happening now. All the people who can get a loan, right, and can actually go and purchase something because they have lived here for more than two years, they've got residency right now, they can't afford a loan because interest rates are so high. Right. So all the pressure right now is just on that rental market. But what are they predicting across the board to say over the next 12 months, anywhere between three and four interest rate drops. Now when you do that, it's actually going to very soon be cheaper to own a property than it will be to rent a property. Now when that happens, what do you think is going to happen on the demand for new stock? What do you know? And thus endeth the lesson. And that's why we're in the perfect market right now, Jane, to say, you get in now before everything starts taking off. The only thing, the. The absolute only thing at the moment that is stopping the market going to the moon is that interest rates are still high. Every other driver is pushing us to go.

Up. Okay, well, I have to say, Rob, I'm putting up on the screen right now for people to click and sign up to your launchpad. I know that this is all orientated towards the opportunities of development, but from a personal point of view, I have been attending these for many a year and getting incredible value from them. I really appreciate the time and effort that you put into bringing the data and making it relevant to us. And for those of us who aren't necessarily into development, we do need to know this information because it's telling us what's happening in the next couple of years as well.

So. And I'll also go through there, how to de risk it. What are some of the things that you need to actually do to. To step through that just so that people can believe that it's actually within their reach? Because it is, as you said, it is scary when the fear of the Unknown. You don't know what you don't know. So we're going to try and reveal some of that and kind of debunk a few.

Myths. Perfect. Look, I really encourage you to click the link, go and join up and just watch, you know, the information and how Rob goes through the data, because in itself, I just find that amazing, being a consumer of data and information, being able to pull it all together and connect the dots and see where the opportunities are. You know, Rob, you're really unique in how you do that and I really, you know, appreciate you putting all that effort into making it real for.

Us. Thank you, Jane. Appreciate.

It. Well, Rob, I'll let you go. We'll close up here. Thank you so much. And I'll be seeing you on the 11th.

At. I'll look for you in the.

Crowd. I'll have those questions.

Ready. Okay, all.

Good. See you later, Rob. All the.

Best.

Bye. Bye. Well, isn't that amazing? There's so much opportunity out there and we've just had the insights from an incredible property expert who is not just doing this in himself every day, but he's dealing with, you know, tens and hundreds of people who are in the development space and are doing this. So I really encourage you to join up. Go and check out the, the launch pad Sunday the 11th. You won't regret it. I, it's, as I said, it's something that I attend every time that Rob says that he's going to be running it because I just get the most amazing insights. Makes me look clever too, when I can quote some of these quotes. But go and do that. And I really encourage you, I put the, the links above so that you can jump straight into that. I'll give you a reminder as well just before we close up. I just want to remind you, go and join my new Facebook group at your success club, creating a life of abundance, your success club today, if you're checking for it. As I said, I ran a master class in this morning about looking at creating abundance. And you know, I've been in the property space and investing for over 20 years. I've been training people for over 15 years. And I have to say, you know, it really frustrated me when a lot of people were not getting the success and weren't getting, you know, the opportunities that I thought that they could get. And I stumbled across this quote and when I was trying to work out the mindset of why people were successful and some people weren't, why some people could see risk and some people couldn't And Bishop Desmond Tutu said, instead of pulling people from drowning in the river, I'm going upstream and stopping them. Jump in. And that's my commitment now and giving you the information to help you create wealth and financial security and abundance in your life and through your property success. Introducing you to the most amazing people who can assist you with the resources that they have. Rob is amazing. He has a number of companies, data company as well that I'm sure he will cover off on on the launch pad. But there's so much opportunity to create wealth through property in the next two years. But if you got your mindset wrong then it means that you might need to be working on that. So I really encourage you to go over check out your successclub.com I've got a number of courses in there. If you jump into my free group today for the next three days I've got a little, a little major 75% off. Renovate yourself, renovate your wealth. And as always, you know, I really look forward to speaking to you in the future, sharing with you information. I will see you at the launch pad on Sunday the 11th and as always I hope that you have an amazing successful time and we will see you in a month's time. Here's to your property success. Bye for.