Q&A Mentor Call - July 2022

Hello. Hello, everyone, and welcome to July's Q A. Oh, my goodness, can you believe it that we are now six months plus a month through the year and boy, you know, it just keeps on coming. More and more news every single day. Look at this, today's paper. We're all about inflation. Yesterday it was all about price drops. You know, there's so much out there and I've got so much to cover, cover with you. But as always, we'd love to know that you're here and that I'm coming through loud and strong. So let me know that you can hear me, you can see me. Give me a thumbs up when you can. But look, there's so many things to talk about at the moment. I know that we've got a lot of information in the media and, you know, I've been to so many webinars and master classes and talks in the last month as, you know, really reading the papers and trying to stay away from the news. But there is a lot of fear out there and a lot of conversations I'm having with clients and students is about where to buy, should I buy. With the rising costs of construction, how should we really be potentially developing or renovating at this stage? What's the drop in the market mean? How much is it going to cost us to continue? So, as I said, I can see some of you are jumping on now. Just let me know that I'm coming through loud and strong. You know me, sometimes I forget to turn on the sound and you never know what could happen. Then I could spend a lot of time just telling to myself. But for those of you who've been really active in the Facebook group, thank you for sharing some of the renovations that we've seen this month. Some questions. There's been a lot of activity in just trying to keep up with all the, all the messages and news. So a couple of clear messages that I really want to share with you. And as you know, you know, I always try to make sure that the information that you get is curated so that it serves your best interest, that it's not just, you know, fairy floss and unicorns and happy, happy. And it's not just, you know, we're all going to crash and die, it's somewhere in between and actually curating the information to give you enough information to make the best decisions. And, you know, to that point, I think it's really important that, you know, we go back to first principle principles. We're getting some of the census data out at the moment which is really refreshing. So we're seeing some of the changes in suburbs. We're seeing a move in some instances to the townhouse or the duplex kind of living in a suburbs and middle suburbs. And we've kind of seen with planning and permits and building approvals over the last few years that there is in some degree a change into more compact living to live closer to communities, not so much closer to work. These days we're seeing a lot of companies encouraging people coming back to work, but also then for those who want to stay at home, actually taking up to 20% of their salary off them. So there's a lot of mixed messages about the return to work. But I think the biggest messages that we're getting at the moment is we've just had another interest rate rise. According to all the experts, we're going to have another one next week as well. And you know, it depends on who you're reading. There's some expectations that, you know, these, these readings are going to go, these interest rates are going to continue to climb. We've just had inflation come out today, yesterday at 6.1%, so prices are going up a higher 6 higher than they were last year. But when we look at the big picture and we're getting started to get some wage growth as well, and we've got the lowest unemployment that we've ever had. So, you know, the big economics are actually really quite positive. But on the downside we have this market sentiment that keeps coming up and you know, the property market is declining in some areas and some people are picking up some amazing opportunities. So I know with some of my dump for you clients and mentoring clients and we've had discussions that they're buying, you know, maybe at 850, 900 and they're securing the property for, you know, 800. So there's some really, you know, amazing opportunities to be had as well. And even to the point where there's some amazing opportunities to look at areas that aren't declining but potentially won't decline and go up. So with that in mind, I jumped on the call with Peter Kalisis on Monday and had a bit of a chat to him. I wanted to get little bit of market knowledge for one of my done for you clients who was considering buying in a particular area. And geez, that conversation went, was just went next level. And I was like, Pete, I've got to record this and share this with people. And he's like, sure. So I'm just editing up some of those at the moment. But you know, looking where the immigration's going. Some of my, I guess, research into what's actually happening has really indicated to me that there's opportunity. And a lot of people are sitting on more than they've ever had in their savings accounts. We've had two years of growth. A lot of properties are worth 20% more than they were two years ago. And even if the market comes back 10, 15%, you know, they're still ahead of where they were, but there is still this trepidation and fear. So for those who are taking the bull by the horns, who are looking at opportunity, making sure they've got a buffer in place, they understand the downside, you know, geez, there's some really great buyers out there. So not everyone's coming to the market. I've been talking to buyers agents in Brisbane and Melbourne this week and they're talking about the fact that they're seeing some great opportunities. Actually, I spoke to a buyer's agent group in Brisbane this week and got five buyer's agents working within the group and 52% of their sales last year or in the last 12 months have actually come from off market. So, you know, they weren't even listed. The agents are going like, the market's so hot. We love working with you guys. Give us a number. So, you know, I know that in talking to some of the buyer's agents who are buying in the northern area and eastern area of Melbourne, they're starting to see some of the expectations of the buyers who've listed properties come off and they haven't quite got to the point where they're dropping significantly, but they are considering dropping. And then we've got spring coming up around the corner, which is generally listing time. And I just saw. Let me have a quick little look. I just saw the quarterly Core Logic Auction market review has just come out in the last 20 minutes and they're talking about that the auction volumes over the June 2020 quarter were the second highest on record for a June quarter and that was only behind 2021. So, you know, the clearance rates are lower, but, you know, there's actually still, you know, some, some real records being hit. So you're hearing a lot of things at the moment that I think potentially can be worrisome and we may actually have a few concerns about that. So, yeah, so the market's great. Elizabeth, great to see you can see your question there about Perth. So let me get onto that a bit later as well. But you know, I think there is some real underlying opportunities all the reports and everything that I'm reading is indicating that fortune may just will favor the brave in these times, but you have to be able to handle interest rate rises. And I found a shocking and surprising report that was buried somewhere that actually indicated that CBA is predicting rate reductions at the end of next year. They reckon RBA is going too hard too soon. So, you know, we didn't hear about that in the market, in the media. It was buried in a Bloomberg report. So, you know, we're getting all of this information where to buy, what to buy, where are the bargains? And to your point, Elizabeth, there's Elizabeth's question here, you know, there is some great opportunities to be had in some of these markets. Now we're starting to see the Perth market come off a little bit. We've seen Perth actually grow and have some growth for the first time in 10 years. Similarly in Darwin, we're starting to see the Darwin market move a bit. We're all going through this trajectory. Sydney started coming off at the end of 21. It took about three months for Melbourne, also to Brisbane to come off after that. So we're starting to see the market come off. We're starting to see some declines, but there's actually less properties being listed. So less properties are being listed over that small number. And those people who are listing now, you know, may have to sell are actually more conditioned to sell at a lower price. Most people are sitting back and watching what's happening. So lots of things going on. Elizabeth? Yeah, my concern, as always, has been, and you may recall that I came from the mining industry. So my concern has been, you know, and talking to friends in the mining industry and shout out to Joe, his birthday is today. The properties market over there seems to keep pace with what's happening with iron ore and what's happening in the mining industry. Iron ore, I think is below $100 a ton at the moment. Iron ore is used to make steel. Those who are making steel and the biggest importers of that are usually China. China has distribution issues. China is about to go through another potential collapse of major building companies. Building companies buy the steel. We've also got, and you'll see in the report a little bit later, the price of steel. I think it's up 46% from last year. So, you know, it doesn't. We've got a commodity that's at the front end that seems to be coming down in price. We've got due to distribution and supply and manufacturing, this tertiary product that's going off it's mainly due not to the input cost, but to this distribution cost and the supply cost. And you know, as much as it's horrible to see your inflation at 6.1% and the cost of, you know, going to the shops, what's with iceberg lettuce is selling at $12. Seriously. But you know, we see all of these information and it does affect our hip pocket. But I don't know if any of you guys have been, you know, re renting or re leasing your properties at the moment, but rents are going up 10 to 20%. And you know, so we're getting some messages that the RBA obviously wants to target inflation between their band of 2 to 3%. It's at 6.1%. They're going to hike up the rates again to try to pull money out of the economy so that we can bring down that inflation rate. But at the same time, we've got the lowest unemployment that we've ever had. People are scrounging to try to get people into jobs and offering insane money. So wage growth is going up, which means that more people have more money to spend, which is not really helpful. They call this. And my husband would laugh at me because he tried to explain it to me the other day, being a master's in economics, this wage spiral and it did take years for us to get out of that decades ago, which is the wages go up and then the RBA puts the rates up to try to pull money out, but then the wages go up because it's low unemployment. What I think is going to be the saving grace, and I dumb this down so I can understand it, is that we're going to have 240 to 300,000 new immigrants come to Australia. Now I've been saying this for a while and I'm like, where are the immigrants? If these guys are going to be the people who are going to come in and you know, know put some pressure back onto the job market and you know, reduce that wage pressure. Why are they not here yet? Fortress, Australia is open. We know everyone's everyone, every single person I speak to is overseas on holidays at the moment. But where are they? But what I found out when I dug a bit deeper was over the last few years, the government saving a bit of Money pulled about $856 million out of the Department of Immigration, which means there's no one there to pull process all the immigration requests that are coming through. So they're about three to four months behind. So three to four months behind we move that forward four months, we're looking at the end of the year, we start turning on this type of immigrants. We start getting pressure on rents. Rents start going up, they need jobs, wage pressure comes down, interest rates may slow down in being increased. The RBA is kind of comfortable and within six months we've got some kind of stability. Now don't forget we've also got these first home buyers. So rents are going up, which means that it may be cheaper for them to buy with a 5% deposit than to rent. So we've all of a sudden got these first home buyers who are buying into the market, which is keeping the market up at that lower price point. We've got this innovative New South Wales stamp duty changes for first time buyers. So they don't have to pay 30, $40,000 to get into a property, they can actually pay a small amount and annualize it. Once they decide that for the property, it's grandfathered for the property forever. So with a 5% deposit they can get in. Now the first time buyer, first home loan deposit scheme that, you know, my mortgage company has been quite involved in the last two years. There was only 10,000 places and they went quickly. Now we've got 35,000 places and another 5,000 that are coming through for regional areas and single parents, et cetera. In October, that's 40,000 people who can migrate from homes through. The other interesting fact that I came up with this week was that when they looked at people coming to Australia, immigrants coming to Australia, it represented the equivalent of a demand of about 40% of property requirements. So we actually have to house these people. So yes, there may be some first home buyers that are moving out into their, into the homes. But we are at a bit of a shortage. Unless they all go into units, we are at a bit of a shortage of homes for those people as well. So rents will continue to go up. So there's this positivity that I'm seeing, seeing as well that's not necessarily being looked at. And then if you really look at inflation, we are an island. We are required to import most of our things and distribution costs are really hitting us. We had the fuel levy, I don't know, what do you call it? They cut the fuel levy and helped us out when fuel prices were really, really high a couple of months ago. They can't do that again. I think it's, it would cost something like 3 billion a month. So the government's not going to do that again. Fuel prices are high. Fuel prices will remain high while the Ukraine continues to fight Russia. Those guys at some stage are going to go into winter and Russia's going to turn off the fuel over to Europe. They're going to be looking elsewhere for fuel. Fuel prices will go up again. So we've got this kind of artificial fuel impact that is affecting our costs. So it's not like inflation potentially could come down, it couldn't come down quite quickly when all of those things are resolved. So interesting, interesting place. Does that mean there's opportunities to be had in Perth? Well, Elizabeth, I do have no, it's a ramble. Got back to the point though. I do have concerns that the Perth market is always kind of limited to how the economic response to the mining industry is there. Will China turn back on their, you know, requirements for steel and everything else when all of their companies get over all of these building issues that they've got over there and companies that owe a lot of money and potential collapse of these building companies? Maybe, I hope so. But hope's not a strategy. So you know, it's when I try to look at patterns and try to predict, you know, where people are going, where's the, there's going to be a concerted effort to protect your money for the longevity. You know, I still, it's a great place to live, it's a great place to visit. I still can't look at the investment potential of that area and with confidence be able to say this is, this is somewhere that I could say that you're going to have growth. There's going to be this, this mining effect and we don't know how the mining effect will play out. So I hope that helps. Any other questions? Let me, let me at them. For all of those of you I know there's hundreds of you who watch this on replay. If you do put questions down below, I'll try to come back and answer them as quick as possible. But you know, I did say that I was going to reveal the area that I believe that there's some real opportunity in and I will do that. It came off a conversation with Peter Kalizas and I think that, you know, from an affordability point of view, from an employment point of view, from a demand on population point of view, there's some real activity that we'll start. Having said that though, you know, I do, I do know that a lot of people that I'm speaking to at the moment are unsure. I know that I have spoken to people over the many years that were just about to pull the trigger on their property purchase and they got to the end of 2021 and we were talking about it, they had equity, had, you know, incomes are going up, they're feeling really confident and now the media has, you know, kind of worried them again. I know the media worried them 2018 and they didn't purchase, they potentially have lost, you know, a significant amount of growth. So for those of you who are out there who may be in that place where you're like, should I invest, should I not invest? You know, my experience has been over the last, you know, 17 years of working with property investors and in the last four or five years of concertedly trying to understand why some people succeed and some people don't, is that it may not have anything to do with the property market. It may actually have more to do with you and how you think. It may have more to do with the conditions and the patterns that you're playing out time and time again. It may come from just the fear of acting and getting it wrong. I mean, let's take it seriously. You've got the family jewels, the family net worth at your disposal to potentially invest. And if you get it wrong, it could have a significant downside. So, you know, I've worked with like three people in the last three days who we've talked about property and where for them to buy and when we've really got to the to the end point of what's true for you and what's going to serve you in the highest interest, we've unraveled issues that are actually holding them back and creating more worry and scarce. And when you come from that position, when you're trying to make an economic decision for, you know, the financial abundance of your family for the next 10 years, then it may not play out how you want. So with that in mind, right at the end of this presentation, I'm going to tell you about a course that I've got coming up. Could renovate yourself, renovate your wealth. I beta tested it and I developed it for my mentoring clients and looked at some of their childhood stories around money and what they've played out, which were just incredibly revealing and some of the conditions and beliefs that may hold you back. So let me tell you about that at the end, but I'm going to run that on the 13th of August as a one day online course. I'm really excited about doing that because I've seen what he has done for my mentoring students in observations, in where they're coming from, in the decisions they're making with their property purchases. And yes, I get to be hands in and, and really help navigate them and see and course correct what they're doing. But I know that there's so many people I've been speaking to who have. There's just something that's holding them back and I just really want to, you know, be able to serve them and looking at what that is. So if you're free on the 13th of August, I've made it very affordable for people to come along and attend that and I'd hope you check it out your successclub.com so let's go and check that out. But in the meantime I am going to share my screen because I would love to be able to talk and I'm just going to do this, I'm just setting up PowerPoint for the moment but I'd love to be able to talk to you about some of the observations I've seen and please, you know, pull up, put in any questions or anything that you need to talk to me about because you know, I would love to be able to continue to chat to you and I see there is a question that's come up. Oh, can I show this quickly? Maybe, maybe not. Yeah, your thoughts on rural New South Wales marketplace last two years has seen amazing growth and days on market and still seems to show high demand. Ooh, I love this question and I tell you why I love this question so much. Okay, I'm going to start stop my presentation to come back now. How do I hide this? I don't know. All right, so the reason that I love this, this question is if you've been following me in. So Wayne, if you've been following this group. I'm in the process of selling my parents property. So my parents have never owned a home. My dad's been a farm manager for people for hundreds of years and you know, they retired from Dubbo to Port Macquarie to look after my 92 year old grandmother and now it's time to bring them to Melbourne to be closer to us. And with that they inherited my grandmother's little villa in Dubbo. And I have to say I've been since the tenant moved out in February and I've been watching the market and going, oh, what's happening regionally? I kind of need to understand, you know, where this, where this is. I'd love to get it onto the market as quick as possible. A maybe there's interest rate rises, who knew there was. But maybe this retreat from the regions is coming back. You know what what does the market look like? So from a seller's perspective, this is kind of. And I can show you. Can I show you this? Yeah, I can show you this on realestate.com why not? So from a seller's perspective, I really went through and wanted to be able to have the property positioned properly. The bathrooms were leaking, we needed to go through and do the bathrooms. But there's this absolute boom going on in Dubbo, right? And so with this boom, we've got this thing that's happening. Let me just share my screen with you. So we've got this thing that's happening is that this market is just going really great. And so I actually went through, and I can do this as a separate thing for you, but I actually went through how to list a property in country wise, but even more interestingly how to actually renovate proper bathrooms over FaceTime. So you can see the bathroom here. I've actually chosen the tiles and the whole layout and the products over facetime with the bathroom guy. So, you know, it was an interesting experience. But the thing was when I booked him in February, he was not free till August and the kitchen had to have new lino and I had to wait four months for the lino for the guy come and put the lino in. And I made sure the line I was in stock. So, you know, this was just insane. And this is just. I mean it's a great little property because it's a three bedroom property. It's the only three bedroom property. Like CBD Duo had a lot of opportunity. But what I did is I actually went through and tried to find out who to list this property with. And the reason that this really interested me, Bob Berry in Bulgari, was that they had just. Now I'm going off topic here, but this is interesting. They had just listed and sold off the plan, the first multi story building in Dubbo. And this place is right, you know, right down by the riverbank, which floods. I don't know, but I guess technically they're up high. But they sold in Dubbo, 61 units and two penthouses. Penthouses sold for, wait for it, 1.755 million each to local families. And you know, we can think of like Nyngan and Warren and Narrabri and all of those country families on properties that want to move back to Dubbo. They had 600 people apply to look at these properties and for some of them it was a stretch too far for them to actually buy up the plan. So this is kind of interesting. I believe it's a JO venture with Jeff Harvey and a local person. But when I was looking at actually appointing an agent, I wanted to have an agent who had a list of really interested people after apartments. So this is interesting. I've just got a text to say the first open homes just happened. Jamie had eight groups through one stake in a contract. I then went through this whole dilemma about should you spend the money in Dubbo instead dialing a property and spending the $3,000 and had a bit of an interesting conversation about that. So it's a really. I guess what I'm saying is a timely question for me because I'm looking at this market, right, and when I spoke to the agent about how do we really need to spend time and money on 3D views, she was saying that in the last six months, like so many of their properties have been bought by Sydney investors because there's a 5% rental return, right? We've got that in demand property. This property itself was rented for 10 years to the Department of Health, furnished so that they could bring their doctor locums up every month. They come up for a month on rotation. They bring down the people from the hospital to clean the property. You know, it's a strata property, so someone's doing the gardening and, you know, it was easy for them. But there really is, you know, as that Dubbo is the hub of the West. You know, if you've got a area that has an economic hub like Dubbo, you've got, you know, potentially, you know, Bathurst with the education, you've got Orange with the. With Cadia and the wineries and tourism. You know, some of these New South Wales regional areas, they're not, depending on the remote work, work from home, you know, phenomenon that could potentially come back. You know, they actually are vibrant economies. Unfortunately, a lot of them do, you know, go up and down based on the economic cycles driven by drought. And just like the iron ore and the mining industry in Western Australia, we can't really predict that. We do know we're going through more and more environmental issues, so I think that's a bit of a concern. But Wayne, you know, I'm looking at. I'm looking at the data at the moment. I went through with, with. It's kind of handy having friends in the business, right. Went through with Kent Lardner from Suburb Trends, Dubbo going, what's going on in Dubbo? You know, what's the price point? What's happening is like the last three months, property prices are continuing to go up. So, you know, I think that there's some real. There's still some real heat in that market. I spoke to Louis Christopher as well. Now he put in a proposal to the government's committee on affordability and his recommendation, I think, Eliza Owen from RP Data as well. There's a number of people who recommended that there was a lot more attraction for the immigrants to go when they come to Australia to some of those regional areas. So. So that's a little bit of a wait and see my book. But I do think that there is some opportunity there. Oh, we've got another. I love it when you guys ask questions. Means I don't have to keep talking myself. We will get to the presentation though. Hey, so we've got Mark. Lovely to hear from you, Mark. I am coming to the Gold coast on 27 August to run a course called you'd Way to Wealth which I'm very excited about. We've got 10 seats for it. So small because I just want to keep it intimate. But I would love, I love, I'd love to see you. So the Sunshine coast, very interesting. So I've got one of my mentoring students. Can't say too much because the sale. We're just talking this afternoon about the final negotiation or a purchase or that he's doing. But the Sunshine coast has. There's some areas on the Sunshine coast that have really. They've really been a hidden jewel for so long and they kind of got discovered during COVID and you know, I was looking in one postcode in particular and it staggered me that there was something like it was like a $450,000 increase in the last year on the property prices there, which is just incredible. You know, they're up around. They've gone from like 950 to 1.5 million and, you know, not fancy properties either. And I have another client that I did a deal review for on Friday night actually who was looking at buying around area a little bit at the southern end of the south coast. And we were looking at some of the opportunities coming up there, you know, has kind of been discovered since COVID and I think there is a commutable kind of opportunity there that people have seen as well. But these price jumps have really gone up and I think that. I don't think you're going to see them come back as much as you're going to see some of the other areas come back. I do have concerns somewhat about the Brisbane market and the changes to the land tax that they've made there in and how that may affect the Brisbane market. But I think buying well in good quality suburbs with you know, renters on demand and people googling Australia going, you know, where do I want to live? Safest place in the world, Melbourne, probably most comfortable place in Australia, Southeast Queensland. So I still think it will have some opportunity there. But actually I discussed this with Peter Kalisis as well on Monday and I'll post that little video in here for you. But there is, I think there is a bit of pressure in the Brisbane market spectrum. Buyer's agents, the large group who do have a Sunshine coast buyer's agent and they're still seeing, you know, good quality inquiries and just looking at, you know, doing this deal review for the mentoring client and looking at comparable prices and looking at turnover. There still is quite a lot of turnover. Having said that, speaking to another mentoring client is looking to buy for a home. They're seeing properties being passed in at the much higher level. So the 2 mil plus level, they're seeing those properties being passed in and being negotiated hard. So you know, I think that there's a sweet spot that will be affordable for the southern south coast that allows people to buy in well. But you know that top end of the market's coming back and as we know the top end the market, you know, moves up first and comes back first and yeah, there you go. So I hope that helps you. Mark, lovely to see you here as always. And I do need to get to my presentation, don't I? So let's leave the duo behind and get on to the, the July talk. So I'm going to show this. I'm going to get rid of myself. Let me know that you can hear me still. Have a glass of water. Okay guys, let me know you can still hear me wave. So I know that you exist there somewhere as well. So the really interesting thing here that I, I see within the market is that there's been a lot of media and it's. Look, let's face it, it's going to be easy for us to get caught up in the media and not do things. Okay. I'm getting some likes, so I'm assuming that means you can see me. So where did we go? Where did we go? No, no, no. Okay, so the first and foremost inflation numbers came out yesterday. Prices up 6.1%. I've spoken to that already. We know unemployment is the lowest it's been, you know, these two things combined with the interest rate rise, you know, it's currently at 1.3, 5%. There's a lot of different predictions around where that will end up as bad as 3.35%, another 2% by the end of the year. But I think that's going to. The RBA is not the only lever to control this. And I think as we see wage growth go up and then immigrants come back in and bring unemployment up a bit further, there's going to be some changes there. The stamp duty changes in New South Wales are probably going to protect that bottom end of the market. So first home buyers moving into the market, I've talked about that already, there's 40,000 of them essentially that are going to be able to come into the market. Looking at that, I've just created a bit of a show it so you can see it. But I've just created First House Buyer, a little survey for people. So this go to First House Buyer and there's this tiny little quiz that I've created that allows people really easily just to work out, you know, if you're in New South Wales and you're in a regional area, how much you the cap is for, you know, that 5% deal. You know, we look at New South Wales and we look at capital cities, it's 900. So in a regional area, what astounds me is that we've still got, you know, up to $750,000 that you can go into with a 5% deposit deposit and then potentially also have this stamp duty change that means that you don't have to pay $30,000. So you know, people with maybe $40,000 in their bank account can potentially be getting into the market. So watch this space. And that's up to $750,000. And when I'm talking bottom of the market, I'm talking like bottom of the New South Wales market. It may not come down as bad as everyone's thinking. And just, you know, we just saw, you know, that was regional, it's $900,000 dollars. So you know, arguably depending on who you read the interest, the median house price at the moment is 1.4 million. So interesting, right, the Queensland land tax changes. Look, I really encourage you to go and Google this, find some good information on it. It's, it's not a double taxing. The Queensland has essentially said, hey, if you have property in other states or territories, then we are going to as a proportion of the value of the property you have in Queensland at the rate that we are charging at, we're going to tax you additionally. Now for people who have Large property portfolios outside of Queensland. This is quite significant and I spoke to one of my done for you clients just this week and you know, with $4 million worth of property outside of Queensland and just like a $450,000 property in Queensland, his land tax charges can actually add up to like six or seven thousand dollars quite quickly. So this potentially could have a big effect on that Brisbane market. However, let's be realistic here. How many investors actually invest interstate so you know, not that many. Most invest in their hometown. They're not strategic in how they, you know, geographically are agnostic with their investments. The other thing is that, you know, the potential for this to make such a big difference is only for those who have a very large portfolio. These taxes have been grandfathered, which means that it's not just for new purchases, it's for old purchases as well. I think we're going to see a lot of media about how this is. There's a big hoo ha. I do think that the number that it affects will be relatively small. But hey, genius move, genius move by the Queensland government because let's face it, what they're actually doing is they're saying how do we get money to pay for the Olympics but do it so that we don't piss anyone off who's a vote voter, who's then a voters out and they're like, oh let's go tax the people who live in another state and can't vote for us anyhow. So genius move. Hats off for that one. Very good. But you know, it's a bit of a pain for us. Victoria tenancy laws. Look, check out Pippa. They've just done a fantastic kind of analysis on this. I think Ben Kingsley talked about the 130 changes. I know personally I've had to put an air conditioner or a heater into the main living areas they can bring in. Everyone seems to be getting greyhounds from New South Wales. Grew up with greyhounds. I like them, I just don't really want them running on the floorboards. But hey, I have no choice. And you know people can go make quite considerable changes without request. So there are some changes there that potentially could scare people as well. Will it make the market drop? I don't think so. But you know, we need to be aware of this. And what I really need you to be aware of all of these things is that at a drop of a hat a government can change something. You know, they can add in incentives of first time buyers, they can do something weird with land Tax, they can do something strange restraint with stamp duty, they can do something change strange with tenancy laws. You know, we are at the mercy of these people. Right? But we have to be able to put that aside and go. We can only control the things that we can control. And of the things that we control, what can we do? Well, we can buy strategically in an area that people want to live. We can try to understand what are the fundamentals that make people want to live in an area and what attracts them. And then we can buy the best possible property we can buy at the time with the money that we have. Time in the market is going to be the key here. And once again, Peter Kalisa's, you know, we recorded this conversation. He came and visited with my mentoring students last year and presented this incredible time in the market analysis. I'm going to cut it down. I'll share it here in the group, I'll share it everywhere. People need to understand this stuff and need to look over the last 15 years and what it means in trying to time the market compared to time in the market. But, you know, gangster move. This is amazing, amazing information I want to share with you. But what it does bring back is, yes, you need a buffer. If your house has now gone up 20% higher than it should have been, you know, it has been in the past and it's coming down slowly, it's probably at the highest it's going to be for some time. Give us a call like, let's tap this equity and pull it out and give you a buffer against you losing your job or potentially taking the opportunity, fortune favoring the brave and buying something where everyone else is fearful. But tap this equity to have as a bit of a buffer for yourself as well. You know, we don't expect people to lose their jobs or go into delinquency. You know, there's going to be a lot of media about, you know, we talked about it last month. The CBA has $500 million with the fixed loans that are going to come up. Well, it's not like people are going to get a letter on the 1st of November and says, 2023 going, your loan's not 2.5%, it's 4.5%. And it's a shock. There's enough information to go, this is coming, guys. So I don't, I think you're going to read a lot of this hype around these, you know, how it's going to affect the market. I don't think it's going to affect that many people. And you know, I was on this incredible talk with S P Global yesterday and they showed the delinquency potential with prime real estate. And of interest. It was only they talk about your things become very. Actually I should be able to pull it up. Let me see if I can pull it up. They interest essentially what they said was let me see if I can find this fantastic report because it should put things in perspective here. Yes, here we go. Oh, I love it when a clan comes together. So copied their files obviously, because hey, why not? So check this out. So this is prime mortgage repayments as a proportion of household income. So you can see here it's considered to be if you spend 30% of your income on rent or a mortgage, it's okay, not a big deal. But if you spend more then you start getting into a little bit of pain. So this is once again, this is prime mortgages. We're not talking low docs, we're not talking, you know, we'd kind of pay extra. Now if you took your loan out in 2016 and interest rates went up by 3% for the majority of people, Most people are highly leveraged. Majority of people, their income, their percentage of mortgage repayments is going to be just over 10% if rates go up 3%. So we're seeing them going up, we're hearing that they potentially could go up 3%. But this is what this is modeling. Even if you got your loan out last year, first home buyers, so this is a bit of a problem, but first home buyers got your loan out last year and they throw 3% on top. They're not seeing overall this huge amount of de stress. Now when we go to non conforming mortgages. Yes. If you took a loan out last year, only then do you tap it. So the reason I wanted to share this is that I think it's really important that we kind of put some of these things into perspectives as well. And I'm not seeing people being realistic and putting a lot of these in perspective anyhow. So let's move on. Any questions? I missed the start due to work. Can we catch up later? Yeah, you could just jump into this link. It's here. In actual fact, it would freak you out if I did share this link to show that I can show you where the Facebook page is. But I possibly can. If you go here into the Facebook page, your property success club and if you go to guides and you go down here to Q and A calls, you're not going to get the full 10 years of monthly calls. But if you're in your property success club or you made a donation, you will get most of those there. But that's where they are and you know, they're there and they'll be up as soon as possible. But you can watch this on replay. So yeah, no. Woohoo. I love it when we make people happy. Woohoo. Okay, so let's move on because, you know, there's a lot of information I want to share here and I've been to a lot of talks recently, I'm just going to summarize this quickly, but the lenders are tightening their way that they're assessing you. So they talk about this as being like your debt to income ratio. So when you start hearing about DTIs, it's just like for the people in the know, debt to income and you know, most lenders were saying, oh, you know, you can have nine times. So if you earn $100,000, you can borrow $900,000. Simple. NAB and ANZ came back and said, oh, we're going to bring this back to about 7.58. CBA came back and said, hey, you know, we can go for the higher rate, but if you've got, you know, mortgage insurance, we might check you at 6% six times. So just know that there is a lot of differential in your borrowing capacity. I know with investors choice mortgages. You know, I was talking to a broker just on Monday when we were doing a review of everyone's files and you know, some of the, some of the borrowing capacity changes at the moment depends on, on the lenders are just extraordinary. So just be aware, lending's tightening. If you're, you know, clean skin, which means, you know, no mortgage insurance, typical type of property, you know, good income, etc. You know, it is possible to get up to like the nine times. But understand things are changing. I just wanted to pull out the rate rise information as well. You know, there's what I find really interesting here and probably here, CoreLogic essentially said that if the 200%, 200 basis points, which is 2%, if the rates go up by 2%, they would suggest there'd be a 15% decline in house prices. Now, as I said, I've been chatting to Peter Kalisis, he's studied the market, he's looked at it the most that any market has dropped in the history of a DRE's property markets is 10% in one year. Could we go down 15%? Yes. Could we go down 20? Yes. Could we go down 25? Potentially all these things are potential. But let's be realistic here. We just talked about the fact that we've got all these people who want to come and live here now when they want to come and live here and push the rents up and the stock market, people go, things are a little bit weird. The inflation measure in the States and the stock market is something that I can't really feel comfortable with. I want to retreat to bricks and mortar and all of a sudden these rent rises are getting me a 4,5% return in yield. I don't think we're going to see this. I'm reading the market, I'm trying to go do as many different opinions as possible. But you know, if the market does decline by 15%, then we're actually still ahead from where we were in 2020 because most of the market has gone up over 20% Australia. So let's be kind of realistic about this. I don't think unless you have to sell, then you know, this, this is not going to, to really affect you. If you went to sleep and woke up in three years time, I think you probably be going like, what happened? Did the world collapse? And it's not going to collapse. However, if you're feeling that you have a job, that it's a threat. And the big disclaimer that we always say, this is not financial advice, it's general information. And my observation is what's happening in the world from past and looking to what people are predicting for the future and you feeling the pressure, then, you know, start looking at how you can potentially increase your income or reduce your cost. And it might be that it's true for you to sell a property because it could currently be at the peak, or it might be refinance and pull out a bit of a buffer of cash in case your tenant leaves or in case you lose your job. So, you know, think of the downside all the time. This is the Bloomberg report that essentially says, you know, the cba, who has the most mortgages in all of Australia that they hold, is saying that they're not expecting to see the rates rise as fast as what the money markets is talking about. There's still a potential for it to get higher, but they're not seeing that now. We are expecting another 50%, 50%, 50 basis points potentially next month. But you know, this is what they're talking about now. This is what's really interesting. With the RBA now expected to take cash rate to yada yada yada, another 50 basis points, the expectation is the headline inflation to peak at 6.25. We've just hit 6 and then start declining. Right. So this is like ah, the RBA has put all the rates up, money's come out of the market, everyone's feeling the pinch. We don't want to pay 12 bucks for iceberg lettuce. And we get, you know, a little bit, you know, looking after ourselves. And we do expect unemployment to come down but then start moving up because immigration and maybe a decline. But what they're talking about is based on this, they don't think, they're thinking that there could be this rate forecasting rate cuts by the second half of 2023. Rate cuts, not up, down because of the fact that we have some, some good economic positions now. I also jumped in, saw Cameron chatting on the rea. I'm just going to go through some of these things quickly but I know they're essentially saying that interest rates are going to go up. We hear there's an expectation in the money market is going to go up and potentially start coming down as well. So there is this kind of expectation that's happening. Inflation. I want you to be very aware that our inflation costs are really driven by what we're seeing in the petrol prices. We're seeing some in groceries as well. But it's really some of these things around construction costs, freight costs that are really affecting the construction industry. A lot of these can be fixed by the end to the Ukraine war, the better management of COVID and therefore people who are steering the ships and bringing freight to our country and away from our country. So this could all turn on a dime based on some of those changes. A photo of my tv, you know Anz is hilarious. They change their predictions every month. No one keeps them accountable. If you want to hear a story about that, go back to an old episode of Elephant in the Room with Veronica Morgan and Chris. You know they, they have actually gone back and looked at how ANS has changed these, their predictions they're talking about. You know, yes, there's some of the market in the red is going to continue to go up. Perth, Adelaide and Brisbane. But then there's going to be these huge drops. I mean I don't agree with that and you know, spoiler alert, the area that I think we should look at that has some longevity is Adelaide. And the reason behind that, which I can, we'll go into a lot more depth and, and share with you the conversation I had with Peter Kisas is there's going to be. Adelaide is considered to be regional in the eyes of people seeking permanent residency, which means they get more points. That gets them to a threshold, that gets them into the lucky dip. That means they can become Australian citizens sooner. So a lot of the immigration agents I'm speaking to are telling people to move to Adelaide. We have a question here. Historically, house prices have risen during times of rising interest rates. I know, weird, right? Our research says at least three years growth left in this economic cycle. Like, yeah, that is fantastic. So, you know, when you actually start looking at some of this information and who's talking here? No, I don't know who's talking. It'll be nice if I could find out. But what some of the information shows also is that this is actually the first time that we've got all of the low unemployment at the time of interest rates going up. So this is kind of been unseen before this time of market. So, yes, there's historical data that says interest rates go up and house prices can go up. But also we're overlaying some really strange times. So, you know, I think that we need to monitor that and not necessarily go, what's happened in the past will happen in the future. But throw in immigration, an extra 180, 240, 300, up to 300,000 people they're talking about. There's some real stuff that's happening in the background here that we should be really mindful of. The fact that things may not completely happen like we've seen before, but low unemployment should give people some confidence that their jobs are protected and they have come off the base of this biggest savings that anyone's had, and economic kind of affluence from their homes going up in value. So there's a lot of positives that indicate that because we have interest rates rising, we shouldn't have to go through a long period of a recovery. And we looked at this last month, the graphs that showed how long it took to recover, and, you know, I think the most that we saw was around about 24 months that have happened in the last 15 years. So, you know, let's be mindful of the fact that Fortress Australia, I think, may actually save for the vacant too. So thank you for that. And upside, As I said, 30% of Australians have home loans and 30% of people rent, and 30% of people have paid off their home loans. And there's only 30% of people who are actually being affected by this higher rates. So, you know, we've been able to squirrel away our money. The other thing that's really interesting as a mortgage broker that I see is as it rates go down, a lot of people have kept their interest repayments or their monthly repayments the same which means that they're doing pretty well. You know, deposits up 12%, rental prices up. Nationally they're saying 9% I'm seeing on my properties, 20%. Immigration coming up, we're coming off a high base. Home guarantees are working. Lots of retirees, they're pretty happy that interest rates going up because they've been earning nothing on their money. So there's some upside now thanks to one of my mentoring students who sent this through. This is interesting. This is high net worth individuals. So we're talking about immigration but Australia is actually the second on the list of where there's a projected inflow of these high net worth individuals. What did they bring? Well, typically they get a kind of free pass to start building businesses in Australia. They bring their money, they can buy properties, there's a lot of opportunity, they bring jobs and affluence. Now these guys, if you have a look at this, most of them are leaving, no surprise here, Hong Kong, China and Russia and Ukraine and India and most of them are coming to three and a half thousand to Australia. Israel, Greece are getting some Portugal, us, Canada, Switzerland, Singapore, but the UAE is getting, you know, the majority share of them for 4,000. So 4,000, three and a half thousand. Fortress Australia, keep your eye on this. I'm just gonna, I'm not going to go into a lot of detail on this. I know I'm nearly at my hour and I took a bit of extra time to talk about regional Australia. But pain and gain report out again, no shock here. Houses make more money than units, capital cities make more money than the regional areas and established properties make more money than new properties. Nothing's changed. I'm still monitoring it. If something changes and all of a sudden one bedroom units are in country towns are the way to go, I'll let you know. But time in, time out, pain and gain report does not change S and P Global, as I said it was on their webinar yesterday. This was really interesting. They're talking about residential property prices. They're talking around that 15% as well. So yes, 2021 made 20% came off some pretty good years where we made some money and a drop and then Here we go, 2023, they're talking growth. This is a short term dip guys and we are already in it. We are already in this dip. So look at this, this is like 6 months so for those sitting back going I'm going to wait until the market starts moving. Check this out. You know this could be buy time. Not telling you it's buy time, your individual circumstances but could be. I'm just going to jump through this once again some rea stuff around how regional areas compared to capital cities. We definitely saw some growth but we're definitely seeing them coming back. Rental days on the market, they're coming down. It doesn't take long to get a property rented and on average people are renting them for more than they did. Unemployment is dropping which is fantastic. Participation in jobs. Price falls below their peak. So we're starting to see some price falls for houses versus units. So Darwin's coming off, Perth is coming off, Western Australia is coming off. This is units, big change. Units as we saw pain and gain report do not outperform houses. Canberra, Melbourne, Sydney. Regional. So regional. So we're starting to see some of these peaks coming off. Not as substantial as you know we're hearing but this is kind of like we, if you think of the long term average of let's say 7% a year of growth and you're seeing property you know in one month say 2% come off, that's significant. Right. But I think we're, we're not going to be rushing to the bottom on this slowdown in price growth combined. Capital cities is the black one about 9% over the year. There's been some significant dwelling changes. We know that. You know Hobart and Adelaide and Brisbane have been the absolute standouts. Please watch the little video I'm going to post on time in the market conversation with Peter Kalisis. I'll post the whole thing so you can watch the whole thing. But this is and why Adelaide is the place to go which is my big reveal at 1:30 for those of you who have to go but I'll post the video so you can check it out but you know we've got some really great data. We've got sales data, sales volumes coming down but we've also got clearance rates coming down as well and you know we've just got, there's a lot of information that's coming out and you know you can get all overwhelmed on it but you know, just understand the fundamentals. People need to leave new properties. We're bringing more people here because of construction costs and a lot of another major developers builders has gone out of business and we're seeing construction costs going up considerably. We're not going to be building that many new properties for all these people coming into the market. So you know, there's a lot of opportunity for us but we need to be really mindful of what's actually happening. So as I said, rents are up 9%. The growth yields were about 3 1/2 percent, which is refreshing. We know some of the major capital cities like Melbourne and Sydney, you know, when I do the mortgage calculations I'm usually calculating 2.5%. So it's nice to see some growth in some of these underperformers at the bottom of the market here. And just a heads up, I always say this but I'm going to say it again. There's some real indicators that I look at from a big point of view. New Zealand is always six months ahead of us. So check out what's happening in the New Zealand market. Very interesting to see. And also, you know, they've had property prices coming down, they've had interest rates go up a lot higher than ours. You know, just watch what's happening in that market and also watch what's happening in the higher percentage of like when you look at the data of the 25, 50 and 75% of the price points in the city, the higher end of the market starts coming down first and we're seeing that in quite a lot of the markets. So it's nice to see potential of buyers that are up a bit and as well listings, yada, yada, yada. Let me get through to where the market is. So investment purchases have come down and investment sales funnily enough has gone up. So this is interesting to see this because I think it gives us an idea of what's happening in the market. But it's still, you know, around 25% of the market that reflects this. Investors are going to start seeing this rental yield improvement and start seeing properties that they couldn't afford last year coming onto the market. And I, I'm tipping that we're going to start seeing this come up in migration. We know that there was a huge change during the pandemic. This is interesting propertyology. Thanks to Simon. This is from his report that looks at the top 50 largest cities in Australia and then put their house price on it. Look at this. 1.4 in, in Sydney. Canberra tops out here at a million. Who could have thought it? Brisbane at 800. Melbourne second after Canberra. Now 998. Hobart. 780 Adelaide. Affordable, affordable, affordable. But there's some areas that are better than others. Silicon Valley of Australia, Adelaide, just a heads up, Perth, Darwin. They look cheap. Will they be cheap forever. Well, they didn't do anything the last 10 years. Maybe someone has the opportunity to sell out in the last six months and I gosh, I hope that they, they've done really well. And yeah, difficult construction cost. Big number I need to show you here. 42% steel costs, timber 20 ceramics, metal, yada yada, electrical, 42% if you are building new. This is huge. So how can we look at this and look at opportunity? Well, for instance, how about we think could if I wanted to. I've got a $900,000 home. I need to renovate it because the kids are growing up. I need to have space. I'm working from home two days a week, whatever. I'm sick of, sick of being, you know, underfoot. Should I go and do a box on the back, renovate the back and to my current home or should I look around and see the million dollar properties that are now 950? Now yes, your $900,000 property might sell for 850, but I think that there's some real opportunities to actually find some already renovated properties that are coming onto the market. And I also think that there's some opportunity in looking at renovation as a strategy of buying a property now and not renovating now. Wait till later. But as I shared with you in just trying to get trades in Dubbo, you know, it may not just be the costs going up, it could also be that it's going to take a long time through for the products to come through due to distribution issues or the people who are working are working so flat out that they don't have time. So be aware of that commencements and construction, they're slowing down. So just when we're bringing 300,000 people in who need about 40,000 properties, 40%, 303, 420,000 properties, that construction is coming down based on this cost. So be aware of that. This is all happening. As I said, guys, I'm running some workshops that are coming up in 13th of 13th of August. I'm running this online. $397. Renovate yourself, renovate your wealth. As I said, I created this for my mentoring clients and just saw the most amazing, amazing observations that they had around the fact that there was beliefs and conditions that they had set up and patterns that they had repeated that once we became aware of them and a lot of them came from their childhood money stories actually liberated them to get on and fulfill their vision of what they wanted to create. So I really encourage you. I've been studying the mindset of money. And oh, I dropped in the newsletter yesterday a link to the conversation I had with Bushy Martin. My gosh, I don't know how I haven't met him before. It's like I met my brother. But you know, we're so aligned. The way we talk talk for like an hour and a half. So please listen to it on double time. But it's really around my observations of what I've seen. It was a limited people in creating what they want to do because they don't. They can't create their vision. Now I do have a vision call that I do. Do I do that? Usually it's a two hour process with my mentoring clients, but it's around understanding exactly what you're trying to achieve, understanding how much that life cost you, understanding where you are now and then building the bridge. A lot of people are closer than they think and or they don't need the 35 properties and maybe just one property that can get them there. But you know, until you have a vision to understand what you're working towards, you know, you're just going to be pulled back to these potential limiting beliefs that are just pulling you back to, you know, I'm not enough or what if I earn more than my family and friends, will they still talk to me? Do I have to hide the fact that I'm investor? You know, if I the Tall Poppy syndrome, do I deserve it? Do I have the capacity, the time, the resources? We all have these beliefs and conditions and that's when I want to go deep into the Renovate yourself and renovate your wealth. Now I'm also got, there's only 10 tickets, but I've also got your way to wealth. Just because I'm going to meet up with my mentoring clients on 28 August, taking them to the Versace. I'm so excited for dinner on the Saturday night. But on the Saturday I'm like, well, I'm there anyhow, why not run a workshop? So we're going to be talking about face to face, your way to wealth. I'm going to be using and sending to everyone he comes to that the magician's way. We're going to be talking about the way to wealth being the magician's way to wealth. And I'm going to be going deep into some of those talks. So some of those concepts. The way to wealth is a modality of thinking about things that is really interesting. And I've seen my mentoring clients and some of my customers and mortgage clients just change their Life based on understanding where they're coming from and where they want to go. I'm one of 20 accredited natural success coaches now. I coach with William personally one on one to make sure that I can deliver what my vision is for my clients, which is everyday people removing their financial problems so they can get on with life and live to their full purpose and what is true for them and create intergenerational change and setting example for the their kids and you know, that's where I'm coming from. And so I've created these two little courses to help people out. They're both $397 once in person. $397. You get lunch and morning to you as well. There you go. But yeah, so there's only 10 places left for that on the Gold Coast. Love to see you there on the 27th of August. Love to see you on the online workshop on the 13th. You know, for me it's all about, you know, delivering that success for people and trying to hack in, why and what holds people back. And I think I've, you know, I've seen what I can do when I work with people one on one in my mentoring group and just the incredible success they bring to them, their lives and their families. And yeah, I'm really keen to pursue that. So if you can join me, please do. Love to see you there. I appreciate you all. I hope we've answered all of your questions. I will post the long video with Peter, but I'm going to post those quick ones. As I said, I really think that Adelaide is not going to go through this dip that we're going to see in some of the other property markets. I think immigration is going to be the thing that drives it and the immigration departments at the moment three to four months behind getting these applications in. There is going to be a flood in the next year which is going to assist our property market, assist our rental yields. It's going to improve the way that money is circulated through the economy. We're going to have high net worth people starting new businesses. Adelaide is considered to be the Silicon Valley of Australia. We've got Google there. CBA's just opened up a huge engineering section. We've got Elon Musk and everything he's doing there. You know, there's, I think it's called, it's not Area 41, but Peter was telling me about it in the CBD where there's cyber security and defense, there's been huge industries that have been attracted, I don't know if they're giving them tax incentives. But there's some really great opportunities in these areas and yeah, I really, I'm really looking forward to seeing as a area that has never been on my, my radar before. It just gets on with it. Never had high highs, never had low lows. But I think it might be a bit of a star that is short term investing because I reckon we're about two and a half, three years behind. All of these immigrants are coming to Australia who get their permanent residency, become citizens who can then get loans, will be buying properties. So the future. Yes, a little uncertain. Yes. Interest rates are going to go up. Yes. You're going to read in the media that fixed rates are going to come off, mortgage delinquencies are not increasing. You know, we're not seeing any pressure there. There's some huge opportunities and the people that I'm speaking to, Peter Kent Lardner from Suburb Trends, Louis, Rob Flux, you know, you know the people that I go to to get the information S and P Global, you know, real estate prop track or whatever Cameron's with now, you know I'm trying to gauge the market and pull all this information together for you guys. I don't think it's as bad bleak as you're going to read with the attention hitting newspapers but stay tuned, I'll keep you up to date next month. All the best and I hope that you guys have a great month. Stay warm, watch and see how my duo sale goes. Very excited with that and you know it's as always, here's to your property success. All the best.