Q&A Mentor Call - November 2023

Sam, It's. We are going to be going live three minutes. Oh, yeah, I'm good. I'm good. I'm recording right now. There is. There are some issues that we've had today, but you know, we're all about playing with them. It's good to see your face too.

Thank you. Your solutions bring us. I'm sure you'll solve magician.

Okay, well, I'm going to put us both on mute and Sammy's here as.

Well, so we just record together.

Hey, Jane, you're bringing it.

You're bringing it today, right?

No, you're really flat.

Data talk.

No, I'm high energy. High. Hi.

Can't wait. All right, I'm gonna go live in like three minutes. Okay, Just one minute to go, guys, until we start your property success club's monthly Q and A call. So grab that cup of tea, cup of coffee, coke, or even some lunch. And stay tuned. We have a very special guest today. Cannot wait to discuss all things property. And that is it. And we are live. Welcome to your success club November Q and A call. Now for those of you who have been here for the long haul, you know that we have been here since we, oh, 2012, running these monthly Q and A calls. And this is all about answering your conversations, your questions, your thoughts about what is happening in the property market. And today I am so excited to say that I actually have two very, very special guests with me. Because you know what, there's so much happening in the market. Who am I to know it all? Now, just in case we get can get to some of your questions later, make sure you do pop them in in the Facebook post down below. But I'm very excited right now to introduce you to Scott and Sam from hello House. Hey, guys, how you going?

Very well, thanks, Jane. How are you?

You know, living the dream. Living the dream. Well, I thought rather than people listening to me rabbiting on and obviously I do have some slides to rabbit on too, because. Always do. But I thought I'd throw up to you guys because, you know, there's. There's so much happening to in the property market at the moment. And you guys are across everything that's there. Let me throw you in me in the bottom screen. So I'm going to ask you some questions. First of all, hello, house. Hello.

Hello, house.

Hello, house. Yeah, there's lots of stuff happening in hello house, isn't there?

Yeah, the little baby of mine is now over 5. We just turned 5 in October and it's growing very fast. We're really proud of what we've built so far. Yeah, it keeps happening, which is exciting.

Well, for those of you who got the newsletter and all the links that I sent you, I've been working with Scott and his team pretty much for many years now and my mentoring clients. A lot of people have used their negotiation services. I personally in the last year, I reckon, Scott, we've used your agent selector service three times to help my parents out and help Todd and I sell a couple of properties that were not worth being in our portfolio anymore. But you've also got a portfolio builder service now. So many things and I thought, you know, interest rates are going up. You know, I was talking to a lady yesterday who was saying she didn't know how to. To a hairdresser who was saying she didn't know how to do deal with her clients that are coming in crying going, you know, we're in so much trouble with the interest rates. What are we going to do? There's, there's a lot of pain due to rates but you know, rates and Covid and every time we expect that the market's going to drop, all of a sudden it does something we don't expect. So rather than me trying to make up things about happening in the market, I'd love you guys to give some insight because I know that you know, you're not just buying in Queensland, Sydney, Melbourne, but you're in Perth and Adelaide and everywhere across the market as well. So what's happening, Scott?

Plenty on the coal face. Yeah, it's. This is why we love doing what we do because it's kind of a never ending story. Right. Like there's ebbs and flows everywhere right across the country in different little pockets. There's no one market, as you well know. Yeah, it's been interesting. I mean I think 2023 I'd say is the year of Ipswich, Toowoomba and Perth. It has been probably Adelaide a fair bit as well based on what we've done in Adelaide in the last six months. But yeah, there's been a lot of drive for if we just focus on in the investor market anyway, there's been a ton of traffic going into those locations. So those markets have been incredibly difficult to buy in and they've seen extreme price growth and obviously along with most of the rest of the country, really strong rental returns. But it's been an interesting market in terms of what you just said, interest rates. Obviously people that have been under financial pressure have had a long road to get to that point of potentially Exiting or getting to a stage where they can't afford to hold onto the asset, I guess. Thankfully in that time since January, they've seen 10 months worth of consistent house price growth across the country back to back. So that's taken at about 8% up from the low in January. So hopefully they've made a bit of money in terms of capital growth in that time. We're not seeing much. I mean, you haven't seen much financial bite from the open market in terms of where we've been buying, have we?

Just. Sam, I'm just saying introduce you. All I know is you're the amen on data research. I think when Scott said to me, I'll bring Sam along because he's my researcher, I said I hope he's got some personality, because a lot of these data people don't have personality to say, you're on to bringing it, Sam. That's your job.

Yeah, bring on the personality. Love a good chat. Data dork.

I'm not too sure.

I just kind of. It helps me convey a message to people because obviously there's always, I guess, people's opinions in the market. And I like to just lean onto the facts and say, well, this is where we're at in the current market and here's the proof. Make your own assumptions as you will. But what we are finding is the more information we can help educate people with the better buyers they become and we become a bit more closer and we work as a team to get to what they want to achieve.

So, Sam, the question is, you know, you're close to the coal face here in looking at what people are after and I'm assuming in the property portfolio building service as well, builder service. So people are still buying or you seeing people, you know, the market coming off in inquiries.

Definitely people still buying, especially in like that investor stock, which is we target some $750,000 purchases mainly because it's affordable for a lot of people. But that aspiring owner occupier is where I'm trying to focus in on to basically help our investors buy assets that have that strong owner occupier appeal because that's what's going to help in that capital growth. Even with these interest rate rises, people are still having that like it's a psychology of a buyer. Right. We go through our journey in life and we're aspiring property buyers and it generally starts in that lower purchase price category. We're just seeing a lot of competition still. People just trying to get into that market. So it's Obviously something we do every day and we're really good at it. But it is tough out there for some buyers.

Can I just ask, just following up on that quickly before Scott, I'll throw to you but Sam, are you seeing more and more first time buyers giving up on the dream and then buying an investment property instead of.

Yes.

Okay, good, good.

Wonderful answer. Nice and clean, bringing the energy. Jane See that?

Yeah, you're right. Scott, your thoughts? Scott?

Oh it's absolutely the case. We've had a whole heap of people that are rent vesting this year and just given up on owning. I've had that in Sydney, Melbourne, Gold Coast, Brisbane and they've gone and bought in locations like Gladstone, Bundaberg, Perth, northern suburbs, Adelaide. You know with Sam's hotspotting data and our help to find those assets that's definitely a realistic option for them. We it'd be great to see everyone be able to afford their own home and not be priced out of that market. But it seems like the horses bolted in many of these places. I know for my own personal circumstances I bought for my brother in law, they're on the Gold coast, he's a chef, she's in retail. They've got no chance of really saving with two children the deposit they need to buy near the beach in Tugen and so we bought them in Gladstone and that market's really performing strongly and it's positively geared that asset from day dot and they can get a three bedroom renovated house in a nice residential suburb for less than $300,000 and that's at least a start for them and owning a few of these and hopefully being able to have something to retire on in 15, 20 years time.

So you know that I'm kind of pro satellite city and capital cities and growth and immigration destination places in that 750 range. Are you still finding areas I guess that are affordable like can is is there an Adelaide market under 750 or Geelong or Newcastle or I don't know Gold coast or with a house.

Yeah in the southeast Queensland you've switched Logan regions and on like Moreton Bay. They're definitely achievable in that 750 or sub 750 range. A lot of investors come in I was just talking about this with one of our analysts today is they typically come in with a $500,000 budget and in most people's mind that's a great purchasing power and their mindset's always going to well I want Metro within close proximity to a CBD. What we're finding now basically over the last 12 months is those with a $500,000 budget is just being pushed out.

Yeah.

And prices have increased and yields in those CBD regions haven't caught up. Even though we have seen that 10% growth in rentals, the supply is a massive issue in the market at the moment. And that's why we're still quite bullish for the next two years to see where prices can go in certain pockets in Australia.

Do you think that there's enough of an interest rate LED crunch for investors and I guess people who are kind of now willing to downsize sooner than later putting properties on the market or are they waiting for the market to go up?

I think the market's just down. I mean statistically we're below the five year average with 16.6% down on listing supply and we can feel that at the coalface. It's just not a lot of stock. The average days on market for most of our clients, if they don't have a strategy is pushing out. It was, you know, if they're going in a loan. The mortgage stats say it takes seven months to buy a property in Australia. I think that's longer from a lot of people that get to get to us.

Nine months is what I came up with two weeks ago.

Did you just make that up or.

You just came up with period of a human? Nine months.

Definitely there.

Nine months, yeah.

If we blow out to the gestation period of an elephant, which I think is like 24 months, we're all in trouble.

I was doing a bit of a data sort of crunch on what the average buyer is taking. And when we first came on board it was seven months and then there's commentary around nine months and spending eight hours a week. The whole process is trying to educate people to say yes, you can do this yourself. By all means, go empower yourself, but think about what your time's worth. Because the average buyer is taking nine months, eight hours a week. That's, that's over 240 hours to actually find that property. So obviously with our help, we're really trying to help people fast track that process.

And I think, Sam, to your point, it's not just your hourly worth, it is the opportunity cost that's lost. So you know, it's not being in the market, it's not having time in the market. It's not, it's missing the opportunities because you're at work that day when it's an open day and everyone else is there. So you Know, it really is, you know, that's, it's scary to think if you go it alone and, and I know I, we went it alone. We bought our first seven properties by ourselves in, you know, five years or something. And you know, it took a while but we were dedicated. We had spreadsheets where 6O'. Clock, this is pre Google Maps showing my age, but this is like 2000. We were up at 6.

More about the 1940s. Jane, sounds awesome.

Back in my day is what my teenage son now tells Be back in your day, Mom. But back in my day, you know, we'd get the Gregory's of the melways out at 6 o' clock on Saturday morning when the paper arrived because it wasn't online. And we're going through and circling the properties that we're going to look at and trying to map out how we get there with the back roads. I mean, you know, it was, I know how much time and effort it goes into it and I think, you know, this is for you, Scott, because you're, you know, and one of the reasons that probably your first service, the negotiation service, I mean you've led a team of a lot of real estate agents over the years. You've been on the dark side, you've come to the light side to help us out now. But from a negotiation point of view, because we do have that 16% less leasing, et cetera. Is there room for negotiation?

Yeah, I mean we're not here just to talk about, hello house. I'm here to try to add value to your group and answer these questions. But we've got stats around that because we track everything.

Well, that's what I thought. That's why we just kind of want to pull out your information so we can apply it.

Yeah, there you go. Well, to sort of, I guess talk to that point. So 60 to 80% of stock is selling on realestate.com or domain nationwide. They're the stats that are openly out in the industry. So that means 20 to 40% of things are selling at any given time, pre or off market. Those things are never going to change if I put my agent hat back on, as you said just then, I can only carry X amount of listings on a Saturday, auction Campaigns dealing with 200 or so buyers a week. It's very difficult even if you've got a really big team to get around to all those locations and service that. So the only way to supplement my wage as a real estate agent was to take those under bidders from properties. The under Bidders at auction, the negotiations that they lost during the week, cherry pick those best buyers and go and match them up with my database. So there's always going to be a drive in Australia to sell pre and off market. That's, you know, driven by the real estate agents themselves. The question I get asked by every buyer that I speak to that's looking at working with us is, but in, you know, and drop X suburb in here in Noosa or in Perth or in, you know, center of Melbourne in Fitzroy, why would anyone sell pre or off market? Everything's selling in two days for record prices. The buyer depth is huge. But from the seller's side, if I take my agent hat off, there's a multitude of different reasons why it will never go away. You know, as an agent, there was people on my database that were under financial pressure, which you've just alluded to. Maybe rates are biting, maybe they've lost a job. Australia's got a 40% divorce rate, so there's a huge amount of relationship breakdowns which drive pre and off market sales. All the people that have bought that need to sell really quickly and there's a lot of those in any given market, but probably the biggest one that was the sleeping giant in our business, personally, and I think this is probably going to ring true with most agents across the country is if you're running a rent roll and you've got property management, there's always people. There's 4% turnover in a property management rent roll per year on average. In Australia, there's 4% of your clients at any given time that are going to sell in the near future. But typically if they're in a high owner occupier location, that's going to be your target buyer. They can't sell if they've got a long lease, that's going to limit the amount of buyers they've got, or if they've got a poor presentation with the tenant in place. So a lot of those sellers are looking to wait to run down the lease, put some styling in and marketing costs so we can take them a buyer off market or pre market, they're going to sell. So those things will remain in play when we build. To answer your question, the long way around, when we build a strategy, which is how we start with everybody, of how to identify what it is that you're looking for, confirm that it actually exists in the location, limit your search ideally down to one to two suburbs, extract all the agent information out of those locations. So we're looking for what agents Jane have sold in the last 12 months in Fitzroy? What agents in Fitzroy currently have got a listing? Let's say there's 200 agents in a capital city. That's not uncommon. We then talk to every one of those agents, so all 200 of them every single week through email communication because they're telling us they want to receive communication on email with your defined shopping list. And when we do that and it snowballs, we send it every single Tuesday for the best opening rate. What we find is that creates pre and off market opportunities. That means you're getting to 20 to 40% more stock, you're knocking out your emotional end users, those people that are under bidders and that are on the hot list from the agents and you're getting one on one with motivated sellers. And that's where the magic is for us. Our average client is not buying nine months the same, just our average client buys in 52 days, they're transacting in seven weeks. So four to maybe five times now the current speed of average buyer doing this strategy and our average customer saves $40,600 below their target price. So we're getting there and we're saving money even in a rising market. So again not about us, but that's the strategy that anyone can go and deploy for free and do themselves. But where the value is always going to be is Sam's brain and mine. Because even if you get to these properties first, can you out analyze a full time analyst and can you out negotiate a skilled negotiator? And those two things I think are the learnt skills. That is where the value is in paying someone who's an expert in that space.

Well I guess for me, you know, and, and even having bought the properties I've had and helped facilitate purchases with mentoring clients and students over the last 20 years, you know, I know that the average person buys a Property once every 10 years and that's really the time they come out as their master negotiator and go woohoo, let me take on the guy who does five a day and, and that negotiation and just the psychology, behavioral psychology that goes into it. And you know, the things I've seen that you've done and how I've learned from you over the years, you know, there's so much just in that and I know that, you know, we've got friends who go hey, you know, can you come to an auction for me or can you, can you go and manage the bids? And I'm sitting there going, when I Took that I could. And I know a lot of people like outsourced to their dad to do things like that. And I was like that this is not what I do every day. Like, I know that you're in pain and you don't want to do it, but just giving it to someone else that doesn't really have the experience doesn't really work it. So yeah, I appreciate that. I appreciate the insight too because I think that there's, you know, we're talking about lower listings. The market has been going up despite rates. Let's face it, there's going to be a rate call next week and who knows where that's going to go. I think the economists are even divided on that. There's conversations about rates reducing next year. There's all this stuff going on. The fact of the matter is we've had 500,000 people arrive in Australia. There is a lot of pressure. People need to live somewhere. Rental returns are improving. So where I guess I'm kind of confused at the moment is how do you, when you're trying to anticipate what's happening in the market, like, you know, we are where to buy. You know, you've talked about some really good investment grade areas at a certain price point. But how do things like the, the greens saying, you know, investors won't be able to put their rent up for two years. How do those kind of like little micro things in some of those markets, how are they affecting housing? How you consider where you would stack up an investment opportunity for a client.

I'll give that to my doomsday cousin.

Over here, my doomsday guy.

So I have anything to unpack? Yeah, I mean there's always commentary around what government regulations are going to do. Definitely seen a dampening effect in Victoria based on the stamp duty that's come out there with the two year look. It's proposed, it's not guaranteed to be approved, obviously. And I'd also look at it and go like, you're not just investing for that cash flow component. And two years isn't a long time. But what you're trying to do is aim for the capital growth as a primary and then look at that cash flow to help you sustain that. And then even for myself, I've got a few investment properties. Once I get that really good tenant, it's always that conversation, do you bump that up to, to increase your cash flow and risk someone moving in and not looking after the property as well? Because that's going to cost you more money. There's definitely those questions that investors, it's causing them to sit on their hands and only add that analysis paralysis that people are experiencing. My biggest thing around why I'm so passionate about property is that it's the opportunity cost of doing nothing. Your money sitting in the bank account decreasing over time due to inflation. Whereas if you've got that debt component that inflation is actually working with you because that debt essentially is getting cheaper over time, if that makes sense.

You can, you can explain that further if you'd like. Those who may not work out how debt gets cheaper every time.

Well, Sam, Sam didn't really introduce himself but he's formerly a financial planner and then a long career as a, as a residential property valuer. So he wears many hats as our property investment specialist. Yeah, very passionate about is investing because.

I think it, I mean it's a difficult concept for people to get. So if you're comfortable in dumbing it down for us, I'd love it. Because you know, the idea of, you know, you've got, let's say $100,000 that's sitting in the bank and it's doing Nothing and earning 1.5% but inflation is 5% actually means you're losing money. So that's what you've described there. Give me the reverse of that in layman's terms of what you just said around the fact that you debt works, the inflation works for you with debt.

Yeah. So you sort of look at like the cost of a dollar over time gets eroded. We all know that we used to be able to go in the corner store and buy a bottle of milk for 50 cents. Everyone's got a different sort of opinion. But if you get that debt in today's dollars, you're locking that in that essentially the hundred thousand dollars or as a round figure today, if you hold it on an interesting repayment in 20 years time, you still got that 100 grand. But that 100 grand is going to be probably what people perceive to be $200,000 in today's. If that makes sense.

It could buy $200,000 in 20 years time of value worth 100,000 today.

It's like it's the opposite effect of inflation. There's a really great book out there called I think is the Debt Millionaire. That's what really sort of motivated me. It was a light bulb moment to say, well if you can lock in from today's dollars, you're borrowing someone else's money. You've got capital growth working with you and you've also Got inflation working with you on that debt component. So that with rental, it just helps you. It simplifies a process where it's not like rocket science, it's just having that ability to save money, invest it, make your money work for you so you don't have to.

Yeah, great. And look, I know there's quite a lot of you watching there. If you've got some questions, drop them in because obviously Sam and Scott have a lot of information about what's happening in the market. Just talking about inflation, the value of inflation. I was in the position, difficult position, when someone asked me to go and buy them a package of cigarettes on the weekend and take. And I went to this server and I was like, oh, I want to pack.

You're the blue light disco again.

I felt like I was a kid at school, like doing the bad thing. I was like, hope no one I know sees me.

But then hasn't started smoking, has he?

Well, not to my knowledge, but the. So I went to buy these cigarettes and the guy said, that'll be $60. I said, no, I don't want a carton, I just want one, one packet. And he went, that is one packet. And I was like, no. And he's like, did you really think a carton was $60? I'm like, well, I didn't think one packet could be like that much, but that's how much. So yes, there's a, there's an active example of shock really.

All us non smokers anyway. Indeed, all the smokers are well and truly aware of those numbers.

Yeah, poor smokers. It's funny, I walk through the suburbs or the back lanes of, of Melbourne and I see all the smokers hiding in lanes these days where they used to, you know, 20 years ago be in the office.

All in those cafes out the front of your office.

Well, look, I've got some questions to us I want to get you some opinions on. I'm going to show. I'm going to kill us off and I'm going to show a couple of things because I think that what I found and Sam, you could probably see that clearly. Can you?

Yeah, we can see that.

Yep, perfect. So the, the SQM boom and bust report, which I anxiously waited for every year since its start, came out in November on my birthday, which I felt, you know, Louis did a great job by, by doing that. But you know what really shocked me here was I always enjoy looking at the scenarios that he comes up with because I'm like, oh, I didn't see that coming. This energy crisis, I must have missed the memo on that. Obviously you know, we have a food crisis. Our systems safari in Africa and there was people talking about the fact of what the war in Ukraine and, and food continuity and security meant that a lot of what world vision was doing there and feeding a lot of the orphanages was not going ahead. We're hearing a little bit about, you know, prices of petrol, et cetera but I don't know, do you want to talk to this at all? Sam, Is this something that's on your radar or being one of the big considerations of scenarios for next year and what's going to happen?

Yeah, definitely like the international side of things, like to track those markets to see what's going on from what the America, America's obviously lead Australia and the uk but Australia in itself is quite a unique case because we are this large landmass with our agriculture is quite large and obviously our mining and our connections with not only the, I guess the Western world but also the eastern with the Chinas, Japan, Indonesia, even India. Our connections there are really quite strong. So there's a massive I guess push. You mentioned 500,000 people coming to Australia this year. There's also another forecast of 315 for the next financial year. So I mean with an energy crisis on that front, I mean I'd sort of look at it and go, we'll zoom out. We're not just investing for a one year basis, we're looking at long term profit prospects. And yeah, sure there's multiple things that could happen from that point of view. There's also a case to be like if we do see an energy crisis, what opportunities does that create? But the underlying fundamentals from where I'm looking at is the massive supply demand imbalance that's in favor of price growth in Australia. Certain pockets we're seeing, rental vacancies is obviously a leading indicator of future growth as well. So what we're actually seeing in real time is that we don't have enough supply to house these people that are coming on. That's increasing rents. People get to that psychological barrier where they go well okay, the rent I'm paying now, I may as well look to invest into the Australian property market because I want to get capital growth and they become buyers in full answer to your question, I don't see it as a major impact because we're only focusing on a few select government areas in Australia and we're investing for the 10 year plus time frame.

So all that, what about the rest of this Analysis. If we just look at scenario one, cash rate ranges between 4.1 and 5. Population growth slows a little, unemployment rises a bit. I mean, is Perth and then Brisbane the stellar performers that you've kind of got your, your eyes on?

Perth's a really interesting market. It's sort of gotten to a point now where things are so tight. Definitely see that short term growth prospect being strong there. I can see why they're at the top. My mind goes more to the eastern side of Australia has historically outperformed the western side and Perth itself is also underperformed. Up until the last few years, well.

Had 14 years of basically zero. Growth went from the highest capital city value in Australia to the lowest over a 14 year period where everything basically doubled in that stage. So there's, there's some risks there, isn't it? Sorry I cut you off, mate.

No, no, I love it. It's, it's, it's just you think about.

It like I'll do it again then stock.

Think about the stock market, the cycle of the buyer, you know, like stock markets actually track human emotion in my opinion. So you see those things and it, it's the same as the capital cities around Australia. Some move like opposite to others. You're seeing Perth having that resurgence now and it's because it's underperformed massively over the last 14 years. So it's time in the sun. An example is everyone was in Hobart. Hobart did Nothing prior to 2015 and then just boom. So what we're looking for is well, where's the next location that's going to give us that good growth prospects? With the Olympic Games in Brisbane Obviously in 2032, there's a big case around the infrastructure and people going to that. And then you've got the baby boomers that are downsizing and looking at well, I can sell out of my Sydney for $3 million and buy the same type of asset for 1.5. I got an extra 1.5 in cash to retire on. So there's definitely that shift that's going through and that's like you can never look at one data point to assess your investment options. You got to look at the whole case scenario around it. And whilst it's just an educated opinion and everyone's got them, it's good that Louis done this chart to visualize it.

It's interesting. I did quite a bit of work with John Edwards from Residex and we looked at so much information and then, then that was like 10 years ago. And then more recently with Peter Kalizas, the property professor. And he had taken the census data of the capital city growth over 20 years, which was in his book. But he had come up with these, these spreadsheets and the comparison of when, you know, Darwin and Perth were number one and number two, like for two or three years, four or five years across all of Australia's growth and everyone else was doing nothing. And then this flip and it's interesting, I mean I love grabbing the census data and manipulating it and looking at, but the flip I've been, you know, over the last 20 years trying to, to track this and try to, you know, predict and look at where the opportunities would be. And Perth is one market I cannot model. And you know, every now, and having come from the mining industry, spending 15 years there, you know, looking at the commodities, looking at the sanctions and looking at the different ways that the, the mining affects that state is so dramatic that I just completely took it off my table, went, those poor guys, they haven't made money for 10 years. I feel so sorry for them. I'm so glad now they're making a little bit of money. But I still wouldn't put my money there because I can't predict it. It's just, it's one of those markets.

Dynamic that's happening at the moment because I'd say 8 to 9 out of 10 investors that come to us to have a conversation about helping them find an investment property come with the preloaded expectation that they're going to buy in Perth. And it's because they're listening to every buyer's agent, reading every magazine article, listening to every podcast, hearing about Perth, Perth and Perth. So there's a lot of blind faith that that's the place to invest in because it's been performing, as you can see on your chart, strongly. But what I would say to bring this back to kind of, you know, real time coalface stuff that we're seeing for property investors for your group here, is that I would match Perth with how we looked at bitcoin a few years ago. When grandma's telling you about bitcoin, when your taxi driver's telling you about bitcoin, get out of bitcoin. It feels like when we go to make an offer for a client in person, we're in that market every day after because clients dictate that we are looking at making offers on properties. And if it's on the market and you can't control 60 to 80% of those opportunities, there will be one of 21 of 40 offers on within two days of it being on the market. There'll be, say, for example, offers over 479. We might see reasons why that could sell for 525, 30, it'll sell for 630,000 and there'll be 39 offers above ours. And the reason is because we'll just put a red line straight through it where we don't see value. All those properties are running the risk of getting down valued. There's your value are saying there's no comparable evidence anywhere near these prices. We're out on this property. But you've just got this, this weighed in this power of people coming behind that don't have any knowledge of the market. They're, you know, they're being pushed into it like sausage factories by buyer's agents that are buying site unseen. It's a really dangerous market, I feel as well. So this, it does come with a massive warning. Not just what you've spoken about for the data and the history of it, but also what's happening in real time on the ground right now there. The other thing is buying in every other state is easier than the contracts that are stacked against you in Western Australia. As a buyer, I personally think as a negotiator, there's lots of risks around building a pest report, structural and non, that make it really difficult to buy properties well without de risking it, which you can do in other states.

Yeah, good point. And I think that to your point too, Sam, there's so many other considerations and things that we have to look at. I know, you know, I hadn't really had Adelaide on my radar until about three years ago when I had, at that time I was employing maybe three Colombians. And they're all telling me how all their friends and family are going to Adelaide. I'm like, but why are they going to Adelaide? And say, well, because it's considered regional. And so all the immigration lawyers are saying you can get your permanent residence quicker if you go to Adelaide. So I started bringing up immigration lawyers and go, tell me more. Where are you telling people to go? And so that was the insight I gave this group three years ago about Adelaide. I'm interested though, you know, watching that South Australian commitment to investment and to technology and almost like the Silicon Valley and, you know, CBA moving large amounts of their headquarters there. There is a vibrancy of investment, public investment that's attracting private investment there and people. And I'm still seeing that. Is that something that you're, you know, based putting into what you're seeing in your, your analysis now in Adelaide, because I'm not, I'm not sure if that's something that they're going to continue with.

Yeah, definitely. All those mentioned, those points you mentioned, that's one of the reasons why I invested personally in Adelaide a few years ago. And it's been a great market to buy into. It's still seeing really strong growth and even growing more and more each day. It's definitely challenging from that point. We find that Yields now, they're sub 5% in that one hour's drive from the CBD. And then it's just, it is quite difficult in that front. And you do feel for these people that are actually trying to buy their homes or just get into the market, but it's because there's a massive supply issue there as well. I mean, vacancy rates in Adelaide is probably some of the worst.

Really.

Yeah.

Brings me to vacancy rates. Happen to have another slide. Yep, another slide. Let's put this one up there. This is, this is something I pulled, I don't know, off Twitter, actually. I don't know who, who had put it on. But this I found really interesting. The national weekly Airbnb listings versus long term weekly rental market listings. So we're starting to see more and more Airbnb listings. Is that because there's more Airbnbs available to be listed or the fact that people aren't using it? Who knows? And, but, and the weekly rental listings are coming down. There seems to be a potential of correlation there. What, what are your thoughts on how the rental market is being affected by your Airbnb and people buying and putting, you know, properties up for Airbnb listings. Have you got clients who are specifically saying this is what I want to do?

No, not on the Airbnb side.

I've had one recently, but have. But other than that, nothing for ages.

Yeah, I think a big thing about the Airbnb, obviously the cash flow is really strong and a lot of, I guess people are spending a lot more time on social media and there's some, a lot of people going out there on TikTok and Instagram and just showing just the cash returns that you can obtain, especially with technology now we can have those. You pretty much automate the whole system, which is quite attractive. I do like the play. I haven't done enough in the space to fully understand it because my value or risk adverse brain to all these government regulations that are changing in different local government areas that could really nail in the coffin. And I was looking at Airbnb, one of my places out. But the whole COVID lockdown thing, if that hit and you were in Airbnb, I'd rather take the sure thing. To each their own.

Yeah. And I think, I mean, one of my business coaching clients who runs it has had many successful Airbnbs and teaches people how to do social media. For Airbnb, you know, it's a 30% hit that they're taking. And then, you know, you've got that, you know, potentially you're renting it out over the weekend or three or four days, but there's the vacancies. At the end of the day, the numbers aren't that different to people who are, you know, just going for the sure thing. The weekly rent.

Bad investment decisions around it as well. Like, the client that I was talking to was looking at buying a unit for an investment because of the higher returns. And I said, oh, talk to me about the higher returns. Then you got $170 a week in strata levies. You've got low capital growth in the same suburb compared to houses. Talk to me about how the returns are any better focused on the lead number that I can get 30% more income or 40% income, but not looking at the net result, which was really poor. And then the capital growth situation, which was really limiting. But we're on the Gold Coast. I'm global in terms of. I've got a business in Japan and I travel a lot like you do. Jane and Sam loves doing as well. And you're seeing these things bite in Paris. In New York, there's risks that the government's going to step in or local councils are going to step in on the Gold coast, they're not issuing certain licenses. So unless you buy a house that's got an Airbnb license in place from council, that makes it difficult to just wait in and buy any old asset. I know from living in these streets where there's an Airbnb, it's an absolute pain in the ass in terms of people partying all the time and, and just very. Especially somewhere like this on the Gold Coast. And I can only imagine, you know, big cities like New York, London and Sydney and Melbourne and things as well, where you've got people flying in for bucks, parties and, yeah, things. So I reckon it's gonna. I. I can't help but think the government's gonna. More regulation, put more regulation around it. I just can't see it happening any other way. But I do see Airbnb potentially moving into the long term rental market and that will have an interesting impact as well. So I think there's some, there's a lot of room for innovation with Airbnb and I've been listening to a lot of like Silicon Valley podcasts around, you know, where their next step is and where their next move is. So I think that business is not necessarily going to go backwards. I think there's big opportunities for them, but different to what it looks like now.

It's interesting. One of my past property mentoring clients has, was an advocate against their Airbnbs in Byron and that I'm going to call it case that went, you know, the local case where they actually brought in the QCs from Sydney for them to argue against. You know, what was going along. You know, just listening to her stories about the fact that there might be an Airbnb opportunity that someone from, you know, the southern states has purchased there, but there's no one there to actually service it because no one can afford to live there. And they're living in Lismore and then Lismore gets hit by a flood and there's no accommodation there so there's no way to clean it. There's no one to, you know, welcome the guests and you know, there is all those extra issues that the locals can't afford to leave live there. So I think, you know, to your point, it's not just the parties, it's the fact that there will be a local surge of like cheap labor that can service it.

Yeah. Unless Byron Shire opens up like Gold Coast Brisbane and Noosa has and, and allow micro housing and you know, that would be a solution that would instantly fix that problem. But they just don't want that density, do they, by the looks of it? Not in my, you know, nimby, not in my backyard.

Well, I've got another slide conversation. I know. Just gets better and better. The property clock. Now I'm always a keen, keen watcher of the property clock and debates about.

This in the office. Yeah, sorry, we have debates about this in the office. I'll be very interested to hear what you have to say.

Oh, well, you know, this is. Okay, I'll show you. I just, I track, I'm more interested in not the position, but I'm interested in tracking it against the past and having a look. And so here I've got April 2022 and November 2023. So we're kind of looking like an 18 month period here. So this is what interests me. You know, I'm seeing and anyone who is looking at this, this, or if.

It'S in orange so we can see all of it.

Yep, in orange. This indicates that there's been a position from last month. So pretty much from the month before October, nothing much has changed. And, you know, we've got Melbourne and Geelong and the New South Wales Southern Highlands right at the bottom of the market. We've got things going up. And what's so funny about this, you can't, you can't say there's a specific time period for any of these. And when we track this month on month and we kind of watch what happens, you know, Dubbo has been sitting at the penny peak of the market for about 12 months now. And, you know, everything else has kind of come past and gone past and past it. So we've only got Ipswich here in Port Macquarie that have made a move this month. But if we look at that in relation over the last 18 months, you know, everyone was sitting around here in this rising market. There's still a lot that are sitting here in that rising market that in theory haven't moved so much. I don't even know.

Even just if you bring up the. The one at the top, this. I just don't understand how it makes any sense whatsoever from us buying at the coal face and all the data that we've just spoken about and even today's data that's come out from, you know, like RP data, Core Logic and the national figures like to say that Canberra is at the peak of the market. Well, the rest. So Canberra, Melbourne and Hobart, three markets that have not outperformed and the rest of the capital cities have. So I don't understand how it's at the peak of the market when it's kind of hasn't gone forward this year to say that the Gold coast, where we are now, is in a. What is it starting to decline? I'm in mermaid waters on Saturday. A house just sold at auction for 7.3 million, which was 2 million above the suburb record on a main road. Like, come on, that's boom. This boom time on the Gold Coast. I had a property on the market for 10, 10 months, was getting lowball offers, and then all of a sudden, August, September, October, I was getting offers every week and sold for 20 more than where we were, you know, three or four months before that. That's land no one wants to buy land. And even that was rising and sold strongly at the end. Everything we're seeing in these areas that are. That you're looking at there that are starting to decline are going the other way. I don't really understand how these property clocks actually work. You understand?

Do you know how they work, Jane?

No, but I love watching them. And I think, I think to your point, there's so much data and information. Right. And it is around for me it's not the position, it's the comparable. It's like so we're whatever. Because we don't know the magic behind how people come up with this stuff. But whatever the magic is we like to think they're consistent be the RP data RPM investor Louis Sqm. Herrington White. So we don't know how they do it, but we assume that they're doing it consistently the same way. So for me it's the comparable of going well, what do they see as different or changed? And so when I look at this, I look at it out of a degree of amusement in the sense of well, here's another data point. But the reality is that if you are a focused investor and you've taken the 16,655 suburbs in Australia and you've applied your risk profile, your long term strategy, where you want to be and you've come up with the three to five that kind of can, can fit that then these big markets, because it's not just as you said before, you know, it's there's markets in markets but there's markets within markets within suburbs that are in each of these cities as well. Right. So we can't really predict it, but I think it's an interesting oversight to look at and go and give me a general perspective of where is the market in relation to where it has been. So I can look at it quickly and go, okay, not much is moving, which is what this one tells me right now.

Ex Heron Todd White Valuer Tell us how it works.

And I love Heron Todd White because I'm thinking what they've got 600 valuers running around the country every, every day looking at this information.

Yeah. So once a month we'd all come in the office and we give our opinion. I'd even write pieces as to where I saw my patch. So each value has a inherent white has a patch that they focus in on and they write a piece of where they see that market at that point in time. The directors of that office then collate that information and overlay their level of research and influence on top of that, which I imagine is what puts forward into this property clock. So the downfall that I see in the hair and sole white property clock is you've got a lot of property valuers who are by nature that more risk averse, conservative nature and they're seeing these markets that they're valuing in increasing over time and then in their mind they're like, oh, it's going to be at its peak or it's just based on an opinion.

Right.

So.

Sorry, like stock market.

Yeah, yeah. I look at it as go, well that's, that's their opinion. Growing up in that industry, there is a, like we're always looking in the past and also mindful of like I came through during that GFC period where we were doing retrospective evaluations on valuers that were, you know, valuing properties in the peak. So there, there's a lot of information around we would get sued, you know, from evaluation we did up to seven years ago. So say to people, you've got to walk a mile in someone's shoes to understand their mindset. So I look at these clocks, I love tracking them as well. It is an opinion and it is still a valid opinion. But you know, you just one opinion.

Don't base your whole portfolio on it.

Yeah. Do your best to understand it. But there are people out there that they spend their life like there's a career researching these property markets and they all different but end of the day, what people that are looking to buy property. The issue that I'm finding is zoom out everyone and understand what's the historical performance of the Australian property market over the last hundred years. We're always going to see ups and downs and that's just the realities of it. So you need to put yourself in that financial position to be able to ride through some tough times and see multiple cycles and your future self is going to thank you for it.

Perfect. Drop the mic.

Yeah.

You know what I really love about the Herrington White Report and it's free and I'll drop the link above here, but what I do like is that every month they do come up with a different insight like where could first home buyers buy or where can investors be or you know, where's something or other that, that is kind of like the oversight but the fact that the, the valuers are, what was it, 70% of all the valuations of bank valuations that aren't reported as sales, like they're people refinancing. So most of the information that comes through, through there is actually more than what we're reading on the market and the valuers are actually, as you said, location, you know, dependent. So they actually have an area of Expertise So they're seeing the same properties in the same areas come up and they've got some comparable knowledge. So that's why I really like going to the source of what the value is saying and I would even if you don't like them, the clock read the report because I think it always adds a lot of value. So thank you for your service, Sam. I appreciate that.

It's a great report and I definitely, I mean the mindset of like read it, understand it, it's very influential in your decision making process. But always reach out and have further questions after reading it to those that are in the market every day.

Speak to the experts. Perfect.

Oh yeah, I pointed at Jane. That's my, that's my North Star. Yeah.

Well, okay. I can tell you about my new North Star is in a moment. But anything that you'd like to wrap up with or any information, I'm going to put some links above to, you know what these guys are doing at hello House. As I said there's, there's three services that I would recommend, you know that I only recommend trusted and true and tried. So services and professionals and that's these guys. I even trust them with my mom. I trust them with my best friend. I trust them with myself.

So you know, you, we love that much. Appreciate it.

It's appreciated. So what hello House and I'm going to give you the link to this have done very kindly. I could probably even just ring it over here and you know, it sounds.

Like you're going to give away something for free here. Jane, what do I commit to if you run this past the okay.

No, not yet. But hey, you look shocked. I love it. These guys have got a really great buyer ready course worth $995. There is a special code just saying a special code that if you put into your, into the buy now part, don't do it.

Do your credit card instead. Do your credit card.

Don't put that code in and get it for free because you know being buyer ready when you, when you need to know what you need to know and as we've just talked about, you know, you can do it yourself. Might take nine months, might take seven months. You might get lucky, it could take three or four months. But you know, having a tried and tested structure, a structure has integrity as we know and if you can actually do something with predictable results then I'm all for getting into the market and having more time in the market than trying to time the market or trying to do it all yourself yourself. So that's my little plug for doing that. So take the initiative if you can. So guys, any words before you go? Interest rates going up next week.

Oh, I'm saying hold, Hold.

Oh, I like it. Sorry, a Christmas hold.

Yeah, yeah, Like Michelle Bullock has come in. She's had the, the first hole to appease everyone. She's just risen and then, I mean we'll see a hold. But then, yeah, there is that. I'm probably like 60, 40 because they won't meet until February. So there might be a case.

Yeah, that's the difficulty, isn't it? Because they're looking ahead, going, gee, if something goes wrong, we're not meeting in January so we kind of have to cover ourselves here. But hopefully the numbers say no.

Retail saying no.

I did note that Starbucks for the first time in 20 years has made a profit in Australia. So that's good to know.

Yeah. Wow. Me supporting them.

But they've been shipping the profits offshore to pay less tax.

There you go. And then. But my husband told me something interesting which was KFC sold half a billion dollars worth of chicken here last year. Last as well. So I don't know what that tells us about a diet. But thank you so much guys. I really appreciate your insights, your time, I know it's valuable and you know, I really also appreciate you sharing, sharing the goods and you know, helping our community to create, you know, property portfolios that are going to withstand the winters so that we can enjoy the summers because after all it is a long term play as Sam has repeatedly said and I know Scott and I believe leave as well. So thank you so very much for your time.

Our pleasure. Thanks for having us.

Thank you.

See you guys.

And just while people are here, I'm gonna run through, as Scott mentioned, my North Star, which is the next exciting thing that I have been working on. I want to share with you right now as well. And that is the your success club. Really keen for you to guys to check this out, see what it is all about. I've just run a masterclass there this morning in about creating a life of abundance. Love you to go there. Having spent 18 years in teaching people about wealth creation, property investment and creating the life of their dreams. What I realized is that I was probably pulling a lot of people out of the river, as Bishop Desmond Tutu said, who were drowning and thinking that money and wealth and property investment was going to solve all of their problems. And what I realized is it didn't and it doesn't. And there is a way of Creating true wealth and abundance through your entire life be career, family, commitment, health, wealth, whatever you're trying to create. Property is definitely something that has assisted me and stood me the test of time in creating a foundation for me to be able to do other things. But I've not seen a lot of the tens of thousands of people I've educated and bought my courses and I've talked to over the last 20 years. I know that it's not the answer to everything. So I'm refocusing a little bit of this. You will continue to see me obviously your property success and supporting you with that and the courses and conversations that we have. But I just want to introduce you to, you know, potentially a way that you can create, create an abundance in your whole life and everything that you're doing. So jump on in there, have a look at the courses I've got. Renovate yourself, renovate your wealth. After all, Renault Queen, your way to wealth and helping you create vision as well. So those vision calls I've been doing now for about eight years with my property, mentoring clients and that's really looking at what why are you doing this? Why are you creating this? What is that 10, 20 years goal of the dream life that you want? I've already created a cute little AI tool for that too. So I'm going to drop that in the notes that you can put in what your goals are and it'll create this lovely narrative for you to concentrate on. So what's, where do you want to go? Where are you now? What's your current reality in circumstances and conditions that you have your income, where that gap is. And obviously I've been having conversations with people about bridging that gap with, with property over the last couple of years. I've also, you know, coaching people with in their businesses creation as well. But it's around how can you get this dream life that you want from where you are right now? And yeah, love having those vision calls. So what you can do next, go and jump in, jump into the group Facebook group. It's free. I'm going to give you the first module of renovate yourself. Renovate your wealth for free as well. If you check it out and get to the masterclass I was on today that I've got an insane birthday bash special in there. Your way to wealth, the magician's way. Pay what you think for the course until Sunday night. So I know I've gone mad and all the past webinars, everything that I've created over the years just head to janeslagsmith.com I have made them all in there to be complimentary. So all that information, all that data, all the research, and as being part of your property success club, as you know, it used to be $97 a month for all the courses and to be in here and have the community and support you. In Covid, I took that price off and it was via donation to Kids Helpline. We have now just cracked $25,500. So for every $10,000 that is donated to Kids Helpline, they have a fully trained counselor on the lines. And it broke my heart when I spoke to them in 2020 and they were telling me about the fact that they'd gone from having maybe one kid at immediate risk, a month of needing to be removed from a situation that was going to greatly affect them, to one a day. And there's now 60 to 90 minutes wait time if the kids do wait around to speak to someone. So all that we can do to get to three of those counsellors that we're supporting, which is $30,000, we're almost there at the moment. 25,500 bucks. Thank you for your contribution, those of you who've donated to be part of this. And thank you also to great partners and everyone who comes in and gives their time and their expertise and adds value to this group. So thank you so very much, guys. And as always, here is to your property success. Bye for now.