Q&A Mentor Call - October 2022

Hello. Hello everyone. Just let me know if you can hear me and see me. We will be starting very, very. Hello, it is Jane here and it is October 2022. Oh my goodness, what a week we've had. What a couple of days we've had with the budget. We've had another interest rate rise. I am back from America. So it has been a pretty hectic month in October and lots of interesting things that have been happening and I hope you all have had a wonderful month as well. As always, these calls are to support you with your questions and give some answers to the questions you may be thinking or haven't even thought of yet. There has been a lot of action in the property market. I know many of you watch this on on replay and I have been running these monthly calls on the last Thursday of the month for the last nine years. Will I make a tenth? Oh, I'm not too sure. But let's just check out what is happening. So if you're there, please say hi, let me know that I'm coming through. Great. And I'm glad that everyone is well and I can see that we are alive and kicking. So first and foremost I would love to be able to let you know that we have been, I guess, in an interesting flux period at the moment. I connected with a couple of people in the last couple of days who are buyer's agents and they have filled me in on some of the things in the market. I think it would be fair to say that there is not a lot of listings out there. Those who do need to sell, are selling and have to sell. A lot of people are waiting and seeing what's going on. Obviously the number of interest rate rises that we've had and the ones that are planned to continue happening. And I think we'll probably see another interest rate rise in November and December, probably another 0.25% before the RBA takes a holiday in January and gets on with working out if their changes have actually made an impact in our spending. And you know, just talking about spending, we've seen the budget just been handed down. Now there was a lot of election promises and there was a lot of promises apparently broken as well. But you know, what it does tend to tell us is that they are trying to keep the money out of the economy, which is what the RBA's interest rate rises are doing as well by trying to get a handle on inflation. And if they handed out money willy nilly, then you know, obviously that extra money in the economy would probably put additional pressures on the inflation rates. So I can see on one hand why they didn't slip out the money. But they did make some significant changes. And, you know, there are going to be some winners out of this. So I'd like to, you know, just jump in and have a look at really what this could mean for us as investors and look at the opportunity that we have. And as always, if you have any questions, you know, please jump in and post them on the Facebook page so I can see them. And if you're super keen, you can click a link to where you're going to find that link. But you can click a link to join me and we can actually. I can actually interview you live now, as always, let me just go back and get that link for you. But as always, you know, these are my opinions. I attend many seminars, webinars, conferences, and read extensively across the market to actually see, you know, what is actually happening in the market. So I can curate that information and hopefully also, you know, put together for you a few ideas on where the opportunity can be for you. Because I think when we look at a lot of the information out there, it can get really absorbing and it can get really confusing as well. And with that confusion, often we do get to the extent where people do not take action. And I think that's one of the saddest things where people don't take action and is because, you know, they just, they're not too sure of what actually is happening in the market. So, you know, if I can give you some clarity on that and some confidence, I'm not going to be, you know, rainbows and unicorns completely. I do have a magic wand behind me, but I won't be waving it. There are some opportunities, as I see it, in the market, and I think, you know, we can definitely jump into those and just have a chance to see where that could sit for you. Now I'm just going to put that link into my chat on Facebook for you so that you can actually jump in and have a look. Now, this might actually create a whole new problem with going in and creating some angst, but I put it under the comment that allows you to become a guest. So if you have no questions or please post them as they come up and I will get to them. I would love to just jump into what's happening in the market, the budget, immigration story, some of the rental pressures, and a bit of a market update as well. And we will get going so that we can fully, you know, look at the market and get that information. So hopefully you will be seeing my screen here. Your Property Success Monthly Update October 2022 what is really interesting around, I guess this month is I've had a perspective of traveling to the US and seeing the extensive effect of the impending recession and in particular in la, the homelessness that has really given effect to the market. And I can see that more and more that we are really, you know, that Fortress Australia and really have been protected by a lot of what has been seen overseas and we have seen that throughout this last couple of years with COVID and everything else that's been going on. So, you know, I really look to, I guess the information that we have here and look at some of the other property markets. I often find, looking at the New Zealand property market and the way that their equivalent RBA has handled things, interesting. They're usually about six months ahead of us in the property markets, inclines and declines. And there's no doubt that we have definitely had some declines in the last couple of months in the property values. But a lot of that's in the top end of the market and we see the top end of the market move fast up and we see it come back so slow. Sorry, come back faster as well. And you know, it's really that bottom end of the market that carries us through at the moment. Doesn't move a lot up, doesn't move a lot down and it's. I've got some stats coming up but you know, it's interesting to see, you know, the first home buyers and you know, some of the regional property markets, you know, still being quite sustainable. Will they be forever? That's the question. Here's a picture of me in front of a big tree. Now this is called the German, sorry, the General Sherman tree. And just look at that, 2,200 years old and you know, just give you some perspective. We do spend a lot of time doing, doing, doing, worrying, worrying, worrying. We've got this tree here. It's been here just being, being, being for the last 2000 plus years and doing it quite well. So, you know, a little bit of a mindset spot there. But it really gave me a sense of that awe and wondering when I visited this whilst I was on retreat with my mentor earlier this month. Now, moving on, as I said, you know, I think there's some really interesting things. Last month we took into the three inflation, immigration and interest rates. Interest rates are going to be here for us and going forward to the future that we have to be aware of. It's the One mechanism at the moment, the RBA and by extension the government has it's trying to control inflation. We see that their budget has come up with a number of things and in particular I want to talk about the million new homes that they're going to start building come to 2024 over the next five years, 2029, I've got their same, same, but different. You'll see what I mean by that. And also 1st of October went by and another 10,000 places were made available for that regional home guarantee. And that's the guarantee if you or old property up to a certain threshold in the regional areas, you can get up to go into the property with a 5% deposit. Government pretty much guarantees the rest. There are some limitations. Income under 120,000 for a single, income's under a certain level for a couple, and certain thresholds of the cap on the price as well. So interesting things that are happening. And then this is the rise of the regions or is it really the retreat from the regions? As you know, I've been someone who follows the numbers over the last 20 years and I look at what the numbers tell me and I don't think the numbers lie. And I know there's a lot of conversation about investing in the regions over the last couple of years and I've been well, in particular when I do deep dives and deep analysis with my mentoring students, it has been something that's come up regularly and I've really cautioned with, you know, evidencing some of the numbers. And I think now we're starting to see that that caution had some leads to it. So without further ado, let's just have a look at the budget so that we know where this sits. And you know, they're talking about this national housing accord and they have this target of a million new homes starting from 2024. The government's going to chip in a bit of money and construct 10,000 new homes new, but are essentially they're expecting the states and territories to fund an additional 10,000. And it'd be nice to think they could get these going before 2024. The nice idea is that they're going to make zoning and planning and land releases a whole lot quicker. Now, I don't know if it's. I'm just being a skeptical person out there, but you know, I've seen a lot of these promises about building huge amounts of properties that haven't really ever come out. It's nice to think that they're going to put a Lot of responsibility on the private sector to do this. And I'm just hoping that institutional investors, superannuation funds, et cetera, you know, think that's great. But for us as a private sector, it'd be interesting to actually look at how this impending rental crisis that we have and this commitment to building all of these new properties, how the government may actually support investors. So what might that look like in reductions of stamp duty, land tax taxes, capital gains tax, whatever that might be. And just, maybe just some cash incentives that we've seen in, you know, that they've thrown around in the, in the past with like NRAs et cetera. They are talking about these private sectors, you know, and the government filling the space between market rent and actual rent for some of the social responsibility type housing parts of this program. But I think that there's going to be a lot of innovation and innovative thinking that comes up with how we can do all of this. Because we do have some constraints as well. Obviously there's some constraints at the moment on supply. There's constraints at the moment on how the costs of just labor. So there are some constraints on this whole building acknowledgement. But I think that it gives us an opportunity and great organizations like pipa, which I really encourage you to go and join, they've just done an amazing job lobbying with the Queensland government to get them to reverse their silly land tax rule. But you know, there's a lot of other lobbying groups that are really going to be speaking for us. And you know, I'd like to think that there are some innovative ways that allows investors to help plug some of this problems that we're going to have in actually housing people. And then there's this help to buy scheme, and this is a scheme too to help your home buyers get into the market. And there is, you know, an opportunity for what we've seen with the first time loan deposit scheme, the family guarantee, the regional guarantees, you know, there's a significant amount of these opportunities now with as little as 5% down to 2% deposit for people to get into the market. And there may be some more interesting schemes that come up which are, you know, equity sharing as well, which I think we will see come through. Is it even possible? I don't know. Am I a bit of a negative person on this? And I think the answer is yes, to actually build these million homes. And as Peter Wardent pointed out quite rightly in his Twitter feed, we actually have been building a million homes over five years. So you can see here from December 2014 the cumulative build up until December 2019, you know, we were building a million homes a year, but we still have a shortage. So this commitment to build a million homes a year and we're already on this shortage. I think that there is a difficulty that arises with that that we just have to be aware of. And I think that the other thing that we need to be looking at as well is that the amount of houses that have traditionally been built per year, around that 205,000 in the peak it has been dropping. And the groups in the know are actually suggesting that, you know, we do have some issues around those getting back into the level of being able to build, you know, 200,000 properties a year. So throw into that 195,000 new immigrants and we know that they're not all rushing to the floor shores right at the moment because the processing time is taking so long. But having 10,000 overseas students a week, which is equivalent of 500,000 people also asking to be part of the market. So I think it's, there's going to be a lot of pricing pressure on us. So it will be very interesting to see what, what does happen in that. And you know, I think that there's going to be, if you're in development, you're possibly going to get a lot of opportunities from developers. Developers also looking at ways that they can get in speeding up planning, new zoning, releasing of land. You know, I think, you know, we look at today the median house is well, property's like a three bedroom house. That rise of the townhouses will be something that an infill in areas, capital cities, areas close to CBD and where people need to work. I think we'll see more and more of. So let's just have a look at that demand as well. You know, we've got expats interestingly returned from home in record numbers during COVID and according to Knight Frank's Global Buyer Survey, 39% of them purchased properties when they returned home. So we also had this mass group that came home and if you buy a property, you're not necessarily thinking about going back overseas. And we had more than 130,000 international students arrive between December and March. That's a three month period. So we're talking about these immigration and all of this pressure of property rents, et cetera and the immigrants coming. This is 130,000 international students in effectively three months. So you know, this is a number that's on top of that. So I think we need to be very mindful of the Fact that we're going to be in a rental shortage and a property shortage and no matter how many promises are made in the budget, I doubt that, you know, the 200,000 a year build is going to get us there and whether we can actually get there with some of the constraints we have at the moment. Here's an interesting fact. Migrants show a tendency to settle in major urban areas where the jobs are, which is Sydney, Melbourne and Perth. So can we use the numbers of the past to help us to predict the future? I want to give you some direction here on how you can use some of the obvious numbers that will lead you to where you can have a low risk investment with capital, growth opportunity and a rental return that allows you to be nice, cover your mortgage as well as costs. So if we look at this tendency of Sydney, Melbourne and Perth now, Perth for me is a complete enigma. It's like the Act. I can correlate the Perth property market along with iron ore prices, etc. And the mining booms. I find it very difficult to do predictive analysis and analysis over the last 20 years of the Perth market without looking at the mining opportunities. And I think globally we're going to have a number of pressures around that. So I'm going to leave Perth off for now as an enigma. But if we look at the major cities that people actually go and settle in, Sydney and Melbourne. Here's some information from the census data that came out in 2021. So I was at a conference for mortgage brokers actually just last week and there was an incredible amount of information that was shared and one of the stats, let me just share like this is just a random stat that I found was interesting. But the group from Pexa, now Pecsa is essentially the online intermediary. When you buy and sell a property, you go through a PECSA platform and it facilitates almost like the conveyancing side of that. Now they have pretty much. Well in Victoria they quoted some numbers, let me get my glasses out here. But they all also do the refinances. So they're not just seeing the sale data, which is what we get through, you know, the information that comes through RP data, for instance, every month. But they're doing around 17,000 sales transactions a month and 12,000 of those are funded, so 5,000 aren't. And it's interesting that 25% of all transactions of sales are actually done with cash. People are buying with cash, you know, like sell my house and buy another one and got all the cash to do it so 75% with the mortgage. Now I find that really interesting. I didn't realize that many people were buying with cash and I found that interesting. So 17,000 sales a month that they're facilitating 13,000 refinances a month. So you know, this is, these are extraordinary kind of numbers which I kind of look at and there is obviously activity in the market and we're seeing clearance rates come down, we're seeing prices come down on those eastern states as well. And the only real exemption being Adelaide, it's not really eastern, but if we look at the numbers and go, well if we're going to invest, where would we best invest? And so for me it's around looking at how I can de risk that investment. 79% of people live on the east coast. The majority of immigrants go to Sydney and Melbourne. Of all of the people in Australia who live in Australia, 66% in capital cities, 70% in detached property. So not units and not, you know, duplexes, et cetera. 70% of families and 70% of people own, with or without a mortgage, their own home. So 30% rent. So CoreLogic research shows a typical tenure cycle for migrants being they rent and share accommodation and then they have home ownership which increases over time. So that the proportion of overseas migrants who eventually own property is on par with the Australian born population now. So what that means is we would expect over a period of time these 195,000 immigrants a year that are coming in are going to need about 50,000 houses at some point in the time they're going to own those houses. So we're going to have a period of rental and rental demand and then a period they own them. Now, depending on how long it takes them get their permanent residency, it will depend on whether they can start borrowing money to borrow, borrow to buy, or they could be one of the 25% as we saw on those stats in Victoria, just buy with cash. Now what is interesting about that is that there's some areas where you can get the points towards your permanent residency faster. And as I've discussed previously as talking to a number of immigration lawyers and agents, Adelaide is considered regional. And if you are moving to a regional area, you get to have more points sooner to go into the lucky drawer to see if you become an Australian citizen or get your permanent residency. So hence why I believe we're still seeing a lot of run in Adelaide and I was working with one of my mentoring clients in the last two months and we've been watching the Adelaide market While she's been getting ready her finances and other property commitments to buy. And we're essentially chasing the Adelaide market up. And what's come to the point of where she's chasing that price point up is that we've met the Melbourne market coming down. So I think, you know, astute or people who have been under, I guess that, you know, I guess she's under my tutelage, but under a little bit of direction of what's happening in the market. It just shows that you can actually be in a market or be in a suburb or be in a commitment to a strategy. But as the market changes and things change, you can be flexible and potentially pick up other opportunities. So I find that particularly interesting as well. So where will our immigrants live? Well, they going to want to live where there's employment and we know capital city where the employment opportunities are, is enemy needing some housing affordability. We know that Melbourne and Brisbane are more affordable than Sydney. There's going to be some indication also of where their community already is. So we know that in each city there is actually some community now. Interesting fun fact, I was talking to someone recently in the data statistics business and they were saying to me that there was areas in Sydney that were actually dropping faster than other areas. And these, a lot of these areas were where the Jewish community is because astute business people, as some of them are, they use their residential homes as ways to leverage into their businesses as well. So with the interest rate rising, there's more effect there on their funding and what they can do. And I guess when they need to be able to sell, they're selling at faster and quicker rates, having to sell rather than waiting to the market improves. So I found that interesting. And you know, just looking at where different communities, you know, live as well. So, you know, you want to be where people are familiar to you if you're moving to a new country. So it makes sense to understand that. So, you know, I've been going through with some of my mentoring students with that in particular looking at when we were looking at Adelaide, the suburbs where there was a high population of the Indian population because we know that's one of the main immigration paths into Australia and looking at those suburbs and starting to do the deep dive there. So this is how you can use the census information to actually get you a little further on in your analysis. So it's obviously, you know, we're going to be increasing overseas migration. We've got a huge amount of international students and you know, they are putting in Particular a lot of pressure on that rental market. So, you know, I think that, you know, we really, I guess know that in the next two to three years as immigration comes in, we're going to have more pressure on the immigrant in the rental market. The buildings were already in shortage and not going to come through because we're still going to have a period, at least of six months apparently of some costs associated with the market, renovations and building. So we're going to have this opportunity whilst there's still this flux, interest rates rising, people panicking where we're going to have opportunity. And as I said, you know, if we look at, you know, population growth and job growth and housing supply and you know, all of all the rental vacancies, etc. And we look at Sydney and Melbourne actually compared to others, you know, they're always just a bit above the, the other areas. So we're kind of looking at, and obviously Melbourne lost quite a few people during COVID Thanks, Premier Dan. But you know, we've got this, this kind of the numbers that validate this attraction to Sydney and Melbourne. But we are seeing, you know, vacancies coming down, which means rental prices are going up and housing supply coming down. So, you know, I think it's you, if you can find a great area within that Sydney and Melbourne area at the moment, it'd be something that I'd be looking at. And you know, we do have private investors like we are to help people, you know, have the sanctuary and security of a home. So there are, you know, 3.2 million properties that are currently being rented out. And you know, as that number Australia's population increases, we know it's around about 30% of the population does need to have to have a rental property. And the rise of the single person property or the rise of, you know, immigrations coming in, you know, this number of renters and the decline of the government owned rental properties. Someone has to fill this void and it's going to be the private investors. So hence why I think that we're going to be seeing more and more incentives for investors to get back in the market. And it could just start with something as simple as the buffer rate for interest rates reducing from 3% or 2.5% on how people are assessed. Or it could be something like some incentives to invest at the moment. For instance, in Arizona, the council there is paying people to take their short term Airbnb properties off the market and put them back into the rental market. So more and more you're going to start Seeing, you know, all of these things happening. So I think that we might see some, some great incentives that come out for investors to invest. And at the moment, in the next six to nine months, I don't know they will come through so quickly. But what we are seeing is that there is still a lot of confusion and hence opportunity. I found this interesting. You know, this month the federal government increased the permanent overseas migration threshold from a hunt to 195,000. And that's from one. It's a key policy to attract much needed skilled labor for the 500,000 jobs that are advertised that can't be filled. That equates to an extra demand for 75,000 properties per year. In their marketing pitch, where they pretend to be Santa Claus, the federal government said they were allocating a lot of money towards affordable housing. It adds up to an extra 6,000 dwellings a year is all that. That's their money is going towards affordable, affordable housing for the next five years. So. And that's if they don't sell any existing rental properties. Australia's been receiving 10,000 applications a week for international students. The education sector can't afford for those applications to be rejected. So our universities have really been hit hard and there'll be a lot of pressure not to be able to turn away those international students and they're going to live somewhere. So hence why I think, you know, the zoning, the townhouses, the infill properties are going to be more and more on the market. And you know, Australian Financial Review, all the headlines are doing it. Rising rates, immigration will tighten the rental market further. So brings me to, if anyone has any questions, happy to answer them. But brings me to my next kind of point and this is, I know I'm not going to call myself a nervous Nancy, but I know that, you know, if we are looking after our family's nest egg, we have to do that with a degree of absolute research and understanding of the strategy and the investment that we're making to protect the downsides. And you know, there's a number of ways of doing that. For me it's around the numbers and looking, talking about what's happening now, obviously in Covid and lockdowns, etc, there was a move especially from Victoria, Melbourne, you know, to Queensland and from Sydney to Queensland, but there was also a move to the regional areas and you know, someone who's, you know, worked in a lot of regional towns, Singleton, Mudgy, grew up in Dubbo. You know, I have seen the new people arrive in towns from the big circle, smoke and they don't necessarily fit in or accepted or welcomed as much. They take the jobs, they put up house prices, you know, take up the rental accommodation, especially during lockdown, where a lot of the kids were coming back from the cities as well and having to live with the parents because there was no other way. Now, what's interesting is a lot of the things that we've seen that have come out of COVID so the rise of the. The three plus zoom room house and what's been important, you know, lots of space. Michael Matusik looked at the NAB survey data and what people are looking for and as you can see here, there is. There's been a bit of a reduction on the size of the dwelling requirements. So, you know, there's been some, some things that people have been, sorry, size of allotments, but the dwellings have increased the. So the block size. There's also been a bit of a decrease on that. Having a dedicated work home and buying in regional areas. Now, the reason that I find this really interesting is that first of all, the regional areas, I think that retreat from the regions is something that we're going to continue to see, but there's also a lot of work being done of people getting their workforce back into the offices and there's a lot of incentives for people to hold office space. There's a. I think there's still like a 39% vacancy rate in office space in Melbourne at the moment. So it's interesting to see, you know, it's taking people time to get back into the offices, but I think we really will be going to that hybrid of two to three days at least, working from offices and just that interaction is so important. So that's what I'm hearing from people at the moment that is actually happening in the market. And we just look at, you know, Michael's other comments, it says it seems that many of those theoretical, lifelong changes brought on by Covid and a range of associated restrictions appear to have been somewhat temporary. After all, it's pretty clear we're now seeing rising rental vacancies and rents in a number of these regions are falling. So we're actually getting higher vacancy rates in the region. So people don't necessarily move to Shepparton and buy a house straight away. They move there, they rent. And what we're seeing now is we're getting a sense that they're actually looking at moving back to the big smoke. And that's why we're seeing those vacancies increase now. Louis Christopher from SQM Research says, I think the trend we'll see over the next six months is higher vacancies in the regional areas and even tighter vacancies and capital cities. He said, I think, I think it'll be a good six to nine months before we actually hit the worst of the rental market tightness. So what does this mean for us? Well, if you've got rental agreements coming up, you may not want to lock in another year because they're going to get tighter and tighter. You might want to stay month to month. You might see there will be people auctioning basically to get into your rental property and offering more than what you're after. I personally, with the properties that I've put up for rent recently, the rental, the accepted rental, has been 20% higher than what it was in the past. And incidentally, you know, I've got a house with a housing commission tenant in it and a year ago they negotiated the rents down but didn't have the workforce of time to actually process that. And now the rents have gone up again and they don't. And they've still been paying the higher rent the entire time. And we've asked to do some renovations and improve the property and, you know, resolve a number of issues to have that tenant leave the property and they can't actually facilitate that request two months on to actually have that, that happening because there's nowhere for the person to go, I'm assuming. So obviously we're not kicking them out, but they just don't have the time to process it. This is public housing, so there are going to be increased issues that I think we'll see out of this. But if we've got people moving back from the regions, we've got the immigrants coming and we've got the students overseas students coming as well. You know, their rental pressure is just going to be insane. So we're possibly going to say, you know, in some of the capital cities that have had twos in front of their yields over the last couple of years, we're going to see threes and possibly, you know, back to over fives in Brisbane, et cetera. So some really interesting, I guess, numbers that coming out of that as well. So let's just get on to the market update what's happening around the market at the moment. As you can see here, we've got a number of, you know, changes in the capital growth that we've experienced over the last week. I don't usually pay much attention to this, but I've told you my reasons why I think Adelaide is actually still holding well with this year to date. It's still above the average. You know, everyone else and month to date. That's where I think Adelaide is trending at the moment. And people are in good quality areas are still chasing that market up. We have seen the big ticket area like Sydney drop further than Melbourne. Melbourne didn't go up that as much as Sydney but we're starting to see, see those, those areas come back as well. Now remember, you know they are anticipating potentially a 15 to 20% drop in those significant capital city markets but they are coming off a 30 to 40% rise over the last two years. So you know it's kind of same same and back to where we were before COVID and also just look here at the listings. So new listings, there's a not a lot of new listings. New listings being these purple ones. They're all down. This is the let's wait and see factor that's coming on. You know, interest rates are going up, property markets coming down. As we can see here, not a lot of rise in Brisbane and it's starting to come off even further just recently. So we've got these three eastern cities, capital cities that you know, really people are not putting their properties on the market unless they have to sell. So you know, if we jump over to the Heron Todd White October property clock and we're starting to see this transition of a lot of these areas from the peak of the market into the declining market. And just a heads up, the yellows mean that they've just moved up or oranges from the last category. So, so we're starting to see Southern Highlands and Sydney start moving into this decline. And I've just done a comparison to where we were back in April. The Southern Highlands sat here starting to decline for quite a significant amount of time. And what's happened is Brisbane and Ipswich have actually, and Sydney have actually come back past them. So it shows you there's no actual time frame within these actual categories. So Sydney Highlands started decline quite Southern highlands, sorry mossvale etc. South of New South Sydney, Wollongong started to decline before the rest of the market. Now a lot of this Southern Highlands is like the Holiday House and the extra, extra home and the higher costing properties but and we know that they do go up first and decline first so this is not surprising. But you know Sydney's Sydney and Brisbane are going in. This declining market has really sped through. So you know it's, it's interesting to see that Brisbane was still sitting down where Were you? Brisbane? Brisbane was sitting down here in a rising market whilst in, in April and these guys started really pushing through. So this is where we are at the moment. We are moving through into this declining market. I can see that someone, Ko has just joined on. Let me know, are you keen to actually come on and ask a question or are you just observing? Okay, cool. Good, good. All right, no problem. Didn't want to lose a question just in case there was an exciting one to share. So let's have a look at the market. It is continuing to drop and I've just thrown in some stats here looking at what's happening overseas. As I said, I always look to Auckland and Wellington to see what is happening and what potentially were happening in Sydney and Melbourne, who are the major, you know, housing markets in Australia, let's be honest. And they are about six months ahead and we've started to see, as I just showed you, these declines. So we've got, where do we go? We've got these declines that are happening that have got, you know, over the last 12 months, Melbourne, Sydney down 5 to 8%. And we know that a lot of the economists are talking 15 to 20%. So that kind of corresponds with what I'm seeing here in Auckland and Wellington. Remember, it's off a 30, 40% improvement. The higher value houses up here are the ones that are being hit the hardest. The reason for this being that the lower end of the market is still in high demand for first home buyers. And especially if you remember, all of those grants, those guarantees the government's offering too. So 5% deposit and a lot of stamp duty concessions that are coming through. An example of this is a year to September 2022. Home prices at the top end of the market have lost 3.8% of their value compared to the properties in the cheapest 25% of the market which saw their prices increase 12.8%. So we always hear, you know, there's markets in markets. It's not just one market. Australia, every city is not just one market as well. So it's interesting to see, you know, what, what is happening there. And I just want to, I pulled this in this change in dwelling values. When you see dwelling values as opposed to housing values being quoted, it means that they can, they're actually combining houses and units. So it kind of looks at the overall market, but the reality is that units and houses perform differently. And as we can see the markets, the lower end of the market performs differently to the mid and higher in the market. So I Just want you when you're looking at information, just be aware of if they're talking housing or dwellings. So here's my thoughts on this. I always looking for the constraints, but also the opportunities. And you know, Warren Buffett said when there's blood in the streets, there's money to be made, essentially paraphrases him. So, you know, if I look at the cost of building and renovating, you know, it is still skyrocketing and the cost of trades. So I think, you know, just looking at reia, the housing associations, they're still talking about six months potential of these costs. I know with one of my mentoring students, his new quote on a property that he's building has gone up by 20%. So what happens is people who will potentially plan to renovate their home are looking to buying something already renovated. Now in some areas what I'm seeing is that the cost of the unrenovated house last year is now the cost of the renovated house this year. But they're few and far between. More often we're still seeing the renovated properties being snapped up because people just don't have the capacity or extra money or wanting to go into an agreement knowing that there's the costs going up. So there is this constraint. But here's the opportunity here. Developers have left the market. So I've been talking to a couple of buyers, agents and I spoke to one yesterday because one of my mentoring students was looking at buying and I wanted to make sure we're looking in the right areas. And he highlighted an area that has the biggest blocks that allow for development in the future. But they're not being snapped up by developers because the developments A can't get money and B can't develop at the moment because of the costs and the dependability of being able to actually develop and turn over their product quickly. So where we're seeing some of these constraints, there's also opportunities for us as investors. Now does that mean you have to develop? No. Does it mean that there might be some incentives that come through that we saw in those planning and zoning and land release incentives that the governments have to come up to come up with to get to that million properties they want to build over five years? I think so. So these areas potentially could be a nice, I'm going to call it a land bank, but a nice opportunity for people to hold. So looking at the areas that have the capital growth opportunities, the areas where there's going to be huge rental demand and your rents are going to go up, but also Looking at the actual block size and type and size of the blocks that allow you to potentially have that property as a development, maybe not for you, but maybe for others in the future, I think this is a real win win. Now look at the constraints of increasing interest rates. People are really worrying about their hip pocket. But let's face it, over the last two years the offset accounts, according to CBA Bank's analysis, you know, have increased more than ever. Our savings have increased so we still have this capacity to pay back. Most people are ahead on their home loans. So the opportunity here is that, you know, the current market is classed as a buyer's market. So there's, you know, the thing is the buyers actually do have an upper hand with negotiations because the people who are selling are the ones that do have to sell. So, you know, I think most people are kind of waiting to January, February to go, I might put my house in the market. And that's. We're going to have spring late this year. Our spring property market will probably hit mid January to February when everyone comes back to work. But you know, I think that at the moment there is amazing buying opportunities and just some of the buyers, agents I've been talking to and just the, some of the deals that can be done are incredible. So, you know, be very astute where you buy what you're buying, but check it out and you know, this is once again from Propertyology. Thank you, Simon. This great graphic. But you know, at the moment there's a lot of people who are worrying about, you know, obviously home loan rates and inflation and, and what's happened. And we just look historically, you know, over the period of time, what's happened in the house prices from 1970 and you know, through these higher interest rates, through up and down inflation, you know, the property prices have continued to increase and we have had GFCS and APRA squeezes and Covid. We've got, you know, working towards the Olympics as well. So there are some opportunities and you know, we're kind of looking at the median house price. Yes, there might be a little bump, come down 10 or so percent. Keeping in mind we've just gone up 30%, might come down 10% but you know, where is that future possibility? I'm not sure if it's such a steep gradient on this, it's probably more up this way, but it's tending upwards. So, you know, as I said before, there's a number of ways that you can access some of the things at the moment. I just wanted to flag to you. One of my new initiatives, your success club. I'm working with people who are in the money stories in their heads that are holding them back. One of those people at the moment who think that maybe that some of the fear and trepidation or worries and concerns are holding you back is not just about the fact that you've got some numbers there that indicate that A, you can borrow, B, you've got a buffer, and C, it's a good time to borrow and buy. Buy strategically in good growth areas with some upside of the rental yields and potential development opportunity in the future that there might be something that is just holding you back. My renovate yourself, renovate your wealth course will be hitting the market very soon. You can head over to your successclub.com and sign up for that and get a discount. It's usually 397. And for the waiting list people, I'm going to throw chuck off $100 off that. So there's that. And obviously, you know, have had a mortgage broken business for the last 17 years. Have have a number of trusted financial professionals on my team and those I'm associated with. If you do want to check out your borrowing capacity, head over to investorschoice.com and book a call and I can get one of my team or one of my network to work with you and just making sure that A, you're ready for the future and B, that any plans you have do actually include a couple of interest rate hikes, which I do expect to continue between now and the end of the year. And you know, I just want to throw this up here because it's something that I feel quite strongly about. But you know, when I look at the, the way that we can actually go through and look at a number of the things that are happening in the market and how we can actually use the framework, you know, we need to plan for the way ahead. We need to set ourselves up right. We need to know where to buy, we need to know how to negotiate it and how to put it aside with all the insurances and all the things that we need in place. You know, that framework for me is one that continues to be important, but, you know, also gives us a framework to actually just follow the bouncing ball. And my experience has been having sold thousands and thousands of property investing courses and renovating courses and talk to thousands of people about their finances and their visions is that, you know, unless you kind of have a plan of sequential steps and understand the risks and the opportunities associated with each one of them, you may just not pull the trigger. And there is definitely opportunities right now for that trigger to be pulled. And I think that we've got a unique situation that those that are prepared for the future will be preparing for their future and laying foundations for great wealth. So I. I welcome you. If anyone's got any questions, I know most people watch this on recording. Got any questions, put them below. I will jump straight into those and, and try to come back to you. But as you know, every month I have been here for the nice last nine years. A lot of people go back through. If you, if you go to the Facebook page, you'll see a section called guides. There's a whole lot of guides in the different areas and different ways that we can assist you in, you know, answering questions around dot maps and suburbs like software. But one of those guides is the last the Q and A calls as well. So I welcome all those people who've made very generous donations to the kids help line and have joined your property success club. I really appreciate it. We've ticked over now $21,750. So for every 10,000 people, $10,000, we get one trained person on the lines. And you know, since pre Covid where there was one child in trouble that had to be immediately rescued from their situation a week they're talking four or five a day and they are understaffed and kids can't wait for an hour at a time to get through. So I really appreciate your generosity and your donation to that group and I'm really proud to be associated with kids helpline and helping them out. So I see there's no clear questions. I am going to wrangle the lovely sue who has been doing a renovation. We've been following sue for numerous years who is have now just bought a home that we've had a lot of conversations about negotiation, conversations about and where to buy. And she's in the midst of renovating it and almost finished. So for those of you who are new to the club, get in and have a look at some of the questions and the journey she's been on. We'll bring her on soon to talk to that as well. But there's a lot of great information in the your property success club Facebook group. I encourage you all to get in there and have a look around. And as always, you know, here is to you and your property Success. And I hope you have a fabulous end of October and beginning of November. All the best. See you soon. Bye.