Your Property Success Mentor Call August 26-08-2021

Hello everyone and welcome to the August 2021 the Q& A call that we do every single month, as we have done for the last eight years. So it's been an epic adventure and I really appreciate you joining and I know a lot of you are in a break at the moment, maybe lunch, and you might be joining us with a few of the questions that are burning that you would like to have addressed. But I also know there's most of you are going to be watching this on recording, so a big hello to you as well. Most of Australia is currently in lockdown, so we are all in, I guess, a bit of a restrictions on everything that we can do. And it means that there's a lot of different opportunities for us to maybe spend some of that commuting time in reading and getting to know the market more. And I know there's been so many different things that have been happening throughout Australia in the last month. So since we last spoke. So if you do recall, last month we went through some of the headwinds and some of the tailwinds that are occurring in the market right at the moment. And there's a lot of opportunity, I still believe in the market. I know some of the mentoring students that I'm working with at the moment are getting very frustrated because the market seems to be moving so quickly and there's offers on properties before they've even been open for inspection. So the market is still moving. However, there's someone who's even more of a watchdog in all of this and, and that is Kent Lardner from Suburb Trends, who I will invite along a bit later to talk to us about everything that's going on in his world and his observations. He's got a brand new podcast that I really encourage you guys to get into. It's a little bit explicit, but then again, hey, sometimes someone's just got to not cut through the BS going on through the property market and tell it how it is. So I'm really keen for Kent to also show you his new, I guess, data that he is providing to the world and in such a really gracious way that we all have access to complimentary at the moment. So I'm really keen to show you that and some of the ways that he can actually read the data and some of the additional information that is shared there. So please just type in the comments box, let me know that we're coming through loud and strong. Let me know if you've got any questions. As always, I'm here to answer your questions and or at least put you on the right path of where you can get that information. Now, it's been a pretty huge month and I know that there's a lot of people who have been sending me messages and they've been really engaged in the Facebook page and there's been some really great conversations going on there. And I really encourage you to get in there and share your learnings and your observations and everything that you are doing. I might just pull up the Facebook page and just give you an idea of what's going on there at the moment. There's some really great conversations to be had and there's some really great people who are sharing their information. So I really encourage you to get in there and have a look at that. Now you can see here some of the conversations that are going on. I'm sharing a lot of the information in here about the New Zealand property market went up 25% last year. They have removed negative gearing now. You know, when we look at the property market there's always this great assumption that immigration has something to do with stimulating the market and the demand to supply ratio that we look at. But there's also a lot of, I guess, evidence now that the market is still going up regardless of not having immigration coming in and filling that spot. There's some really, really interesting conversations here about buying regionally, which I'm going to get into with Kent a bit later as well. And what's possible, you know, should you get in here and you know, with a 5% deposit and buy the best possible property you can or wait and save. So this is a really great conversation that's going on here. I encourage you all to get in there and have a chat and have a look at it as well. As you can see, there's a lot of things that are going in on in the, at the club at the moment. Solar powered battery grid. Is there a demand? What's going on throughout the market? So I just encourage you to get in there and have a look at what's happening in the market, have a look at, you know, the conversations and the data sources that are being shared there in the club and the conversations are going on. If you feel that you've got something that you can contribute, please do because we really want to see that community thrive. I think we're nearly near 2,000 people and for all of the people who have made a donation to Kids Helpline and really, you know, been able to get into the club, you know, complimentary and have access to all the your property Success Club resources. I really, really appreciate that you have made those and in some cases very significant contributions to Kids Help Club. We do have a goal of raising $20,000 and we're well over $16,000 at the moment. So that's all thanks to you guys. And I will keep this offer going for a complime access into the club for as long as it takes to get to that goal. And you never know, we might move that goal again. So onto any questions. If anyone's got any questions that you'd like to post, please do. I did get a couple of questions this week from Beth regarding owner builders and how owner builders might be seen in the pros and cons of being an owner builder. And you know, it's really, it's really a great exercise to go through this kind of conversation because there's a lot of benefits to being an owner builder. Obviously you have the opportunity to not have the builder's premium put on top of everything, which in some cases can be 20% or more. You obviously have the opportunity to be available on site and in every single decision part of the process. So the advantages of this means that you're not turning up at the end of the week to find that there's the toilet in the wrong place or their interpretation of what you wanted is not exactly the same. Now, there is some downside to being an owner builder and one of those is that lenders don't really look on owner builders that well. They like to know that they've got someone who has some experience and someone who's done it before. And you can imagine they're about to throw hundreds of thousands of dollars at you. They want to make sure that they're, they've got their investment covered. So you know, it doesn't take very long to get, depending on the state you're in, you know the qualifications to be an owner builder. But just be aware that before you go down that path that the lender that you're looking to lend through will actually allow you to do that or you might need to find a new lender. So there is some, some opportunities there to make money obviously and there is some opportunities to lose money and one of that is through lack of exposure experience. So not having a professional on site. So maybe if you're thinking about owning a building, you know, get in and volunteer with another builder, become a, an apprentice, get on the tools for a bit and just have a bit of learning around it before you actually go gung ho into it yourself. Beth also had a really interesting question around insurance and I really encourage you to go and check this out with your own insurance providers. But I know that when we were renovating properties and we had the property vacant, there's obviously a big risk of someone coming in. And you know, we've heard these stories time and time again, you know, stealing the air conditioning or the kitchen appliances that are all nicely boxed up, safe and secure and you know, having the property untenanted and not habitated with you in it either. Some insurance companies don't pay out. So it is important that if you aren't going to have that property actually occupied that you do let your insurance company know or at least know if you need to let them know. So there's a couple questions there. I don't see anything else coming through. So what I'm actually going to do, I've put together, you know, as always, a little bit of a headwinds and tailwinds and economic view of the world. Actually, you know, Kent, I see you there. I'm going to bring you online first of all because I reckon we could go through this together and have a whole lot more interesting conversation about it. So without further ado, let's say hi to Kent. Kent, how are you going today?

I'm really well. It's. Look at that, it's very sunny, you can see the sun beating in. So it's a good day.

Well, I really encourage you to go and check out Kent Suburb trends dot com. We're going to get into that a bit later because I've asked him to demonstrate some of the really exciting features that I think are really going to give us a heads up about the property market in the future. But Kent, are you interested in hanging around and, and looking at the latest headwinds and tailwinds of the property market in the last month and having a bit of a chat.

Wonderful.

Let's do it. Okay, so what I would love to do is I'm just going to share my screen here so that you can see this operating over here. I hope everyone can see that. Not quite yet. Let me do that again. Where did we go?

One second.

I'm going to share my screen.

I'm.

Going to stop my video and I'm going to stop your video and let's see if we can get this going. Alrighty, here we go. Okay, so let's just check out what is happening in the month. This is just a really quick little update from RP Data that came out last week. You Know, we're definitely seeing that the capital city home values are changing. Please butt in at any time, Kent, and have a, have a thoughts on this. But you know, we're really seeing a lot of those capital cities prices going up. We're seeing a lot of supply being gobbled up really quickly. There's a huge amount of demand and you know, there's some really great, I guess, indications that this is going to be ongoing. We just look at what the experts have been talking about and they're definitely talking about the fact that they're seeing there's some longevity in the growth, especially in the capital cities that will go through to the end of 2022. Now we know that there has been some lockdowns and some tailwinds on this, so it's really interesting to see how that might affect it. But Kent, are you hearing as well that there's some really great opportunities out there?

Well, for me, about six months ago there were some murmurs and people predicting that it was petering out. And I openly said I couldn't see the data supporting that argument. So I think that was more anecdotal or wishful thinking. But for me, the leading indicator for most of the capital cities, most of the markets that I measure down to what I call a statistical area 3 or the ABS calls it, that the inventory levels were plummeting. Still plummeting. And so we've got so many markets now. And to your point, Jane, they're tough. They're very tough. They're very, very low levels of inventory. So there are offers being made and people trying to gazump left, right and center. So it's a very hot market. A lot of that's been driven by a lack of listing. So again, this macro data is highlighting that as well. But right down to a suburb level, we're finding that listings volumes are at year on year on year record low levels and just plummeting. So I think there's a couple of key things, I think prices, I can't see any let up in this, this crazy level of pressure based on that leading indicator of inventory levels.

It is interesting, isn't it? And I think the thing is that it's just going to keep going at this stage. We're just not seeing any, anything letting up. So you know, bring that on and let's see, you know, what that looks like going forward. I just wanted to jump also over to your point there, Kent. You know, geez, time on market, vendor discounting. We're seeing some real changes there as well.

Right, yeah. And I think the metric that we like to look at is obviously the trend line. And if you expand out and look at capital cities, look at regions, look at the suburbs, you're finding that time on market or days on market is trending lower and lower. So a couple of key things drive prices and the trend of some key metrics. The trend itself is a driver of price, but equally where it is now. So, for example, if you've got a high level of inventory and that's trending down, it's that lowering that trend over time, pushing prices up, irrespective of where that level of inventories. And the same thing happens with days on market. So you may have a market that might have started 70 or 80 days a year ago and is now trending down and down and down. That slope of that trend is another thing that's driving prices up.

Yeah. And I think the interesting thing here is we're having a chat about this yesterday in the mentoring, and one of the gentlemen was saying that he watches the trends of rents going up. So as rents go up or the yields go up within an area, you know, investors start getting in there and prices start going up. But. And then it's kind of like it's done. Is that something that you see, you know, as a generalization as well as an indicative of an area going up in value?

Yeah, it's really interesting. I'm seeing a couple of things that. And again, I'm not too old to keep learning, and this year's been fascinating because I started this year of the opinion, a little bit too, of a mono opinion of inventory levels. That is, every market, the prices behave the same way in terms of inventory going down or vacancy rates going down. And that was, I think, an oversight on my part without understanding or appreciating the nuances between markets. So what you have is some markets that vacancy rates go down and then prices go up and you follow it. But that rate of change of prices going up, whether it be rents going up or whether it be inventory levels going down and sale prices going up, those prices change market to market and have their own. Their own distinct flavor. So I think that's a key thing. But I am finding that to your point about the investors, they're actively chasing cash flow, they're actively chasing inventory. So you've really got these two schools. You've got those who chase capital gains first and cash flow second. And then you've got those that are looking for that more balanced approach or looking for cash flow first. And so what's happening, there's online forums and I think what's driving a lot of the demand into these pockets that suddenly flatten out that cash flow yield is the fact that there is a pylon. People start to talk about or identify a given area and say, let's go, let's go to Adelaide, let's go to Perth, let's go to regional. So I think the online forums are actually creating a bit of group think as well.

Yeah, to that point it's really interesting, isn't it? Because I think we have this kind of conscious bias when someone starts talking about, oh my goodness, Darwin's rents are going up and then all you see is information about Darwin's rents and it just, it's a confirmation bias. Right. And so we start feeding on that and I find it really interesting to kind of get that 10,000 foot view and go. And because I consume a lot of webinars and reports and you know, like you do newspaper articles every day and I try to find patterns and it's interesting when you, you kind of get interested in something, you go down that rabbit hole, right?

You Google it, right?

Oh yeah, this is so true. I had just found the best opportunity and no one else has seen it.

Well, I'm working with a number of buyers, agents now and what's been fascinating is listening, just opening up the ears and the eyes and hearing their different approaches to it. And some of them don't have many years experience, but they've got a very unique approach. And that's the thing that fascinates me is that everyone's got their own unique take on how do they use census information or how do they use data in different ways. So they're looking at things quite differently and they're finding different opportunities for their clients. So it is fascinating because there is no one set magical formula or one set magical piece of data that gives you all the answers.

No, I wish there was. Maybe, maybe that's something that you can build into subway transfer.

I thought that, see, that was the point. I over emphasize just one metric of inventory and obviously the other one being vacancy rate and treating that as a catch all for supply and demand, which it is. But what then you've got to do is say there's another dimension of that is how that interacts through time. Prices move at different levels and that's where all of the new layers of complexity and unique to each area where that comes in. That's my new learning, even though I'm.

Old learning every day. I definitely can tell you I'm doing exactly the same. Right. So let's just have a look through, you know, Heron Todd White. As I've said, you know, I try to look at as much information every single month. I'm encouraging you guys to join Heron Todd White's free newsletter. They've got thousands of valuers out there. 70% of valuations that are done are not done for sale. So they're getting an insight that we don't normally get to. To say. So I really love their reports. I really interested also in their property clocks. Just from a kind of a movement, really. You know, if you see the yellows, it means that they're moving from the last stage up to the next stage. And I've got a really interesting slide coming up from Michael. Always get it wrong, hopefully. I never actually have to introduce him anywhere, but he's got a really interesting idea around property clocks as well. But more interesting, it's. There's no set time frame between these different, you know, peak of market down to starting declines.

Yep. Thumbs up for me.

Yeah. And I think we all like to think that, oh, you know, I've got some time because it's the bottom of the market, we can go bottom market to top market very quickly and then we can come down the other side very soon low. So I don't know. That's been my observation over the last 20 years. You the same boat?

Yeah. My view on this is that a unit and strata markets follow a greater cyclical pattern because humans are involved and humans can dictate supply. And I think so where you've got an area where there's access to greater supply, that human element comes in and it becomes a cycle. But houses in areas that aren't surrounded by greenfields or don't have a lot of access to. Turning the dial on for pipeline supply, I'm arguing with. I haven't read Michael Matusik's view on this, but my view is some markets don't follow the clock. And specifically those are the markets that don't have access to that turn the dial on for supply.

Yeah, it's interesting, isn't it? And the other thing is, this is an extraordinary clock image here. Everything's in a rising market. And that's to the point of what you've just suggested. What we're seeing, the economy economists are talking about, the banks are coming out going, we've got another year of growth. And I'm still having conversations with mortgage clients every week that say, I think the market's peaked. I'm going to stop. I'm like, when was the best time to plant an oak tree? 50 years ago and today same about buying property. Don't delay guys, because I think you'll see here there are some headwinds we need to be aware of. But also if we do it in a low risk way, there's some great opportunities for all of us to jump into. Look, you know, the biggest news since we kind of met last month was Brisbane. They got the Olympics. I'm going to go into a little bit more about that. And obviously we've got most of the country in some degree of lockdown. I was just lamenting with my husband this morning that I think the escape to Port Douglas I'd booked a couple of weeks ago for us to do at the end of September may be off the cars if Chairman Dan has something to say about that today. But it really has constrained a lot of people and working from home and you know, putting a lot of demand on our front line and we just need to be aware of that. And I think some of the enthusiasm that we're seeing and have been seeing in the media about the spring market may come back a little bit. So let's just be aware of that. And you know, I think that we need to be really realistic about what that means for the Brisbane property market as well. And I'll share a little bit of that with you. I've attended quite a few webinars. Terry Ryder did a fantastic webinar this past couple of weeks on this. I think the biggest thing that I took away from the economic opportunities in Brisbane was that, you know, Brisbane pretty much was the shoo in to win the Olympics based on the fact that Olympic Committee said that they didn't want it to have a huge economic infrastructure burden on the country that had to take and the city that had to take this on. And Brisbane pretty much had all of the infrastructure in place. What's interesting to see that there is some economic benefits and obviously the Lord mayor and politicians are going to be talking it up. But the reality is from, you know, my reading of different reports, articles, analysis, etc. Is that tourism is going to be really boosted around the Olympics in 11 years time. Foreign investment, but particularly in hotels and that type of investment will be something to watch for. And all of the infrastructure, there's a lot of it that's needed for this and we've been given a extra time period to be able to achieve it. Most of it was on the cards already. So there's no extra real infrastructure that has been generated by this. There is obviously going to be a lot of activity in Brisbane, but also the Gold coast and Sunshine coast and all the way out to like Springfield Lakes and where the new women's AFL stadiums and all of those things are as well. So there's some talk about, you know, it's kind of perpetuating this entire area being one big mass rather than, you know, three or four different areas, which will be interesting to watch as well. And I think, you know, just looking at all the analysis, you know, we've got PID did an analysis on the Sydney Olympics, the Brisbane G20, the Expo 88, you know, and what went on there. And I think the really interesting thing around that is that there was incredible growth and opportunity in the build up to these events. Post the events, there was nothing. So if you've got like a 10 year investment timeframe, potentially there's some great opportunities. If it's a 20 year investment timeframe, my concerns would be 2.3% has been the 10 year growth of Brisbane over the last 10 years. And I think it will probably settle into that. There will be some opportunities in the next couple of years for growth while people who are potentially a little uneducated will be getting in and driving that opportunity of investment up there. But you know, when I'm looking at this stuff, you know, I'm definitely seeing the analysis that shows post these events, post Sydney Olympics, post Expo 88, there wasn't really all of the property market gaining any momentum that could be carried forward. So the run up is really that period. So just another couple of comments. You know, John Lindemann looked at the before the Games, you know, what the expectations were and what, you know, who was going to benefit around it as well. Unlike say the G20 and the gold coast development, people don't have to go and rent in the Gold coast and move from Brisbane to the Gold coast to do the infrastructure work, the tradies, et cetera, they can stay at home. So I don't think we're going to see a huge amount effect on the property prices as well during the Games. Obviously short term accommodation, Airbnb, still nothing that's really going to generate property rises. And after the Games, you know, we're not really expecting to see a whole lot more either. Now tell me, have you got some thoughts on the Olympics and what that means? Ken?

Yeah. So I was asked to do a couple of articles for Courier Mail on the topic. So the first one was the comparison to Sydney, which is the obvious thing and what we found in Sydney was that was a period where we went through about 2 1/2% decrease in interest rates. So we saw, you know, every quarter there was movement. So for several years just kind of went on forever, interest rates going down. So that was a big catalyst for the, for the market picking up in Sydney. I think the second key difference with the Sydney market was the fact that it was 20Ks out at Homebush in an industrial wasteland. Whereas what we've got in Brisbane is very different. It's in effectively in the gaba, in the epicenter of the city. So I think that the differences and benefits for Brisbane I think are significantly bigger than they were for Sydney. And equally we had a lot of unit markets in and around Brisbane that were soft about 3, 4, 5, 6 months ago. They're starting to improve quite rapidly, especially those that are well positioned along the river there. So we've seen some immediate benefit already in the unit markets where people say oh I feel confident now, so they're coming back in. So I think there's a couple of really key things. The other interesting thing is a lot of eyes were on Brisbane anyway. So people exiting that, you know, coming out of Melbourne, bypass New South Wales, go straight into Queensland. And I think if you were a first home buyer, you would not want to be in Sydney, you wouldn't want to be in Newcastle, you wouldn't want to be in Gosford because you're not going to have much change from 700k. Whereas if I go up to buy in Brisbane, I've got a lot of change from 600k still that's drying up. But if you were buying a house as a first time buyer with a young family, I would rather be in Brisbane.

And even those that are trading up, you know, I know friends are selling their properties in Melbourne for 2 million bucks, putting a million in the pocket and buying a nice million dollar home in Brisbane. You know, it's across the market. And as I said, you know, I think to your point there is that short term kind of surge and we just need to be mindful if we're long term investors, what's that look like on the other side? So, so let's keep our mind open to what's happening and let's keep reading all the information because I'd like to think that some people could be out there making a bit of money too. Let's just check out just a couple of the, I guess, you know, headwinds that We've got, obviously there's some thought around the fact that we're going to have less population than we expected. I've got a comment around countering that a little bit later. The pace of the vaccine rollout is going to be a great impact to when we get back to the new norms and how the lockdown impact is going to affect us as well. We talked about all this last month. The China trade tensions and the new economic disciplines that are being put in on the Chinese nationals in their own homeland, on the three prongs of what they need to do to contribute to the greater good of everyone is having huge effects. And, you know, I think we just need to be watching that. There may be the opportunity for at some stage the high net worth Chinese immigration to really, really come back in Australia when, you know, the borders open or come back as big investors. And we did have 15,000 people last year granted that special economic visa because they're going to spend over a million bucks in Australia and invest. So let's just keep watching that as well. So we've got some great tailwinds. We went through most of these last month. But, you know, just to remind you, we've got, you know, some really good expansionary policy settings for the government supporting us. Low rates still. Low rates will still probably be maintained. It looked like New Zealand was about to put their rates up last month, but the latest Delta outbreak out there had the Reserve bank keeping them on hold. So let's just keep watching them. They're usually about six, six months ahead of what happens in Australia, only when it comes to interest rates, not when it comes to other things, in my opinion. But anyhow, let's not talk about that. I've got a Kiwi husband who's very happy about the All Blacks winning. The bled is low for 19 years in a row. Moving on. So we've got strong balance sheets. There's that optimism around our savings. You know, there is the speculation that at least until the end of 2023, we're going to have low rates. The Reserve bank is kind of wobbling around those dates a little bit, but we've got a few years of low rates, which is good to see. Low unemployment. Now trading partners are really rebounding strongly. I'm really keen to see the spring season come back and I'm interested to see the lockdown booms do continue. Now, just a little interesting side note to that I did have for my mentoring students. Kylie Davis from the Prop Tech association join us last Sunday for the full Day and it was really interesting to hear her thoughts on some of the conversations she's having with some of the new prop tech companies that are coming in to disrupt the real estate market. It's always good to be ahead of what's happening. But she's been talking to a lot of these agents around, you know, the perception that you do need to have a live auction to have the enthrall and the group momentum to actually get the result that the seller wants, that's obviously been proven very wrong. What they're saying with three to four people would be actively bidding in most auctions when they're doing it online. At the moment, the intel is that there's up to eight and quite consistently six to eight. And another interesting little piece of information from the people who are running these auctions is there's a lot of drunk bidding going on. I don't know, what's your thought about drunk getting their kids a thing? Right?

I, I wouldn't recommend it.

Sometimes you need to ease the stress.

Just buy two houses, it's okay.

But apparently there's drunk bidding. And the other thing that they're saying is that, you know, rather than like the, the partners, you know, standing in a huddle trying not to let the real estate agent hear them go, just another 5,000, they're putting themselves on mute and they're having an open conversation and you know, it's actually giving a better opportunity to slow the auctions down and actually make more considered bidding. So prices are still going up. Online auctions are here to stay. If you've seen any of the walkthroughs that some of the real estate agents are doing with properties because you can't actually visit the properties. Some are better than others. But you know, I think we're going to be stuck in this kind of online auction experience for a while. And I don't think it's such a bad thing. It's, it's really. People have the ease and comfort of being at their own home and especially when they have kids, rather than someone having to think about, you know, the kids running around, etc. You've got the kids locked in from the TV, hopefully whilst the, the adults can start playing monopoly money and buy themselves property. So let's watch that. I was going to share this. I find this really interesting. The property markets around the world, if we look at the growth and the stimulus and the rebound, as you know, from about April, March, June through to June last year, you know, there wasn't a few there Wasn't a lot of data that I could present to you on what the markets were doing. China, obviously the uk, us, Italy. But now, you know, we're starting to get more and more information through about, you know, the markets and the stimulus and, you know, what's happening with the house prices, you know, year on year. We've definitely seen that Australia is not Robinson Crusoe. There is being a huge amount of growth that is happening post lockdown or as we get more comfortable with the new norm. Our housing market has just gone hit 8 trillion, as I said. Michael, give me that name again.

Kent Matusik.

Matusik. He has this interesting thought about where the market's going in the next 12 to 24 months as well. And I really appreciate his insight here. But as you can see, he's definitely looking at a large amount of growth. Now just note that these little ones over here with the star are actually represented over here. So don't think they're at the top of the market. They're over here. So it's interesting to see some of these regional centers come off. And I'm really keen to have a chat around regional centers with you a bit later, Kent. But you know, I know that there's a lot of talk about, you know, the rise of the regionals. Well, they may just have had their day, but let's have a bigger look at that. Historical trends. This is amazing. 140 years of data that can kind of show us, you know, after every stagnation, the growth and you know, where that's going. And even when they start making this real time, you know, numbers, it's quite extraordinary when we start looking at, you know, the fact that when there has been no real growth post that period, there is more growth. And we're definitely on a growth trajectory at the moment. Really interesting modeling that shows house prices follow finance. We know the investors are back in the market. We know the first home buyers are retreating. But the investors are not at that level that needed the ASIC and APRA to step in only a few years ago and start putting on quite constraining macro prudential kind of restrictions on lending. So, you know, at this stage we're not at that high level that is really marketing any real concern. And this is really interesting, Hakan, this is where he's thinking prices are going by September, housing finance, all the indicators are just going up and up and up and showing these annual changes in dwelling prices increasing somewhat extraordinarily. So, you know, as I said, New Zealand market's done 25% in the last year. He is definitely predicting that there's going to be some considerable upswing going forward. So, you know, I think there's some really great information there. It's some really interesting information for us to look at as well. I think that. I don't know, Kent, it just seems to be there's a lot of buoyancy and positivity in the market. Is that what you're seeing with your numbers?

Yeah, I'm seeing some markets being challenged by an upswing in listings and they're meeting that demand quite well. So probably the first one that I'll focus on when we go into the software is I'll pull up Gosford and that particular part of the world which represents a very. A regional area that's still kind of. Well, they classified as part of Greater Sydney, but it's that first step for a lot of families exiting Sydney, wanting to get out and they're going in. And I think that's a really interesting one where we've seen some increasing listings and it's met that challenge, I. E. Inventory levels are continuing to go down and prices are continuing to go up. That's not the case everywhere, but by and large it's still happening across the regions. There are other regions where regardless of how much they've been challenged, their prices have been 3, 4, 5%. So there's not a lot. Been a lot there. And again, it's a similar thing through a lot of the city areas. So it's not one market, it's not greater city, it's not great in Melbourne, it's very different, but markets are still performing very differently across Australia.

Well, look, let me now formally introduce you. Ken, I appreciate you jumping in on the presentation so far, but I mean there's probably not a data company you haven't either worked for or owned over the last 30 years, I reckon. So what have we got? JLL, CoreLogic, Genworth Price Finder. Obviously you're a director on Price Finder for a while, CoreLogic, again, you've worked for some of the bigger research companies. You have now come to the market with your own product. Suburb trends tell us a little bit about that and, and how and what you're doing with it. And yeah, I'd love to jump in and play around because I think there's some amazing tools in there that aren't easily found anywhere else and I love some of these predictive tools that you have. So over to you, tell us about it.

Yeah, so what I wanted to do was to kind of own my look at that Gartner magic quadrant. And I wanted that little bit of white space up the top that was all my own. So really my aim with Suburb Trends was to create something that could be viewed as the most trusted, valued research tool available and free, so I could own some unique white space. Because it's hard to compete in any space, right? You got to work hard, you got to get eyeballs and build trust. So my view was, can I create that particular product and monetize it a different way? And the way I'm monetizing is I'm bringing in buyer's agents to sponsor suburbs. So the idea is this. You go in and you do your research and you find a location that you like because of your own criteria, your own research. You land on that suburb and you're presented with one buyer's agent. You may or may not call them, but you know, there's, there's a greater chance you'll, you'll, you'll recognize that buyer's agent through the research. So that's what I'm looking to do.

And I just have to say, you know, because I know when we started talking to beginning of the year and you know, there's, you know, no one works for free. You've got to put food on the table, especially when you've got screaming kids, you know, using up our bandwidth, remote schooling. But you know, the fact that there's a way that you can present this data for free for, you know, everyday man so that we can get out there and get the information, make really considered property decisions in our purchasing, I think is just fantastic. But also the way that you're actually doing it is actually introducing people to buyer's agents. And you know, at the moment I can't. I know that you're at a disadvantage unless you are using a buyer's agent because a lot of them are seeing off market opportunities. A lot of them are, you know, got networked around the areas that they know, so they know the agents there and they get a heads up. But more importantly, you know, just having them as negotiators on your side, they're in every single day negotiating this. And you know, us poor clumsy fools, we turn up once every 10 years to buy our own home, right? Usually. And you know, we're trying, we're going up against these master negotiators. So just having someone with that now and understanding the vocabulary of what an agent says and what they really mean on your side, you know, the Prices for buyer's agents range from 7,000 to $20,000 on average. I know people are paying 2% and buying $6 million properties, so they're paying 120,000. But, you know, there's a. There's a huge range, but it just gives you the introduction to someone who has some expertise in the area. So I really appreciate the way that, you know, sharing this information with us, but not just sharing it, introducing us to, like, the trusted people. Because I know you've got a rigorous kind of process you put your buyer's agents through before they get associated with suburb trends that allows them to, you know, offer a service as well. So thank you for doing that. I really appreciate it.

You're welcome. So, yeah, so we've got the software. Would you like me to launch in?

Okay, wait, I can't wait.

So I've got to do the share screen button, I'm guessing here. So I hit the share screen and I hit that, and I hit share and now I go to there. Can you see that?

Okay, yeah, I'm going to put that there. So we've got you in the bottom corner and I'll turn it off when we get into something exciting that you cover your face up.

Terrific. All right, so on my landing page, if anyone goes in, they'll see this particular screen. There's three particular tools there. The first two here are hidden behind a registration. It's still free to join, but that's the way I'm building up some members. And then this particular tool's out in the open. So let's have a look at that particular tool. So the first thing I wanted to do, there's a few features to it, but what I'll do is I'll focus specifically on the suburb level. So what you've got, when you do a search for a given suburb, you'll see that it's focused in and it gives you the satellite image. And the reason why I like the satellite image over and above street maps is if I'm going into some of these regional areas or regardless of where you are, you can quickly see how much potential supply there might be by how much green space there is around. And you can kind of quickly determine if it's a national park or whether it's privately owned land. So satellite image you can click and view and go across the different suburbs. So what are we looking at here? We've got a data panel over the side here, which is a snapshot of the suburb, a very quick summary and then we've Got these icons above the top. I'll quickly go through and explain what I'm displaying here. I display here the asking price. This is the median asking price. The reason why I've selected asking prices. If you're looking at that particular suburb now, I wanted something that was the best current reflection of what to expect if you start searching in that particular suburb. So that's what that median asking price is. But I use sold prices and you'll see that in a moment. In the next tabs, I quickly then tell you what that price was a year ago. Now, I don't like to use suburbs and the trend of a median at a suburb level through time, because a lot of the time you'll find. And I'll show you in a moment, especially for a suburb like Wombura, which is a couple of beach suburbs up, most of these suburbs don't have a distribution, a price distribution that is acceptable or normal enough to rely on if you're tracking price change through time. So I've dealt with that a different way. What I do is I aggregate it, something called a statistical area. 3. I'll come to that. The second thing that we present here is the number of listings. This is just the average amount of listings you would expect to see on any given day. Now, it might be higher or it might be lower than that on a given day that you look at it, but that's the average that we are calculating so far. That should seem pretty straightforward. This is where we start to get into the more abstract stuff. So inventory is a measure of how many months of stock there is in a suburb. So, for example, if no other seller entered the market, if no other property was listed for sale ever again in Terrigal in New South Wales, it would take 1.62 months to clear out everything available for sale.

So essentially means that if I take the total listings now of 22 and I divided by 1.62, that tells me how many sales are happening a month.

Pretty much, yes. Exactly. So what we've got is, you know, the simple example I do is, you know, if there's 50 listings and 10 are selling per month, 50 divided by 10, five months of inventory. So typically, what we want to look at here is what that is today. Is it below three? If it's below three, that's a very, very tight market and I'd call that a strong sellers market. The other thing I like to look at is what was it a year ago? And is it trending lower? Is it becoming tighter, or is it starting to Move away from sellers back towards buyers. Now what we're finding across the country to our discussion earlier on is so many markets are looking around down at this very, very low level. So it's an extraordinary situation. Same thing again presented for units. And then down there at the snapshot, we're looking at vacancy rates. What I do with vacancy rates, I measure how many properties are still advertised after three weeks and I express that as a ratio of how many properties are managed by real estate agents in that suburb. And that gives us our percentage. If you're below one, you're in a crisis, you really have very few available rentals.

Just a heads up here guys. You know, back in the old day where we used to have like the prediction reports that came through from John Edwards at Residex and we all kind of love those and to Kent's I guess, commentary a bit earlier, you know, there's that group think he was really worried every time he put out that report that people just ran off to the first three or four properties or suburbs and buy properties there and self, you know, perpetuating kind of predictions there that the market goes up. But we really haven't had on the market, you know, over the last five or six years some type of way to predict what can happen in the future. And what I really love about what we're seeing here with this inventory stock is that Kent's actually putting what that prediction or what that should look like in 12 months in the future. So we're actually getting some indicative information. We can see where the trend line has come and is it going up or is it going to keep going down? And this is really key for you to be able to quickly get into a suburb and you know, run suburbs against each other and be able to see, well, where is there more opportunity. So yeah, loving this, thank you.

So I do that with machine learn. Sorry, pardon me, I've lost my voice. I used machine learning to forecast that and I'll be supplementing this with something called a growth score. So the growth score will be giving you the actual, what I predict to be the actual monthly change in median price. So that's on its way. And right down the bottom there is the local buyers agents that sponsor and keep the business running. Thank you very much. The next tab across is a snapshot in text format. So I use a machine effectively generate automated text here and you start to extract a little bit different information here. It'll tell you what the area that it belongs to, it belongs to the Gosford SA3 and it explains things in plain English. So days of market, we spoke about that earlier on. So at the moment 20 days, sorry, 20 average houses sold per month. Days of market 24. But that was 30 days a year ago. So we can see a big trend there. So that should be fairly self explanatory.

One, just one more time we talk about SA1 being the smallest statistical information in the census, like 200 homes.

Yes.

SAP is what, and then what's SA3?

Yeah. So the statistical area one is give or take about 200 homes. It's the smallest area that the census information will be shown to us without them worrying about privacy. So the next tier up above that is called an SA2. So they all fit together like Lego blocks. An essay two is about two to three suburbs big and by and large that's pretty good statistically, but still not enough for me to rely upon for a nice shaped median distribution. So what I've done is I've experimented with the SA1s and suburbs and postcodes and SA2s and I've arrived after all these years on something called the SA3 designed by the Australian Bureau of Statistics, designed specifically because it's statistically sound. And that's what I'm using for all of my key metrics. And you'll see that in the next icon across.

Great. So SA2 is a couple of suburbs.

In general, SA3 is in most cases you'll find an SA3 in some areas, like a Newcastle is very, very closely aligned to the local government area. But if you go to Brisbane, for example, Brisbane's one massive city, large lga. It's so huge, suddenly it's blown the whole use and purpose of an LGA out of the water. Because Brisbane's not one housing market. So if you use the SA3s, you're suddenly carving Brisbane up into seven or eight SA3s.

Got it?

Yeah. So it does vary to location, to location, but by and large, you know, SA3 is about 350 of them across the country. And as you get into the less densely populated regions, the SA3 is larger.

And can we be with some confidence look at your predictive information around SA3s and get down to the suburb level. Like can we go? Yeah, I should be buying, you know, Breckenridge over, you know, Stafford for instance, in Brisbane.

Yeah, so what I, I'm doing a number of different supplementary reports to talk about that. So over, over the course of the next few weeks you'll see some more and more reports where I focus on comparing the region. So what I like to do is really look at market trends at that region level. And then for a lot of the, the, a lot of the bas that I train, I actually coach them to do their analysis and selection of at a regional level and then go straight to the suburb. Sorry, straight to the properties and then do their DD after the properties float to the top that meet all the numbers. So it's region property and then the suburb comes into that DD analysis. But what you're doing is you're not omitting stacks of individual properties because they didn't meet your suburb level filters.

So and that due diligence that the buyer's agent is doing, you know, once they've gone through that filter, then they go into what does the suburb justify the purchase end as well?

Exactly. Because you might find that, you know, all your metrics tell you that the yields are too low for a given suburb so you ignore the suburb. But what if, what if you find a property that's the right price that offers you that yield?

Great. I love it. Very counter to what I do. But it's really good because sometimes you just have to, sometimes opportunities come up or sometimes we do analysis and you know, we get down to a suburb level and you know, the person I'm working with engages the buyer's agent goes, well, there's something that's just come up in the next suburb and rather than saying an absolute no because it didn't turn up in our suburbs, like, well, let's have a look at it. And why, why does it justify our attention?

Exactly.

Is this working the other way? Which is fantastic.

Yeah. And it's just, and as I say, I talk to bas that have got their own nuanced approaches and it's all good. Everyone's got their own different approach. That, that's just my approach.

Yeah, I like it because the thing is, is that we can be flexible. Right. It's not like anyone's right or wrong. Like I've got 150 property books on my, my, my cupboards. I know everyone has got, has only writes a book when they've been successful and there's like 150 different strategies. So always, always willing to learn and try something new.

Yeah. And my approach is purely by the numbers. So I just, I just let the numbers start speak for themselves. So that's the text based summary which should be felt fairly self explanatory. This is where we start. I track this and present this at the SA3 level. So what you'll find is by me measuring at the statistical area 3 level for things such as inventory listings, volumes and prices, they are smoother, they're less volatile than they would be if I were doing this at a suburb level. So typically what we're seeing across the country at the moment is a similar trend here where inventory levels have fallen below 3. So 3 is probably the point at which it goes from being a seller's market to a very strong seller's market, very biased towards someone selling because we know that the competition is extraordinarily high. What we've also seen across the country is that heavily correlated to this, which is really, you know, decrease in listings. And my theory has been all year is I need to wait and see this uptick. I need to see listings volume increase to see what then happens with both prices and inventory. We need to test and see if this is purely supply driven or primarily supply driven, which I still have to argue with, you know, year on year on year having 10% less listings. A lot of these prices are being driven by the fact that we just don't have enough stock. So that test, one of those tests, has been a pretty good test for this particular area. And we can see here that, yes, listings have gone up, inventory's gone up slightly, but boy, they're still extraordinarily low and we can just see prices continuing to rise. So again, this is for that Gosford SA3. We've gone to 920 now as a median for that broader area. And right back at the start of the year we were 8:15. So it's been extraordinary growth. And I think I calculated up here as a percentage and I think it was 21%. So you know, who, who would have thought that we'd have so many markets that could be above 15% year on year change?

And just tell me if we've got a strong seller's market at inventory. Three is it three to five is the seller's market five to give me just the range?

Yeah. Then five to seven is at what I call a balanced market. Seven to nine then starts to become a buyer's market and over nine is a very strong buyer's market. So what you'll find though, the last 12 months have been very offered a lot of insights in terms of some of these trends. What I found is it's wrong to assume that prices can't go up in a market that might be considered a, a buyer's market. The reason why I'm saying that is it's the trend. So it may have been 13 or 14 or 10 months of inventory a year ago. And it's still, you know, might be at seven or eight months now. But it's that trend down that's driven prices now. These markets haven't boomed. But what, what it's wrong to assume that just because it's seven or eight months of stock now or seven or eight months of inventory now that prices wouldn't necessarily go up. What really is important is what's the trend? What was it six months ago, what was it a year ago? So again, the slope of that line is the key. Unit markets have been interesting across the country as well. What you'll find in a lot of places where housing markets where people are being squeezed out, where inventory levels are extraordinarily low, you can see the crossover where people are starting to say, I can't afford a house or I can't find a house combination, both. And they're entering the unit market. So it's really interesting. We're not seeing these types of charts in the cities. Obviously there's a lot of pipeline, high pipeline supply still in cbd. There's a lot of high levels of vacancy rates. So very different unit markets in pockets throughout the CBD areas. But unit markets in a lot of these regions have been very interesting. Right, next one's, same thing, SA3, but again, looking purely at rents. And we can see some massive changes in rents as you can see here, which, you know, great for an investor, not great for a low income family. Units have been a little bit flatter. And again, that's kind of the story of units. I just think units. You know, you mentioned earlier, Jane, that 10 year growth rate. I think it's an important variable to look at to say, you know, what's the long term trend and how much growth have I got if I invest in one particular asset class over another.

When we were looking at these vacancy rates yesterday, it struck me that the numbers here weren't the same as the written numbers. Is that because the written numbers are based on SA3 and this vacancy is based on the suburb.

Correct. So this one's based on the SA3 and the other one is talking to the suburb. Correct. And that's stuff that I can, I'm listening to everything you're saying so I can improve the way I word that, those sentences or paragraphs.

Right.

So yeah, so this is the regional trend. So whenever I present anything at a trend through time, I'm doing it at a statistical level of significance. That is the SA3. And again you can see so many of these regions sitting below one, which is alarmingly low. And then what.

I'll tell you something, an interesting way that we were using this yesterday was it frustrates me, right, because at the end of the period of census data, you start losing confidence in the data that's coming through. And we're looking at the suburb of Brunswick. Now the three bedroom house is the typical property in Brunswick in 2016. But I know there's been unit developments and I know that there's been, you know, all of these different developments that have been going on and it's like, is it still the typical property? Is this the most in demand property? And so it was. We were using suburb trends to go through and we're looking at where you're going to next, which was the planning data because it's, I mean normally we had to go to five different sites to bring all this stuff together. Right. So we jumped into the planning data and we're looking at, we're going, okay, you know, how, how many plans have been approved for units or townhouses and how does that reflect to what the houses were? And it was a slight degree of frustration going, oh, it only goes back two years. We really want to go back to 2016 and see if there's been this change. But what it did give us was this amazing insight that we didn't have before and easily to look at and go, oh, look, there has been a lot of changes or a lot of approvals.

I like to look at this and at the same time I would look at inventory so that, you know, this is another thing that's driving pipeline now when even though that might be going up, the numbers are quite low. Yeah, you don't have a lot of land, there's not a lot of pipeline supply in and around the, the Gosford area. Whereas if you go out to a lot of the, the tree change locations, some of these numbers are extraordinarily high. Especially if you go to the out out outskirts of Melbourne. Some of those areas have massive pipeline approvals, you know, 1, 2, 300 massive. So yeah, so I think that's an important. So you really don't have a lot of pipeline supply at all in that Gosford area. So that's how I look at it. And another dimension on this data is to say, well, if you're a renter, there's not much reprieve for you. Where is the supply of rentals, affordable rentals? There's not, that's not there. So there's Going to be no let up in rental pressure.

How would I find this piece of information? Let's just say that, you know, we're looking at median price over a period of time and it's obvious that, you know, it just doesn't seem right. For instance, currently the median price seems to be a lot lower than what's the reality or it's indicated that it was high and the trend line's coming down. But there has been a large amount of stuff stock come on the market through a development or through a, you know, house and land area opening up etc, and the price has been affected by that is, I mean it goes to the point that you should always look long, you know, look at the trends, look at long term rather than just individual points in time. But can you pick up that information?

You can, you can drill down to pipeline approvals at an SA2 level. So the one level below that. So if that's if you want to look at. So you know we're looking at building approvals here, this is at the SA3 level to tie it all together to my SA3 level charting. But you do have access to the ABS does make the approvals data available at the SA2 level. Okay, so there's one more icon to show you. This is my favorite and this is my favorite. Now what you'll find here is this one's a fairly normally distributed, reasonably normally distributed especially for a beachside suburb. But the reason here is all of this stuff is commercial up here. So there's not a lot of beachside. But if you go up, up the road to, to somewhere like Wamboral, which is the next suburb up, you just click on the map you can navigate up and I go across to this look at the distribution of Wambora. Why? Because all of this stuff down here that's residential.

Three million dollar homes.

Yeah. So they're your three million dollar plus homes. And then you've got this market over here that sits on this side of the highway. That's your second market there and then the rest. So you've got three suburbs in one this side of the highway. This side of the highway but not walking distance to the beach and here beach views or beachside. And that reflects your three price distributions.

You're able to determine correlate where those different areas are based on your knowledge of the area. But how would a person looking interstate know?

I would recommend the best thing you could do is you'll get a handle for it. If you looked at say if you went to rea and domain. You could do this for free. Pull up the map and look at the sales on the map. So they do have sold maps. And you'll quickly determine, you know, by the time you look at three or four houses that sell down here on a map, and then three or four houses that sell here, and then three or four houses that sell here, you'll get. You'll get a feel for that very quickly.

Actually, you know what? One of my mentoring clients had a. Had found an article and I'll post it below this. But this is. Who's this from? Let me just think. It's from realestate.com Can I just share this for a second?

Well, I'm done. I finished the.

I don't want you to leave yet. All right. So I just want to show you this. So this is just an article. Prestigious Australian suburbs with affordable pockets. But what I really like about this and how we hack things is if we bring up that one barrel, we can see that the price points from now, this is where everything gets dodgy. So the Data is from September 2020. Right. But it gives us a reference of different parts. So I gather these are SA1 levels we're looking at.

Yeah, that does look like an essay one.

So if we cover this up. Thank you. Jackie taught me this. It'll actually show you the. Where the more expensive areas are and what those medians are in those expensive areas.

Well, why I like this. It doesn't necessarily matter that much that it might be dated by six months or even 12 months. Because it's a relativity measure.

Exactly. And that's why I kind of. I look at that and I look at the price segmentation, because I think that's pure genius, what you've got there, because I haven't seen that anywhere before. And so it gives us an opportunity to be able to look at what's available and where the areas are. And sometimes there are, you know, less affordable areas, but then there's the ones that are, you know, the in demand and that segmentation. Now, I think if we have a look at your map, which would be more realistic than this one, when we do have these areas over here, not on the beachfront, that are the ones it would be going back to. And I'll just share your screen again. It would go back to what you've got, which is get your. Your screen up. But that's probably like the commercial area. And there's one property that's been shown, you know, being sold or something. Like, it's not like it's the, the typical property in the area. Yeah, it's probably like there's just one great big block that's been sold.

Quite expensive, I think what you'll find here. And I did speak to Linda and Michelle about this particular suburb and they instantly gave me insights as to why. So, so this was the, this is kind of goes to the heart of what I'm trying to do. And they kind of really painted a very clear picture as to why it was, was. I think the right approach is that they could explain to me the fact that these were large lots. They could explain to me, you know, what the building approvals were and they could explain to me the limitation or the constraint of pipeline supply for units because of some quality issues. And a lot of the building approvals in and around the central coast for units have been on sub standard lots. I couldn't tell you that from the data I have access to.

And I think that's why this is so important. We look at that price segmentation tool that you've got there, we can't get that anywhere else. And we're playing with, you know, we're trying to find links and that's why I don't post these in my courses anymore because they change all the time, right. So it's around and you never know how the data is. And you know, there was a great tool, microburbs, years ago, but they're still using 2011 census data. It's like, what? And so, you know, but this price segmentation, it gives you an idea when you're out in, when you're reading, you know, the median house price is, whatever it is, $900,000. And then all of a sudden you're in the market and you're like, but everything's going for 1.1, this is 1.2. Just being able to use this tool and go, okay, give me the spread. So I know what's really happening here and what my realistic expectation is. If you're going to do all the work yourself, you need to be doing this data. And then there's the shortcut, which is go and speak to. Who is it Linda?

Yes, Linda and Michelle.

Guys, you know, the buyer's agents who can give you that information straight up. So this is how I see, you know, using buyer's agents in a really clever and direct ways. Do your research, get your information and have the questions and then, you know, go and interview the buyer's agents you're going to work with. And he's obviously someone who you've got a heads up, has already got some intel and knowledge and experience in that suburb and, and ask them the questions and with the confidence they're giving you, you know, it's a no brainer to engage those kind of people to go and work on your behalf.

Yeah, and what I'm doing is I'm giving them. So the onboarding is a slow process because I've got to give a fair bit of training to the, to the buyer's agent so they understand everything that we've just gone through. But then they've got that level of insight that just goes so much deeper. So you know, teaching them on the data and the nuances of the data, their level of understanding, once they grasp what I'm trying to do, they have that on the ground experience that takes it to an entirely different level.

I know, I love it. It's a shortcut, right? Shortcut. Well guys, I know there's a few of you there. If you've got some questions, please shoot them through. I know Kent would be very happy to answer them. Look, we just, I'm just so delighted that I'm going to put the suburb turns my, my groovy little crawler up again. But I'm so excited that you pulled this information not just together and obviously your experience of working with all the different data companies over the years, you know, you've got the, the hands on intelligence of what works, what doesn't work, what the data means and you're having that kind of thoughts and you know, considerations while you're building this. And I just love the price segmentation and the inventory and hopefully this growth score can't wait.

Yes.

Before I let you go, would you mind just showing your, the two other sections that I think are fantastic in the software as well because I think that, you know, there's some extra, you know, just quickly just going through it, there's some extra intel that people can pick up. There's a cash flow report right There is, there is. Now I look at the great feedback you're getting here.

Oh really?

Oh yeah. Amazing. People are so excited that you're building it.

Great, thank you. I'll show you. I think the main one I might just focus on is the, is the cash flow clusters. I think that's a, that's a, you might like that one. So I'll just go to. Oh. Because I've got it hidden behind the paywall. So I'm going to just struggle for a minute here. You're going to have to forgive me.

Everyone okay.

Because I can't do this in the. I'm in Chrome and that's the problem. I've done everything in Safari so I'm going to have to just do a quick little dance for a moment. So forgive me.

Can I get, can I ask you some questions? Can you multitask?

No. Well, I'm chewing gum at the same time, so. Man.

Because I do love your price rank houses, but I don't understand, understand the color code.

No. Well, that's because I've got to do a bit of work to make it a bit clearer. So please don't look at it because I've done a bit of it.

I won't bring you up on screen. I'm just looking at my other screen.

They're going, oh, yeah, no, I'm, I'm not going to be. I'm not ready. I didn't prepare to do the demo.

On the other stuff. So I'm gonna, I'm throwing you under the bus.

You throw me out because everything's in Safari and I'm locked into using the Chrome browser here and I just didn't prepare. So I'm sorry everyone.

It was actually a sneaky maneuver on my part. So I can invite you back to show us when it's ready.

I'll get it all set up in Chrome next time.

No, that is so good. Well, look, you know, I really do appreciate you coming along and chatting to us today. You know, I think as far as I'm concerned, information and data is the source of that information is the power that we have as investors in the market. And as you guys have seen, you know, we've got headwinds, we've got tailwinds, we've got opportunity out there. It just, it blows my mind that, you know, there is so many transactions going on which are essentially just people moving house. Right. First time buyers aren't the getting out of the rental market. Going the house into their first property is not the biggest part of the market. It's people trading. So we're just seeing a lot of people just moving house.

Yeah. And moving areas. I think they're moving from suburbs that they're familiar with and they're moving to entirely new regions.

Yeah, let's have a chat about that. The regional rise. The regionals, you know, five families leave Melbourne and no one notices. But if five families turn up in Dalesford all of a sudden, it just hits the economy. So what's, what's your intel, your analysis? What's happening is rise of the regional still A thing.

It is a big thing. Look, it is big. And so I, I did this 15 years ago. I moved out of Sydney, Balmain in the thick of it and I moved up to Newcastle. We already had a house up here. So I've been watching and I've been being one. You know, I've been one of those people using Zoom and you know, Skype and whatnot for 15 years and now it's becoming the norm. And every post that I see or every article I see coming out of the demographer Bernard Salt, he's talking about this, you know, 1 million plus people who will be working from home. So what am I observing up here? That people are coming up from Sydney and they're just putting an extra 200k on the table above the upper limit of what I would put on a price for your price range for an auction. So there was a property nearby that I said at the most it would go for about 1.2 and someone came along and put 200k on top of that. And this is normal because they're getting sick of that travel.

Yeah.

And I think with every time there's a lockdown and every time we have a different level of understanding of how dangerous this virus is. I think that this, this movement to space or this movement to fresh air and getting out of high density is just driving people into these types of regions. Now Newcastle is becoming higher density but it's never going to be a Parramatta type density. So I think the regions have still got a lot of, a lot of good future because of this horrid virus. And I think equally though people are always scared of that move because of jobs and now that we can work from home, I think there's a whole class of people who say, look, I know it's, it's not a great career move because I won't be the boss because I'm not in and I'm not going to drinks on a Friday night and doing all that stuff. So I miss out on that. I know that, I acknowledge that, but I'm okay with that. So they change their perspective. They look at a quality of life, quality of house, a room to work from, from home. And I think this is a big thing, this is not just some passing phase.

I think so too. And you know, when I'm normally doing like the low risk analysis in suburbs and you know, looking at the 2016 data that's saying, you know, three bedroom house is the most typical property, it's now, well, let's also include four bedrooms in There too, because people are getting more comfortable about working from home. I do, you know, my, my kind of theory on the, the move to the regionals. I think most people who still need to have that visibility to their bosses for that career progression are going to have to be in that 35 to 45 year old kind of age group. They typically have kids and thinking kids going high school, they don't want to have their kids at, you know, Shepparton High. Not that there's anything wrong with Shepparton High. You know, they're thinking of, you know, we want to be in a good catchment area for the kids to have the high school that they can go to. However, you know, we're probably going to go into another couple of months of zoom high schools and you know, that may change as well. And I think it's about just being flexible and looking at the, you know, what, how will this change the way that we work? And I think that more and more, you know, having some extra space makes sense. And you know, I'm looking at a lot of these very, you know, these 3D printed little granny flat additions and studios. I think we're going to see some real, a lot more of those pop up as well. And you know, I'm talking to a lot of people about the little homes and you know, having a cabin in a caravan park equivalent or having a collective of, you know, friends and family who actually have a block of land and have, you know, separate little residences they can get away to if they need to. Like these are the conversations that people are having. But you know, if I put my, where is it my mortgage broken hat on, my mortgage broking hat on. The, the reality is that I'm not talking to many people at all who are talking about tree changes, sea changes. People are buying and they're buying and they're, they're looking at the opportunity to buy now, make hundreds of thousands of dollars in equity in the next 12 to 18 months in their purchase decision rather than renovating the kind of property they've got at the moment. So, you know, I think there's some real opportunity out there and there's some really exciting things that we could be watching, but it is a watching brief and you know, we just have to be watch the numbers, watch what human behavior is doing as well. And you know, when, if we get out of these lockdowns, you know, are people going to come out and start spending money and getting, you know, back into life and, or they're going to be a little bit Hesitant having, you know, lockdown number six or two or three or whatever.

The extension is losing count. I think the biggest driver though, even though, you know, Covid is a big thing and the desire for a bigger house is big, the. This price movement that's happened in the last couple of years is probably the single biggest thing that's pushing people out and in the pursuit of affordability. So, you know, if I'm a 600k budget buyer in Sydney, I'm. I'm left to a town home or a unit that. That's it. Now, I, I tried to find some suburbs that I could buy for under 600k for, for an article a few weeks back, and I found about 12 suburbs each with one or two properties in each. And they were awful houses. They were. And they all needed 100 or 200k spent on them. That was Sydney. So I said, okay, look, I'll find some. Up in Central coast, it was the same. I couldn't find anything. So I think there's this spread in pursuit of affordable housing and that's the biggest driver.

Well, it's interesting, I was speaking as part of our process that we assisted our client journey with our mortgage clients through, you know, after they've kind of had their borrowing capacity done, they get a strategy call with me. And I ran that algorithm Yesterday for a $650,000 purchase price with a 4% yield across all of Australia. So I did all of Australia first up at 650,000 with our criteria, you know, less than 3% vacancy graded, 30%, renters, etc. And we had 190 suburbs came out over all of Australia. And then we started looking at. And in Sydney there was like two. And then as you say, Central coast, there was a few, Newcastle, a few more. And then all of a sudden you get to Victoria, you got Ballarat, you got Bendigo, you've got Geelong, you've got, you know, Werribee. Yeah, we take Werribee and Melton off all of those house and land package places go. But I think there was about 20 in Sydney, sorry, in Melbourne, you know, two in Sydney, 20 in Melbourne, and obviously a whole lot more up in Sunshine, Coastal and hinterlands and Gold coast. There was a few and a few around Brisbane as well. But, you know, it really shows you people in New South Wales, they are very limited in their pricing. And, you know, I guess we're seeing that and the fact that people are getting a little frustrated being, you know, in lockdown and being stuck at home with the kids and Two people trying to run businesses or, you know, they're their. Their jobs. You know, everyone wants a little bit of space. So I think it's a watching brief. So. And I know, I see this is Zosha. They're saying, hey, guys, from Realify. You know, it's interesting. It's just, you know, there's all these incredible new opportunities for proptechs like Realify and other companies coming up that are allowing us to look at a different way of buying properties and are looking at a different way of doing the analysis.

So.

So it's good. Things are coming out of it. It's a little frustrating.

Very good.

Well, thank you so much for joining us today and spending so much time with us. It's been so good. I love what is happening in Suburb Trends. Now I want you to give us a plug for that podcast as well.

Oh, it's very rude. So there you go. That's my disclaimer. And warning. Advanced warning. It's called the Suburb Trolls. I'm doing it with a fellow by the name of Mike, Mike Mortlock. Now, Mike runs a company called MCG Quantity Surveying. So he's a. A numbers guy with a really wicked wit. So the way we've settled, we've settled into our two personality types. I'm kind of become the more loose guy.

Yeah.

And he's the guy with the mixing deck. And he's a little bit better spoken than I am. And he hits the mute button whenever he swears. So he doesn't. He doesn't sound like he ever swears. Whereas because I'm remote and I'm not next to him, I drop the nasty words every so often and they get through to the keeper. So I'm coming across as the larrikin, but we're having a bit of fun.

So. And let me just show it. So, Suburb Trolls.

The Suburb Trolls. Suburb Trolls. You can find it now. You can search for it on Spotify. You can search for it on Apple Podcasts. We're up to our fourth show. We're about to. We've recorded our fifth. That's. That was recorded yesterday. And what we do is we troll suburbs. And then what we do is we talk to an interesting, fun story about the suburbs, and then we wrap it up with some property information.

Oh, here we go. Australia's worst behaved property investment podcast. Like, hello, how could we not say yes to that? So I'm really interested to. And I'm gathering that the suburbs that you're profiling aren't always the nicest suburbs.

There's a very strong theme of crime and drugs and, you know, shit canning suburbs. But equally, I do pick out some hotties every so often. So I do some, you know, hot or not. So I do some hot spotting type. There's a lot of potty humor in it. It is a race to the bottom. And we promise that every show will be worse than the last one.

Oh, my. Oh, my. So good. How could we ever say no to that? Right? Well, look, thank you so much again, Kenda. Really appreciate you joining us and joining me so early as well. So you could go through some of the headwinds and tailwinds of the Australian property market. I guess there's one thing that we can all take from this and that is that the data doesn't lie. And it seems to be good times for all for at least a while to come.

Yeah.

Okay. Thanks a lot, Ken. We'll speak to you.

Thank you. Okay.

And guys, thank you so much for joining for the August Q and A session. Not a lot of questions this month. I appreciate you, Beth, and some of the others who sent me through some of the questions. I hope the questions that you posed for us on regional Australia got a little bit of insight there. I'm giving you a whole new tool that you can go and check out as well. And please do that. And as always, here is to your property. Success. All the best now, bye.