Your Property Success Mentor Call May 28-05-2020

Hello, it is Jane and it is May. And this is your. Your Property Success. May. Q and A call for all of our clubbers. I hope everyone has been hanging tight and staying sane during these crazy, crazy periods. Now, just before we kick off, I would love for you to let me know that you can hear me and you can see me. Please type a comment in so that we know that we're coming through. A live action and clear for everyone. Just want to make sure that everyone is getting the most important information because I really don't want you to miss out on that today because there is so much happening in the world that I am dying to tell you about. And I do know that a lot of people also have a lot of questions and I want to make sure that we are answering your questions as well. So I can see that we are live. I can see that there's some people here. And if you are new to your Property Success Club, maybe in the last month you have made a donation to Kids Helpline. Thank you so very much. We are like $120 off making $11,000 donation to them. And if you have a chance, please head over now. Which direction am I pointing here? But head over to the unit section and go to module 10 and check out the 15 interviews that I did with experts on health, wellness, parenting, home, everything. Hey, Sharon, it is great to see you and lovely that you have popped in to say hi as well. Now I think Siri's about to talk to me, which is always a bit of a worry. Hey, great to see you. Hey Sharon and everyone else there. It is so nice to be able to reconnect with you. As you can see, I am coming live from my. I don't know, we call it the reading room. We're trying to inspire my son to read. As you can see here, my green screen has been converted into a reading tent for him. I don't know what you guys are doing at home. How are you? How are you keeping the children sane before they go back to school? We've got another 10 days here and I have to say, counting down. Counting down. Well, as always, we are having this Q and A call to answer any of your questions. I've had a few questions sent through. Now. This is the first time in eight years that I am doing this solo. So John and I have managed to do this from when we were traveling, you know, and away and zooming in, talking to each other and, and to you guys and answering questions. So bear with me. There is usually a disclaimer that we kick in here insert. Now, just know that, you know, I'm not an accountant or financial planner and can't always give you all the information that you need. So please take this information as general information. I will talk from my experience, from the experience of thousands of people that I speak to over the years, and also from some of the experiences that I have been through in the last couple of months with my mentoring clients as well as my mortgage clients as well. So it is so great to see you all here. Here. If you would like to talk to us, then just click on that link so that I can see you with the comments issue that's up at the top and I can see your name pop up. But it's so lovely to have you here. Now, if you have any questions, please pop them in because I would like to be able to address your questions as well. It has been a really big month and I don't know about you guys, but there's been ups and downs and I've just, you know, stopped reading the media. At one stage we were looking at, you know, 15% unemployment, 30% property price drops. The next instance, there's all this optimism that people saying the market hasn't changed and there's not going to be any problems. So what I'd like to do today is share with you some of the insights that I have been able to glean through some of the reports and some of the economic updates that I have been privy to that are often available to the public. And I'll be sharing some of those in this presentation. But I'll also be copying in some links and some reports that I think you might find interesting. Now, first and foremost, if you are like me and you're sitting at home and you're working really hard, there's an assumption everyone's hanging on the couch and watching Netflix. I don't know who those people are, but if you are still working hard and but you've got all of these, you know, webinars and calls and information and courses and things that you need to be doing and watching on replay, here is a quick hint for you. Go to your Chrome extension. There's a Chrome extension called a video speed controller and what it does is on every video in Facebook as well, which is fantastic. It just puts a little controller at the top and it can speed things up to double time. So do that. So in the next hour, if you want to fast forward to things, you can. And it makes it easier to listen. I find it fantastic. And it has changed my life. Now if you have any questions, as I said, please pop them in. I'll address them as they come through. But first and foremost, I really just want to share with you, I guess, what I am seeing in the market. If you've seen some of the posts recently or if you're an Investors Choice mortgages client, we've spent a lot of time in trying to get people safe and secure with their current lending and cash flow so that they can go on and really deal with any of the health related issues to COVID 19 or employment issues that they might be facing. So we've had some extraordinary response to the pricing requests that I have coached my mortgage clients through on how to do. Now normally as a mortgage broker we would negotiate this for our clients, but we're finding in COVID 19 there is a quicker and direct route to go to your lender yourself. So I want to give you some of those comparison sites or comparison banks that you should use because if you ring up and just say, by the way, I would like a cheaper rate, they're going to go. So sad. Not really interested. And you know, to be honest, there is a bank loyalty tax that you pay. And we see this time and time again when we talk to the mortgage clients and they say, look, I've been with expense for so many years, I know the bank manager, they got to look after me. It doesn't really matter that my circumstances have changed that much. The reality is circumstances are, have changed quite considerably. And I know, you know, we go into bat for people day in and day out and the risk teams that, and compliance teams that govern a lot of the policies and decisions that the banks are making are actually tightening up and things are getting harder and harder. So I want to give you some clues on some of the finance things so that you can save some money. Now, some significant savings that we've been able to see that our clients have been able to do by making that call and asking for a pricing request. And essentially what that is is calling up your incumbent lender and having the information with you about a lender that's comparable to them. And I'll show you some of the lenders a little bit later. But when you do that, you can say, look, my mortgage broker has said that X has actually got a cheaper rate and wants me to move. I've been with you for so long, I'm just wondering, is there anything that you can do? And that's when they go away and do their magic. Now this loyalty tax is a real tax that people are paying. And that is, you know, you might have set your loan up years ago and, you know, like me, I'm like the plumber who doesn't have, you know, has the washer missing and the tap stripping. I know I looked at my own lending recently and, you know, got a 2% interest rate saving from a variable to a fixed and a 1.9% from just asking for a saving from a variable interest only to a variable variable interest only. So still interest only, still variable, and just asking for a good 1.9% off. So this is how you should actually ask for these requests. You know, so have a comparison bank that you're comparing against. You know, let them know you want to be loyal. They don't want you to move. It takes three times as much effort to get a new client as it does to retain a current one. You're on a rate that was probably, probably set years ago. And there's more discounts that they're offering new clients and incentives. So I know we've been refinancing some people who have just been really keen to move to Access Equity. It's been the right move for them to change banks and they're getting up to $4,000 cash back by moving. So, you know, there are some incentives out there as well. Now, that brings me to a question I had this week. It came through privately through messenger, because the person doesn't really want anyone publicly to know that their circumstances. Circumstances have changed somewhat. So I'm just going to share my screen here and you should be able to see this now. So what I've got here. So this is just a little update that I do. I'm just going to turn off my pretty overlay there, a little update that I do for my mortgage clients every single week since COVID started. And this is for week 10 that we're up to at the moment. Look at what the lender appetite is now. This week, it hasn't changed that much. The week before, I had it as a six. You know, there really was a lot more scrutiny going on. There was a lot of changes happening. You know, this week we've had Anz increase their fixed rates, which is just seems ludicrous because everyone else is bringing them down. And one of the reasons behind that is that they're doing that because they're seeing so many new clients coming into their market at the moment that they just can't handle the volume. So they're just trying to turn off the tap. We've seen Macquarie bank drop fixed rates. We've seen Adelaide bank who was one of the three only lenders that we had on our panel that it allow interest only for 10 years drop back to a 5 year interest only period. So you have to be reassessed after five years. So just in case you want to know, the other two lenders are ANZ and Resimac are still doing 10 years interest only. And that just means that you get to park your loan for 10 years without having to think about it switching to principal and interest. Okay, so let me just go to this question. So this was the question that came up and the person's situation has changed somewhat so they can't necessarily go back and refinance to another lender. And so she says, look, I want to renegotiate our interest rates. We are coming off a fixed rate in advance loan in about three weeks time with one of the big lenders. Currently they only offered us the standard variable or fixed. I know that new borrowers can get substantial discounts. Here's the loyalty tax off the advertised standard variable rate with the big four. But it's hard to find out what these are unless you are in the broking industry. We currently have other loans with me standard variable with offset. I noticed that ME have dropped their rates for new borrowers so I want to go back to them and try to secure some rates for us. Knowing the rates that they're being offered at similar types of banks will help me with when I go to negotiate. Therefore, are you able to discuss what rates you are currently getting for new borrowers with which banks? Big four investment standard interest only with offset and principal interest and banks similar to me. Now this is the insight that I've been trying to share with my clients recently is that you have to know that there is different categories of banks. So for instance, if we're talking about cba, anz, NAB and westpac, the big four banks, you should only compare against one of those. If you are with one of those big four banks, as she's indicated, she's with one of those big four banks. Now if you went to CBA and said hey, you know, I notice that Eubank is offering 2.5% for principal and interest owner occupied less than 70% LBR, they're going to go, yeah, we're not really going to match that. They don't have branches, they don't have the overheads, they're not the lender to compare against. But if you went to them and said hey, I Noticed that Anz has this really great crazy rate going on. I'm about to jump. My broker wants me to go. They're about to give me $2,000 just for moving. What can you do? You can be hearing them typing on their typewriters and trying typewriters, laptops and trying to find a good rate for you. So this is why it's important. So I just wanted to share with you some of the rates so that you can see this. So that comparison against the big four bank and it's CBA that she's with, so over $250,000 worth of lending, principal and entrance with offset. These are the really good rates that we're seeing at the moment in the market with Westpac 3.54 and NAB 3.66. So if you're with Westpac, for instance, you might quote NAB. If you're with NAB, you'd quote Westpac. If you're ANZ, you'd quote Westpac. If you're with St. George, you'd quote Westpac. But beware on that. I'm just going to show you one other worry and that is right now, westpac, if you actually went to one of these lenders, this is how long it is taking them to actually assess new loans. So for a pricing request, hey, what can you do for me that can go through pretty much immediately takes 10 minutes on the phone. Usually I did it for myself yesterday. But if you're actually going to go through with your threat and jump to Anz, for instance, because they've got this great money back that they're giving you, just beware that this is what could happen to you. You could be thrown out and it could actually create some angst for you in trying to be able to refinance. It could take up to a month or so. Okay, so just back to this. She's also said for me, bank, what's the comparison? Now this is the next level of where you would go to do a comparison. So she' with me. So the lenders that are comparable in size and infrastructure, we've got BanQuest and ING. So BankWest has a few branches, but that was where we would compare it. So for her owner, occupier, parent, principal and interest with offset compared to bankwest. Now if you were with banquest, you might be at the lowest. You can go and have a bit of difficulty in getting a lower rate. But your ing Compare against BankWest. If you're me, compare against BankWest. And this is the typical rates that we'd see for owner, occupier, principal, interest with offset, Bank West 2.73, ING 2.83. Now, Main bank comparison, owner, owner occupied, sorry, Investment, principal and interest with offset. The Bank west is 3.24. So we notice that 0.5% kind of difference between investment and own occupied and ING is 3.24. Really good rates. So just so you know, you know, if you're with the big four banks, we've got anz, nab, westpac and CBA compare against each other, you're at the next tier, ME Bank West, ING. Here's some of those figures. And if you're at the next level, AMP and Macquarie. So with Macquarie compared to amp. AMP compared to Macquarie. So that's the kind of criteria that you need to do. So we're talking about picking up the phone, not ringing the COVID 19 hardship line. You know, that's. We've covered that in our previous meeting, how to deal with hardship and some of the implications. But what I want you to know is that this is, this allows you to pick up the phone and say, hey, you know, Mr. CBA, I am currently being chatting to my broker. They're really encouraging me to move to another lender. They've been putting 3.54% on the table with Westpac. I'm currently paying 4.5%. What can you do? And let's just see what they do. Now, here is my big warning here and this is what we're hearing is happening. When you do that is they say, hey, did you think about fixing? Now, this is a really, really big question because all of a sudden they're offering you maybe 3.54 for your variable rate with West Bank. Now they might be offering you, I don't know, 2.9% to fix. Now I've got a whole ebook here. I'm going to attach it for you to have a look at later. Fixing rates and should you chase the rate? Two questions to ask. With the fixed rates, there are some reasons why this is just not going to suit you. So fixed rates, for instance, if you're thinking about fixing for three years, if you actually sell the property within the three years, then potentially you're up for an economic break cost. Now, that could be tens of thousands of dollars. If you're thinking that you might have some savings or an inheritance or a bonus coming in. Now that would be in an offset account. So maybe rather than fixing $300,000, you fix $100,000 and have $200,000 for that big bonus or inheritance. So when that is against your interest only loan, you're not paying any interest. If you for instance are thinking about renovating or building a granny flat or subdividing or any major changes, you actually might be at your limit of lending with the lender you're at. So you have to refinance to another lender to do it. Now if you've got mortgage insurance, that might mean paying mortgage insurance again, it might mean paying that economic break cost. So there's so many things you need to take into account when you're thinking about, you know, fixing your rates and you know, if you're picking up the phone and they're saying, you know, I can give you the pricing discount for you, but to think about fixing and you're in any doubt, please head over to us investorschoice.com bookatime and we will definitely take you through some of those assessments etc because you know, I think it's, it's a big decision and often people make it this decision willy nilly without knowing what they're doing. Having said that, I rang up my bank rams yesterday, mortgage broker should be doing her own mortgage broking, right? And said hey look, I noticed my fixed rates coming off. You're throwing me onto 5.33% for an interest only line of credit. What can you do? And they've gone, you know what? We can't do anything. And I couldn't. I didn't have a comparison for that type of lender. That was something that was, you know, the type of loan that I had got when I had got it. We all know way back in 2006 and 2005 they were throwing out load up loans and assessment criteria was a whole lot different. Handy to have a 30 year interest only line of credit back then and pay a little bit more. But I did ask was it possible to fix now. I rang up last week, I said yeah, 4.14. I was like okay, that's really good. It's a lot cheaper than 5.33. I rang up yesterday and they said actually because of the loan that you've got, you can have 3.13. So I've gone from 5.33 to 3.13 fixing some of my lending. Now I have other loans obviously with other investment properties that have available rates against them with offsets. So I don't have fixed for everything. I would definitely not have all of my loans, you know, so that they move to principal interest at the same time or all of them. Fixed or all of them variable. I know over a 30 year study they have found that it is always been in people's general interest. If you're a general mum and dad with a mum and dad mortgage to have a variable loan not fixed. There's like three occurrences over three weeks within the 30 years that if you had fixed at that rate, you'd be better off. So I know that with all the economists in the bank that, that's, that's, you know, they know what they're doing and they're fixing based on either getting market share or making some money. I get that. But for some of us with some different, different types of loans, it could be in your interest. For others who just want that sleep of night, you know, kind of, I want to lock this in for three years knowing that my monthly repayments, $1,000, this could suit you. So regardless of whom you are, this could be something for you. So, so I'll put those links down for you. But just to reinforce that this is a really great way for you to make a savings. Now I did mention that we also did some strategic kind of repurposing and movement for a client recently saving her $72,000 a year. Now let me let you in on how that worked. There was a three step process. First of all, we got the pricing request, which is great, lower interest rate compared against a different lender, and got that through. Secondly, they'd actually built this property as an investment property and it was funded as an investment property. So the rates were actually categorized as investment interest rates at least 0.5% above. So they've decided to move back into that property, keep it, at the moment it's a home. So the interest rate came down another 0.5%. Now here is, I guess the benefits of knowing the difference between different types of lenders. And that is CBA has a unique way of how they calculate their monthly repayments on interest only loans. If you've got money in the redraw, if you actually have money in the redraw, they actually move the monthly repayment down to the monthly repayment as calculated on the balance, not the limit. So what that actually did was further reduce their cash flow. They had a significant amount of cash, obviously it was a significant sized loan, as you can imagine, but that reduced a lot of interest. So that was just extraordinary. But other mortgage clients have contacted us and over the last 10 weeks, you know, we're up to over $120,000 in savings for them by just using this pricing request. So consider pricing ringing up your lender to seeing what you can do. Fixed rates, there are some really great rates out there. If you're investors choice clients, make sure you give us a call and we can talk with you. Or if you'd like to become one, just go to investorschoice.com bookacall okay, so moving on, I want to make sure that I also have a chance to answer any questions. So any questions have come up? Nope, nothing's popped through at this stage. So I'm just going to pop on and keep chatting. So now another. And so we've talked about the delays. If you are looking at purchasing at the moment, just be aware that there are these huge delays that are going ahead now. One of the reasons westpac is so far out is just because their hardship policy policy actually involves them checking out and talking to all the people who apply for hardship. So we've got over 1500 people. They have to ring back an interview. Now most of the other lenders don't have that policy. What they do is have you fill in a form online or have a chat to one of their admin people. You can have a long wait for that. If you do have any concerns about hardship, please go to investorschoice.com hardship and I've got a list of all the lenders that you can contact there. And you know, just know that, you know, you can, you don't have to, you know, delay your repayments for the entire 12 months or six months. You know, some lenders actually extend the term. Some lenders just make sure that you pay back the, the interest that you should have PA in the six months, in the next six months. So just work out, you know, what, what the effect could be. You may just negotiate to pay half of your mortgage rather than, you know, none of it. So just know that there's a lot of different options there. Okay, so got no new questions coming through. So I'm going to run you around some of the things that I am seeing at the moment in the world at large. So I monitor a lot of the international real estate sites as well just because I'm a nerd and I like to. But one of the things that I'm looking at is how long it's taking the countries to respond post Covid and post lockdowns. So we can see here in China, you know, they pretty much their property sales dropped completely because no one was let out of the house. But then they started coming back within 30 days and you know, by the beginning of May they were actually back to this 100% mark, which is compared to 2019. So they're actually made a significant recovery. If we look at Italy, eight weeks after lockdown, they started also seeing new listings coming on, which is really encouraging. If we go over here to the UK once again, you can see that this demand has come down really considerably. You know, the sales then, you know, people browsing, usually people start browsing and then we start seeing sales. But we've actually seen these new listings coming on as well. So this is really, I think, you know, we've been now in lockdown or 65 days. As yesterday, as you saw the top image, we had the announcement that the auctions and inspections are open in most cities now. So we're starting to see this turnaround now. These are two measures that I'm seeing that some comment traders are looking at because clearance rates are really not worth a damn at the moment. Let's face it, if there's 100 properties on the market and 70%, 70 of them clear that 70%, if there's a thousand on the market and 700 clear at 70%, we know that the market is very low at the moment. There's not a lot of stock, so those percentages don't mean anything. This is interesting. This is what anz I was on one of their economic updates. They weren't going to share their slides but I happened to be able to screen snap these. You can see here, this is. They're watching the search so dwelling prices, you know, they've seen go up and down. This is over the last 13 years and then they started seeing this search index drop. So this is something that they started seeing now recently in other data, I'll show you, this has started rising again. Now this is another type of metric. You know, people or the economists are really trying to find metrics to see what level of activity engagement's happening again. One of these is search index. So, you know, assuming that not everyone's sitting at home and getting bored and just searching up houses, their other thing that they're looking at is this foot traffic. Now they've only got Melbourne at the moment, but this is what you'd expect during the day, you know, 50,000, 60, 70, 80,000 people walking around Melbourne during the day. Now over these weeks in April, as you can see, we got up to 10,000 people. So they're going to be starting to watch these. So there's interesting measures and metrics to watch as well. Look, there's obviously been significant hundred thousand deaths in America, there's significant things that are happening, but one of the most worrying ones, and this is from an economic update that I did with Bendigo bank and the head economist, I emailed and asked for his slide deck where he very generously gave me so I could share it with my clients. But this one here, I thought just for today's discussion was interesting to see. We're looking here over 50 years and this is the weekly initial jobless claim. So this is people who are going in and claiming joblessness. So in one week they had 3.3 million people go in and claim for joblessness. Now to give you an idea of that, over the previous 10 years, 3 million jobs had been created. So they'd kind of like lost a 10 years worth of jobs. Significant. Watch the US markets, that'd be an interesting one to monitor. Now this is really sad. This is, you know, the stock markets and where they are. I know we've had a response in the last couple of days and they're coming back. You read the Switcher report, you can get across all that. But the stock markets are weighing up social distancing and fiscal stimulus measures and they're trying to see what's happening. What concerned me the most about this is that at one stage in the middle of 2019, I was hearing a lot of financial planners and a lot of people going to their client base, particularly people who are about to retire or the people in pension going, your money in cash is only getting 2% get in the stock market. Let's get you 5 to 7. Look at this significant drop. Anyone who put their money in last year, the drop in that market and what they've lost, I think what we're going to see and I think this is going to be a really interesting social kind of thing that we can follow up on. Just want to make sure I haven't talked too much. No one out there bored as yet is that we're going to have potentially people who are going to have to delay their retirement. We may have them already have lost their jobs or being underemployed, having hours, they've been cut back. We may have the hope and dream of moving into the retirement village. You know that let's face it, at a quite costly, mind you, I don't think I've been in a retirement village right at the moment. But move into one of those assisted living areas, then they may not be able to afford it and potentially, you know, their house price might go down 10% in the next year. So if they're planning to go to retirement, things are going to change. So I think we should be looking at maybe the changes in social fabric and what that means to the property market. I'm going to be continually monitoring this. I don't know if that means there's going to be a rise of the Gray Nomad. So you know, the Gray Nomad is those that are going to get in the Winnebago and say, look, you know, for 300 bucks a week we can be traveling around. I spoke to a friend just this week, you know, she's back from Europe. They purchased a, it wasn't a Winnebago but a travel home and around about $50,000. And for every, I've learned, for every hundred thousand kilometers done and every subsequent year you can take $10,000 off that. So just give you an idea. $50,000. And they're just traveling around the countryside and we're doing it for a year through Europe. Obviously there's visa implications, blah, blah. But you know, I think we might see more of that domestic travel. In Australia especially, people are packing up homes and going, well, where to next? I also have a couple of my men mentoring students are going to age well, disgracefully with their friends and they're looking at buying, you know, properties together and potentially having their own live in nurse, for instance, if they need them in the future. So I think we're going to see some really interesting changing social dynamics, especially in this aged population. So let's watch this for the moment because I think this is something that we should monitor. The other rise. If you, if you've been watching the Thrive not Just Survive series, head over to units, go to module 10 and check out the interview with Gina Ingram. Now we talked about homeschooling, but she and her husband Todd have been traveling the world for 25 years, him as a digital nomad. Now that means that essentially he zooms into work. He doesn't have to drive into work, but he zooms via link and he does all his work online. Now we in the last six weeks know that that's now possible. I know, you know, some employers like Google and Twitter are saying don't come back to October. We don't really think we need you in the office. There's obviously a lot of people who have commercial office rental spaces who are quite concerned about hearing things like that. But and I also know on the other hand there's a lot of employers who are wondering what their employees are doing at home because they're not seeing a lot happening. So you know, I know that there's some trust issues there, there's some productivity issues, but we might just, just see that more ability to take off for three months and know that you can work from anywhere. So keep that in mind. Let's watch that. Because there could be some investment space. It might be just creating an incredible gray nomads land area where they can come and hang out in a nice community with their Winnebago and park up and have a couple of days in the company of other gray nomads. Who knows? Let's watch this. Okay, so a couple of other things that I'm saying. This is where I think there's going to be the absolute biggest issue that we are going to have going forward. And that is, and I'm not hearing it being talked about and this is really concerning me because I think that this is going to be the issue. I know, you know, CBA came out with some modeling last week and all the media picked up was that there was going to be a property crash of 30%. The reality is that that was their most extreme version of scenario analysis. They also had 10 and 20% or 15%. I'm obviously talking to a lot of economists and property experts and we're seeing somewhere, somewhere between like a 10% drop is the expected area. I have to say, you know, loving you guys in your property success club, you know, you followed the bouncing ball by the typical property in an area set for growth where most people want to live with a high percentage of renters, renovate your property to just above the standard. So people want to stay there and hey presto, you know, we don't have a lot of people in this group who are having, you know, significant economic downturn or problems, you know, so I really think that you know this, these fundamentals of having the right property in the right area and knowing what the your target market wants is just gold. So follow the ball, bouncing ball. And if you want to go back and do the some of the course modules again, if you're in the ultimate guide to renovation, head back to module 2 and 3. Just verifying that search criteria with the access to suburb selector Software, your location MasterCard class, go back through those first two modules as well. If in your property success club, go ahead to those 10 videos that you'll see at the top and just work your way through there. Just about the fundamentals of the Trident strategy. Buy below the market, understand the market where you're buying with growth opportunity. I know that I've just Recently I can share it with you. I've recently just updated my dot maps as well. Who shall I choose? Queensland, for instance, to share with my mentoring students so that they don't have to go and spend four or five hours in doing that. And let me just share this screen. As you can see here, you know, this just allows you to get an understanding over the last 10 years. So we're looking at the past 10 years of capital growth now, where the areas have got pricing pressure on them. You know, where you've got for instance these oranges which represent, you know, in Queensland, 4.5% to 4.9% and pinks which are 5% pushing on these Mount Gravatt areas, for instance. This is the ripple effect. And when we talk about buying and looking at the ripple effect, that's what we're talking about. When we're talking about, let me share another screen with you. Share your entire window. Turn the sound off. Love and technology show. No, no, no, show and stream that one and hide this one. Too much fun when you see this. And you've obviously got the suburb selector software as well. You know where you can go in and you can say, you know, I am in for instance Brisbane and you know, I have a purchase price of 650,000. I happy to go 30% below, can't go above and I want to be within 20Ks of the CBD. And you're coming up with, you know, this information, it's allowing you to go through and potentially, you know, choose one of those areas that could have potential that's in your price range and go through and actually do the analysis. So I encourage you, if you're in the location Masterclass or the ultimate guide to renovation, go through and get this information. You know, we've got here percentage of rent at 60%. We've got, you know, 118 sold in the last year. We've got a nice healthy rental yield, low public housing. Let's just check out and make sure it is housing houses that are typical because if that many renters, I'd be worried about units. And then we have typical properties of flats, huge amount of flats compared to, you know, what's happening in houses. So you know, this is just about just knowing your demographic just because there might be some pricing pressure on it. Understand what the vacancy rate is.6.8%. That's what happens when you have an inner city unit. So, you know, just be aware of the fundamentals that we always talk about when we're talking about the property Market. Okay, I do have a question here. So I'm going to jump to the question because I just love getting questions. Let's have a look. Theresa said, hey, Jane, what do you think is going to happen on rentals in the major cities? International students are down. Yeah. Young people have moved back home. Airbnb properties on the market. So 120,000 Airbnb rental properties coming back onto the market. A lot of them are coming onto the market as long term rentals, lower migration and stimulus for more property construction. Therese, this is a fantastic question. Before I go back to my incredible presentation, I am going to find for you a report that came out yesterday that I know is not public and I know where I put it and let me go and find that for you. And here it is. I did know, I was reading it recently. Here we go. How will lower population growth impact property markets? Let me include that in the files here in the club as well. This is from cbre. It's a market research that went on. This is about, you know, what the pandemic's done with the close off of migration and construction. So this is the annualized population growth for the last 10 years. So we can see, you know, we are doing really well. But 60% of our, sorry, the move or net overseas migration has accounted for almost 60% of population growth. So of all the population growth we've had in Australia, 40% have come internally, more people being born than those dying and the rest has come from overseas. So cutting off that 60%, huge big issue. Now, what I found interesting here, get it to the retail residential section was ahead of the onset of the pandemic, the level of new residential supply in Australia was declining. So there already was this construction declining. And this is reinforced in an economic update that I listened to with Anz just recently. But we already had apartments and housing commencements come down. Now what they actually say about that is they're now certain there'll be a downside to their previous forecasts on new supply. So the lower population growth will outweigh the supply deficit. We didn't have enough properties. We've stopped building properties. But now we're expecting with the lower population growth that there is going to be enough properties. So usually what we're looking for is this market pressure of there's supply and demand, there's not enough supply. Therefore the demand goes up and the price goes up. So this is actually a significant, and I think they said something here about the population of Tasmania was here, it is here somewhere. Apartments in particular problem. Essentially, they've said that the less the 500,000 people that they're expecting to come into Australia that aren't coming into Australia is the equivalent of. Sorry if this is freaking your eyes out. Is equivalent of the population of Tasmania. So that is like, okay, population shortfall of almost half a million people is roughly the population of Tasmania. So we were expecting that many people to come into the country. They're not coming in. They do believe, even with the decline in construction, that there's going to be some significant issues. So then we come to this apartment market, and this is why we're seeing 6.8% of the. What we just saw over here for Newstead, 6.8% vacancy rate. So selling there at the moment, bit of a concern. Unless you have a property that is, you know, has something unique about it, view of the river, for instance, larger size, you know, whatever that might be. You know, this is why buying the stock standard property really, you know, puts you at the stock, sorry, a unit that is exactly same as every other one puts you at the mercy of the market. So obviously they're expecting, you know, fewer dwellings to be commenced, fuel population. We've got this Airbnb factor that's also coming on. What I think is really interesting here, though, is they're talking about Queensland being the first to emerge, so, you know, that it will be the first to emerge from the oversupply and Victoria will be in decline for a period to come. So this is really going to hit the apartment market that, you know, we just talked about with the students not coming in. You know, I know that with the jobkeeper change in numbers this week, there's been some type of discussion about, you know, maybe we should have the students, you know, overseas students, get the jobkeeper and bring money into the economy. Well, you know, if we're going to have 2 million people unemployed in the next couple of months, then I don't think there's going to be a lot of support for that. But let's just watch that. You know, I think, Therese, that there is some significant concerns and I think we need to watch for it. But, you know, going for an apartment or buying an apartment if it. It might just seem cheap. But I think the reality is, is that it's probably going to cost you in the long term. So having an apartment is a worry. If you currently have a property and you're trying to sell it, there might be some innovative techniques to sell it that we can come up with. I know I'm working with A couple of my mentoring students at the moment on some copy and some discussion around that. So, yeah, keep watching. Brief, but, yeah, good points. All of those things are going to create problems going forward. Okay, so let me jump back to my presentation here so that we can get through this. If you've got any more questions, let me know. But this is, this is what I think is going to be the biggest issue, and it touches on that point, Theresa, and that is vacancy rates. So we've got data here, and this is the data from Anz that renters have less than three months of buffer to cover their rent and living expenses. Now, this is a real significant number, and less than 30% of owner occupiers actually have enough to cover three months of costs as well. Now, if we've got all these renters, and let's just say we've had the overseas students go back home, Airbnb properties come on the market. The renters are most, you know, in some of these areas. And I've got a couple of reports that I've been watching. Australian Property Investor magazine and also Supply and Demand from the Empower Group came out with some really interesting information about the areas that have been the greatest hits. And they're the areas with a large potential, a large amount of Airbnb and a large amount of retail hospitality. So Gold coast, for instance, you know, I know Hobart's been hit hard as well, so a lot of these areas are areas that are hit, and it's going to be the vacancy rates. So I think what we're going to see is we're going to see properties come on the market. We're going to see those people who've been sharing properties, you know, happy to move back home, for instance. And if you are buying, and I think there's going to be a period of time within, you know, the June, July, August period of time where we're going to see a bit of a bump coming back up into the market. We're going to see properties come on the market. A bit of optimism that may emerge, some opportunities where people want to sell so they can buy something else in the same market that they think is going down that's going to use their money better. I know that I've got some of my mentoring students doing that, but come September, we're going to have the end of Jobkeeper and we're going to have the end of the hardship that the banks have put in, and we may just have another decline come through. So if you are thinking of buying, make sure you have enough buff up to maybe cover six to 12 months of covering the mortgage without having any rent come in. And there are some innovative ways that you can actually jump in and get your tenants to stay. How you know if you are buying properties. We've got a client, one of our mentoring clients tomorrow is settling on a property that she's bought in Geelong. I had someone yesterday go out and do a pre settlement inspection for her. We've been through that report today but one of the things we had and that I had put in the letter of offer when she put in the letter offer to buy the purchase and we had did this again last month. One of our done few clients was putting in, they had access beforehand, properties were empty to do minor repairs, list the repairs down. We're not talking kitchen and bathroom makeovers, we're talking fixes that make the property. Property doesn't have any objections for renters. And then we put in the fact that we can market the property beforehand. So both of those people have had applications come through before they actually settled their properties. So this is the kind of thing that we're doing. But in some instances you might have to take a hit on the rent as well. So don't be over optimistic on that. And it might just be getting a six month contract on the rent so you can review it then. So there are some things that I really want you to be aware of. This rental market risk I think is quite, quite large. And you know, just looking at this as well, you know we've actually come from a really interesting position. I think we're going to the expectations and this is from Anz is that we're going to respond quicker because we've flattened the curve so well and so quickly. But there's some underlying issues that we have. You know, Australia's actually has the highest household debt of any of these countries. And in the last 10 years we all know, you know, our medical insurance has gone up, the cost of living has gone up for our basics things like the utilities, etc. And food, you know, our cost of food has accelerated so much in the last few years just because of the drought. So just be aware that, you know, although we're actually sitting back and sitting a bit pretty, the reality is we do need to get the economy underway again. We do need people to have their jobs but we do need to be mindful. We don't want a second outbreak of all of this going on. So I just want to run through quickly the current market, just going to check Are there any questions there, Trace? Do I answer your question for you? Hopefully I have. Say hi, guys. Let me know you're there. Let me know you're alive. Let me know what you're doing to maintain some sanity during your lockdown period as well. I'd love to see your comments. Okay, so just popping back over here to the current market. This is really interesting. This is data that has just come out yesterday on these rolling 28 days. Now, as you can see, 20, 16, 17, 18, 19, you know, we kind of go through, there's the winter period and we pick up to, you know, the spring period where we have these new listings coming on. Well, we've just turned a corner here, so we've just got some listings coming on, but we're still still 30,000 short of what we would expect for May. And if we see, you know, the current market, these are the total listings that are on the market. So these are the ones that have come on in the last 28 days. These are the ones that are already there, that haven't moved. So there's 157,000, but we would be expecting around 250,000 normally. So we're about 100,000 down of properties on the market. This is just. I want to give you some optimistic outcomes as well. And I know you'll see these because I know there's all the doom and gloom, but there is also some optimism out there. This is from that Bendigo bank presentation. And this just shows, you know, during the, the time of downturns, you know, we're going all the way back down here to 19, 23. The market comes back after a recession. The market comes back. I think everybody, everyone's pretty convinced we're going to recession. Market comes back, market comes back. So we understand that we're going through some doom and gloom at the moment, but we're expecting for the market to come back. And we've got some, you know, the projections that Goldman and Sachs has for the US economy, they're talking about a 24% decline in GDP, like holy moly. But check it out. Projections coming back. They're actually talking about a 10% improvement. Now. This is more than they've had in the last 15 years. So interesting to see just some more information. This came from one of our good mates and that is property Professor Peter Kalizas. He has talked about New South Wales and Victoria because, let's face it, that the biggest markets and represent 70% of the Australian marketplace. He says history shows us that in the early 1990s down here we sustained a period of unemployment. Unemployment is the red figure. Unemployment rates that were 10% yet the property market still kept going up. So here's the unemployment rates and the property market still keeps coming up. So he doesn't believe that these are catastrophic. This is Victoria and the same thing, unemployment and the property market goes up. So this is what I found really interesting. This is from. This is one of the slides I stole from anz's little presentation. Don't let them know I stole it for you. But they're doing some predictions. They're predicting the 9.5% unemployment rate, which is an interesting rate. RBAS verified that on their modeling. They've would have been a whole lot higher if the jobkeeper hadn't been put in place and the market stimulus that the governments have done. This is interesting, this is just looking their forecast for 2021, they're expecting a 10% drop in house prices but this is where they're seeing some actually pump back quicker. So we've got Adelaide and Perth, not as big as rental markets or Airbnb markets for instance. But the others they're still seeing, you know, there's going to be a change in the property markets but you know, not overall terrible. And what else did I have here? Oh, this is just from Tim Lawless, CoreLogic. This is an update came through on Monday. He was just saying, you know, in the beginning of 2020 we really had, we were optimistic about what was going on. We had the onset of COVID 19 before that came on. The housing and finance conditions were becoming more accommodative for potential buyers. That was because some of the APRA and ASIC rulings that put in place and restrictions on investors, interest only loans, et cetera, had gone. We had the cash rate come down, we had the servicing rate come down so you could borrow more money just based on a change in a calculator from a lender. And he's saying now officially, I've got the word official in here because I'm not really saying this. Monetary policy and financial regulation has sharply shifted in response to COVID 19. Policies now focus around deferring implementation of more conservative measures. So there's measures that we're going to put in through the banking industry reports from a few years ago and the mortgage industry reports and the Hayne reports and you know, the, there's a, what's it called? It's not Eric. Eric's A R E C that basically said you have to see people face to face. That are now saying you can do ID checks for conveyancing act conveyancing, you can sign via remotely with video and get a recording of it. So there's some of these things that are happening, appraisal, the lender restrictions. But the reality is, the reason I'm a little bit, you know, tongue in cheek on all of that is that, you know, when we're talking to the lenders, they are being more prescriptive about, you know, if you're self employed. They're making us go back not looking at the last two years tax returns which is the norm, but the last two weeks to make sure you haven't got any government incentives, you know, which would indicate that you've put your hand up to say that you need some help. So there's all of these things coming on. So just be aware and watchful. There has been some loosening. You know, we obviously have the market coming back a bit. I think that this unemployment data is some of the most significant data we should watch. So 600,000 people lost their jobs which moved the unemployment rate from 5.2 to 6.2. They're expecting conservatively 9.5. So that's another, you know, 1.2 million people. Essentially, at least they're going to 1.8 million people are going to lose their jobs in the next few months. So watch this space. There is an expectation that unemployment rate will come back at the beginning of the year, by mid next year to where it is now, around that 6.2. But this is the length of time we're talking about. This is why I want you to be mindful of the length of time that you need to consider any property investment decisions you're making or fixed rate decisions or what you're doing. Now this is the rate I really want most people to watch and this is the under employment rate. Now it's jumped from 4.9 way below the 5.2 to over 13.7. And this is people who are having their hours reduced, for instance. So just be mindful of the fact that there's millions of people who are about to lose their job, but there's a lot more that are actually going to have less money to contribute. And remember, owner occupiers and renters have less than three months of buffer. 30% of each of those have less than three months of buffer to cover their living expenses. So we had that highest amount of household debt to start with. We do have some optimistic things for our economy. Australian dollars low, etc. You know, makes all of our, our exports look cheaper, you know, so there's all of those things. I know there's trade wars and barley and everything that's going on with China. But just be mindful, these are the data we need to be watching. And if there, this major underemployment is affecting rental tenants, then we could see some more harm ahead. So there is some positive wins. Let's not be so negative about all this. You know, the world is a. Is a beautiful place. After all, we do have low interest rates. Oh, my goodness. You can get a 2 in front of your interest rate at the moment. Use all my techniques that I talked about at the beginning. Pricing requests. More properties are covering their own costs. So we've got all these positively geared properties. So if you have a tax variation in price based on a negative gear property, make sure you go and review it. Because. Because if your property turns positively geared and you've got that in place, they may impact your ability to put a request in in future years. Just something to look for. Look, supply is low. It is a seller's market. The stock on the market is lasting two or three weeks. There is a lot of enthusiasm out there, you know, and I'm seeing people, you know, our mortgage inquiries at the moment, I'm seeing people buy from anything, you know, from a 350 price point to a 1.3 million price point. And you know, they're negotiating because there's other people who are in that market who are negotiating against them. Less construction. So that's less pressure on property prices going up. It's positive if you're buying. Economists are saying the worst is behind us. Unemployment rates drop historically. So what we're talking about here is we've got unemployment rate of 5.2. It's just gone to 6.2. There's an expectation of 9.5 and they're expecting it to be 6.2, 6.5 by mid next year. When they start coming down around that 7% mark, that's when there's some optimism. And historically we've always seen people go out and start buying properties and the pricing prices have started increasing. I do not expect you to time the market and try to work out when to buy and sell. Remember, it is, you know, buy the best possible property you can afford when you can afford it in the best possible place so it suits your needs at the time. Don't look at all this other stuff. Look, in 1991, unemployment was over 10%. You know, it was extremely high. Property prices continued to go up. We know that unemployment, they're expecting it to improve. There are stormy waters ahead. I want you to watch that unemployment rate, I want you to watch the vacancy rates. And you know, I think end of September, when that extension on that bank's hardship and jobkeeper, if they're not extended, there could be some real people in trouble. And I think that there's going to be more lenders having less appetite for certain employment types and self employed and even income type of income. So I did attend Bank Update for First Mac this morning and they were going against the trend and they're accepting 100% overtime from anyone. You don't have to be essential services if you can prove it. Over the last two years, that's the exception. We've seen most banks with their lending criteria come back and say, you know, we're only accepting. We're not accepting overtime, we're not accepting commissions, we're not accepting casual work. If you're in a certain industry, we're not accepting that either. So although there's officially all these relaxing and lending standards on the ground, not necessarily seeing it, that's not to say that the banks therefore are not going, we really need to be writing some mortgages. What can we do? So there are some lenders that are still being open to their lending and that is it. I have a couple of other comments here. Let me just show these up. Yes, thanks. Please share some things. Yay. Thank you. Come on. Click on that comments issues button so that I can see your pretty faces. When you've got your comments, go in there now and do it so that I can see some of your comments come up. So this is Therese. She's saying, trying to find some strategies for her Airbnb. So I was just invited to a isolation accommodation group that might be, you know, a bit of a twist on it. I've also joined the Karma groups on Facebook. I mean, you know, the suburb Karma group. And I'm seeing people saying, you know, so joining a karma group around a hospital, for instance, and they're saying, look, you know, I'm in isolation and, and I can't go home. I'm needing to have a property for the next, you know, not 14 days, Etc. So I think there's some opportunities in there that could really help people out. Airbnb strategies, I think obviously they're furnished, which makes it a little difficult. I know there's a lot of people who have been affected by not being able to go home or they've been caught out and maybe just Just putting, you know, your property on the market at a more reasonable rate might actually, you know, get you a month's worth of accommodation there. I think when we see the borders open, there's going to be a real encouragement of domestic travel. And I think you could possibly set your property aside and do some innovative, maybe Instagram igtv, I don't know. My husband is an artist. I show you his pictures. I'm really impressed. That one and that one of Nathan Lyon and this one he's just put up. Oh my gosh, you can see that. Anyhow, he's an artist. I'm very impressed. He's on his first Instagram TV thing tonight. But you know, I, I'm seeing all of these people doing things differently and using social media in different place and maybe for Airbnb, you know, creating a bit of a profile with your property. I don't know, go put some gnomes in there and do some gnomes pictures or you know, whatever and make the property a little bit interesting. Or maybe there are some artists out there who've got art that they're not selling and you could say, hey, you know, I'm going to do a pop up art thing in here. And this is the art property. And you know, you hang your art in here. Big hotels do it all the time. Hang your art in here and you could create a bit of an art space. So it is a destination property. I don't know. Top of my head, some thoughts, who knows? I hope that helps. What have we got here? Thank you, Jane. Oh, you're doing painting during lockdown. Is this the painting of the house or the painting of the paintings, I wonder? Interesting, but that's great. Painting is always fun for five minutes, isn't it? But I love to, I love you to post some of the pictures in there. Thanks Jan. Great information as always. We are doing our principal place of renovate of Prince place of residence renovation during this time. Okay, so internals finish this one week. Here is a big hint. I had a chat to Rob from Renault Save and he convinced me that, you know, we've been giving our, our ultimate guide to renovation course participants a free Renault Safe card for a year and access to that. I think it's a hundred dollars. Check the link in the announcements. If you go in there and click it. I'm not officially allowed to tell you this, but you then have to apply for a power pass card from Bunnings and normally if you apply for a trade card from Bunnings, you have to say I'm a carpenter or I'm a plumber or I'm an electrician and you get discounts in that vein. But because Renault Save has got all of the different trades you actually have the massive discounts across all of them. Didn't hear it from me. And it's on average 9% and during lockdown you can get access at like 6:30 in the morning so you can get straight into your project rather than waiting at 9:30 which is when everyone else in public can get to it. So tip when I say go and click on it and I want to see your pictures and let's have a look. Thanks Jane. Thanks Jane. Thanks Jane. I love Todd's pictures too. Okay, I am going to once again share my screen. It's going to be a little bit weird because I am going to. I wonder if I can do this. Okay, let's have a look. I don't have any questions on that so I'm going to close that and I'm going to share my screen. Just finally I'm just going to do a couple of run throughs so that you can see what is happening in the club at the moment. Let me put that on. Oh, that looks yummy. Keto recipe. Okay, so Jamie now she posted this a couple of years ago and the conversation's been bumped back up and it's around painting bench tops. The questions come from Susie. Now hello to the beautiful Susie who wrote this incredible testimony for us. And Susie's been part of the club. She bought the ultimate guide to renovation a while ago. She has, we've been through the, the sale of her investment property so she gets some money together. She has, I'm not going to say the banks are ageist but I'm saying she had some challenges due to her age buying her first home. And we've been through a lot of information with her over the time in renovating that investment property in Mildura, all the way to purchasing her home. Very excited just recently and congratulations Susie. Now Susie is renovating that property and she's asking for some queries and questions in there. So let's just jump in there and you know, support her and give her a bit of congratulations. Everyone in there is doing some work at the moment. We've got some more questions in here and demographics and I also had something in here that I was looking at that I was going to share with you. Can't remember quite what it was. Oh, I know. Borrow my brain. So if you go to investorschoice.com borrowmybrain there's a form in there. If you need my brain for anything, then please ask. Suzy was in a bit of a muddle and was having some troubles and confused about how she could go forward and why the office that she needed to put in and what suburbs to look at. She borrowed my brain. We got on a call. She'd had many a sleepless night. She only had a couple of weeks left of her pre approval. She is doing research that was coming out of her ears and I gave her some clarity. Now in the next couple of weeks I'm going to be publishing article or that interview with her. So you can kind of follow through the methodology of how we're looking at suburbs. We're looking at, you know, the ripple effect, we're looking at the fundamentals for growth. And I'm so very happy to hear that she's got her own home. So that's it from me. I'm gathering that there's no other questions here. And yes, we. Oh, Mark says. Yep, that's Mark is doing, doing the internals on his renovation. Check out that Renault safe card. But guys, you know, we know that this is a good difficult time for everyone. You know, we're all in this together. Please, you know, if you're feeling that things are just getting on top of you, you want to talk to someone, you know, go to that investorschoice.com hardship. I've also got some links in there to, you know, Griefline and Beyond Blue and some of the helpful links go over and listen also to the Thrive, Not Just Survive series. You know, some of this tapping stuff that Faye does, I know it sounds, sounds a bit woo woo. But seriously, it is incredible. The people who have emailed me, sorry, messaged me and just said that they really were feeling anxiety and depression and overwhelm. And I've just posted, she's just done a session on kids going back to school because I know there's particularly mums and dads as well that are a bit worried about their kids going back to school the next few weeks. And the tapping session she did on that, I know it's weird, seems to work, let's go with it. So if you are feeling a bit overwhelmed, we hear you, we want to support you. Let me know how we can assist you. We are definitely here to give you some tips and heads up on what's happening in the market. As I said, I think the social fabric will change going forward. I think that will change how we assess property investments and we're going to Be on the front foot to be able to take that opportunity. For those of you who are looking at purchasing at the moment, be mindful of just buying that typical property in the typical area and catering to the typical market and what they want. You know, potentially renovating and adding a bit of value when you can. But having a buffer in place, place in case there are long periods of vacancies I think is probably the most important thing. Being creative with your contracting your offer as well so that you could probably get access early and even advertise it early for rental and getting there and ask your, your lender about the pricing discounts you've got. All of the information I've shared with you of how you do that and you know, post up and let us know if you've made a saving. Anyhow, I see that all of my questions are done. It has been so nice to be with you on this day. And for those of you who are watching the recording, please go and check out our previous recordings if you haven't as well. They're in the modules over there in the units section as well under the Q and A calls. Go and check out all the information. This credible community here. I really appreciate you supporting each other during this time and I know that there's going to be good times ahead but let's be optimistic and be cautious about it because I know that we need to be protecting the downside as well. So let's get that cash flow under control first and then go forth and look at opportunities next. And I look forward to joining you next month and discussing those. And if you're a first time buyer and you're considering buying your first home, that first home buyers loan deposit scheme is going to be relaunched in July at this stage for another 10,000 people. So you know if you want some information about that that I have a lot of ebooks on first home loan deposit schemes. I'm really trying to help the first time buyers to think like investors when they're buying so that they can use that as a platform for growth. And wouldn't that would have been wonderful for many people who bought their first home thinking as an investor. Anyhow, that's it for me. Thank you so much for joining me for this month of May and stay safe, don't touch your face, stay at home if you can can wash your hands, be nice to each other and as always, here's to your property success. Bye for now.