Your Property Success Mentor Call September 23-09-2021

Hello everyone, it is Jane here and it is almost time for your property success club. I cannot wait to have a chat to you. Grab a cup of coffee, grab your questions because it will all start very, very soon. So if you could just let me know that you can hear me and I'm coming through loud and clear, that would be fantastic. I look forward to speaking to you soon. Hello guys, it won't be long now. Grab that cup of coffee, grab your sandwich and I look forward to having a chat to you very, very soon. Grab your questions and we'll be ready to go in about two minutes. Sa. Not long now, guys, about a minute away. Please get ready and have your questions ready. I look forward to chatting to you soon. Hello, hello everyone and welcome to the September 2021 Q&A monthly call for the very special people in our your property success club. So, clubbers, what an incredible month it has been since we last spoke. Before we kick off, I would love for you to just put in chat to make sure I am coming through loud and clear. I vaulted to my office so that I could run this. It turns out that all the it things weren't set up quite as I had expected and most of the things on the back of my shelf had fallen off due to the earthquake. So we do live in interesting times. It's really exciting. I'll just remind you guys that. Oh good, we're getting. We're getting a couple of people here saying yes, that I'm coming through loud and clear, which is fantastic. A couple of people have clicked the link to come through to the Belive studio and I welcome you to do that. If you'd like to come up on screen, share your face and have a question and ask. Ask what you would like to ask live. Otherwise you can just watch this obviously in the your property success club page Now. There's so many things that have been happening in the last month and so, so many questions. I really would love you to put your questions in and we'll run through those and deal with some of those questions. But I've also got a little bit of an economic update for you because I know everyone's wondering what is happening. You know, it is spring, but we're not really in the spring market. And you know, we've got the economy and we've got questions around interest rates. We've got questions around so many different things. So that's what this group is for. A place where you can ask the questions and for all of the new members and those who have actually donated to the kids helpline. We are just crashing it and really getting into the very close to the $20,000 goal that we have set. And for those of you who don't know, our last goal was for $10,000 and we raised that for the Epilepsy campaign which helps families and kids that are dealing with epilepsy. And a member of our community set that up and our thoughts go out to them and little Piper at the moment who's been in and out of ICU so many times. So guys, please, you know, I really encourage you to jump into the group, have a look around and you know, ask questions. You know, there's, I know there's a couple of you trying to message me saying can you get into the group now? I will try to get someone to help you get in. I can see that sometimes it is a little bit difficult because we do have people signing up with different email addresses to their Facebook. So we'll try to help you out as much as possible. So I can see here that we've got a few people around and some questions usually how this format is for all of those of you who are new to this is that we usually get quite a few people watching this once a month on 12:30 last Thursday of the month. But then we have hundreds of people watching it in their own time. So if that is you welcome as well. And I have to say that it has been such an interesting month and I really want to just jump into some of the questions straight off so that we can start looking at what is happening in the market and really give you some value around what the questions are that people have. So I'm going to share my screen and just kick it off a little bit because it has been a really interesting month and I think we explored some really deep questions in a mentoring group weekly catch up yesterday around what is going on with Evergrande property development, potential collapse in China. What's the effect on the sourcing and requirement of iron ore from particularly Western Australia and their economy? What's that mean to the Australian economy? What's that mean to our property investments? We've also looking at the nuclear submarine deal pissing off China and potentially throwing a red rag in front of China and France. What does that look like for us as well on the economic stage? There's so many questions that we're reviewing all the time in our weekly catch ups and I really look forward to getting into that detail. But if we go to a bit of a macro level, there's Also a lot of other things that are happening at the moment. Obviously, I think Melbourne's in lockdown number six. We have, we've just crossed the 230 day mark. So it's a kind of mantle we did not want to have, which was to be the longest serving city in the world in lockdown. So if you look over the last 360 days, you know, it has been a mad ride. And know, being someone who's based in Carlton, who had the earth shaking on Monday from helicopters because the road, the rioting protesters were street away, and then earthquakes yesterday, more protesters and less protesters today means that it's been a really interesting time also in society to watch. So I'm going to just jump straight into some of the questions that have been coming up because I'd love for you to hear these. And now, Paul Austin joined rather quickly on the day of our last call, and I couldn't quite get him into the group in time. He had a lot of questions, which I hope I've served him with well over the last month, about his purchase, an imminent move to a regional Queensland town and purchasing there. But he also asked this question. I think it's a really interesting question because, you know, this comes up a lot around saving money and how we deal with money. And when I look at this, you know, he's really saying, you know, should he be potentially renovating his property and having an equity boost? So he says, hey, would I be better off saving, for example, $750 a week to put towards a kitchen bathroom renovation to boost the equity, or would I be better off putting it on my mortgage while I have two years at a 1.89% interest rate? Now, there's a lot of different opinions on where you put your money. And I'm not an accountant or financial planner, but as a mortgage broker, I can tell you we do have conversations around offset accounts and as a property educator, specifically around renovation and research. It really does bear putting a bit of time and effort into thinking about this because if you've got money that you can save, and well done, Austin, for being able to save so much, but where do you put that money and what is the potential? So really if we first look at the question around renovation, most properties can be renovated, but can most properties be renovated for a profit? Do they deserve to be renovated? And that's the question as strategic renovators that we have to ask. Now, Austin's buying his first home. He's going to strategically buy that and look to boosting equity in that property through renovation. So the key component for everyone who's a student of the ultimate guide to renovation, you guys know this, or if you read my book, it's all about understanding the pricing disparity in the suburb. So understanding the difference between the renovated property and the unrenovated property in between is the costs of holding the property, the cost of renovating the property, and your profit. If there's not enough money between these two numbers, then it can't be renovated profitably. Now, if you're renovating strategically, your home to be a forever home. Yeah, that's kind of off the table a little bit, right? You're putting in the home office. Maybe you're putting in the deck out the back. Maybe you're putting on one of our unique box on the back kind of constructions to create that lovely living dining space with the kitchen and the butler's pantry. Now, sometimes you can overspend and be a little emotional about that. But, you know, when we're strategically renovating and specifically where Austin's looking about turning this property into an investment property in the future, then you have to be a little bit cleverer. So it all starts with getting the right property in the right area and making sure there is that pricing disparity. Because if you buy a $400,000 property, spend $40,000 cosmetic renovation, 10% of the value of the property, and the end value is 440, and the renovated properties are selling for 440, 450, 430, 4, 80, you actually haven't made money. And the students, the ultimate guide to renovation know that there is a way to make $2 for every dollar you. So if you're buying at 400, spending 40 and adding $2 for every dollar that you create, 480 and all of your costs associated with it as well, you should be looking at a suburb that has the pricing disparity between the renovated and the unrenovated properties being between 400 and at least $500,000. So first answer to your question is actually a whole new answer to a whole new question, which is find the property first that deserves the renovation. Austin. 750 a week. You know, you're getting to about three grand a month that is going to allow you to do a renovation. I know the area that we discussed that you're looking at buying in, and you know that's going to get you a really good head start within three to five months of getting that kitchen and maybe bathroom renovation done. So if you're thinking you know, renovating to the taste of the comparable sales, not putting in granite bench tops where everyone else has got lemonade, just doing a fit for purpose strategic renovation. Then you probably have four or five months where you can actually knock this over and have the money for that. Would you be pushing up the equity? Well, once again, make sure there's the pricing disparity, but also make sure that you're doing this for the right purpose. Now, at the moment there is a watch and see, as you'll see in a little bit later in the presentation, around what's actually happening in the market at the moment. So, you know, there's a couple of things that are happening in the market and I think that, you know, we need to be really mindful of those and we need to be looking at, you know, what is possible for renovating because there really is a increase in costs and there is a increase in what has been. So not just the trades, but also what's been happening in the cost of goods. So, you know, we're getting a bit of a shortage of people who can do the work and we're also getting a bit of a shortage on those that the goods that we need. So there's a lot of ships full of shipments of timber in particular at the moment, but other fixtures and fittings that are sitting over near China and not heading our way. So we need to be mindful that the cost of renovation at the moment is a little high as well. So so many things that we need to consider and so many things that we need to think about. So the other thing that the question is, is like if your interest rate is 1.89% now if you're putting that into your mortgage, it sounds to me like you are putting it in to pay it down. Like, is it better for me to pay off my mort? Because there's other finance structuring tools and one of those would be having an offset account. So essentially, if your mortgage is $400,000 and you could save 3,500, let's just say 3,000amonth, then when the interest calculation happens daily, what happens is that the bank goes 400,000 minus $3,000. We're only going to calculate the interest on $397,000. So you're actually in a cash flow positive position. That's with an interest only loan. Now, as an investor, arguably you probably will have an interest only loan because you don't want to be paying off the principal, you want to be saving all your dollars. So you can actually Build up that offset or build up your savings so that money can go into your next purchase or your principal place of residence. So you need to be really strategic. So at the moment money is cheap, 1.89%. However, you know, that's probably the equivalent of you pre tax earning two and a half percent somewhere else. And you know, at the moment, you know, eyes closed, anyone could get 2.5% in some of the investments that we're seeing in the share market and super, etc. But one and a half, 1.89% is very, very cheap money. And I would suggest that if you're going to structure your money and save your money, put it in an offset account, don't pay your loan down unless this is like your own occupied home and this is the forever home and you have got a plan and strategy to pay your property off. So a little bit of finance things to consider. It's not obviously specific advice, it's giving you some intention about what is possible. So make sure you contact your mortgage broker and speak to them about that finance structuring. But keep in mind that keeping cash on hand, no one really knows where the economy is going. We're seeing some really positive things, but I think cash is king. And being able to have cash not in a loan that you can't get out, but potentially in an offset account, creating your cash flow buffer and savings you can dip into is a great idea. You don't need to rush into the kitchen or bathroom renovation either. You know, if you're going to be living in this property for a period of time, this renovation is going to be one that is going to allow you to uplift the equity of the property. And you really only need to have that when you want to draw that equity out to purchase the next one or purchase whatever you want, or you want to be able to make that property really, really attractive to renters. So, you know, you may not need to rush into this either. So I would suggest that a property selection in the right area, number one consideration, then look at the comparable sales of renovated properties before you actually buy it. But to see the standard of fixtures and fittings and create a renovation plan to do that. Get some quotes, get some mates in to help you out. I know you've got a trade and that's really going to be the thing that would serve you the most. Paying off the loan potentially won't serve you as much because I know that you have acquisition plans for the future. So I hope that serves you. Austin, let me know Guys, if you've got any thoughts or information, I can see there's quite a few of you watching at the moment. So make sure that you bring those questions forward so that we can address them. Now I do want to give you a little bit of a look at the economic update also for the month. As you know, I try to get out and look at a lot of the information that's out there and bring it all together for you in one place so that you have the opportunity to see that. And what I have got here and what I attended recently was an S and P global breakfast. Now this was just for economists and banking people, but it really gives a little bit of insight of what is happening and there's some really great resources that you too can access and go through and have a look at and I suggest you sign up for as many as you can to get that information. So if you have a look here, you know, there's some really, obviously there's concerns around the New South Wales and Victorian lockdown so we're going to have a look at what that means in future slides. But also, you know, there is going to be a decline in the GDP in this quarter. Now one quarter decline does not make a recession as Switzerland down here talks about. Peter Switzer but you know, we have had a growing economy over the last 30 years and we have been in an incredible place. And you know, if you think about what Shane Oliver, AMP Capital's chief economist talks about, they're looking at potentially a economy growth rate of about 6% next year. Now just to give you an idea, when we were talking, you know, 10 years ago around the Chinese growth rates and they were doing 6%, everyone was saying that was unheard of. And now here we are in Australia in the middle of a pandemic looking at doing something similar. So this is really an amazing kind of place that we are in at the moment. And I think the other thing that we need to be mindful of is that, you know, when we look at where our GDP has been, you know, we've really done very well compared to the rest of the world and you know what we've been able to achieve. The obviously the government stimulus has really, really assisted us in being able to sustain the economy that we have. And you know, we're kind of punching above our weight when it comes to the biggest economies in the world. You know, the US economy shrank by 9.5%, UK by 20%, France by 13%, Japan by 7. And you know, we, we've Had a bit of a shrink, but geez, you know, we're doing really, really good. So I just want to give you, put that in context so that you really have an idea of where we are sitting in the market and what we've got happening. Here's a comment that says what's likely to be replicated from last year's lockdown is a jump in the savings rate. And I've got a couple of articles from the paper today, actually around that, which fell to 9.7% in the second quarter from 11.6% in the first three quarters. There is a lot of wealth acquisition going on at the mom moment. People are not going out for long lunches. They're not taking holidays. Their savings are really going towards looking after where they are. And there's really some opportunity for us to be really thankful, I think that we are actually creating wealth in our homes. And you can see a bit later, most of us have made at least $70,000 more than your income, in some cases on equity growth and the homes in Australia over the last 12 months. But also we've been saving as well. So, you know, I think it's really important for us to look at this and be a little mindful of the fact that, you know, we've got, we're in a really unique situation. And you know, we have got a lot of the country at the moment over 60%, you know, in lockdown again. And we're, we're saving our money. So it's good to see. But it's, it's one of those things that kind of gives us a bit of a buffer. And as I said, you know, this was actually in yesterday's paper in the Australian. And it just looks at, you know, the cash drive that's going on at the moment. You know, there's extra savings in our accounts of over $230 billion. And what really I find really interesting here is, you know, I attended as a mortgage broker a CBA update on the economy and lending, etc. Just a few months ago and they were talking about watching the savings account that they have access to millions of them. Most of the savings accounts in Australia, let's be fair to see what was the effect of the end Jobkeeper March. There was supposed to be a cliff where, you know, when everyone lost Jobkeeper, there was going to be extraordinary run on savings, mortgage debts, etc. That has not occurred. So, you know, this kind of buffer of information that we've pulled up has really given us an opportunity to be Able to save and to be able to build up a buffer against, you know, a lot of the things that may come which are not expected but should be planned for. So, you know, this is really interesting and I think, you know, when we're looking at the projected growth as well and you know, more vaccination rates, which is going to mean that we're going to reopen and the Australian economy is going to, you know, really, really have a solid trend of increasing in money back into the economy and then an opening of the Australian borders with people who are going to come in as well. You know, there's some really, there's a really good news story around this. So, you know, I really encourage you to consider, you know, things aren't all that bad and you know me, I'm a low risk person who's always looking for the bad side. So we can minimize it. But you know, things are looking up. We've got Nab bank, this has come out and talking about 17 to 21% growth again next year. So, you know, there is a real booming that is happening. The latest information from, you know, the Australian housing market and RP data indicates that, you know, on average the national average per month is 1.5%. Now to put this in context, there's a lot of capital cities that haven't even been able to do over 2% over the last 10 years. So you know, this is per annum. So this is extraordinary kind of numbers that we're seeing here. So I think, you know, it's really important that we kind of, we look at it, but we also consider, you know, what else is available to us and what else is going on. So, you know, there's some really different opportunities that we can consider. And just so that you can see, I guess, you know, where the RP data is talking about where the market's going, saying housing prices have risen almost 11 times faster than wage growth over the past year, creating a really significant barrier to entry for those who don't own a home. Now, you know, I've got a lot of investment properties obviously and those of you who have, you know, we definitely had a lot of people have been had to reduce their rents because of their tenants not being able to make payments, et cetera. Different states have got different opportunities and cashbacks and reductions of land tax and all those kind of things to help landlords, help tenants. But I know personally we've had a couple of our properties have had to take a real haircut to retain or gain a tenant. However, there is going to start being and we starting to see that in some of the markets a real pressure on rent. So those that can't buy are going to be trying to save for a deposit for instance and their rents are going to go up. So there is going to be a real disparity in the future on wealth and wealth distribution. And as landlords we have to be mindful of preparing our properties and our assets to actually meet the market. We're not going to get the census data unfortunately to 2022 to see what's been happening in the last four years but what we will or five years but you know what we are seeing and what I am doing is tracking some of the planning information, et cetera and the infill. I think we're going to see more and more infill developments which is really interesting because so happens that a question has just popped up here and let me just have a look at this and see what we can talk about here. Hey, what's your thoughts on our da? Well I am not a developer as always as you know. So please go and talk to those people who are developer type experts. So you know Rob Flux and Matt Jones etc. But let me just have a look at this. I bought a house in Everton Park, Queensland right in 2015 six years ago for 595 build is close to a million dollars for a one into three development, 1.66 in total to be developing including the house cost. Sales are hard to exactly work out especially on a new house at front of the new development. But this is what I'm working on and we'll be keeping it. One house at the front. Yep. What's the block of land size? One house at the front, two story, three bedroom, two bath. Yep. And two townhouses at the back. Total 1.9% approximately return on in investment of 20%. So what are my thoughts? Okay, well as I said I really can't give you thoughts on developments. Funny thing is that I have been talking to a number of different developers in the last couple of weeks and actually I was a guest on Cheryl Long's Australian Property Development Facebook page just two weeks ago talking about how you can use renovation on the house at the front to help pay for the subdivision and costs of development at the back. And it's a really interesting question because I think that this infill that we're seeing and these opportunities that are coming about 595 are something that could really meet the market where the market is where people can't afford to Buy the properties. The other thing is that be mindful in Queensland that the caps on some of the first time loan deposit schemes, et cetera, cap out around 600,000. So it's not the first time buyers are going to be buying this product. So just be really mindful of who you selling to when you come to sell. A 20% return on investment sounds fantastic. However every now and then when I look at people Phisos numbers, a lot of the numbers aren't counted in. So I would suggest that you probably work with someone who has that expertise. I know that John Hubbard, the co creator of the Ultimate Guide to Renovation when I was, when we were working together he had done a number of developments and he was paying his mentor 5,000amonth and 20% of the profit to make sure that they got the numbers right. And he was just delighted to think that the mentor thought that they were going to get the numbers right. And there was a lot of deals that came across their desk that were turned down and could have lost them a lot of money. So just be mindful of the fact that, you know, it's really important to get the information correct. What I might do though is I might just show you, I'm going to share my screen again show you how I would try to get some of the information that would allow you to start video share on the stream. Is it true that it's more difficult to gain entry into the market? Isn't disposable income the correct indicator to determine affordability? Tax rates, expense percentages to wages have reduced over the years. So wages, there hasn't been wages growth but there's been property obviously value growth. And the disposable income is actually your cash flow position that allows you to fund, you know, what you're trying to do, pay your rent or pay your mortgage. The way that lenders are going to assess you obviously is how that they, how they allow you to be assessed is based on your income. So there hasn't been a lot of wage growth and your debts so it's your liabilities. So I think where we're going to be going is the affordability issue is based on incomes aren't going up very much regardless of the savings that you have and also that people are acquiring some debt. So you know, if you're using all of those extra savings to pay down debt, fantastic. But you know, when I look at assessing people in the mortgage business, you know they're either limited by the deposit they have or they're limited by the amount that they can borrow. Now that means that knowing specifically what you're limited by is so important before you do anything. So if you've got a $30,000 credit card with a $15,000, you know, balance for every $5,000 limit, not balance limit, you can borrow about 20,000 less. So that really affects your borrowing capacity. So the question is, well, should I go and pay off the 15 grand and reduce my limit to 15,000? Well if you've only got like 45 grand in the bank, reducing that 45,000 by $15,000 is really going to affect your deposit. And if you're not limited, you know, by your borrowing capacity, you've got a really great job earning lots and show that you can afford it, you're limited by your deposit so it wouldn't be in your interest to pay it down. So you really need to be strategic at work with your mortgage broker and making sure that you can understand what you need to concentrate on. But I do think affordability will become a growing issue. We've got, I was listening to statistics today and 10, 15 years ago there was 15% of the workforce were women between 55 and 65 and now it's 30%. You know, there's two incomes going into the boomers and the exes, you know, income stream. They are able to use those incomes to borrow more and they're able to buy more and there's a lack of supply and hence there's more demand and that will push up prices. So for the single person on a good wage, but he's trying to get into the market, it's going to become an affordability push for them and it will become difficult. So it's now we just need to be mindful of the fact that the largest group of investors who've been buying in the last 20 years is the over 50s. So you know that that age group and that asset class are actually making it driving the market and making it harder and harder for younger people to get in. So we just need to be mindful of that. Now I also said that I was just going to give you an idea of how I would look at Everton Park. Let me just pull this up. And mentioned I have it problems. Turned out I didn't have a keyboard. So when I would be looking at the type of properties that you're looking at, this is what I would be done and I think that. Oh great, thank you. Hey, appreciate, glad that I could help. This is what I would do. If it's a house that you're after. So there's 5119 properties in Everton park is the house that you're after. And you're creating a three bedroom at the front, two story, three bedroom at the front. I would be looking at all of the three bedroom houses. Now you started with 595 square meters, but once you start carving this up it's going to be smaller. So let's just say it's between 2 and 300 square meters. Right. So this now gives us an idea of the fact that there's not that many properties in that area of that smaller construction. Now this really concerns me because are you creating a property that a product that doesn't exist and it's okay to be first to market and to be leading the market but as you know I'm low risk. I like to have proof that there's, there's a market out there. So I would, I use, I hack the information from SQM Research to try to use their data to find out what's going on. But you can see here most of the properties that sell between 4 and 800 square meters, mostly 600. So your property that you bought was typical. And these are all the townhouses and the subdivisions down here. So there are some definitely. And they're predominantly between 100 and 200 square meters. So this is possibly where I threw things. So there's only 25 houses, let's call them units as well because they might actually be classified as units or townhouses. Okay, so there's some more. And then I would go into sales history. I would check out this sales history of all the properties that have been developed, what they're selling for, what the block size they are. If you're a student obviously of ultimate, go to Renovation location Masterclass or your property success club. You've got that code to be able to buy RP data month on, month off. We don't expect you to sign up for a year but this allows you to actually look at the market you're trying to create and see what the market is. Now you can take this a step further and if you're in my investment choice mortgages group, you know that there's a video I've just added here, I've selected all of these recent sales. Now it's only a six month period so you could go for a year if you wanted to. And I would export this to a CSV file. Now exporting this to the CSV file allows you to really quickly, really quickly pull up the information in an Excel spreadsheet. And start monitoring the information. So it's going to give you the ability. You guys still with me here? Let me know. Not sending any love gives you the ability to have a look at the properties and start doing some analysis on them. So you can start filtering by the land size, you can start adding in what's the cost per square square meter that they're getting. You can start seeing who the agents are who are selling it. You might be up for selling your property and good for intel in the future. And you note here that they're actually considered units, so not houses. And that's why we were actually not seeing a lot of those. So do your research and get in and find out what the typical properties are and see what's on the market at the moment. So, yeah, great. Loving it. Good. Glad people are paying attention. Thank you so much, guys. So look, I just want to make sure that, you know, if you're going into something like development, as I said, you know, I, I'm not a developer, I do not have experience in that. I'm not prepared to comment on phases etc. But what I can do is say that, you know, understand the asset class, understanding what people want to do in comparable sales is going to get you a whole lot further ahead. So without further ado, let's jump in back to some of the information that we've got here and looking at it, I think we do need to consider how the consumer sentiment are going to affect lockdowns. Looking at the stats and all the information and you'll see this coming up a little bit that there does seem to be optimism. There's inspections that just opened last weekend in Melbourne and real estate agents and buyer's agents are just going completely nuts. So, you know, there is a lot of market out there, so keep watching that. It does have some issues that we need to think about for that wealth gap, the future. If you're investing for five to 10 years, then you may not even think that's a big deal. RP Data also said Capital City Houses and continuing to record a stronger growth rate relative to units. However, the performance gap does appear to be narrowing. So this is this affordability thing that we need to be looking at as well. Does that mean you should buy units? John McGrath from McGrath Real Estate did a fantastic blog. Go Google it. I'll copy it in in the show notes below. But you know, units are still the poor bridesmaid to houses. RP Data's pain and gain report shows continually that people who are buying units losing money there is an oversupply of units at the moment. And I know that there's, you know, a real issue around unit values dropping. Even with the opening of the borders. I think we're going to be in a surplus of units and we're not going to see the growth going forward. The growth will be driven by this affordability push of young first home buyers and it might keep the market looking buoyant. But you know, I always go back to what has happened in the past. August update also takes Australian housing values 15.8% higher over the first eight months of the year, 18% over the year ago and in dollar terms the annual increase in the national dwelling value equates to about 100 grand. Or the fact that Australians have earned around about $2,000 a week just by sitting in a well placed home and having a roof over their heads. In comparison, Australian rate wages have only increased at 1.7%. It's not even inflation. This is really interesting. This came from a report yesterday. CoreLogic estimates that there are almost 600,000 house and unit sales across Australia over the year ending August 2021. This is the highest number of sales since 2013. 4. It's a 42% uplift. So there is a lot more sales. When hearing how hard it is to find properties, let me tell you, people are out there and they're finding properties. So we're definitely eager to see the Sydney and Melbourne markets come back. Melbourne has had a bit of a hit and they are slower in recovering than the other states. But I think we'll all go back to median. And when I look at the realestate.com au listing trends, you know, it's really showing confidence. It's showing, you know, month on month they're down a little but year on year we're up 17% from last year of listing trends. And yes, you know, this is across all of Australia where there weren't the shutdowns. I mean look at Darwin, 95% up. This is insane. Once again, you know my opinion on making sure that we are minimizing our risk and being mindful of investment. For those who are looking at buying in Perth, this effect of this Evergrande Chinese property development collapse, the potential of the reduction in requirement of steel for construction, the effect on the iron ore industry and in that the Western Australian economy has dire consequences in my mind that need to be considered in any Western Australia investment that you're looking at. So I'm not saying don't invest there, don't know your specific Circumstances, I'm just saying be aware. But as you can see, you know, Melbourne's now up 200%. No shock there because they didn't have a market last year. Which brings me to the numbers of what we've been seeing. So we've been seeing Sydney's up 1.8% for the month, 6% for three months, 20% for the last 12 months, 13% for Melbourne, 18 for Brisbane, Adelaide 17, Hobart 24, Canberra, Darwin 2022. Fantastic numbers, regional giving you a nod as well. But there's some amazing information here and I think it's really important that you know, you kind of having a look at this and understanding what does this mean for you. And going further now, last month I did do a quite an extensive look at all the webinars that I watched on. Was the Brisbane market going to be affected by the Olympics? And we've kind of probably exhausted that conversation. But you know, there is so much information that is available to us and I think it's really important that we use that information as well. And I being me have been tracking the. So this is just from my algorithm that I run every single month with the new SQM data research. Now this data comes out on the 21st of the month. So this is the latest data. Now I've been tracking what the markets have been doing per annum over the last 10 years. And you can see here Darwin -1% and they're back to minus. And my argument would be there has been an uplift over the period of time in the last 12 months. But I think that we're going to see the markets going back to their norm and their norm is at minus one. Darwin's a little. Has already reached that. Does that mean that Adelaide and Perth, Poor Perth didn't even get a Guernsey here are going to go back to that as well? Well, I think we really need to consider the fact that over the last 10 years property market in Perth has not made any money. You know, when we look at everywhere else we've got, you know, some really fantastic results. Now this is a concern to me. This Brisbane market doing 4.2% and gave Brisbane 18% over the last year. Like, you know, it really deserves some time in the sun. And I know there's a lot of reporting of people moving up to Queensland that 4.2 has been hugely influenced by the last 12 months. This time last year and for the last two or three years this number's been 2%. So Brisbane's been doing a 2% per annum growth and what we're seeing here with Darwin falling back to its long term norm, I just worry that there are opportunities to get into markets. For instance, the Melbourne market, which has not had the performance of everywhere else and it's just lagging a little. It will come back to exactly what we expect or potentially. Geelong, 7%, Ballarat, Bendigo. These guys have outperformed a lot of the capital cities. So just be mindful of the fact that your price point, you can be very strategic about where you can buy. And look, this is fantastic. I just love these stories. Domain in an article said properties in a third of the suburbs have outpaced annual wages in property price growth. Now that's according to Domain right? So according to the report, 95% of Australians suburbs have clocked annual gains in houses over the year to date, June 2021. And all these suburbs, 33% recorded gains that were more than the annual household income as per the tax data for those suburbs. So this is just extraordinary. This wealth effect that I think that we're seeing and combined with the savings really is a part of the success story of what we're seeing in Australia. In fact, 67% of suburbs that experience growth in units, only 10% actually witness gains over the annual household income. This is why I really want to caution you guys, land is content, goes up in spades, units don't. When you can't afford a house, consider the townhouse or the duplex. Don't go units in the suburb. All the suburb data that you've done, when you, when the property market in that suburb starts moving on, don't just settle on a unit because the data is completely different. So you know, I think it's really important to see this. Eliza Owens, RP data economist, she did this assessment looking at post Melbourne lockdown, whether the market bounced back. Now this is really interesting because we know that spring is the season, right, when most of the listings happen and most of the market happens. Now obviously the listings in Melbourne in spring last year overall were really, really down and you know, weren't what they're used to being because you know, we really didn't have the market available to. There was no market, everything was shut down. But what's really interesting is that that spring season of buying and listing properties was just moved forward three months. It's not like they missed it. So Melbourne then had January, February, March that went, just went crazy. So we know that spring is the listing time. We know that that is what's happening. But what we do also know is post these lockdowns. The market bounces back and it's not like we expect there to be a downturn. And even to the extent I had this conversation with my mentoring students in our weekly catch up yesterday around should we buy now? And some of the questions are really, you know, has the market pegged, it's gone up 20%. You know, should we buy now? I have these conversations when people where, where the market's down below and they're like, has it gone down low enough? Should I buy now? You know, the best time to plant an oak tree is 40 years ago or today. You need to take action on these. The banks are still predicting, you know, 17 to 20% growth. We know that the, the leaders are coming out more and more in accepting that Covid is going to be a way of life. You know, congratulations to all of those that have, you know, rolled up their sleeves and had a jab or two and being able to, you know, take some positive steps to us getting reopened because really that's, that's what we're waiting for. But you know, the lessons from the Melbourne lockdown are definitely the fact that, you know, the market does bounce back and this is what we're going to be expecting to be. The Sydney and Melbourne market didn't start and start a spring, but it's going to be starting real soon. So watch this. There's nothing at this stage that I'm listening to, watching or reading or interpreting or finding patterns in that is indicating that there isn't anything but optimism for the overall economy. And that is with a disclaimer of watch the Chinese face. So let's just go through and have a look at this. The Property Investment Professionals of Australia, pipa great organization, really encourage you to join, represents the professionals and the people that we serve. There's a code of conduct as we know that property is open to a lot of people in speculative type of inverted commas. If you can see my hands, it is experts, experts out there that may not always be serving you to the best that you can be served. But look, 800 lined up and did a survey recently. You guys got a link that I sent you and it really came back that said, you know, 76% of investors believe that property prices in their state or territory will increase in the next year, up strongly from 41%. So we had 20% growth on average, 18% growth in the last year. And more people this year think that the market's going to go up further. So I'm not, I'm not running my mouth off here on Buy, Buy, Buy. But what I'm saying is strategically there's an opportunity for people to create a significant amount of uplift in the value of their property. And if you're investing for 10 years time, if you, if you buy now and get in, even if the market does go down a little bit next year, borders will open. And mark my words, we are getting the largest amount of inquiry and interest from the us, from India and China for people looking to move to Australia. And they only have to work for a year or two before they start buying properties. So there may be a little bit of down, a downturn. Can't see it, no one's predicting it. But if there is, then it'd be really interesting to see what happens the year or two after that as well. So, you know, a lot of optimism. Go and check out the PIPA report. It's fantastic. Peter Kalis is friend of ours and a great guy. He did this amazing assessment also into this kind of assumption that interest rates being so low is the thing that is driving the incredible property market surge that we see at the moment. And as soon as interest rates go up, everything's going to stop and the market's going to discontinue. Now, he's a man of many, many talents and in actual fact, I have to say I was walking yesterday listening to his fantastic podcast. I think it's called the Property Planner, professor and Buyer. Anyhow, I'll put a link in the show notes. And as I was listening to it, all of a sudden the earth shook and I was like, there you go, Peach shakes my world again. Earthquake. Who knew? But look, this is really interesting because he did this, this kind of look at June 2002 to June to 2003. Cash rate 4.75%. So we're probably paying 2.5% more than that. So you know, 6 to 7% interest rates. So this is the RBA rate and what the banks sell it to US is usually 2, 2.5% higher. Property prices went up by 20% right in Sydney. 17 Melbourne, yada yada yada. Weighted average 23% for all of the capital cities. September 13th to December 14th, the market went up by 11%. But hey, look, cash rate had dropped almost half. We were paying 4 and 4.5%. Now we've got 2016, 19. Most people forget that we, you know, went into Covid off the back of a declining market that wasn't doing a lot. 1.2% when their cash rate was at 1.5, we were paying 2.53%. So this is really interesting, guys, when you start reading the information and the media that's saying, you know, as soon as rates go up, the market's in a crash and you're trying to plan ahead, here's the statistics of showing what the history is. Now, we do need to take into context what the changes are, and that's why we're trying to get the live data. We're looking at listings, we're looking at sales, we're looking at wealth effects and what's affecting things. But we always, I always look at the history first and build from there and a case that argues, should we invest or not? And at the moment, you know, this whole fur fee of as soon as interest rates move, we're going to be out is not correct. Or we're going to have mortgage stress or people are building up all their wealth, the properties are worth more than they've ever been worth, and if they did need to sell, there's a huge supply of people who want to buy it. You know, just keep these things in mind because I really want you to be confident with your conscious thought on how you buy. And I think it's really important that we put some integrity of research and understanding and putting all these patterns together when we're actually thinking about investments. So the confidence is important, but the competence is also important. And the competence comes from your understanding. Going to podcasts, listening to things like that, being part of the club, getting through some of the course material that I have there and offer. So, you know, just be mindful of that because there's so many opportunities out there at the moment and I don't want you to miss them. And as you know, you know, I would tell you if I don't think there's a good opportunity for us. Just a really quick little look at the property clock. You can see here. Some of these areas have moved a little bit. Most of them are still in a rising market. You know, this is incredible to have most of Australia and the rising market. This bottom of the market has started to move up. Arguably, these guys are at the peak of the market, but as you can see, there hasn't been any movement in the last month of these towns or suburbs, towns or cities moving from one area to the next. They've been consistent for a period of time. So good news there. Now I do encourage you to go to the Heron Todd White review. As I say, every month, their valuers are out there. Every single month doing an amazing job. And every single month they come up with a fantastic property review, region by region, city by city, and they usually take them a really interesting conversation. And this month the interesting conversation is all about renovation and renovation potential. So this is something that you should really, you know, reading to and have a look at because as you know, renovation is one of the core strategies of my. Oh, let me see if I've even got it here. My Trident strategy. The Trident strategy, buying a capital growth area for the long term growth. Buy below the market if you can, which in this market is the only prong of this Trident strategy that I would forego and then add equity through renovation. So this is why in particular this renovation document is really important. Have a read. However, be mindful as well, because here we go. This is in September 16th article. So just last week homeowners warn resist the urge to do it up. So this is a real, I guess conversation around the fact that it is costing more to do renovations. And that's because of the lack of the trades and sometimes some lack of actual goods as well, as you can see. Amp chief economist Shane Oliver again says that he thinks that, you know, people who have been used to spending discretionary income on hairdressers and travel, physical goods, cars, buildings are going to have, you know, money saved up. But these costs are going up too. As you know, the car manufacturers can't find the parts or get the parts to make the cars and the cost of cars are going up. Secondhand cars are in some cases selling more than first hand cars, new cars. So you know, just be aware that the renovation costs are going to be considerable and it is something that, you know, you need to look at and we need to be really mindful of as we go forward. So just keep that in mind because I think more and more this is something that we need to be considerate of. So as you can see, there's a lot of things to think about. If you don't have to renovate now for an equity increase or for an opportunity to sell the property or rent the property, it might be worthwhile just considering waiting for a little bit. So that's really my wrap on what's happening. Bear in mind too, you know how I love a good renovation. If your property's gone up by 70,000 in the last year, maybe there's an opportunity for you to actually consider accessing that equity and start planning for the second media room or office or kitchen or bathroom upgrade. So, you know, that's something that we're Talking about with a lot of our clients at the moment and investors choice and we're seeing people who are considering doing those upgrades rather than moving house. So, you know, if that's you, please, you know, I'll put the once again the link in the show notes, but have a call with us regarding your finances. We'd love to be able to help you and assist you. And this week I'm assisting Elisa on the discovery call, so you may even talk to me in the discovery call. Usually I just get to chat to people once we know the borrowing capacity. I do the strategy call and pull up all my data and see where they can borrow so where they can buy with the borrowing capacity they have so that they're making strategic decisions on where to buy. But this week I'm on the phones as well. So if you're interested in finance or seeing if you've got some borrowing capacity, hit us up. Go to investorstoys.com bookacall and I look forward to chatting to you but you know, I think we probably exhausted a few questions there. As I said, unfortunately, you know, I'm not a developer dean, but I'm glad that I could give you a little bit of extra information on how to consider the FISO and comparable sales for the property that you're looking at developing. I'd really encourage you to either get a mentor or someone who has the knowledge and skills to be able to do the FISO full out. And I am currently looking at opportunities for all of us to potentially come together as a bit of a coalition and invest together in some, you know, profit with purpose investment opportunities. I know that there's a lot of housing needs at the moment for a lot of people and creating sanctuary and security is what we've been really able to do as landlords and I think we've got some capability for us to do a lot more, so. Oh good, I'm so glad it was helpful for you. But as always, guys, you know this is really great forum in the All Property Success Club. There's amazing people in here with great insights. You can learn a lot. Go to the units, I think they call them guides at the top now and go through the modules and all the information people have put up there, their renovation projects and their costings if you're interested in that, have a look around the research, the dot, maps, reports, etc. There's so much information there and obviously got your Property Success club. You can also go back and listen to over eight years of monthly calls which always astounds me that so many people do. And I'm glad that you do and that we've been continuing to add value and. Oh, let's just have a little update and see where we are with our. As you've probably seen, managed to get a new website, some more photos that have been taken. But where are we with The Kids Helpline? $17,092. We are so close. I'm speaking to the head of the Kids Helpline tomorrow. I can't wait to hear a little bit more. Hey, Susie. Hear a little bit more about what they've been able to do with our donations and you know, the demands that they have on the Kids Helpline at the moment. I'm so grateful for you as a community to come together and really support this incredible cause. And I'm really, really proud of what we've been able to do and to assist them. And as always, tell your friends they can get into that your property success club. Get the access to those 10 videos. Education and this community monthly calls where we answer the questions just for a donation to Kids Helpline. Used to be $97 a month for as little as $25. Once off you can get in. People do monthly people pay 500 bucks. Whatever it is, whatever you can afford. You know, I want to make education really accessible to people and I want to make sure that we're helping those in the community who need it the most. So as always, guys, it's been so lovely speaking to you. I know a lot of you are watching this and recording and I hope the future has been fantastic. No more earthquakes have attacked since since then and since now. And I hope, as always, here is to your property success. Have a fantastic month and I look forward to talking to you next month. Bye for now.