Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMToday the Trio roll up their sleeves and tackle first-time property investors and family planning. A special callout to our lovely listeners, "Sheree" and "Chloe" (not their real names), for prompting this insightful episode.Why do first-time investors often consider helping their children onto the property ladder? Cate and Mike discuss Sheree's situation, where family planning meets wealth-building.Cate highlights the unique challenges and strategies for investing with a long-term goal of aiding children, even when they're still in primary school. Cate dives into key considerations such as the structure of the investment, future financial implications and the need for expert advice. Whether it's about protecting the asset, tax-effective planning or ensuring the investment is a gift and not a burden, the duo unpacks what parents need to know before buying property for their kids.Mike emphasises the importance of planning for retirement first before taking steps to support children.They explore how defined benefit super funds like Sheree's provide a foundation of financial security and why this can influence property investment decisions.Chloe’s question focuses on planning her first property investment. She impresses the team with her detailed groundwork—budgeting, borrowing and cash flow planning.Cate underscores the importance of clarity around long-term goals: Is it about building a multi-property portfolio or securing a single growth asset? This distinction guides every next step.The team debates whether to go for national versus local expertise when selecting a property, with Cate advocating for local buyer's agents who deeply understand their markets. She also highlights the risks of analysis paralysis and the elusive "perfect property." Instead, they encourage focusing on sound fundamentals and a strategy aligned with future aspirations.  ..... and our gold nuggets!Mike Mortlock's gold nugget: "The more work you do on your strategy, the fewer options—and more clarity—you'll have for making the right decision."Cate Bakos's gold nugget: "When you're helping your kids, always ask: Is it a gift or a burden?"  Show notes: https://www.propertytrio.com.au/2024/11/25/first-time-property-investors-family-planning/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMCate kicks off this episode with Dave while Mike hikes around New Zealand. The Duo note some of the interesting indices for the state of the nation in the month of October. They marvel at Hobart's quick pivot and wonder what has driven the positive growth. The combined regions outperformed the combined capitals too, and despite the strong monthly performance in Perth, they note that growth has slowed of late. Dave and Cate delve into reluctant-seller psychology. After the high's of 2021 for the eastern states, and observing Perth's stellar run over the past couple of years, it's interesting to consider what behaviours are exhibited when locations experience downturns following a strong run.Dave notes that consumer sentiment data is suggesting many have a keen eye on Melbourne, and Cate shares some observations about the regional performance in Victoria. Segmenting the market into price quartiles tells quite a story. Cate and Dave use some examples in the market and they canvas the reasons why the various price points have performed so differently to each other. Rents remain steady, and aside from Hobart, the pace of growth has slowed. However, vacancy rates remain very tight and yields have strengthened. Dave points out that this combination of data is a leading indicator for value growth.Perth's downward trajectory over the past few months is quite obvious, but what could be driving Hobart's rent? Could it be an increase in short-stay dwellings? Has domestic travel to the Apple Isle increased? Or could it be related to the weather? The Duo mull it over...The correlation between capital growth and listing activity is one of the Trio's favourite discussion points each month. Although Dave makes an important point. "One of the issues with a five year average is that it doesn't factor in population growth." What's driving listing activity around the nation? Tune in to find out.... New listing activity has pivoted and Melbourne, Hobart and Canberra listing activity has dropped compared to this time, last year. On the flip-side, Perth and Darwin are exhibiting higher numbers of new listings.The consumer sentiment index shows a marked increase in the "Time to Buy a Dwelling) measure, and Dave breaks down the data by state. Victoria's measure is now over 100, a 31.5% increase, while Western Australia's measure dropped to 66. Dave points out the potential price signals in combination with listing activity.Investors are moving back in to the market at a higher rate and lending has remained steady accross the board. Victoria has underperformed on the investment lending front, unsurprisingly. NSW leads the chase with 44% of new loans secured in September. Monthly change of employed people jumped 44,000; a figure that eclipses what many would have expected. Our unemployment rate remains steady despite fears of job-losses as coined by the RBA.And... time for our gold nuggets... Cate Bakos's gold nugget: The new listing activity for 2024 campaigns is easing and there is only realistically another fortnight to run before campaigns finish and the market goes into hibernation over the Christmas period. For any buyers who wanted to purchase in 2024, now is the time! Get out there!David Johnston's gold nugget: Make your own decisions based on your own personal economy! Shownotes: https://www.propertytrio.com.au/2024/11/15/ep-284-oct-market-update/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMToday the Trio roll up their sleeves and tackle regional investing. A special callout to our lovely listener, Ester for prompting this exciting episode.Why do investors choose to invest regionally? Cate shares some of the reasons she started investing in the regions. Cashflow is one key element, but diversification also counts.Cate sheds light on some of the considerations that investors need to apply when selecting one region over another. Distance, demographics, target tenants and the growth drivers are all important considerations.Lack of diverse employers is a threat to some of the smaller regional cities, but Townsville is not one of these. It's the 14th largest city in Australia and this glorious, sunny city has a lot on offer. The Trio delve into what makes Townsville special.Cate shares some of the common traps and downsides that investors need to be aware of when it comes to regional investing. Picking a cheapie and buying in the Bronx is a risk for those who don't do their homework. Careful selection of a good investment area is critical.Keeping trade services in mind is really important in the regions.Cate also sheds light on some of the difficulties associated with harnessing tradespeople in some of the regional cities.Let's talk about Townsville! There are some significant projects underway and the Trio list some of these. The strategic location and port access count for a lot also, and the Trio also chat about the economic and industrial drivers in the area. Townsville is made up of more than forty suburbs, and it's bigger than Darwin when it comes to population count. It's the largest urban centre in northern Queensland, and surprisingly, health is the number one employer in the city.Townsville's involvement in defence is significant and the Trio share some of the insights they've gathered. Job growth is the big item for discussion, though. The fundamentals sound very strong and sustainable. Tune in to find out more........ and our gold nuggets!Mike Mortlock's gold nugget: "Firstly, make sure Townsville, (or any other region) fits within your strategy. But... is the word already out about Townsville?"Cate Bakos's gold nugget: You really need to understand the growth drivers, the vulnerabilities of the area, the good streets, the tenant demands and the flavour of the region. Buy and hold, long term is a great fit for regional cities.Special mention to our industry friend, Simon Pressley from Propertyology, for his generosity with his research and information.Show notes: https://www.propertytrio.com.au/2024/11/11/regional_investing/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMToday's episode is all about depreciation; Mike's wheelhouse! Dave opens the conversation with a question for Mike, "How often should I update or review my depreciation schedule to maximise my tax benefits?" Reports last an owner as long as they hold the property. Mike delves into the role of the quantity surveyor when it comes to estimating construction costs.One of Cate's investing mistakes gets aired; after having completed a significant renovation on an investment property, Cate overlooked the chance to arrange a depreciation schedule at the onset. Mike unlocks the magnitude of unclaimed deductions in our nation.  How easy is it to arrange a depreciation schedule, and what documentation is required?  And how do self managed superannuation fund property assets differ when it comes to deprecation?Mike explains the challenges of high depreciation versus high capital growth. He is often asked the question by investors, and his Southbank high-rise, one bedroom apartment example illustrates the inverse relationship between the two measures. If a property is over forty years old, is there any point looking at arranging a depreciation report? Tune in to hear the answer! Mike explains the importance of physical inspections when a tax depreciation specialist is formulating the depreciation schedule, and he also sheds light on the circumstances that allow for a physical inspection not to be conducted. Mike's service station story is a warning to investors who engage professionals who cut corners. What is the difference between a repair you claim through your accountant and a depreciable item on your schedule? Mike shares the nuts and bolts for our listeners.  ..... and our gold nuggets!  Cate Bakos's gold nugget: Well-meaning advice from accountants to maximise tax deductions isn't always great property advice. If in doubt, get a second opinion.Mike Mortlock's gold nugget: Don't assume that it's not worth getting a depreciation schedule. Always check! Show Notes: https://www.propertytrio.com.au/2024/11/04/depreciation/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM Today's episode is all about loan to value ratio's (LVR). Mike throws Dave the first question;  "In twenty words or less, what is LVR?"  Cate delves into the reasons why LVR is so important when it comes to Mortgage Insurance. Managing risk is what lenders do, but once a buyer triggers mortgage insurance, dwelling types, quirks and risks count for a lot. Heightened scrutiny and having the final say on loan approval is something that a mortgage insurer often holds.  Cate also explores those professionals who get exemptions when it comes to LVR and mortgage insurance waivers. Dave's examples bring this point to life; from postcode restrictions to zoning types to the property condition. Policies vary greatly among lenders and it can be quite complex. Cate also shares some of her experiences and insights in relation to tricky properties that sometimes pack a nasty lending surprise. Strategic mortgage brokers can assist with the associated challenges. Dave shares the history of LVR and Lenders Mortgage Insurance in Australia with the listeners... a step down memory lane for some, but a significant step for home ownership in Australia.  Cate reminisces about the impact of smaller deposits and the burden of Lender's Mortgage Insurance. Is it a cost of doing business? Absolutely, but it's tough on first home buyers. Cate's support of the First Home Guarantee is strong, but she feels our Government need to offer more places to eligible applicants. And the 2% savings guarantee for eligible single parents is one policy she loves.  LVR can be a great metric to track our prudential regulator’s level of concern. Macro-prudential policy intervention is evident when we look through the history books at high LVR loan origination. But what does the current five-year data show us? Tune in to find out.  We talk a lot about macro-prudential regulation and how it affected credit, particularly for investors during the 2014 – 2019 period. APRA intervened, and before we knew it, lending became tough, despite reasonable interest rates. Credit was almost impossible for investors. Dave talks our listeners through the challenges of this period and the impact that our regulator had on the property market. LVR is a viable measure of health that a lot of investors and businesses use. Cate talks us through the concept of overall LVR, and how it can be reduced/optimised. Lastly, Cate and Dave touch on cross-securitisation... the good, the bad, the ugly.  ..... and our gold nuggets!   Cate Bakos's gold nugget: Buyers must manage risk when they are in high LVR territory when they are making unconditional offers.  Dave Johnston's gold nugget: "LMI is the cost of doing business, as Peter Koulizos has told us." Dave talks about the benefit of being open minded to a higher LVR and LMI in order to get into the market earlier.  Mike Mortlock's gold nugget: Mike talks about the potential cost of avoiding LMI, and he reminds listeners that these costs can be modelled. Show Notes: https://www.propertytrio.com.au/2024/10/28/mastering-accessing-equity/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMMarilyn's question is about the suburban rail loop civil works in Melbourne, and how this could influence the suburbs and property markets that are impacted by the project. Dave sheds light on the shortfalls of Melbourne's current rail lines, and the future changes that the project will enable."It is the most expensive infrastructure project in Australian history".  Mike ponders how the new stations and hubs could impact different genres of properties and he dares to step into town planning initiatives. Dave asks the obvious question; how will higher density, (and more inhabitants) impact businesses and heightened demand for services?  How could this impact property prices in the 1.6km radius within these affected stations? Cate points out that this insight is transferrable amongst several other cities that have invested in their rail infrastructure.Cate and Mike discuss the positives of a commutable location with easy transport hubs. Will buyers pay more for an easy commute to work? Absolutely.  What are the likely impacts of higher density hubs in designated locations?The Trio consider the impact across the nation for various planning changes for high-amenity areas.  And Cate raises the question: what do these new stations mean for the various precincts that are impacted?Melbourne has four new train stations hitting the map in 2025 and there will be plenty of positives. Hunter asks the Trio where they'd invest if they had $500,000 or $1,000,000 in either Melbourne or Brisbane. Cate ponders why Melb vs Brisbane is a popular consideration. Recency-bias from the Olympics, or weather differential are two considerations, but could it be price-points? Or the media?  Is Melbourne's potential bounce back a factor? Dave lays done some really important property planning considerations, and Hunter's scenario is put under the microscope.The Trio unpack some of the complexity that should be considered, and Cate shares some specific Victorian examples at these two price points.  Mike unpacks locations around the country where listings have increased at the highest rate. What are they? And why have the listings exploded? Tune in to find out....  ..... and our gold nuggets!  Mike Mortlock's gold nugget: The strategy is more important than the hotspot!Cate Bakos's gold nugget: Rail amenity counts for a lot. What are our town planners thinking, and how is rail infrastructure playing a key role in our growing population threat to traffic congestion? Show Notes: https://www.propertytrio.com.au/2024/10/21/listener-questions-rail-projects-and-melb-vs-brisbane/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMMike kicks off this episode, and after stumbling with Cate's surname (yes, he's on fire with names), the Trio crack into the market update for September."Is this the beginning of the peak or decline for these markets?"Perth's rate of growth has slowed, and the Trio ponder whether it's listing numbers, tightening household savings, or interest rate pain that is contributing.  How long can the three top performers maintain this strength? And are they at their peak? Perth's annualised growth is currently sitting at 24.4%, which is significant by any historical measures.Taking the Reserve Board's monthly press releases into account is important. Until we return our inflation numbers to a figure within the target band, our interest rate pain is likely to remain.Dave sheds light on net overseas migration numbers and draws a parallel with the slowdown in price growth, and the Trio overlay the listing figures that are amplifying the supply/demand imbalance. Mike and Cate chat about mean reversion and some of the weaknesses of this popular argument. Just because Darwin hasn't performed well over many years, does not mean that Darwin's 'turn' is next. There is more to mean reversion than just labelling a slow performer 'the next one'. Rental pressure continues to soften. What could explain Hobart's pattern? Rents have all come off the boil with the exception of Hobart. Cate has some insider insights....Will pressure on rents continue to ease? As Dave mentions, household formation rates are playing a powerful role in the rental numbers also. Cate ponders the impact of student numbers and the effect on market segments, specifically inner-city apartments.The key takeaways from the consumer sentiment index include 'Time to buy a dwelling'. The WA figures are interesting in particular. The 'Interest rate expectations index' has dropped substantially, and once again, the differences across the states and territories might be telling us a valuable story.Sentiment counts for a lot, and Cate considers the impact of the anticipation for a rate cut during September. The 'House price expectation' index was another that the Trio noted and Dave noted WA's and QLD's softening for this measure, and contrasted it against Vic's and NSW's uptick. And we've hit the highest number of new investor lending commitments that we've seen since Jan 2022 this month, and as Dave points out, "That was back when the cash rate was just 0.1%."Are first homebuyers getting enough support?Shared equity... yeah/nah? The Trio chat about some of the government led initiatives that offer some support to first homebuyers.  And... time for our gold nuggets... Cate Bakos's gold nugget: The rate of change of rental growth is easing and it will be interesting to see how this filters through into political policies.David Johnston's gold nugget: "Markets are cyclical. No market is always flying or always struggling. Have a long term plan when you're buying property." Mike Mortlock's gold nugget: When it comes to first homebuyer activity, it seems that we're addicted to stimulatory stuff. But we don't tend to have many policies that help with supply. "We need to attack the supply issue, rather than stimulus, stimulus, stimulus."

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMToday's episode is a great case study. Georgia is stating to feel the strain of managing her two investment properties and she wants to make sure she makes the right decisions now so that she can enjoy her retirement. Georgia is 52 and has no children, lives in Sydney, and works four days per week. She owns a property in Pagewood, (Sydney's eastern suburbs) and St Leonards (lower north shore). Collectively they are valued at $2.86M and they bring in a rental income of $86,000 per year.Her plan has always been to eventually move in to the Pagewood property, but she wants some help working out when and how to do this. Ultimately though, Georgia will want to downsize into something more manageable. What are Georgia's key challenges? Georgia has no borrowing capacity in this current economic and lending climate. The change in interest rates have been tough on Georgia, (and many others), but her offset balance and savings balance ($285,000) are holding her in good stead.  Dave steps through these challenges in details and has some ideas and modelled scenarios to share with Georgia.Should she hold? Should she sell? Or are there other options?  Considering the cashflows is one thing, but calculating the recent capital growth that Georgia's two properties have delivered is also important. Mike shares Georgia's financials with our listeners, and while the data is detailed, it's reassuring to see just how much wealth she has built whilst also enjoying the important things in life. One key observation is the power of time, and what this has done for Georgia. Georgia has a portfolio equity position of $1.257M and an LVR of 56%. She has stayed the course, and as Cate points out, "It's a healthy LVR!"  Georgia considered selling one of her properties to fund her cashflow. Dave chats about the modelling, likely outcomes and questions they addressed. What did they determine would optimise Georgia's scenario? And what did she decide? Tune in to find out how the modelling gave her the answer. Cate touches on the value of time, and the prize that it can deliver for those who are patient.  Mike discusses the shock that our pace of interest rate increases delivered for a lot of investors. While we may be close to equilibrium, our last two years have been tough on plenty of households.Back to Georgia... what is her risk profile? And what determines risk profile? And how does risk profile translate into goals, options and decisions?  Back to metrics... the Trio chat about how to best construct conservative estimates and Cate leans on her 29 years of investing experience and assures Dave that his vacancy rate modelled assumptions are reliable. Mike circles in on the historical growth of each of Georgia's two properties and he wholeheartedly supports her decision. Dave shares in detail the three scenarios that were modelled... and following trialling multiple versions, the findings were compelling. Tune in to find out!  ..... and our gold nuggets!  Cate Bakos's gold nugget: "Personal finance is just that.... it's personal!"Mike Mortlock's gold nugget: Mike's vegies and dessert metaphor is apt, but in this case, he marvels at how Georgia made the vegies into dessert. Her regimented approach impressed us all.  Dave Johnston's gold nugget: This was one of Dave's favourite case studies and he highlights why you don't need to own lots of properties to get a benefit out of one key plan.Show notes: https://www.propertytrio.com.au/2024/10/07/case-study-retirement-success/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMToday's episode is a special one. The Trio have often reflected on their own past experiences as investors and home buyers. This time, they decided to share their nerves, excitement and rookie mistakes when they each tackled their own first purchases.Mike had an exciting week when he bought a home, rolled his car and took of to Thailand on a trip. He paid $230,000 for a home in Waratah (Newcastle) and thought hard about all of the ways that he could generate some income out of his asset. Renting a room to his previous flatmate, drawing up a depreciation schedule, and contemplating a cleanup of an otherwise rugged property was the beginning of Mr Mortlock's property success.  A $30,000 immediate uplift for a $12,000 investment was a great payoff. Young Dave was a 25/26 year old mortgage broker, driving around in his EB Ford Falcon when he decided to get serious about mortgage broking. His red clinker brick, older style apartment caught his eye immediately, and for all of the right reasons. Dave paid $176,500 for his first home.  Cate touched on the fear of debt and the enormity of the pressure she felt once she took possession of her first home. This isn't an uncommon feeling for some buyers.  "What if I lose my job?" Cate's first purchase was a townhouse that she bought off-the-plan in Mordialloc. She talks about the pros, cons, and the better alternatives she could have targeted. She contrasts the skills she had then vs now.Dave was able to apply his mortgage broking skillset to his acquisition, but he maintains that he felt very nervous about the purchase itself. From contract signing to comparable sales data, Dave recalls that he was relatively green as a first home buyer. He recalls the ways that he monitored and researched loan products and interest rates.  How did buyers navigate the home buying process back in their day? Cate recalls her expensive phone bills, when agents had mobile phones and Telstra charged by thirty second blocks for landline calls to mobiles.   "Doing the legwork" was different for first home buyers prior to online property search engines being commonplace. From slicing out line advertisements in the paper to collecting magazines in the coffee shops, Dave and Cate reminisce.What were their income to asset price ratios? Clearly, Dave and Mike were on better incomes than Cate.  Mike: 3.4% Dave: 3.5% Cate: 4.8%How did the Trio members each borrow? What were their loan products? Did they go via a broker? And how did grants and initiatives spur on their decision to purchase?  And how have their first purchased properties performed over the years since reselling?  ..... and our gold nuggets! Mike Mortlock's gold nugget: "Don't sell if you can avoid it!"Dave Johnston's gold nugget: Getting into the market and making a decision is important. Don't overanalyse, get in the game. Cate Bakos's gold nugget: Surrounding yourself with knowledgeable people is important. Cate's top two picks are; 1. a strategic mortgage broker, and 2. a great conveyancer. Show notes: https://www.propertytrio.com.au/2024/09/30/our-first-property-purchase/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMMike's company, MCG Quantity Surveyors, recently released a comprehensive report on affordable housing in our capital cities. The report focuses on the lower 25% of the property market across Australia’s major capital cities. MCG wanted to identify what’s truly "affordable" in each market by analysing the 25th percentile of sales prices.This approach gives a clear snapshot of the most budget-friendly properties currently available, which is crucial information for anyone trying to navigate today’s challenging market.  Cate steps through some of the median prices around our nation and she contrasts Sydney against Perth.Mike asks, "How many years of income it would take to purchase a median priced home in the market?"House price to income multiples are a reasonable measure of affordability, and the multiples for both houses and units across the two cities is fascinating.  Contrasting other cities is intriguing too; Perth vs Hobart requires more consideration than just income multiples. There is no doubt that the metric is a bit of a blunt instrument, though.Are there specific areas within our cities where affordability is better, or is it tough across the board?  IIn Sydney, for example, regions like the Outer South West, Central Coast, and the Outer West and Blue Mountains offer more affordable options compared to the inner suburbs. These areas typically offer a more suburban or semi-rural lifestyle, which tends to come with a lower price tag. In Melbourne, the western suburbs such as Werribee and Tarneit are also known for being more affordable, particularly for houses. These areas are popular among families and first-time buyers who are looking for more space without the hefty price tag of inner-city living. "Mike, for someone looking to buy or invest, where should they be focusing their attention?"  Despite the strong recent growth, Perth still rates. Tune in to hear why....Cate prompts Mike to share what the data means for the future of affordable housing in Australia.Affordability varies significantly not just across the country, but even within individual cities. It’s crucial for buyers and investors to understand these local dynamics and to do their homework. While the headlines often focus on the un-affordability of the major capitals, there are still opportunities out there if you know where to look.  The data really emphasises the importance of being informed and strategic in your property decisions. Whether you’re buying your first home or looking to expand your investment portfolio, understanding the market is key to making the right choices.  ..... and our gold nuggets!   Mike Mortlock's gold nugget: Median house price to income multiples challenge some buyers and Mike showcases the opportunities that quality units can provide when considering the lure of inner-ring, blue chip suburbs.Cate Bakos's gold nugget: With all of the changes we're seeing at local council level, it will be interesting to see how the affordability measure changes with higher density developments that are closer to CBD. Dave Johnston's gold nugget: "Always flip it around to your own situation, your own economy and your own price point in order to work out what the best investment is for you." Show notes: https://www.propertytrio.com.au/2024/09/23/budget-friendly-properties-in-aussie-capitals/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMMike kicks off this episode, and after establishing Dave's surname's correct spelling, the Trio launch into the August figures. National figures were up across the board +0.5%, but as Mike eludes, it's really a tale of eight cities. How long can the three top performers maintain this strength? And are they at their peak?Perth's annualised growth is currently sitting at 24.4%, which is significant by any historical measures. "We've got three very heavy lifters, and their growth isn't really easing", says Cate. Although Dave's focus on Brisbane's growth rate suggests it may be a city that is coming off it's recent high pace of growth.  Interestingly, median values are not the most reliable indicator of places on the performance league ladder. The Trio have discussed the imbalance of houses to units in the various capital cities, and they cite this example as a case in point. Given Melbourne has a higher proportion of units than each of Adelaide, Perth and Brisbane, the median value figure is influenced by this ratio in every city. What could trigger Melbourne's market to rebound? Cate steps through her three possible triggers for change. Dave points out the rental yield figure; a potential indicator of a price signal to a lot of investors. For the first time in the history of the Core Logic gross rental figures, this is the first time that Melbourne has been on par with Brisbane and Adelaide.The Trio delve into the impact of COVID and the market recovery, followed by Victoria's static performance on the Victorian regions. Will pressure on rents continue to ease? Supply is our challenge, but quite a few cities are showing a slowdown in rental rises. An increasing household formation rate, seasonality in the southern states, and lower student numbers are contributing to some of the easing. In addition, holiday house sales have softened the rental conditions, as has the return to work for many workers. Less people need their additional bedroom for work-from-home purposes, hence household formation rates have been able to increase. Listing numbers count for a lot when it comes to capital growth, because supply and demand can tell us a lot. The three high performing cities have particularly tight stock levels and a decline in old listing numbers, however Brisbane appears to be exhibiting higher new listing numbers this month; a possible sign of market easing.And while listing figures are segmented for cities, unfortunately they aren't segmented for dwelling types, and as Cate points out, there are markets within markets. The Trio cast their gaze over the Westpac Consumer Confidence Index. A slight increase in the 'time to buy a dwelling' looks significant until we recognise that sentiment to buy a dwelling is still well under 100, indicating that less than half of the population believe that now is a good time to buy a dwelling. Dave's state-based focus is intriguing though. Which cities have had modest increases, and which have shown far higher figures? The answer may surprise...Inflation remains our RBA's challenge. As Dave points out, inflation hurts everyone, while higher interest rates hurt a segment of our market. Our reserve bank governor's caution is palpable and the Trio's general consensus is that we won't see an interest rate cut in 2024.Turning to finance and lending; refinances have fallen away and loan percentages have been impacted by this change. But what has caused the tumble in refinancing? The Trio unpack the various triggers for this.And the Trio consider Loan to Value Ratios (LVR's) and the historical changes that have occurred with leveraging, deposit sizes and costs of borrowing..... an ep in the making! Dave, Cate and Mike discuss the intricate balance that the RBA have to manage between inflation, employment, wage growth and market confidence.  Lastly, the three year bond yield currently sits slightly below our current interest rate and indicates a potential for short to medium term market expectations for a rate reduction (or two or three)... time will tell, but our money markets are interesting leading indicators. And... time for our gold nuggets... Cate Bakos's gold nugget: For all of the investors who have been experiencing rental growth.... we have to keep market conditions in perspective, and given rental growth is slowing, investors need to pay attention to their property manager and take on good advice.David Johnston's gold nugget: "If you invest, expect ups and downs, but don't lose sleep during the downs. Usually, when we make mistakes, it's when our investments are flat, and people feel the heat and sell." Maintaining a long term, pragmatic expectation is a healthy perspective. Show notes: https://www.propertytrio.com.au/2024/09/16/ep-275-aug-market-update/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMThis week our topic comes from a valued listener, Gaurav.  Gaurav and his wife have made some impressive strides in building their property portfolio since moving to Australia in 2019 by now owning 6 properties, and they're at the stage where they are looking to achieve financial independence within the next 5 to 7 years."Hi Property Trio Team, I have been listening to your podcast for the last two years and have listened to every episode of the property trio previously The Property Planner, Buyer and Professor, we do miss Peter, though Mike is a great add to the team.  Our goal is to be financially independent in the next 5 to 7 years.  Are we on the right track, what are some of the steps we should take to get there in time." Mike steps through the specifications of the six properties in their portfolio, all the while marvelling at their acumen and sheer drive.  Their total debt sits at $3.219 million, giving them a Loan-to-Value Ratio (LVR) of about 76.6%.This is impressive, and no mean feat!  Our couple's rental incomes may be strong, but their debt repayments are greater, leaving them with a net monthly rental loss of $3,195. But stepping through living expenses, owner-occupied mortgage obligations, negative gearing benefits and other deductions change the figures significantly.Mike sheds more light on the associated tax benefits that Gaurav and Amit have access to.  Given that their properties are negatively geared, they’re in a position to leverage some tax benefits. Their annual loss on the properties is approximately $38,340. With the properties being jointly owned, this loss would be split evenly, reducing both Amit and Gaurav's taxable incomes by $19,170 each. Given their current employment incomes, this reduction in taxable income would translate into a tax refund of about $7,092 per person. Combined, that’s a total refund of $14,184 for the year. When we break it down on a monthly basis, this refund adds an additional $1,182 to their cash flow each month. So, after factoring in this tax benefit, their after-tax surplus jumps to $6,570 per month. This is a significant boost to their financial position, helping them manage their expenses and potentially accelerate their investment goals.Dave steps our listeners through the outlook and timing for our amazing couple to reach cashflow-positive status with their portfolio.  Cate asks the big question: Can this couple retire within seven years?  At the seven-year mark, our couple's projected property portfolio is valued at just shy of six million dollars, but despite this impressive figure, they aren't in a position to retire. The Trio ponder the power of time and they mastermind some ideas for Gaurav and Amit to consider in order to optimise their retirement outcome. "To answer their original question, I think to be conservative and provide a range, I would say that they could expect to be able to live partially to entirely off their rent in 10-15 years on their current trajectory", says Dave. "A big part of this picture is to maintain good savings habits."Dave canvases some suggestions to consider for our duo to maximise their lifestyle flexibility. Divesting doesn't always feel great for investors, but sometimes selling assets is an important part of an investor's long term plan.  .... and our gold nuggets!  Mike Mortlock's gold nugget: Dedicating time and being decisive is the key, according to Mike.Dave Johnston's gold nugget: "Most people don't actually know their numbers when they are looking to make a purchase, let alone having a long term plan." Flying blind is so dangerous, as opposed to having a clear strategy that can aid you to make decisions that are aligned with where you want to be in the future. Cate Bakos's gold nugget: Selling a mature property vs holding - what is the right approach? It all stems from strategy. There is no right or wrong, but investors need to be clear about their strategy before they start acquiring assets.Show notes: https://www.propertytrio.com.au/2024/09/09/listener-question-financial-independence/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMThis week our topic comes from Cate. Dave kicks off the episode by delving into the concept of a "sixth sense", and questions the science behind it. From pattern recognition experience, to subconscious processing, and a study called heuristics, Dave questions the notion of this ability."When do your spidey senses start to ring alarm bells?" Cate steps through some of the signs that she has picked up on when canvasing a neighbourhood or a neighbouring property. What are the subtle signs? And what should buyers keep an eye out for? Cate shares some real life experiences in this gripping episode.Safety is paramount, and the Trio talked together about some of her hair-raising, less than pleasant inspections. Having safety protocols in place is essential for all buyers, including buyer's agents.When else do you get a sense of an issue with a dwelling? Being familiar with issues such as illegal conversions, works that have been conducted without permits, and questionable extensions/renovations that may not have insurance cover is a valuable accrued experience. How does Cate tackle some of these issues to determine whether a property is worth pursuing or not?Mike delves into vendor behaviours and vendor personalities. How can an experienced person determine a potentially difficult vendor? And what insights can buyers apply to get a better idea of what type of vendor could be on the other side of the transaction. Cate shares some of her past actions when it comes to protecting buyers from vendors who attempt to do the wrong thing. One of her stories includes a vendor who swapped out good appliances for inferior appliances.Contract inclusions and documentation is critical. Strata managers are another key person in the due diligence steps for a strata property, but gleaning information is not always easy. However, there are some warning bells that buyers should be aware of. Sometimes issues can stem from legal representatives that aren't responsive or throw other stressful challenges into the mix. Cate steps through some of the tell-tale signs and things to look out for.And what about sinister issues? The Trio unpack some of the more spooky elements that can sometimes strike in a property...... and our gold nuggets! Mike Mortlock's gold nugget: Mike shares a good tip he remembered about meeting the neighbours if in any doubt.Cate Bakos's gold nugget: "If it's an important thing, and it's been agreed to, get it in writing. And if the other person is reluctant to sign, there is your warning bell.Show notes: https://www.propertytrio.com.au/2024/09/02/intuitive-property-inspection-sixth-sense/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMThis week our topic comes from a research report commissioned by Mike’s business MCG Quantity Surveyors, and it focussed on how yields change per city as distance from the centre of the town or CBD increases, so there’s a lot to unpack here. We often hear people quoting about buying within say 10, 20 or 30kms from the CBD, but Dave unpacks the factors that also need to be taken into account with this consideration, and Cate questions whether commute times are the more important measure.But how do units and house metrics differ when it comes to distance from CBD? Rental yields are one interesting metric that MCG's study has focused on in each capital city. There is one city that bucks the trend... and it's Melbourne. Melbourne's unit rental yields decrease as the distance from CBD increases.  What is driving this? Could it be buyer attitudes towards outer ring locations? Is infrastructure the problem? Or is Melbourne's landscape physically different? Tune in to find out. AAffordable and aspirational are two very different drivers. Cate and Dave ponder how our urban make up differs around our capital cities. In particular, Dave cites some interesting student population statistics.  The results may surprise our listeners!Regional areas were also canvased in the study and some of the drivers for double-digit yields are explained by Mike, and he cautions those investors who target rental yields without understanding the other aspects of investment strategy and asset selection.The Trio take a trip around Australia and uncover some of the highest rental yields across the nation.  Cate and Dave agree on the importance of looking beyond the rental yields. Conducting thorough due diligence is essential for any investment area."The study has essentially confirmed our thoughts that regions are higher yielding than cities and the super-yields are often associated with mining and the like. So getting back to these concentric rings of distance from the CBD. What do we think the strengths and weaknesses of an arbitrary division like that is for investors?"  The Trio loved bringing this episode to life and MCG Quantity Surveying have provided the report for listeners to access. We've saved it in our show notes and we hope our listeners enjoy digesting it.   ..... and our gold nuggets! Cate Bakos's gold nugget: It's integral for investors to know what their purpose is for investing. Different life stages and different retirement strategies could shine a spotlight on yield.David Johnston's gold nugget: "That's a great one Cate. I might just double down on that!" Mike Mortlock's gold nugget: Mike likes the fact that they took a metric that is often used, and demonstrated that research is not always valuable to investors. Yield is not everything, it's just one part of the puzzle. Show notes: https://www.propertytrio.com.au/2024/08/26/proximity-to-cbd-across-10km-rings-impact/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMMike kicks off this episode, and the Trio reminisce about Pete Koulizos's special place in the history of the show as they marvel at Adelaide's stellar growth. How sustainable do they think the City of Church's continued growth is?Dave references the quartile performance breakdowns, and the possible leading indicators when it comes to capital city growth cycles. The softening of the higher priced quartile of the market is important to note.The market sentiment is currently hinging on interest rates and the possibility of a rate cut, and Cate canvases the challenges associated with this, and in particular, her local market. Despite the heightened listing activity, interstate investor interest is buffering Melbourne's price falls. The difference between the heated markets and the softer markets at the coal face boils down to the sense of urgency. Brisbane, Adelaide and Perth are plagued with tough buying conditions, while other softer markets are experiencing longer days on market, more indecision and relaxed competition.The chart illustrating the onset of COVID in March 2020 relative to peak levels attracts some attention and the Trio consider the growth drivers, inhibitors and obvious reasons for the vast differential in growth figures. Considering that during this time, three cities that have delivered between 64%-70%, contrasted to 10.6% and 28.7% in Melbourne and Sydney, respectively is fascinating. How important is timing, and can we pick a market peak and trough?The rate of rental growth is the smallest monthly rise since August 2020 and some markets are exhibiting rental drops. It's fair to say that rental movement appears to be plateauing now. Cate reminds listeners about the seasonality of asking rents and rental stock, particularly in cooler climates. Dave hints at the impact of reducing rental rates on the CPI money markets also, and considers that the impact on inflation could be positive. And what is happening with listings? We have more new listings than previous years, but our total listing figures are still below historical levels. Mike points out the correlation between listing figures and capital growth and Dave circles in on Brisbane. Could heightened new listing figures hint that Brisbane's market is peaking?The standouts in the Westpac Consumer Sentiment Index are relate to the Interest Rate Expectations index and the Family Finances vs a Year Ago. Are households getting accustomed to the conditions now, or have household savings stabilised now that some of the other costs like fuel and consumables have calmed down..... or could it relate to the recent tax cuts? Mike points out the impact of insurance and the costs associated with natural disasters on the inflation figures. Breaking the figures down into states and territories is interesting though, and NSW records the bleakest outlook for Time to Buy a Dwelling, as Dave cites. The figures within the ABS lending indicators data demonstrate that investors are certainly strong. Owner occupier finance for first home buyers is reasonably strong in both QLD, VIC and ACT and Dave puts this down to incentives and government support.Lastly, Dave discusses the delicate balance between interest rates, the unemployment rate, and the complexity that the Reserve Bank board have to consider at every step.And... time for our gold nuggets...  Mike Mortlock's gold nugget: While the monthly updates are great, month to month isn't a big indicator of movement. It's really the trends that we need to pay attention to.David Johnston's gold nugget: "If you're not willing to purchase interstate, then the month to month figures aren't that relevant. If you're not willing to purchase interstate, then the best time is now." Cate Bakos's gold nugget: Household spending of toys has been curbed, and Cate takes some encouragement from the decrease in travel/holidays in the finance and spending activity figures. Here's hoping for an interest rate cut soon! Show notes: https://www.propertytrio.com.au/2024/08/19/ep-271-july-market-update/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMEmma has a great question: "I am early thirties and my husband late thirties, we have two young children. We recently made our forever home purchase in Seaholme around a year ago (not many in Melbourne know where that is but Cate will!) $2+ mil. Our mortgage is approx $880k, mostly offset. I love the area and all going to plan we stay here forever, no plans to upgrade. Our combined income is just over $500k per year (gross) I work part time and will increase my income when kids go to school. We own an inner city apartment that is rented at $900 a week and will sell when kids are out of childcare. We have cash savings that could enable a deposit on an investment property.  My husband has purchased multiple properties in the past, (mostly smaller interstate properties) and our PPOR is my first property purchase. I have always been into shares and have done quite well for us investing pre home purchase. My default thinking has been 100% share investment after buying the PPOR however perhaps an investment property is the way to go first. My query is timing, now or wait?" Alignment of investment timing with personal financial stability is crucial for several reasons. Financial stability determines an investors ability to manage and sustain and investment, particularly in volatile markets.It also puts an investor in a stronger stronger position to absorb any unexpected costs or economic downturns that might affect their investment.Factoring in time and compound growth, an investor has some positive outcomes to look forward to, and Dave talks our listeners through some realistic modelled projections."And this is why starting early is so advantageous."Emma has also asked for the Trio's thoughts on shares vs property and what would be a good diversification mix. Emma has a background in shares and has done well. Starting off with diversification first, how should this consideration be factored into an overall investment strategy? From superannuation to asset allocation, there are many important considerations for investors to canvas. Tune in to find out...  How does a person's age factor into an investment strategy? Mike dares to answer... but there is a common theme.... TIME. What role does property play in property investment, and how does it compare to shares? Dave shares another fantastic example of leverage vs cash. Over 10,20 and 30 years, the outcomes are astonishing.  Shares versus property... Mike is in the hotseat, but Dave details the pros and cons of each too.  But canvasing a balanced strategy; for someone who is ambivalent and not particularly swayed towards either property or shares, the Trio have a few thoughts about how investors can achieve a balanced strategy.  Dave's key points include;An initial focus on securing a home and acquiring 1-3 investment properties as soon as possible,Opening a focus to shares, whilst maximising super contributions in the early daysRetaining the ability to continue paying down any existing debtTiming share investments when rental cash flow becomes positively geared, andMaintaining a healthy balance of both asset classesCate's knowledge of Melbourne's inner-west shines through, but she reminds listeners that there is more to property strategy than just circling capital growth prospects. Assuming Emma is circling capital growth, Cate has some local insights to share.What advice does Dave have for those who are anticipating inheritance and/or bonuses? Research suggests that this can impact negatively on people's diligence with budgeting and investing ..... and our gold nuggets!  Cate Bakos's gold nugget: These listeners are young and they are thinking pro-actively about investing. Time is their best friend!David Johnston's gold nugget: What jumps out for Emma and her husband is the fact that they have been investing since a young age. Dave marvels at their diligence, and reminds listeners that this couple are in a great position because they started young. Mike Mortlock's gold nugget: Mike reflects on the shares vs property discussion and he challenges our duo to consider the power of leveraging. Show Notes: https://www.propertytrio.com.au/2024/08/12/demystifying-auction-campaigns-2-2/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMWe often talk about property acquisition experiences from the buyer’s perspective, but this second part episode is all about the auction campaign process from an agent’s perspective. The Trio specifically circled in on the challenges and flavours of auction day, noting the various twists and turns that campaigns can take.What visibility does the vendor have throughout the campaign? From campaign updates to online buyer activity reports, the agents can track a multitude of leading indicators to share with the vendors along the way.  Dave promps Cate to share some of the things that can go wrong for the vendor and their agent in the final week of the auction campaign. Buyers circumstances can change, finance delays could ensue, legal issues could arise, or buyers could purchase alternative properties. So many challenges can crop up and agents need to be prepared to pivot quickly.And what happens when another similar property comes onto the market with a lower auction quote range?  Mike questions vendor-led curveballs and Cate chats about the things that can lead vendors to change things up. Cate walks the listeners through some of the behind-the-scenes things that most buyers wouldn't realise, including reserve price setting. The Trio delve into the pro's and cons of leaving the reserve price setting to auction day.  The pressure that many vendors face is quite significant, and Cate's insights into the 'half time show' (or referral) sheds light on the intensity of the decision to place the property on the market. Pass-ins can be terrifying for some, but being equipped with knowledge and comparable sales research can make a huge difference. Cate shares some tips for buyers who may face a pass-in.  Cate demystifies heckling, auction disrupters and intimidating behaviours. She also delves into the risks that buyers take if they annoy the auctioneer. Intimidating bidding is tough for buyers who are ill-prepared, but there are other mistakes that buyers make at auction. Cate's real life story about bidding increments and auction rules illustrates the critical mistakes that buyers sometimes make. The auctioneer, agents and vendor's plights must be considered when bidders make mistakes..... and our gold nuggets! Mike Mortlock's gold nugget: Mike reflects on the complexity of auction campaigns. Cate Bakos's gold nugget: How you are viewed by the vendor. The agent is the conduit between the buyer and the vendor. Buyers need to consider the impact and influence that the agent can have on the vendor when it comes to favouring certain buyers. David Johnston's gold nugget: Agents deal with different vendor personalities all the time. It's OK to ask for a bit of background about the vendor if you are wanting to understand more about what the agent is dealing with behind the scenes. Show Notes: https://www.propertytrio.com.au/2024/08/05/demystifying-auction-campaigns-2/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMWe often talk about property acquisition experiences from the buyer’s perspective. We have spoken a lot on the show over the years from Cate's perspective as a buyer’s agent. But this episode is a little bit different. The Trio have delved into the auction campaign process from an agent’s perspective to share behind the curtain for our listeners. We often find that when we step into another person’s shoes, we get an appreciation of the situation from their side. This episode is all about demystifying some of the agent-speak when it comes to auctions, but it’s also about educating our listeners to be able to get a better appreciation of the twists and turns auctions can deliver.What are the key differences between an auction campaign and private sales campaigns? The conversation quickly arrives at underquoting, and Cate distils the limitations to the transparency of the campaign, and the Trio chat about the variability of auction results. Cate also touches on the power of social proof, and also the situations when underquoting backfires on agents.The Trio canvas the challenges that agents and vendors face when competing campaigns are quoting lower estimated auction price ranges. "Appraising a property is a combination of art and science."  Dave delves into the challenges that a real estate professional, (and even a valuer) faces when appraising or valuing a property. Cate chats about the skill of the agent to manage good dialogue with their buyers, but she also sheds light on the usefulness of CRM's. What are some of the hallmarks that buyers exhibit that agents take note of? Tune in to find out. Mike reminds buyers to channel their disinterested-teenager vibes!  What steps could an agent take if they sense that they have limited buyer interest on an auction campaign?  And what does it mean when an auction quote range changes? Cate shares her industry insights and explains some of the pivots that agents sometimes initiate during a campaign.The Trio chat about the best way for vendors to approach agent selection when selecting a property. Those who promise the world aren't necessarily the best agents to go with. Due diligence is critical and a science-based approach from the agent at the commencement should be obvious. Dave delves into the planning and the campaign calendar that agents present to their vendors. From photos to styling, advertising to open for inspections... there are a lot of important steps that agents manage.  And why do agents resist pre-auction offers from some buyers, but allow others to trigger a pre-auction sale with a sharper offer? There is a reason why this sometimes happens... .... and our gold nuggets!  Mike Mortlock's gold nugget: Mike chats about the benefits of buyer's agents and the skills and services they bring to the table.Cate Bakos's gold nugget: Agents deal with different vendor personalities all the time. It's OK to ask for a bit of background about hte vendor if you are wanting to understand more about what the agent is dealing with behind the scenes. Show notes: https://www.propertytrio.com.au/2024/07/29/demystifying-auction-campaigns-1/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMMike kicks off the episode with the first listener question. Josephine writes in... she and her partner have just secured their first property with the help of the First Home Guarantee, and the purchase is about to settle. They were initially planning to reside in the property, but after discussions they are wondering if they have made the right move. They are keen to continue building a property portfolio and they are worried that they should have considered an investment first. Was it a mistake? Should they revise their strategy? And is it costly to switch the property to an investment now?The Trio unpack this dilemma... or is it a dilemma? Dave breaks down the questions and congratulates Josephine and her husband on a great achievement. They have navigated the purchase of a potential family home that could be improved/extended, getting "the big rock in the jar." Dave concedes that they have actually got the purchase mechanism in the right order. Our listener is planning on moving out and renting the property out for a while before moving back, and while there are tax considerations and critical dates to consider, their overall strategy sounds feasible. Moving back in with parents will enable them to manage their cashflow optimally and continue saving hard. Cate acknowledges their Lender's Mortgage Insurance advantage also.  Dave addresses the burning technical question: Are there big implications to switching from owner occupier to investment and back again?  Paying interest only and preserving all of the debt is an important consideration if they are considering this property as a stepping stone to later be converted to an investment property later on. Cate's sage words about the importance of getting great tax advice before making firm decisions that can't be reversed, resonate.Mike revels in sharing some tax details with our listeners. There are two main elements of depreciation topic; Division 40, (Plant and equipment) and Division 43 (Structural components). Both are treated differently when a borrower renovates and Mike sets out some examples of how each are treated.  "You're 26 and you've got a house. You're crushing it!", says Mike. Catherine's listener question is all about the optimal configuration of a character dwelling in Melbourne. She wonders if she should be targeting two bedroom, one bathroom cottages, larger three bedroom houses or improved dwellings with ensuites.   Cate details the styles, eras and historical timeframe of Melbourne's growth during the turn of the century through to pre-war. Where can you find the different categories and styles? How do they perform? Why are they so special? And what changes did COVID create to demand for Victorian cottages? The Trio discuss the variables, from price points, to the work from home phenomenon, and renovation opportunities. Yield, (cashflow) and Land to Asset Ratio are important considerations when an investor is considering layouts and configurations.Dave tackles the strategy-piece that Catherine should be considering as she devises her purchase plan for this purchase.  Cate shares some A-grade period property selection tips... tune in to catch them!  .... and our gold nuggets!   Cate Bakos's gold nugget: If a buyer can identify a property that has no obvious detractors to a mainstream buyer, they are poised well for capital growth.Dave Johnston's gold nugget: Getting the big rock in the jar sooner, the better. For most people it's the most expensive asset they hold, (and for some, the only asset they hold). Getting the big rock in the jar early enables borrowers to get the debt down sooner, and allows them to focus on their investment plans for retirement.  Mike Mortlock's gold nugget: "It's all about strategy, and Dave and Cate are all in for the period homes!"Shownotes: https://www.propertytrio.com.au/2024/07/22/winning-strategy-and-asset-selection/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMMike kicks off this episode, and the Trio unpack the latest stats. Brisbane, Adelaide and Perth continue to be the star performers, with Perth taking up first place with an annualised growth rate of 23.6%.On the flip side, Cate shares her coalface findings on Melbourne's climate, citing opportunities as "low hanging fruit." Cate describes some of the interstate investor interest in Melbourne as speculative and opportunistic. Dave raises the point that interstate migration has played a key role in some of the growth data also, as have investors whose purchase and selling activity has been triggered by tax and legislation changes.While the pace of growth of rents has slowed, rents are still all positive, and with the exception of Darwin, Canberra and Hobart, our rents are still out-pacing CPI. The Trio reflect on Peter Koulizos's sage observation in past years; rents are only just catching up after a long period of limited growth. Mike wonders what the driving force is for rental growth easing. Could it be a supply and demand factor? Are more people cohabitating? Have rents reached a natural cap based on affordability? The Trio debate some of the possibilities, including re-partnering of couples following the COVID response.And what is happening with listings? We have more new listings than previous years, but our total listing figures are still below historical levels. However, the increasing number of 'old listings' in Victoria is showing signs of total supply potentially outpacing buyer demand. This month's Westpac Consumer Sentiment has some changes since last month. As Cate says, "Everybody seems to think that the next twelve months isn't looking so rosy but they can visualise good times ahead of that."Dave distils consumer sentiment into states and territories. Time to buy a dwelling index had the largest declines in the capital cities that have recorded the highest price gains. The Trio tackle a conflicting driver of sentiment; the wealth effect.  Mike cites the 'crane index', which is a crude measure of building activity and supply. It is as basic as counting the cranes on the city landscape. The Trio uncover two interesting extra charts. The cash rate target vs cumulative change in national home values proves Peter Koulizos's point that there is not a direct correlation between house price growth and interest rates.The chart below shows the difference between median monthly rent value and mortgage repayment for the equivalent property. It illustrates the huge differential between the mortgage repayments and the rental payments for the same dwelling.And... time for our gold nuggets... David Johnston's gold nugget: Dave wants Core Logic do conduct a deep dive analysis into the Victorian market purchaser/investor activity following recent land tax changes.Cate Bakos's gold nugget: Cate would also love access to our various state and territory revenue offices to understand the impact of the reforms and taxes, particularly on overseas investors. Mike Mortlock's gold nugget: Mike shares the importance of buying when you are ready, as opposed to attempts to time the market. While the white noise and doomsayer stories float around in the media, it's important for investors to keep a long term focus. Shownotes: https://www.propertytrio.com.au/2024/07/15/ep-266-june-market-update/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMDave hosts this week's show and Mike is in the hot seat to shed light on some of the items that the Australian Taxation Office, (ATO) is focusing on this year. Specifically, the ATO is honing in on a few key areas that often trip up property investors. What could these be? Tune in to find out...From deductible expenses to claims for repairs and maintenance, there are quite a few ways that investors make boo-boo's at tax time.  Redraw versus offset: What is the difference? And how do borrowers sometimes make a mess of it?  Dave shares the six key principles that he and his team share with their clients in relation to this very topic. What is the third thing that the ATO is targeting investors for? Mike details the rules around properties that are not occupied full time by tenants, and he also shares an interesting fact that a lot of people wouldn't realise. What is the implication if an investment property has been inhabited by the owner before it becomes a rental property? This applies to over 20% of investors! Repairs versus capital improvements... what's the difference? What do people often get wrong? And why does timing matter? Mike sheds light on these questions.  What did Cate get wrong with her tax depreciation a few years back? Mike enjoys ribbing Cate, but it was an expensive oversight, and one that the Trio don't wish on our listeners. Mike shares the five basics that an investor needs to know about tax depreciation, from timing to feasibility, the magnitude of the return to the firm who tackles the depreciation schedule. His simple list of three triggers should give every investor a hint as to whether it's worthwhile conducting the depreciation schedule.  Cate shares her tips for making tax-time a bit easier, particular for multi-property investors. .... and our gold nuggets!  Cate Bakos's gold nugget: If you're already active in property, your tax affairs are probably starting to get a bit detailed. It might pay to go and see an accountant to prepare your return for you by the time your return is getting detailed.Mike Mortlock's gold nugget: We shouldn't be thinking "tax time is coming and now we have to do all this work." What systems can investors put in place to make tax time a bit easier? Mike has some great suggestions.Dave Johnston's gold nugget: If you have a property portfolio and you feel that you haven't been getting strategic mortgage advice, it may be a good idea to go and see a strategic mortgage broker. They may even identify some tax deductions that you've been missing. Shownotes:  https://www.propertytrio.com.au/2024/07/08/tax-time/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMRentvesting is not for everyone, but many people do not even consider it, which may be to the detriment of their finances or lifestyle.  Maintaining an open mind to rentvesting and exploring it’s potential will provide you with greater clarity on your pathway forward, whether you take that path or cross it off as an option. Dave explains what rentvesting is, and why it's becoming a popular strategy among first-time buyers. From desireable rental locations to growing wealth, there are plenty of reasons why some choose to adopt this strategy.  Mike touches on the key benefits and he highlights his own rentvesting benefits that he's currently experiencing. Cate covers off some of the reasons why rentvesting is more affordable in capital cities, particularly the lower-rental-yielding cities such as Melbourne and Sydney.  Dave shares a real-time example in Melbourne's leafy Hawthorn East. He contrasts a mortgage versus a rental property for a make-believe couple and the cashflow differentials are quite a surprise!For a first home buyer versus a renter, the difference in monthly cost is more than three times.  Was buying always this difficult? Cate dares to ask the question and Dave steps our listeners through the last forty years. But Cate sheds light on the cost of property on the opposite side of town. How do these locations compare, and what is the multiple of the average annual wage these days?Mike explains why it's so difficult to get into highly sought-after locations, but he also explains why the number of rentvestors is so limited. And there are quite a few reasons!  But how short a tenure is too short for a rentvestor? Tune in to find out.... .... and our gold nuggets!  Dave Johnston's gold nugget: Carefully consider your own personal situation and goals. Rentvesting can be great, but it's not for everyone. It only makes sense that your property decisions should be informed by your over-arching property strategy. And how will your next purchase impact your future purchases? This is a very important question.Mike Mortlock's gold nugget: Mike uses a car analogy. Selecting the right car for the right track is critical. "Asking the place where you want to live to be the investment as well, is sub-optimal for property success." Cate Bakos's gold nugget: Cate reminisces about a successful real life client scenario that was based on a well-carved out strategy. Show Notes: https://www.propertytrio.com.au/2024/07/01/rentvesting/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMHelping versus hindering our children's financial futures... it's all about mindset! Dave hosts today's episode and the Trio enjoy sharing their thoughts about the various ways we can help our children get a foot on the property ladder.First homebuyer participation is up a little bit when contrasted against recent years. Dave runs through some of the key reasons that could be contributing to this increased level. First home buyer activity bounced up with targeted government incentives during GFC recovery and COVID recovery. Both also had record low interest rates.“The series shows only two substantial spikes in first home buyer loans between 2008-09 and 2020-21. These can largely be explained by temporary government incentives for housing purchases. There was a temporary boost to the first home owner grant introduced around the GFC, and a temporary HomeBuilder grant introduced around the onset of the pandemic (which was not specifically targeted at first home buyers, but could be used in combination with the then recently introduced ‘First Home Loan Deposit Scheme’).” (Source: Core Logic) The Trio take a walk down memory lane as they recall some of the various first home buyer incentives introduced by our governments since the GFC. Dave canvases the concept of false economy when it comes to incentives and price points that some buyers chase that don't completely align with an optimal strategy.Cate delves into some of the issues that could arise when parents' generosity is too great.  From a lack of appreciation to jealousy among peers, (and many others), there are some significant risks that need to be considered.Cate chats about hers and her husband's approach with their daughter's property deposit savings regime. From a small inheritance from her grandmother a few years ago, followed by ETF share portfolio outperformance of that little nest egg, this seventeen year old has been making regular contributions to her portfolio with her part time job. What is the deal that Cate has struck with her? Tune in to find out...  The Trio reflect on the great encouragement that their own parents imparted. Thinking about the great lessons and moments of pride during our own childhood can lead to some great ideas that can be paid forward.   And lastly, Cate talks about some of the non-financial ways that we can make a positive difference for kids these days. .... and our gold nuggets!  Cate Bakos's gold nugget: When you're working out how you can help your kids with their financial future, make sure you let it be their journey.Mike Mortlock's gold nugget: Mike reflects on Cate's daughter's $5000 nest egg which was compounding. That 'early win' is a very valuable introduction to good investing. Dave Johnston's gold nugget: Getting his children applying some research and selecting companies in a share portfolio from the age of grade six is an exciting plan that Dave has been considering.  Show notes: https://www.propertytrio.com.au/2024/06/24/helping-our-children/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMMike kicks off this episode, and the Trio chat about the ferocity of the Perth market and they ponder the nature of cyclic markets. Is Perth cyclic? And is this city sharing a pattern with any other cities, or is Perth unique? And how is it possible that rental growth is still strong when investors are buying up? Brisbane's outperformance is noteworthy too, with this beautiful city taking the lead on Melbourne. Hobart's decline in rents defies most of the nation, but Cate explains some of the driving forces at play. Namely, the sea-change/sea-change moves during lockdown are reversing for many, and combined with the update in overseas holiday activity (to the detriment of domestic travel), cities like Hobart are experiencing different trends to most of our other capital cities.Mike tackles yields and marvels at the combined capitals average yield, but as Cate reminds listeners, average yields are not a perfect measure because the ratio of houses/units across our cities varies greatly. If only Core Logic could give us a separate measure for houses versus units!And what is happening with listings? We have more new listings than previous years, but our total listing figures are below historical levels. This tells us that buyer demand is strong, and is soaking up the listings faster than they are hitting.While the Spring market has returned after two years of glitches to 'the norm' over COVID, some things have changed. Cate talks through some of these, including off-market listings."Such a tale of eight cities", says Mike as he compares the difference in listing volumes across several capital cities.  But by drawing our listener's attention to the three data sets, (new listings, old listings, total listings), in triplicate they tell a very interesting story. Cate ponders the viability of gauging the retraction of old listings when it comes to identifying markets that may be over-heated.This month's Westpac Consumer Sentiment Index is reasonably unchanged from last month. There is no doubt that the affects of higher interest rates are biting for many households. However, as Cate says, "It's a bit of a boring chart, but right now, boring is good." Lending indicators are showing some strong numbers; with the exception of construction. Despite investor numbers coming off a low base, Dave explains that buyers are making decisions now that it's obvious that the risk of interest rate increases is lower.Cate shares an interesting chart that segments funding into construction, established, land, new builds and alterations/repairs. There is no doubt that the pain of the construction industry is showing up in the data.The bond yields shows that the rate today is predicted by the markets to be the 'new norm'. Dave steps the listeners through some of the charts, including the unemployment data."Unemployment has often been the collateral damage as the RBA has been increasing rates to bring down inflation, but this time they are trying a different tact, and they've actually said that", states Dave.And... time for our gold nuggets...  Cate Bakos's gold nugget: Buyers have to consider a broad picture before they circle in on one city that's doing well. Getting our hands on the rate of change of old listings offers a bit of valuable insight.David Johnston's gold nugget: Market updates talk about the monthly market gyrations, but ultimately it's about the big picture and the long term that really matters. And what's right for your personal circumstances is vital. Understand your own strategy and understand the price point that's right for you. Show notes: https://www.propertytrio.com.au/2024/06/17/ep-262-may-market-update/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMDave opens our episode with a cautionary tale. We are grateful to our listener, Daniela who wrote to us about a challenging experience she and her husband had with a purchase she described as a "lemon."After having bought a house and land package in Perth that delivered underwhelming capital growth performance for nine years, Daniela and her husband chose to sell the asset when moving to Melbourne for work. Sadly their timing wasn't great and they feel they missed the full cycle (home, upgrade, downsize). Now they find themselves with $110,000 in savings, a limited array of property options that appeal to them, a student son living with them, and a dilemma on their hands.Do they buy a house in the outer suburbs or consider apartments? And if they can afford two apartments instead of a house, will this help them gain a better financial position? Mike and Cate tackle the houses vs apartment outperformance question. Cate steps back to the heart of the listener question and suggests that finding a suitable home should be the primary focus at this stage, (as opposed to their appetite for capital growth outperformance).  Four unfortunate headwinds have compounded the issue for the couple now, namely; Their timing with the Perth market was unfortunateMarkets are cyclical and managing market cycle risk is always a challenge when buy and hold timeframes are shortHouse and land packages are notorious for underperformance due to the lower Land to Asset RatioMelbourne's broad property value is still greater than Perth"Over the previous ten years, Melbourne prices grew 96 percent, yet Perth prices in the same timeframe only delivered eight percent."From managing simultaneous sales/purchases to strategising a surprise interstate move, Dave touches on some of the important elements for buyers to consider.  Daniela and her husband sold the house in Perth, but could have they had a better long term outlook if they'd held onto Perth? And should they be buying in Melbourne now that they have moved there? There are a lot of questions that the Trio bring up for our listener couple to think about.Daniela has nominated two options that she feels could be feasible, but why does Cate suggest that she could be on the wrong track? And what other options could be viable? Tune in to find out... Stage of life is very important when it comes to determining a property plan. The Trio discuss the next items for Daniela and her husband to canvas in relation to their strategy.  "If they are focusing on Melbourne as their forever place, there is a silver lining. The market has stood still for them", says Cate. .... and our gold nuggets!  Mike Mortlock's gold nugget: "Avoid perverting the course of what you are trying to achieve with dual ambitions." Having a clear strategy on a primary requirement can mitigate this risk.Cate Bakos's gold nugget: Only once you trigger a sale event is when a result is crystallised. Cate recommends buyers seek professional advice before triggering a loss or a gain. Shownotes:  https://www.propertytrio.com.au/2024/06/10/recovering-from-buying-a-lemon/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMMike opens our 260th episodes, congratulating Dave and Cate on five years of podcasting. The Trio have decided to take a trip down memory lane and reflect on some of the eps, and the special bond that they all share, Pete included.Cate gives the listeners a bit of background about what drove the market update deliveries, and how the show has evolved as a result of lockdowns and listener feedback.Reflecting on the initial seven episodes from their pilot run has been fascinating and they share a few fun soundbites. Why don't the Trio invite guests on the show? They actually imagined at the start that they would, but it's become a point of difference to stick to the Trio, (plus Pete for the occasional appearance). Cate expands on why the show is likely to remain as just the three hosts. Deep-diving into the data, and in particular their chosen topics has a dual benefit for the Trio. Sometimes they select a topic that really stretches their own knowledge.  Replacing Pete was no mean feat and Cate reflects on Mike's appointment and some of his cheeky antics.  The Trio have each selected some of their favourite snippets from the early days .... we hope you enjoy! Show Notes: https://www.propertytrio.com.au/2024/06/03/celebrating-five-years/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMThis week, we unpack a fabulous listener question from Melissa. "What advice would you give to those of us who have construction loans were the build is dragging and we're being squeezed between increasing rents, increasing interest rates, and increasing construction costs?", she asks. "And what advice would you give to anyone considering a construction loan? " Cate steps through some of the planning, building and environmental issues that can threaten a build or renovation.Mike sheds light on the flow-on effects that are triggered by planning and building delays. From overcapitalisation to materials surcharges, council enforced orders and others, there are some serious risks that must be considered by those who decide to build or renovate.How can renovators avoid some of the stressors? Dave has some good tips...  How many people consider the contractual details, milestone payments, additional costs and cashflow considerations? It can be tricky to navigate these points, but Mike has some great ideas he shares with the listeners who are considering embarking on a build or a renovation. How long should people spend in the planning phase?  Mike sheds light on some of the elements that get missed at the design phase. Did you know that approximately 60% of defects occur at the design phase?The Trio share their advice for those who are thinking about a construction loan. Construction lending experience is critical, and Cate and Dave chat about the key differences between traditional, established-property lending versus construction lending. And what is an "as-if completion valuation"? And what is the process that needs to be followed? Mike gives us some valuable insights into the role of a Quantity Surveyor.  ..... and the gold nuggets!  Cate Bakos's gold nugget: There are three things that Cate thinks are really important to nail. 1. understand the budget. 2. work with someone who will work to your budget. 3. have a very good strategic finance person on your side.Mike Mortlock's gold nugget: "Make sure the contract is reviewed!" Having an firm understanding of all of the important elements is so valuable for those who are building and renovating. Show notes: https://www.propertytrio.com.au/2024/05/27/home-building-and-development-project-perils/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMMike kicks off this episode, and directly following Budget Night, the Trio chat all things Federal budget. From the lack of new property initiatives to questioning the impact of the Federal Rental relief, one thing is obvious. The Labour government are acutely aware of the need to see inflation rates reduce, and we are less than one year out from an election. The budget could be described as tame, but that doesn't slow the discussion at all for the Trio.April’s increase takes the current growth cycle into its 15th month, with housing values up 11.1% since the trough in January last year. However, almost every capital city is recording stronger growth conditions across the lower value range of the market.The shift towards stronger conditions across lower value markets can also be seen between the housing types, with growth in unit values outpacing house values over the past three months. Hobart was the only city where houses recorded a larger gain than units over the past three months.Regional markets have shown a slightly stronger quarterly growth rate over the past five months than their capital city counterparts, following a 10-month period where the combined capitals index was outperforming. Regional Victoria (-0.1%) was the only rest of state market to record a decline in values over the rolling quarter. Nationally, rents were up 0.8% in April, a slightly lower rate of growth relative to February and March when the national rental index rose 0.9% and 1.0% respectively. As Dave points out, Although rental growth may be tapering, supply remains extremely short and the trend towards smaller households seen through COVID has been slow to reverse, further amplifying rental demand. It is likely rental growth will remain well above average for some time yet.In April, the national gross rental yield rose to 3.75%, the highest reading since October 2019, up from a record low of 3.16% in January 2021. Vacancies continue to remain tight, although a subtle ease is evident from last month to our current month, with more than half of the capital cities increasing slightly. Dwelling sales look to have moved through a cyclical peak in November last year. Although the monthly trend in home sales is highly seasonal, the less seasonal six-month trend has remained relatively flat since the November rate hike. Estimated sales over the past three months are tracking 8.6% higher than at the same time last year, and about 5.1% above the previous five-year average. Listing volumes tell an interesting story, and as Cate points out, the rate of new listings is remarkably 'normal', in fact it's slightly stronger than the past five year average. However, the total listings tell another story. Demand is exceeding supply, and older listings are now being snapped up by buyers. The trio canvas what the possible driver could be, and they determine that old stock, (in particular, units) could be the reason. Given the the relative outperformance of units in most capital cities, this possibility doesn't seem all that extreme.In an effort to cover off the Consumer Sentiment Index, we turned to the ANZ Roy Morgan poll given Westpac's index is yet to materialise. Consumer Confidence remains very weak, sitting at its lowest level for the year.Show Notes: https://www.propertytrio.com.au/2024/05/20/ep-258-april-market-update/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMCate circles on on what technically defines a townhouse. She shares an example and talks about the differences between apartments and townhouses when it comes to land on title.Mike asks a tough question, "How do townhouses perform, as compared to houses?" but as Cate points out, it's not a hard and fast rule. There are elements that can bolster up the value (and performance) of a townhouse such as vista, prestigious locale, water views etc. Of course Land to Asset Ratio comes into play, but it isn't fair to classify all townhouses the same. Dave talks about the complexities of buying a townhouse that is yet to have it's subdivision registered. This is technically deemed an 'off the plan purchase' and this does carry lending risk for some buyers.  But what can buyers do when they need to move in to their new home by a certain date, but title registration is delayed? Cate shares an interesting possible solution .... a license agreement.Cate runs through the various subsets of units; apartments, villa units, and townhouses. She breaks down the hierarchy of land ownership for each subset and details some of the formats of townhouses and common land versus no common land. And how do some townhouses qualify for no owner's (or strata) corporations?  "These types of townhouses are inherently more valuable". The Trio delve into the attributes that developers look for to optimise their profits on a multi-unit development site, but Cate also talks about some of the investor mistakes associated with medium-density development activity areas.  What are some of the attributes that Cate looks for when assisting developer clients? Tune to find out... Lending is not always straight-forward or easy for developer finance and Dave shares some of the categories of lending and LVRs, from small-time residential to larger-scale commercial. Buckle in for some valuable, technical insights and explanations, and Cate points out the risks.  And what are some of the things that developers get wrong?  ..... and the gold nuggets! Cate Bakos's gold nugget: Bedroom count can create a difficult compromise. Is the bedroom too tight? Is the proportionality of the unit not feeling right? You have to ask yourself the question; "Have you bought yourself a lemon?" Overcapitalisation risk challenges the profitability of making changes, so buyers need to search in the right area for the right townhouse.  Dave Johnston's gold nugget: If a townhouse is going to be a stepping stone home or an investment, it can be quite feasible for first time buyers. Dave implores buyers to consider buying into a great location that is close to where they would ultimately like to live in their family home. Mike Mortlock's gold nugget: Mike likes townhouses! Provided, of course, that they are well-located. He notes the stronger rental yields, but his concern is that of scarcity. Show notes: https://www.propertytrio.com.au/2024/05/13/all-things-townhouses/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMMike has crafted a great episode from the 2020/2021 tax year data.The average income rose to $68,289. Surprise, surprise, Double Bay came in at first $266,000 and Dover Heights, Rose Bay and Vaucluse came in second at $230,597, and Toorak (Vic) starred, but Cottesloe and Peppermint Bay in WA came in third at $229,000.The median is what’s interesting. Stats can be distorting. The median in the top ten suburnbs is $80,000, but the average is significantly higher”Cate sheds light on the returns lodged during the year 2020/2021 which were up 28.3% on the 2006/2007 financial year.A large proportion of SMSF owners account for this strong differential and the Trio ponder the popularity of SMSF investment.“If you don’t own your own home, you’re in big trouble when you retire.” How much truth to this claim is there? The Trio unpack the history of superannuation and reflect on super from an employer’s angle too.The big bucks earners start with Surgeons at an average income of $457,281, followed by Anaesthetists, then ‘Financial Dealers’ (whatever that means?!), and fourth with Mining Engineers.Where does the revenue come from? Company tax and GST, followed by individual income tax, and only 15% is GST. Dave dares to raise the concept of bracket creep.Mike shares a startling stat, “88.35% of Aussies earn less than $120K, but the remaining 11.65% pay just over half of all income tax in Australia.” The bracket that most Australians sit within is the $6001 – $37,000 income earners. Dave adds that 4% of income earners pay 35% of tax and he highlights the sensitivities of bracket creep and the required changes.Historically we have always had net rental losses, but what happened in 2020/2021? Cate explains…tune in to find out!How many people earn six or more properties? Cate has some insightful stats to share. Check out our show notes to see an interesting breakdown..….. and the gold nuggets!Mike Mortlock’s gold nugget: Things are a little bit more complex than the media would have you believe. When you slice and dice the data, you get some interesting results. But stay tuned for the battle leading up to the Federal election.Cate Bakos’s gold nugget: The fiancial year where we saw net rental gains (2020/2021) needs to be contrasted against the following year. We’re on treacherous territory with over 90% of private investors servicing the rental market while our politicians focus on the downside of negative gearing.Dave Johnston’s gold nugget: The word negative gearing needs to be understood better in relation to all business activities. As Dave points out, when this term is associated with property it’s portrayed as ‘the big bad wolf’, but negative gearing is widely misunderstood.Shoe notes: https://www.propertytrio.com.au/2024/05/06/ato-insights-unveiled-what-does-the-data-tell-us-about-investor-behaviours/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMCate kicks off the episode and invites Dave to share a bit of information about our exciting case study couple and their quest to move to Venus Bay to enjoy a simpler life. They asked Dave's team to help them work out how they can achieve their goals, including the generation of a passive income and retaining their Melbourne home as an investment. Is it realistic? Is it achievable?The Trio delve into the emotions that can run when setting these types of goals. They also congratulate our case study couple for having a firm goal and setting about constructing a plan. "Not having a plan is like chipping away at a piece of marble without knowing what the statue is going to be", says Mike.  Rachel and Marcus have a very solid financial outlook. Cate gives a fiscal snapshot of their debt, income and equity position for context and Dave runs through the critical questions that are asked in order to determine their property plan. Our case study couple rated themselves on the risk profile meter as 4-4.5 out of 5, however the Trio challenge this and discuss their rationale for down-scaling our couple to lesser risk score.  Dave steps through the assumptions and inputs, and Cate weaves through each of the three scenarios that were presented to the couple.  What is a prudent capital growth forecast rate? And when should consumers be wary? Mike expands on the reasons why some claims can be dangerous and Cate warns about the risks of buying brand new.The three scenarios show a progression of outcomes, and with small tweaks and changes, each scenario is quite different from the last option. But what are some of the most stunning outcomes, and what are the powerful tweaks that could surprise many of us? Tune in to find out....  Cate touches on the risks of buying a future home, and the Trio share some of the mitigants others who find themselves in a similar situation to consider.  One of the three scenarios not only gets our hard working duo to their goals, but enables them to enjoy an even higher passive income. What are some of the tips, tricks and counter-intuitive moves that they had to consider?We wish Rachel and Marcus a wonderful and rewarding journey, and a fabulous future in Venus Bay!  ..... and the gold nuggets!  Cate Bakos's gold nugget: The tiny little decisions that can be made from one scenario to another may not seem significant, but can be very conservative in the long run. The counter-intuitive suggestions can make a huge difference.Dave Johnston's gold nugget: This is a great example of the benefit of creating a property plan. "For anyone who's interested in creating wealth through property, setting a plan will set you a step ahead." Mike Mortlock's gold nugget: Make sure you have income protection insurance and other risk-mitigating insurances. Congrats to our case study couple! Shownotes: https://www.propertytrio.com.au/2024/04/29/listener-questions-moving-to-the-coast-for-a-simpler-life/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMCate kicks off the episode by sharing that the podcast is just a couple of recordings away from it's fifth birthday!Kym is a single mum of two teenage kids, a business owner and her rent on her home has just gone up substantially. Kym has been yearning to get into property ownership for a few years now, but she is facing a few headwinds currently.Dave talks our listeners through some of the hurdles that self employed borrowers face, from financials and timeframes, to heightened scrutiny. He also sheds light on some interesting small business statistics. "Small businesses comprise 97.3% of businesses in the whole nation". Dave steps through the impact that dependants (i.e. children) have on borrowing capacity with some context of a case study.While Mike talks through the high rate of rental increase that Kym is facing. What can a renter do if their rental increase is unfair or unsubstantiated? Tune in to hear...The Trio chat about some of the initiatives available to those who need a bit of assistance with their home buying. From National initiatives to state-based offerings, the Trio chat about each opportunity and consider those that could be helpful for Kym to explore. Shared equity schemes, deposit guarantees, regional opportunities and concessions are some of the items on the discussion table. (See these initiatives in the show notes). We hope Kym finds some of this helpful, and we love the fact that Kym reached out with a question that applies to so many people.For our second listener questions, Claire asks, "What do you do when your financial planner is anti-property?"Dave breaks down some of the key differences between the role of a financial planner and a property planner. The Trio ponder some of the reasons why some financial planners are less than enthusiastic about property as an asset class. Cate has a few possible reasons on her laundry list and she chats with Mike and Dave about some of these reasons."You can't sell a third of a property easily."So, how can investors get the best out of their financial planners, and how can they navigate any perceived negativity about property. The Trio have a few tips to share...... and the gold nuggets! Cate Bakos's gold nugget: "To anyone who's looking to get into the property market and needs a little bit of help.... check out some of the initiatives on offer and familiarise yourself with them."Dave Johnston's gold nugget: Dave expands on his answer for Claire about the role of a property planner versus a financial planner.Mike Mortlock's gold nugget: Look at the 'ad-backs' and make sure your accountant is providing reliable information to your broker.Show notes: https://www.propertytrio.com.au/2024/04/22/listener-questions-single-parent-and-financial-planners-vs-property-planners/

The March 2024 data is out, and Cate concedes she got it wrong with her March data predictions. She's considered the reasons why, and Cate sheds light on a possible reason for this, and it relates to bias.Dave overviews the last twelve months of growth, and he points out that the last year has delivered almost 10% growth for the combined capitals; something very few would have predicted.Cate sheds light on some of the enquiry she's getting, and some of the reasons why investors are turning away from ultra-hot markets. Perth is one example of a hot market, and the Trio explore how much steam remains in the Perth market.Cate recalls a great article from Pete Koulizos in the recent PIPA Newsletter... he believes that Adelaide will continue to perform. Tune in to hear more...Mike segues into rental performance. Median rents as a function of income highlight the expensive cities for tenants. Cate's insights into house versus unit rents is interesting also. Is there a correlation between increased land tax and increasing house rents? Mike explores.Mike dares to broach the question Perth's climbing rents and tight vacancy rates; surely this signals that Perth is not at the top of the cycle.Sales data is showing volumes above the five year average; although the Trio plead with CoreLogic to reinstate listing numbers and agent appraisal activity.Distressed listings are showing an uptick in a few states, however. Are any jungle drums beating in Victoria? Cate delves into the data and asks the hard questions, although Dave wonders if distressed listings paint a picture of the overall health of a given market. Is there a correlation?The Westpac consumer sentiment index isn't showing a dramatically different outlook since last month, but at a state level the indices aren't all aligned. Dave hints at the cities that are showing a more optimistic outlook.Investment lending has increased despite headwinds such as interest rates, additional taxes and onerous rental reforms.This state breakdown of investment activity is intriguing, particularly the disparity between Vic/Tas and the other, hotter states.And... time for our gold nuggets...Cate Bakos's gold nugget: Cate considers how we interpret data, and how bias can be introduced. Dave Johnston's gold nugget: "n order to avoid FOMO, understand the right price point for yourself. Work out your strategy and match up the property location and type to your strategy. Look at the long term when you're making your property decision.Mike Mortlock's gold nugget: "You can't buy the data, you can only buy the property."Shownotes: https://www.propertytrio.com.au/2024/04/15/ep-253-march-market-update/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMSally is about to purchase her first home. She has a deposit of $300K and is targeting a purchase price of $700K - $800K. Sally wants to live in the home, but is feeling that her borrowing capacity as an owner occupier is holding her back. She asks the Trio whether she should initially purchase as an investor in order to borrow more. Dave breaks down Sally's initial strategy with a few clever questions.Sally is targeting Melbourne and she works in town. She is thinking of living in it for 5-10 years, and then upgrading to a larger family home when the time comes, keeping this initial property as an investment. Five to ten years is a long time though, and Sally is keen to find a property that will be adequate for her for a 5-10 year period. Cate has some thought-provoking ideas for Sally to consider. Cate also talks about tenure, and the importance of buyers making sure they have at least five years of tenure in their plan. Sally has indeed stated that she has done some homework and she’s identified that 2BR townhouses and villa units might be the ideal purchase. Cate demystifies villa units and recalls the conversations she had in previous eps with Pete about dwelling description variations around the nation.  Sally has made a deliberate decision to avoid apartments. But.. not all apartments are equal. "There's apartments, and then there are apartments".  Which are the variety that Cate thinks are absolute out-performers? Tune in to find out. Given townhouses aren’t all equal, the Trio unpack the various types of townhouses.  Sally notes that the market conditions have changed a bit over the last couple of years in Melbourne.How can Sally best navigate the Melbourne market over the coming months?  Sally circles back to her original suggestion about getting an investment loan for a property that she wants to live in. But as Dave explains, it’s not that easy.  How do the banks regulate this?Lastly, Sally is unclear on whether she gets the stamp duty benefits if it’s an investment loan. Dave sheds light on some great tips for our loyal listener. .....and the gold nuggets:Cate Bakos’s gold nugget: Sally can use the ‘sold’ tab on the property search engine to get a great peg in the sand.Dave Johnston’s gold nugget: “Make sure you can purchase a property that you can see yourself living in for 5-7, even 10 years. Can you get a better quality asset in a better location, even if it means forgoing stamp duty savings?”Mike Mortlock’s gold nugget: Mike congratulates Sally for saving $300,000 for a deposit, and he assures Sally not to worry about Melbourne’s slow performance.Shownotes: https://www.propertytrio.com.au/2024/04/08/listener-question-owner-occupier-versus-investor-dilemma/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMFor today's episode, Dave throws it out to Mike... the paper that Mike's business has uncovered relates to growth of rents in units, contrasted to house rental price growth. Median rental growth for units have eclipsed that of houses, but why?The Trio unpack their theories. Are investors pushing rents up or is the supply/demand equation speaking up? Mike hands the wooden spoon to the Victorian Parliament "People always want to be close to the action".Mike ponders the pull of the city. And Cate mentions traffic congestion... is it an issue?  Labour shortage is challenging our economy. As Mike and Dave point out, "Anyone who wants a job, can have one."Cate sheds light on unit performance in Melbourne and the investors who feel disenfranchised. We now have an undersupply issue that has challenged units in Melbourne.But what is Mike's data telling us?  "How is our aging population likely to challenge this data?", asks Dave. Mike shares his thoughts. And why is WA outperforming? The Trio shed light on this outperformance. And our gold nuggets: Dave Johnston's gold nugget: Dave looks forward to the pub!Mike Mortlock's gold nugget: Unit yields may outperform houses. Mike ponders affordability and concludes that units should be considered. Cate Bakos's gold nugget: "There are markets within markets. It's pockets, it's streets, it's orientation. You have to remember to use the data wisely when you have a specific wish list." Show notes: https://www.propertytrio.com.au/2024/04/01/median-rental-gap-between-houses-and-units-closing/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMFor today's episode, the Trio are diving into the sophisticated world of investment borrowing and they'll unpack the nuances of leveraging borrowed funds to not just acquire investment properties, but also to optimise the financial structure surrounding your investment to legally optimise deductions.Despite accountants being tax expertes, they are not mortgage strategists and so it is important that investors understand these strategies and are able to impliment them with their strategic mortgage broker.Whether our listeners are seasoned investors or just starting out, today's masterclass with Dave will equip buyers with the insights to navigate the complex landscape of investment borrowing.Dave launches into the ep with the first tip about investment borrowing. But he confuses Mike about good debt versus bad debt. Cate defines good debt, bad debt and terrible debt!Should buyers try to borrow the full purchase price plus all purchase costs? Surely this could feel alarming for those who are debt averse, but the Trio shed light on when this is a great idea, and why it's so beneficial for investors.  Cate raises the concept of 106% Loan to Value Ratio and Dave distils how this works, and why it's not an uncommon LVR.Why is 80% LVR such a well-versed figure though, and what lender benefits to some professionals get to enjoy in relation to higher LVRs?  "If you read in the media, it's all about the cost you have to save for a deposit, but who really saves 20%?", asks Mike. Good question, Mike. The Trio shed light on the reality of this claim.Is there any reason to set up the investment loan limit for more than the full purchase price plus costs? And when is this a dangerous play? Mike delves a bit deeper... From cash-out policies to drawdown processes, Dave walks our listeners through this complex question.  "The true cost of your interest rate after the tax deduction is cheaper than the cost of your interest on your home loan (as long as you're above the tax free threshold with your earnings." What does Dave mean by this, and why is this so critical to understand in relation to 'good debt'? Which tricky scenarios might fall outside of that general rule of paying interest-only on investment, and P&I on your home loan? Dave has three scenarios, and Cate excitedly recognises that her own personal journey currently fits one of these quirks.  And lastly, Dave has some general advice for listeners who are planning to upgrade their home and retain their old home as an investment. .... and our Gold Nuggets!  Dave Johnston's gold nugget: "If you're getting strategic mortgage advice, make notes." The retention rate of detailed information isn't often compromised, and it's important for borrowers to be clear on their mortgage strategy and set up.Mike Mortlock's gold nugget: Number one rule - investment debt is what you want to maximise, and home loan debt should be minimised. Cate Bakos's gold nugget: Not being afraid of good debt is important. But being aware of the worst kind of debt is also very important too. Unsecured, expensive and short-amortised debt can be problematic. "I highly recommend you talk to a strategic mortgage advisor if you have that kind of debt." Show notes: https://www.propertytrio.com.au/2024/03/25/mortgage-masterclass/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMThe February 2024 data is out, and the Trio circle the headline; the ridiculously tight vacancy rates nationally. Mike compares houses and unit performance and ponders the drivers for unit purchasers. Dave delves into Perth's outperformance and notes the predictions he and Pete made eighteen months' prior.Is buyer confidence up? Cate sheds light on her own experience at the coalface. But how does data lag impact the figures, and will Cate's prediction match the March data? Only time will tell... What is happening with the regions? For the quarter, combined regions have outperformed the combined cities, but why? The Trio unpack this.Mike dares to broach the question... "Where is Melbourne at?" The Novocastrian dares to challenge the proud Melburnians with this question, but they rise to the challenge and shed light on what is going on in their home city with investors.  And have the regions suffered to the detriment of Melbourne's recovery? Not at all, but Cate explains the dynamics post-COVID. Cate also shares the value-proposition of houses in nearby regions versus apartments in Melbourne's inner-east. Vacancy rates are so tough on tenants right now and the Trio note that vacancies have tightened even further. From changed planning laws to talk of investor incentives, the jungle drums are beating. But sadly the Trio concur that conditions will continue to deteriorate until governments make a different kind of change. Listing activity is higher, yet sales volumes reflect that buyer demand is meeting supply and this coming weekend is set to be a stand-out weekend for auction numbers. But what will post Easter, and early winter look like?"We only need to talk about rate decreases and people go crazy" Rental values have re-accelerated in 2024. Feb recorded the highest rental reading for the last eleven months.Will rent growth outpace capital growth? The Trio weigh in... and they don't all agree.  The three year bonds curve shows that the money markets are predicting three rate reductions as an average cash rate. And... time for our gold nuggets... Cate Bakos's gold nugget: For any prospective tenants out there, you have to be prepared to differentiate yourself in this tight vacancy rate environment.Dave Johnston's gold nugget: This month suggests that so many data points are pointing towards a property price rebound this year, so if you are considering buying property, it's time to get your ducks in a row. Narrow in on your strategy, arrange your pre-approval and be clear on the plan. Shownotes: https://www.propertytrio.com.au/2024/03/18/ep-249-february-market-update/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMDave and Cate man the fort this week while Mike does his charity ride... and the duo decided to tackle a great listener question about lending policy, loan structuring and the critical decisions that arise for many.Jim and his partner have a very important scenario to run past the Trio. They are particularly high income earners with $500,000+ combined incomes, but there are some critical messages here that apply to all home owners and investors. The challenges they face have been exacerbated by increased interest rates, but they also have had second thoughts about the home that they selected in 2019.  The dilemmas are very real... how do Cate and Dave address them?Our listeners chose to buy a house that had less appeal than some of the others that they were missing out on in the lofty hot market of Sydney. Why do people go for the lower hanging fruit? And what are the risks? Dave and Cate share their thoughts, from fatigue to FOMO.  Should they sell and rent-vest, re-purchase in another location, or hold their home? "They need to nail the big rock in the jar, which is where they'd like to live long-term to raise their kids." Dave's ever-pragmatic insights shine through... tune in to hear more.Cate discusses the importance of partners being on the same page as each other, and this is a fantastic case in point in relation to rent-vesting. Rent-vesting is often a particularly challenging strategy for couples and Cate explains why. She also shares a personal experience dating back to 2008 that derailed hers and Ian's rent-vesting strategy.  Jim asks, "Should we purchase a B grade property in an A grade suburb, or an A grade property in a B grade suburb?" Dave and Cate don't necessarily agree, but they each share their answers openly and Cate cites a great recent example.  Dave takes up the challenge to help Jim and his partner with the cashflow challenge. How can they ease the pressure, and what are some of the options? Dave and Cate enjoy a good banter about investment strategy, and in particular, retirement strategy... and this is what it's all about!And lastly, can Jim and his partner achieve $140,000pa passive income? Dave uncovers the answer.  .... and our Gold Nuggets!  Dave Johnston's gold nugget: "If you do plan to purchase a family home, don't put off deciding what that looks like. Start planning for it!" Cate Bakos's gold nugget: "I wish everyone could afford a property plan. If you can get that right from the start, you can establish things from the ground up". And when you're a high income earner, it really does carry some weight. Mike Mortlock's gold nugget: Mike talks about the importance of being quite discerning when it comes to buying the family home, and not compromising on the key element.Show notes: https://www.propertytrio.com.au/2024/03/11/listener-question-dilemma/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMDave hosts this time. He opens the episode with the obvious question, "What is settlement?" Did you know that settlement dates are completely negotiable? And did you know that some people conduct their own conveyancing?, (although the Trio don't recommend this, as it involves a lot of risks and responsibilities.) If you do your own conveyancing, you will need to research what is required and the relevant legislation. Like real estate licences, they are state and territory based. Cate shares some of the challenges associated with cheap, unreliable conveyancers.Physically, how does settlement happen? Cate and Dave weigh in, and Dave explains how settlements hinge firmly around the broker and the banks. Settlement day is a bit of a magical event. Cate talks through the parties who are involved, how long the actual settlement takes, how it's facilitated and how conveyancers conducted settlements before our online portal, PEXA existed.What is an “ideal” settlement day? What does it look like? The Trio canvas the steps and the paperwork required to get to settlement. From legal transfers to 'funds to complete', bank loan documentation certification and pre-settlement inspections. There are many steps that are important in the lead up to settlement day.When are short settlements advantageous? And why would a buyer consider making a short settlement? Cate explains that many buyers think that a shrewd offer with a short settlement is the key to tough negotiating, but sometimes this isn't the best way to drive a good bargain. What can go wrong at settlement? Tune in to find out! What causes delays? Dave and Cate step through a range of issues that can threaten a smooth settlement, from finance to lost titles, to late subdivisions, caveats and lost titles. There are many elements to manage and be aware of when it comes to property settlements.What happens if the purchaser is at fault and can’t give the vendor confidence that they can settle? The answer to this question can be quite ugly, but it's important that purchasers appreciate the gravity of the situation when it comes to obtaining finance in time. And let's assume settlement goes to plan.... what are the next steps? Dave steps listeners through the nitty gritty that borrowers should check straight after offset to make sure they are on course with their mortgage strategy and loan facilities. .... and our Gold Nuggets! Mike Mortlock's gold nugget: "Don't do it yourself! And book the truck for the day after settlement!"Cate Bakos's gold nugget: "Make sure you've got a really good checklist! Give us a yell if you'd like a checklist emailed over to you." Shownotes: https://www.propertytrio.com.au/2024/03/04/settlement-day-what-can-go-wrong/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMIn this innovative, two part series, the Trio share their own ideas and ideals to contribute to some solutions for solving the housing crisis.Dave is clear. "It's all supply, supply, supply". But he is clear on the need to define the 'ideal' balance being agreed and struck. Cate and Dave debate the short-stay accommodation impact on rental supply... is short-stay problematic? Mike weighs in with his thoughts. Will the day come when the government(s) decide to entice investors back? As Cate points out, limited investor participation is dangerous. But politicians need votes.The Trio tackle consider some possibilities, but questioning the disincentives is their first stop. The Trio share their ideas, with Cate's investor-incentives, and Dave's finance considerations. Cate contemplates the role that banks could play with postcode-based information. Mike likes the idea of moving towards a more European approach; long lease terms. Tune in to hear more.How could lending changes enhance our chances of improving the housing crisis? And what changes to some great existing government policies could make a significant difference? "Some of this is a function of being one of the wealthiest nations in the world". How can we provide support housing for critical workers? And how can we provide crisis accommodation? Does decentralising government services have a positive impact on housing?Cate runs through quite a few of the Trio's ideas. There is no doubt that many solutions have unintended consequences. Political decisions aren't easy, and tax reform and legislative change are often unpopular. The Trio recognise this and reflect on the power of consultation and healthy debate.Shownotes: https://www.propertytrio.com.au/2024/02/26/tackling-housing-affordability-part-two/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMThe January 2024 data is out, and the capital city league ladder has been changing. But are houses and unit imbalances across capitals skewing the data? Dave explains.."Data does let us down like that", says Cate and she shares some another example of stock segmentation and purchaser incentives skewing data.What's happening with the regions? The quarterly data shows that regions have outpaced the capitals. Are we seeing a recovery in some of the regions that suffered during 2023 with the reverse-COVID exodus?Mike dares to broach the inflation data and asks his co-hosts when they think interest rates will fall. Dave suggests August/September this year, whereas Cate won't be surprised if it's even in 2025. Time will tell! The national rental index recorded it's strongest monthly rise since April. Could things get worse before they get better? Cate shares her concern about the rate of investor sales and anecdotal evidence from agents' reporting. Cate predicts that rental hikes will eclipse 10% nationally. She also talks about the challenges being tougher for families, as opposed to singles and couples.We have sales volumes to thank for our 2023 year holding up as it did, but now that sales numbers have increased, will the supply and demand ratio threaten capital growth? It seems not. Buyer appetite is strong and sentiment has ticked up somewhat.The stock availability, (or lack thereof) has a direct correlation with capital growth, as shown in our charts in the shownotes.Yet the distressed listings have The Trio intrigued. Is Victoria's data point a green shoot or an anomaly? It's one to watch....The Westpac Consumer Sentiment data provided some good discussion; what a difference the surprise inflation figures made! But which measure still has Cate worried?Cate draws attention to the unsecured lending figures and holds concerns about some of the items that people are financing on high-interest credit.Dave explains how the consumer sentiment index is determined with 50+ sub-groups of people assessed. It's an interesting peek behind the curtain!Investor activity is up and it has been steadily increasing. Despite the investor-led sales, talk of increased rents and the potential for strong capital growth surges are exciting a cohort of investors. The three year bonds show that we could see rates drop in the near-term, yet the ten year bonds suggest that rates could sit at similar levels to where they currently are now.And... time for our gold nuggets... Cate Bakos's gold nugget: Stop spending on discretionary stuff! And better yet, stop using unsecured debt to do it. We need to bring down inflation.Dave Johnston's gold nugget: An interesting fact... House values have continued rising at a faster rate relative to units. House and unit median values are at their greatest differential ever. Mike Mortlock's gold nugget: Don't make it a holiday, make it a toy, and make it second hand.... AND use cash! Shownotes: https://www.propertytrio.com.au/2024/02/19/ep-245-january-market-update/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMIn this innovative, two part series, the Trio canvassed some measures that could be implemented to ease affordability and promote the healthy functioning of the Australian property market.Mike took some inspiration from an industry friend's article, and Cate and Dave chimed in with their thoughts on some of the initiatives from the article. In Part 2, the Trio will cover their own ideas and insights to foster a healthy property market. How do the Trio define a healthy property market? Dave considers the different perspectives from all of the various stakeholders. From developers to renters, first time buyers to investors, NIMBY's, local council, retirees, ... the list is enormous. Cate weighs in with her thoughts on the multiple barriers for acquiring home ownership, in addition to the 'big three'. Our casualised work force, for one is a significant blocker for credit availability for many. Dave cites an insufficient supply of new property.The Trio step through the six innovations in the article, namely; 45 year loan termsPhasing out stamp dutyBalloon paymentsSeparating the 'real risk' from 'robotic risk'Social housing accountability, andSuperannuation, LMIU and Family EquityDave's insights into loan term increases is enlightening and he chats about the historic changes of loan terms over the decades, and also the impact of the scars inflicted from the GFC. He touches on the stigma of longer loan terms, and essentially, borrower mindset."Are all innovations stimulatory?" asks Mike, and he proceeds to cite many examples. Cate shares some of her preferred initiatives that have been devised to assist first home owners, but she also illustrates the failings of past concessions/grants, and poorly considered incentives. Dave boldly tackles the concept of Stamp Duty abolition and proposes some thoughtful ways that the State Governments could maintain the revenue stream. He also touches on the possibilities that superannuation offset accounts could open up. How could balloon payments work? And what are the pitfalls? Dave expands on the possible unintended consequences. ...And our gold nuggets! Cate Bakos's gold nugget: This is a courageous episode, and lots of people have lots of different ideas on this. What is important is that people in this industry who do care about housing feel like they are in a safe space to speak up.Mike Mortlock's gold nugget: "We require a national debate on this." The politicians have had their opportunity and they have had quite a few fancy ideas that have exacerbated some of the issues. "Investors are part of the solution." David Johnston's gold nugget: "Send us your thought on what you think will make a difference to creating a healthy property market for all participants. Show notes: https://www.propertytrio.com.au/2024/02/12/tackling-housing-affordability-part-one/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMThis week's episode features a two great listener questions, the first from Catherine."My husband (39) and I (32) are doing well financially and trying to decide our next move. Our goal is to pay off our mortgage but we feel like maybe we should be buying an investment property. In SA western suburbs, our house is worth around $900k and our mortgage is sitting at $290k. We have a spare $3000 monthly (after bills and allowances) that we are putting on our mortgage. If we buy an investment property it will be negatively geared but we aren't sure whether it is worth buying now as we will have to contribute to repayments. To buy a house with some land in a decent area is around $600-700k+. Will the tax deductions be worth it or should we wait and keep smashing our mortgage, pay it off in 5 years?" Many people feel compelled to pay down debt, but this isn't necessarily the optimal way to build future wealth. The Trio share their individual thoughts around Catherine's dilemma, explaining leveraging, setting financial goals and discussing the positives of good debt. Dave also includes a scenario to illustrate the potential in store for Catherine and her husband. Dave acknowledges the strain and subjectivity of such a personal decision. Debt aversion can strike many, and as he points out, understanding our surplus cash flow is a critical step to getting it right. The scenario Dave cites is modest, and the modelled outcome spells a $500,000 superior net asset position for our listener couple. Our second listener question challenges the use of the Land to Asset Ratio as a metric. Lennard's musings are plentiful and Cate, Dave and Mike tackle each one. If capital growth is maximised by a higher Land to Asset Ratio, why wouldn't an investor just buy land? And is a million dollar farm in the outback a better investment than a small parcel of land in a blue chip, city suburb? And how do you quantify the exact land to asset ratio metric? Lennard's questions are probing and they keep the trio on their toes.They canvas the difference between capital growth returns, rental returns and tax returns. Each also offer examples to help explain the ways in which a Land to Asset Ratio metric can be a helpful measure. Dave tackles Lennard's question about how a buyer could attribute a value to both the land and the dwelling components of a property. He points out that it's not an exacting science. When can dwellings appreciate? Dave takes up the challenge and faces it head on, citing scarcity, inflation and maintenance. Mike chimes in with the term "functional obsolescence" and he illustrates depreciation. Land to Asset Ratio is not static, and nor is there an optimal ratio. It's important for investors to recognise where their own tolerance comfortably sits. ....And our gold nuggets! Cate Bakos’s gold nugget - Due diligence counts for so much, and it goes way beyond Land to Asset Ratio calculations.Mike Mortlock's gold nugget - Value drops and depreciation are two very different concepts. Dave Johnston’s gold nugget - Land to asset ratio is just one factor when assessing the future capital growth prospects of a property. It is not a valuation methodology at all. Show Notes: https://www.propertytrio.com.au/2024/02/05/building-long-term-wealth-and-mastering-land-to-asset-ratio/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMThe December data is out, albeit in parts after the Core Logic team put out a thinner report over the break. Dave points out that December represented the smallest gain in property growth and he ponders whether the most recent interest rate increase triggered a slowdown at year end.Dave also draws our attention to the 'tale of two cities', and the two-speed property economy between the mining states and the non-mining states. Cate questions the relationship between listing activity and growth rates. Is there a correlation? And are we back to the good ol' days when it comes to the summer break and the property industry shutdown?What's happening with the regions? Dave and Cate shed light on some of the elastic behaviours in certain regions. Mike shares his press release story about the national rental crisis with the listeners... tune in to hear more.Was the December rental figure a data blip, or has the rental demand started to ease? Cate demystifies things for our listeners.Gross rental yields have ticked up to new levels, but as Dave explains, "that's what they used to look like!" Like many other property-related cycles, rental yield, too is cyclic. Are we expecting a busy listing period over the coming months? Cate shares some coal face intel and some insights into buyer activity currently.What is the Westpac Consumer Sentiment Index telling us? Have the interest rate increases finally bitten hard? And what direction does the Trio think rate movements will take over the coming months/year? And Mike asks Dave for some business insights into borrower activity; it's an intriguing overview and it ties in with the data.Lastly, Cate draws attention to the construction challenges being faced now. And... time for our gold nuggets... Cate Bakos's gold nugget: For all those people who are planning on purchasing sub-median priced property in early 2024, stay close to the agents as ex-rental stock emergesDave Johnston's gold nugget: Dave emphasis the need to make your own personal decisions based on your own economy. Show notes:https://www.propertytrio.com.au/2024/01/29/ep-242-december-market-update/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMPete joins us in the studio! Mike kicks off the Trio's predictions for 2023 and he runs through their January predictions, holding each accountable for their forecasts. What will the market do? Cate admits she was quite bullish on this question, while Dave thought prices would drop 5-8%. It was the Property Professor who got this prediction right. Which capital cities will be the top performers? According to Mike, the Trio all got this one right in identifying Perth as a top performer. Cate concedes though that Melbourne demonstrated resilience, as opposed to a bounce-back, and she points out that none of them picked Brisbane. And Pete sheds light on some fundamental reasons why Perth was so popular for eastern states investors. How will the regions perform? With hybrid office working environments, things are changing now, but what will the larger regions do in the short term? Who got it right? And what is in store for office spaces? ...Tune in to find out.Investor numbers: What did the Trio underestimate? How has credit policy played a role? And how did tax legislation changes impact investor activity? The Trio ponder.What government intervention could impact the property market? Each of the Trio had a good point, but who got it the 'most' right?Developers and building - what did the Trio think would be in store for 2023? Why could we see private builders ease their pricing? Does Cate have a valid theory? And Mike sheds some light on the challenges today for volume builders... and it's insightful. Pete adds his insights on the current building pipeline and Dave discusses supply chain woes. Dave was determined the deserved winner of this prediction. Where will interest rates land at the end of 2023? The Trio concede defeat!Rents and vacancy rates - where would they end up at the end of 2023? Cate and Pete took out top marks for this prediction: "Record increase in asking rents for 2023. It will shadow 2022, we’re not getting more stock, we’re getting more people. With interest rate increases, some people who were looking at purchasing might be looking at renting instead."Where did the Trio peg listing and sales volumes by year end 2023? Full marks to Dave! "We’ll see it around the 5 year average this year, first 6 months will be flat, but pick up in the back half of the year.And what risks did they anticipate could impact the market? From recession to higher unemployment, war/invasion and share market corrections, the Trio canvas some of the possibilities.Lastly....where did the Trio think inflation would head? Pete speaks candidly about the practicality of reading inflation charts. But did Dave and Cate get it right? Or were they one year too early with their predictions? ....And our gold nuggets! Peter Koulizos's gold nugget: Borrow as much as you can to buy as much as you can, and hold on for as long as you can!Cate Bakos's gold nugget: The differences of opinion between the Trio is what makes the show interesting, but it also sheds light on the importance of noting different economists' points of view. We pride ourselves on being fiercely independent. Shoe notes: https://www.propertytrio.com.au/2024/01/22/2023-predictions-unpacked/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMCate kicks off the Trio's predictions for 2024 and reminds Mike that he will be accountable in a year's time.Dave picks value growth of 2-7% nationally in 2024, with the market being weighed down by Melbourne and Sydney, with a comment that he feels we'll see a similar year to 2022. Cate feels that a strong supply of listings in early 2024 will dim the growth potential for the busy cities in the early months. The supply and demand ratio may lead to some great buying conditions during this period.Cate backs Perth, Adelaide and Brisbane for outperformance growth for the year. Mike leans on Chris Gray's comment, "It will either go up, go down, or stay the same." Yep, thanks for that Mike. Mike does share some economist's updates for our listeners though and challenges Dave with a 7-9% growth estimate. Mike suggests that 2024 could be a year of two halves. Tune in to find out why.Will 'chicken and egg' impact our markets again? And could this lead to a stock undersupply? The top three performers.... Who will get it right? And who will be proven wrong? The Trio place their bets! Cate challenges Dave and Mike with their insights and predictions into investor numbers and government intervention. From vacancy taxes, rent freezes, superannuation, and first home buyer initiatives, they have some fun debating the possibilities. Cate also touches on the tax opportunities that could arise as our baby-boomer generation age. Mike's insights into developer activity and construction is intriguing. It's a must-listen! Interest rates and inflation.... where do Cate, Mike and Dave think they will land in 2024? Their responses aren't aligned either. The Trio agree that rental vacancy rates aren't likely to improve for renters and Cate gives Victoria a special mention for double digit rental growth for the year.The Trio also contemplate listing numbers for the new year and the impact that this could have on the markets. And lastly, Dave, Cate and Mike toy with unlikely and the unpopular as they discuss the biggest potential threats to the market. ....And our gold nuggets! While they've enjoyed putting together this episode, they remind listeners that predictions can be fickle. "Hotspotting is never as important as the planning", says Mike.Show notes: https://www.propertytrio.com.au/2024/01/15/2024-predictions-and-insights-for-the-year/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMThis week's episode features a great listener question from Ben."Offset account question I am grappling with. I am nearing retirement and have three investment properties in NE Melbourne, two of which are IO and fully offset. Third is IO and partially offset. I have a PPOR P&I loan with and offset account set up. I continually go round the conundrum of whether to park my funds offset against investment IO loans or the PPOR P&I loan. I fully understand the extra cash flow I get by not paying interest on the IO loans, and effectively have the rent as income (taxable). And offsetting P&I PPOR actually makes no difference to my P&L unless I do something downstream - sell or refinance. Any thoughts?" Cate offers the layman's view on Ben's predicament.Can Ben have his cake and eat it too? Dave would suggest that Ben 100% offsets his home loan first, and then he would target placing his surplus funds into the highest interest rate investment loan offset account. Switching his home loan to Interest Only is another good option. Mike prompts Dave with a question: "What stages of life do you typically see your clients facing this conundrum?" Cate weighs in with some insights based on recent economic and banking changes, relating Ben's conundrum to some of her client's questions. When APRA stepped in, requiring banks to set home loan rates lower than investment rates, things started to change for a few investors. Tune in to hear more...Cate's simple solution hinges around refinancing his home loan to Interest Only, but is it that easy? Dave weighs in with some of the challenges Ben may face. Dave has a technical solution, but it's not easy and will require some intense concentration!Mike ponders; can refinancing the existing debt to reduce the minimum loan repayment commitment help Ben's case? Cate and Dave step through the pro's and cons of the various approaches on option to Ben, highlighting the tax benefits, interest rate differential and long-term benefits. And the Trio shed light on the benefits of offset against Principal and Interest loans....And our gold nuggests! Dave Johnston’s gold nugget - If Ben can't refinance and can't go to IO, Dave highlights the important points for Ben to consider. Sometimes going backwards from a cashflow perspective isn't always the worst case scenario. Looking forward, doing the maths and not losing sight of the bigger picture is important.Cate Bakos’s gold nugget - Visibility is everything. If Ben has a dashboard and can get a sense of timeframes, he will get a better sense of perspective. His overall portfolio will likely hold him in good stead, but in the meantime he could do a stocktake of his current discretionary spending, and conduct a health check on his current home loans. Mike Mortlock's gold nugget - There is no simple answer, but there are a number of ways that he can do this. Knowing what the banks will allow is important too. Show notes: https://www.propertytrio.com.au/2024/01/08/can-we-retire-at-50-and-how-many-properties-will-we-need-2/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXMHappy New Year to our listeners! Mike introduces James and Lisa's case study. They are both 36 and have a goal of attaining $80,000 of passive income per year into retirement, and scaling back work to 50% by the age of 50 remains an ideal. Their annual combined incomes are $144,000 and they have $90,000 in savings. Can it be done? And what do they need to compromise on to reach their goal? Cate ponders their plans and discusses the cost disparity between life in the major capitals versus the regions. She also touches on 'overshooting the runway'; a common pleasant surprise for those who make firm plans early in life. Dave explains how he and his team would typically tackle the determination of subsequent property purchases, timing, budget and buffers. How did James and Lisa's property plan compare to other plans? Tune in to find out what scenario Dave's team recommended to this duo. Do they purchase an investment first? Do they move to their ideal future home location? How many properties do they ultimately need? The alternative options for James and Lisa are an interesting surprise!Mike and Cate tackle the investment-future use conundrum; a common investor challenge that the Trio see often. And Dave makes a valid point about the differential in post-retirement outcomes when sensible financial decisions are made at the start of an investor's journey. It's little wonder that compound interest is considered the eighth wonder of the world. ....And our gold suggests! Cate Bakos’s gold nugget - Retirement is not what it used to be. We don't just stop. We have much longer retirements these days and we do have to think about how we wish to enjoy our segments of retirement, well before the 'golden years'.Dave Johnston’s gold nugget - When modelling out a property plan, setting pathways and determining if a goal is achievable is critical. Decision-making often has to face adjustment as life changes. Show Notes: https://www.propertytrio.com.au/2024/01/01/can-we-retire-at-50-and-how-many-properties-will-we-need/