The Property Trio

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/