Phil Tarrant (MD of Real Estate Business) and I discuss navigating the complexities of Real Estate: Markets, Affordability, and the Future.
Phil Tarrant (MD of Real Estate Business) and I discuss navigating the complexities of Real Estate: Markets, Affordability, and the Future.
2023,. Bill Tarrant, tom Panos, real estate expo's. I've been getting a lot of grief, tom. For some reason these days people think I know a lot about property as because I've been hanging around with you, because you're the most famous man in property in Australia, so they seem to somehow think that I know you and therefore I must know about real estate. But I've been getting a lot of heat, mate. People are disappointed in us, disappointed that we've been pretty humdrum this year with real estate expo's. We've only done a couple of special editions, today being one of them the 2023, the real estate market, mortgage market and review. But we have the news flash, tom we're back and we're gonna be bigger and better in 2024.
Tom Panos:100%, 100%. We're gonna sit down and have a planning session to work out the correct date and time and we're gonna give people that have got an interest in investment, real estate industry, real estate agents, mortgage-broken finance, mortgage brokers and everything to do with government decisions that impact all that. I think we were the only people that really bringing this magazine style of information that your average property person loves to get involved in, and we will be doing it again next year, phil we will be doing it again and I do look forward to it.
Phil Tarrant:I do enjoy catching up, tom, and I do learn a lot from you and your informed commentary, which I get coming through my social media feed. If you're not following Tom Panos, you're probably missing out quite a lot, because I dial in every single Saturday arbor and that's where I get my information around what's happening in the market, and then I badge it up and regurgitate it and claim it as my own, because I do steal a lot of Tom's ideas. He knows that, but he's okay with that because it's all about sharing the right information. One of the biggest issues we have in today's modern media landscape, tom Panos, is disinformation and misinformation and you see it more than any other market than real estate, because people are making big buying decisions based on information they think is factual and right and relevant and practical and in line with where the market is right now. And people keep making mistakes, tom, in real estate. That's what keeps us in the job 100%.
Tom Panos:And I think what's becoming very, very clear is the marketplace. I know, phil, right now the marketplace is so confused about real estate. Right, because on the one hand they're hearing we have a housing problem, prices are out of control, we're never gonna be able to afford to buy a home, we've gotta get on top of prices. Yet on the other hand, I'm also seeing in certain markets there's it's not a seller's market, it's a buyer's market. And I know that vendors are confused because over the years, every time I show up to do an auction, phil, the first question I ask to Vendor is what's your understanding of the current market? And when the market is being good, they'll say it's booming. When the market's been bad, they'll say, yeah, I hear it's not that good. But in recent months, when I ask them the question, phil, they say we're not sure. We're getting mixed signals.
Tom Panos:And I think, more than ever, agents and mortgage brokers have got an audience that's dying to hear what they've got to say. Right, and I think, Phil, you are right. I think if you were to look at mainstream media that is, in the business of selling ad space to companies, they know shock, jock, lead, magnet talk is what gets them going, and that's why you'll always open up a paper on the weekend to actually hear about some house in Kujih that sold for 1.3 million over reserve, that was derelict, that couldn't be lived in, or you'll hear about some incredible result. But in that day, phil, there are a lot of people that are vendors that have not sold their property at the price that they want. There's a lot of people that I mean.
Tom Panos:To give you an example, the other week I did 10 out of 10, well, close to 10 out of 10, and I could have easily have driven home and done zero out of 10, because it was one buyer, it was a motivated vendor. They both compromised, it was grinded out and it looked like it's a sale. So, to the surface, if I was reporting the results to someone, 10 out of 10, that's a hot market. What it didn't take into account that one of those properties sold for 200 grand less than what they paid for it. One of those owners had to sell because they had bought elsewhere and they were on bridging finance, and one of the others had to sell because they couldn't afford their loan repayment. That went up from six and a half to 10 and a half and it had been third month that they were on the new loan repayments and they were struggling. So, yeah, our voice, like ours, is probably gonna fit in a gap in the marketplace that's not being covered.
Phil Tarrant:Now we'll do what we say as it is as well. We're not. I was scared of pulling our punches, tom, we'll say it as it is and that's why we call this real estate exposed, this installment being the year in review. Look forward to more of me and Tom over 2024,. Tom, I've got some points here that we've worked up to give us a bit of structure to our discussion today. We've got about half an hour or so and we'll get through it. We're gonna talk about the resilience of the Perth market. We're gonna be talking about interest rate rises. We're gonna be talking about a two speed market those with buying, with mortgages and without mortgages. Gonna be talking about it being a buyers market. We're gonna be talking about AI, gonna be talking about foreign buyers. We're gonna be talking about developers, the new RBA governor and home ownership in general. Just this whole idea and concept of misinformation, disinformation which led by a lot of discussions you see coming out of the political apparatus and also the papers.
Phil Tarrant:I'm gonna start there, tom, because early recently the government has handed down this new vision for immigration. We all know that immigration has been a half bit of this station. The POMs arrived here in Sydney, harvard, 200 plus years ago, noting that we have had people on this nation for 40,000 plus years. Tom, home ownership is where it's at. We're all a nation of migrants. We've just heard from the government they're gonna try and curb it. They've decided that migration is the reason why we have a home ownership crisis in Australia. We can't rent, there's not a place for rent and it's too expensive to buy here.
Phil Tarrant:Tom mate, I was just playing around myself on a property that I was looking at just the other day and I pressed the button on the stamp duty calculation that I was just saying I was a foreign buyer and I probably get the numbers wrong, but it was three or four times the stamp duty cost for me to buy here in Australia when you survive, in particular as a foreign buyer. So here we are, tied by the government. No, no, no. We need to stop migration, and I do note also is that we would be in a recession if it wasn't for the migration we've been having. Tom double it sword. Let's stop migration. But this is where the government, this is where the government makes most of his tax receipts at least the state governments. It's with property taxes. So how's that gonna work out into 2024?
Tom Panos:Look, it's a hard one because you know it takes a very brave government to actually say we're gonna say no to that 400 grand. I mean, they sit down, they're a business, they're an organization that creates, you know, targets and actuals and budgets. And, phil, you've just told me there I mean $400,000 versus, I think, $100,000. That's a significant amount of money. And I'm also gonna go off to say some of these overseas wealthy foreign buyers, they're not millionaires, they're billionaires, right. So I don't even think that them having to pay some extra money is gonna stop a lot of the high-end buyers.
Tom Panos:They are extremely wealthy people, phil, right, I don't think it's gonna make a significant amount of difference, but, yes, property is a lever for a very big chunk of revenue for the government, phil. And if they, you know if I can see how, on the one hand, they'll respond to the housing crisis and the cries that Aussies have, but, on the other hand, I also understand, cause I'm a business person, you're a business person and, at the end of the day, numbers matter, budgets matter, revenue matters. Being able to keep your budget under control matters, so yeah, it's a tough one.
Phil Tarrant:I think we're that. You know predictions for 2024, we'll see this play out. You know the government's talking about surpluses right Now. The reason why is because they've been so effective in generating income, so which they generate through tax receipts, right, and every single business person I speak to right now they're telling me that the ATR, in particular, is at them. They want to get paid quickly and this is important for the government. Look, that's on the income side. On the expenditure side is a very, very different proposition. Are we spending our money appropriately? But let's just remember real estate transactions is a huge driver of tax receipts and therefore a huge driver of economic growth in Australia. So we need to be conscious and consider it to it how they're going to work it out. So I'm really anecdotal.
Phil Tarrant:I was at the bank the other day and I was chatting with the bank manager and he went. I don't get it, phil. He goes. People arrive in Australia and they're opening bank accounts and I'll say to them why are you opening a bank account? You're only here for two months. They go I just want a bank account here. Or foreign visitors and travelers. And the reason why is because they open these bank accounts, which, allegedly, is really easy to open Australia. You just need a passport, they just load it up with cash, then they just deploy that in time into Australian real estate.
Phil Tarrant:That's the nature of the market. I think we're going to see a lot more of it moving forward. What do you do about it? This is really this intersection of sort of social issues and social housing and ensuring that everyone's got a place to live and stay in Australia. I know, tom, that you spend a lot of time in original Australia. Some areas original Australia Byron Bay, for example the government's clamped down and now stopped Airbnb letting you all, really restricted it to only 60 days of the year, I think up into Byron Shire. That's completely changing property markets. So government regulation, government policies, is going to be a big driver and a big influencer in property markets moving forward. But, tom, let's go to Perth. What's happening in Perth, tom?
Tom Panos:I think Phil, 15 years of no growth eventually had to come to an end and Perth is one of the biggest winners WA, in fact of COVID, because it was isolated away from a lot of the action. All of a sudden it became an attractive proposition because of incredible value for money. And I can tell you, phil, because I'm speaking to lots of agents Shane, beaumont, shabaj you know all these agents in Perth that are high performing agents are telling me FaceTime appointments with buyers from Sydney, melbourne and Brisbane. They're buying property. They're not inspecting them, and we're not talking about the occasional one, we're talking about lots of them on a monthly basis 500 grand, 600 grand securing homes there, getting good rental returns, and I think it's a classic case of 15 years of no growth Ended up providing this area as having incredible value for money.
Tom Panos:Sqm and a number of the other data forecasters Phil have said that they believe this is the sure thing again of 2024. Days on market Phil are literally less than 10 in most suburbs of Perth and the attractive regional areas of WA. So well done and I'm happy for him. I'm happy for him because I can't tell you how many people bought a home for 500 grand in Perth in 2009 or 2008 or whatever, and that home had actually not gone up in value for a decade, right? So happy days. And yeah, I can't get out. I would have thought to myself you'd hop on a plane, fly over for five hours, but it's not happening, phil. They're buying them off. Facetime inspections, the agent grabs their phone, does a FaceTime thing and, like one agent said to me, phil, in Perth, he said, tom, christmas is an inconvenience at the moment.
Phil Tarrant:Yeah well, every single buyer's agent I know are out there right now aggressively buying property for investor clients. And keep those comments coming, thomas, as they feed through, and please tell us what you think. Happy to answer anything. Tom's happy to answer anything that you want to feed through. Just comment on whichever platform you're tuning into this right now. But, tom, every buyer's agent is out there aggressively buying property. Now, I don't know how long this is gonna last, for there's a moment in time when you want to be buying a Perth.
Phil Tarrant:I don't know if you saw the Smart Property Investment Fast 50, tom. You actually participated in it. We picked all of the superb suburbs which are performing very, very well. Maybe you're already too late. Who knows? In real estate, tom, maybe the market, maybe the smart money was in there a year ago. Don't know how long this run's gonna continue. But just remember, look back in history. Look back in the past 10 plus years of flat growth. Tom, I remember being in Perth with you, probably about five years ago, hosting a panel discussion when you were emceeing the Better Business Summit for the advisor and I did a panel with the real estate markets. I've never seen anything like it, just their body language. They were browbeatin'. They were browbeatin'. You could hardly get anyone to turn up to come and talk about it because it was so tough, that marketplace. So they're walking around. They've got a spring to the step. Right now. Hope the agents are makin' hey, makin' money while the sun's shining, tom, out there, they boy.
Tom Panos:I think, phil, I went there two weeks ago, copped COVID. Perth was going through another COVID wave copped COVID again while I was there, but this time it wasn't long COVID, it was gone in a week. But there's a spring in their step, phil. I mean I went there with the agenda I've been teaching agents in Sydney and Melbourne this year, which is how to put deals together and how to get vendors to accept the reality of the market in markets at prices that have been challenging. And they sort of said, tom, scrape that off the agenda, we don't need that. You just tell us how to get more listings. If we've got listings, even if they're overpriced, they're selling. All we wanna know is how do we secure more stock? Nothing else matters for us in Perth. That's a big change, phil. I used to sit there and they used to say to me Tom, how do we get our owner, who wants 800, to accept 600? That's what they wanted. So the landscape has changed and, yes, there's a spring in their step. You can go down and see them. They're drinking in the bars. The agents are like the agents here during the COVID years when they were sort of you know, life's pumping, ordering new cars. So that's Perth.
Tom Panos:While we're talking about, I just saw a comment come up here, phil, about the top end of the market. You know, and I think we are gonna touch on that subject and we're not gonna go through suburb by suburb, but to answer Andy's comment here will the top end of the markets of 2024, what will they do? Example Balgala I don't think, phil, it matters where. It is the topic. What became clear to me this year, phil, is, apart from the Perth market being so clearly different to others, I started to identify there's another market in real estate which we never really thought about, and that is the mortgage market versus the un-mortgage market.
Tom Panos:I mean, there's a large group of people that are over the moon about rates going up, and the reason why is they own $10 million of real estate. They've got two or $3 million sitting in cash. They're getting five 6% with no risk in term deposits. They're probably the biggest contributors to inflation because they've got money. So they're spending it on travel, they're spending it on cars, they're spending it on restaurants, they're spending it on well, the Reserve Bank chief reckons they're spending it on dentists and hairdressers, and that's the cause of it all. But as far as I'm concerned. I don't think you've got to be rich or poor to get a haircut or get your teeth fixed. I think their basic necessities that we all get done. Right now people are getting them done in the Gaza Strip. They're seeing dentists. I don't think dentists is a luxury. Put it that way.
Phil Tarrant:So only you could link a conflict in the Middle East before we get in our teeth fixed. I don't know how you do it. I don't know how I do the teeth Well. Well, this got to remember right. A third of Australia rents, a third of Australia has a mortgage on their home and all their property investors, and a third of Australians and their homes outright. And this is the way it works.
Phil Tarrant:And this is one of the biggest criticisms, tom, of how the RBA is approaching inflation is that they've jacked up rates 13 times since that rate cycle started last May, and it's only impacting part of the market, people with cash, people with cash and savings. They're very, very happy because, rather than getting 0.01% on their money sitting in a bank account, they're now getting 5% and 6%. That's good, safe money in anyone's language, Tom, and those people who do have cash and have mortgages are offsetting it. We'll have a chat about this interest rate cliff in a moment, tom, but it's a very, very tough market at the moment. Let's talk about interest rates because we're gonna cover it off.
Phil Tarrant:Your view and I subscribe into it that November, the Melbourne Cup rate rise is probably one that slowed everything right down. I think you may see another one in Fed. I'm not too sure. If they do do that, I think that'll be the straw that breaks the camel's back. But, tom, the market is strongly respective.
Phil Tarrant:A lot of people still have savings. The money sitting in offset accounts, reducing people's interest repayments, is still huge. People have been able to absorb these rate rises despite the fact that a lot of people were coming off fixed rates at a point in time. So there is this still inflationary crisis driven by a portion of the population who it's heady days for. They're thinking this is great, what a great time, what a great time to be unencumbered in mortgages and having cash in the bank. I was only reading the paper this morning, tom. Share markets are making a bounce back. They're talking about all the losses from 2022 being eroded from the back end of 2023. So you put your head in your hands and say the sky's falling in, everything's wrong in the world. There's a lot of people, mate, who see it very, very different, and they're doing well in Australia at the moment.
Tom Panos:Yeah, absolutely, phil, 100%. There are people that at the moment would be saying I don't know what all the big fuss is about. But it's very clear to me If you've got money, you can make money. If you don't have money, you'll find it harder than the rest of the people in our current economy. But, phil, you're spot on. We're noticing, in certain markets there is a buyer's market, certain price points, but in that higher end of the market there is no indication whatsoever that there is going to be a softening because the depth of bias I mean. Here's a simple fact there are more millionaires coming to Australia than any country at the moment. So they're finding it attractive in this country. Why are they finding it? Why is the world finding Australia more attractive? Why would a millionaire that's living in another country, that can migrate to another country, pick Australia? Let's talk about that for a moment. What makes Australia so attractive?
Phil Tarrant:Well, there's a number of reasons. Well, man, I'm looking outside. Today my light isn't that good because it's overcast and rainy for the first time in a long time. But, tom, I always come back to people who are a lot smarter than me in explaining these types of these issues and when it comes to why Australia is attractive, I lean on descendants of Bernard Salt, who was with KPMG for many years. You would know him as a demographer and an economist and he looks at the reasons why things happen, particularly with cities, and he talks about Australia through the lens of the Dubai effect.
Phil Tarrant:Now, the Dubai effect for those of you who have been to Dubai on a trip out to the UK, dubai is where the Middle East, the Middle East nations and wealthy people in Middle East park their wealth. The reason why they do that it's a stable government. It's secure. Dubai's world-like. It gets on with all its partners and its nations, irrespective of the conflicts and the issues in the Middle East. It's an honest broker that sits in the middle and encourages a lot of commerce and a lot of economic activity. It gives tax incentives for people to set up there. That's where people park their money.
Phil Tarrant:Now Bernard Salt has a concept of Sydney and Melbourne, australia in general, being the Dubai effect for the Asia Pacific. So if you drew a board, from Afghanistan on the left of the map all the way through to some of the Pacific nations to the right and all in between, the Asia Pacific, the Indo-Pacific, australia represents the Dubai of the Middle East. This is where Asia Pacific Indo-Pacific park their money, because it's safe, it's secure, we have a stable political system, we have strong economic growth, we have a strong professional of financial services here. We're technology capable, we're a good manufacturing, advanced manufacturing company. We have strong real estate. You're not going to blow your dough here and the likelihood of us having conflict with anyone is very, very low. It's also got beautiful beaches, great landscapes, nice place to raise your children, all in sundry. It's a good place to be Tom.
Phil Tarrant:So this is why Australia, sydney and Melbourne in particular but we're seeing it now in Perth and then in Brisbane is the Dubai of the Indo-Pacific. That's why people are parking their money here and that's why Australian real estate operates very differently to other real estate markets in the world, particularly Sydney and Melbourne. And for those of you that don't know, if you picked up Sydney and Melbourne, poured them into America, they would be, I think, the third or the fourth and the fifth largest cities in America, after places like New York and Chicago and a handful of other places. They are big global cities, tom, with diverse economies, and everyone, should they move out to Australia, can have a good crack at it, and no doubt, like we've talked beforehand, we're a nation of migrants, tom, and what a great place to pull your socks up and pull yourself out of what has been maybe some tough areas that you've lived in in the world. So that's why people come to Australia, tom.
Tom Panos:Okay, well said, well said. And I've got a professor at Sydney University that lives down the road from me and they live off overseas students and they're over the moon that they're back and he said to me they all come here because it's got a great education system and they also think I don't know whether it's the Justin Hems effect, but they reckon that it's just a great place to live, that the social life and places and eating is second to none. I mean, all you gotta do our oceans. I don't care what anyone says, phil, you know I swim in Bali, I swim in Thailand, I swim in Hawaii, mate, australian beaches are fantastic, education's great. Like it ticks all the boxes. But I wanna move the subject to this person here, nick Rest Bella, I just wanna touch on this because you want anyway I won't pronounce the last sentence you want ours to keep going up. Where do you wanna read?
Tom Panos:Nick is an example and symbolic of a lot of people, phil, that are frustrated with housing affordability. Right, he's an example of it. There are thousands of these people out there. I run across them every day. I see them at auctions putting their head down and walking away disenchanted because they've missed out. I have emails come from people saying to me that they're thinking about leaving this country because they'll never be able to afford to buy a house. That came from someone the other day on my email. So the list goes on and to further this.
Tom Panos:Phil, this year I did not sell one house to a developer. I sold a lot of duplicate sites to people that consider themselves a part-time developer. That will do a duplicate. But this thing about DA approved sites where I'm gonna build 10, 20 units, developers aren't touching it.
Tom Panos:So this issue of the housing crisis right, this, like if migration were to continue even if it was gonna slow down, but were to continue and there are no one building unit, which is normally the first type of property a person that comes from overseas moves into. Right, they're not moving into a fly bedroom home by the water in Bellevue Hill, right, they're moving into a two-bedroom unit, normally in a very affordable area. It's a stepping stone. They're not building units. I can just picture we are gonna have a super accommodation crash in the years to come, phil, because the government is basically allowing people to come through Tullamarene and mascot every day without thinking too much. Once we get all these people, where are they gonna live? Are they gonna be living in granny flats at the back of the houses in St Mary's Well?
Phil Tarrant:babe, they're changing the rules around granny flats to try and provide for greater density. But, tom, this is a really, really tough issue and I can't remember the person's name there, but I just want to talk about that very quickly. Nick, look, you probably feel like a lot of people in Australia and this is not unique to this generation. You go back to our parish generation. They were saying exactly the same thing and it goes to the fact and to the point of why Australia is so attractive for real estate. But for me, you've got to disconnect the two issues here and what I acknowledge the significant challenge a lot of people have now in affordable housing. You know, people living in cars, tom, people raising families in cars or tents under a bridge mate. That's not cool and that's the responsibility of the government, absolutely the responsibility of the government to ensure that people have the basic needs and necessities to live, and that is housing. So I want to acknowledge that and it's horrible to hear these stories. There's a lot of NGOs and other sort of hozai bodies trying to support people in those challenges. And as we come up to Christmas, tom, and hear these stories of families going without because of housing prices, you know it's a significant issue and I just want to acknowledge that. But I want to just separate that and put that over here. I want to talk about housing. Now. It's a responsibility of the government to get this right. Already we are so far behind where we need to be in housing construction to be supporting housing into the years ahead.
Phil Tarrant:Now, tom, I used an analogy some time earlier this year and it seems to have been picked up by the government where I spoke about how was it 100 years ago that some bright people were smart enough to build the biggest expansion bridge in the world to cross the CBD with the North Shore? I'm talking about the Harbour Bridge. That was so far out of what we needed at that point in time for the traffic requirements to get people over the bridge. We built that and it's still serving us very well today and it's still delivering. We're due to some new crossing tunnels. How is it that we're able to be so forward-thinking to build something like that 100 years ago? But a housing policy today is all it's worried about is the next election cycle, trying to win votes for the immediacy of getting stuff done. We need to build more housing, tom. Absolutely critical. Now the government.
Phil Tarrant:The federal government, has put the, the, the, the responsibility of rental Accommodation, rental stock, into hands, into the hands of the mum and dad investor. 93 94% of the number of all rental accommodation is owned by mum and dad investors. I'm using mum and dad investors. There is an easy term. We don't have built a rent start. Like Europe, we have large organizations buying and owning the housing stock for people rent. So I'm by mum and dad investors. There is incentivize to do so through favorable tax incentives from the government. That's the structure here and that's how it works. However, if there's a handbrake in building more accommodation, that's where we're gonna face issues we're facing right now and I think it's gonna be dire moving forward. So something needs to change now.
Phil Tarrant:Developers want to develop because developers traditionally they get a right make a lot of money at the moment, the numbers that stack up for developers. We still got supply chain constraints that cost the building. We don't have skilled labor to build, you can't find the stock at the right price to build on it to make a margin, and that's just the economics of it all. So you're not gonna see that coming back for some time. So we're just stuck in this vortex now of In decision-making.
Phil Tarrant:You know the governments have been told to reduce the red tape around DA applications. It's do it to go through at a state level at five or six different departments and get rubber stamps Just to actually break ground and build something. It's nearly impossible Developers are decentralized to actually do anything. So, tom, it's up to the government. They're gonna sort this out, mate. You know it's, it's, it's the only way that we get out of this. They're gonna have some big, bold, ambitious plan. So I need to step up and do something differently. Rather than just thinking about whether they're gonna get reelected in the next election and they're they're state or federal level they're gonna be thinking about long-term nation building, generational nation building, tom, and it's not happening right now.
Tom Panos:Yeah, so so, phil, I'm gonna. I love talking about this subject because I believe the government we have to start. I'm not a developer, but a lot of people Automatically come to an assumption that if you're a real estate agent, you'll always side with that of a developer, and people see developers as being Opportunistic people that try and make money out of buying and selling at a margin right. I think we've got to start looking in Australia to solve the housing problem and look and Want these developers to come forward and see them as friends, not enemies, because they are the ones that will produce. Stop the people to actually sit in there.
Tom Panos:So I had a really interesting conversation with the developer in punch bowl three weeks ago. It helped me really understand Things from their side, feel it. I had a property in punch bowl. It was a DA approved site to build 17 units and off the top of my head it was around under three million and there was not a single developer there. And then I noticed one across the road just watching from a distance and I went over to him and I said to him Do you intend to bid today? And he goes, no. I said at what price? Would you all of a sudden be interested and I was saying it, phil, because I had no other buyers and he looked at me and he says I'm not interested at any price. And I said how come? And he said I'll tell you how come.
Tom Panos:He says my building materials have gone up by 39 to 42%, depending on the thing. So I say 40%, he goes in business. After all our overheads we were always happy to make 20%, 25%, great 20%. If materials have gone up 40%, we can't make 20%. Then he goes. Think about it, something's got to give in. You've either got to buy the land at a super cheap price We've either got to sell the finished product at a high price, right or You've got to reduce all the costs involved in it, whether it's interest, whether it's your building materials. So he goes, I'm not interested, none of my mates are interested, and he goes. Quite frankly, he goes.
Tom Panos:If this building commissioner Wants to keep slowing things down on, council can keep slowing down. They can do that. But they better find a solution for the housing problem. Because as far as I'm concerned, he goes. I own 150 units. Rents are booming. Man, let it just rip. Let the rents keep coming up right. This is the. You understand what I'm getting at feel like and we have. We have an issue here. We have an issue that I'm trying to work out when they're going to be putting these millions of extra people that are coming to Australia. I don't know, because we know we got a boom at the moment in rentals. What's gonna happen in two, three years time, when there's no more stop but there's a lot more people? Big problem.
Phil Tarrant:It's a big problem and and if you read the RBA notes after each meeting, you know the increase in rents is a big driver inflation but structurally, rents are going to continue to grow because of supply and demand. There's more people that want Rental stock than what there is available. So what are you going to do? You got to fix the supply problem, but developers aren't building and you explain that very well, tom. You know this whole idea of built to rent, so large conglomerates coming in with big backings of major global funds starting to build office towers like you know, we spoke about Australia being a great place to live and invest but they're not going to come here until there's more favorable conditions for them to deploy their capital, knowing they're going to get a decent return out of it. You know it's it's. You know it's it's a crisis. You know it's a crisis.
Phil Tarrant:And you look at this government and and you know I don't want to get too political on this you know this. This current government, the, the federal government, who's now? The honeymoon is certainly over. We're going to be Moving into election cycle soon. The issues that they've thought are the most important issues facing Australia versus what the real issues are, and I would say housing availability and Construction is critical to Australia right now. They've got it largely wrong. They've put the attention on stuff which are, yeah, nice issues, but not critical and essential issues, and this will hold Australia back. If we do not fix the housing issue In Australia because it's got a curbing, it's going to curb migration out. Already We've seen that happening and they're trying to they're, they're, they're, they're tackling, or what they're trying to do is to Reduce the pressure on housing stock by reducing international students.
Phil Tarrant:Now, tom, it's our biggest export, other than what we dig out of the ground, is education. So going yeah, yeah, yeah, no, let's not, let's not let international students here anymore. What happens? There's less money in the economy. International students spend a lot of time a when they're out here, not only with the universities themselves but everything else connected with it, so they've got a fixer supply problem. It's the, I would say is probably one of the top two or three Issues facing Australia into its future 10, 20, 30 years. And I'm not seeing enough, mate. I'm just seeing committees. They get together to work out whether or not they need to form another committee to look at this. We need action and we need action now, and I can't see it happening, mate. I don't know how they're gonna fix this. I'm really concerned about it.
Tom Panos:Yeah, well said. And, phil, what warms me, as you're saying, is Every time when living into another election Again, what actually happens is the focus is how do we win votes, not how we solve problems, and that's that's. That's an absolute, absolute worry. But I also think, phil, there was a wonderful article, and I think was written by Alan Kohler. I think was written by a ton call, I'm not a hundred percent certain, but it talked about the narrative of home ownership.
Tom Panos:The gentleman that just wrote that comment there, nick, and the thousands of others who are frustrated they're frustrated, often feel, because they believe that you're either an owner or not. If you're an owner, you're a better person, you're a happier person, life is better. If you're not an owner, life is hard. You're where we have become, a country where we are defined on whether you own real estate or not.
Tom Panos:Somewhere along the line, I think, around the early 2000s, it sort of became the haves and the have nots, and I think that we might have to also Change our view. I mean, phil, I I think I meet some people that are highly intelligent, people that actually add a lot of value, that are financially doing it hard, and I meet other people that probably don't do a Contribution to society that probably don't solve a lot of problems, but just through the birth lottery or in Decisions that they made to where they bought a property, they're multi millionaires, right. So we're becoming a society where success is. We're here in a position to a bought a property in double bay instead of Minto, right, and this person's worth 10 million and this person is worth 800,000. And then we've also got the other extent where we have certain people that don't have real estate as well and feel like losers. I think we've got to change the narrative, and I don't think it's more than change in narrative.
Phil Tarrant:I think Australia really needs to grow up. I've got a very similar story. I was in a cab this morning I'll speak to the cabbie and he went. He went. I had a choice 25 years ago to buy plates for To be a cabbie and that being an investment, that being my retirement or buy a place in Croydon. He went, I bought the place in Croydon and now I'm a multi-millionaire and he goes. Real estate's been being good to him.
Phil Tarrant:But, tom, we need to grow up and and it's about, you know, as you know, australia, australians, we're still a young nation. We're still trying to work it out. You know, we, we clutch it, we clutch it. These, these perceived ideas of what makes Australia, or Australians, australian, and and one of them is this, this idea around home ownership. It's a right for everyone to to own their own home there enough, and I subscribe into that in some ways, but not everyone is going to be able to afford property in Australia, and we've spoken about all the reasons why our housing market here is going to be Operating differently than how it does in other parts of the world. Tom, I think I know the article you're referring to by Alan, and I think there was a piece in this and I I probably gonna butcher this, but I'm probably gonna get it slightly right. I think he spoke in that story around 50% of Australians now have Non-traditional working arrangements, and and by that I think you're referring to people that don't have a nine to five full-time job. So, if you imagine, half of people in Australia have a nine to five full-time job and there's another half of workers who work part-time or casually or with gear economy orientated stuff. So so these are people who are choosing, maybe, flexibility in other life choices, as in they want to work when they want to work, they want to have multiple jobs, you know using, you know platform-based, geek economy type work. And then you've got the other half of people who are like me and you, who have full-time, traditional jobs. Right, and they're both okay. Horses, of course, is do what you want.
Phil Tarrant:I've got a theory on this, and that is, tom, you can't do Both things at the same time, and by that I mean if you want to have flexibility in your life, if you want to go to the beach when it's sunny outside, if you want to Spend all your time working on on on personal development or fulfillment or happiness, whatever that looks like, whether it's yoga or surfing or whatever float your boat or you want to travel the world and and, and, and and experience. That's cool. Knock yourself out. If you're going to do that, you're probably not going to be able to own a home because the banks won't lend you money. Number one and number two You're probably not going to be able to save for a deposit. So you can't do both of these things. You need to choose one Eventually. If you choose one, you can move into the second and then, when you do that really well and that is a full-time job for a long time you can probably do both again, right. But if you're starting out in property and you want to buy a home, great. You're going to have to compromise Certain aspects or elements of your life in order to achieve that, and it's going to be a moment of time.
Phil Tarrant:Tom, I did the first one before I did this Second one. I spent 10 years traveling the world. You know I had no money. You know I was excited when I had enough dollars to be able to buy a beer or kebab, right. So, so, so skin, but geez, I had a good time. But then I chose the other one, and that was a full-time job, saved money, invest in real estate, be able to afford a mortgage and and be able to persuade about to give me a mortgage. Great, you can't do both at the same time. And this is the mindset shift I think, tom, that we need to have about this expectation entitlement of I want everything and I want to be able to own a home, and it's just I've got to work that way. No, I think what you're saying is is very valid.
Tom Panos:I think at some point if you are going to own real estate in Australia, particularly in the areas that are the higher price points, say city Melbourne, because let's assume I mean the truth is, I do think that even if you're not in the market now and you're not at a really high salary, even if you're on 70 grand a year, two or three years in the workforce would still allow you to buy a home in certain parts of Australia. 500 or I mean in some parts units have not gone up for you can get units. You can get units in the Lake Amber area, which is a 20 minute drive or a ride from the city by train, for four or five undergrants. But we're talking about, you know, the people that are disgruntled about not being able to buy where they wanna buy.
Tom Panos:My view is feel that every person that is going to own real estate has to commit to a short period of the grind, and the grind is that you'll be working long, you won't be spending much, you'll be pressing the repeat button each day, you'll be saving a lot of money, you'll be having cheaper holidays, cheaper eateries, you'll be doing a lot of stuff at home and that's gonna set you up to be able to have things that you, that others might not have, because they're not gonna go through the grind. You've gone through it. I look at every person that's successful. They've gone through it and I think you've summed it up very, very well. You can't have both right. You've got to.
Phil Tarrant:You've got to Choose one, choose one just choose one and do it well, and if that is a flexible life and that's what you want, brilliant, I think it's great. I'd love to do it. I hope to do it later on. I'll choose that again at some point, but at the moment, I'm doing the grind, tom, and I choose to part my money in real estate. It's been very good to me, it's been very good to you, but this is where it's at.
Phil Tarrant:But it still doesn't dismiss the needs of the government at a local, a state and a federal level, to ensure housing policy supports, fixing the supply problem, because I don't like seeing people living in tents, tom, and in their cars, particularly for a country like Australia. That's not cool, that's a big social. It needs to be addressed. I said, though, everyone who's tuning into us are either working in and around real estate mortgage brokers, real estate agents or their property investors themselves, and you've probably seen the Hymnsheet. Real estate is a great investment, it's a great asset class, and we'll continue to have narratives around it, tom. So let's chat about I want to pick this up with you very quickly. You touched on it Real estate agents in Perth, down the pubs drinking champagne, living large on a great real estate market, tom, which seated in other parts of the industry and want to get sense for it.
Phil Tarrant:It's good times right now for Perth real estates. Hopefully they're squirreling their money away and putting it in some way, because it's not going to be like this all the time this year, next year, probably not going to be repeated in years. So you've got to be thinking about how your income is going to get balanced over a period of time. As a real estate agent, I know there's a lot less agents in Sydney, melbourne, on the East Coast, tom. With the market being tougher because largely anyone could have sold real estate in those boom periods that we had a couple of years ago, it's got very, very difficult. What's going to happen to real estate numbers moving forward, tom? Are we going to see a decline in Perth once these good days are over and universally across Australia? Is it an attractive profession to be in?
Tom Panos:It's the highest paid hard work and it's the lowest paid easy work. And it's an industry that has a big influx of people joining it when the market is going strong and it has a big group of people leading the industry and going back to where they came from, because a lot of people are not born real estate agents. They come from other industries. They come in when things are hot and then they leave when they're not. Is it a great industry to be in? I think the marketplace, if you're a person that tells the truth and has got a long, sustainable opportunity in real estate, it's a great way of life and that's why we're seeing university graduates enter real estate more and more verse. In the past, they didn't. In the past, the person that became the real estate agent was the guy that didn't want to be a plumber or sparky, that didn't get into university and wanted to actually wear a suit became a real estate agent, not in 2023. 2023, there's a lot of people that are saying goodbye to the corporate world. I'm not going to be working in an office tower or sitting in my pajamas on Zoom, having meetings at home, working for some corporation. I want to actually run my own business, I can actually get into real estate. You don't have to have an outlay when you're a real estate agent and you can have uncapped earnings. I think it's a great industry to be in.
Tom Panos:But I've got to also say to you, phil, mike, one-on-one coaching had a very big proportion of people that had moved from what I was calling coaching advice and were looking at more at mental counseling, because it is a challenge If you don't have a predictable, repeatable income coming in, if you're living the first hour of every month not knowing where your next deal's going to come from, and you don't have the luxury. Like all your staff, they're at momentum media. They know on the 15th of the month there's money going into the bank account. That's not the life of people that work in real estate or mortgage-broken for that. They're very commission-based people and a lot of them are going away on holidays at the moment, phil, also aware that they're not going to make a hell of a lot of sales in December and January and that's going to hit their bank account in February because there's a lag between sales and your bank balance. So it's not for everyone, phil. It's not for everyone. It can be extremely challenging waking up and knowing that you live in total unpredictability.
Phil Tarrant:It must be tough for you sometimes, tom, because you're a trusted advocate for many people in terms of supporting and promoting the industry, but people rely on you. You point about your one-on-one coaching, not just professional coaching, but coaching around, probably more life coaching. Do you get fatigued with it? Did you absorb it, seeing all these troubles and problems that people have because you are on the front line?
Tom Panos:Look, phil, I do, but I mean you get to a stage where you learn you've got to put an invisible bubble around you, because if you don't put an invisible bubble around you and you are just totally empathetic right from start to finish, you can't be of service to anyone. Because they're coming to you, because they're crumbling. If you crumble, you're not actually serving them. But and so most of the time, no, but, phil, you're only human, like you know. I look at one of my colleagues and one of the guys I've done work with for a long time. I look at Matty Steinway, who's a 19-year-old son committed suicide, right, you know, having conversations with agents about things like that, or bad diagnoses or the breakdown of a relationship.
Tom Panos:Yeah, I'm only human and I also can relate to it because of my own health issues. When someone you know I'm sitting there on a coaching session, I just really hate hearing someone that's just been diagnosed with some sort of illness, particularly if it's a bad illness. But, phil, and look to be honest with you, it's not just me and the coaching, I think it's a lot of real estate agents. They take the pain on off their clients as well and that's very tiring, phil, very, very tiring. You know, I had a situation last week where an owner was pretty much selling for a million less after their expenses, so they burnt a million dollars. You've got to be a ruthless person not to feel the pain of that person, you know.
Phil Tarrant:Yeah, and there, in light of the skill of the real estate agent. You know we spoke about it during COVID that accountants were the doctors and nurses for Australian business In tough property markets. Real estate agents play a very similar role and often the perception of real estate agents are true. But often it's not true and a lot of them are very sincere and considered people who work with people as some of the toughest parts of their lives in terms of financial transactions that don't work out. You know they're celebrating. You know the dichotomy is celebrating the commission received from a real estate transaction, but on the other side of the transaction is someone dusting a million dollars, right Like.
Phil Tarrant:It's an uncomfortable relationship sometimes and we need to acknowledge that Most real estate agents I know time are pretty good. The less good ones probably don't use the coaching services of Tom Panos or they're part of the real estate gym. So you're doing your service to the industry, making better real estate agents. Tom and you spoke about the challenges of being in real estate and that would extend out to mortgage broken as well the Uncertainty Commission. It's a tough, it's a tough going, it's a tough grind and you need to have that resilience around it, tom AI must be changing things in real estate. What have you seen this year? What's your predictions for 2024?
Tom Panos:Phil, it is. I've never I've always taken the approach. Don't be the first that jumps in and goes off and changes their whole direction of their life and their business and spends all this money. Let others be the guinea pigs. Learn from what's working and not working, because I've seen a hell of a lot of real estate companies jump down the tech part thinking that we're going to have first move advantage and what they end up having is blood move advantage. They lose the most amount of blood. Right, you don't want to be bleeding edge. You want to be cutting edge AI. There's no question about it. I think everyone should actually have a basic subscription on chat, gpt or whatever the platform and start using it right at this moment.
Tom Panos:Phil, I know that there's a lot of agents talking about how they're using AI in real estate. Here's how I see AI helping people. Number one, no question about it, whether it's companies like Nurture, cloud, reader, any of these AI lead prioritization services let's call it that so they get your data and they basically say this person has a higher propensity of doing something. Contact that person first. That's been around for a while now and I see agents using these effectively. I also see AI being able to help agents produce advertisements for their copywriting in a faster, more efficient way. I'm not seeing. And some basic admin tasks. I've seen it. I'm not seeing it actually doing significantly more at the moment, but it will be.
Tom Panos:Whilst we're talking about AI, phil, I've got to tell you there's no question about it it was not a real estate platform in 2022, but it definitely has become a real estate platform in the second half of 2023. So there has been a large group of real estate agents who have set up and now have got content that they're putting out on a daily basis on TikTok whether it's live options, whether it's market wraps and there's this growing group of people that are using it as positioning themselves as giving people a backstage view, because TikTok does that well. Tiktok allows people to get high views by saying let me tell you these things that the marketplace doesn't want you to know. So TikTok is very good at actually giving.
Phil Tarrant:But that's not different to how it's been for years. What you're talking about there is giving people distribution and connectivity. Yeah, you might be able to do a little bit different on TikTok, and the point being, how many buyers are actually on TikTok versus how many people are just watching that for that and who knows Tom? But it is another social platform that gives agency to real estate agents to go out there and connect with the marketplace and give a sense for their stories and the endorsement of why people should be choosing them. Facebook's done it, linkedin's done it, twitter's done it.
Phil Tarrant:What I would say about TikTok, tom, is and this is for all agents and mortgage brokers Be very careful where you create your assets, because algorithms change. Even online Algorithms change all the time. Whether or not TikTok will be banned in Australia, who knows Tom? There is a lot of continuing issues and questions around the efficacy of it from an ownership point of view and whether that's compromising other aspects of Australia's sovereignty. Who knows, tom? Will TikTok be around forever? Who knows? I don't have the answer, but if you're investing all your time, energy and effort on one single source, irrespective of TikTok and I know TikTok, I look at it or AI, you can't put everything in one particular channel because if that changes and you do not have ownership of that, you're just renting. You're just renting space on that right now. When things change and you lose that connectivity, you can see huge commercial challenges for your organization. So how would you be approaching that? As a real estate agent and a mortgage broker, tom? You need direct connected relationships.
Tom Panos:Tom, the phone is still king 100% and all I see TikTok, and you are right. I don't know, maybe this time next year, when we're doing a market in review, maybe feel TikTok is no longer the talk of the town. Right, but it will be something else though it will be something else.
Phil Tarrant:It's irrelevant really. There will be something else, so I have a view feel that Instagram, facebook, linkedin, tiktok, youtube.
Tom Panos:They're no different to Channel 9, channel Clan, channel 2, fox Till Stan. They are a destination where some people are and you can use that destination to get their attention. You don't own it. You are more or less leasing it Right and, for that matter, you've got to be prepared to know that the decisions that that organization takes and how successful it is in the future will affect your success on that platform.
Tom Panos:However, my view, feel, is some people will watch you on Facebook Right now. We're live streaming on my business page, on my personal page, on LinkedIn. On YouTube, we're not on TikTok. So I know that I am going to put this content up on TikTok, we're going to take it and we'll put it up separately, and all I can say is that some people right now are watching us, including JR, nick Samir and the other people. They're watching us. Where are they watching us from? There are some on LinkedIn, there are some on YouTube, there are some on Facebook, and all I'm saying is Bill, it's just another channel, but it is a channel that did get a lot of eyeballs. The other thing that I think is so that's an interesting feel. You have a view and a belief that there is a possibility that we may see TikTok bans in the future.
Phil Tarrant:I'm going to go and make no idea that. You hear about it all the time, but you remember this? When Facebook turned off all media companies, people woke up one morning Channel 9, news Corp, everyone included and went oh, we don't have our Facebook page anymore. We were relying on that for traffic and this was the brinkmanship of large tech. When Australian media organizations would say, well, you need to be paying us for our content, they would not get stuff, we'll turn you off. It can happen at any time, any time. We saw only a month ago, optus went down for a day because of some glitch in their system Technology this idea of cyber connectivity, cyber connectivity being the main channel in how people connect and communicate.
Phil Tarrant:Look at the impact of that. Things can be disrupted, whether through accident or through nefarious activities, whether through government policy, whether through large change in their stuff. You'd largely have very little sovereignty over your ability to connect with people in real estate and mortgages, and this is the challenge that everyone faces. How do you do you risk it so you're across as many channels as possible so that if this one gets shut down, this one, you still have this one, you still have this one. So it how analog. Can you be in real estate anymore? You can have a shopfront, people can walk past and look in your window and see properties for sale or for rent and they can more pin and they can speak to someone. How often does that happen anymore, tom? Everything is digitized in real estate Not very often.
Tom Panos:not very often. I think it's a bit depressing when you think about it.
Tom Panos:Yeah, yeah, not very often, Phil. The last thing I want to touch on before we finish off today. We're going to be seeing everyone on a regular basis next year. I think the most common thing that I'm asked, phil and I think we should both form a view on it is what do you reckon the market's going to do next year? That's got to be the most common thing right Right now. If you ask people Perth and Adelaide they'd say market's great. We hope it continues. High-end market people will say just get us more stock, there's a lot of buys out there. Lower end market you know, oh, there's been a fair bit of stock in the last few weeks. Absorption rates went down. That last rate rise from Melbourne Cup wasn't good. Phil, what's your view? What do you reckon 2024 real estate? Put your neck on the line, have a stat at it. We'll leave it up on our social media platforms and we can go look at it in 12 months time and see who was right and who was wrong.
Phil Tarrant:Well, tom, this when I frustrate people and I come back to just being a humble journalist curating and narrating conversations. I have around stuff, so I don't have a view. However, we haven't spoken a lot about mortgages, tom, and liquidity, as in people's ability to take on debt will be the major factor that will shape real estate markets in 2024. And what I'm seeing in mortgages is that it's getting just a little bit easier to get mortgages than what it was six months ago. Now I think we're at a terminal rate, or there may be one small increase. Most people absorb the idea that mortgages are going to be where they're at now for the foreseeable future, plus or minus 25 basis points. 50 basis points are down at the end of 2024 potentially. So this is the new normal. These rates that we have right now are the new normal and they're going to be this way for some time. We're never going to go back to where they were, unless something catastrophic happened is some sort of new seismic shift that changes everything, like a COVID pandemic, and what we've had the GFC, we've had COVID. There will be something in the future. Who knows? I don't know. I expect mortgage rates to be as they are now for the next period of time. So you need to be thinking about investing in real estate on that basis.
Phil Tarrant:Now we spoke about a two-speed mortgage market. There's a lot of people out there with cash money Tom particularly in commercial property, I who are buying without mortgages. But most Australians who are starting out in property or on their property journey do have a mortgage. So there has been some innovation, if you want to call that, inside of the banks We've got now these buffers are being decreased, so most people's serviceability is at 3%. There's now banks servicing people with a 1% buffer for refinance or take on new debts, so banks want to lend money. So there is an easing on that serviceability side of things and that's good if you're trying to access money. So that's an important point because, rather than being assessed to borrow based on 3% on top of the standard variable rate that the banks are offering, they're only putting a 1% buffer on top of it.
Phil Tarrant:You can only access this if you're perfect and clean in terms of your mortgage repayments. If you've missed the mortgage repayment, the banks won't look at you. You've got to be squeaky clean and they'll look at that. That's good if you're looking to buy, to refinance or even to change where you have your mortgage. So we've been speaking about this year, 2023, this notion of mortgage prison, mortgage prison or mortgage sale, where you can't move your mortgage because you don't meet the serviceability requirements with a new lender to change your loan to another lender and therefore get a different rate or different conditions. You might go for fixed to variable, you might go from principal interest to interest sale.
Phil Tarrant:That's now getting a little bit easier to shift your mortgage around, tom, and that's going to change away in many ways how the real estate markets will operate moving forward. We've seen huge competition amongst the banks. We've seen the dominance of the major banks who have done a lot of cashback offers at the start of the year. They've now put an end to all of that. That really, really shaped the way in which mortgage borrowing was happening at compromise and on bank lenders. People were going to the major banks not necessarily the best place for them to be taking on loans when there was other all terms available. Speak to your mortgage broker, they can help with this.
Phil Tarrant:But Tom 2024, 2024 property markets is going to be a story of how accessible mortgages will be for Australian borrowers, investors and people on occupiers. So the realisation that rates are going to be the way they are, the calibration of family budgets and balance sheets to afford mortgages, tom, a lot of people buy real estate right now. It's a good time to buy. It's a buyer's market. It's all going to work in lockstep. I think mortgage borrowing will get again easier into 2024. So if you have a good job, if you're one of those people with a good full time job, you're making good money, you got control of your expenses, you'll be able to get loans, tom, and that will be a driver for property markets. Now it's all dependent what happens in February or March of next year, whether the RBA is going to hide the rates. The RBA is only meeting eight times a year now, instead of 11, I believe, so they've got less chance to rise rates.
Phil Tarrant:But under the new RBA governor, tom, I think we'll see stability moving forward. You're going to see different markets performing different levels. Perth going along. Perth will continue to grow. The Adelaide will continue to perform, not at the same rate as Perth, but it's always a long strong-term performer.
Phil Tarrant:Southeast Queensland, tom, still a good place to be putting your money. I think Melbourne will be subdued. I wouldn't see growth. It'll be flat at best. I'll be looking down at Melbourne for buying. I think there's still a long hangover and you're going to see it, as a result of the changing government down there, a lot of damage done over the COVID period that needs to be ameliorated. You're going to see those changes taking place. We've just seen a premier change in Queensland. What that's going to do to housing markets up there still to be determined, tom. Sydney will perform, but I think they're predicting 3% to 4% growth there. Tom, irrespective, my summary if you could afford and you're ready to invest in real estate, now is the right time, because it's always the right time to invest in real estate if you've got all your stuff sorted out. That's my view and opinion, but I don't really have a view or opinion on it.
Tom Panos:Now, will said, will said. I share a similar view to what you've just said. I think it stands to reason. If rates go down, borrowing capacity goes up. Borrowing capacity goes up. Borrowers have got more to spend. They offer more. Owners get their price At the end of the quarter. You've seen price growth right. Viring capacity drops, which it has 30% roughly since May 2022. Roughly, the formula is for every half a percent rate rise, there's a 5% drop in borrowing capacity. So even if you want to buy it, you physically can't. And what you've more or less said, will that the availability of money, how much, how easy is going to highly impact what the state of real estate is going to look like in 2024? There's an article in today's review field that is saying one quarter of people that I think they call them economists have tipped a rate cut at the first half of next year and most economists have tipped a rate cut by the end of next year. Right, and this time next year we should be seeing, based on what they've said, cuts happening on interest rates.
Phil Tarrant:Well, let's find out. That's the mail. I'm seeing, tom, that there will be reductions towards the back end of 2024. But let's not leave it a year to work out whether that's going to happen. Tom, we'll be back next year on more regular basis for real estate exposed and just getting that cadence, tom, of regular market commentary, you know we haven't followed this upward cycle of interest rate rises. It would have been the same discussions every single week, but now we've got some understanding of appreciation for how interest rates will be into the near future.
Phil Tarrant:I think, tom, we can offer commentary analysis and I reckon I was going to choose three or four points that's going to dominate our discussions next year. The first one will be government regulation. Government policy around real estate, I think, would probably be the number one thing. We're going to be talking a lot about that next year at a federal and a state level. I reckon, tom, that will be the major thing we chat about, about how those changes are shaping and influencing public markets. Number two will be access to money. Number three I don't know. Give number three to you, tom. What would be? Sorry, number three, what were you asking me Really, yes, what would be the other thing that we're going to dominate our conversations next year.
Tom Panos:I think next year feel one of the clear dominators out of everything. Yeah.
Phil Tarrant:Yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah yeah.
Tom Panos:Yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah. Then we will talk about that next year. Yeah, yeah, yeah. Guys, you said the number three thing is going to be the first time you've been in business year, like even if they were going to turn around and say we're agreeing to build 500 houses in Rutte Park, right, find a park that's massive and build it. That's going to take ages to do, right, yet we still have got a shortage of property now.
Tom Panos:So I think that's going to be the big focus of 2023, 24, sorry, and I do see more people increasingly which has been happening this year moving from households that are single households to multiple people living in households. A lot of people moved into single households during COVID for lots of reasons. One of them was isolation. I think what we're doing is now seeing people moving back into a home where multiple people are living to solve the issue. But, phil, let's make sure that we're on here on a regular basis attacking issues as they happen. Merry Christmas to you, my mental media, family, all that stuff there. Hope you enjoy and we look forward to seeing everyone in the new year.
Phil Tarrant:Absolutely, and thanks, tom. Thanks for your considered commentary over 2023. As I mentioned, a lot of people rely on your views and opinions to shape their decision-making, so it's a great service to Australia's real estate sector, tom, and in many ways you're synonymous with people's attitudes towards real estate. So keep up the good fight that's Tom Paddles. Good work on the block. By the way, we did a good piece in that. You should go and tune into it. So that's our signing off. Expect to see us again next year. Remember to check out Tom Paddles with Google Him anywhere. You'll track him down and realestatebusinesscomau If you want to keep up what's going on in real estate. We'll be back with real estate exposed in 2024. Merry Christmas everyone.
Tom Panos:Thanks a lot. Signing off.