The 2% Deposit Scheme 🗞️ Real Estate Market Wrap

00:00 - I had the same conversation with every vendor today

01:10 - Agents who "wing it" won’t survive the headwinds

03:15 - First auction using the 2% deposit scheme. The government takes 30% ownership, buyer puts in 2% deposit

05:10 - Office of Fair Trading attending NSW auctions

05:50 - Price guides are coming to NSW

07:40 – My Clearance Rate: 8/13

09:40 - Market forecast: lower price points performing; housing supply is the real issue; taxing investment properties raises rents; tenants are the most vulnerable

Transcript

endors Versus Buyer Reality

Tom Panos 0:00

Oh, today was difficult, man. Today was difficult. And listen, any vendor that's listening to this, because I pretty much have to have the same conversation with every vendor today. Not every, 80% of them. I want you to listen here. And I said this to one vendor. I said, listen, I understand, I get it. You've got a number in your head. I understand that because of where you want to go next. I get it. But buyers don't wake up on a Saturday morning thinking, how do I help the vendor upgrade to a waterfront property? Do you understand that? They don't do that. Buyers don't do that. Buyers don't wake up and say, I'm going to go to the auction to help the vendors with their next move. They don't do that. What buyers do is they wake up and go to the auction to say, I'm going to try and buy this at the cheapest possible price. That's what they do. And I'm letting you know it's becoming super clear to me right now that you know those real estate agents that seem to wing their way through

nterest Rates Shrink Borrowing Power

ow The 2% Deposit Works

air Trading Watches NSW Auctions

arket Turns And Tougher Ahead

risbane Shifts Housing Supply And Rent

Speaker 1:10

real estate. Someone's always helping them. They don't read the play. They don't know how to narrow the gap because the gap is getting bigger in various parts of Australia. And if it's not where you are now, I'm letting you know it's coming. It's coming. Don't think to yourself you're always going to have a booming market in Brisbane, Perth, and Adelaide. At some point, you have to understand that people turn around and say, hey, this is what we can go to. And part of the problem that we got with rising interest rates, apart from changing sentiment, what it actually does is it reduces people's borrowing capacity. So it's actually not something that is uh uh a desire, it is an actual condition. You cannot pay more because you've been revalued by the bank. Today, I have to say that it was probably the first time I've auctioned a property where a buyer was involved in that new two two percent deposit scheme. So you can look at on my Instagram, you can see the young lady who bought the unit in Lord Street, Newtown. The way it works is that you go into business with the government. That's right. You buy a property with Anthony Albanese and his government. So what you do is they the government buys 30% shareholder, your 70% shareholder. I believe that they'll go up to 40% on I think new properties. You can do it with a 2% deposit. You can do it with a 2% deposit, right? And obviously, if you ever sell the property, the uh the government is a 30% shareholder, so they would get 30% of the funds once that property is sold. Um why would you sell it? Why would you sell it? I just thought about that. Why would you sell it? So you buy this property. Please, by the way, check out the scheme. Check out the scheme. You can buy a property, and this young lady from Vietnamese heritage bought a property with a 2% deposit. Uh, the government's gonna come in as a 30 percent business partner, she's gonna be 70 percent. And I just thought about it, you'd never sell it. That's what you do. You'd have to read into the detail. That is a different scheme to the 5% deposit scheme, right? So um other things that I wanted touch on. Obviously, in New South Wales, every real estate agent is on notice because Office of Fair Trading is out at auctions. They visited auctions that I was involved in last week. They've been out, and I've got to say to you, it's a good thing. Because as far as I'm concerned, a clear, honest, transparent auction system is good for the whole community, and it means there'll be more auctions. Because at the moment, I'm seeing that some people are saying that they might shift away from auction and go towards private treaty because they're not getting the inquiry levels with a no price on their marketing. Well, hello. We know that that law is about to change. You're gonna be putting price guides on property very, very soon. My advice to every real estate agent in New South Wales is to start putting price guides now. Get used to it. It's happening, it's around the corner. And not only that, you will get more buyer inquiry. So I would start as of next week, have a guide on the actual adverts, and you might as well get first move advantage at doing it. And for the record, I've been saying this since 2013. I believe that price guides should be on all auction ads. I realise that in Queensland there's legislation that means that that's not as straightforward as that. But in Victoria, they've already had it and it works. I've got, you know, thousands of clients in my real estate gym in Victoria that tell me it works. So why wouldn't it work in Sydney and New South Wales? Though having said that, I was over the moon this morning because I meet a vendor that says to me, Tom, I've got good news for you. I've got a friend that works in senior banking, and they believe that rates are gonna start coming down at the end of this year and prices are gonna start going up again, right? Well, look, I have a friend in a bank that said this, right? But it's super, super, super clear that we uh uh changing direction in the marketplace. And whilst buyers were chasing the market up, houses now look like they're chasing the market down. Um is it really, really bad? Well, eight out of thirteen is a lot better than the results I was getting in 1990 when interest rates were 18% and there was actually no one coming to open for inspections. So when you look at things in proper context, you'll turn around and say, hey, it's pretty good. But the question is, is it going to get much worse? And I think the issue is that we've got more rate rises coming. And for that reason, I believe that it probably will get more challenging. So no Sydney FC tonight. You're right, David, but there is Sydney FC there tomorrow. I'll tell you what's on the agenda. I'm going to watch Sydney Olympic play Western Wanderers in the NPL game, then I'm coming back, and then I'm going to watch most likely at a pub, West Tigers play South Sydney. Then I've got to prepare. I've got a very big event. I've got 50 to 60 black belt agents. These are agents that are riding millions of GCI coming in to spend a day uh in Sydney with John McGrath and I on Tuesday. So, team, in light of that, I'm going to actually say goodbye, but I'm letting everyone know. Everyone know. Thank you. As I said, yes, Brisbane is still booming. Well done. Congratulations. You got the uh Olympic Games, but I can tell you the real estate agents that I speak to Brisbane are telling me that they themselves are seeing a change in the market. And these are people that are high volume agents, so they've got a very big sample size. Having said that, it does appear to be prices more than a million and over that are more challenging. So, in summary, lower price points around the country are doing well. The 2% deposit scheme is an option for people out there. Um we're tracking as a country way behind our target in building new homes. We keep spending every few days talking about moving tax levers to help the housing issue, but it's not going away. If you build more homes, you can accommodate more people, and it'll help prices not go crazy. But when you tax something, you get less of it. So when you tax an investment property, you get less of them, it pushes rents go up. We must always be understanding of the most vulnerable cohort of people in our community, and they are tenants.