Season 2, Episode 6: All things Property Investment in Australia with special guest - Bob Hand

Season 2, Episode 6: All Things Property Investment in Australia with Special Guest - Bob Hand

In this episode, we dive deep into the current landscape of property investment in Australia with our esteemed guest, Bob Hand. Bob is a seasoned real estate investor and consultant with over 40 years of experience in the industry. He has successfully navigated the ups and downs of the property market since the late 1970's and is here to share his invaluable insights and strategies.

As one half of the team who thought up the idea to start The Property Now Podcast, we are truly excited to get Bob on to share his opinions on where the Australian market is at, and what he expects to occur in the near future. 

Join us as we explore the current trends in the Australian property market, discuss the best investment opportunities, and uncover the secrets to building a profitable property portfolio. Whether you’re a seasoned investor or just starting out, this episode is packed with practical advice and expert tips to help you make informed decisions.

Tune in to learn from one of the best in the business and get inspired to take your property investment journey to the next level!

Transcript

Speaker 1 (00:01):

Welcome to the Property Now Podcast, where we talk all things property, investment and new homes with your host Matt eol. Speaker 2 (00:09):

Yes, there's bad debt. Yes, there's good debt. The good debt is not bad. It will never send you broke. Ever rich people rely on debt to expand because without debt it's pretty hard to expand. It's almost impossible. Speaker 1 (00:20):

If you want to learn more about what's happening in the market and how to benefit from property investment, then go no further. We dig deep as to why our sector is a key to building financial security and safety for your family. Never before has it been more important to understand the playing field than now. Speaker 2 (00:39):

And I would say this, this is probably going to raise some eyebrows with some people, but your family home is not an asset. It is a liability. It's taking money out of your pocket from a cashflow position. Speaker 1 (00:49):

So let's get on with the show. Happy listening and we'll see you on the other side. Speaker 2 (00:54):

Hello, hello and welcome to the Property Now podcast. I'm your guest, Matt Lowell, and we have a special guest today for the second time. I feel like it's going to be a once a season approach maybe Bob. Absolutely. We have the great Bob hand in the building who is one of the two men in the photo of the podcast and one of the pioneers of this show and help get it started. So how are you mate? How's things? Good, thanks Speaker 3 (01:20):

Matt. Yeah, very challenging out there at the moment in the real estate industry, but I think better days are ahead very soon. Speaker 2 (01:25):

What are we August, 2024 just in case this recording comes out next month, which I think it probably will. What are you seeing, mate? What's happening in the land space? Speaker 3 (01:36):

I think it was probably three years ago when we saw interest rates starting to rise and we all thought the good market was only a few months away and here we are two or three years down the track and it's still looking pretty sick out there. But anyway, as I always say, you best time to buyers when everyone else is selling and today is probably as good as it's going to get to buy in Melbourne. Speaker 2 (01:58):

Be fearful when others are greedy and be greedy when others are fearful, I think is the saying. Yeah. So yeah, it's an interesting time and we've been finding it as well in the investment space. It's definitely a little bit tricky for people to make decisions as well. But what have you seen historically? Obviously you've been in the market since 1980 something. Is that accurate or am I a little bit Speaker 3 (02:18):

Earlier? Probably early eighties, actually, early eighties, I was selling lots of land in Melbourne Speaker 2 (02:22):

Doing you an injustice by sharing that information. Speaker 3 (02:25):

But I think the worst crash we saw was 89 point 90 interest rates were running then at 18%. So people complain about interest rates at six or 7% today it was 18% in 89. And mind you, the market came to a grinding halt. But it was interesting to see that within probably 12 months, the market was starting to recover. This time around we probably saw the biggest boom we'd seen during Covid, but it's been dead for a long time now. Inquiries have been very strong, but people aren't prepared to commit. So the underlying market is there for there when the market accelerates. Lot of inquiry but not committing. Speaker 2 (03:03):

Talk about the 30 years from 1990 till now, obviously within what you can remember, but the thing that I like and I started in 2007, so nowhere near as long as you, but it's so consistent in the way that it performs. Boom, adjust or correction, boom, maybe a slide off drop. It always almost operates as long as there's population coming in and those kinds of things over Speaker 3 (03:27):

Any 10 year period, it hasn't gone backwards. So it continues to grow. And look, I can only say I bought my first home back in probably 78, 79. I paid 11 and a half thousand dollars for it. A two bedroom, they used to call 'em home unit centres down townhouse, but two bedroom, two story single garage, 11 and half thousand dollars, probably worth 650,000 today, Speaker 2 (03:54):

60 times. Speaker 3 (03:56):

And it doesn't matter where you look, I mean I'm sure people out there know what their parents paid for their homes, continued growth. Yeah, Speaker 2 (04:05):

I think we can agree that and the stats do prove that we can agree that it is more difficult to get into the market now that it has been. However, the problem that we see a lot of the times that people want the dream home to start with, they want the first home to be a four bed, three bath house with a double lockup garage in a great location. It's crazy. And I'm sure your $11,000 investment, no, Speaker 3 (04:27):

I think, well look, I started in early eighties selling land in Endeavour Hills and we're selling blocks of land for probably nine and a half, $10,000 back then. But the first home was very different. I mean predominantly all we dealt with was first home buyers, but a first home comprised of probably three bedrooms in most instances, one bathroom, a single carport. And then for whatever reason, first time buyers became very entitled and they want four bedrooms, two bathrooms, double lockup, garage, fully air conditioned and heated. They want too much and they wonder why they can't afford it. And I think there's still this market there for a builder to come in and build a smaller style of home to get people into the market again. Speaker 2 (05:18):

I've been watching owning Manhattan recently. It's a show on Netflix about real estate in New York and people say that, oh, house prices can't continue to increase. I seen something in the news yesterday about some economists saying the market's going to crash and whatever, a million dollars for a house seems like a lot of money. But you go to New York and you are paying three and a half million us, which is a lot more than three and a half million Australian and they're getting 200 odd square metre apartments and they're not even that flat. I mean they're in New York, so that's a great spot, but there's so many people moving there and they're building so many apartments. So our property market has a long way to go. Look, Speaker 3 (06:01):

It's all relevant to income. I mean our income and wages continue to climb and so too will the price for housing people say, oh, but it was so cheap when you were younger to buy a house. It must have been so much easier now. It wasn't. I mean I remember my first job, I think I might've been earning $17,000 a year. Oh actually even probably not even that much, but I mean it's all relevant. Speaker 2 (06:24):

My apprenticeship in, so what was on it would've been 2001. I was on 26, 20 6,000 a year I'm pretty sure. Speaker 3 (06:35):

Which is crazy to think back now. Yeah, so it's all relevant, maybe Speaker 2 (06:39):

Less I Speaker 3 (06:40):

Think as our wages increased property and cost of living increases. So Speaker 2 (06:44):

I think it was on 17,000 a year. Crazy 2001. Yeah. Are you sort of across what's happening across the country? Have you been looking at other states? I mean you're based in Victoria? Speaker 3 (06:57):

We're based in Victoria and I do quite a bit of work up in Queensland as well, but I think we are hearing more and more about the facts that West Australia starting to get very high in price. South Australia's had a surge and it is probably peaking out. Brisbane may have a little bit more growth, but it's peaking out also. And a number of the big investment houses now are looking for opportunities in Melbourne and it's logical. I mean we've had stagnant pricing. I mean it's just been going nowhere and yet we've got all this demand, so it has to accelerate. There has to be capital growth. So I think the time is right now in Melbourne or even some regional areas, I wouldn't look too far out, but I certainly think Ballarat, Bendigo, Geelong are good areas like Warrigal. I think they'll see more growth but more that's beautiful out there as well. Fringes of Melbourne, you'll see capital growth again. Yeah, but the hardest part has been getting finance. Speaker 2 (08:00):

So I'll share some stats with you. I mean I agree with you, the finance option has been a bit tricky, but there are new products coming out. We've got access to some new products recently which are very good for first time buyers or first time investors that you should reach out to us if you're interested. But so some of the stats around what you are saying, I love my stats, you know that, but so Brisbane's media in house price is now actually quite a lot more expensive than Melbourne, Speaker 3 (08:23):

Which is unheard of. It never happened before. Speaker 2 (08:27):

I think I'm going to point some stats here and you're going to agree with them because I know the way that you talk about these things as well, but interstate migration in Queensland is the highest in the country. It's circa 30,000 in the last year, which is a lot. It's 600 odd people a week moving to Queensland from Melbourne, Sydney mostly from Sydney, Sydney's in negative interstate migration, which is interesting to see. And Western Australia has done really well in that respect too because there's a lot of opportunity over there. It's a nice climate, et cetera. However, overseas international migration, Sydney and Melbourne are still the top dogs quite comfortably. Sydney in the last 12 months, 160 odd thousand Melbourne, 140,000 Queensland's still being strong at, I think it's 90,000. So still great numbers, but as you've spoken about before with the international migration, we don't see the outcome straight away. It takes time, they get settled in. You want to talk about that. So Speaker 3 (09:29):

When they arrive, I mean they don't immediately buy a house, they usually settle into an area, find employment, pay rent for a while and work out where they want to be. And they'll need some qualifying time here too to establish themselves with the banks with some savings and what have you. So it usually takes two to three years before it tells, but we've got no housing. I mean we've got a shortage of housing already and we keep bringing migrants in. So mind you, we do need the migration as well to service jobs that we need to have serviced here, especially tradespeople. But I think if you go back to the Queensland situation, and you're right, Queensland has seen some great growth, but historically it's always been cyclical. The Sydney Melbourne market against Queensland, Queensland's going up while Melbourne and Sydney are stagnant and maybe things are different now, but what happens is most of the employment opportunities are in Sydney or Melbourne, not in Brisbane now unless things are changing. What happens is there's an influx of people into Queensland, they can't find the employment opportunities and after a few years they sell up and come back to Melbourne or back to Sydney. Whether that'll happen this time around, who knows. But traditionally that's what's been happening. Speaker 2 (10:42):

It's one and house in circus, six and a half families at the moment that we're building that are coming here or 15 people. So for every 15 people there's one house that's being built. So for those that are saying the property market's going to crash in value, it's like, well, how is that possible? It's not possible. Speaker 3 (10:59):

And as soon as you get that surge of sales, you're going to see price growth. You can't avoid it. Speaker 2 (11:06):

It's interesting with the first home buyer product as far as being a bit greedy, I do see that in the first investor, someone who already has a house, they've got some equity, they've got some super savings, whatever, and they want to invest. I do see that in that space too. I would imagine that your outlook is pretty similar. Let's get you into another asset, let's get you something growing, let's get some income. Speaker 3 (11:30):

You've got to keep that money turning as soon as you get equity, you've got to inject it into another property, but you've got to get for the first time by, you've just got to get started. You. You're not going to get your dream home straight off the bat. You've got to actually get started somewhere and get an entry level home that you feel comfortable you can meet the payments Speaker 2 (11:49):

On. Do you know what my advice to that is? So my advice is if you want your dream home, rent it. Speaker 3 (11:55):

Good point. Speaker 2 (11:55):

Rent your dream home. A lot of Speaker 3 (11:56):

People do that, isn't they? Yeah, they buy a house on the fringe, but rent in the city, I Speaker 2 (12:02):

Rent personally, I mean the place that I rent a really nice place, I know the numbers, it would cost me two or three times as much live in that house if it was mortgage. But if I own that and rented it out, it's much more cost effective. But I buy more affordable stuff in better locations Speaker 3 (12:20):

And that's the way to do it. Yeah, you're right. Speaker 2 (12:21):

Yeah. So we do have something you might see in front of us. I feel quite honoured to be able to personally my first book, it's probably not your first, I dunno if it is or not, but I know you've done some books in the past I Speaker 3 (12:35):

Think. Yeah, this is the third one. Speaker 2 (12:36):

Three. Oh, there you go. So Bob and I have written a book. I couldn't be happier with how it's come up. I think it's come up really nice. It's called Guide to Investing in Property. Bob, I'd love your feedback. We can point out some points in here that we can talk on if you want, but overall, what was it like writing this and what do you think? Yeah, look, Speaker 3 (13:00):

I'd written an earlier version of this and then when Matt and I joined forces, Matt had a lot of really good content to add to it. So we went back and started again. But the original plan for the book was I'm a pretty simple person, so I like things to be very simple and easy to follow. Most of the books that I found when I went out hunting for investment books were way too complex and so bloody confusing. I couldn't understand it myself. So what I wanted to do was write a book that was very simple. You could read it in probably 40 or 50 minutes, but you got a very good strong understanding and you could actually follow what was being said without all the bullshit. And I think we achieved that. Speaker 2 (13:42):

I think so too. We've had some really good feedback. I think we published a hundred of them to start with and most of them are gone, but the feedback we've had is really good. Do you want to touch on any of the topics in here? You're right. I think the good thing is that it's not complicated, but Speaker 3 (13:59):

No, it's not complicated. I'd just like people to reach out and get a copy. But a lot of basic stuff, I mean become successful in property, you've got to get outside your comfort zone. And like I was saying to you before, Matt, I've got this theory and we cover in the book that people generally comply with what every honest is doing. They don't want to go outside the comfort zone, they like to conform from the day we start school, we wear the same uniforms, we do the same things as everyone else. No one branches out. And when you try to branch out, you're going to be brought back in by the masses. And I know over the years we used to do a lot of property seminars and the people loved hang around after and drink coffee and want to talk more. They were extremely excited. They wanted to get started, but then nothing would happen and we'd reach out to them a few months later and sure enough, they'd spoken to their brothers, their sisters, their moms and dads, their friends and oh look, it's way too risky. So what was happening is they were ready to break out and do something, but then they're quickly brought back into the pack and those people sadly probably retire on social welfare or an equivalent income, not where they would probably aspire to on the night of the seminar. Speaker 2 (15:25):

I think the thing to take out of that is to speak with professionals. Is that fair to say? Yeah, Speaker 3 (15:31):

I think so. I mean, look, obviously you've got to be comfortable with the decision you make, but you've got to back yourself in and take advice from somebody who actually does know what they're talking about and it's not necessarily your friends or your brother or sister. Speaker 2 (15:46):

Yeah, I think obviously you need to have trust for the people that you're working with and I mean we base our operation on trust. I mean, I know it's easy to say, but you've got to deliver. Speaker 3 (15:56):

It's easier said, but look, if you just look around you and you look at people that have created wealth, you'll find a very large percentage of those have done it through property. Yeah. Speaker 2 (16:07):

I often ask people to ask those people that are giving that advice, just simple questions like, okay, great, well can you tell me why you don't think it's a good idea? Can you explain a little bit more? And usually it's very much like, oh no, no, it's just not a good idea. Don't do it. Don't go into more depth. Speaker 3 (16:23):

Yeah, people are scared of debt. No one created wealth without incurring debt. There is no way to do it unfortunately. Speaker 2 (16:32):

How long have you been in business for now? Speaker 3 (16:34):

Roughly 45 years. Speaker 2 (16:36):

45 Speaker 3 (16:36):

Years. Always in the property industry. Always in the property industry. Speaker 2 (16:39):

How important has debt been to run a business for you? Speaker 3 (16:42):

Well, even a business, you can't run a business without debt. Well, some people do, but I mean if you want to expand your business, you need to have debt. Yeah. But more importantly in property, I mean the best way to make money is using someone else's money to make money. Speaker 2 (16:58):

It's the good thing. It's called leverage as well. Being able to use other people's money to be able to buy something that we're very confident will go up in value. And if you can have someone else supporting the holding costs of that, and you can gain incentives from government tax offsets, depreciation, I love depreciate. It's my favourite thing. Speaker 3 (17:17):

Well, you put all the tax benefits, but just if you look at it from logical form, if you're paying six and a half or 7% interest, which you would be probably today in August 24, you're going to get maybe a four or 5% return from the rent. Plus you're going to have capital growth probably ranging from six to 8%. So you can see just from that simple mass without all the tax benefits which are complex and hard to understand, you're in front and really do you want to be paying tax legally we have to pay tax and it's all good, but if you can claw a little bit of that tax back by way of buying investment properties, why wouldn't you? Because then you're getting your own tax money to help pay for your house. It's a simple equation Speaker 2 (18:04):

And it's like talking about conforming and doing these things and sort of setting yourself up. It's the ones that don't conform that succeed, they succeed how it works, Speaker 3 (18:15):

And they're not necessarily clever people. You don't have to be clever to be wealthy, Speaker 2 (18:21):

But the whole rich get rich or poor get poor. It's so true, unfortunately, and people talk about it as a bad thing, but it's just a reality. And that is because of the rich. I mean my outlook on that is that the rich have assets, have income producing assets. They're not relying on one income. They've taken some calculated risks, either set up a business invested in property, invested in oil or whatever it is, and then they've built a foundation, which then means it becomes easier to acquire more assets. Correct. The value of money declines and it's declining faster at the moment with the higher inflationary environment whilst the value of assets continue to grow, Speaker 3 (19:04):

They do. And the majority of people even at bifa that we sell to are average moms and dads. They're not wealthy people, but they will become wealthy people. But when they come in the door, their moms and dads in a working job who have got a little bit of equity in their home. So full marks, most of 'em, they've actually got a start, but we are levering off the house that they already live in to get a deposit to buy their investment property. So a lot of people think, oh, I don't have the right income, I've got no savings. I'm not in a position to buy an investment property. Well, that's not necessarily true. Speaker 2 (19:44):

And every client that I pretty much deal with still after 15 odd years of dealing with people that are purchasing property off us, almost every single person that I deal with is still terrified when they do it. But as soon as they do it, it's almost like this weight is taken off their shoulder. You can see it. They're like, okay, so we're good. Okay, great. Now I feel better because I've done what I've made the tough decision and they've backed themselves. Look, Speaker 3 (20:12):

I think I'm not involved in the day-to-day like Matt is getting out and meeting these families and actually doing the hard work. It is a lot of hard work what Matt does, but what I am seeing is the end result. And you're right, the people at the other end are relieved and they are seriously excited about the path they've taken. But what we are seeing also is those people are quickly recommending Matt and his services to their friends, which is really comforting that the level of service has been to that level. And these people are now so comfortable with probably at that point the hardest decision they've probably made in their life is getting out of their comfort zone from just their own little home and mortgage and then expanding into wealth creation. And it's exciting to see that growth. Speaker 2 (21:05):

It's all a numbers thing for me. The guidance I try to give to people is that, look, let's try and remove emotion from this. If you're buying a house to live in and it's your dream home and all of that, we've spoken about that. That's Speaker 3 (21:17):

So true. It's in the book as well. Speaker 2 (21:18):

Yeah. Okay, cool. I understand there's more emotion attached to that. You're going to be raising a family there. Cool. But when we're talking investment, I mean I have clients all the time. We speak with clients from different states. We're based in Melbourne. I had a client in Queensland two nights ago we're talking about investment. I said, look, here's what I'm thinking. And we were talking Melbourne because we really like Melbourne at the moment. No, absolutely not. No way would I do that is what the client said. And I said, oh cool. Okay, can you tell me what your concerns are? Well, I can't see it. I don't know Melbourne. So the logical side of this is that what are the dollars and cents? What are the fundamentals of where you're investing? What does that location provide from a fundamental standpoint? Main one being is there good employment opportunities, other people moving there? Is there a lack of supply? If that's the case, we know that an area is going to do well Speaker 3 (22:17):

And the shortage of rental one in that market to rental stock in the market. So all the indicators of FML at the moment. I know we've done well at bifa with Western Australia and Brisbane, and even in those areas there are some isolated pockets for investment stock. More importantly with your in, of course, that's where the market takes you is where there's a need for people with disadvantage that obviously need homes in specific areas. So that's a different market. But the traditional investment market, all the indicators are that Melbourne and ceramic suburbs is ready to go. Speaker 2 (22:56):

And that's a good thing with investing again, is that you've got the ability to follow the opportunities. If we know that, okay, well Perth might've hit its straps. I'm not saying that has, but it might have and you feel a little bit uncomfortable about that, we're not confident that you're going to get returns in a quick enough period. Cool, let's go to somewhere where we are more confident we don't have to be stuck. Speaker 3 (23:18):

Well, another way to gauge it is that, and we do land and housing new homes. So if you gauge on the land market, if you went to Western Australia today, very hard to find any land. I mean it's tough. They release land, it's sold titled stock is very scarce titled Lots is fully developed land. Same in South Australia and Brisbane. You come to Melbourne, there's ample stock, there's an oversupply of titled Land for sale today. And like the old saying goes, you buy when everyone else is selling at the moment, there's a glut of people selling vacant land. It's the time to pick up an opportunity. Whereas if you've got a Perth or South Australia, you're going to be paying a premium price for that stock right now. Speaker 2 (24:06):

It's quite often that people follow everyone else's activity and when a market becomes hot, they're like, oh, I've got to jump on that as well. I've Speaker 3 (24:13):

Got to follow. Well, these people shouldn't be selling their land now. I mean, it's crazy to think they're not selling. We're seeing titles released and people not settling and walking away from deposits. It's crazy stuff because in 12 months time, this land stock is going to be in serious demand and they're missing out on the opportunity to capitalise on the land that they're sitting on today. Speaker 2 (24:33):

It's buying at the peak, selling at the bottom, Speaker 3 (24:35):

And it's the bottom. It definitely at the bottom. You come in, you could buy a block of title, block of land a day at a reduced price on what you would've paid 12 or 18 months ago. So it's definitely time to buy. Speaker 2 (24:47):

There's Speaker 3 (24:47):

Opportunity, massive opportunity. We had a client, the other side of our business, a company called Latitude, and we sell residential land, but we had a large investment marketer come into our office yesterday from interstate and he's here to buy land. He knows that it's poised to go and he's prepared to dig deep and actually buy the land outright. Speaker 2 (25:10):

And it's people like that that make those decisions, Speaker 3 (25:13):

Decisions and not make money. Speaker 2 (25:15):

But I do hear people that criticise those that have done well. It's like, well, they've gone and done. Oh, it's easy for you. It's like, well, Speaker 3 (25:22):

What happens is people sit on the fence and they think, oh yeah, well probably is the time, but let's see what happens. Let's see what happens. By the time they make the decision, they've missed the bottom of the market. So they're buying on the way back up again. But if you seriously want to buy at the bottom, today is the bottom for land sales in Metro Melbourne. Speaker 2 (25:41):

Alright, so I'm going to pick a topic from the book. Thank you for your feedback on that. I think that's spot on. I love your outlook on what's happening. So it's sort of half, I think half of my chapter's half yours, so it'd be interesting. So I like that we sort of approach it slightly differently, but we're pretty similar. What do you reckon, mate? Are there any topics in there that you like that you want to talk about quickly or not we've got a chance to get first. Speaker 3 (26:12):

A couple of things I think don't buy. Most people make the mistake of buying within a certain radius from where they live, which in a lot of instances isn't where you should be guided by an expert on where to buy. I think that's important. And of course you've got to buy where there's going to be a need, which pretty much at the moment it's anywhere because we've got a shortage of rental stock. So I think that's important to note. But I think the other thing that people come undone on is they go and they buy a block of land and a new home. Now the reason we always talk about new homes because new homes is where the BES tax benefits are and way too complex to explain to you here, but Matt or one of the team will explain that to you if you reach out. But I think the key is to stick to the basics of the house. So many people get carried away and they end up going to the builder's showroom and it's like McDonald's, you want fries with that. They are going to up, so they're going to seriously upsell you because that's where they make additional margin. You've got to keep it basic because you're not going to live there. It's not an emotional purchase. So keeping and you'll get the best return by keeping it very basic. Speaker 2 (27:28):

We had a client, there is sections in here about building a portfolio and tax and those kind of things. I had quite a few clients that I've got one client that's had property for a long time and they haven't had a depreciation schedule on the property for 10 years. And if you're listening, it's not your fault. You just didn't know. Yeah, I mean you've got an accountant that hasn't guided you and done the job for you and Speaker 3 (27:53):

And to legitimately claim the tax benefits, you need a depreciation schedule. Speaker 2 (27:59):

We give a depreciation schedule to all of our clients with their properties, which is good. But the question I was going to get to is the point around having a team around you, a team of advisors, because it's not just someone that can teach you or guide you onto what to buy, what other advisors would you need for tax and these kinds of things? Speaker 3 (28:16):

Yeah, well you definitely need accountants. I mean it gives me peace of mind knowing that our clients have gone to an accountant or just to get support from the accountant as to what we've informed them, that it gives them some comfort knowing that they, it's been ticked off by somebody outside of our team. Speaker 2 (28:37):

I mean part of what we do with if you come and work with us is you speak with an accountant, you speak with a financial planner, you speak with a conveyancer, you speak with a finance team, you speak with us, which might seem like a lot and it is a lot of work at the start, but once it's done you've got your team of advisors, I like to say your army of advisors, they're working for you Speaker 3 (28:55):

And you can come back to those people. I mean even after you purchased and you had your tenant in there, you'll still have queries as to same thing at the end of the financial year, do I go about the tax? What do I do now? Who should I talk to? You've got to find the right real estate agent. So it's another thing we give guidance on finding the right agent to look after your rental property and what to look for there. I mean the whole thing can come undone with a bad property manager. Speaker 2 (29:21):

Yeah, property manager as well. I didn't mention that. Very important. Good point. Good point. Getting towards the end mate, I actually want to ask a question of 10 years down the track, looking back on this discussion, it's always easy in hindsight to go, oh, well we didn't know at the time, but where are we going to be in 10 years for these people that are buying now, how are they going to be Speaker 3 (29:44):

Position? I think look, it's always hard to gauge where we'll be, but I mean prices will have gone up and I'd suggest from the flat base we're working on now, it would be quite believable that prices could be doubled in 10 years. It's not generally doubled in 10 years, but we've been stable for three years, probably come back a little bit in three years and we'll get some accelerated growth. We'll get accelerated growth because we're seeing 140,000 odd people. I think it's 140,000 in migrants. Speaker 2 (30:12):

That's just to Melbourne Speaker 3 (30:13):

Into Melbourne. So you had 140,000 people a year to a market that's been starved of stock for the last three years. And we know there's a massive shortage of housing in Victoria. What's going to happen to prices, Speaker 2 (30:30):

It's about 900,000 in the last two years. And so what they're saying moving forward is the a BS is saying circuit two to two 50,000 moving forward for the foreseeable future. So in 10 years from now, disregarding natural births and increases from that respect. But just purely people moving to the country over the next 10 years should be two to two and a half million if the, Speaker 3 (30:51):

It's insane. A, B, S and we don't have sufficient land stocks zoned in Melbourne already. So those sitting on land at the moment are going to do very well and not, like I say, if anyone's sitting on land and thinking of selling it at the moment, I'd be saying, don't be crazy. Hang in Speaker 2 (31:07):

There. Supply and demand. I mean, I dunno if you remember when banana prices went through the roof, there was cyclones, they went to Loeb, Speaker 3 (31:15):

Hey, we still bought bananas. Speaker 2 (31:18):

But understand it in that respect. It's the same with property. So if there's a hundred people buying 50 houses, the 50 house owners if they're selling are the ones that benefit because those people are fighting against each other to buy one of the 50 houses. If there's 50 people buying in a hundred houses for sale, can it go well? It goes down because, Speaker 3 (31:35):

Sorry, other way Speaker 2 (31:36):

Around, there's less people buying them. So what we're saying to you is that if there's two and a half million people coming into the country in the next 10 years and we're not building anywhere near enough homes to facilitate that, what's going to happen? What's going to happen with prices? Speaker 3 (31:51):

And I think the other attitude is people saying, oh, but interest rates are too high now. I think if you're reading the papers and this is the news, I'm sure we're all convinced that the interest rates are going to come down. So that's another benefit of buying at the moment. If people are waiting for interest rates to come down, get in and buy before them. Speaker 2 (32:08):

My prediction for Melbourne has been that I think as soon as we start seeing drop-offs in the interest rates, you will see so much activity the Speaker 3 (32:14):

Way Speaker 2 (32:14):

She goes. And guess what will happen with that? Guess what will happen with that? As soon as the demand increases, prices will start to increase again as well. So if you buy now when the prices are lower and you do it a bit tough, even if it's for six months and then interest rates drop, firstly, you start getting better returns on your property because the interest rates go down. You're like, oh, this is getting easier. Speaker 3 (32:37):

But it's easier than that. If you came into the Melbourne market now and you bought a block of land that wasn't titled, you're buying at the price today and you're not going to pay for that block of land for six to 12 months anyway or maybe longer. So you can do your timing perfectly to fit where you think interest rates will start to decline. But I might gut feel this won't happen until early first to second quarter next year. But you don't want to wait until they start to go down because if you wait until they start to go down, you're going to see people in the marketplace in numbers and you may lose the opportunity. Speaker 2 (33:14):

It's a good chance you won't settle. If you're buying new like we suggest there's a good chance you won't settle for three months anyway. Correct. So you're not paying an interest. Yes, you'll start paying an interest rate during the construction, but by the time you're up and running, you're probably going to see things drop off a bit anyway. Speaker 3 (33:28):

Even the title land that's already developed out there at the moment, you're right, if you went in and offered them to pay in 90 days or in 120 days even, you'd probably find your offer would be accepted and you'd get a good price. Speaker 2 (33:42):

I probably shouldn't say this because I know that you sell land for a living, but yeah, we do have more ability to negotiate and to get favourable terms, delayed settlements, these kind of things. And we do that for you. That's our job. We are here to represent you. So take advantage of that because you're right in Perth or Queensland, we sell Perth in Queensland, we're not selling as much of it at the moment. Very Speaker 3 (34:05):

Hard to get land. Speaker 2 (34:06):

I'm like, can you give us this hold? Can we get these terms? No, Speaker 3 (34:12):

And we'll get back to that. I mean, if you come in to buy a block of land three years ago here, you're not going to get a discount of any sort whatsoever because we had people queued up to buy, we'd release 30 or 40 lots on a certain project on a Saturday morning. By lunchtime they were all gone. We're not there right now. We're totally in reverse that. So if there ever's an opportunity, and I think there's a thing we've probably got through very strongly today, it wasn't what we sat out to talk Speaker 2 (34:35):

About. That's alright. Speaker 3 (34:37):

But yeah, it's definitely time to buy in Melbourne. Speaker 2 (34:41):

I've always wanted this podcast to be conversational. Where it goes, it goes. It's your time to talk about what you want to talk about. Anytime that you get to come on here and share your insight with people is something that I love because, and the amount of followers that we're getting in this show and people that are listening is just growing and growing. So I'm really grateful for that. And that means there's more people that get access to people like yourself. I get access to you when I need it, which is great, but a lot of people don't. Speaker 3 (35:08):

I think the thing is, and there's no such thing as an expert in our industry because even the experts in our industry, none of us have any idea where it's going. It's all gut feel historically. And I know in our book we set out different headlines from newspapers from years ago from So-called Experts who said, they're in the book don't buy property. What were they? Speaker 2 (35:29):

Classics? No one is going to invest in property again, the Australian Melbourne medium property price 125,000 1992. And these Speaker 3 (35:37):

Were all experts. And then after that, the market kicked. Like if you were fortunate enough to have bought back in those days, your money would've gone up by six or seven times since the 1990s was it? Speaker 2 (35:48):

Beware of the love affair with Property Personal Investment Magazine, first of the sixth, 1998, Melbourne's median house price, one 55,000 median house price in Melbourne in the March quarter of 2024 is 929,000. I have zero. I dunno if I'll be around to see it. I hope I am, but I have no doubt. Once again, you're right. It's a gut feel, but I feel like house prices are 3 million, 4 million, 5 million bucks. It's coming. Yeah, Speaker 3 (36:18):

We are close to it. I mean, I've seen the cycles of the market. It happens every few years, but there's one thing, sure it's going to bounce out the other end and the longer the decline or the stagnation of the market is faster and the quicker the return is, and this has been the longest downturn that I've seen and I've been doing it, like I said before, for 45 years. This is the longest I've seen. And when it comes out the other end, I think it's going to go gangbusters. Speaker 2 (36:47):

Unreal, mate, it's been a pleasure to have you on. I think we've been 30 or 40 minutes or something, which is I think a good time. Unless there's anything else. Speaker 3 (36:57):

No, that's all. Thank you. Yeah, thanks Speaker 2 (36:58):

Matt. Thanks again, guys. Always appreciate the support. Hope you enjoyed the show with Bob. As always, be brave. Go above and beyond and back yourself. Thank Speaker 3 (37:07):

You. Thanks guys. Thank you. Bye. Speaker 1 (37:09):

Thanks for listening to The Prope