Victoria's Building Crisis EXPOSED Wayne Farnham MP Speaks Out

🏡🎙️ Welcome to Season 2, Episode 11 of The Real Estate Forum Podcast!

This week we are joined by a very special guest, Wayne Farnham MP, who shares his unique insights into Victoria's building, housing and planning sectors. As the Member for Narracan and currently serving as:

• Shadow Assistant Minister to the Leader of the Opposition (Regional)
• Shadow Assistant Minister for Planning
• Shadow Assistant Minister for Housing and Building
• Acting Speaker of the Victorian Parliament

Wayne provides a fascinating perspective on the challenges and opportunities facing Victoria's property and construction industries, along with some valuable takeaways for homeowners, investors, builders and industry professionals alike.

We are also joined by our very own Jade Murphy from Eleven Financial, who joins us via phone to provide her expert financial insights.

Stepping into the co-host chair this week is Metin Azarit, filling in for Brent while he enjoys a well-earned holiday.

Whether you're involved in real estate, construction, development, property investment, or simply interested in the future of housing in Victoria, this is an episode you won't want to miss.

👇 Let us know your thoughts in the comments and don't forget to Like, Subscribe and hit the Notification Bell to stay up to date with future episodes of The Real Estate Forum Podcast.

A sincere thank you to our valued sponsors for their continued support:

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Transcript

SPEAKER_02 0:09

The Real Estate Forum podcast is back. It looks a little different for those that are watching because I'm joined by not Brent, because he is away either in Fiji or Bali or Hamilton. The guy just travels, but I'm here actually, ironically, with one of his number one competitors, Meton. Welcome back to the show. You're a guest a few months ago, and now you're in the hot seat.

SPEAKER_03 0:30

Looking forward to it. So um obviously we've got a big show today, and I know Brent would want to be here for this one, but unfortunately, he's out uh probably winning and dining in a really nice restaurant somewhere in the sun.

SPEAKER_02 0:39

I think he'd be on jet skis, actually, that's what he's doing. To be honest, I don't know if Brent would have enjoyed this. He the only politician he knows is a guy called Bob Catter. He's himself with Bob Catter. And he just sends me reels. Apparently, he was in Melbourne the other day, and I had no idea, but he sent me like, oh, Bob Catter's in Melbourne. Who cares, Brent? That's the only person he knows. Um, but he's having a great time up there and he works hard. So I feel like anyone that's a hard worker deserves to you know play hard and work hard, right? That's right.

SPEAKER_03 1:06

He's always play hard.

SPEAKER_02 1:07

He's got a bubs on the way, too. So take the time while he can. He does. All right. So interestingly, things are happening from a house price perspective. So Sydney, huge headwaves out of that. Uh the May results are out. They're down 1.1% for the month.

SPEAKER_03 1:26

Yep. Yeah, big drop. That's huge. Yeah, that's massive.

SPEAKER_02 1:28

Like over the course, if that holds, over the course of a year, we're talking a 15% drop.

SPEAKER_03 1:34

Yeah. Big prices.

SPEAKER_02 1:36

The biggest market in Australia.

SPEAKER_03 1:37

Look at the median prices there too. They're a lot higher than ours. So yeah, there's a bit of a bloodbath going on at the moment down in Sydney.

SPEAKER_02 1:42

Did you see the auction clearance rates in Melbourne as well?

SPEAKER_03 1:44

Yeah, I think it was around the 55, 56.

SPEAKER_02 1:47

They dropped. Like the so the initial clearance rates were there. They were sub-50. Yep. Wow. They were at the lowest they've been since that first week of COVID.

SPEAKER_03 1:56

Yep. Yeah, I'm I'm not surprised at the moment. There's uh there's a lot going on in the housing market. There's a lot of uh a lot of good, a lot of bad, and everything in between.

SPEAKER_02 2:06

So how do you find it in your market? So, so I guess for context or listeners, um, Southeast market of Cranber, which is fairly affordable. Like I guess we say affordable with inverted commas, um, it's you're probably looking at your sixes, sevens, eights, that kind of price.

SPEAKER_03 2:22

Six to eight hundreds, our our our bread and butter sort of price range. Um, what we're saying a lot is a lot of first-time buyers, investors are gone. They're gone. Absolutely gone. Like no one wants to invest. Um, and and when I do talk to investors that actually have property, they're contemplating on dissolving that property and moving elsewhere. Yeah, they've they've had enough.

SPEAKER_02 2:41

So even the ones that can retain negative gearing, they're still saying, no, I'm done.

SPEAKER_03 2:45

They're done. Yeah, I think just the I think the previous laws that have been introduced over the last couple of years by the Labour government have really just put a bad taste in their mouth. Like their holding costs are just huge. So, you know, they're looking at the holding costs, they're looking at their ongoing costs, their living expenses going up, everything's just going up, and they're sitting there going, there's better options. So even with that that new that new budget talk uh surrounding the you know uh the ongoing uh capital gains tax, um, you know, they just they've had enough. And and I think just last week they started to introduce there was there's more laws coming in where they could they have to fix cap the the rent increase.

SPEAKER_02 3:22

Yeah, correct.

SPEAKER_03 3:23

Yeah, like like how many landlords have been beaten and battered enough over the past five years where they're sitting there just mass exiting and sitting there going, we're not investing? We're not the state, in my opinion, where investment is good at the moment.

SPEAKER_02 3:38

It's funny, so um, I had a stat, I'm not so sure if you heard it. Um, so two and a half weeks out for after the federal budget was announced, um, I had 75 open for inspections. And from the 75, 145 people walked through there. Um, of the 145 buyers that came through my inspections, normally you could expect about 30% would be an investors. So roughly you'd say 30 to 40 groups would come through. I had six. Yeah, that's enough. Six investors out of 145 people. And the weekend just gone, um, numbers were down across the board, but only had one investor. So in three and a half weeks of open for inspections, over 100 open for inspections, nearly 200 people have walked through my doors. Seven are investors. So, really, the the the climate, it's deserted now. Yeah. Investors like, you know what, I'm not, I'm not, and this is not just Melbourne, it's everywhere. Yeah, yeah. Internationally. Um, it is scary. And so if you are an estate agent that's listening to this, let us know how you're finding it. Is there a market right now? I was chatting with Jake Gardam, um, who's down at uh down at Gippsland, right? So he's selling four, $500,000 houses. He's one of the number one client um agents down there, four, five hundred thousand dollar houses, which you don't really get anywhere in the country now. Um and he said, Gav, it's unbelievable. I used to be able to list a property and then five hours sell it to an investor. Now they're gone. Yep. Every single investor has just dissipated. And this is an area where rental yields are five and six percent. Yep. Investors gone. Yeah. They just moved out. And it's not just though, I feel like it it's it's also into the other markets too. Like, I don't know if you pay attention to the ASX as well, the stock market.

SPEAKER_03 5:18

Nah, nah, that's one thing that's just out of my repertoire.

SPEAKER_02 5:22

The I think it's actually it's about to open, I'll just been open for an hour today. This it's probably gonna be a another financial year where the ASX has actually dropped for the year. Um, and uh there was uh the the drop in 2022 when the interest rate started going up. Yep. Um there was a drop in in 2020, obviously because of COVID, um, when every everything just hit the fan in March. Um, but outside of that, that hadn't been a loss for 10 years prior to that. Yep. And we're about to have three in the space of five years.

SPEAKER_03 5:51

And that that's interesting you say that, Gav. Why do you think that is?

SPEAKER_02 5:54

Well, I just I think a lot of people are scared.

SPEAKER_03 5:56

Yeah.

SPEAKER_02 5:57

Yeah, there's a lot of people that are worried about what's going on, whether it be internally, externally, overseas, um, people are sitting on their hands and they're going, Well, I don't know if I want to go out and spend money and take risks at the moment because the appetite for it is not there. There's there's so much unknown, there's so much pain. Like you read, I mean, you can read Instagram comments or whatever, like you know, letters to the editor and the papers, um, but there is an undercurrent of discontent. And I we mentioned it briefly, uh, that there is this push now to one nation, which is just coming out of nowhere, really. And I feel like people, they then I don't think one nation is necessarily gonna get up, but I just feel like there is a surge of unhappiness at the moment, and so people aren't investing, that's not spending the money.

SPEAKER_03 6:45

Yeah, well, if if you have a look at look, everything goes up, everything comes down at one point. Obviously, you know, historically, it's always a 10-year margin. So you've got two, three years of a of a down market, a down cycle, and then you've usually got five to seven years of a good cycle. But I think what we've witnessed, uh and me personally, in the last, I'm gonna say 10 years being in real estate, we've probably had those three cycles, maybe four cycles in ten years. Yeah. As Victorians, we have absolutely been smashed from pillar to post. And I suppose this is probably a bit more why, you know, people are sitting there going, we just want another option. We we're we're looking at other options. They're looking at inflation, cost of living, they're looking at um, you know, immigration, they're looking at basically how labor is run in this state, and they're just sitting there going, we've had enough.

SPEAKER_02 7:30

Yeah, yeah, yeah. Well, you're right. You're not wrong. It's um, and I guess uh new laws, I guess, uh for Victorians. So for those that are listening from Victoria, news laws coming out regarding the auctions. So you have to disclose the um the reserve two weeks out from an auction day. Yeah, and then I'm sorry, seven days out, seven days out from auction day.

SPEAKER_03 7:48

And and I want to understand, like, when they make these decisions from the government, they say they've got feet on the ground that people are in the industry making these decisions. Um, what's really interesting is the people I've spoken to, the people actually calling these auctions and feet on the ground, they're just sitting there going, you know, really who's who's pulling these strings, who's making these? And and really, is is that a law that's really gonna stop um what's going on in the industry? Uh in my opinion, probably not. They'll just find other ways around it. So they need to find better ways, and and in my opinion, that's not the way.

SPEAKER_02 8:21

I actually, to be honest, I actually like the the law that's coming in. I I think it's good because um I and you would be the same, Matt. You see a lot of agents that are underquoting, yeah, yeah, and it's rampant. It is. Um, and I I just think that it it's a bad look on the industry, it's a blight on our craft. And so I think the the transparency element I think is really good.

SPEAKER_03 8:41

Yeah. Look, I don't know about the transparency because look, at the end of the day, you are an owner that has put your blood, sweat, and tears, your money, your time, you know, you're paying, if you buy a million-dollar house, you're actually paying two to two and a half million dollars back to the bank. So that's basically your whole life, like your whole livelihood in that house. Now, I sit there going, well, how does that advantage the owner who has put that time, sweat, and blood and tears into paying off that house as best they can? How's that advantage them? Can it, does it advantage the buyer? Yes, it does. But in in my opinion, I think there are better ways to do this where you can try and find a common ground where hopefully it advantages everyone. Um, look, I've had some suggestions thrown at me by actually really great auctionees, better ways of doing it. In my opinion, I don't think it's one. Um, but I will stand by this. I agree with I I don't like agents that underquote. I I think it is pitiful. Um, I don't like it, and you can smell it from a mile away. So I'm not an advocate, absolutely not for that. Um, but there are better ways that can be done.

SPEAKER_02 9:40

Yeah, quite possibly. And I think you're right. There's a quite a few people that have said like high up in the RAIV and um that haven't been consulted and that like what your point met's was where was the consultation?

SPEAKER_03 9:51

Yeah. Um it seems to be having a lot uh at the moment. There seems like to be no consultation or anything and rule changes everywhere. So yeah. I I actually just before we we get going, I know we we're short on time today, um, because we got a very special guest today. Um I look at uh um oh shit, it just uh gone.

SPEAKER_02 10:10

Well, while you're trying to think of what you're talking about, Canberra also just announced last night uh the ACT is abolishing stamp duty for first home buyers.

SPEAKER_03 10:18

There you go.

SPEAKER_02 10:19

So again, is that a good thing? Is it a bad thing? I mean it's great for first home buyers, and I think it's really good that we get first home buyers into the market, but is it just adding more fuel to the fire? There's a runaway market up there.

SPEAKER_03 10:30

They did last time. Yeah. As soon as that stamp duty changed last time, that was uh it ran gangbusters within six months.

SPEAKER_02 10:36

Now we have an exciting guest. Um, but before we do, I just want to run through our sponsors, and they've been loyal sponsors to us. We've got Douglas from Mafire and Electrical Adaptive, and he's been amazing. I'm trying to get him work, but it's actually very hard to try and get Sparky's work at the moment. People just aren't ready to spend lots and lots of money on enhancements to their property. Um, we've got Style with Us now. They have done a few jobs for us as well, and they are incredible. As far as stylists go, Style with Us is probably one of the leading brands in the state, I would say. We've got Jay from 11 Financial, as always. She'll be bouncing on soon. And lo and behold, Craig from Craig Hollowell Photography. He's also jumped on as a sponsor. Only took him about 40 episodes, but he's finally there. So if you need photography, Craig's your guy. But super excited. Um, I'm we're gonna do the introduction after the break, but we've got a really special guest, and it's probably one that we haven't had in the past. We've obviously had estate agents, we've had auctioneers. Yep. Just quickly, who have we got on after the break, Mets?

SPEAKER_03 11:39

We have the Honourable Wayne Farnum.

SPEAKER_02 11:42

Politician? Politician, absolutely. Yes.

SPEAKER_03 11:45

But um, there's a actually there's a very special reason why we have the politician on, because he's actually part of our sector.

SPEAKER_02 11:50

So the shadow minister for housing in the state. So um have a small break and you don't want to miss this one.

SPEAKER_03 11:56

Um, today we are joined by the member of Narrakan, uh, Wayne Farnum, MP. So thank you so much for being here. We appreciate having you on. Good to be here, mate. Uh thank you. Um, but uh just gonna go through a couple of things here, uh, because obviously I've got a uh I I prepared some stuff, so I just want to make sure that I get all this one out.

SPEAKER_02 12:13

You prepared shit, it was all Brent, but go ahead and read it.

SPEAKER_03 12:16

Thank you, Brent. No, Brent was really good. He wanted to be here. He wanted to be here. So um a little bit about Wayne's journey, uh, a little bit different to most politicians. Okay, before entering into parliament, he spent decades, and we're just talking about this, and I mean decades, in the construct in the construction industry, uh building homes, running businesses, employing local people, and experiencing firsthand obviously the challenges that faces builders, developers, and homeowners, and especially small business operators across Victoria. So comes pretty prepared. Um, he's also the founder of Farnum Built. Wayne developed a strong reputation throughout West Gippsland before successfully entering Victorian Parliament in 2023 as the member for Narrakan. Since being elected, Wayne has become a prominent advocate for regional Victoria. Um, we see him uh around a lot around his electoral area, um, pushing for improved healthcare services, infrastructure investment, housing supply, planning reform, uh, greater support for local communities as well, and also small business. Um, he's got a strong voice on issues including the future of housing affordability, which is a big problem. Uh, land supply, which is also a big problem. I'm gonna throw a couple in here about the uh, I'm gonna say a lot of red tape these days to cut through. Um, land supply, regional development and the infrastructure required to support Victoria's growing population, which I think they've skipped over in my neck of the woods, the Casey area. Uh today Wayne serves as Shadow Assistant Minister for Planning, uh, Housing and Regional Victoria. Place him at the center of the most important conversations currently facing this state, which there's no doubt about that. His unique perspective combines practical experience from the construction industry with a direct understanding of government policy, which is uh very true because we were just talking off air and he has some really, really good knowledge around this and also decision making. Whether you're homeowner, investor, developer, first home buyer, or business owner, today's conversation will hopefully provide some valuable insight into where Victoria's heading and what needs to change to create more opportunities for future for future generations. Wayne, we welcome you to the real estate podcast.

SPEAKER_01 14:28

Thanks, bitch. Uh fancy real estate agents and a politician being on a podcast puts us high up on the ladder, doesn't it?

SPEAKER_02 14:35

Probably some kind of joke. Two estate agents and a builder walk into a sure they could create a lot.

SPEAKER_03 14:41

I could uh I could just imagine a couple of the memes coming out of this one. Jeez, you talked me up on the intro, but anyhow, let's go, let's see how we end up. Definitely. Well, look, to today I just want to, you know, get the light-hearted side. I think Gab's gonna play bad cop today. Oh, that's right. Um, so he's probably got the more hard-hitting questions, but I think I've got the most hard-hitting question. And and when I um when I spoke to my wife that I was in uh that I was interviewing today, Wayne, she's first question that she had was, is uh is he related to John Farnham. John Farnham. So is there any any relations there along the line?

SPEAKER_01 15:13

Yeah, never heard that before. Um I'll tell you a funny story, true story. When I was about 15, John Farnham used to hang out down Nearham South. He had a farm out there with Denise Drysdale. Okay. Next door neighbours. Anyway, we'll let the footy out at Nearham South, and after the game, in the club rooms having a beer as you do as a 15-year-old. And um this bloke comes up to me and goes, Oh, John Farnham's over there. I said, Yeah, I saw him, but I didn't want to hassle him. And he said, Oh, what's your name? I said, Wayne Farnham. He goes, Oh, he hasn't met another Farnum before. So anyway, I go over there and I'm sitting down with him. Two uh two hours later, we're pretty pissed. Trying to figure out if we're related. Yeah, the only connection we had was I think at the time his grandfather's names was Jack, and so was mine, but that's about the only connection. But no, no relation.

SPEAKER_02 16:00

Well, more importantly though, are you any relation to Gabby Farnum, who's going on Farmer Wants the Wife? Where'd you hear that one? Well, I I know Gabby. So yeah, how do you know her? I've known her for years. Yeah, she's my daughter, you dick it.

SPEAKER_03 16:14

Really? Two degrees of separation. Jabers, we talked everything before. Gabby's your daughter. Yeah. Really?

SPEAKER_02 16:21

Yeah, she and I she and I've been messaging quite a bit. Well, back in the day we're messaging quite a bit. Anyway, you can put two of them together.

SPEAKER_01 16:27

Just you've got to go through a vetting process.

SPEAKER_02 16:32

If we don't see you here, yeah, she's gone. She's on the now, yeah. Yeah, she's on the now.

SPEAKER_03 16:37

Well, mate, if we don't see you here in a couple of weeks, someone we know where you're out the back of it shot by the dad. Father in law ball.

SPEAKER_01 16:46

I'm half Italian too, so you're gonna.

SPEAKER_02 16:50

Well, that's what I was thinking, not John Funham. Like, well, she's gonna maybe it's related to the iconic Gabby Funum.

SPEAKER_01 16:55

She she goes all right, Gabby.

SPEAKER_02 16:57

She's she's a good chick.

SPEAKER_03 16:58

I'm sure she finds a hopefully.

SPEAKER_02 17:00

She's into social media, and I think when she gets there, I'm gonna have a conversation about it because she just started up her own company. She did, uh, neighborhood, I think it's good.

SPEAKER_01 17:07

Um no, she's doing well. She's she's out there having a crack, and that's what you need to do. That's my daughter, you absolute idiot.

SPEAKER_03 17:14

That's great. Actually, I I'm interested to good to see you've done your research. I'm interested to know if you said your daughter's opening a business. Yeah. Um what advice did you give her?

SPEAKER_01 17:24

Opening a business. Don't cock it up. Um look, business is anyone that opens a business, you know it's hard work, right? You can't open a business and expect to just do 40 hours a week. So my advice to Gabe's was well basic, look, she's in an industry I don't know much about. I'm a bit of a fossil when it comes to social media. But just get in there, get your structure right, get your plan. You've got to have your plan in business, whether you're starting up or whether you've been running a company for however long, get your plan right, get your structure right. Um, get rid of shit clients, you don't need them. There's plenty out there. She had one client giving her a hard time and I said, I'll piss him off, you don't need him. But you know, just stick to a plan and a bit of a, I suppose, business tip, you sort of 30-40-30 rule, you know, keep your 30% for your tax, 40% reinvestment in your company, and 30% pay yourself. Yeah, interesting. You've got to reward yourself for your hard work, too. It's no use flogging yourself stupid and having no reward for effort. So I've sort of used that theory in my life of the 30-40-30 rule.

SPEAKER_02 18:35

Does that rule change now with the new CGT issues that are coming in? It could be it could be it could be 48, 40, and two.

SPEAKER_01 18:43

Actually, you're dead set right, that rule's out the bloody window. Yeah. Fancy. How would if you got any aspiration in this country, well, the Federal Labour government just hit you on the head with a massive sledgehammer? Like put a chuck on 40 47% for startups. You know, work your ass off everything, sell it for $100,000, the government's going to take $47,000. What incentive is it? Why would you bother? Might as well just go on wages. Is that what they want everyone to do?

SPEAKER_03 19:11

It's really interesting because I have a little bit to do with developers, not a whole lot, but a little bit. And one of the last conversations that I actually had with a pretty prominent developer and builder was a project he was talking about margins of 12%. Um and he said this is getting pretty common. Why? How have we got to this point?

SPEAKER_01 19:32

There's a lot of reasons. Um the taxation on developers and the amount of fees and levies and everything else you have to pay now. I think the HIA put out a figure there a while ago. It's about 43% now is taxes into building a home. Yeah. You know, a lot of those are associated with the development as well. Um land holding cost, land tax, capital gains tax, windfall gains tax, depending on where the property is. You know, start adding all those up. And at some point in time, you get to a point where you know, if you try to you're covering all your costs, and the market, the market will all well, you guys will know this, but the market sets the price. So if your costs have got to a point where you're just 12% below market price, that's it. Yeah. That's all you're gonna get. You can't ask for another 20% more if the market's not there. A well, two reasons. You've got to have the market there. But the price point has to be at that point where the market will actually buy the property. So we're at a point at the moment, I think in this state, where nobody has any confidence anymore in the property sector.

SPEAKER_04 20:39

Yep.

SPEAKER_01 20:39

Um you were talking earlier about landlords and property investors, they're being valid valted from pillar to post. Um interesting, and and just going back to what you're saying about the auction, the new rules coming through with the auction, the reserve price has to be set seven days before. I don't have too much of a problem with that. But what I probably, in my opinion, I'll tweak it a bit and have a range rather than a definite price. Yeah. You know, you could you could put it, depending on the scale of the property. If it's worth two million, you're not going to have a 10% range. You'd you'd bring that down a bit. But you know, let's say on a $600,000 property, it might have a range of 5% of where the reserve should be. Yeah. Because you had a very good point. People work their ass off, they put in their blood, sweat, and tears, and and rightly so they want to get the most for their property. Um, you don't really really want to disclose your price up front, but a bit of a range is still transparent enough, in my opinion, to have that go forward. I sorry, I just went back to that conversation. But um at the state of Victoria, there is no confidence in the property sector in the state of Victoria. Um the government totally stuffed up their planned Victoria policy. That's the biggest waste of time of all time. You know, 70% brownfield, 30% greenfield. For God's sake, let the market decide.

SPEAKER_04 21:59

Yeah.

SPEAKER_01 22:00

Okay. Uh not everyone wants to live in a unit next to a railway station. Some people like a white picket fence in a bit of a backyard. So let the market decide. Release the PSPs.

SPEAKER_04 22:11

Yes.

SPEAKER_01 22:11

Get that out in the market. The market will decide what they want to buy. Yep. Might be a 50-50 split. Could be 70-30 the other way. But this is where the government is dumb as a brick. Yep. They just don't listen.

SPEAKER_03 22:24

With the PSPs.

SPEAKER_02 22:25

So just explain what PSPs are.

SPEAKER_03 22:27

Yeah, PSP is basically the future called precinct structure plans. There you go. So even you the precinct structure plan, right? So PSPs is basically the next, you know, 10 to 20 years of land that's going to be released, or they've got earmarked to be the next suburbs and everything like that around the area.

SPEAKER_01 22:44

That's basically Yeah, that's basically it. A precinct structure plan is a plan. So a lot of people, especially down my way, you know, we're from Warrigland drawing. We got PSPs down there, and people keep saying, oh, they're cutting our farmland. No, they're not. It's actually in the PSP. Yep. It's controlled development at the end of the day, but does factor in things like schools and sporting facilities and everything else. That has to be in the in that community, you know, within that plan. So but the government's sitting on 27 of them at the moment. That's huge. And massive.

SPEAKER_03 23:16

How long is it taking for the government to approve these? Well, by by that laugh, a little while. Years and years and years and years.

SPEAKER_01 23:27

And it shouldn't be taking that long.

SPEAKER_03 23:28

How long realistically, with with if the red tape was, you know, taken away and it was a lot easier, what what realistically should that take? How long should it realistically take?

SPEAKER_01 23:39

Okay, to be honest, if it if there's a PSP in an area, you go back to the local council, you go, well, you've got a PSP in this area. Tell us what the community needs, what the community wants. You get the councils and the community engaged in that process. I can't see why that process wouldn't take any longer than 12 months. Okay.

SPEAKER_03 23:58

How long is it then taking at the moment?

SPEAKER_01 24:01

They've been sitting on there eight, ten years. Wow. Like it's ridiculous. Yep. It's a ridiculous. And we're screaming out for more supply.

SPEAKER_03 24:08

Yep.

SPEAKER_01 24:09

But it's all sitting on a minister's desk gathering desk.

SPEAKER_02 24:13

Let's talk about supply. Yeah. So this is a national thing, it's not just confined to Victoria. So supply is really the way that if you're going to control the housing market or the rapid price increase that you've seen nationally, then it's through supply. You mentioned Plan Victoria. Talk us to about how, what's happened with the big build. The Labour government came out uh what almost 10 years ago and announced the big build.

SPEAKER_01 24:38

Yep.

SPEAKER_02 24:39

Explain what that's about and the effectiveness behind that. Which big build? Well, the one to generate more homes, to get more, I think it was 5,000 homes in in 10 years. Was that right?

SPEAKER_01 24:49

Yeah, look, they they came out with the policy um big housing build, which was 5,000 is about a $13 billion policy or whatever. They're nowhere near that, right? That's failed. Yeah. Um that hasn't got anywhere near the figures. I mean, they come out and said that we want to build 80,000 homes a year. Well, they're they're 50,000 behind after the first two years. They're averaging about 80,000, sorry, yeah.

SPEAKER_03 25:13

And then they're not really incentivising people to go and buy investment properties, is it?

SPEAKER_01 25:18

Well, look, and you've got to appreciate too what they've done to the construction industry over the last two years. Now, I'm I might be talking people think I'm talking Japanese when I start talking about a minimal financial requirement. But they introduced a law last year that changed the minimum financial requirement, and what it was was a turnover cap, right? So if I was on a limit from the Building Plumbing Commission, might be two mil, I could build a house, one house would fall off, and I could put another one on. The government decided we're going to put them on a turnover cap. So it's like saying a McDonald's, you you can actually feed a thousand people, but we're only going to let you sell a hundred hamburgers, right? To put it into perspective. They have now just reversed that legislation last week because then because that would have dropped our housing supply from 55 down to about 40,000 homes. Yeah. New minister came in, tore it up, and said, Thankfully, you said this is rubbish and we go again. But the amount of legislation and regulation that's changed over the past couple of years, all because of the Porter Davis debacle, right? They have belted builders from pillar to post.

SPEAKER_04 26:26

Yeah.

SPEAKER_01 26:27

I'm not joking, builders, I'm 55, a lot of builders my age have said, stuff this, we're gone. It's just too hard. Like they brought in, it sounds like a good consumer protection bill. 10-year minor defect liability period. 10 years.

SPEAKER_03 26:42

That's a lot. That's a lot.

SPEAKER_01 26:44

I know houses after a couple of years is two years is good. Two years is good because your house will go through seasonal changes, right? It'll expand, it'll contract, you'll get cracks, a little bit of movement. That gives you enough time for minor defects. But 10 years when a lot of your product warranty only lasts seven.

SPEAKER_04 27:02

Yeah.

SPEAKER_01 27:03

How are you meant to guarantee that? Yeah. Like, you know, a hairline crack in the cornice after eight years, you've got to fix. Like houses move.

SPEAKER_02 27:11

So regarding my- I knew that there was a structural, a 10-year structural guarantee. Yeah, no, this is minor defect. Oh, you say minor defects as well?

SPEAKER_01 27:18

Like a hairline crack in your cornice. Yeah. A hairline crack in a tile.

SPEAKER_03 27:22

Yeah.

SPEAKER_01 27:23

You know. And the problem we have is, or the problem I see with it, is things happen in the lifetime of a house. Owners might do something themselves that creates a minor defect, not the builder's fault. But then under that, they can claim it. Build it as and fix it, they get their licenses suspended.

SPEAKER_03 27:41

Yeah. It's pretty harsh.

SPEAKER_01 27:43

You've got to you've just got to appreciate how much the government has smacked the building industry. And builders that are good builders that really do nothing wrong are tied up in this. I have no problem with getting rid of the shonky ones.

SPEAKER_03 27:56

Yeah.

SPEAKER_01 27:56

No problem at all.

SPEAKER_03 27:57

Oh, there's a few of them running around at the moment.

SPEAKER_01 27:58

Well, absolutely. And don't suspend their license, cancel their license, never to build again, you know. But we've got to balance that up because you've got to have the people there to build the homes.

SPEAKER_02 28:08

Yeah. Right. So, what would you do from a supply perspective? November rolls around. Yep. Liberal gets in. Yep. What are you doing then to then help create that supply?

SPEAKER_01 28:20

Well, the first thing you do is you look at those PSPs, right? You get them out as quick as you can. Get the supply out there. So people have choice. Because at the moment there's not a lot of choice. The government's got their 63 precincts or whatever it is. But you talk to the development community, they go, they're not viable. Like if we want to get kids in our homes, right? A 60 square unit, pretty dumbed down about 1.2 mil. That's not a first home buyer's market. So the Brownfield Development's not first home buyers market, it's a downsizers market. You know, they're going to sell their queue and housing queue or build an apartment in the city, buy an apartment in the city, that type of thing. So you've got to get those PSPs out there. And we've got to get that choice out there. So our Gen Z, millennials, can have an option. You know, we should we should have more two-bedroom homes in the market, for example. Um just to give people that option, you know.

SPEAKER_02 29:22

Affordable two-bedroom homes. Affordable. That's the important thing. Because as you said, like you talk about these brownfields, they're all centred around like train stations, but they're in Clayton or they're in Brighton. And so the the residents there aren't going to be saying, well, you can sell them for $500 a pop. No way. They're going to be putting jacking up the prices one point. What kind of first home buyer is able to buy that?

SPEAKER_01 29:41

Look, I've seen the cheapest apartment I've seen, uh, new new build was uh 39 square meters for about 540 grand.

SPEAKER_03 29:52

Yeah. I think our garages are bigger, Gav.

SPEAKER_01 29:54

Well, your garages are about 36. Yeah. A six by six. Yeah. Right? That's crazy. 39 square meters. Now that's and right on a railway. Yeah. Who in the bloody hell wants to live in that?

SPEAKER_04 30:05

Yeah.

SPEAKER_01 30:05

You know, not many people want to live. In fact, they can't sell them.

SPEAKER_04 30:08

Yep.

SPEAKER_01 30:08

They're that unpopular. So uh you've got to get the choice in the market, as you rightly point out. Affordable housing. And I think with housing and cost of housing, we all talk about affordability. We've got to lean into the technology a bit more now. Um labor costs are high, material costs are high. Yep. We've got to look at different methods of construction to get that primary cost down to make it affordable. Well, you see some of the products coming out of Europe. Um amazing products out there that make housing more affordable. So we've just got to think outside the box a bit more. Because your traditional brick veneer construction now is quite expensive.

SPEAKER_02 30:46

So talk to me about the system as well, at the moment, I I foresee the people that will suffer from a lot of these changes, these recent changes, are the guys at the bottom, like your tenants, yeah, your renters. I think will suffer a lot. I think uh rent prices will go up as there are less investors purchasing homes.

SPEAKER_03 31:06

We're seeing that. I actually heard a start the other day, it went up. So, and this is just our office. So the office I work for has pretty close to 3,000 rentals, and it went up by 50 bucks in the last six months on average. Yeah, on average.

SPEAKER_02 31:18

Well, I think Melbourne has gone up 38% since 2020. So rents are only going to keep increasing. Yep. What can we then offer them if investors are bailing out of the market in this in this current system? What can we do? Again, we go back to if you get in November, how do how do we help guys that uh are are trying to get into the property market or will never get in the property market?

SPEAKER_01 31:41

Yeah, it's a good point. I mean, the government, you guys would know, I think there's been uh over 130 odd changes to the Residential Tenancy Act. Um landlords are beginning getting bailed with land taxes, etc. Um, you know, investors now, and especially off the back of the federal government, investors have just gone stuffed domestic property. Yeah. And what people don't realise is we need the investors for the rental supply. Absolutely. So if you keep beating the leather and suitcase out of investors, your rental supply is not going to be there. And you guys will probably see it firsthand, those houses won't sit on the market. You know, clearance was pretty quick. Those houses will be on the market for months and months and months and months. Then we've got that out of the uh, you know, that's not there and tenanted. So look, I got blokes, I got mates that own houses, and they're just saying we're not we're not renting them anymore, we're done. Yeah, it's too too hard. Um so to your question, uh we've got to make it attractive for investment back into this state because we're losing investment to South Australia, New South Wales, and Queensland. Very much, I agree. Right. Everyone's going stuff, Victoria. Yeah, we're getting out of here. Um so we've got to we've got to get a trigger to get them incentivized to come back in now. Uh Jess Wilson, our leader, she came out on a land tax incentive. Um, and at least Jess was bloody honest, more honest than the shit government. She came out and said we don't have a magic wand to fix this. It's got to be a gradual fix. So we've come out on the land tax, and that will be reduced over the next four years. Um, we'll be lifting the lifting those thresholds that reduces the land tax because we need the investors in the state. You know, that's one trigger. There'll be other triggers that that we come out with closer to the election. But if we can't incentivize people to invest in the state, we're gonna have massive issues. And I mean, we've already got most massive homeless issues, yeah. Homelessness issues.

SPEAKER_03 33:39

Yeah, you can see that in the last five years.

SPEAKER_01 33:41

Yeah, look, even down my patch, we never used to see rough sleepers. You see rough sleepers. Yep. You know, so um, yeah, there's a lot of work to do. Linda. There's not a magic one moment. It's got to be a gradual, yeah, gradual fix.

SPEAKER_02 33:56

This has been good. We're gonna take a break um because Craig, our fearless producer, he has a life limit on the uh the cameras, and they only go for a certain amount of time before they run out. So he's like gaving and wrap it up. Um, Wayne, we want you to stick around. Yeah, a few more questions. Um, thank you so much. Super insightful. Small break. We'll be back in one minute. All right, so we're back on the real estate forum podcast. It was meant to be um us grilling Wayne, he's now grilling me about how I knew his daughter. And he's I don't know. If you can't, if you can't, if you're listening to this on Spotify, whatever you listen to and you can't watch it. Um, I'll paint you a picture. So Wayne, so Italian, half Italian guy, um, looks permanently angry. He's got like this brow, and he's just got this eye that's just piercing through me and saying, if you ever so think about it, I will come down anyway.

SPEAKER_03 34:44

And it's a builder, too. So he doesn't cut up my bodies.

SPEAKER_02 34:46

Yeah, like you can see his hands, like they're full of calluses. Like, I reckon I've got one maybe from I might have picked up an axe once in my life, one. Oh yeah, those paper cuts really hurt me.

SPEAKER_01 34:56

Thank you. That callus from axe in the grilling. Okay, I can't believe we've had people on long tail for paper cuts, but anyway.

SPEAKER_02 35:06

Um Mets far away.

SPEAKER_03 35:08

You want to say I do something you mentioned before was really interesting, the the tax when it comes to the development side and the land side of basically, I think you said, you know, when someone goes and buys a brand new home, it they're paying something in the vicinity of around 43% in tax, which is just mind-blowing. Because if you're going to go and buy a house, let's say a brand new house and land package in your neck of the woods at $700,000, you're basically saying $300,000 of that is government tax. That just is mind-blowing.

SPEAKER_01 35:39

Taxes, levies, when you when you start adding it all up, and the HIA put the study out there a year or so ago. Yep. You know, by the time you put in all your development costs, all your levies, give uh Melbourne water fees, or all the other crap associated with development, by the time you put the house on there, the GST, and all the other levies and associated costs, yeah, they're saying 43%. Crazy. It's mind-blowing.

SPEAKER_03 36:02

It's mind-blowing. So how obviously the the government is looking for affordable living. Yeah. Wouldn't this be an avenue where they would look at things like this to reduce those taxes, say then therefore it is then more affordable?

SPEAKER_01 36:16

Yeah, well, when you're in the financial shit that this state is in, I mean, we're paying a million dollars an hour in interest. Yeah, the government hasn't given themselves a lot of wiggle room, have they? Yeah. At the end of the day. Like we're heading towards $200 billion worth of debt.

SPEAKER_03 36:31

Yep.

SPEAKER_01 36:32

Like this is honestly phenomenally incompetent by the government to get us into this position. If you guys run businesses, if you're in your business like that, you'd be you'd be gone in a week.

SPEAKER_02 36:43

Considering that we were at surplus only 10 years ago.

SPEAKER_01 36:45

Yeah.

SPEAKER_02 36:46

Yeah.

SPEAKER_01 36:46

Well, interesting, you know, when when they took over government, we had $22 billion worth of debt. That's back in 2014. We're now going to hit $200 billion.

unknown 36:57

Yeah.

SPEAKER_01 36:58

And $24 million a day in interest going up to oh it's about $1.232 million an hour in 2028, right? So getting back to your question, we need to review those levies and charges across the board because I you can't tax your way out of debt. Doesn't work. People just get pissed off and leave.

SPEAKER_03 37:20

Yep.

SPEAKER_01 37:21

And that's what's happening to Victoria now. The best way to get out of debt is get the economy moving again.

SPEAKER_03 37:27

Yep.

SPEAKER_01 37:27

How do you do that? You've got to incentivize people to come back, you've got to incentivize business. Small business is the cornerstone of the economy in any country. And um you've got to get that going. So, what I would call the natural taxes are paid. You know, you go to the shop, you buy a coffee or whatever. You know, you've got to get back to the natural taxes. Get the economy moving, get people spending money because they're confident to spend money again. I mean, we've got high inflation, interest rates are going up. I mean, honestly, you couldn't have so many cock-ups in one spot. So you need to actually focus on that. Focus on your business sector to get things moving again. And that includes real estate developers and everything else. Construction. Construction is the biggest economic driver in the state.

SPEAKER_02 38:12

Massive in GDP.

SPEAKER_01 38:13

And construction is just decimated at the moment. So that's where we've got to focus.

SPEAKER_03 38:19

How do you get those people back that have worked in this sector that are now working on the big, build Labour government projects, earning $300 an hour to going back to being a you know a plumber, you know, for $50, $55 an hour? How do you get those people back? Because that money is that good. And at the moment, I'm I'm looking for someone for my team and they're sitting there going, well, hang on, why would I come work for you when I'm gonna get you know $35,000, $40 an hour when I can go and work on the NOIS or on some big build project and they're getting $150,000 an hour?

SPEAKER_01 38:55

Well, we've got to be the only country in the world, like stop-go person gets about $200,000 a year. Yeah. And for full disclosure to every anyone listening, my base salary is $211,000. Right? Stop go person, $200. Yep. So you sit there and you go, you know, the skill level for reward is disproportionate. Yeah. You know, teachers, nurses, um coppers, another million 200 grand to hold a stop-go site. How do you get them back? I don't know if you do. I think what will happen in Vitruria, what we'll see is the people used to those big build infrastructure wages, they will chase, they'll go to Queensland because they'll be chasing the Olympic Games work up there. Because they're they're under the pump up there, that they've got to get that ready. So you'll see that transition. Some people will come back. Um, and I've never looked I was a tradier, I'm never gonna knock a tradier for going out and earn taking home three grand a week.

SPEAKER_03 39:54

Yeah.

SPEAKER_01 39:55

I mean, to be honest, you work in some pretty shit conditions at times. So I would. Yep. Like I would. What am I gonna do? Build up a frame for 12, take home 1200 bucks a week or go on a big build site and take home three grand.

SPEAKER_04 40:07

Yeah.

SPEAKER_01 40:08

Or do that for a few years and I've set myself up. So I'm not never gonna blame the tradie, but the the blame is actually with the government because they decided they just wanted to do everything at once, right? And that drove everything up. Yeah. Material costs, labour costs. Because no one is gonna sit back and earn 80 grand a year being a chippy on a domestic building site when you could be taking home 150 grand on a big bill project. It's human nature. You can't beat them up for that. But is the government's fault that they put all that in at once? They could have, they could have, we could have had the infrastructure, you know, done methodically over time that kept everything out of balance, and now it's out of balance. Yep. So how would we fix that? Well, when people have no work, you know, because infrastructure jobs will shut, yeah, they'll either go into state or they'll come back to normal wages. Yeah, and it takes 100 a week.

SPEAKER_03 41:03

You would think it would have to, like the government can't keep spending this volume of money whilst they're trying to get us back into the surplus.

SPEAKER_01 41:10

Right. Well, but even look, the last budget, this word surplus, what a load of crap. $727 million, $727 million surplus, right? Three quarters of a billion dollars. They and they get there and they go, We've got a surplus, we've got a surplus. Well, that's bullshit. How can you have a surplus when you're spending a million dollars an hour in interest?

SPEAKER_03 41:31

Yeah.

SPEAKER_01 41:32

Not even knocking down the debt. Yep. But what they do, they go, We had a $727 million surplus, but then they went, now we're gonna do this, we're gonna give away this for free, that for free. All of a sudden they've spent one and a half billion, and now we're another 700 odd million in debt.

SPEAKER_03 41:47

Yeah.

SPEAKER_01 41:48

Right? Most normal people, you have a good year, you're disciplined, you work hard, you get a bit of a an SDG, you go, shit, I'm gonna jump drop that off my mortgage to reduce my interest payment. Yeah. That's what normal people do. It astounds me. Or your business or whatever. Yeah.

SPEAKER_03 42:04

It astounds me that the government think that we are that stupid. Do they do they think we are that stupid that we don't realise what's going on and you know, having the wool pull over our eyes?

SPEAKER_02 42:15

Do they well Matt's with all due respect, maybe you are because we voted them back in.

SPEAKER_03 42:20

Well, you know, well, so this is this is true. Maybe we are stupid. You know, in our line of work, you you saw 200 people or that at Europeans. Like I had we see a lot of people in our line of work. And how many people do you come across that actually sit there and go, yeah, no, we voted Labour? Seriously, I I I I reckon I've asked hundreds of people in the last 12, 18, 24 months, and I reckon probably I've had maybe two or three going, yeah, we voted them. I'm sitting there going, how do they get in then? So who's voted them?

SPEAKER_02 42:47

Because they're not telling you the truth, mate. That's why. Well, nobody had a barrel. No one's been into it, man. No one's only up to it. Well, I've been to vote for them. Yeah.

SPEAKER_01 42:54

Like everyone I'm talking to now saying, oh my god, can we get rid of them? Yeah, me too.

SPEAKER_03 42:58

Yeah, um with the same. They've had enough.

SPEAKER_01 43:00

I voted Labour. Oh, did you really? I voted Labour.

SPEAKER_03 43:02

Even now, my third person I know.

SPEAKER_02 43:03

Yeah, there you go. It's and I kind of regret it. Um, but I I voted Labour. But I I'd tell you now that you go, if you ask people, they don't want to tell you that they they stuffed it up. They don't want to admit to it. Like they you can see what's going on. Like it sucks. Like it sucks. I actually I feel embarrassed, you know. Like went to Sydney the other day, and like I was meeting with buyers, agents, and investors from around the country, and they're they're saying, Oh, where you're from? I say Melbourne, and they laugh at me. Yeah, they laugh. They laugh at me. Yeah, and look, it's embarrassing. It's like people that leave, like every second client that we sell is leaving interstate. And when I go to New Zealand, they call us moody Melbourne. When I go to Queensland, they're like, Oh, you're from the South, like like in a pessimistic connotation. And I'm I'm like, why is Melbourne always getting laughed at? I don't, it's actually embarrassing. It is.

SPEAKER_01 43:56

What amazes me is when you say you're from Melbourne, the sympathetic

SPEAKER_00 44:00

look they have on their face when you say it oh you poor bastard it's especially for lockdown everyone knows us for the the lockdowns like you're saying you get through it so it's yeah it's kind of shit in a way like I actually I'm I'm proud to be Melbourne like I I I love it here I love the footy here come on no I do Victoria is a bloody good state it is and I love Gippsland I got a bate there is better you know it hurts me it probably hurts you more because you've been around for a little a lot longer Jesus we we're going ages that's all right we are resilient we are resilient look if if you want to you want to get a state uh sorry people in in any state of Australia that have backbone mate Victorians have been being beaten pillar to post and so we are absolutely resilient so if we can get through this God help us we can get through anything yeah well look that there is there's a way out there is there's a way out there is but look we do in my opinion um totally unbiased we need to change the government we need a new direction to quote the line we need a fresh start yep you know we've got to reset and get going again absolutely talk about resetting we're gonna actually throw to Jade um she is our fortnightly reset so we're gonna have a small break when we come back Wayne stick around she's a mortgage broker so if you want to chime in with any questions for Jade our resident mortgage broker please do but we'll be back in two sacks real estate forum podcast we're into the last segment thank you very much for staying with us if you've stayed with us if not get stuffed you didn't hear it uh Jade we're joined 11 financial Brents I don't know where he is he's with Sundays apparently he's probably got a beer in his hand isn't he Hamilton Island with Sundays also himself hard life um so you're here now with Mets from Ray White Cranny it's almost like a Ray White show now and Wayne now I want to find out from you what is going on there was I read an article in the age that interest rates might be coming down am I getting over ahead of myself you might be getting ahead of yourself someone for the nab the the the nub boss said it could happen the nab economist yes so there has been news that's come out what they've said is that they basically forecast that we're at the peak now they're not forecasting a rate cut anytime soon unfortunately but what I I think it's ANZ as well NAB and ANZ have come out um predicting that rates will stay on hold for the rest of 2026 and then we will look at a rate cut in Q1 Q2 of 2027 now what they're predicting is around 50 to 75 basis points which basically brings us back to where we were before the most recent increases.

SPEAKER_02 46:38

Yeah yeah all right so I mean I know you're not an economist or a financial advisor but if inflation's still going up and there's a lot of shit still going on in the world why wouldn't they rise raise interest rates again? That's a good question principle behind it?

SPEAKER_00 46:54

Yeah I think there's a lot of things that are being taken into account the unemployment rate has risen yep um and and that is a big factor that the RBA take into account as well I think overall what they're basically doing now is sitting back and seeing what these most recent increases are going to do to household spending which is make things tough for a lot of people.

SPEAKER_02 47:18

Well yeah it is and how you've seen it out there in in the trenches are people spending uh I think people are cutting back a lot more than what they ever have before.

SPEAKER_00 47:28

I think we live in a generation and a time of people overspending once upon a time you know I remember my parents we'd eat very basic foods and we'd be dressed in very basic clothes and that doesn't seem to be the thing for a lot of families these days. But a lot of households have had to start cutting back on the luxuries that they've been used to for so many years. And I think it's the first time that I really have noticed how much people are being more uh conservative with their funds and yet a little bit more frugal with their overall spending how is which isn't a bad thing.

SPEAKER_02 48:05

No it's it's not a bad thing. I think we live in a very materialistic world like look we do first time buys when they buy the house and then get the TV, they get the car, they get the couch like it's it's got to look like Pinterest.

SPEAKER_00 48:16

Even my nephews I think they both got a $150 special jumper that's branded I don't know something a couple of weeks ago and I thought I would never we would have never got that as kids it would have been a $20 jumper from Kmart but the dandy market job.

SPEAKER_01 48:33

Yeah like in my data the Wu Tang of the data the fake cross colours from dandy marketing I didn't get a new pair of jeans till I was 16 I had to wear my brother's jeans all the time so and we didn't lock it.

SPEAKER_02 48:46

But it's all about keeping up these days you know back in my day was getting spent 15 we lived in a shoebox yeah that's what Wayne that's what Wayne's trying to tell us at the moment pretty much yeah and we worked we worked 26 hours a day and we got home and dad would spank us around the grave God you're a wink no wonder my daughter didn't go out with you um I've been copying it here I know it's my podcast I'm copping um Wayne here how are you how much how are you good good how much mortgage stress are you seeing out there you're there sort of on the cold face do you see people just totally nearly at the point of giving up or they're saying we can't do this anymore.

SPEAKER_01 49:27

What do you see?

SPEAKER_00 49:29

Thankfully I am quite lucky with a lot of my clients that I haven't seen too much stress though in saying that it is the first time that I'm seeing some clients of mine that are in arrears and I've I've in 14 years in the industry I haven't had a high arrears level on um my the mortgages on my book but at the moment they would be the highest that they've ever been it's an interesting point Wayne Jay did you know that delinquency rates in the States are actually the highest they've been since 2008 in America? Yeah I would believe that because I I see that too I have had the most conversations around loan arrears and people who are under pressure more than ever before. That's that's a bit of a worry there's not a high volume but it's creeping in it's creeping in correct yeah that's a concern I I think one of the biggest issues is we had rates that were too low right we had rates that were too low they were sub 2% for some people so a lot of people went out and bought million dollar houses plus but also it was had it too when we had so much money in our pocket left over yeah they would like what you said you know they're out spending the $150 jumpers and realistically they don't want to go you know go backwards in their lifestyle so that I find the people I'm speaking to that's what they've found hardest like you know when they're spending you know two three hundred dollars a week on takeout food and I said they go well hang on just just cut the takeout food stop the Uber Eats right cook a cook a spag bog and you get three nights out of that but yeah they don't want to they don't want to change the habit that they've formed over the last 10 years.

SPEAKER_01 51:17

But I think Jade's right Jade had a very good point when she said interest rates are really cheap and I suppose this is a bit of a generational difference when I went through I had to watch my father go through the 17 18 19% in the early 90s. Yeah I remember that so I was probably a lot more conservative than a lot of people in my lending they go well I don't want interest rates to hit that again but when you when your interest rates are so low and you borrow them to the maximum well they could only go one way and that is up.

SPEAKER_02 51:45

So then it's hard for a generation though younger generation who hasn't experienced that.

SPEAKER_01 51:49

Yeah well it's it's a problem we've got three four generations that haven't gone through that.

SPEAKER_00 51:53

Yeah right and we've spoken about that before I think Gav where our parents are a lot more frugal you know I don't know many people my parents' age that would have multiple multiple investment portfolios however I would know many people who are have debt up to their eyeballs they're leveraged to the max but have six or seven investment properties and they just run the risk. My parents' generation are a lot more risk adverse than the generation that we're in.

SPEAKER_01 52:23

But I I think it's something lacking in our education system is actually teaching people economic responsibility. Financial literacy financial literacy absolutely I think that's something we should be taught at schools to say if interest rates are low they can only go up don't borrow too much money or you'll end up in the shit.

SPEAKER_02 52:42

It's an old dollar white accounting 50 cents a week or 20 cents a week the other thing as well obviously you talk about interest rates Jade and how they came down so people had money right but then I think it was infueled from a policy perspective because buyers first home buyers could enter into the market with 5% deposits or even less so not only did if if if they had the money but they could buy at a higher rate almost from a Victorian perspective paying peak dollar at really marginal deposits. So ultimately there wasn't a great deal of buffer if things went to the shit.

SPEAKER_03 53:20

No equity well I remember back in the day and this is how long I'm probably showing up in real estate for they were lending 103% lending 103% of the house value.

SPEAKER_01 53:30

This might shock a lot of people I'm dead set against first home buyers grants. Yeah dead set against it if you the problem with first home buyers grants it never ends up with the the purchaser at the end of the day your developer or your builders absorb it. You know there's 50 grand out there you can guarantee the builder or the developer will take them 50 grand.

SPEAKER_02 53:48

There's really no value for money in that that's just well interesting you say that because construction costs now you could you could build a brand new house out here in our area it's probably costing you 750 8000 house and land but then from a resale perspective you're probably looking it might be 700. So you're right the developer is taking that extra buffer.

SPEAKER_00 54:08

Jade are you finding many people using those 5% and even 2% schemes 5% yes we get a lot of clients using the five 5% first home guarantee scheme in saying that though there's been study or data released saying that those clients are actually often the lowest arrears rates. Really that's good yeah um so then who is the most exposed great question that was my next question that was good I I actually couldn't I that's probably something I should know but I don't have the answer.

SPEAKER_01 54:43

Next time in two weeks' time I'm gonna ask this again you got home with Jade you'd fail you'd fail as politician we'll just bash on and talk a heap of crap so nobody well maybe not maybe not a labor maybe not a labor politician she might pass.

SPEAKER_00 54:56

I would have done it I would have been a great I would have yeah I would have been a great politician I would have started talking about I don't know something the weather yeah something deflection yeah yeah the weather instead um yeah anyway so Jade look thank you very much for joining us any parting comments about what you've seen even up in Queensland investors are they floating around in your books I know you're from Queensland yeah look my business is still heavily based in VIC but even Queensland has slowed down a little bit there's less people going through open for inspections the theme is pretty consistent across the board at the moment but all it takes is news like yesterday looks like rates are going to be on hold and people all of a sudden think oh okay I have a bit more confidence we the rates aren't going to continue going up and that's what gets people back out looking at open for inspections so as we know the media heavily impacts what we see.

SPEAKER_02 55:55

So yeah I guess who knows those predictions could change next week but we'll enjoy them while they're all right jay well you've got your homework so I'm gonna be asking you in in two weeks we'll we'll do our conspiracy in two weeks as well Jay we're not gonna do it this week because Brent's not here um but thank you very much for joining us mate thanks Jade you yeah and um thank you thank you Jade you can you can bugger off now um I had uh uh out of curiosity how did you end up getting into politics because you're basically starting on the the back nine of your life yeah yeah you know what what what made you get into politics I want to understand the the conversations at home that you would have had with your partner saying well swear dad I think I think I think I'm gonna go into politics.

SPEAKER_01 56:38

Yeah well look um it's a bit cliche but the only reason you should get into politics is you've got to care about your community you've got to care about where you live right if you're getting into it to get your photo in the paper or whatever or on a sign that's all the wrong reasons. So our local MP was retiring he'd been there for 16 years. I looked around the membership and I was the youngest by about 20 years because our young liberals are about 64. So I decided to put my hand up and um yeah and I went that way I remember talking to Gary the previous member I said oh I'm thinking of going in putting my hand up and he went shit you're a bit rough around the edges that's fine and yeah so then I uh put my hand up and had a crack but I went from builder to politician though there was no council there was nothing in between I remember sitting in there first week or so and they're talking about moving motions and all this other crap and I'm thinking the only motion motion I move is when I go to the toilet I've got no idea what they're talking about. I sat there for four months scratching my head totally it was it was all foreign to me.

SPEAKER_02 57:47

The whole and parliament itself is very procedural you know they they stuff around with this they stuff around with that and you know you do that all day and I I just sat there for four months going oh shit have I done the right thing like yeah I I like I love the job I hate politics can't stand it yeah couldn't give a shit about politics but I love being the local member of parliament I love getting in there and um you know fighting fighting for the community and fighting the good fight fighting the good fight beat the government up when you need to beat them up and um you know hopefully you get the result at the end of the day but yeah it's a good job good job hard work but good job well thank you very much mate and good luck for the next six months I know it's gonna be a very heavy time in your life and your career it will be yeah we um we look forward to having you on again and we look forward to watching what you can do over the next six months mate but thank you very much for joining us on the Real Estate Forum podcast happy to be here happy to come back when you want me back thanks mate all the best