Everyone Has Been Sleeping on Melbourne Units... 👀📈

🎙️ In this episode of Moves to Momentum, Jason and Ria sit down with Melbourne real estate agent James Burne to unpack why everyone is suddenly paying attention to Melbourne's unit market.

Together, they discuss:

✅ Why investors are returning to Melbourne apartments
✅ The opportunity many buyers have been overlooking
✅ How replacement costs are creating value in established units
✅ Why strategy beats trying to time the market
✅ The biggest mistakes investors make when building a portfolio
✅ What James is seeing on the ground as one of Melbourne's leading agents
✅ Why the next few years could look very different for Melbourne property

If you've been wondering whether Melbourne is finally ready for its next growth phase, this episode is packed with practical insights from someone working in the market every day.

📅 Want help building your own property portfolio?

Book a discovery call:
👉 https://calendars.buyersedgeproperty.com.au/discovery

#MovesToMomentum #PropertyInvesting #MelbourneProperty #PropertyPodcast #BuyersAgent #PropertyInvestment #MelbourneUnits #WealthCreation

Transcript

SPEAKER_01 0:00

In my 15 years selling apartments predominantly in Stonington, I've been selling apartments for pretty much the same price my entire career. Yeah.

SPEAKER_02 0:10

For 15 years, the unit market has done sweet FA in Melbourne.

SPEAKER_01 0:14

In Melbourne, nothing. But in other states, it's gone bananas. Up until probably 12 months ago, we wouldn't meet any investors. At all. None. Zero. Around 40% of deals of sales this year have been to investors.

SPEAKER_02 0:31

Affordable housing to produce right now is costing you 900 to a mil. Yes. Whoa. Man, we're buying this stuff like half that.

SPEAKER_00 0:39

James Byrne, welcome to the Moves to Momentum podcast. We're very excited to have you here. Thank you. Thanks for having me.

SPEAKER_01 0:45

Yeah. Good flight this morning. Sunny weather.

SPEAKER_00 0:48

A bit better than Melbourne.

SPEAKER_01 0:49

A little bit more than a lot of.

SPEAKER_00 0:52

Yeah, so you have been a real estate agent for 15 years. You were just telling us. Yeah. You're currently at Big and Scott Stonington.

SPEAKER_01 0:59

Yes, been there for about seven years now. And uh loving it. Loving it.

SPEAKER_00 1:03

That's awesome. Look, we're so stoked to have you on today. We're going to run through a bit of your personal story, get a bit of your expertise on the South Yera and Melbourne unit market at the moment, and just kind of pick your brain apart.

SPEAKER_03 1:15

Yeah, fantastic.

SPEAKER_00 1:20

Let's jump straight into it. So tell us a bit about your personal story. How did you get into the real estate world and when?

SPEAKER_01 1:27

So yeah, 15 years. I think 15 or 16. Around that kind of mark. I no, all good. I uh finished school and didn't know entirely what I wanted to do. I was a bit more creative back then, if I'm being honest. So I actually went into fashion design.

SPEAKER_02 1:44

Which is gonna be I thought I thought it was more like um more like a musician.

SPEAKER_01 1:49

I thought that's what fashion design and then it didn't quite grab me. So I did that for a couple of well, a couple of semesters or whatever it is, and then um got out of that, and I've got my dad is an accountant, but all of his siblings have all been real estate agents, still are, and have doubled in that. So I thought, you know, I'll get into that. Exactly. It's in the blood. How hard could it be? So got into it, worked at a few places, uh, spent about three and a half or almost four years at one particular agency in South Yarra. Um do we name them? Or they should be unnamed. Uh unnamed. Unnamed. They're probably irrelevant, but irrelevant to me now. Agency. But uh look, it was it was selling a particular type of product and that alone. And I got a bit sick of um sick of that type of job, and you know what it's like. It's you know, and it was a it got a bit toxic. They were started off quite little, they grow they grew very, very quickly, and then it just I just found myself, you know, a bit unhappy in that in that space. So we know the agency he's talking about. We know went into off the plan, actually, and spent about four, three to four years doing that and having a crack at that. I had kind of aspirations of trying to get into the development world myself at that point in time. So I thought that might be a good way to do that. And then uh decided to go back to kind of what we would call mum and dad real estate, normal residential real estate, out of the off-the-plan world and uh haven't looked back. I've been at Big and Scott for yeah, about seven years now.

SPEAKER_02 3:24

How did you like what was the catalyst for you to get out of the developing ways and get into the the mum and dad stuff? Like, did something happen?

SPEAKER_01 3:32

No, nothing really happened. I did have a baby on the way, and it was hard to it was hard in that space at that time. And look, I don't it probably is still, particularly I'm in Melbourne with off the plan and you know, building costs going up and all that kind of stuff, and trying to sell property without being able to walk through it. Um, it's pretty challenging. So, you know, I decided to get out of the first baby. He was, yes. I've now got two. Yeah, you've got two kids. Yeah, two kids. Happily married to your beloved Brody Brody. Yes, and a teddy and cocoa man, how good. Yeah, it's good full family man.

SPEAKER_02 4:06

Yeah, yeah.

SPEAKER_01 4:06

And the dog and the cabinet. And the dog, yeah, exactly.

SPEAKER_02 4:10

So it's kind of like the wife picked a fan in Timmy. Yeah, it's good, it's good. Unreal man.

SPEAKER_01 4:16

Yeah.

SPEAKER_02 4:17

So lifetime, um, well, it's it's it's in the family lineage to be with us that agent. Yeah, and so you jump in, you've been doing it for 15 years, you're doing a bit of development, softer plans, this, that, yeah, and you you have a baby along the way. Yeah. What else is going on there? Like, when did you get married in all this?

SPEAKER_01 4:36

Uh, pre-COVID, got married in 2018. So, yeah. And then, yeah, once I was starting to have a family, there was a lot of pressure to, you know, well, I felt a lot of pressure anyway, to be trying to make as much money as you can. Sales were slowing and that kind of thing. And I felt like we were very, very reliant on government initiatives and all that kind of stuff in that space. Whereas I do find in the normal real estate world, it's much more of a necessity. It's an immediate roof over people's heads where you're providing that that um shelter, or you're providing that investment property, or you're providing a source of income, or you're, you know, whatever it is, but it's immediate rather than maybe aspirational down the track. Um, and the government would shift their mind on and their views on what incentives they would bring out. Couple that with escalating building costs and all that kind of stuff that made it hard uh for developers to keep up. And yeah, it was just it was time to move on.

SPEAKER_02 5:36

Can I ask you a personal question?

SPEAKER_01 5:37

Yeah.

SPEAKER_02 5:38

Have you ever thought about packing it in? Because man, Melbourne has been through the absolute ringer, real estate-wise, in the last seven years. That's the whole time you've been at um Bigan School.

SPEAKER_01 5:49

Never thought about it. No, not really. COVID is not a critter. COVID was tough.

SPEAKER_03 5:55

Yeah.

SPEAKER_01 5:56

COVID was tough when at the start of COVID, when we couldn't do any work really. You couldn't do any appointments, you couldn't do anything like that. But obviously, once we kind of came back out into the sunlight, into the world, um, the market did go pretty well for a time. Now it's definitely come away. Um, and it's, you know, it's I think we're start we're at the at the the right point now where I think things are gonna start moving in the right direction. Yes.

SPEAKER_03 6:22

Let's go.

SPEAKER_01 6:23

It's been moving in the right direction for one particular type of of asset, I think, for a little while now. It's the Melbourne market is definitely a couple of months, I would say. Yeah. Look, and and it won't be a surprise to you, but yeah, look, the Melbourne market we're finding at the moment is definitely split into two categories. And I would put it, I'd be simplifying it a lot by going a million plus and a million dollars and below, which in the Metropolitan Melbourne is apartments versus the housing market. The housing market is definitely got its challenges right now, but the apartment market is just kind of chugging away and doing relatively well, and I think has good things coming. So unbelievable man, how fine.

SPEAKER_00 7:03

So obviously, James, we chat basically every day. Um, you're one of my top agents down in Melbourne. Um, but I want to ask you, what are your thoughts on property vesting? Do you have any investments yourself?

SPEAKER_01 7:15

I yes, I do until it settles. I did actually sell my uh one and only at this point in time, investment property, which is in uh WA. Um that'll settle in August. When did you buy that? No, not that long ago, like 20 months ago. Oh, not 20 months ago. So I was probably late to it.

SPEAKER_02 7:33

Yeah.

SPEAKER_01 7:34

Early to exit, probably. But we're talking like early 25? Yeah. Early 25. Late 24.

SPEAKER_02 7:39

Late 24.

SPEAKER_01 7:40

I think that's good. That's a good window. Yeah, late 24. And um, yeah, look, for our personal circumstances, it's definitely served its purpose. And then we will be buying again. Um we love the numbers, bro.

SPEAKER_02 7:52

Tell us the area, tell us the numbers.

SPEAKER_01 7:53

It was in Mandra. Mandra? It was in Mandra.

SPEAKER_02 7:55

Three by one, four by two. Three by one. Three by one in Mandra.

SPEAKER_01 7:58

806 square meters land. Yeah, good, it was a good spot. Um, fiber shack, but it the everything was fine with uh building inspection, all that kind of stuff. It came back pretty good. Um, there weren't any problems there. Bought for 465. I think 465, and we've just sold for 650.

SPEAKER_00 8:18

Amazing.

SPEAKER_02 8:18

You're making well, you buy mid-4s, you sell for mid-sixes, you make 200 grand in 20 months. Yeah.

SPEAKER_01 8:24

Yeah. Yeah, it was good. It was good, and it's definitely served its purpose. The next one will be in Victoria. Go on. We're definitely, I know, we're definitely sure of that. It's just a matter of where and exactly what. But yeah, we'll definitely get into that.

SPEAKER_00 8:37

Are you saying apartment first house?

SPEAKER_01 8:39

Yeah. Yeah, definitely.

SPEAKER_00 8:42

Yeah.

SPEAKER_01 8:42

Or, you know, depending on what it is, multiple apartments versus one house. Um, definitely think that there is a lot of room for apartments in the Melbourne market, which probably isn't going to be a surprise to you. But if you want me to elaborate on that, I certainly can.

SPEAKER_02 8:58

We can, and we want you to, but first, can we go back? Yes. I want to find out the catalyst that got you into property investing because you've been selling real estate for 15 years now and you choose to buy back then in Perth. Yes. What like how does that happen? How does that conversation with Brody go?

SPEAKER_01 9:16

Yeah, well, so it was easy because Brody's actually from Perth and WA. She has and she has family in Mandra too. So that was actually kind of like a, you know, we had a bit of intel into the market there, which is good. Um, so that made it easy. It's something we'd wanted to do for a little while. We did actually used to own a one-bedroom uh apartment in South Yarra, and we did pretty well out of that. It we we actually bought it to rent out, we lived in it for a time. We renovated it and we did well out of that. Um, sold in COVID and then sat out of the market for a while, finally got back into WA. Probably waited a bit too long out of the market when we should have jumped straight back in, but you're living there.

SPEAKER_02 9:55

Man, so you guys have been dabbling and probably investing for a little bit.

SPEAKER_01 9:58

A little bit, yeah.

SPEAKER_02 9:59

Definitely a family in Melbourne.

SPEAKER_01 10:01

Yeah, yeah, all that stuff. But now I do we definitely do want to kind of ramp it up. And yeah, I was pretty speech about that. Asking lots of questions. Exactly, exactly. So, yeah, definitely want to ramp that up, and that's part of our plan for the balance of this year and into next year. Yeah.

SPEAKER_02 10:18

Nice. Yeah. And I'm always interested in the catalyst. Like, what changes from getting one, sitting on the sidelines, kind of stepping back, to we want to ramp it up? Like that's a big swing.

SPEAKER_01 10:32

To be honest, it's actually friends of ours who have done this. And we've got a few friends that are now on board and doing it in varying kind of um volumes. But like one of our best friends, young couple, they've got three girls, and they are I don't want to say the wrong answer. It's probably it's plus eight. They're probably sitting on about nine, they've probably they've probably uh bought maybe 12 or 13 over the last three to four years.

SPEAKER_02 10:58

Three or four years.

SPEAKER_01 10:59

Yeah.

SPEAKER_02 10:59

But they've been going hard.

SPEAKER_01 11:01

Yeah, they have. They've been going really hard. Yeah, they've been going really hard. And so they've they've recruited a few of a few mutual friends, and uh yeah, we're kind of you're one of the mutual friends. Yes, we're one of the mutual friends who's very interested and they've they've they've been able to do pretty well. But I'm I'm intrigued by it.

SPEAKER_02 11:20

So it's it's it's to unpack it that little bit further. Yes, you've you're interested, and by the sounds of it, every time you've bought and sold, you've done well off it, from what you've said. But you see someone else going about this in a more aggressive approach and seeing it work out, you're like, oh, we could get around that.

unknown 11:39

Yeah, totally.

SPEAKER_02 11:39

That's just seeing the path, the strategy.

SPEAKER_01 11:42

Yeah, the strat the strategy is something that I, as a real estate agent, I can maybe look at certain things and maybe know a good deal when I see one, or um all that kind of stuff. But the structuring is something that I'm learning about every day and um is a bit foreign to me. So I pick my friend's brain, I'll pick your guy's brain all the time, and try to work out okay, how how are we gonna do this? How do how can I get to um, you know, four properties? How can I get to three? How can I get to two? You know, what's the best way to get to that point? Still haven't got there yet, two, but um, you know, getting to uh the next one will be, I think, the the launching pad, hopefully.

SPEAKER_02 12:22

I I agree, man. The the you you kind of need to like test it, test it, feel it, be around it, then you're like, okay, yeah, I feel this, and you get the momentum. I reckon after the second or third equity release, it's just like foot to the floor, you just go for it.

SPEAKER_01 12:36

That's something that I I kind of was aware of, but wasn't really, I guess, fully aware on how well you could use equity within properties. I mean, looking back, we sold South Area and we did pretty pretty well out of that one bedroom apartment. We could have bought another another apartment, or we could have bought another property somewhere else. We didn't do it. We we sold that. Um looking back, yeah, that would have been. Why didn't you do it? I don't really know. I don't really know.

SPEAKER_02 13:02

We just lack of education, lack of education.

SPEAKER_01 13:04

Pretty much. I think lack of education around the whole property investing um thing and and and trying to accumulate more. It was, I think I was probably more so going, well, we can use this as a jumping pad to maybe sell this one and then buy the next one and then sell that and buy the next one, rather than trying to accumulate accumulate and and grow as a as a portfolio.

SPEAKER_02 13:26

If someone back then when you guys, you and Brody were in the one by one, yeah, if someone gave her the option, hey, how about you just take equity and just go buy your next place and just keep this place? Do you reckon you guys would have done it?

unknown 13:37

Absolutely.

SPEAKER_01 13:38

Yeah. Yeah, I know. I know. We bought that for 356, renovated it. I did most of it. Uh, and we spent, honestly, about I think total, probably 12 grand. Bought it for 356, sold for 500. So that's mad. Yeah, it was great. It was great. Good result. This guy's like a property savant. Anything he touches, it's don't know about that. Don't know about that. But yeah, as I said, launching pad for the next one, hopefully. I think that'd be a good that'd be good. That'd be good. Yeah.

SPEAKER_00 14:09

I have to ask, um, with the recent, or do you think there has been a recent influx of investors in South Yara, and has that impacted your has that swayed your mind on investing yourself again in South Yara?

SPEAKER_01 14:26

Yes, uh, it has. It's obviously look for price point wise, it's a it's a it's a great market because it's an entry-level market. The the thing that I've always kind of looked at, especially as a real estate agent, I can tell you that for the most part, obviously there's here and there, there's properties like the one I sold. Obviously, we improved that property and made money on it. But for the most part, in my 15 years selling apartments predominantly in Stonington, I've been selling apartments for pretty much the same price my entire career.

SPEAKER_02 15:00

For 15 years, the unit market has done sweet FA in Melbourne.

SPEAKER_01 15:04

In Melbourne, nothing. But in other states, it's gone bananas. Yeah. It's gone bananas. And it's gone up in equal terms with the housing market, but we have not seen that in Victoria or in Melbourne. So that's where I see an opportunity. Will it catch a look, it'll definitely grow. It's a matter of when. And I do think that we are heading to with this influx of investors coming into the market, it it, you know, it hopefully touch wood, and I think it will do well.

SPEAKER_02 15:32

Could you give us like a three, a five, three, one? Like like what was it like five years ago? What was it like three years ago? And what was it like last year?

SPEAKER_01 15:42

Yeah. Well, for the to give you an example, um since about 2020, up until probably 12 months ago, we wouldn't meet any investors at all. None. Zero. Zero.

SPEAKER_02 15:57

He wouldn't even know what they he could walk past one in the street, wouldn't even, wouldn't even know. No clue.

SPEAKER_01 16:02

Pre that, yeah, we would see investors, not in huge numbers, but we would. But in the in yeah, for for five years or so, there was zero. And I mean zero. Just nothing happening. You may be the odd SMSF, but that is it. That is it. And I'm talking one deal a year, maybe to a to an investor.

SPEAKER_02 16:21

So you're lumping the last three or five years in one category, and then now the last 12 months? Yeah. What are we how many are you seeing?

SPEAKER_01 16:28

Right now, to date so far this year, I can tell you that me personally, I've sold about 40%, somewhere between 38 or 30. I did it the other day, I should probably remember. I think it was 43, but I don't want to go too high because I have made a couple of sales in the last seven days. So let's say around 40% of deals of sales this year have been to investors. Now, that's me personally. Obviously, it depends what you're selling.

SPEAKER_02 16:52

What do we have at the office? You got the office stats?

SPEAKER_01 16:55

Well, this is the thing. We sell a pretty broad range of properties. So we sell some houses and we sell some apartments. Now, the apartments are moving pretty well at the moment. And that's because investors are coming back. You've got owner occupiers who still need a roof over their head. Uh, the other market, the kind of, you know, your second home, your third home, your downsizer, your upssizer, they're being very cautious. The market isn't really moving. Not much is being listed and not much is being sold. It's just it's a much slower market. So it's it's really split up into those, into those two categories. Um, so for me, who I probably sell somewhere between 80 and 90 percent of apartments per per year. Um, yeah, my numbers are are obviously going relatively well. But for someone selling houses, it is a tougher market in Melbourne at the moment. It's good opportunity and it's good buying, very good buying, to be honest. Um, but uh for the apartment market, yeah, we're still seeing relatively good numbers for that reason.

SPEAKER_02 17:55

When you say pretty good, yeah, can you tell us, can you define it a bit more for us? Like how many days on market, how many, what's the level of inquiry? When you list something online, are you just like your phone's bing, bing, bing, bing, bing on?

SPEAKER_01 18:09

Yeah. Look, obviously, I'm dealing with investors, advocacy groups, I'm dealing with owner occupiers as well. Um, I would I think my average days on market at the moment is about 21 days, 22 days, which is pretty good. Um, I think I have seen a lot of people who only sell houses and they are starting to push out a little bit more. Um, obviously the good, yeah, the good operator is obviously going to be able to keep that down, but you know, that's putting a lot of pressure on your vendors and that kind of thing, whereas we're not really seeing that too much with the apartment market. We are still, you know, managed to get pretty good. Yeah. Yeah. They're moving. They're moving well.

SPEAKER_00 18:47

And what about off-markets? Yeah. Like how quickly do you have the same kind of turnaround time for that? Or does that seem to move a bit quicker?

SPEAKER_01 18:54

Well, we've got to wait for contracts, first of all. Um, no, but look, they are, yeah, I think you're able to get offers. There are still some owners who you've got to be understand that with the Melbourne market, uh Melbourne market, I've spoken about the fact that we haven't had price variations for a quite a long time. I mean, they've kind of gone up here and there, but we're talking a couple percent. We're not talking huge growth. So the the complex thing in a lot of cases has actually been that you've got owners who have bought 20 years ago and it hasn't done what they what they thought it would do. And so they're not making any money. They might be some in some cases, people sell at a loss. You know, it that's never it never good. Um, or they're not making as much money as they thought they were going to. You know, they could have bought the house in another state, they could have bought a house in the outer western suburbs for the same price that would have tripled by now or doubled by now, but they didn't do that. They bought an apartment and it just hasn't done what it should have done or what they expected it to do.

SPEAKER_02 19:55

You say this, I hear I hear this in every single market that we get into, right? At the start of Perth, I hear the same thing. You know, then you talk about regional WA and Jolton, then you talk about Queensland, then you talk about regional Queensland, then you talk about like it was like nothing for so long. Then these people that are like the early movers that are selling, it's like we're buying this we're buying this thing for the same thing that this guy bought back in 2011. And it's like, wow, and it's like it's crazy.

SPEAKER_01 20:25

And look, my one of my directors, he's always said, and he's been in the industry for a little while, but he he he says that all these markets, they always repair themselves from the ground up. So from the lower price stock upwards. And that's exactly what we are starting to see, which is why I think it's an exciting time, is that apartments are all of a sudden, having not really done anything for a while, they're starting to move a bit. And they're moving better than the higher priced market, which is a really good sign that we're on the right trajectory. I mean, we've got, I think I've told you this before, Rhea. I've got I sell apartments in Turak, South Yara, Peran. I mean, in Turak, you can you can be standing on the balcony of your $400,000 one-bedroom apartment and you can look across the road at a $10, $20, $30 million house. That doesn't happen in any other state. I mean, you guys will know better than me, but I'm pretty sure that doesn't happen. You don't have that in any other state other than Victoria at the moment.

SPEAKER_02 21:21

At the moment.

SPEAKER_01 21:22

At the moment. So yeah. I don't think so, but time will tell.

SPEAKER_02 21:27

One of the main reasons we love working with you, James, is the fact that you have got such a deep experience in the unit market, especially that area that really kind of mops up South Yarp and all that type of stuff. But what do you think is going to change for it to really like go?

SPEAKER_01 21:49

Yeah. Um to be honest, at this point, I think it's it is happening, it's happening perhaps slower than people maybe want or expect. I think. I certainly thought that the Melbourne market might have bounced off the bottom. I'm talking about the whole housing market because houses, I speak to a lot of my neighbors, and yeah, they're a lot of them are kind of freaking out.

SPEAKER_03 22:12

Yeah.

SPEAKER_01 22:12

You know, we're dealing with people who've bought for over 2 million bucks. They're now going to be selling. If they do sell under under $2 million, and that's not a good feeling. Uh good opportunity to upsize if they're looking for a PPR. But as an investment at the lower end, I think, you know, the more investors that do come in, as well as uh raising rents, which is, I mean, the rent is crazy at the moment in Melbourne. So, and it's looking like with all these government changes, it's just gonna keep going up. Yeah. I mean, even if you look at what happened yesterday with the SMSF. I I yeah, I mean, and my point is I think a lot of it is to do with government. Um, I don't want to get too political. Uh, but yeah, that I think if we if Melbourne are to uh or Victoria are to get a new government, that will certainly have an impact. Even if it's just confidence.

SPEAKER_03 23:07

Yeah, yeah.

SPEAKER_01 23:08

Even if it's just confidence, that will turn things around, I think, quite quickly.

SPEAKER_02 23:11

Before we move on on this point, can I take you back to your developing days?

SPEAKER_03 23:15

Yeah.

SPEAKER_02 23:15

Right? We talked to a lot about we talk to a lot of clients about replacement costs, these units that we're buying. What would a let's say like a two by one in Paran, we're buying them for like let's say 550, 600-ish, what would it cost for one of your developer mates to build that thing today?

SPEAKER_01 23:33

Very really good question. Because I'm I mean, effectively in our area in particular, you can't developers cannot make a project work unless they are selling for around about 16 to 17,000 per square meter. Yeah. Where yeah.

SPEAKER_02 23:51

Can we do the math on that? Because the most the most common thing that we are buying is around 60 squares. 60 times, what did you say, 15,000?

SPEAKER_01 24:00

No, more than that. Probably 16 to 17. Go 16.

SPEAKER_02 24:04

16 to 10. 16, please save.

SPEAKER_01 24:06

Yeah.

SPEAKER_02 24:08

960, bro.

SPEAKER_01 24:09

Yeah. So that's what you can expect to pay for an off the plan or a new property in Melbourne. And this is this is the whole thing, is you can go around the corner and you can buy a 60 square meter two-bedroom apartment in a great little pocket in Piran, in South Yara, in Turak, and you're buying it for 10,000, 11,000 square meters.

SPEAKER_02 24:33

That's mental. We talk to clients about this all the time. All the time. You're giving me numbers that are way more aggressive. I'm being super conservative. I'm saying like eight, eight fifty. And you're telling us nine fifty.

SPEAKER_01 24:42

In our areas, you might be able to build for less, but in our area, that's what you gotta, that's what you gotta do. Yeah. I mean, in in premium, if you're buying a really premium building, it's 20 plus.

SPEAKER_00 24:53

Yeah.

SPEAKER_01 24:54

Yeah, it's 20 plus.

SPEAKER_00 24:55

Are you noticing that all the investors that you do work with that older established, you know, low set stock is exactly what everyone's after.

SPEAKER_01 25:05

Yes, mostly. I think there's more people um buying older stuff. And that's actually been across the board, um, especially since COVID hit. I think a lot more people wanted um, you know, you tried, you tested your 70s blocks, the uh brick. Um, they were often a little bit larger and they're a safer bet because there was combustible cladding problems with a lot of buildings um in Victoria as well, uh, which were expensive um and caused some problems. So everyone looked at the older style buildings as a bit of a safer bet. But the the newer buildings do offer pretty high yields. So I guess for investors, it depends what the strategy is. If they want something that's really high yielding, yeah, a modern apartment, you can get extraordinary um yields, but you might not have as much growth as a really boutique, you know, one of ten or one of eight, whatever it is. Older style block.

SPEAKER_02 26:01

Yeah. Yeah, the older stuff is definitely the stuff we like a bit more.

SPEAKER_01 26:04

I think it's a pr it's basically the best of both.

SPEAKER_02 26:06

Yeah. Yeah. But I'm still blown away by those numbers, you know what I mean? And it's like I feel like why would they even add more supply, which is gonna help with the housing crisis?

SPEAKER_01 26:17

It's like that's why I talk about government.

SPEAKER_02 26:18

I mean affordable housing just like doesn't even become a thing anymore. Because if that's what it's costing them to build on the low end, you're saying it's 20 grand a square foot. Nice a square square meter.

SPEAKER_01 26:30

If you're buying something really premium, um, you know, that might have the the gyms and the pools, even if it's a boutique block, yeah, that's what you're gonna be that's what you're gonna be paying.

SPEAKER_02 26:38

Affordable housing to produce right now is costing you 900 to a mil.

unknown 26:41

Yes.

SPEAKER_02 26:42

Whoa.

SPEAKER_00 26:42

For 60 square meters, that's crazy.

SPEAKER_02 26:44

Man, we're buying this stuff like half that. Not quite half that, but like nearly goodness, nearly. Yeah, two-thirds, comfortably two-thirds. And in my opportunity opportunistic property investor mind, it's like that's the we're buying this thing for 550, it's got headroom to get up to 900. Yeah, that's freaking let's go.

SPEAKER_01 27:04

Yeah, you put the nice reno in if you want to do that, you don't even have to do that. I think you'll probably catch up by itself. But if you did renovate and all of a sudden you've got internally an apartment that's just as nice, possibly better built than a lot of these brand new apartments.

SPEAKER_02 27:19

And yeah, this heap I've been froffing Melbourne units like this whole year, and this guy's just gene, right? Yeah, like get on.

SPEAKER_00 27:30

I remember when we first started um working together and we've had a few conversations, and you were like, I've been saying this for years. Like you could predict that this was happening and this was coming, and it was so good to be able to, you know, for us to chat amongst each other because it's exciting. It's an exciting time for both ends of this.

SPEAKER_01 27:48

Yes, definitely agree. There's so much opportunity, I think, in the Melbourne market. And probably more, I mean, as I said, you guys, the professionals, you're looking at I'm pretty, I'm in my own little bubble.

SPEAKER_03 27:57

Yeah.

SPEAKER_01 27:58

But I do get glimpses of other states and think, you know, Melbourne has so much catching up to do for the rest of the country. So yeah.

SPEAKER_02 28:08

Can I ask you a few questions about the industry? Well, I do want to ask you about um, I do want to talk about like the challenges that your clients are facing. You know, you're talking everyday mums and dads in and around the in around the suburbs, but you you're also dealing with, I assume, and from what you've told us, a lot of buyers agents.

SPEAKER_03 28:27

Yeah.

SPEAKER_02 28:27

Um maybe a few buyers agents. A few.

SPEAKER_01 28:30

You pick the ones that you want to deal with. Yeah.

SPEAKER_02 28:32

Yeah. You know, maybe you're healing from a lot. Yeah, I do.

SPEAKER_01 28:36

Yeah, I I I get calls from plenty, yeah, but I would say there's a handful, if not less, that I actively go to, at least first. And then if there's if it's if it's not quite happening or there's not as much traction as I would like, yes, I'll maybe speak to a few more, but yeah.

SPEAKER_02 28:55

Bit of a shameless plug. What puts Rhea in and amongst that top three? Like, what's different between that, let's say the 20, 30, 40 that are reaching out to every week to put her in the ones that are like, oh yep, I want to well, I'll I'll go to her first.

SPEAKER_01 29:11

Uh I think probably the number one thing is actually responsiveness.

SPEAKER_02 29:15

Responsiveness.

SPEAKER_01 29:16

Yeah, just responsiveness. I can call Rhea. You pretty much, I don't think it's it's really weird if you don't answer the call. And if you don't, you will actually text me saying, I'm just getting lunch. I think you did that yesterday or the day before you said I'm just getting lunch.

SPEAKER_00 29:28

I'm just getting lunch. Chicken Caesar salad.

SPEAKER_01 29:30

Yeah. And um I'll call you back. Yeah. Yeah. And so uh that's the best thing. Um, and being able to get kind of get um feedback as well. Because sometimes, you know, it it's even for me, it can be hard to appraise properties. Owners have a particular idea of value in their own mind. That could be right, it could be incorrect. Um, and I will do my best to try to work that out, but it's just someone to kind of bounce that off as well and say, what do you think? Where do you see value? And then I can take that back to the owner. We might be having really early chats with them, uh, but I can chat to you and say, look, this might be coming up. I haven't actually got control of it yet. Or, you know, I don't know. They don't, even they don't know what they want to do just yet. But I can speak to you about it first and say, look, this is where they're thinking. You know, what do you think about that and have a good conversation about it?

SPEAKER_00 30:17

Yeah.

SPEAKER_01 30:18

Yeah.

SPEAKER_00 30:18

Yeah, that's definitely something I value a lot in a working relationship. It's the the transparency and just the open and honest communication. Like I think it's it's so important and it also just gets rid of all the fluff and it just saves time. Like, you know, we're both um trying to do the best for our clients, but we're also gonna work together to reach an outcome that everyone's happy with.

SPEAKER_01 30:39

Yes, we've had some, we've had a couple of doors.

SPEAKER_00 30:42

Yes, we've been through the trenches together through some. We have. I mean, Jace and I talk about this all the time. Like going through the trenches and going through all that bullshit with people, you come out so much stronger in the end. And it's like, mate, if we can get through that, we can get through a hundred more of these. So yeah, I think yeah, it's it's important, I think, that you go through that together. Um, I think Jace did ask you before, but I don't know, it might have just got mixed up. Um, but yeah, what are some of the most common challenges that you're seeing your clients are facing like more so recently in the past like six to twelve months?

SPEAKER_01 31:20

Compliance is a big one. It's just a fact of, yeah. So there's a lot of compliance in Victoria now. And they look, they're adding to the list every year. Um, you know, air conditioning, double or block-out blinds, um, you know, uh all sorts of things that, you know, are all small, but they add up. And, you know, I mean, I to give you an idea, I had a conversation with an elderly landlord of ours who actually would end up in tears because she's been told, you know, she put air conditioning in last year, she's now got to put this other thing in, and she's got to do all these things to meet compliance, to meet the code. And she can't afford it. It's not that she she just can't afford it, you know. And so, you know, this is this is the problem in trying to, you know, so that's one of the challenges is that all of the time there's all these compliance checks. Well, they're ca they're squeezing everyone. Now, ultimately, it just pushes rents up. I mean, the the minimum standards that we get told that's what they are, it's just pushing up minimum rent. Yeah, that's really what it's doing.

SPEAKER_02 32:23

100%. Because the landlord just passes it on to the tenant.

SPEAKER_01 32:26

Yeah. Well, it also, it also, I mean, if you if you're a really tight budget and you want, you, you know, you think, you know what, I really want to save as much as I can. I'm just renting, I'm gonna get a tighter little apartment with no air conditioning, with no, you know, this and that, and I'll get a little bell heater and I'll save some money. You can't do that anymore. The minimum standard has been raised. So you can't actually do that because all of these standards being built up, the minimum rent just gets built up as well. Yeah, yeah. Anything else? It's a good thing for investors though, because the you know, the the rents are good. Yeah, the rents are good. That's all we are. Yeah, exactly right.

SPEAKER_03 33:04

Love it, um, anything else?

SPEAKER_01 33:06

Probably just back to the the price point, you know. For for some people, it is challenging. Investment properties haven't necessarily done what they thought they would, but that's the way we're living.

SPEAKER_00 33:16

I do always feel a little bit bad sometimes. Like when I see, yeah, I go on our pidata and I see when it sold last and for what price, and I'm like, these poor swords.

SPEAKER_02 33:26

Sorry.

SPEAKER_01 33:27

But as you said, but like as you said, Perth. I mean, I looked at the price history in WA and my wife's family is from there. You know, there you look at um, there was what a 10-year stint where nothing happened. There's parts of regional New South Wales, Victoria where that doesn't that that happened as well. Prices either went backwards or or didn't do a single thing for a very long time. So it you know, it happens.

SPEAKER_02 33:51

I see I honestly say I seen it in Perth, I'd seen it like so many times. Like even I bought my place in Perth, um we bought it in 2021 in February, they bought it in February 2018, but they bought it for 340, we bought it for 350. And they're like shivers. And then after that, bang, like it's just gone up, double digits every year, year on year since we've held it. It's like oh shivers, you know, they held it for three years, I made nothing.

SPEAKER_01 34:18

Oh, well, there's talking about, I mean, square meter rates now, obviously, but let's say for a brand you build 16,000 square meter, 10 years ago, it was still 12, 13,000 a square meter. And what was happening was people would, you know, settle on these properties and I'd appraise them and they'd be going, hang on, has the market dropped that much? And you know, it just that's the real world market, you know?

SPEAKER_02 34:43

Uh people don't realize that, eh? People people just think that's what they pay, that's what it is. But then you realize there's a whole living, breathing market out here that is changing every day, every week. Um, and that's scary. Yeah, it's hard to navigate that. Can I ask you a final question to wrap us up? Not to um embarrass you, but there's been some recent awards that you've been winning as a real estate agent, just killing it. But like you've got uh a wife that loves you, kids that want to spend time with you, you're kicking goals at work. Like, how do you balance the high performance pushing? But you're here at Cornella, you've got your running shoes on so you can go for a run. Like, how do you balance it, man? That's a lot.

SPEAKER_01 35:28

It is a lot, and my wife is actually she's a star, she's actually a business owner, which makes it extra hard because yeah, she works much harder than me. She works much harder than me. Um, yeah, I just get to I get to watch TV at the end of the day. She's working away till like 11 p.m. every night.

SPEAKER_03 35:44

What'd she do?

SPEAKER_01 35:45

She owns a wallpaper business. So, yeah, wallpaper commercial, residential, or like you know, kind of um kind of business. So yeah, she's busy. It's good. She's busy. It's good.

SPEAKER_02 35:54

Where do you mean it?

SPEAKER_01 35:56

Technically, we met at dancing classes in year 10.

unknown 36:00

Oh, yeah.

SPEAKER_01 36:00

And then like through through school. Wow. We don't we didn't we didn't hit it off then or anything like that, but we did know each other. Were you a bit weird back then? I was weird. Um but uh and then I ended up being housemates with one of her best friends, and so she lived in Nice in France for three years, and then when she moved back, her and Claire were obviously best mates, and Claire was my housemate, and then we kind of yeah kicked off a a uh bit of romance up at Mount Holland.

SPEAKER_02 36:29

That's been spicy, huh? The roommate's best friend. Yeah, and then you're like, oh, who's she?

SPEAKER_00 36:36

Is this the sad friend you were talking about before that's got three kids, three girls?

SPEAKER_02 36:42

That's recruited you. No, no, different friend.

SPEAKER_00 36:44

Different friend.

SPEAKER_02 36:45

Oh man, that sounds spicy, huh?

SPEAKER_00 36:47

Yeah.

SPEAKER_02 36:48

That's spicy, it is and so Brody's running a business. How long has she been doing that for?

SPEAKER_01 36:55

Technically, she's been kind of general manager and part owner for like 12 years, at least a decade. But she actually, as of about two months ago, she is now sole owner and director, which is cool.

SPEAKER_00 37:08

You both travel that having two young kids as well.

SPEAKER_01 37:11

That is hard, actually. That is hard. But you know what? Being in real estate, you're kind of your own boss. Yeah, I can call you and say, hey, um, don't mind the kids screaming in the back and you're okay with that, which is good. I do that with everyone, but you're okay. Um, but uh yeah, you say I'll pick up the kids at 3 or 3.30, I'll meet you at 4:30, I'll go back to the office. I do try to do a gym session sometimes at lunch, if I can fit it in. And then, you know, odds kick on Saturdays for the little guy to do football, and you just maybe set your opens a little bit later on the day so you can then shoot off and and do that. But it's just a balance, you know. Yeah, just constant, constant management. Yeah, pretty much. You know what it's like. You're at dad. It is, it's constant management. Yeah, it's a bit tiring, but it's fun, it's good.

SPEAKER_00 37:57

What's your what's your way of like switching off? Like, how do you because you know, being in the real estate world, uh for all of us, it feels like we're on all the time, we are always available. So, do you have somewhere you go or something you do that really helps you?

SPEAKER_01 38:10

Yeah, love my camping.

SPEAKER_00 38:12

Oh, camping.

SPEAKER_01 38:13

And the kids love it too, which is good. And the best is when you can go somewhere where there's no reception. Yeah, phone off. Yeah, phone just loves it. That's the best. That's the best. So yeah, I love my camping. Um mountain biking, that kind of thing. Take the kids out and yeah, haven't I had to do much golf recently because that's kind of uh maybe too too much time on a Saturday or a Sunday. But yeah, but camping, camping's a good one. And it just gets you out in nature and you know, fresh air, no phone.

SPEAKER_00 38:42

It resets you, like definitely being out in nature.

SPEAKER_01 38:45

Definitely need it, yes, and a good adventure.

SPEAKER_00 38:48

Yeah, yeah, yeah, man.

SPEAKER_01 38:49

Cheers.

SPEAKER_02 38:51

Just kicking goals.

SPEAKER_00 38:52

Yeah, I see. What a man.

SPEAKER_02 38:54

You and we didn't realize all this on that broken.

SPEAKER_00 38:57

Yeah, entrepreneur, she's a jet.

SPEAKER_01 38:58

Yeah, she's a jet.

SPEAKER_02 38:59

Oh um, what else do you want to tell us? Any other secrets? Any other no other secrets?

SPEAKER_01 39:05

No secrets. No other secrets, I don't think. No. You know everything about me now.

SPEAKER_00 39:09

We love you in the office every time we chat. I'm like, oh, it's Bernsey. Everyone's like, Burnsy.

SPEAKER_01 39:16

Everyone calls me. Well, actually, the my own office doesn't call me Bernsey. It's just James in the office. Most other people call me Bernsey. Our wedding invitations were bro, because I call Brody Bro. Bro and Bernsey. That was it, you know. So it's there.

SPEAKER_02 39:31

I feel like in in Stonington Council it's a bit um bit uppity. Yeah. Can be posh.

SPEAKER_01 39:36

You got to bring it down level sometime.

SPEAKER_02 39:38

Uh in the streets.

SPEAKER_01 39:42

J Betty, Bernsey, James, Jimmy. Jimmy, what it is. Jimbo Bernsey's. Jimbo. Jimbo. Jimbo Dini. Jimbo. Whatever.

SPEAKER_00 39:51

That's actually funny you say that because I feel like always on the phone with you, just because we work together so much, I get I'm very comfortable and casual with you that even I say bro, no. It's like goes between bro and Bernsey. So that's just so funny. There you go.

SPEAKER_02 40:03

Perfect. Well, man, thank you so much for coming out. Thank you for having me. The trek all the way from Melbourne to Sunny Crenella.

SPEAKER_01 40:09

Exactly. Sunny Crenella is the key. That's the key.

SPEAKER_02 40:12

But man, we really appreciate um you working with us, and we really appreciate you just sharing your insight on the Melbourne unit market. And man, looking forward to many, many more.

SPEAKER_01 40:22

Perfect. Me too. Me too. Fantastic. Thank you very much. Cheers, guys.

SPEAKER_02 40:26

Thanks so much for listening to the Moves to Momentum podcast. If you got any value out of this episode, please give us a like or subscribe. Or if you think this is relevant to any one of your friends or family, please flick it to them so they can have a listen.