"Crystal Ball Chronicles: Navigating the Future - Forecasting the Real Estate Market in 2024

Episode Title: Crystal Ball Chronicles: Navigating the Future - Forecasting the Real Estate Market in 2024

Introduction:
Welcome back, dear listeners, to another insightful episode of The Property and Lending Show.

Today, we embark on a journey into the future as we delve into the fascinating realm of real estate forecasting for the year 2024.

Segment 1: A Brief Recap

We started with a brief recap of the current state of the real estate market.
Notable trends and factors influencing the market as of 2023.

Segment 2: The Forecasting Toolbox

Insights from leading industry experts and analysts.
Key economic indicators shaping real estate trends.

Segment 3: Risks and Challenges

Identification of potential risks and challenges in the 2024 real estate market.
Strategies for mitigating risks and navigating uncertainties.

Conclusion:
As we conclude this episode, we hope you feel equipped with valuable insights into the real estate landscape of 2024. Remember, the future is always filled with both challenges and opportunities, and a well-informed perspective can make all the difference.

Thank you for joining us on this journey through the Crystal Ball Chronicles. Until next time, happy forecasting!

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If you would like to get in contact with Mark, Fadi, Peter or KM you can find them here:
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Fadi@powerloans.com.au

Peter@powerloans.com.au

hello@firstbrick.com.au

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Transcript

Kyrillos Mansour (KM): 0:15

Podcast. This is our first episode of 2024 and I feel like we have so many comebacks. We do an episodes, we go on break for three months. But Mark is going to keep us on path this year and we're going to be consistent and Mark's going to make sure. So if we're not consistent, send your complaints into Mark Kadara at mark@paolones.com au. Let him know that you're not happy, but we'll kick into it pretty soon. But ferry, Mark, how's your new year? As you know, everyone likes to hear about your days and your lives and your feelings.

Fadi Youssef: 0:55

I want to hear about Mark's New Year's and his holidays.

Kyrillos Mansour (KM): 1:01

I heard you were stuck in a. Yeah.

Mark Kilada: 1:06

Oh, like in Queensland. Yeah. No fun running in the rain, crazy winds going down buildings.

Kyrillos Mansour (KM): 1:18

That's nice. So we'll find out more about Mark's life next week. Every week he's opening up a little bit. Ferdi, anything fun for you to mention?

Fadi Youssef: 1:34

I just worked through it, man. I had nothing else to do. We didn't leave the house. We're on red alert.

Kyrillos Mansour (KM): 1:39

So.

Fadi Youssef: 1:39

Yeah, so I did nothing but work and stay home.

Kyrillos Mansour (KM): 1:44

That's very fun. Very fun.

Fadi Youssef: 1:47

All right, tell us about yours. Yours.

Kyrillos Mansour (KM): 1:52

Sorry?

Fadi Youssef: 1:53

Tell us about yours. Yours is a little bit more exciting.

Kyrillos Mansour (KM): 1:57

You know, me just on the private jet out to Monaco and just jumping on now we're just in Bali with a big group of people. We had a good time. We're just talking. My necklace got stolen when I was driving a motorbike, so that's fun. Yeah, but besides that, all good. We had a good time. Back to work. Now we have to change people's lives so they can get onto their private jets and go to Bali. That's what we're doing. Yeah, we're changing people's lives this year. One week at a time. Anyway, so start of the year before we'll start with a topic that to forecast what the rest of the year we think is going to look like. A lot of people probably on the fence, not sure what to do. Interest rates up, interest rates down, prices too high. Prices too low. Do I buy here? Do I buy there? What to do? So I think we're going to be looking at forecasting for this year. What's the property market going to look like as well as what's the correct way to be purchasing a property, especially if you're a new buyer? Start of the New Year's resolutions. People always like to at the start of the put goals and a lot of goals are around getting their finances and financial futures set up. And so we're going to help them. And one of the best ways is obviously through brokers and getting the pre approvals and all of this sorted at the start. So that's what we're going to talk about today. I guess the first step when we look to buy a property is we need finance. So I guess we'll start there with you guys. We've spoken about this so many times, but new year, so we'll start again. We'll talk about it again. What is the correct way and what is the best way for someone that, who wants to buy a property, especially if it's first time, they're not sure what is the correct way for them to go about it from a finance perspective, before they start looking at properties and before they come to me or whatnot, they come to you guys. What should they be doing? What is the first steps?

Fadi Youssef: 4:19

So pretty much obviously contact the broker, contact us and pretty much we try to have a sit down with the customer from the get go. So we might ask for a couple of documentation. We obviously send them through a credit guide, a list of documentation we're going to need, for example, pay slips if they've got any outstanding debt, any current home loans or current loans they've got at the moment as well. And we try to sit down off them and do a funding position and a borrowing capacity. So what the funding position basically means is, for example, are they looking to purchase a property with a deposit they've got at the moment. We put that down as a deposit that they're going to be using towards the purchase or it might be a guarantor loan. And it pretty much tells us what we need to fund that deal. And also very important, their borrowing capacity. We find out exactly with a number of lenders, what's their maximum borrowing capacity in regards to purchasing this property. And obviously we do other tests in regards to servicing wise to make sure that they're going to be looked after after they purchase the property as well. And I'll leave the rest up to mark anything that I've missed.

Mark Kilada: 5:23

I was just going to say as well, it's good to have like when we sit down with the client, we get a very clear understanding of exactly what they're looking at buying as well. So sometimes we have a client that comes and says I want to buy an investment property, residential. We get a residential pre approval and then they're like, oh, I found this really good commercial property. Can I use this pre approval for that. And the answer is no. The lending criteria for commercial versus residential is very different. The pre approval for a commercial doesn't apply to residential and vice versa. So need to have a clear understanding about what asset class you're looking at buying into, not just property itself. It's important to understand if you're buying commercial or residential. And then also it's important to understand if you're buying investment or owner occupied. Because again, the pre approval is based on the scenario we give the bank. So when we do a pre approval, we tell the bank this person is a first home buyer looking to buy a property that they're going to live in for the first twelve months. So we're going to buy it under the first home guarantee scheme or under the guarantor loan or whatever it is. If you want to change that. And now you're buying investment property interstate, you can't use the first home guarantee scheme. And that pre approval is based on that scenario we put together. So when we sit with the customer, we need a clear understanding of what type of property they're looking at buying and the purpose for the purchase, whether it's investment or own occupied. And like we said, residential commercial, so that we get the right pre approval that is valid for the purchase that they're looking at doing. A lot of properties go to auction and you need a pre approval that's valid for that particular purchase. So we can't really do that unless understanding what the customer is actually looking for. So with these discussions that we have for the customer, we'd understand that, that we can put them in the right position to purchase a property and stress free go from pre approval to formal approval in the fully off period and then settle with no dramas.

Fadi Youssef: 7:12

And just to add to that point, that Mark said, which is so important in regards to the auction, and I think in the know, Kane, you said that we're constantly repeating ourselves in regards to getting how important a pre approval is to gain before you go look at your property. But when it comes to know what we do, what mark and I do is we always tell the customer, you've got the pre approval now, but if you're looking to go to an auction on a Saturday, a Friday, whatever a day it may be, to try and get in contact with us five days prior, so we can try and run evaluation on that property and tell the bank that we've got the biding number and they're registered to bid at auction, the bank will do evaluation. And it also tell us if the security is suitable. And that's the most important part is that with the pre approval, if you buy an auction and Kane, you know this the most gone to auction bidding for customers. Once you win, that's a 10% deposit, non refundable since that day. So it's so important for customers to get in contact with us to go into auction of that pre approval to confirm that the security they're looking to purchase is suitable by the banks. And what I mean by that, it might be in a rural area, population area is not high enough, especially purchasing investment property interstate. We look at what other things meant. You guys look at from a perspective how far it's from the city, all that the make of the house. Sometimes the house is run down. If the bank, it's not suitable as well. Pest control and everything as well. So that must be checked. Because if you purchase the house at auction and the Pest control report comes back and there's a heap of problems, tough luck. You're still giving up that 10% deposit. So it's so important when it comes to that pre approval. Yes, it gives you the freedom. But when it comes to option, just to get in contact with your broker five days prior to the auction date.

Kyrillos Mansour (KM): 8:55

Yeah.

Mark Kilada: 8:59

I always tell my clients that buying your property, the finance side of things should be stress free. The most part of the process is finding the property, negotiating with the real estate agent and then finally having it accepted and then signing the contract after that. It should be stress free. If you're buying a property the right way, you've got a pre approval and you're buying a property that's suitable for that pre approval, it's not your concern. It's out. Look after your finance. So it's not something that you should be stressed about. Whether you're buying an auction, not an auction, it's not a stressful process. Getting the financing quite easy. We do it all the time, of course, so leave it to us, but do it the right way. Get pre approved. Buy a property that let your broker know before you sign a contract. If the property is for investment purposes and it's currently rented out, we need to know how much it's rented out for. If not, get a rental appraisal, because in the pre approval, how much the rental will be for the property, which is a guess because you don't know what you're buying. So there's a few things that we do with you before you sign as well. So definitely call the broker before you sign. Never sign before you have a pre approval. Have you solicitor look over the contract before you go to auction and building investment inspection before you go to auction so that there's no surprises.

Kyrillos Mansour (KM): 10:13

Yeah, 100%. I think everything you guys said is spot on. And I think the other thing is actually when we work with our clients, when anyone's looking to invest or build a portfolio, you need to have some sort of strategy and you have your end goal and where you want to get to, and then you have to work out how you're going to get there. And if you don't know actually how much you can spend, it's impossible to build a strategy. You're completely guessing. So I might be creating this fantasy strategy in my head. I'm going to buy this property for a million dollars or I'm going to buy another one for a million dollars and 800. When I go to my brokers and you tell me you're pre approved for 500, it's a completely different scenario. We have to completely change the strategy. So pre approval being step one is hugely important for your own security and safety and for your peace of mind, like you guys have said. But also I think, so you can build a strategy. And I've pulled out, I mentioned this data quite a few times, this statistic. I think 90% of all property investors never pass to investment properties. And the simple reason is because people have no idea what they're doing. They are just guessing. They're not getting their steps in properly, they're not lining up their ducks, they're just buying and they're buying in their own backyard, they're buying with their parents or where they live or whatnot, where someone told them it's a good spot. And then they buy the house. Then they go to the broker and say, hey, figure it out. And often you're getting overextended or you're having to put a larger deposit to meet the criteria or puts people into bad financial positions. All of this can really easily be avoided simply by calling the mortgage brokers, by calling Fetty and Mark first and saying, hey, I'm interested in buying a property. What can I borrow? Can you get me a pre approval? It's really simple. The boys will send you out a couple of documents and then they will take care of the rest. Like Mark said, that part should be super stress free. You shouldn't really have stress around finance when purchasing a property because the boys do it for you. It gets done in the background. They tell you how much you can borrow as long as you're within these limits, as long as you're telling them before you sign a contract, you show them the contract, they can check where the purchase is, make sure it's not a red flag. It's not in a zone that the banks won't give finance for all that stuff. They give you the thumbs up. You don't have to worry about that part. And that part is obviously quite important because that's how you're going to pay for the property. So you don't want to be stuck in a position where you can't actually pay even there are penalties. It just gets into a worse and worse situation. You're digging a big, big hole. So I think definitely, number one, everything you guys said makes sense. 100% pre approval. It's a no brainer. Sorry.

Fadi Youssef: 13:15

I do love what you said, min, in regards to the structure and strategy, that's probably the most important part before you even start this process. And you said to contact your mortgage broker like Mark and I have so many customers that have actually created trust. So you also have to have the right accountant to go see, because smart accounts will allow you to save tax and be able to purchase on the trust and different sort of trust as well. And also, like you said, people might think they have want to buy a property for a million dollars, they're pre approved for 500 grand. But in any scenario, even if they can get a pre approved up to a million dollars, speaking to a great mortgage broker, to a great accountant, to a great buyer's agent, that can turn into two properties. Instead of just purchasing the one property at a very high loan amount where you're negative, getting a bit too much to be affecting your borrowing capacity as well. We're going to be purchasing two properties that allows you to purchase that third one. Like you said, the statistics I think you're saying, I think not too many people get over the two property. Mark, is that right?

Kyrillos Mansour (KM): 14:12

Yeah, 90%.

Fadi Youssef: 14:14

That comes down to what you said at the beginning, strategy and structure, and that's how important it is.

Kyrillos Mansour (KM): 14:19

Yeah, 100%.

Mark Kilada: 14:23

Sorry, one more thing. I think one of the key reasons why only 10% of property investors get more than two is because real estate building a big portfolio is a game of finance. If you can get the finance, you'll keep buying anyone that it's not because people don't want to buy another property. That's not why people don't have more than two investors, because they can't get the funding from the bank. So before buying even the first one, having a long term strategy, saying, I want to build that big portfolio here's my income, here's my debts. Is there a way that I can structure this better than buying everything just in my personal name and understanding the pros and cons, it's not roses and butterflies. If you buy everything in a trust and company, it definitely does have its place and definitely can extend your borrowing. But it may mean that you buy for a lower amount now, but just that you don't get capped out as early as you would if everything was in your personal name. So it's important to understand the pros and cons because there are expenses involved when you open and run a trust or company as well, and land tax implications and capital gains tax implications, and the accountant needs to get involved. So maybe a bit more time consuming, a bit more expensive, but in the long run it may fit your profile better. So it's important to understand, before you buy the first one, when to buy it. Because when people buy the first one in their personal name and reach a stage where they can't move anymore, in order to keep moving, they may need to restructure. What that means is pay the stamp duty on an existing property that they currently own in order to change the current owner from the personal name to an SPV, whether it's a trusted company or whatever it is. And why would you pay tax like stamp duty two times? People hate paying it once, so buy it right the first time and you save yourself a lot of heartache in the long run.

Fadi Youssef: 16:11

It also comes down to that conversation. Mark and KM, when you came to be becoming a buyer's agency, I didn't even know what rentvesting was. So now that's a big conversation that we're having with a lot of our customers is they're like, okay, before be like, oh, we want to purchase this occupied property and we do want to purchase investment properties later on. But now the conversation is people are looking to get that portfolio started, purchase the properties interstate, and in the future have their own occupied property. But in the past and historically, people have gone all out on own occupied property and left very minimal for their investment properties all around, where you can have both of best worlds if you've got the right structure and strategy. And like Mark said, if it costs you a little bit more through fees and stuff like that with accountants or financial planners, it's definitely worth over the long run.

Kyrillos Mansour (KM): 16:59

Yeah, and I think the other reason for that statistic is a lack of planning, not only in terms of your structure and whatnot, but also in terms of forecasting cash flow, equity and whatnot. So to get a loan, you need two things. You need a deposit, whether it's cash or equity, and then you need to be able to service that loan. So through your wage, your income and through rent. And so when we're not taking this into account and people buying in their own backyard or in just nearby locations without doing any research and just saying, hey, well, this is a good spot, great, you made some good equity, but then often they can't actually service the loan if they want to use that equity and so they get stuck. And actually speaking to one of my clients the other day that we purchased for a few years ago in Sydney and when we were starting to work together, he insisted on purchasing in Sydney and we got a great deal and he's made really good growth. But now that especially with rates being higher, he's really feeling the pinch on his mortgage payments. And he said to me, cam, I wish I just listened to you and purchased interstate because I can afford it and I can hold it, but it's going to be very hard for me to buy another one right now, especially with rates being high. And that's the thing, is that we will look at the full picture and you have to look at the full picture. And really it's very important to know where you want to go. If you jump into your car and you just start driving, you're just going to drive aimlessly. You're just wasting petrol. You don't know what you're doing. You're wasting, literally wasting money because you're not going anywhere, you're just spending petrol. But if you know where you're going, then you can find the best route to get there and be the most efficient and plan how you're going to get there. And that's exactly what you got to do at the start. So first is you speak to your brokers, get that number and then figure out your strategy and work out where you want to get to. And if it's only just one property, that's cool, as long as you know what you want to do. Not everyone needs to be building huge portfolios, but obviously if you're listening to our show, more likely than not you are looking to become financially free, which means planning and strategy and being very selective and specific with what you are doing and not just picking random properties in random places and just saying, oh, I heard Perth is good, I'll buy in Perth because there's lots of bad suburbs in Perth and likewise lots of good suburbs. Same with Adelaide, Brisbane, Sydney. It doesn't really matter, needs to be really specific and laser focused with what you're doing in this process.

Mark Kilada: 19:54

I think also, one, sorry, I know we keep talking about it, but I think another, just a little of why people don't get to that 10% is that a lot of the time when we talk clients, they're ultra rate sensitive. When you're trying to depend on certain credit policies to extend your borrowing passage because you bought the right way and you bought companies and whatever. Not all banks provide, and it may be lenders that provide that, and their rate may be 0.2% or 0.3% higher. They may require deposit, not attempt deposit, when you get further and further and further down. So people that are flexible are the ones that go further. People that are. I want the absolute best rate on the market, and I'm not expecting anything besides that will stop at one or two, because they are depending on the credit policies of that one bank that is the cheapest in the market, and you're really pigeonholing yourself. So as you get further and further down, more and more flexibility is required in order to maneuver through the bank's credit policies.

Kyrillos Mansour (KM): 20:59

100%. Because we've been going for about 20 minutes now, I might just shift over to the next step, the next part of our conversation and forecasting for this year, what we think is going to happen collectively. I might just touch on what happened in 2023. Quick overview so last year we heard. I don't know if you guys. I know what you guys heard, but I don't know if you heard it as much as me, but there's a lot of doom and gloom, people calling me, rates are going up, the world's coming to an end, can't buy property and everything's going to crash. Yada yada. Not sure, but I would guess you guys had similar conversations. But if we look at actually.

Mark Kilada: 21:44

The.

Kyrillos Mansour (KM): 21:45

Final numbers for 23, only three capital cities had negative years. In terms of which one, do you want to guess? Negative shouldn't be hard.

Fadi Youssef: 22:02

Want to go Perth?

Kyrillos Mansour (KM): 22:05

No. Perf had the highest growth in 2023. That's why we're buying there. Teddy, think of like, the three small capital cities.

Fadi Youssef: 22:25

Tasmania. Is that one?

Kyrillos Mansour (KM): 22:27

Yes. Hobart had -3% over the year.

Mark Kilada: 22:32

Canberra.

Kyrillos Mansour (KM): 22:33

Canberra, yeah.-0.3 and then there's one more in between them. If you think north of Australia, I.

Fadi Youssef: 22:43

Was the worst in geography already doing that.

Kyrillos Mansour (KM): 22:46

The other city we forget is part of Australia, Darwin. So Darwin had a minus one and a half percent growth over the year. But then we look at the rest of Australia. So Melbourne's been struggling a little bit. Still had a 3% over the year, which is. It is what it is. It's okay. But then Adelaide, Sydney, Brisbane, Perth, sorry, 8%, 10%. 10% and 14 or 13 and a half percent in Perth. So these capital cities have had very good growth rates, actually better than usual in terms of the typical average growth rates in Australia. And that was in a year of interest rates going up and uncertainty around rates and uncertainty around recessions and whatnot, and all the doom and gloom, and these areas went up by 10%. So if you did not purchase because you were sitting around waiting and thinking, that market is going to crash, and either I'm going to get in when it crashes, or you're just scared you've lost 10%. And let's put that into real numbers, because it is a real number. If your borrowing power was $500,000 and you could have bought a $500,000 property, you lost $50,000 last year by doing nothing. Pretty much. And not just 50 grand, it's $50,000. That's also compounding. So you would be owning an asset of 550, and if you were to get the same growth this year, it would be 55,000, which is so over two years, it's 110 grand or 105 grand that you potentially have lost on a $500,000 purchase, which is. This is a real loss if you do not take action. Sitting on the sidelines is not a strategy. You will not get. The people sometimes want to time the market and hit the bottom. It is impossible because you'll never know the bottom till after the fact. And so many people just waiting, scared, scared, scared. I have someone else who messaged me today, sorry, two days ago, and said, can we have a chat? And I was looking at. I said, oh, I've messaged this person before, and it's literally one year ago that that person messaged me and said, let's chat. If it didn't take action because they were waiting and it's been a year, and they said, let's chat, it's been a year, we should have bought in that year. That person would have made 50, 60, $70,000 based off the budget that they had. So I think that's very important to know, and I think it's important to look at these numbers for 2023, considering all the problems and the doom and gloom that we had in the media and whatnot. And one of the reasons for the growth is lack of supply in really tight areas. The areas that we saw had having the biggest negative impact were the high, high net worth locations, again. So three, four, $5 million plus locations. But below that, especially the interstate market. Perth with the highest growth, 14% is huge. 14% is massive. It's a massive growth rate as well as 10% across the other cities. These are areas that have affordable investments with very tight markets. Now, again, not all of Perth has grown, all of Brisbane and Adelaide. There are some suburbs that have done better than others. And it's very important to be picky. But these locations also have great yields, which is helping with the cash flow and serviceability when it comes to building that portfolio. So what I think we'll see this year is we're going to see very much the same. A lack of supply. Rates may hold high and then come down towards end of year. Maybe we might even get one more rate rise. Not sure, but definitely as we move away from, and we move on from the COVID era and people back to work and life is moving on and we're trying to fix this inflation problem and people are moving on with their lives. More travel, more spending, whatnot, and more work and all these things happening, immigration, migration, we're going to see prices continue to increase and specific locations will increase and do better than others. And I think it's very important that if you're interested in actually taking care of your financial future, to speak to the boys, get a loan, get a pre approval, come to us. We'll run a full data analysis to find the best locations for your particular strategy and budget and then execute so that you are not losing money by doing nothing. It is a real thing that people lose money by not doing anything. And it's real money that's been lost. I think this year we'll see the same thing. We're going to hear a lot of doom and gloom in the news, but actually behind the scenes you're going to see property prices increasing because there's a huge lack of supply across the market. And from a rental market perspective, it's not getting any better. Very hot, rents are getting higher and the demand is much higher and the supply is almost zero. So that's my forecast. I don't know if you boys have anything different to add to that.

Mark Kilada: 28:14

I think it's 4000 people, 24,000 people need a roof over their heads. Some of them. A lot of people, when you tell them that, they say, okay, well, these are people that can't qualify for loans because they're not prs or Aussie citizens. We have many people coming from overseas. I had a client that sold a bunch of properties in China and came and bought in cash in Sydney. And it's a story that keeps coming and becoming more and more prominent. So migration is a real stress on the rental market, as km saying, and will continue to squeeze the market upwards, increasing the yields or increasing, sorry, the rental income. The yields may stay the same because the property prices will be increasing accordingly. But also, even like the current building approvals are very low and they definitely will not meet the demand that migration is bringing in. So if the houses aren't increasing, which is what km saying with the lack of supply, but demand is increasing with migration coming in, then that excess demand is going to further push up the prices, which is basic economics. So yeah, definitely expecting prices to continue increasing. Definitely expect buyer sentiment, I think, to increase as well. Like people, as soon as they see several months of the RBA not increasing, more and more people become more and more confident that we have hit the peak, which for some reason is something that people are waiting for. They're waiting for a lot of other people to become more comfortable, to jump in the market to further increase demand, which also makes no sense. But I think by seeing a few months where the RBA goes by, buyer sentiment will increase as well, further worsening the market for buyers because a bunch of competition will come their way.

Fadi Youssef: 30:18

Yeah, I couldn't tell you, man. Last year was a bit of a journey. Like you said, there's a lot of gloom in the market. Rates were going up, customers freaking out. I think all of us were freaking out, the rates going up. But it's funny, we had a lot of customers come through. And one of my customers, a very proactive one, I even asked him, he was just purchasing property through super personal, name, everything. I'm like, you're not worried about the rates? Because I am, but I'm purchasing as much as I can now. Because when the rates were to go down, his repayments are only going to go down, his property is only going to go up, and it's always going to come back to what we always say. If you're able to afford to buy a property in this market or any market, go for it, because it's always the best time, because you're able to afford right now. Because maybe, for example, the best scenario was Covid, when the rate was so low, a lot of people actually got into the market and they took advantage and purchased a proper investment. Property owner occupied. But if they were to purchase the exact same property today they're not going to be able to in regards to servicing and borrowing as well. So it's always going to come back to if you can afford to get into the market, then it's always going to be the right time because it's a 30 year investment, it's a 30 year loan term as well.

Mark Kilada: 31:31

And I think like buying a property nowadays when the rates are maybe as high as they will be over your 30 year loan term, who knows? But given that, that's quite likely, it's actually the safest time to buy property when you're going to be paying the maximum repayments. Because when the repayments go down, you will feel that relief. The rent will continue going up. So eventually you'll become neutrally geared and even positively geared, hopefully at one stage. So if you can afford to get into the market now, it's definitely a safer time to buy now than in Covid when the rates were ones and twos.

Fadi Youssef: 32:06

Yeah. That customer even said to me, I'm worried this is high interest rates for these loans, and he's able to cover and manage it as well. And he goes, man, it's all about keeping my head above water for now. He goes, he always goes through this historic kind of up and down, like we always know if the market and the race or anything like that. And he goes, as long as I keep my head above waters, I keep my loan repayments up. The moment the rates come down, he's actually laughing because he's able to service the loan at that high interest rate. Like you're saying, mark, he's able to make those repayments. Now just imagine when those rates come down and those repayments come down, his borrowing capacity is also going to improve as well because his repayments are lowering as well, and he's going to be able to borrow for something else. So I think all of us have repeated on this podcast a number of times, the best time to enter the market is when you can enter the market, you're able to borrow to enter the market. And that's one thing I've learned. Like I said, since I've met km, I didn't really know about rent vesting or long term investments and all that, but it's just been proven time and time and again. The best time to enter the market is when you're able to, and if you're not able to, Mark and I can walk you through pretty much hold your hand month to month to make sure you're saving, getting to our targets. So we get in a position where we actually purchase that property, whether it's in six months, three months, a year, we're still going to be around for that.

Mark Kilada: 33:28

I was just going to say, I always find it funny when customers say, I'm waiting for the market to dip, I'm waiting for point of the market. What's funny is that when it's the lowest point of the market, you don't know it's the lowest point until the market goes up. And then a few months later it's reported on the news. By that stage, a whole bunch of new buyers are now in the market pushing up the price. And if historically australian property prices teach us anything, is that when australian property bounces back, it doesn't bounce back slowly, it's exponential growth. After any downturn, we saw that. I think the lowest point came, correct me if I'm wrong, was Feb last. And the only time we knew it was Feb last year was maybe in April, May, June, July, after the market had gone up. A lot of people, when it starts going up, people then said, okay, no, it's not a material increase. It's just like there's been just some random factors that have contributed. So, no, expecting it to go down. And then you wait a few more months and realize, oh ****, I actually missed, it was Feb, and now it's August, and now I've missed the mark again. So, yeah, there's definitely a bunch of people that wait on the sidelines, not making capital growth, not making their decisions, and then there's people that take action and experience growth that really does change their life, like, really does set them up for early retirement, allowing them to travel more, giving them flexibility to spend more time with their families, whatever their goal is, gives them that flexibility.

Kyrillos Mansour (KM): 34:55

Yeah, I think as well. Just last point is just always remembering. Real estate is a long term game. And to be honest, the short term fluctuations are irrelevant. And in five to ten or 15 years, people won't even remember what happened in those short term fluctuations. So just trying to wait and wait and wait. I keep saying it's money loss by doing nothing, because it really is. And I think a really easy example would be to tell someone, hey, if you buy something now and then in ten years it's going to be worth whatever, double, let's call it double. So if you bought something today for 500 and in ten years it's going to be worth a million, would you buy it? Everyone would say yes, right. But if we said, you're going to buy this for 500, and then over the next twelve months, it might be 510 520, then go down to 515 and 525 520 even you might be. I'm not sure, really. I'm not too sure. But if we got rid of that and just told you, hey, ten years time is going to be worth a million, you're not really going to care about what's happening in between. And so it's just remembering long term, and ten years is not long. It's actually considered a short term investment in real estate if you're to exit after ten years. But the idea is that it's long term and you're not buying this to make money tomorrow. It's not the shares, it's not liquid. It is a long term game. And so if you are looking for long term, you're not worried about timing. It's all about time in the market and getting the compound growth and the compound interest. And really, like Mark said, changing your life. We do it every single day for our clients. We are making people financially free for the rest of their lives, every single day. I don't know why we're not the busiest people in the world, because literally we're just making people money all the time and in the right location so that you're outperforming the markets. But this year that's what we're going to see, I think as well. As soon as we see that first rate drop could be the smallest drop, just a zero point 25% drop, consumer sentiment is going to go through the roof and you're going to have an influx of demand, and there's already a lack of supply, and that is going to see, what's the word? There's going to be blood in the water because there's going to be people fighting. There's going to be people fighting for properties. And that's where you see people buy incorrect properties. And we always see this when sentiment is super high, people are rushing and making bad decisions and buying anything, and then they get a quick wave of growth or whatnot. And then it's when things start to go slower and back to normal and the supply demand is a bit more balanced, is that people who bought in the wrong markets in the wrong spots, they tend to lose out long term compared to the people who did it properly. So I think that's my last two cent. Is that you guys have anything else to add or should we wrap up?

Fadi Youssef: 38:16

The sooner you get into the market, the sooner you can leverage of that current property to purchase your next one. It's all about like, it's not just the one property you're going for. Or maybe it is. It just depends on, again, your strategy and structure. But if you're looking to build a portfolio loan or get into the investment market and start purchasing properties, the sooner you get in, the sooner you can leverage off that property as well. It's all about growing leverage in this game in regards to purchasing your next one, your next one, next one, next one. It's all about equity. People having access to the equity, leverage off that equity and purchase the next property. It really comes down again to the strategy and structure. But I agree with everything that you both were saying.

Kyrillos Mansour (KM): 38:52

Yeah, beautiful. Well, let's wrap it up there about 40 minutes. So thank you boys for joining, as always, our first episode of 2024 and hopefully to at least, let's call it like 40 more episodes for the year. Let's not say 51 more episodes because we'll be lying to ourselves. But if.

Fadi Youssef: 39:19

Sorry, anything less than 50 is on Mark.

Kyrillos Mansour (KM): 39:22

That's true. So any complaints or any issues regarding the podcast, as you know, please email mark@palons.com au anyone that wants to make money, email Ferdi at thanks, boys. And if anyone actually does have any topics, because we're always trying to find topics that are relatable and what people want to hear, email any of us, message us on Instagram, Facebook, whatever, and we'll get it on and we'll go from there. Thank you guys, as always, and we'll talk soon.