Property Hub - Investment Insights & Inspiration - Get Invested: Housing values to triple? How history informs our property future with Simon Pressley

Episode Date: October 10, 2025

Is population growth really driving property prices? Tune in for Simon Pressley’s timeless insights from 80 years of Australian property cycles. Do interest rates really move the market, or is that another investor myth? In this Get Invested rewind, host Bushy Martin reopens the Rolled-Gold Property Hub Vault to revisit one of the most popular and timeless interviews from over a thousand episodes. This week, Bushy is joined by Simon Pressley — Australia’s leading property analyst, Real Estate Institute of Australia Hall of Fame inductee, and Director of Propertyology — to unpack more than 80 years of Australian property history and reveal the principles that still hold true today. Simon, who Bushy calls the “Warren Buffett of Australian property,” dives deep into the real drivers of long-term performance, helping investors cut through the noise of interest rates, migration headlines, and short-term hype. Together, they explore: Which so-called “world-ending” events actually shifted property markets — and which just made headlines How rent controls have affected supply (and why history might be repeating itself) The property fundamentals that haven’t changed in eight decades — and what’s likely to happen next If you want to build wealth by design and invest with clarity — not clickbait — this classic conversation will sharpen your understanding of what really moves Australian property. 🎧 Listen now and future-proof your property strategy. Find your Freedom Formula Success in property starts with your 'why', and then the 'what' and 'how'. Let me, Bushy Martin, lead you through it! Sign up for my Freedom Formula program. The first session is absolutely free, and it only takes around an hour! Find out more https://bushymartin.com.au/freedom-formula-course Subscribe to Property Hub for free now on your favourite podcast player. Take the next step - connect, engage and get more insights with the Property Hub community at linktr.ee/propertyhubau Book a personal solutions session with Bushy to go deeper on your specific property needs or challenges Continue the discussion with likeminded investors and experts on The Property Hub Collective Facebook group Get a copy of Bushy's book, Get Invested, for FREE, and find out what it takes for you to invest in living more, working less Get all Property Hub info here linktr.ee/propertyhubau About Get Invested, a Property Hub show Get Invested is the leading weekly podcast for Australians who want to learn how to unlock their full ‘self, health and wealth’ potential. Hosted by Bushy Martin, an award winning property investor, founder, author and media commentator who is recognised as one of Australia’s most trusted experts in property, investment and lifestyle, Get Invested reveals the secrets of the high performers who invest for success in every aspect of their lives and the world around them. Subscribe now on Apple Podcasts, Spotify and YouTube to get every Get Invested episode each week for free. For business enquiries, email [e-mail] omnystudio.com/listener for privacy information.

how many times value did the standard house increase by so the 20 years ending 1960 so the 40s and 50s um capital city house prices increased 3.6 times the next 20 years so the 60s and 70s house prices increased sixfold the next next period of um of time so we're looking at the The 80s and the 90s, they increased 4.4 times. And the most recent 20-year block, they increased 3.7 times. Wrap all that up. And what that says, 80 years of evidence is a pretty good chance, Bushy, no matter where it is in Australia, you buy a property today and 80 years of evidence will show that it'll

be worth at least three times that, maybe four, maybe five times that over the next 20 years. Welcome to Get Invested on the Property Hub podcast channel, the leading weekly show for Australians who want to learn how to unlock their full self, health and wealth potential. I'm your host, Bushy Martin, and each week I go deep with the best investors, experts, leaders and founders to find out what it takes to break free from the grind, discover freedom and to live by design. Subscribe now and join me and get invested in the life that you really want. Let's get started.

Hi, Frodo Fighters. Does population growth really drive property prices, or is that just pub talk? And do interest rates predict price moves, or is that just another red herring? Well, today you're going to find out. Following on from our recent Getting Invested 400 Show celebrations, where I revealed that I'll be taking some time to eat my own recipe for a much-needed self-health wealth reset sabbatical in order to reprogram some of my old, entrenched subconscious stories that are having a bit of an impact on my health so that I can recharge the batteries and resharpen my brain and my body.

Well, today we start by reopening the Roll Gold Property Hub vault. In between some new interviews and a lot of bush banter, in order to reshare and reinforce the most popular evergreen gems that were recorded over the last eight years from amongst a thousand interviews or more with industry-leading property and proven professionals. Now, this is the stuff that doesn't date because underlying property principles and fundamentals just don't change.

Only the headlines do. So this week, we're kicking off a big fan favourite. When Simon Presley shared his history of property learnings and timeless property principles, Evans, over the last 80 years, way back on episode 580, of Realty Talk. Now, Simon is Australia's number one thought-leading property analyst. He's a Real Estate Industry of Australia Hall of Fame inductee, and he's the Director of Propertyology, the data-driven borderless buyers agency that's been mapping the markets long ways

for decades. And he's the man that I affectionately call the Warren Buffett of Australian property. And he's a fierce Brisbane Lions supporter, so go the Lions, Simon. So on this rewind, Simon and I zoom out across 80 years of Australian property to answer all of your questions that actually matter, including which world-ending shocks actually changed property and which just changed the headlines, what did rent controls do to supply, and why are we repeating history in this regard, and most important, what hasn't changed at all in relation to property values, rents, supply, and affordability gates. as well as what's likely to happen next so if you crave timeless over trendy and this one's your compass so let's get invested and roll the tape with simon presley on what 80 years of property has taught us now the german philosopher george hegel famously said that the only thing we learn from history is that we learn nothing from history and nowhere is this more true than the wonderful world of property, where everyone mistakenly thinks that current

property conditions are always unique and different from the past. But if you've been involved in property for as long as today's special guest and I have, you'll know that history generally rhymes. Today, we've got the opportunity to put this right and to learn what property history lessons have taught us. So welcome back to the Property Hub's Realty Talk Show, Simon. G'day Bushy, I'm really looking forward to this chat. It'll be quite nostalgic, I think, some of the things we're going to be talking about today. Absolutely. I'm probably going to reveal my age through our discussion, mate,

but there's a lot of having a look at some of the stuff that you were suggesting we're going to talk about today. There was a lot of very fond memories that were emerging from that, mate. So I know everyone that's tuning in is going to get a lot of that out of the discussion. But just to sort of kick things off, Simon, can we start by getting you to paint us a picture of what Australia looked like way back in 1943

compared to how it looks now, starting with population and some other metrics? Yeah, so 1943, for those who aren't great with their history, we're in the back half of World War II. Of course, World War II finished in 1945. Australia had an enormous rental crisis. We sort of, before the war, we already had a dire shortage of rental accommodation. And then when Australia chose to participate in the World War, Not that we were given much choice, but we literally could not build any more homes, zero homes, because our skilled workforce was off fighting for our national security.

So the rental crisis in 1943 was very much there and about to get worse for decades to come, as we'll go through. And national population back in 1943 was just 7.2 million. It's 26.3 million today. You'll find this interesting. Today, there are about 1.1 million Australians who are 80 years or older. So they were born at the start of this 1943 period that we're talking. Life expectancy back then, it was expected that, you know, you'll live to roughly age 65.

Of course, it was quite normal for people to die at 50. I mean, you and I would be gone by now, mate. We'd be dead and buried. Absolutely. Never to be seen. But, you know, today, the age expectancy is about 85. um in in 2023 uh the number the total population in 1943 of 7.2 million australia today has 7.2 million people that are aged 55 and older

crazy stuff yeah really interesting stuff mate uh sort of uh diving onto the population piece that you mentioned already yeah what impact has population growth had on property values over that extensive period of time then? Not a lot, of course. I mean, population growth does influence property prices, but lots of things influence property prices. There never has been, whether it's 1943, 1973 or 2023, there never has been a direct link between property price growth

and population growth. This graphic here looks at from 1970 to 2023. the green columns there is the combined capital city annual change in median house prices and the blue wavy line going up horizontally across the page there is the population growth rate for each of the last 53 years so you can see that Australia has always been subject to high population growth rates but it's not like we can say a pattern where the years that we had the highest population growth produced the highest property price growth. That's never been the case, even though the banks, the economists,

the world always preach population growth. It's bollocks. This graphic shows it's bollocks. And the recent reminder of that, the two intense years of COVID, Australia actually had zero population growth. We've got to go way back to World War I, Bushy. So we're talking more than 100 years ago that the population growth rate in this country was that low,

but yet we had our second biggest property boom without any population growth rate. So, yeah, it's never been a big influencing factor. For those of you who are curious, the start of this period, 1943, a brand-new home, you would have paid between $2,000 and $3,000, depending on which part of Australia you're living in, but that's what you would have paid.

And you spend that on the front door now, mate. So it's a pretty interesting comparison when we look back at that. Now, how have the major towns and cities changed over time? And I'd love you to share some examples of how that looks, if you could, please. Yeah, I mean, well, I guess the pecking order is one thing that people might find interesting.

So back in 1943, Gold Coast was nothing then like we know it today. In 1943, Gold Coast didn't even technically exist. There was a series of very tiny villages about an hour south of brisbane um nothing that you could really call a town um but you know now it's australia's six largest city and a very densely populated one at that um you know one of one of the top three fastest growing regions in all of australia um so that's the gold coast canberra um back in 1943 was even though it's our national capital canberra was only a 16th largest city in 1943 at their seventh largest now um perth um you know back in in the 1940s um was was big in terms of it

was a capital city but adelaide was a significantly bigger city than perth back then um about 47 bigger in terms of population size um and jobs are different um you know back in the 19 you know Late 1940s, 1950s, 21% of Australia's workforce was in manufacturing, 9% was in agriculture. Today, about 14% of our workforce is in manufacturing and only 2% is in agriculture. Of course, the services sector has taken up a lot from the manual labour days.

Big shift, which would have an impact on where people live and how they live. You've touched on this already around the population piece, but I'd love for you to take us through some examples of how population growth looks versus housing values with some specific examples that we talked about previously around Launceston and Townsville in particular, if you could. Yeah, absolutely.

I could have picked any one of the 400 towns and cities across Australia, but we always talk about the big cities, don't we? Brisbane, Sydney, Melbourne. So I've chosen Tasmania as a southern-based city. Some people won't be aware, but Tasmania... So Launceston is Australia's fourth-oldest city. It actually was founded well before most of our capital cities. And today it's still a very sizeable, 34th-largest city.

But, you know, its population has grown. It's grown everywhere. It's grown at different rates. The population growth has grown at different rates in different, you know, townships across the country. But population's grown, cost of housing's grown. In Launceston, I would have paid about $5,000 for a standard house in Launceston in 1950. Today, you really won't get much change out of $650,000, to be honest.

I can say that I've got a stake in Launceston myself. Population, at the turn of the century, Launceston's population was about 19,000. Today, it's about 90,000. So it's grown a lot, and look, I'm biased, but one of the most special parts of the world, I think. um townsville in the far north um of australia it evolves incredibly um you know the one of the most diverse economies in all of australia today um but its roots um you know it's it's our front line for our national defense townsville is australia's military capital um but it's great for manufacturing and precious metals and tourism and education health its population uh it was

about 10 000 people um at the turn of the century you know today it's 200 000 people one of our biggest cities one of our top 20 uh biggest cities but you know adversity we'll touch a little bit on that but you know townsville over the last 80 years it's had cyclones it's been involved in in wars it's had recessions it's had a gfc it's had a health pandemic um the cost of a house has gone from a thousand bucks to you know 450 odd thousand dollars so over the last 80 years so But everything grows no matter what you throw at it, housing, shelter at the end of the day. Spot on, Matt.

Some really good examples there. Now, I'd love you to talk us through some of the biggest property-related changes that you've just started to touch on that have occurred since the 1940s, starting with migration and also how our neighbourhoods have changed over the years. This is where the nostalgia is really going to kick in. Oh, absolutely. And you and I, not many of our listeners will be old enough

to remember this stuff, mate, but in our 50s, we can remember this. So, look, coming out of the war, Australia, yes, we were attacked. Darwin was wiped out. Other parts of Australia were bombed. But largely we got through World War II unscathed. And we were lucky. We dodged a bullet, excuse the pun, but we recognised that we might not be so lucky if there was a Third World War.

And we must populate. Our Prime Minister back then, populate or perish was one of several famous sayings that he used. And we targeted the Poms. Australia is a convict country at the end of the day, and it took us a long time. They ruled us for a long period of time. So there was this term some people might have heard of,

10-pound POM. If you were a POM, you literally could pay 10,000, so 10 pounds, and I think it took you about 16 weeks or something like that. The only way to get here was by ship. And you could come to Australia for a new life. And we just put so much marketing into the UK to say, the great australian dream and so we had the 10 pound poms from 1945 to 1972 a million poms

relocated to australia in the back half that period of time it wasn't just england like you know there's a lot of culture today um italy and greece and lots of other parts of europe that sort of come after the 10 pound poms so that that was a big change um their population grew a lot from that but we become a lot more culturally diverse the things we enjoy today um is largely a legacy of how we responded to world war ii i just love the way our neighborhoods have changed well we've got a graphic here this just takes me back to not you know being at my grandparents place you know as a 10 year old playing cricket in the backyard which was what you did for entertainment back then you weren't stuck on a device like our kids are today but this backyard is almost

That's exactly, carbon copy, my grandparents said that. People are wondering, what's that Bessa Brick, you know, ugly thing there in the, that's what they called an insinkerator. Now, what that was, you didn't have recycle bins like we've got these days that the council pick up. And your rubbish bin was the old galvanised tin can thing, which you only fit so much in. So most backyards had the insinkerator.

So you would burn your own rubbish and smoke would go everywhere. Too bad if you're a hay fever or asthma sufferer, but that was in pretty much every backyard. and the old-fashioned Hill's Hoist. Well, that come out of, you know, about 1953-ish. Probably you and I used to swing on it and our parents would be whacking us over the head with the same thing, you're going to break it.

But that's where we hung our clothes on. The Victor Lawnmower, that come out of the 1950s as well. Not so pleasant stuff. We had a major problem trying to build enough homes for decades, really. and one reason was we can't we haven't got enough timber to build to build the home skilled labor was the biggest constraint but materials was also a serious consideration so we developed this this fabricated product called asbestos so from we're laughing at now because it causes cancer

it's outlawed now but from 1945 to eventually being outlawed in 1985 pretty much any home in australia that was building that 40 year period of time either all of the home or most of the home was with asbestos um home sewerage it sort of started to come in at the turn of you know early 1900s but it wasn't until 1950 which is not that long ago mate until 1950 that sewerage was a regulated requirement that he put in new homes um so there were still plenty of homes in the late 60s that didn't have home sewerage it was still going to the old what they called the traditional thunderbox well i i was sharing with you uh in the green room uh when i yeah grew up on the booming move um rural metropolis of groke in western victoria we had a drop pit uh toilet

uh simon i remember going out there on horrible old nights and dropping the torch down the down pit uh to see my uh my grandfather come out with a magnet and a string to try and hook it out of the sludge has a beam of light that's shown up from the slime below. Well, as we said earlier, mate, you know, there's more than a million people that are still alive today that, you know, live through that. So things change quickly.

It wasn't until around about the 60s that there was any form of commerce in the suburbs. So certainly any white-collar service, any bank, the accountant, the solicitor, 100% of them were in the CBD. The only form of commerce that existed in the suburbs was the old-fashioned corner shop. So this was before Coles and Woolworths

become the big conglomerates that they are today. But groceries, and we're talking... So in the 50s, maybe every second house had a car, which means that the other houses didn't have a car. You go around a lot by pushbike, and there's not too many groceries you can carry on your back while you're, you know, travelling on your bike, or walk. So most of us bought our groceries, the whole shop,

not just a bit of milk and bread, from, you know, walking 500 metres or wherever it was to the corner shop. Now, that existed through to the 70s, really. But as I said, all business, you went into town for that. In the early 1970s is when supermarkets progressively started to be developed in suburbia. I'm a 1970s baby. So it was about that time that the Westfields of the world started to pop up.

But they're a lot smaller scale than now. But that was the start of going to one venue for multiple different retail shops. And then that sort of progressively from there, we would start to see a real estate agent pop up in the suburbs and that sort of stuff. But that's not that long ago. Also around the 70s, maybe a little bit earlier, the six-pack block of units. Yep. they started to pop up and we have a look at them now in places like sydney and melbourne they'll go up 100 stories but um you know two or three stories we started to see those in that

period of time the rise of the middle class that happened um in the 60s and 70s we're talking you know we're measuring uh miserable at the moment the inflation being until the seven percent um we had decades mate was in double digit um territory but of course whilst the cost of Everything went up. The wages, you know, went up a heck of a lot as well. What we call Friday Town Planning. So, again, from about the 1970s onwards, the town planners recognised that we want the cities

to become more densely populated, so progressively the apartment blocks got higher, but we want more business there. We want to get everyone to come into town. The first casino that Australia had was in Hobart in 1973. Yep. Things like poker machines are everywhere these days. Fast food, that really took off.

It started to come in in the 70s. The Golden Archers, Maccas, come to Australia in the early 70s, but they weren't in every sort of second corner until the 80s. KFC, Maccas, Hungry Jacks. We used to have childrens freely roaming the street and we were very comfortable as parents that they were safe. Not these days. Cubby houses were everywhere, tree swing.

Two household incomes. they become more increasingly common in the 90s. And now a lot of households have two incomes. The regional expansion, that probably really started to take off in the mid-90s. And not saying that every regional town did it, but it depends on their local assets, whether it's natural resources or farming

or food production, whatever. Infrastructure, the 90s, we invested a heck of a lot in the airport infrastructure. And air travel started to increase a lot. The 1990s is when the really, really high-rise apartment stuff really started to kick in. And, of course, the digital platforms in real estate, realestate.com domain, it was the very early 2000s.

We take it for granted these days, but this time 20 years ago, they sort of only just started. Property data, CoreLogic Australia didn't exist until about 11 years ago. That's right. I remember back in the 90s combing through the newspapers with a highlighter and then getting out the street directory to try and weave a path to look at all the properties

all day Saturday. Yes. Just about every weekend we'd spend in the car driving around looking at properties. It's a far cry from scrolling with your finger on the phone these days, Simon. Yeah. Yes, a heck of a lot of change.

But when you go through it like we have in the last five minutes, We've packed a lot in in the last 80 years, haven't we? Massive change. And I think we forget, you know, until talking about this, there's a lot of stuff I've completely forgotten. And the change has been exponential, particularly in the last couple of decades. So I'd love to get your thoughts on how we've heard also in terms

of household size, the transport infrastructure impacts, impacts the the regional city development and any uh relationship between australia and our global economic ties so what what's your research telling you on that side yeah look i mean i've literally devoted years to reading you know the old archive newspapers and it's fascinating stuff some of it you remember um you know as a young kid and some of it you know i wasn't even born but a lot a lot's changed um you know so coming out of the war um suburban uh development of housing estates was you know on steroids but the standard block was sort of 800 square meters uh and most houses were built for three bedrooms um whereas these days a lot of them are built

four bedrooms um yeah when we look at census data the official numbers um the the average annual people the average number of people per household in australia back then was four that's progressively reduced to today being 2.4 but it is a big drop um that's funny we've got over that period of time we've got households with less people in them but the houses themselves have become bigger and the blocks have become smaller so we are really you know causing some of our own problems um but what was also common probably up until the mid-70s to be honest bushy lots of households it wasn't just family members living in them because we had a dire shortage of housing And it didn't, you know, correct itself with proper policy until the 70s.

Lots of single people really had no choice but to hire a room from someone. And that was common. What we know today to be a boarding house, which might be, you know, someone living in the country who's been sent away, you know, by their parents lovingly, of course, but to school and to live on campus. That's what you and I associate with a boarding house. But back then, it could have just been a big home with 10 bedrooms and 20 people living in it. Absolutely. And they were renting a room each. So that's a big change.

Transport's changed a heck of a lot. You know, at the start of this 80-year period, trams were arguably the most common form of transport. Progressively, each household got a car. Now most households have got two, but that took a long time. Buses sort of started to progressively take over from trams, I guess because the bus can get to more drop-off spots, you know, when it's sharing the same route as the car. But it wasn't until about the 60s.

I love looking back through old photos, you know, Brisbane, Sydney, wherever, and you see trams on roads where trams don't exist in most places. So that's changed a lot. I mentioned air travel. That's changed a heck of a lot. And it's been one of many things that have contributed a lot to the love affair that Australians have now with regional Australia. It's just so easy to get there.

I've already mentioned regional development. At the start of this 80-year period of time, Australia's closest economic tie was easily with the US. Easily. But sort of around about the 80s, that started to progressively transition more towards different parts of Asia. I mean, the 1990s was famous in this country

for Japanese tourism and stuff like that. And now it's China, it's India, it's Vietnam, it's all of Asia, Singapore, Hong Kong, you name it. I'd love for you to, there's been, you know, massive changes in the technology front. So can you talk us through the progression of some of those advances since the distant times of the 1940s?

Yeah, well, I mean, it was only progressively in the 40s that households got electricity. um so that really restricted what people couldn't couldn't do uh um but what we saw in in the 60s um houses become warmer through kerosene heaters and and oil heaters so you usually you literally used to have businesses um you know you're placing an order and this big big truck would would come around um with a cylinder on the back with oil in it and they put this big hose in and they top up your oil and um you know winter winter months you'd turn the oil heater on a very um you know environmentally friendly stuff of course bushy um as the kerosene heaters around then as well that

progressively um you know we got reverse cycle air conditions that could provide cooling and heating but it's not that long ago that was brought in the 1980s um was famous for videos um you know people at houses were going out buying video recorders and then we go to blockbuster the video and that sort of stuff, and we get our entertainment from hiring a video and watching the latest movie. 1995 is when Foxtel come in, and now we're streaming everything. It's only a bit over 20 years ago that all households had their own email address.

Yeah. Before then, pretty much everything was delivered by Australia Post. By a fax machine. A fax machine. That's right. Everyone, fax was the only way to do it. It's only 2003 that Facebook, you know, was founded.

It's only 20 years ago. So much has changed. 2010, I mean, smartphones come in before 2010, but I would argue that the masses didn't all have a smartphone until around about 2010. So, and now everything's online purchasing. So it's changed a lot. TVs didn't come in until 1956, but it was black and white.

So it wasn't until about the mid-70s that we had colour TV, but all you had was three commercial channels and the ABC. And then I brought up my country, so we normally had two channels, the ABC and one other. That was pretty much it for me, Simon. Some great stuff there. I want to sort of pivot slightly now into the world of credit because there's also been a massive evolution in the world of finance.

Can you talk us through some of the changes that progressed through that arena? Yeah. Look, without credit, there is no home at the end of the day. You know, not just 80 years ago. You know, housing has always been the most valuable asset that any of us can have. People just don't pay cash for homes, including the Convict Day.

So, and we're not going to have another gold rush, you know, like we had in the 1850s. So credit's critical. And, you know, reading back through the archives and seeing the change in credit. It's phenomenal. In 1943, the start of this year, we're talking about, well, Commonwealth Bank was government-owned, but they weren't just a bank as we know them today.

Because they were government-owned, they oversaw monetary policy. So the setting of the interest rates was determined by the Commonwealth Bank. The setting of credit policies, the checks and references that banks had to follow when assessing a home application was determined by the Commonwealth Bank. That didn't change until, where are we? So APRA, you know, they come in in 1998. Yes. Not that long ago.

The Reserve Bank was not founded until 1960. And initially, the Reserve Bank was doing monetary policy and a bit of credit policy as well. Back in the 1950s, no ifs, buts, maybes, you wanted to buy a home, stump up 30% deposit, or it doesn't happen. 30%, you know, we had the housing affordability, you know, debate which has happened every year over the last 80 years

and 200 years for that matter. It depends how you hold your mouth. You know, some people say, oh, well, you know, it costs me $800,000 now, I can't afford that. You know, you guys never had it that tough. But, you know, it's all relative. The interest rates that people pay was different in different areas. The size of deposits that you paid.

I mentioned two incomes, you know, that we didn't have before. So things are all relative. Private finance is really big for decades, not just in the 1950s. It was not uncommon for a vendor, someone selling a home, for that sale to occur if they were a bit more financially affluent than others, they might help that willing buyer either by putting up finance for the whole transaction or for some of it because the banks would give them only a portion of what they wanted.

um a lot of hotel owners or you know more well-respected business owners on the side they would lend out money for things like housing um it was common for someone who wanted to buy a home this is not just the 1950s this happened for decades beyond that for someone to buy a home and to say look the most that the bank will give me will be five grand to buy this ten thousand dollar house or whatever but they might be able to get a loan against their car or something so The bill of sales, they were known as then, were very common. Mortgage insurance, a very important part for home ownership, especially getting that first foot in the property ladder.

Well, that didn't start until 1965, Bushy. Yeah. And it was actually driven by credit unions. Credit unions had a big, big share of home lending until the digital world started. Decimal currency, of course, came in 1966. In the 1970s, money boxes. We all had money boxes.

you know all our loose coins but it amounts to a lot of money if you filled your money box up with coin you could have 10 bucks now 10 bucks you know won't buy you much at all well put some relatively around it i used to buy a bag of lollies for one cent in the early 70s mate so at 10 bucks on the money box went a long way a long way um the australian dollar was floated in 83 we're talking about credit banking deregulation was huge um in the early 90s so essentially what that meant was um some of our biggest bigger banks i mentioned cba you know westpac they become privatized so they become responsible to shareholders and it's amazing when you get rid of the political plonkers and you put in entrepreneurial and business-minded people it's

amazing what shit you can happen if only we did a bit more of that these days right but um so loan products we become very creative um not only could you get credit with you know a smaller than a 30 deposit but the features that were attached to loans and progressively we saw things like offset accounts and redraws and electronic funds transfers none of these existed back then you had to go into a branch and you had the old passbook um accounts and lots of chains there um the australian stock exchange was listed in 1998 gsc was a big thing that was supposed to be the tax to replace all taxes in this country they wrapped up a lot of taxes but they still managed to leave out things like stamp duty and a bundle of other taxes but that was in the year

2000 it was also big for um uh for property markets because i guess um to compensate the the um the initial hit of bringing in the gsc everything would essentially increase by 10 overnight um there was all these government grants thrown out um you know for first home buyers especially um so that was big mortgage brokers i mean they existed in the 90s um but it wasn't until the 2000s that they really started to take off i think in 2002 for memory there was about 30 of home loans written were via a mortgage broker today it's 70 frankly why would you go to a bank um yeah there was a period of time there for about five years where there was such a thing as a 106% home loan.

Yeah, I took advantage of one of those to buy an investment property, mate, at the time. So I remember that very well. And why wouldn't you? I mean, I remember, you know, companies don't exist these days. There's a company called Rams, you know, subsequently bought out by Westpac. But, you know, Rams and a few others,

106%, where did that come from, was sort of saying, we'll give you the full 100% to buy the purchase property, but we know you've got stamp duty and a few other bits and pieces as well. Well, guess what? Well, you can funnel all that up in there as well, and that's sort of come to about 6%. So it wasn't that they gave them to everybody.

You still had to prove that you had a savings pattern, even though you mightn't be putting any cash in and you had a stable job. But I'm not saying we need to go back to 106% home loans, but there were some things there that I think we can take back out and look at the housing situation today. We've been through a GFC. 2008 credit become very hard to get for a few years there.

Australian property markets actually stood up really well, but it was harder for people with good, strong credit to get a loan for a couple of years. And then the last one with credit reform, 2015, not that long ago, those crazy buggers called APRA just squeezed the bejesus out of things for a few years there. They certainly did. There's some really good info there.

Now, I want to sort of switch into the old favourite that the media likes to talk about, and particularly in recent years, and that's good old interest rates. So what impact have interest rate changes had on property values? And is there any correlation between the two, Simon? Yeah, I guess similar to the population thing. Does interest rate influence property markets? Yes, everything influences property markets.

Is it the dominant force? It never has been. And again, we've got that same 53 years of evidence here, reminding our viewers the green columns is the change in median house price in each of the calendar years. And look, if anything, I put a big orange box there, around a period where interest rates not only did they go up, consistently go up, but they went up a lot.

You and I will remember paying really high teams, maybe even 20%. 17% when my home loaned at one stage at that stage, mate. Yeah, but look what property prices did. Look at the green columns. I would argue that they went up a lot more. It's evidence. In the 50s, 60s, 70s and 80s, house prices increased at a much higher rate than any period since then.

but interest rates were a lot higher. Yeah, recession. The box I put around there is a 17-year period from 1974 to 1992. That 17 years, Australia had three recessions. The cost of a house went up 400% in just 17 years with three recessions. So whenever, now and for the rest of anyone's life, whenever you hear the word recession,

beware the economists who will scream doom and gloom and tell you it's physically impossible for property prices to go up during the recession called bullshit in 2020 we had another recession and we also had a property boom the the second highest uh property boom in the history of the country i think uh quoting quoting uh you on that score simon correct yeah correct so uh yeah no that's some pretty good evidence there and now i want to sort of switch across to control over property and rents in particular rod what if anything has changed in relation to those over the years yes um look i wasn't aware until this stuff which i met here with rent control is not something that you're going to learn in school or economics degree or whatever i've never heard of

it i'm 53 mate i never knew of it until rummaging through all the archives and the stuff that But the number one topic I think that's dominated Australian current affairs over the last couple of years is rents. But a poorly controlled message. The commentary has been focusing on the price of rent when the problem is actually we don't have enough supply of rent. And there is all this evidence. Australia had an enormous rental crisis from 1912

through to in some parts of Australia in 1970. 1912 right so so that's a couple years before world war one we already had a shortage now all markets will have periods where there's a bit more rent supply than what we need and appear with the shortage it's just coincidental that in 1912 we had a shortage that's due to no one's fault it just is what it was but then when world war one started in 1914 we lost their skilled labour because they were fighting for the country's survival so we had an inability to build more rental supply

of course rents went up because there wasn't enough supply and the regulators come in and said we can't have that we're going to stop a landlord's ability to increase rent of course why is an investor then going to go and invest and provide more rental supply Well, I can sort of understand it when you're at war because you literally can't build anymore.

And the reason rent controls were brought in during World War I was literally that, the skilled labour's not there. But then coming out of World War I in 1918, the skilled labour had returned. We still kept the rent controls in place. Not long after that, we then went into the Great World Depression. So no one wanted to invest anyway. In fact, Australia's unemployment rate hit about 20%.

So why would you be investing? And then not long after that, we went into World War II. So we lost our skilled labour again. So again, through no one's fault from 1912 to the end of World War II in 1948, we effectively added no more rental supply, but we kept adding the population to it. You'd think Senatib would then prevail when all the wars were over. We've got to encourage more investors.

But no, we focused on let's keep a lid on rents because the tenants can't afford it. and that really shrunk rental yields and discouraged investment. Sanity didn't prevail until in some states mid-60s, in some others 1970 when they said, we actually need to bite the bullet and do the only thing that will fix this.

And that's to encourage people to invest in their future and some will choose property as their asset class to do that and that will fix this problem properly. But from 1970 through to let's call it 2019, a year or so before COVID, we were fine. Australia was fine. But now we've gone crazy with rental legislation and we haven't learned anything from all those decades of proof, mate.

Yeah, it just never ceases to amaze me. Yeah, we keep making the same mistakes. What about rental yields? How have they changed since the 1950s, Tom? Yeah, so we'll go back a little bit further. A hundred years ago, we were having this conversation, mate, as an investor, and we would have been standard 11%. standard yield without even trying 11 but progressively um down to the start of this

this period here 80 years ago it would have a standard yield would have been 7 and then as now it's not a one fits all yeah um you know some locations a bit better you know some a bit less but the average um yeah in the 50s would have been about 7 and that's progressively shrunk even at the price of rent like everything else has increased when we express that value of rent to the value of the actual property that you have to purchase and convert it into a yield. The yields have consistently retracted.

This time, five years ago, that standard yield would have been probably 4.5%. Again, Sydney and Melbourne would have been below that. Other parts would have been a bit above that. Today, a standard yield is about 3.5%. Plenty of parts of Australia where you've got a two in the front of that.

And we need to take a good look at that because rental accommodation is never going to go out of fashion, mate. No. Well, we'll always need it. 80 years of evidence, we've always needed it. We're always well in the future. And rental returns are important to that. Hey, stay with us.

We'll be back in just a moment as Bushy asks Simon about what Australia was like 100 years ago and about some of the moments of adversity that have actually shaped us. This is Realty Talk. Successful property investment is a game of finance. Do you have the right team and the right game plan? Realty Talk is brought to you by KnowHow Property.

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Visit knowhowproperty.com.au. We've touched on a few of these throughout the conversation, but I want you to remind us of the series of so-called world-ending events and moments of adversity that Australians have experienced since the 1920s, Simon. Well, what we know is it doesn't matter what year we were looking in the archives, there was always, I call it shit happens, there was always something.

It was just a different thing. We've spoken about this period started at the end of World War II, but there's never, ever been a single year in the last 80 years where there hasn't been a major war, at least one major war somewhere, always. But yet property prices have gone from two grand, this time 80 years ago, to the current combined capital city average

of about 950 grand. So don't let anyone tell you that wars will, you know, suppress property prices because wars have always been there. We've had multiple oil crises. We've always needed petrol over the 80 years, but there's been lots of, I mean, some of the wars have been related

to control over oil fields. But there's been plenty of times there where it felt like overnight the price of petrol at the Bowsers spiked, including now. In Australia, perhaps more than any other country in the world, we've had so many natural disasters. No town, big or small, has been immune to multiple natural disasters over the last 80 years, but the cost of housing still goes up. There's been numerous stock market crashes,

some directly in Australia, some globally. I mentioned the recessions, to be specific, 1974, 1983, 1991, and 2020. Yep. At the GFC, we had the health pandemic. So that's a lot of stuff, mate, in 80 years, not to mention, you know, politics and taxes and always something. Absolutely, and to state the bleeding obvious and to, I guess, stress this point, just to reinforce,

What impact have any of these had on residential property values? And can you give us a couple of examples just to really underscore that? Most of those moments of adversity have had no direct impact. Although in the moment, you know, when there's the announcement that there's an initial fear of the unknown, but that's more a sentiment thing, you know, until we get our head around things. You know, someone might delay buying, you know, their home

or something like that because they've been told by the news that the world's going to fall apart. That's a sentiment thing that, in time, people adjust their heads and they realise, hey, the world didn't fall apart. I guess there's been a couple that have had a more direct impact. The GFC didn't destroy property markets. We certainly didn't have a crash. But the effect of the GFC on property markets was more a lagging effect.

The GFC was in 2008-9. Adversity is always followed by stimulus. No matter what form the adversity comes in, money solves all things. And governments all over the world will always throw money at them, as they should. Whether they throw money in the right areas, well, that's always going to be debatable. They're always going to respond to adversity with money. Sometimes they hit the mark with it, and sometimes they don't. But the GFC is probably the biggest one.

I mean, COVID really hasn't had any material impact on property prices at all. In fact, if anything, what it's done is changed the way I think a lot of people have considered what they value most. and we've re-evaluated our priorities and there's been lots of people that have moved home or renovated homes or moved town, worked from home. So I'd argue that of all the moments of adversity, COVID's probably had the most positive influence of all of them. 100% agree, 100%.

It's brought forward a lot of trends that were already in play to our benefit, actually, in that context. Now, we've talked a lot about what has changed, Simon, On what hasn't changed much in property over the last 80 years? Well, we've always needed rental accommodation. For every single one of those last eight decades, three out of 10 households have been rented, every single one of them. Now, in some individual years, it's been 32% rent,

and some others have been 28% rent. But give or take three out of 10 households for every single one of those last eight decades i would suggest that's a big big big body of evidence to say to everyone listening to this today we're always going to need rental accommodation for three out of ten households i have that we get our shit sorted and start doing what we need to provide um rental accommodation for those three to ten households that's never changed um the government contribution to the rental pool one thing that hasn't changed there it's always been a very small contribution but the contribution has got smaller and smaller and smaller.

Today, our combined eight state and territory governments and the federal government, they own 9% of Australia's rental pool. So it's the everyday Aussie that owns the 91%, and they're the ones that need to be encouraged to provide more. Interest rates and inflation, they've always been around. There's been lots of periods when they've been incredibly high, a lot higher than what they are now.

Negative gearing has been out not just for that 80 years, but for more than a century. Negative gearing is actually not a formal policy. It's just a term that people use. It will always be around because, well, I assume it will always be around because the tax office will always require people to declare income and claim expenses. And property, the biggest expense is debt, hence the word gearing

and negative gearing. The biggest expense will be, sorry, interest. And in periods when interest rates are high, that increases the chances that the property will run at a loss rather than a profit, hence the word negative. So that will always be around. There was a two-year window in there where the Hawke government, 85 to 87,

thought it was wise to scrap it. And people voted with their feet and it made the problem worse. They brought it back in in 1987. We've always been popular, highly sought out from overseas migrants. They've become a national security policy, the 10-pound bombers we were talking about earlier,

to protect themselves, populate or perish. But I think all World War II did was open up all the other countries to, hey, there's this, what we call the great southern land down under and all the great opportunities that we offer. That hasn't changed over the last 80 years. I can't ever see that changing. And the greatness it brings to our country, the great diverse foods and cultures and clothing,

it's been awesome. Housing supply has always been a bone of contention, the whole 80 years. The archives, you know, like every month there's a story somewhere about we don't build enough, we don't build enough. Every month there's a story about housing's expensive, including when a brand-new house costs $2,000. It wasn't affordable.

We've got a newspaper clipping I found in the archives, 1950. Front page of the Sunday Telegraph, only one in five people stand a chance to buy a home. In 1950 we were saying that. Some things will never change, my friend. No, there's some really good examples there of exactly that. While we keep thinking it's new, it's all happened before. If we sort of wrap a big bow around all this, Simon,

what are some of the key takeaway lessons that we need to be heading from all of this? Well, I think the biggest lesson is we've all heard the saying safe as houses. I've given you 80 years of evidence to, I guess, show why that term exists. I didn't create it. No one can stack their name to it, but we can see it's true.

It doesn't matter what happens to interest rates, what happens to inflation, what happens to population, what happens to the economy, what moments of adversity that are out there. Humans always need shelter. Housing is not an index. We always need shelter. And no matter what is happening in the world, good or bad,

and we don't just live in the same house all our life. So even without population growth, property transactions still take place because household circumstances change incomes change families change um and when people transact in real estate they create competition and competition causes prices to grow with or without bloody population growth i'll keep saying it it's the existing population that buy 95 of the properties um a graphic i've put together here showing the last 80 years bundle up into four blocks of 20-year periods and showing how many times value did the standard house increase by. So the 20 years ending 1960, so the 40s and 50s, Capital City house prices

increased 3.6 times. The next 20 years, so the 60s and 70s, house prices increased sixfold. the next next period of um of time so we're looking at the 80s and the 90s they increased 4.4 times and the most recent 20-year block they increased 3.7 times wrap all that up and what that says 80 years of evidence there's a pretty good chance bushy no matter where it is in the state that you buy a property today and 80 years of evidence so it'll be worth at least three times that maybe four maybe five times that over the next 20 years so if you're 40 years of age and you want to exit the workforce in 60 years i'm sorry age 60 in 20 years time get busy safe as houses beautifully said mate it's certainly a very solid foundation this is this is not just

cherry picking like a lot of data tends to do this is a long-term look at what's happened over that time and it's it's all all predicting uh that there's no reason why that's not going to continue given the the underlying fundamentals are exactly the same so look um there's some really good examples there if we sort of paint the picture of what uh things are going to look like in 20 years you want to put a bit more shape around that yeah um so i guess i've just um uh making some assumptions based on previous uh numbers uh you know if history repeats itself 20 years from now so in 2043 a national population is likely to be about 34 million people now don't say that won't happen that's too many people when we had 7 million people living in this country

people were saying we could never survive with 11 million people let alone 20 million people let alone 26 million that we are today um so if we've got 34 million uh population we're likely to have a housing stock of about 15 million properties. The standard house price, if it increased, let's call it three and a half times over the next 20 years, a standard house would be worth $2.7 million. That's not a luxury home. That's a pretty basic three-bedroom, you know,

weatherboard house somewhere in Australia. $2.7 million. So don't moan and groan about housing affordability. They were moaning and groaning about that 50 years ago. It will keep happening. life expectancy we're going to live longer so if you don't want to work the whole time the scientists the medical scientists say that the life expectancy will be about 85 but you're going to have literally millions of people living well into their 90s

hundreds of thousands of people that will exceed a century year old so if you want to retire at age 60 you've got 30 to 40 years of income you've got to find without going to work again get busy invest in your future and and the fact that we're living longer is is again adding significant pressure to housing demand because we're there's more people living longer uh in some form of housing which is going to put more pressure on the the supply side of the equation as a consequence of that so we're all heading in the right direction anything else to add to that um I think our workforce, we're heading close to this. Now, I reckon 20 years' time, one in five households,

they will earn their income from home. Yeah. We are very close to that now already. I think a lot of people thought out of COVID, this is a fad that won't last very long. Technology is not going away. If you've embraced work from home and you already love it, I would suggest that no employer is going to be able to drag you back.

So that trend is here to stay. three out of five maybe 3.5 households out of 10 um will be rented yep but certainly it still will be at least three um i think some lifestyle trends if you think about an aging population and technology and trying to crystal ball those things together i think telehealth it's not a standard thing now um we tried it during covid i think it will become a standard thing um there will be sometimes when you have to be face to face with a medical practitioner but i think we'll be a lot be doing a lot more diagnosis on by telehealth i think clean foods natural environment home deliveries um yoga um lagree cycling all these lifestyle enhancements some of us um found a

liking to during covid some are already doing that but i think that trend is going to continue superannuation if you are listening to this and your retirement strategy is superannuation Give yourself a slap. That is not a strategy. That is sitting back in a world of complacency, expecting that the money that your employer puts aside and locks it up for you will be enough when you retire. We are really close to that access age being 70 or more.

If you want to exit the workforce before that and your only retirement strategy is super, good luck with that. And with governments seeing this massive growing lolly jar in front of them with sinking budgets, we've already seen the number of changes that are occurring to superannuation legislation. So if you think what you're going to do today is going to be the same when you get to retirement age,

you're in for a big shock. So if you're not going to start self-funding your own investment in your future, then you've really only got yourself to blame. Absolutely, which leads to my last point on this, age pensions. today if we spend 60 billion dollars with a b per annum funding what we could otherwise phrase as back-ended unemployment benefits age pensions why because we don't encourage investing this is not a

criticism of old people this is just stating the facts right 60 billion dollars per year imagine if we actually encouraged investing how much infrastructure we could build with just a portion with that right so um living longer the reliance and not encouraging investing the government funded um taxes that they collect that need to be you know pushed pushed aside for age pensions is going to be an even greater reliance so um investing in your future because no one else is going to do it for you beautifully said and and what a fantastic run through uh everything that the past has taught us so there's some really important lessons there so i really want to thank you for all of these evidence-based insights, Simon, which certainly reinforced that in terms

of property performance variances, what stands the test of time is that the more that things appear to change, the more they actually remain the same. And it's clear that property is not reliant on one current dominant driver, but is actually affected by a multitude of dynamic factors that all support ongoing growth. In addition, what's really crystal clear to me is that the ongoing opportunity that property will continue to provide for hardworking Aussies to secure their future lifestyle for those who actually learn the lessons of history that you've just demonstrated and are brave enough to ignore the uneducated negative noise that they see in the news that sadly prevents or delays many from getting invested and enjoying the

exponential benefits the magic of time leverage and compounding returns create is really important that people start now to take some action so i really want to thank you for this massive wake up call and reminder, Simon, for sharing your endless hours and years of expert research and to spend the time doing it here on Realty Talk. So thanks, Simon. My pleasure. And thinkerator. Thanks for tuning in to Get Invested on the Property Hub podcast channel, your home for property investment insights and inspiration. Make sure you subscribe to Property Hub for free. Get your weekly dose of Get Invested inspiration along with every episode of Realty Talk, Australia's top online property show for red hot property investing news,

and insights direct from industry leaders and influencers. And finally, I'll see you next time.