Property Hub - Investment Insights & Inspiration - Realty Talk: Auction sandwich ends the year + Housing crisis solved + 2023 predictions

Episode Date: December 16, 2022

We wrap up a big year with a big show that looks like an auction sandwich filled with housing crisis solutions, property predictions and pet hates. Celebrity auctioneer Damien Cooley tantalizes your tastebuds with Part 2 of his special feature that helps buyers perform better in the high pressure street theatre of auctions.   Why are employers still struggling to secure workers since the migrant floodgates have opened? Ludwina Dautovic from The Room Xchange reveals a surprising answer and a great solution to our national housing crisis. Queensland has recently introduced significant changes to tenancy legislation that is likely to ripple out across Australia, so property manager Jamie-Lee Billerwell from Code Property unveils new pet treatment impacts for investor landlords.  In our ever uncertain topsy turvy world of property, what’s likely to happen in the times ahead? Mickael Roger from Prophero Buyers Agents unpacks what their 40 million data points are revealing. And to close out the show and whet your appetite for our upcoming special 8-part auction summer series, Kevin Turner interviews buyers agent Cate Bakos starting with how to work out your bidding range.  RealtyTalk is part of the Property Hub podcast channel, your home for property investment insights, inspiration, and stories from Australia’s top property experts, investors, leaders, and analysts. Subscribe now to get every RealtyTalk episode delivered to you each week for free, and also get full access to Get Invested, the leading podcast for Australians who want to unlock their full ‘self, health, and wealth’ potential and get inspired by the stories of investors, founders, and entrepreneurs. Subscribe to RealtyTalk on the Property Hub channel: Apple Podcasts | Spotify | Google Podcasts | Email Property Hub is a collaboration between Bushy Martin from KnowHow Property, Kevin Turner from Realty, Andrew Montesi from Apiro Marketing and Apiro Media, and Australia’s largest independent podcast network DM Media. Business and partnership enquiries: [e-mail] omnystudio.com/listener for privacy information.

Welcome to Realty Talk, the show that brings together the country's most authoritative and respected property experts. Follow us on all the socials and subscribe for updates and exclusive offers. Realty Talk is powered by realty.com.au, connecting buyers, sellers and agents differently. Hi, and welcome to this year's final Realty Talk show, the flagship of the Property Hub, your home for property investment insights, inspiration and stories from Australia's top property experts, leaders and analysts, which is done in collaboration with Apiro Marketing and DM Media, Australia's largest independent podcast network. I'm Bushy Martin from KnowHow

Property Finance and this week we wrap up a big year with a big show that looks a bit like an auction sandwich filled with housing crisis solutions, property predictions and pet hates. Celebrity auctioneer Damien Cooley kicks things off by tantalising your taste buds with part two of his special feature that helps buyers perform better in the high professor high pressure should i say street theater of auctions we then shift to the question of why are employers still struggling to secure workers since the migrant floodgates have opened especially in regional tourism areas but when a daughter from the room exchange reveals the surprising answer and a great immediate solution to our national housing crisis. Queensland has recently introduced

significant changes to tenancy legislation that's likely to ripple out across Australia so property manager Jamie Lee Billiwell from the Co-Property Group unveils new pet treatment impacts for investor landlords. And finally in our ever-certain topsy-turvy world of property what's likely to happen in the times ahead. Michael Roger from Prop Hero Buyer's Agents unpacks what their 40 million data points are revealing to help you make much better informed property decisions in the year ahead.

And to close out the show and to whet your appetite for our upcoming special eight-part auction summer series, Kevin Turner interviews buyer's agent Kate Bakos on the ins and outs of auctions, starting with how to work out your bidding range. Now, before we get into it, make sure you don't miss another episode of Realty Talk by subscribing to the Property Hub on your favourite podcast player, where you will get

two powerful episodes of both Realty Talk as well as the Get Invested Long Form podcast delivered to you each and every week. And make sure you also sign up on the realty.com.au homepage, where you'll also get a free copy of my award-winning book, Get Invested, just for making the effort. We've got a poultice of property positives to share as your early Christmas present, so let's get underway. How confident and comfortable are you buying a property at auction? I've often heard auction bidding described as a bit of a sport where a bunch of potential buyers sprint headlong towards a cliff, and the only way to win is for you to outlast the competition by skidding to an absolute sudden stop just before you fall over the edge.

With figures flying through the air like machine gun bullets, an auctioneer talking at the speed of light and paddles, fingers and eyebrows going up left, right and centre, the high-pressure street theatre of auctions can be frightening and overwhelming, regardless of how prepared you feel prior to the day. But they don't have to be. To help you make sure that you don't bid well above your limit, or worse still, get paralysed with fear and not bid at all, we're joined again for part two of our special feature on the Art of Auctions by Damien Cooley, the leading auctioneer of choice for many of Australia's sellers and most respected real estate agencies, whose business actually conducts over 6,000 auctions a year.

So welcome back to the show, Damien. Thanks for having me, Bushy. Mate, no better person to talk about this subject than you. And this week, I sort of want to get into looking at auctions from the buyer's and the bidder's side. So to sort of dive into that subject, what are the biggest mistakes that you see buyers making around auctions? right at the moment well i think one of the biggest mistakes is actually they're not bidding um there there's some deals around at the moment pushy you know property prices have come back um we spoke a little while ago about you know markets and how they're tracking with the property prices coming back there are some opportunities for buyers i feel like a buyer

goes through an emotional roller coaster during the campaign are we going to buy it are we not going to buy it do we have to pay this are we going to pay why and they get to auction and maybe it's not the result that they thought may have happened. And what I mean by that is that maybe no one bids. So they kind of psych themselves out. And as a result of psyching themselves out, they decide to play really hard ball in the negotiation. They don't secure the property on auction day. The agent puts the property for sale. In the following week, they find a new buyer and it sells for full asking price. I think buyers can afford to be a little bit tough in the way they negotiate right now. But don't be too tough that you lose the property. Yeah, it's really good

advice. Well, it's a nice segue into getting your thoughts on what you've seen as the best strategies, tactics, and tips that you've seen buyers employ to actually win an auction. Look, I think you've got to get involved in the bidding. I think buyers that sit back and wait, wait, wait, are often the ones that don't end up buying. I have no problem if you want to sit back for a couple of bids and see what anyone else is going to do but I do believe you've got to get involved in the bidding to show your competition that you are there to buy. I think you also need to assess each auction for its own merits because not every auction you have to go bullet a gate and bid you know incredibly strongly. Some auctions you can not bid at all and sit back and just

assess things and maybe come in for one bid and sit back. You need to employ the right strategy based on the type of property you're buying for essentially what that means who else is interested in buying it if there's a lot of people wanting to buy it you've got to bid confidently and strongly all the way to the end if you're the only bidder well you can afford to negotiate a little bit harder yeah very good commentary and what i'm picking up there is it's just as important to be keeping a very close eye on the other bidders than it is having the focus just on the auctioneer because it's reading their psychology that's probably going to be more important.

Am I right in saying that, mate? Absolutely. It's a mistake that people make. They don't watch their competition. They don't see when they buy it and the people they're competing against are out. You know, watch the increments they're bidding in. If they're starting to weaken those increments,

that's the time where you can bid confidently. And that doesn't necessarily mean bid 10,000 or 20,000. Maybe 1,000 is appropriate at that point. But it's the speed at which you make the bid opposed to the increment that you bid. Yeah, so very, very good suggestion there, mate. So to sort of bring it to a close then, how can potential buyers and bidders beat an auctioneer? I mean, if someone came up against you, mate, I wouldn't like their chances, but what are your thoughts around that subject? Don't worry, mate, I've had my fair challenges

over the years. You know, I think one thing for me as an auctioneer, I'm a fast auctioneer. I believe the speed and the volume that I use during an auction enables me to build pressure and urgency for a buyer to make a decision faster than what they would have otherwise have liked to make that decision. And let me give you an example. There are situations where I can see a buyer is thinking in their head, I'm going to bid $5,000, I'm going to bid $5,000. But I'm talking over the top of their little bloke on the left-hand side.

i'm saying can we say 20 can we say 20 can we say 20 and and they're trying to talk and i'm saying can we say 20 can we say 20 and eventually sometimes eventually they just say just say 20 you know um so the thing for me is that i'm looking for speed and i'm looking for volume um i think from a buyer's point of view to try and slow things down and and for the buyer to try and control the pace and don't let the auctioneer talk over the top of them make sure that they're focused on what they're doing, I think that's a little tip for a buyer. That's a very good tip indeed, mate.

Yeah, always a pot of gold when it comes to the sole subject, mate. I'd really want to thank you again for opening our eyes to the actual auction opportunity. And thanks again for your time on the show today. My pleasure, Bushy. Thanks for having me. Thanks, mate.

Well, there you have it. The reality is that at some point in your life, you're likely to sell a property at auction or try and buy one at auction. Keep watching Realty Talk, your trusted voice for all things property. Property deductions can save you thousands of dollars each year. To make sure you maximise deductions, you need to work with the most experienced quantity surveyor in the country.

BMT Tax Depreciation is the leading specialist in the industry. They've completed over 700,000 tax deduction schedules for residential investment and commercial properties Australia-wide. BMT guarantee to find double your fee in the first full financial year deductions. Call BMT on 1300 728 726 today for an obligation free quote. How often have you walked into a coffee shop or restaurant lately to be confronted with ads looking to staff or signs saying be patient as we're understaffed? If you're like me, it's just about everywhere, every day. And nowhere is this more prevalent than in regional tourism areas that are suffering severe staff shortages. Now, you may be asking, how can this be the case?

Because the federal government has opened the floodgates to migrants to the tune of over half a million extra temporary visa holders and nearly 300,000 permanent skilled migrants in recent times. But this reveals a real problem. It's not a shortage of people to do the work, but a chronic shortage of housing to accommodate them that's actually creating the issue. So to deep dive into this growing problem and to discuss a great potential solution, we're joined by Ludwina.

Dordovic, the founder of The Room Exchange. So welcome back to Realty Talk. Thank you, Bushy, for having me. Awesome. Now, as I've already mentioned, Australia's regional tourism areas seem to be taking a hard hit right now with staff shortages due to the lack of accessible housing. So can you unpack this a bit further and tell us what's really going on? Yeah, I'll paint a picture actually. So my husband and I recently went away to Lawn in, sorry, in Lake Hilden. Oh my gosh, I'm getting my holiday places mixed up. um it's a couple of hours away and on the drive back on the sunday we could not literally get a

coffee anywhere not in like gildan and not in yay not in any of the places on the way back and it really just dawned on me how much of an issue this is becoming not just even in the coastal areas but in the um regional um you know towns that are kind of like inland as well and i grew up in the country and i can't believe that this is actually occurring and what i'm hearing is i'm having lots of conversations particularly at the moment with Apollo Bay Colac area down there in Geelong that there is just no housing available and I'm not even talking about affordable there's no accessible housing available and the reason that that's happening is because there's you know we've got a lot more holiday houses down there we've got um you know we're not sort of building new

housing so what's happening as a result of that the hospitality but not just hospitality but also service industry so i think child care nurses anybody that's actually making this town run to the pleasure of tourists by the way they're not actually able to sustain these workers so there's a huge problem and it's we've got to do something about it really quickly otherwise these regional towns are going to lose what it is that they're actually known for absolutely it's a very good call so given your experience there what are some of these areas doing to solve the problem currently well um i learned um recently that lawn started this program called adopt a worker and i just have to take my hat off to them because i think it's you know it's a great initiative

uh they um on their local love lawn website i think they put a page up saying you know adopt a worker if you have a spare room please consider opening it up so we've got somewhere to house a worker um but you know with those sorts of things it actually requires human time unless the technology is there to back it up. Port Douglas I think sort of ran off the back of something like that. I know that there have been regions where the council has sent out letters to all of the households that are sitting empty because you know we have millions of empty homes sitting around this country and a lot of them are in these tourist areas as well so the councils have almost begged could you please open up these homes so that we can put our staff in to rent

there's a number of things like that that have occurred but the challenge that they've all faced is the concern from the homeowner point of view is like but hang on a second somebody's going to be living in a house how do we know that we're going to be safe how do we know anything about them you know who are they are they going to comply with our house rules are they like who we are and so these issues are then faced and I've also found a number of not-for-profit organizations who have tried to match up not necessarily in the tourist areas but elderly with you know university students and again they're faced with the same problem because they're not-for-profit they don't have the funding or the tech background or the the business knowledge to actually make

that work the marketing etc they've not actually had any success with them so you know again I take my hat off to the fact that they're actively trying to do something but we need something more solid and grounded and proven to be able to help them with that. Well that really opens the door to your unique platform the Room Exchange in helping to solve this problem because I know that some of those issues you've just mentioned are well and truly covered for what you're doing so for those that don't know about the Room Exchange tell us what is it and how are you helping? Well I founded the Room Exchange five years ago. I'm the CEO and the founder. It's Australia's first verified house sharing platform essentially what that means is is that every one

of our users whether you're a homeowner we call them households that have got a room to rent or a housemate who's looking for a room to rent both parties have to have a digital ID by Australian Post it's integrated within our technology what that means is the information you put in your profile has to match your ID if it doesn't you don't get verified and so what that does is it removes potential problematic people because if they've got ill intentions they're not going to want to be identified in that way. So that's tip number one. And the second thing is that the profiles make it easy to be matched based on personality, values, and lifestyle. So you feel like you're coming home to a friend. So if you're a homeowner with a spare bedroom and you're

thinking, well, what if we don't get along? I guarantee you with our profiles, you'll look at them and you'll say, I think that might be my new best friend, right? And then the third thing is that you can choose a traditional rental option or you can choose a rent offset. Now in the tourist areas think about this you know you might have a holiday house it's massive it's got a spare bedroom that maybe a housemate can live in they can mow the lawns they can get chop the firewood get the fire going fill the fridge up with food get it all ready for when you come down for your holiday or when your guests are coming for a holiday they can maybe cook some meals while you're there maybe look after the kids there's a number of different ways that we can actually look

at this so that it benefits not just um you know or it helps improve the problem but it can also add value to the household. And that's what we're all about. The households aren't doing our housemates a favour. They're not there to save people or to, you know, solve problems out there in terms of the rental crisis. We want the homeowners to know that they're going to receive equal value that the housemates are going to receive as well. So that's how our model actually works. And what that will do is provide an instant solution to this issue. So we're currently in conversations with various different coastal regions leading up to Christmas and the summer holiday and talking to them about how we can actually support them we're in conversations

with some pretty big regional towns and also with state government on our on how we can not only help them with their tourist areas but also with the housing crisis so you know we're really open to having conversations with anyone whether you're a small council a small traders association head of tourism in your region ceo of your town if you want some advice on how you know we can help you We're going to let you know how we can. Just please get in touch. We're ready to actually help you solve this issue. Well, it's a great solution that can be sort of instituted straight away.

So I really want to thank you for sharing and revealing this great solution to what's become a national problem now, Louina. And thanks for your time on the show today. My pleasure. Thank you. Well, as you just heard, the Room Exchange's great housing solution is not just confined to regional tourism areas, but is just as applicable across the board to address the growing national rental crisis, with rental vacancies never being this low before, at a time when we've got over 13 million unused bedrooms right across the country.

So if you've got a spare bedroom and you'd like to make a real difference to someone's life as well as your own, or perhaps you know someone who's really struggling to find a place to live jump on the windows the room exchange now at theroomexchange.com that's the room and then exchange starting with an x and without the e theroomexchange.com stay with us for more on your property hub's trusted voice for all things property here on 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 know how property more than mortgage brokers bushy martin and his team of investment architects set you up with a sustainable strategy structured to lower your costs tax risk

and stress while increasing your capacity for growth know how has helped over 1900 homeowners and investors secure more than 800 million dollars in property wealth so get set to live more work less and live your legacy want to know how to invest in your freedom visit knowhowproperty.com.au now as of the 1st of October this year Queensland's introduced another raft of new tenancy legislation reforms which the real estate institute of Queensland is repeatedly indicating has actually swung the pendulum well and truly in the favour of tenants and actually reduces property owners, investors and landlords' contractual rights, which means now is a really good time to listen up

because the ripple effect of the changes is likely to spread across to other states if it hasn't done so already. So in the second part of our two-part feature on the changes and their impacts, leading property management specialist Jamie Lee Billiwell from the award-winning Code Property Group joins us again to look at the changing requirements in relation to the treatment of pets. So welcome back to the show Jamie. Thank you for having me it's always a pleasure. Always Jamie. So let's kick things off what are the legislation changes

in relation to the treatment of tenants pets then? The new legislation effectively eliminates a property owner's right to have a no pets policy. So it's multifaceted. Firstly if you have an investment property with an existing tenant already in place they can apply to have a pet and the landlord and the property management team have 14 days to respond to that request with an answer if they don't reply the pet is automatically accepted wow okay so that certainly is a shift so are there any grounds that a can't a landlord can actually decline a pet under the new legislation then yes there are multiple grounds so some off the top of my head keeping the pet would exceed a reasonable number of animals being kept at the property

number two the property is unsuitable for keeping the pet because a lack of appropriate fencing open space or another item necessary to humanely accommodate the pet as an example a doberman in a studio apartment probably wouldn't be suitable um number three keeping the pet at the property is likely to cause damage to the property and could resolve in the property being repaired significantly less in terms of the bond so there is about 10 of prescribed reasons why a property owner can decline an animal bear in mind it needs to be honest and it needs to be accurate because i personally believe that we may get ourselves in circumstances where it can be challenged in the sense that if you've got acreage and it and this

is obviously a very dramatic hypothetical if you've got acreage and the tenant is requesting a dog and the property manager puts for the term the property is not suitable for a dog that may be challenged in QCAP. Yeah okay so I mean it sounds like the interpretations are going to be open to discretion to some degree which will be interesting to say the least but can a pet actually be approved with conditions then and and what would some of those reasonable conditions be they can requiring the pet to be kept outside of the rental property and if it's and if it's not an ordinary pet to be kept outside i think there's going to be a lot of conversations around cats as well because they're ordinarily inside as well a similar condition for it would be a similar

condition to rooming accommodation that would require a pet to generally be kept in the residence room requiring the premises to be professionally fumigated at the end of the tenancy. If the pet is capable of carrying parasites that could infest the property or requiring the carpets to be professionally cleaned at the end of the tenancy if the pet's allowed to be inside the premises. I definitely want to come as a warning though if you've got timber floors and you're approving an inside dog that could be extremely problematic to the landlord as well because you've got to take into consideration the wear and tear of the specific property. Yeah, that's a very good point. Can a tenant pay a pet bond or higher rent then to

overcome that? That's very easy. No. Okay, good. Okay, that's good to know. You've touched on potential pet damage and, you know, timber floors and dog's claws. How is pet damage now going to be handled then? I think this will be an insurance issue. It is no longer classified as fair wear and tear. This has also altered landlord insurance policies. So my first piece of advice is to reach out to your insurance broker or your insurance company and double check the policies surrounding the new legislation. Yeah, that's a very good point. And I'll take this opportunity to reinforce the need to get specialist landlord insurance not the off-the-shelf landlord insurance you get through the major insurers because you would know better than I that you know when it comes to the

crunch those average policies leave the landlord holding the can whereas the likes of Rent Cover and Terry Shear for example are much more likely to give you better protection so look really want to thank you for bringing these Queensland tenancy legislation changes to our attention Jamie and Thanks again for sharing your insights on the show today. Thank you for having me. Thank you. Well, it's clear that negotiating through the maze of changing legislation is becoming a lot more challenging.

So if you want to make sure that you're abreast of ongoing tenancy law changes and you're protecting your position, make sure you reach out to specialised and dedicated local property managers like Jamie and the award-winning Co-Property Group. Keep watching the Property Hubs Realty Talk, your trusted voice for all things property. Property depreciation is the natural wear and tear of a building and its assets. Property investors can claim depreciation as a tax deduction each financial year. Depreciation is a non-cash deduction. This means you don't need to spend any money in order to claim it.

On average, BMT tax depreciation find residential investors almost $9,000 in first full financial year deductions. Call BMT on 1300 728 726 today for an obligation free quote. If you've been involved in property for any length of time, you'll know that there's never a dull moment when it comes to property conditions and this year has been no different and the future is again filled with uncertainty. So how do you sift through the wheat and separate the wheat from the chaff when it comes to reading the tea leaves in order to predict what's likely to happen with property moving forward given the complex constantly moving dynamics and multiple multitude

of factors that influence property in your decision making. Well, you need to eliminate the gut fuel and the guesswork, which many rely on, and shift to the exciting world of artificial intelligence. And prop hero buyers agents are leading this charge by pulling somewhere near 40 million data points and constantly running models that look at over 240 variables to screen the 15,353 locations around Australia to test and assess supply and demand, demographics, climate risk, rental yields, and prices. So to shed some quantifiable light on what's likely to happen to property conditions in the near future, we're joined by the co-founder of PropHero, Michael Roger.

So welcome back to Realty Talk, Michael. Hey, thanks for having me, Bushy. Great to see you back again, mate. We really enjoyed your input when we caught up a bit over 12 months ago. So sort of to set the scene, I'd love you to just to run through what Prop Hero predicted last year and how it actually panned out in the finish. Yeah, so look, last year, we predicted three things. Inflation, price fall in Sydney and Melbourne, and Brisbane and Adelaide outperforming the markets. Proof of this, you can ask our hundreds of clients.

We have bought zero property in Sydney and Melbourne, all in Brisbane and then Adelaide. And every time a client was asking us, hey guys, I would like to buy in Sydney and Melbourne, for the past 12 months, we've said, hey, sorry, keep your money. We don't want to buy there. And so that was our predictions last year. And so we are pretty happy so far about the results.

Absolutely. You've read that extremely well. And that's a good lead into, we're looking at the next 12 months. So what do you believe is likely to happen in the property market over the next year? And most importantly, why do you think that? Yeah, so let me start with the macroeconomics, right?

The very likely scenario is a pretty strong recession in Europe, mild or like flat economy in the US and slightly better potentially in Australia. One massive risk that we see for 2023 is a new debt crisis in the EU, right? European countries have like massive amounts of debt. And as interest rates rise, the cost of this debt will increase and massive risk, especially in some countries in the southern part of Europe. And if this debt actually happens, if this crisis that happened, then it would have like a domino effect on the bank. So big macroeconomic risk. On the more positive sides, inflation is likely to slightly reduce also because the economy will not be that strong. and as a consequence as well we believe that rate increase will soon stop and with countries the

most affected by a slowing economy actually we think interest rates may go down so but yeah so some risk globally we believe that in australia things should be slightly better and when we think about like what we think will happen in the property market in australia um next quarter i I think for the first time, we will see that all capital cities will go down on average, right? Up until this quarter, we had Adelaide still going up. And of course, we were buying there. We actually stopped buying Adelaide because we think next quarter, Adelaide will go down as well. Again, it's on average.

And just be careful because averages and we actually find pockets that are still going. But on average, going down. The big topic for the property market in 2023, we believe, is polarization. What do I mean by this? 2021, every place in the country went up. 2022, most capital cities, again, on average, went down. 2023, we actually think that for the first time, the market will be split in two.

On one side, some areas will continue to go down quite significantly, including in many parts of Sydney and Melbourne, because prices are still too high, yields are too low, attract any investors and even owner occupiers and rents are not growing fast enough to justify any acquisition there on the contrary we believe that the markets where yields are higher rents are growing faster than inflation and there is a very limited supply available we actually think these markets will pick up quite significantly and think about like some parts of north brisbane or southeast uh queensland as well some of these areas we believe have all the intrinsics to

actually pick up quite strongly yeah and what i'm hearing is i've been in property for nearly 40 years now where we're actually returning to a normal market situation where every area and every location is operating differently and out of sync to others so where i think you're right on the money there so given that context then michael where and how do you suggest that we invest in this environment to be ahead of the next curve yeah yeah so what you want is to invest in an area that is going for the next two or three years to attract both investors and owner occupiers so like demand will be high you also want to invest in an area where supply is limited which by the way is the case with uh uh overseas migrations and the lack of supply because

of inflation you know we have like a less new homes being built so what you want to look for where we are buying right now in australia areas with yields above four percent rents growing at least at twice the pace of inflation areas which are already 10 to 15 percent below the peak right and areas where the affordability is high meaning that the ratio between how much households make and how much repayments they have to make on their loan is actually quite positive, right? So this is where we're investing. And yeah, so we're investing in some parts

of South Queensland right now. We are about to stop buying in Adelaide because we think we have reached like a local peak. We still believe in Adelaide longer term, but we think like next quarter, it will probably go down. And yeah, so right now we are back in South Queensland after leaving it for a few months because, well, actually the scariest moment for me

was not now, but was four or five months ago when the market was at its peak in Queensland and we had to tell our clients, guys, we have to stop buying there because it's a peak and it's going to go down. I'm glad we did, but we had some very difficult conversation because telling us, no, no, I want to buy in Brisbane.

We said, guys, just wait a few months, right? Just wait a few months. And now feeling very comfortable about buying there again. Yeah, it's good to see that your algorithms are really picking up leading rather than lagging indicators, which is an issue the industry has suffered by some time. So, look, I really want to thank you for sharing these data demonstrative insights, Michael, and thanks again for joining us on the show today. Thanks. Thanks, Michael. Well, yet again, you've heard further evidence that as long as we need to live in housing, there's always opportunity in property because conditions may fluctuate, but the fundamentals remain constant.

So if you want to access artificial intelligence algorithms to interrogate large volumes of dynamic data to remove the limitations of our emotionally charged gut feel in order to make much better and objective fully informed decisions quickly without the stress and without the hassle and uncertainty, then reach out to Michael and his PropHero team at PropHero.com.au. Stay with us for more here on 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 know how property more than mortgage brokers bushy martin and his team of investment architects set you up with a sustainable strategy structured to lower your costs tax risk and stress while increasing your capacity for growth know how has helped over 1,900 homeowners and investors secure more than $800 million in property wealth. So get set to live more, work less and live your legacy. Want to know how to

invest in your freedom? Visit knowhowproperty.com.au. Hello and welcome to this series where my featured guest is going to be Kate Bakos. Kate, of course, is no stranger to our audience. She is a buyer's agent based in Melbourne. Melbourne, of course, you'd have to say is one of the most prolific property auction markets in Australia, if not the world. Even though auctions might be well accepted in both Melbourne and Sydney, we have to acknowledge the fact that many people will probably only ever be a bidder at an auction maybe once or twice in their whole life. That's why we're creating this series where we're going to take you behind the scenes, It's almost behind the auctioneer to get a better understanding of how you can prepare yourself for auction, how you can get along to an auction and how you can bid successfully.

This week, Kate is going to help us work out the price range that you need to be realistically preparing yourself to bid in when you go to an auction. Kate, welcome to the show and thanks for your time. It's a total pleasure. I love coming on the show. Good on you. Okay, let's talk about price because this is probably one of the big things that many people don't prepare themselves well enough for and probably end up paying a little bit more than they wanted to and creating that premium price that we so often hear about at auctions.

How do we guard against that, Kate? Well, we have to look into the science of pricing. So conduct some recent comparable analysis. And the way that we do this is we look at some past sales that are very similar to this property. So in other words, similar land size, same suburb, similar dwelling type, similar number of bedrooms. When you can source the properties that have recently sold that are similar, you'll get a very good feel for where this one might sit in amongst those sales data. And I say to people when they're sorting out what sort of property they're going for and they're starting on their journey, go out and do some reconnaissance and see some auctions.

So watch the bidders, familiarise yourself with the way that some of the auctioneers call an auction. And you might even spot some bidders that become quite familiar because obviously there's underbidders and they follow similar properties. Not only will this give the buyer a little bit more intel, but they'll also get a sense of familiarity with a process that usually terrifies people. Yeah, some great advice there. Can we talk about price ranges because we're seeing more and more agents using price ranging. The question I've got for you is how realistic is that range and how much notice should we take of it, Kate? I'm opening Pandora's box here.

But we have varying legislation around our states with how an auction property is presented to the public and what sort of pricing is mentioned. And sometimes the guide price is not an actual indication of what the property is likely to sell for. Sometimes there's bait pricing, which is a method that some agents can use to to pull in the buyers with an expectation that the property will sell for less than what it's worth and then they get caught up in the hype and they

decide to stretch accordingly so there's lots of um difficult processes for buyers to navigate around but in short if they can have a look at the agent's comparable sales and if if the agent isn't suggesting there are comparable sales buyers can actually just ask them what are some of the sales that you think are indicative of where this one could wind up. And then they can have a simple look on a search engine themselves or drive past and decide for themselves whether it's comparable or inferior or superior. And it sounds like a very difficult way to go about determining price,

but this is, in fact, how agents, buyers, agents and valuers go about determining value often. Yeah, because one of the difficulties for every buyer and every seller for that case is the fact that every buyer wants to pay less than what it's worth and every seller wants more than what it's worth even though they both might not individually realize they're doing that it's actually what happens so it sort of it leads me therefore to wonder Kate and this is a question without notice if a buyer going to an auction should actually prepare themselves for the the price I'd really love to buy it at

the price that I am prepared to pay and the price that I'm not prepared to pay. Absolutely. Those three prices are actually how we conduct our price setting with our clients and we call it the XYZ pricing structure. Obviously, X is where we'd love it to land and it's got to be a realistic expectation of what the property could sell for in the absence of competition. Y is where we think the property price is likely to wind up based on the competition and said is that figure that at a dollar more they're happy to walk away they will be disappointed and they will feel like grieving but they won't feel regret because they've stretched themselves to a fair stretch and they've let it go to someone else who's prepared to pay a premium

yeah because that xyz pricing and i love the way you you describe that that's a really good indicator too about where the market is i mean if we're seeing a lot of properties sell at the x price, then we know that it's definitely a buyer's market. And so on it goes. So where are we right now? Let's say in the Melbourne market, are we at the X, Y or Z range? Well, it's interesting. A month or two ago, I would have said we're at the Z range because stock was very tight and sentiment was very strong. We had such a turnaround after our federal election. We've had some rate cuts and we've got some energy out there. We're also seeing investors coming back onto the market. So I would have argued that two months ago buyers had to be prepared to stretch and records were

being set every weekend with Christmas approaching though and with an influx of auction activity in a very late spring we're actually finding that we're getting a little bit of equilibrium sorting itself out and we're seeing a few more pass-ins and we're not seeing auctions flying like they were in the in the past months because we've got a little bit more of a balance it's not by any means buyer's market and our auction clearance rates are still high but if we segment them and we ask some careful questions we'll see that some of those sales results are actually negotiations after a passing. I noticed in your notes too and you've mentioned it already that part of the homework that every buyer should do is they should go to some other auctions and I suppose the best

way to do that is to become familiar with the auctioneer who'll be calling the auction of the property you're particularly interested in but also to follow the agent and you're going to be to see how well they prepare their seller for auction what they do what the language is like so all of that homework can be can really come back to pay big dividends can't it it absolutely can we get some of the best intel that we can possibly source from the listing agent just by asking them questions that might be closed where we get a direct yes or a no or a number or by asking them open questions about the nature of the campaign and what sorts of terms the vendors could could be excited by. Wonderful stuff, Kate. We're going to come back next week. I'm going to build

a little bit on what we've talked about now, and that is the sorts of questions or the information you can get from the agent. What's acceptable to ask? Kate, thank you for your time, and we'll look forward to talking to you next week. Sounds great. Now, before I leave you, here's a final thought from me. As we approach the end of yet another year, it's always a good time to reflect on the year that was and learn from the lessons that have flowed from it to take time for yourself to invest in your knowledge and your mindset by catching up on all of the podcasts books audio books and youtube videos that you were just too busy to get around to during the year to start setting your vision and goals for the year ahead and to enjoy the fulfillment that only comes from

giving freely to others and if you're not taking time to do this then you need to because every single successful person I've ever known takes time every year to reflect, recalibrate, re-energize and replan. Remember it's never too late to start but it's always too late to wait and the best time is always now. So to help you with this, in this often talked about but seldom done endeavour, we're going to make it really easy for you. In addition to Kevin's auction series with Kate Bakos here on your property hub, I'm going to roll out a property investment fundamental series that will take you through the proven growth revolution process that I detail in my book, The Freedom Formula, that's worked really well for me and my good wife, Sonia, personally,

along with over 2000 investors that we've now helped to accumulate over a billion dollars in property wealth. So make the time and take some positive action now that your future self and your family is going to thank you for because words without deeds are just weeds don't wait just do it that's more food for thought and that brings us to the close of this week's show as well as another massive year another big thanks to our guests Damien Cooley, Louina Dodovic, Jamie Lee Billiwell, Michael Roger and Kate Bakos along with all of the industry leading guests that we've had the pleasure of joining us here on Realty Talk this year to share their wealth of wisdom and before we go make sure you don't miss another episode of your trusted voice for all things

property by subscribing to property hub on your favorite podcast player now where you'll also enjoy the get invested podcast delivered to you each and every week thanks again to realty.com.au bmt tax depreciation appear on marketing and dm media for all of their ongoing support i'm bushy martin from know how property finance and along with kevin turner and the entire property Hub Realty Talk team we thank you for investing in yourself by investing in us and we wish you and your family and friends all the compliments of the festive season. May your holidays be filled with fun and freedom and after our summer series we'll all be back at the end of January for an even bigger and better show next year. Miss something in this week's show or want to catch

up on past shows? Do it anytime at realty.com.au where we connect buyers, sellers and agents differently.