Property Hub - Investment Insights & Inspiration - Realty Talk: Beware of cheap insurance

Episode Date: December 9, 2023

Did you know there are more than thirteen million spare, unused bedrooms in Australia right now?  This week we ask if that can help ease the housing crisis.  Also this week Bushy firms up on the notion that property is a game of finance and then he introduces a concept that makes owning a home more affordable with a zero deposit home loan. But in a compelling piece from Bushy, he raises some big questions about insurance and if you are still covered.  NEW – join our Facebook group, The Property Hub Collective: https://www.facebook.com/groups/1857513011165686 Join the Property Hub community on Substack! Sign up to get Australian property news, opinion, and episodes in your inbox: https://propertyhubau.substack.com/ 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.

Hi and welcome to this Realty Talk show. How did you know that there are more than 13 million spare unused bedrooms in Australia right now? Well this week we ask if that can help ease the housing crisis. Also this week Bushy firms up on the notion that property is a game of finance and then he introduces a concept that makes owning a home a lot more affordable with a zero deposit home loan but in a really compelling piece from bushy he raises some big questions about insurance and if you're still covered and we'll round out the show this week with that comment from bushy so make sure you stay with us right till the end now if this is your first time with us welcome you're going to find us on all podcast players and through the southern cross austereo network

if you like the show make sure you hit the subscribe button and help us to continue to bring you the best guests every week. Make sure too that you join the conversation anytime on Facebook at the Property Hub Collective. We'll be back in just a moment as Bushy kicks off this week's show. Property deductions can save you thousands of dollars each year. To make sure you maximize 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. Realty Talk and your host, Bushy Martin. Do you have a spare bedroom? room. You know, the one that becomes the dumping ground for all of that stuff that you're still going to use one day, but never quite get around to it. Or the room that looks nice and you clean it every week, but hasn't been used for just about as long as you can remember. I want you to park that thought. Now turn to our ever-growing and ever-escalating housing and rental crisis that we're hearing about every day in the news. The migrant population explosion, our continuing

construction industry crisis, massive drop in properties for sale and rent, rising interest rates and rents, investors selling properties as they continue to be scapegoated by governments, and then there's the rising inflation and living cost increases, which have all combined to create pretty much a perfect storm for housing accessibility, leaving many out in the cold or struggling to survive. So what's the answer? Well, it's definitely not slamming the door and closing the borders while governments are finally coming to the table kicking and screaming because pointing the finger at just about everyone else has actually made things worse rather than better it's going to be years and far too late before new housing supply actually comes online so what's the

what's the actual solution well remember that spare room that we spoke about at the start well there are just over 13 million of these right across the country right here right now that are collecting dust like yours so why not do yourself and someone in need a favor and make it available for someone to rent and you can also earn some rental income as well it's a really obvious solution that's sitting right under our noses so we just keep failing to see it but other countries have actually incentivized mum and dads like you and i to better utilise our unused spaces through rental room schemes and to reveal an example to see how they can help us

and our great country. Now, we're joined by show favourite, Lubwena Dortolik, the founder of Energy Disruptor, The Room Exchange. So welcome back to the show, Lubwena. Thanks, Bushy. That was such a great intro. I always love catching up with you. You've got great energy and I love what you're doing

to really disrupt the space. And as I've already said, it's such an obvious solution sitting right there in front of us. I just can't get my head around why people aren't embracing this opportunity and the solution and the problems could be solved very quickly. But I know that you've been doing some homework and research and there are other areas around the globe that are doing what you're suggesting successfully. So to set the scene, tell us a bit more about the rental room scheme. Where is it? How does it work and how successful has it been? Yeah, well, look, I think it's a brilliant idea and it comes from the UK. It's called Rent a Room Scheme. And I'm really hoping that we can bring something like that to light in Australia because it's just such a great way to support homeowners who do actually want to rent out their room.

so we do have you know thousands of people across the country who are listing their homes on our platform now and that's great and they're doing that but i think we could get many more of those 13 million unused bare bedrooms if we actually provided some form of an incentive other than you know being able to make some rent or maybe get some help around the house so the rent a room scheme in the uk is based on well if you rent out a room it's actually helping the the country and the government with their housing crisis and so they're offering a tax break to you for doing so and like duh like seriously think about that it makes such obvious sense so the government at the moment in australia is scrambling around trying to figure out solutions meanwhile there's lots of

innovative concepts that are right under their nose but let's put that aside for the minute yep what if mum and dads who have or anybody really individuals families who do have a spare room could rent that out and have a portion of that tax-free so in the uk you can earn up to seven and a half thousand pounds a year tax-free by renting a room in your home that's about 15 grand in aussie dollars in reality yeah well look look i'm not a mathematician but from what i understand i think the average mortgage is about 500 000 ish and with all the additional interest rate hikes i know for us it's actually an extra fourteen thousand dollars a year so when you think that that room could be rented out at roughly a thousand dollars a month then you've pretty much

got most of those 13 interest rate hikes covered so it's an instant solution the government can say look we're willing to turn a blind eye to a certain amount of income that you can earn tax-free you're helping us solve a problem you're solving a problem for yourself we're not having to build anything we don't have to wait years to solve the problem bam this is just the perfect solution love it so if we sort of translated that uk uk experience uh here into australia how would you see it actually working locally well again as i said the government's trying to find solutions to housing so if we just do the maths for a minute bushy and again you know i'm not great at it but you can correct me if i'm wrong but if we just got 10 of those 13.5 million

so let's just say it's 1.3 million bedrooms roughly right just 10 because not everyone's going to be in a position where they can rent they might have a spare room but maybe their place isn't big enough to have an additional person there's a number of reasons why so let's just say for 10 so there's 1.3 million people who are being removed from the rental market now when you think about the fact that we don't have the current rental supply that we need and we cannot build them fast enough that's solving an instant problem right there because those spare rooms don't have to be built we're also helping 1.3 million homeowners hang on to their homes because of the additional interest rate hikes and then we've got 1.3 million people

that are creating a win-win solution for each other by utilizing space and utilizing their resources so i just think that you know if we can do whatever it is we can house sharing is not the only solution that's going to solve this but it's a pretty damn good one and if we can do whatever it is that we can to support both homeowners and renters to create this um arrangement in a way that is really beneficial for both i think you know the government just really needs to have a look at this and that's just something i'm really working to advocate for because bushy if us as individuals don't do what it is that we can to put a dent in this housing crisis I'm afraid that we will not recognize our country in 12 months from now well there's a great quote that I often use

and that is the the only thing that needs to happen for and I'm going to paraphrase this but the only thing that needs to happen for bad to prevail is for good people to do nothing and we've got a glaring opportunity here and the other thing that that needs mentioning as well I think is that from a cost benefit perspective from government expenditure purposes uh providing tax incentives to existing australians rather than spending hundreds of millions of dollars on building new stock that are going to take years to actually eventuate by the way and we've got a growing and escalating housing accessibility issue both from a ownership and a rental perspective moving forward it's a no-brainer it is it seems so simple to me and i think this is part of the

problem that when things are so simple people ignore them because they're looking for the complex solution because they've got to justify doing something when it's staring us right in the face so um so tell me i love your thoughts on uh what sort of uh demographics will benefit from this approach look i'd say that i don't think it's as much of a demographic bushy as it is a need so i think the need would be you know who are the homeowners because they're the ones that would be affected by it who are the homeowners that have a mortgage who are struggling with the additional uh costs of interest rate hikes but it's not even just that bushy it's also the you know the inflation the cost of living at the moment everything just seems to be getting so much

more expensive so it it's it's looking at who needs it the most and so you know but look having said that too there's also um pensioners and retirees who you know could also be impacted uh you know through tax so i just think this shouldn't be seen as income in that way i think it no it needs to be seen as a way to support households it's going to reduce you know costs further down the round. I mean, what happens when homeowners are losing their homes, Bushy? You know, most middle-class, as they're called, middle-class houses are only two paychecks away from losing their place. And what happens then? We don't have rental supply for them. I mean, I'm hearing stories of people on six-figure salaries who are sleeping in their car because

they can't, not because they can't afford to, but they can't find somewhere. I'm hearing more and more of 50 to 100 people applying for the one rental property. I mean, it must be driving property managers insane at the moment you know with the amount of people they're having to turn away all the time like there's there is a solution and i've been saying a lot lately and this is one thing that i really want to bring into to light i want to get the attention of the real estate industry because house sharing needs to become real estate's third option that's a thought that i had a couple of years ago so we've got home ownership renting house sharing it is a viable option for people not just for the people looking for somewhere to rent but also for the people with

the space because Bushy I don't know why but we've managed to build a bunch of McMansions in this country and a lot of them have got additional bathrooms or you know you just got so many rooms that it's ridiculous and a lot of the times it's not viable for people to downsize it's not viable for elderly people to move out of their communities but those two demographics there have got the most unused spare bedrooms out of any demographic in the country but you know look I know that my husband I both have kids have left home so we house share instead of moving because we love the area we've got all of our memories in the home we've got the neighbors that we know we we have the services nearby that that we use and to be quite honest Bushy moving into I don't know

a smaller place closer to the city oh you know like it's not really a viable option let alone wondering if something's going to be there so there's a lot of reasons why people are not shifting from where they live so instead of it becoming or exacerbating the problem let's see how we can utilize existing stock that's laying dormant in homes right now that can benefit the homeowners it's not just a rent we also have a rent offset option remember so you can ask for help around the house the companionship the support and here's another one we're near christmas house sitters i wonder how many people are thinking about getting a house sitter don't get a house sitter get a housemate you know there's lots of viable reasons why this can work

so yeah really well said because i think it's not just a housing issue it's a community wellness issue and in reality because what you're suggesting and let's face it the baby boomers that are coming through and those that are retired there's a lot of australians who on paper look wealthy and so they're asset rich in terms of the home they live in but they're cash poor and a lot of those people are also very lonely now they're rattling around in big houses they're struggling financially and living on toast and two metal noodles why not bring some life and vitality into your home have some help as you say because there are ways of offsetting the exercise providing a benefit for those who are struggling to find

accommodation elsewhere and collectively it's a win-win all around i just again i think it's an absolute no-brainer in that perspective uh just just let's jump into the future and let's say we embrace this what would be the impact on our housing crisis do you think if the australian government actually got behind this to offer a similar scheme here look i think it's what it will do it will stop further problems from arising because i i really don't understand how the government thinks that by building like all the funding that they've got forward putting forward for for building all these homes in the next five years which is by the way it's really interesting that it's five years and not that not shorter than the term of our current prime

minister because we don't want anyone to be accountable for it not working out do we just don't start me on that one don't start me on that one but you know like it's is this going to work i don't think so we don't have the laborers in the country the cost of materials are ridiculous really how is that going to happen i mean the actual building industry itself needs disruption because the amount of time it takes to build and the way that they're building needs to change for anything to speed up anyway so when you look at the fact that that is really not going to help immediately let alone in the next one two three years we need something right now now you know at the risk of plugging the room exchange this has been deployed right now we're in years we're

about to hit year seven we are established we have verified house sharing platform like it's it's solid it has a running history it's already set up in there and you know we have been lobbying the government we put in submission for the worsening housing crisis we got accepted number 72 that's great we're talking a lot to councils and regional areas to help them as well there's a lot that we can do the technology is right there come and have a conversation with me because we can actually help this problem right now absolutely agree and so on that very point what's the best way for the rest of us in addition to what you're doing the room exchange to actually make this happen now and turn this awesome opportunity into reality well lobby your government lobby

your local council tell them about the uk rental scheme and let's bring this to australia why shouldn't it be the case any tax that's attached to you actually sharing your spare room and solving a problem for the government should be abolished 100 so uh for those of us who are excited about this opportunity as i am how and where can we find out more awareness uh well more about us at theroomexchange.com. That's the letter X-C-H-A-N-G-E.com. Please connect with me on LinkedIn, Ludwina Dordovic.

I'd love to have a conversation with you there if you've got some ideas on how we can work together to lobby the government or how we can work together to, you know, solve this problem. There are so many innovative ideas out there. It's not just house sharing.

You know, there's so many different ways that we can deploy solutions right now. We just have to, as you said at the start of this conversation, we just got to think outside the square. you know what is available to us right now and with technology at the at the place that it's in right now there are so many things particularly in the prop tech space that can help um solve these issues so just get active like don't be don't fall into the doom and gloom of what's

happening because in these times there's also great opportunity for change and the level of change that we can actually encounter that will also at the same token strengthen communities is i think there is a massive potential there that we really haven't tapped into yet absolutely taking action rather than talking about is the absolute key so i implore anyone who's listening to this to actually make a call stir up your local polities talk to the council have a look at your own bedroom and then reach out to louise to see how it's going to work for you uh so look louise i'd always love having you on the show i want to really thank you for these insights again as i've said a couple of times already, it never ceases to amaze me that the best ideas are actually often

staring us right in the face, yet they remain invisible because we fail to see them and take advantage of them as they're always almost too easy to adopt. So again, I want to encourage everyone to start taking action and making noise about this and reach out to LaWeena and her team at theroomexchange.com. And just to repeat that, it's theroomex, without the E, exchange.com, or just click on the link in the show notes if you want to find out more. So thanks again for bringing this to our attention, Louina. Thanks, Bushy.

I really appreciate it. 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. 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. KnowHow 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. This is Realty Talk powered by realty.com.au As an investor, you're bound to have heard the expression that property is a game of finance.

And in fact, I've often said it myself. But is this really the case? And is there more to it? Well, today's guests, Josh Descartes and Tom Pettifer from Only Source Property, are actually transforming real estate property sourcing and search transactions across Australia by inevitably matching buyers' agents' clients' briefs for selling agents' pre-market and off-market properties, certainly believe there's more to property

than just finance and the numbers. And they both join me now to complete the property investment picture. So welcome back to the Property Hub's Realty Talk Show, Josh and Tom. Thanks, Bushy. Thanks for having us. Thanks for having us, Bushy.

I love this topic. I had a good read of your blog on your website recently, and I thought it was well worth having a chat about it. So to set the scene, what do you believe are the limitations of making property decisions based purely on the numbers well look by only focused on the numbers you're really you're overlooking the non-quantifiable factors that are related to property so um you know social social perception lifestyle livability um you don't want to fall

into the trap of of perceiving an area to be what everyone else believes it to be i mean you know like i guess what they say don't follow the crowd and the crowd's always late or usually wrong so the most successful people in in this world that become successful by not following the herd so um yeah like until you really go in and do your own dd and and and really assess the fundamentals you're not going to know if the area has the prospects um yeah and if you just fall into that trap and believing to see it to be what everyone else perceived to be um you can miss an opportunity totally agree and you touched on uh perception there tom so what part does perception play in property do you believe goss yeah so i guess um perception is is everything

really i mean it you know value is a perception what one person perceives to be the value of a property compared to another and it all comes down to the way you think about the property the way you think about the location the way you know you assess the property in your mind and it just differs between two parties i guess you know some things that you could consider are how do you perceive social housing to affect the property prices on the street um some people would perceive it that it would reduce the value of the property and other people would see it as a an opportunity where you might be in a rapidly gentrifying area and that your your perception is that that area they will get developed eventually they will get developed the area is rapidly gentrifying and

getting in at a good price point for example so i guess fundamentally everyone thinks differently and your perception of what one thing is is not necessarily the perception that someone else has on the same on the same property in this instance yeah i agree i think the the awareness of local perception in particular is important in the property sphere because on the numbers something on a desktop can look fantastic but if the locals think that a particular area or proceed precinct is is a dog uh it's it's unlikely to perform from a growth perspective particularly for that very reason because the locals have already tagged that area as a bad area regardless of what changes that like to occur so it if at worst it's going to be slow in its growth versus versus other sides

so really important distinction you draw so when it comes to investing then what are the bedrocks of buying decisions yeah so i guess in terms of bedrocks it's um prompt action is probably the one thing it's it's not being held back and doing your fundamental and numerical analysis on a property it's encompassing both parts so you'll look at you know for example commutability um looking at the yeah this this the social status of the area looking at proximity to infrastructure and support um so there's a lot of you know like tom said there's there's a lot of non-quantifiable um areas of property assessment that you need to take into consideration as one of the the core decision making you know the yield and the and the property price obviously that is the financial

component however you know you've got to take into account a broad spectrum of of factors and then then make a decision um and i guess reality is is 80 correct like your your decision is 80 the way to a perfect property you know making the decision and and making prompt taking prompt action at that point you're going to be sitting there for ages trying to find that you know a unicorn i guess that's 100 perfect so that prompt action in a good market is everything yeah well said so how can our psychological biases cloud the judgment on property decisions then guys i guess fundamentally the the herd mentality is a key is one of the ones that i can think of herd mentality you're following what people are saying you're following the group and i'll give

you an example at the moment people will say have to buy in perth but a lot of people wouldn't be able to pinpoint exactly what the reason is to invest in perth um so i guess you know herd mentality you would reduce the amount of due diligence and amount of oversight that you apply to a property yeah I guess you know the psychological attributes they lead to hesitation as well so if you did identify that there's a large amount of social housing in an area that would present some sort of hurdle that you would say hey well I don't know whether I should do it now and the reality is is 50 other factors that should be taken into consideration in making a decision that's only one point so i guess we you know it's a holistic approach um you don't

want to be caught in these biases where you know herd mentality or um getting caught up on the first thing you read saying oh it's got eight percent growth then that must be a good area so yes we've you know you need to take a holistic approach and not be caught up in the the nitty-gritty of one or two attributes and and go for it all it'll be like the analogy that the stock market trader that just does the technical analysis but ignores the fundamental the two have to be in sync yeah it's using both sides of the brain uh to make a decision rather than relying on one and that there's some people who make decisions purely on the emotional uh side of the brain and and the others who make it purely on the rational it's a matter of combining those two to

get the the best outcome so you bring this all together then what do you believe is the true secret to property success and that can in this context adaptability i bet we all don't invest the way the way we invest now invest now probably wasn't the way we first started but we're not going to learn and grow it's all a big growth journey it's a long-term game um so i think the action would be a bit you have to transact to learn so i would yeah i would definitely say yeah the ability to adapt as your circumstances change um not not for the sake of it but yeah adaptability with for for the for the right reasons is key yeah well said any final comments there josh yeah i think tom's tom's nailed it but yeah you learn through your mistakes and unfortunately

yeah there's money at stake but you know fundamentally transact learn understand what you're good at and whether it's you have a renovation strategy or whether you like development or buy and hold or you know trying to trying to buy a you know a little um you know a unicorn as such you might be good at doing one thing and stick to that and adapt as necessary based on market conditions and and obviously your financial capacity and the way you you know you identify properties in the market that will change um you know i guess a perfect example is people start with residential property they transition to commercial and then they say i want to do some developing and you know obviously the financial capacity is one of the things that is you know

considerably um or considerable in that sort of instance however you really gotta you know look at it it's it's your brain opens up over time and the way you do things and how smart and how much street smarts you have in property that adapts and if you embrace that then you can do well yeah well said well look i really want to thank you for these quite timely insights gentlemen which certainly reinforces that successful property investment is both a science and an art that delicately balances the importance of the mind and emotion from behavioral economics with the might of money so if anyone would like to learn more if you're a buyers agent or selling agent wanting to eliminate the pain and stress of sourcing quality properties jump on the link to

onlysourceproperty.com that you're going to find in the show notes so thanks again for your journalists time on the show today josh and tom thanks very much pushy thanks hi just before we go back to the show i want to spend a few seconds and tell you about a book that was sent to me that's now become my go-to reference when i'm looking for inspiration about property investment you know sometimes it's not about knowing all the answers it's certainly more important to know what questions to ask. This book by Rasty is called the Property Wealth Blueprint. And it's one that you don't read just once and then put it away. It stays out as a reference. It's a book that you go back to time and time again, as I do, because it's packed with personal experience and with great

examples of how to get property investment right. It's very frank, it's to the point. And as you can see here, I've needed to bookmark several points. And I can tell you that it's a constant companion on my desk here. The remarkable thing is that it's absolutely free on Rasty's website, getrare.com.au. Get Rare, it's a gateway to a richer life. The website there for you again, getrare.com.au. So get this book, get it for yourself. Realty Talk exclusive to the Property Hub. Now, housing accessibility continues to be the biggest hurdle preventing hardworking Aussies from getting onto the home ownership ladder

because saving for the required deposit and non-costs is like chasing a train that's already left the station as home values in most parts of the country continue to rise. And this has echoed in a more than 25% drop in home ownership rates since the early 1980s amongst those aged between 25 and 34 and saving up the 20 deposit to avoid costly lenders mortgage insurance on a typical average cost home now takes 14 years or more based on average incomes so to help overcome this major bottleneck and help aspiring home buyers to secure a bank loan with zero deposit cba-backed industry disruptors own home have

recently launched their Australian First Deposit Boost Loan. And co-founder James Bower joins us again to reveal the details. So welcome back to the Property Hub's Realty Talk, James. Great to be here, Bushy. Thanks for having me. I love the way you guys are constantly looking at the market and looking at different ways and avenues to try and help people get onto the property ladder. And this is a great addition to the exercise. So tell us a bit more about what the Own Home Deposit Boost Loan is and how it words. So the Own Home Deposit Boost loan is really focused on removing the largest barrier to home ownership that we see currently facing Australians. And that's the upfront costs. Of

course, as many, you know, serviceability and affordability is also a challenge, but we're really focused on accessibility in the form of removing those upfront cost barriers. And so the problem that we're here fundamentally to do our best to solve is that home ownership in Australia is at risk of becoming hereditary. I mean, Bush, you just mentioned those stats around falling rates of homeownership amongst my generation. And it's certainly not by virtue of sort of changing preferences and desire to have the security of homeownership. So today, up to two thirds of new homebuyers utilize the bank of mom and dad to purchase their property. And that's not the fault of those that rely on it. It's certainly becoming a borderline necessity to access the

security of home ownership. And we're really here to support with our deposit boost loan, those that don't have access to that intergenerational wealth. And so we know that right around the country, there are hundreds of thousands of families that are more than capable of making the repayments of a mortgage or affording a mortgage, but don't have the hundreds of thousands upfront that are typically required to bridge that deposit cap. And so that's where we step in. We fund up to the full 20% deposit, allowing our customers or brokers clients to access a standard 80% LVR mortgage from one of our growing list of partner lenders and also avoid costly lenders mortgage insurance. And so most importantly,

we're really focused on enabling people to buy their home today rather than sort of years in the future that they'll continue to spend sort of renting and typically paying off someone else's mortgage. Yeah, that's a great hole that you've identified and a really awesome way to plug that gap. So in the context of all that then, James, who's best suited for the own home deposit boost loan as well as who isn't? And talk us through some of the eligibility requirements as well. Of course. So the individuals or families that we most often support are those who are doing everything right. They've got great credit histories. They're earning high incomes or have great incomes. They've got great credit scores. They don't have the full 20% deposit,

but they're otherwise in a position to service a mortgage as well as the own home loan. So as I said, people that are financially responsible, but are feeling sort of left behind by the Australian housing market. And so typically those people are individuals or families who, as I said, don't have access to the bank of mom and dad. Maybe they don't have parents that have enjoyed the great Australian property boom. And overwhelmingly, you know, in a country where 30% of Australians were born overseas, there are so many who, you know, have parents who are very unlikely to have enjoyed the great Australian property boom, which is more often than not the source of that sort of intergenerational wealth transfer for folks

to bridge that deposit gap. And so the common thread is that, you know, these families would all be dream customers of lenders if they had the deposit funds, because they're more than capable of affording a home loan. Yeah, perfect. So if you're getting specific around some of those eligibility requirements, can you sort of break those down for us? Yeah. So typically, in terms of an income threshold. If you're above the first home owner or the first home buyer guarantee program threshold for income, then that's becoming an individual or a family that we can support. And those cutoffs are sort of $125,000 for individuals and $200,000 for couples or families. And so that starts to put you or that puts you into a territory where we're going to be likely

able to support you and it also means that you're going to have a serviceability for a property profile that we're going to be best placed to support you purchasing because we're today able to support families looking in metro and sort of regional centers so if we're in New South Wales think of sort of Newcastle down to Wollongong and Greater Sydney and so that's from a sort of property profile and geographic area point of view. And today we're able to serve families on sort of the east coast of Australia, Perth, South Australia, but not yet in Tasmania or the Northern Territory. Yeah, awesome. So to put some context around the relative costings, what are the upfront costs and how do they compare with other options that people might want to look

at? Yeah, so the upfront costs of own home are really straightforward. It's one to two percent plus GST of the purchase price. So it's 1% where you contribute a 10% or more deposit towards that home purchase. And it's 2% where you contribute less than a 10% deposit. So it's typically less than half the cost of lender's mortgage insurance. And when I say, in fact, more often than not, you can't access lender's mortgage insurance loans above a 95% LVR typically. So to put that In perspective, those that are looking to buy a medium-priced home in Sydney are going to need to save typically over $270,000 for a 20% deposit and stamp duty, which would, as you said, Bushy, often take well over a decade or 14 years was the figure that you mentioned. With the deposit boost loan, so aspiring homeowners are going to need a fraction of that for that medium-priced home in Sydney, so $70,000, including stamp duty, and so really slashing

the time that it would take to get into the security of homeownership by, hopefully, a decade. Yeah, it's a significant saving, and with good quality properties and areas continuing to grow in value, then they're actually getting on the wealth train as far as that goes as well. So I love that. Now, I know you've got a deposit boost loan starter fee that's incorporated in what you've just mentioned.

What's included in that, please, James? So that starter fee covers a personal own home buyer's agent. So our buyer's agent service is really what our customers shout about from the rooftops if you read our online reviews. So a licensed buyer's agent to guide customers through the home purchase journey from property hunting to settlement and move in. So the expert team handle all real estate agent communications, including negotiations and auction bidding. Conveyancing fees are included in that starter fee. So usually homeowners or

aspiring homeowners have to pay additional costs for those, but not at own home. So we work with a team of conveyances and solicitors to make sure that paperwork is done right and fast, as well as building and pest or strata reports are also covered by that for any properties that you diligence as part of that home purchase journey. And so while we hope that every property report comes back with a clean bill of health, we've certainly, or the team has certainly seen it all before. And so we're there to advise on next steps

if there's any red flags that come out of those reports. And of course, families have a personalized digital home finder tool. So we're in the weeds via that with our clients to help them suss out properties that could genuinely work for them. I love the way you're taking a lot of the pain, stress and time away from the process, as well as bolstering, particularly someone who's buying a property for the first time,

who knows enough to be dangerous, often in that context, to have an experienced buyer's agent by their side, who's de-risking the whole process, coordinating the inputs, and really giving their time back to focus on the enjoyable part of the home buying journey. That's an awesome advantage they get by using own home to help them do that so i love that now are there any limitations james on homes that can be purchased using the own home deposit boost line yeah so one important consideration is what's the purpose of the loan or the home so today we can support those that are looking to own or occupy their properties that are looking for a home to live in and we're able to support families in metro areas or regional centers of new south wales victoria

Western Australia, and South Australia. We're today only able to support those that are looking for existing dwellings or homes that have, and by that I mean have occupation certificates. So move-in ready homes if they are new builds. So unfortunately that means that we're not able to support house and land packages today. And I know that that's a really important focus for a lot of first home buyers uh so so watch this space but that does come with its own sort of distinct set of uh risks it's a very different area and given the challenges that construction industry continues to work through uh then it's probably a good place to sit out of in the the current climate uh now you touched on risks there james are there any risks from a home buyer's perspective

associated with a deposit boost loan that they need to know about yeah so i think there are you know broadly speaking inherent risks when purchasing a home with credit it's a massive investment uh the property market can be volatile we've just lived through a period of you know relative volatility um in the context of the australian property market but we are there to try and mitigate those risks as much as possible um part of the magic as you mentioned of how we're able to support lending up to a hundred percent of the home value is that we are incredibly rigorous when it comes to assessment and that's both for the individuals or families that are borrowing from own home but it's also being incredibly rigorous in the diligence of the properties

or the homes that they're buying so for the person uh for for the or the people you know normal lending looks at do you have a 20 deposit and then more often than not um their lenders are comfortable even if that is mostly in the form of a gift from say their parents in contrast we are there to understand 12 months of banking transaction data to make a real world assessment of someone's ability to make repayments on that loan obligation for both the first mortgage as well as their loan with own home. And so the second aspect of that risk mitigation is really on the house or home itself. So the most significant risk for customers and also for own home is that, you know, a suburb record is set where it shouldn't be and that people spend

their money on a home that's not a good investment. And so we're really hyper-focused on ensuring that customers buy an amazing property at a really great entry price. And we see our buyer's agent service is really aligned with, you know, honestly own home's interests as a lender to that family, as well as the client's interest that we're there to support. Yeah, I love that. Having your own buyer's agent in your back pocket, keeping an eye on things

and orchestrating things on your behalf is an absolute bonus that the average person buying a home doesn't even get near to. So some clear advantages there. This is really interesting. James, what's the best way for anyone interested to find out more?

The best way for anyone to find out more is one, speak to their broker. That's a really great avenue. And I think they're really well placed to help you think through what are all the options that are available to me, whether that's parental guarantor, whether that's high LVR, LMI supported loans, or whether that's own home. But of course, you can also find out more directly about own home via our website at ownhome.com. And there you're able to read customer stories, compare upfront costs, and ultimately check your eligibility for Own Home. Yeah, I love it, James. I know how property finance team's getting right behind what you're doing with this deposit boost loan. So for those

who just want to have a chat to some of our finance architects, feel free to reach out and have a chat. But I really want to thank you for bringing this quite groundbreaking initiative to the marketplace and to our attention, James. And I just want to reinforce, I want to suggest that anyone who'd like to learn more just jumps on the website at ownhome.com. And you can do that just by clicking the link in the show notes. So we appreciate your very generous time on talking about this today, James. Thanks, Bushy. Here's how Realty's discovery search works. Now think of AI as an assistant on your real estate journey. How AI works is by using algorithms and data The words that you use to describe the type of property you want.

By entering what you want, the AI learns and makes predictions or decisions and then shows you the results. So rather than searching by suburb and then property type and land size and so on, simply type in or say what you want. The more you use Realty's AI discovery search, the more accurate it becomes. Unlock bonus content now as a premium subscriber. Are you still insured? And how much have you seen the cost of your insurance policies increase in recent times? One of the areas that property buyers and investors need to pay much more heat of, as the escalating risk of climate change and its effects on extreme weather events

continues to escalate, is getting good specialised insurance cover. Sadly, many standard insurance policies offered by general off-the-shelf insurance companies or rebranded insurance products that are offered cheaply via supermarkets, etc., may look cheap, but in reality, they're not worth the paper they're written on. And you only find this out when you go to make a claim. Remember the old adage that if it's too good to be true, then it probably is. And what appears to be cheap insurance may actually turn out to be very expensive. when your claim is rejected or takes many months or even years to settle.

So believe me, if you're a long-term buy-and-hold investor or a long-term homeowner occupier, it's not a matter of if you'll need to make an insurance claim, but it's just a matter of when. And it's the when that reveals just how good, bad or ugly your insurance policy is. As when we owned and ran a property management business for many years, we got to see firsthand the claims processes of most insurers and many of the cheap off-the-shelf

policies from general insurers are looking for a reason to say no and to not pay out when it comes to making a claim and it can often take many months or even years before your claim eventually gets settled. So in the meantime you're left holding the cost. Now this is no insurance advice and it's only general information and it's definitely not a recommendation as we're not licence to advise on insurance, we just want you to make sure you consider spending just a few extra dollars a year required to get specialist building contents and landlord insurance from a recognised provider or speak to a savvy insurance broker to assist you with this. Now following on from this, with climate change risk escalating, you need to be very careful about where you buy

a property because even the specialised insurance companies are now pulling back from offering or renewing insurance in climate change areas that are increasingly being affected by extreme weather events in terms of the escalating frequency and severity of these issues. For example, as of a few weeks ago, some property insurance specialists are no longer offering building insurance in high-risk flood-prone areas, as the buildings are no longer considered insurable. Given a series of floods in recent years, the dignity in securing cover for properties in flood-prone areas is well known, and the worsening extreme weather events and resultant impacts on claims and costs have finally meant that a growing number of insurance companies can no longer offer

ongoing building cover to properties in high-risk flood-prone areas. And this is not just for new property buyers, as existing property owners with existing policies will no longer be able to renew them. Property owners in these high-risk areas can still take out landlord and contents policies, but not building policies, which is a big issue. And some insurers are also putting embargoes on cyclone-prone areas. Over the next six months, we've been made aware that a growing number of insurance companies are unable to offer cover to new property purchases and new policyholders in cyclone-prone areas. Now, it's anticipated and hoped that this is just a short-term change

and that they will once again be able to offer cover in these areas in due course, but time and climate conditions are likely to dictate this. Existing policyholders in these areas can still renew their usual cover and limits, but potential new property purchases will be at the mercy of nature. The message, be careful where you invest and buy property from here on through.

So we suggest that you can contact your insurer to confirm exactly what you are and aren't covered for. Make sure you consider a property insurance specialist to make sure you've got good insurance cover and at the adequate level and take much more care of where you buy property in the future to ensure you can actually be insured.

And if you want to discuss this more and share your thoughts on this growing area of risk, join Eddie the Frenchman on the Property Hub Collective Facebook community by clicking the link in the show notes to facebook.com forward slash groups forward slash The Property Hub Collective. Thanks, and that's more food for thought.

And that brings us to the end of this week's show. A big thanks to Ladwina, Tom and James for their contributions. And make sure you don't miss a single episode of Realty Talk or Bushy's Get Invested podcast delivered to you each week by subscribing to The Property Hub now on your favourite podcast player

or wherever you're listening to or watching this show. Also, join the conversation anytime on Facebook at the Property Hub Collective. Thanks to our supporters and content partners, realty.com.au, BMT, Tax Depreciation, Know How Property Finance Get Rare Property and Apera Marketing. I'm Kevin Turner and on behalf of Bushy

and the Property Hub team, we look forward to seeing you again next week. Thank you.