Property Hub - Investment Insights & Inspiration - Realty Talk: Proven Property Predictions + PIPA Imposters + Doing Deals Differently

Episode Date: October 22, 2022

How and where can you separate the wheat from the chaff when it comes to reliable property predictions? Legendary property analyst John Lindeman joins us to reveal the answers and his latest Shooting Star Suburbs report. How can you engage property professionals that you can trust to act with honesty and integrity? The Chair of PIPA, Nicola McDougall, returns to reveal their ongoing crackdown on property imposters. As many locations shift from a seller’s to a buyer’s market, what does this mean to your negotiation strategy at this opportune time? Australia’s number one property negotiator Scott Aggett from Hello Haus returns to unpack how you need to do deals differently.  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 week's Realty Talk show, which is now proudly a part of the new an expanded property hub, your home for property investment insights, inspiration and stories from Australia's top property experts, investors, leaders and analysts in collaboration with Appiro Marketing and DM Media, Australia's largest independent podcast network. I'm Bushy

Martin from Know How Property Finance and we've got another cracking show for you this week. To get things rolling, legendary property analyst John Lindeman joins us to reveal where can obtain proven property predictions for the future through his latest Shooting Star Suburbs report. How and where can you engage independent property professionals that you can trust to act with honesty and integrity? Nicola McDougall, the Chair of PIPA, or the Property Investment Professional of Australia, returns to reveal their ongoing crackdown on property imposters. And to conclude the show, Australia's number one property negotiator, Scott Agate from Hello House, unpacks how you need to do deals differently with your negotiation approach

as many locations around the country shift from a seller's to a buyer's market. But before we get into it, make sure you don't miss another episode of Realty Talk by subscribing to Property Hub on your favourite podcast player, where you'll get two powerful episodes of both Realty Talk as well as the Get Invested 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 stacks to unpack, so let's get underway. Greetings and welcome.

Now, in a world where everyone with an iPhone is now a property expert, how can you stay sift through the, and separate the wheat from the chaff when it comes to reliable property predictions and information to help you make good property decisions. Well, unfortunately, the property landscape is littered with historic rear view mirror data that tells you what's happened, but doesn't actually help you when you're looking through the windscreen at the road ahead, and you're not sure whether the shimmering tropical oasis is real or it's actually a mirage. So where do you turn to get reliable forward-looking property reports? Well, for our money, it's a long-term show favourite and one of Australia's leading property market analysts

who's actually got a legendary track record of correctly predicting housing movements. And we're talking about John Linderman, the CEO of innovative property market research firm, Property Power Partners. So welcome back to Realty Talk, John. Thanks very much, Bushy. It's great to be here again. And hello, everyone. Yeah, I'm really looking forward to diving into the subject, mate. So to kick things off, what are the three biggest mistakes that investors make that you've experienced over the years? Well, I've been around a long time, Bushy, and I've seen lots and lots of mistakes made,

some of which I've unfortunately made myself in the early days. But I think the main mistake is buying with your heart instead of your head. And I've seen this time and time again, when people go away on holidays, and they see a cute little beach house. and they think, wow, you know, we could retire here one day or we could use it as an Airbnb and come here on the holidays, but they've got no idea as to what the actual growth potential or the rent market potential for that type of area is.

And another mistake is they might go to an area and say, well, this has got great potential, but they see a house with a tropical garden and a pool and buy that instead of buying typical property, which is what you do if you're an investor. I think the most important thing to remember about property investing is that it's not about you, it's about the person who is renting the property or going to buy it from you. And I'd like to share, Bushy, if I may, a story that explains this quite clearly.

Yes, please. Okay, so what it is, we do a lot of analysis of the property market and we look at areas that have got the highest rental yields and we look at in particular at areas where the rental yield is supported by high rent demand not because prices have gone backwards and we discovered this little it's a suburb of Hobart called Risden Vale it's on the eastern shore of Hobart and it had the highest rental yield in all of Tasmania genuine rental yield so we went there Carol and I went to as we do a lot of on the ground research and we decided to have a look at Risdon Vale to see what was causing this high rent demand. Now, when we got there, what we saw

was the male maximum security prison. It's where all the bad boys go from Tassie. They go to this jail in Hobart. And I thought, it's just terrible. You know, there's razor wire, there's howling dogs and searchlights at night. Why on earth would anyone want to rent here? And what we discovered was that it was actually the wives and the girlfriends of the inmates who rent in Risdon Vale while their partners are serving time so that they can be near, bring the kids to the prison to visit dad and have conjugal visits. So the actual, yeah, and it's actually true.

So the rent demand is astronomical. So you think to yourself, well, I wouldn't want to live there and you probably wouldn't, but other people do and that's really what it's about so always use your head and not your heart that's a really good example john now the best one i've heard i think in relation to demonstrating that it's the it's the numbers that work not not the the feelings and how glossy the place looks so mate let's sort of switch into the future now i'd love for you to share how you can actually predict the future of in the property market? Well, that's a question I'm often asked and it's all about learning about

how the market works. I started a long time in property investing. The first property I bought was in Hawthorne in Melbourne. It doubled in value in four years. And being young and naive, I thought that's how the market works. And the second property I bought didn't go anywhere in four years and we actually lost money on it. So I thought, I've got to find out how the market works so I read all the books I could find on property investing I went to boot camps and seminars and workshops and I learned a lot from a lot of you know well-known people but none of them actually could tell me how the market works and how investors can benefit so I then I'd finished my professional studies I worked for five years at the Bureau of Statistics studying the property

market and then another five years as head of research at Residex and then I set up my own company which I've owned for the last 12 years so the whole aim was how does the market work you know and it's really about supply and demand there's been a few famous studies stapled and did one of the Sydney market from 1890 all the way through to present there was the Herengracht study which is 400 years of property market movements in Amsterdam and I did my own study of the Australian property market from 1901 and what I discovered was that it's supply and demand simply you know if there's enough properties available prices don't go up and if the demand is too high then they do and how how can you measure that so I studied ways of you know what

numbers you look at what are the important indicators and pretty much their property sales and property listings and there's a relationship between them. In 2016 I was awarded an innovation patent for my predictive system and that's what we use in all our reports and when we make our predictions it's all based on this methodology that has been proven to work. Yeah well that's certainly groundbreaking in that respect because as I say most data is historic and that's great at telling you what's happened, but there's very little that tells you what's likely to happen. So now, as you've mentioned with your own company,

you're now producing self-predictive reports, such as your Shooting Star Subway report. Just how accurate are they then, John? Well, the accuracy of our database on which they're based, it's been since we developed the database in 2010, which is 12 years ago, it's been over 90% accurate in predicting both the direction and intensity of price movement. So that's a pretty good 90% accuracy rate.

Remarkable. Yes, it works. But, of course, we don't make the market. We can only predict what's likely to happen. So if there's no growth in the market, our prediction reports won't be able to say, well, this area is going to go up more than the others because there's simply no growth. But what we have also discovered is that Australia, especially the capital cities, has always had an acute shortage of properties.

And so if prices don't go up, rents do. And that's what we're seeing at the moment is rent demand is escalating. So you can always go for either cash flow or capital growth with the property market, which is a great fallback. You know, if you're not getting one, you'll get the other. Yeah, no, brilliant. So how can investors benefit from your reports then, John? Well, the best way would be by buying one, I'd say. But I'm not here to sell my reports.

We issue three different reports every month. We issue different ones. We have the shooting stars, the cash cow suburbs, and cheapies set to boom. So cash cows obviously concentrates more on yield and cash flow, the other two on growth. So we've always got one report out there and one of the benefits of these reports is they're not just reports that say here are the areas with the best cash flow or the best growth. What we do is we look and do this underground research to make sure that the numbers are supported by what's actually happening on the ground and that there's enough properties available on the market for you to actually go out, negotiate a good price and find the right type of property.

so it's no good me saying oh this area's got boom potential if there's not one property listed for sale what's what's the good of such a prediction it's got to be in areas where people can actually invest and buy the right types of properties so that's what our reports do in a nutshell yeah just on that last point you just made I noticed with your most recent reports you've actually excluded the territory and in Canberra because clearly there's just not enough listings or property opportunities there to justify or quantify what's likely to happen. So I'd take my hat off to you because not many people have the courage and gumption to make that call. Yeah. And it's, I mean, we're not saying that these areas aren't going to boom or whatever

they're going to do, but it's just, as you say, there's not enough properties. We need about 20 properties listed for sale in the suburb before we'll include them in our reports. Yeah, brilliant. Well, look, I really want to thank you for shedding a very informed perspective on the future of property, John. And thanks again for joining us on the show today. It's been a pleasure, Bushy.

Thanks, John. Well, there you have it. The facts speak much more clearly than fiction when it comes to predicting the future of property moments. So if you're serious about ignoring the noise and getting the good oil, you can't afford to miss John's property predictor reports and his latest Shooting Star Subwards report

be confined at lindemanreports.com.au. Stay tuned for more here on the Property Hub's Realty Talk. 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. Hi and welcome. Now, unfortunately, the history of the property industry has been plagued by slippery shoe salespeople and spruikers who suck people in to overpay for poor properties that invariably underperform. Like wolves in sheep's clothing who present convincing arguments by cleverly packaging truisms that sound plausible but don't ultimately pass the sniff test. So how can you separate the sheep from the goats and engage your team of independent professionals

who operate with integrity and honesty and have your best interests at heart, not their own hidden agendas? The answer, PIPA, the Property Investment Professionals of Australia, where membership demands that professionals across the full spectrum of property strategists, buyers, agents, finance brokers, and others uphold a very strict code of conduct. However, some PIPA members who've been operating as imposters as they fail to uphold the high professional standards or falsely advertise their PIPA membership when they no longer actually have it are potentially misleading, unsuspecting investors. So to discuss PIPA's proactive approach to upholding and ensuring their professionalism in the industry, the chair

of Pippa, Nicola McDougall, joins us again. So welcome back, Nicola. Thanks, Bushy, and thank you for that intro. Apart from your astounding command of the English language, it is sad that every word that you were saying was true about the myriad charlatans and spruikers out there, but that was an amazing introduction. Thank you. No, thank you. I think the sad thing is that There's enough of those out there that give the bad name to the other host of very professional operators in the industry who have been doing the right thing and continue to do the right thing. So I just admire the way PIPA is really setting the standards there.

And I guess just to get into it then, Nicola, can you sort of summarize for us what is PIPA's key role in the industry as you say? Yeah, so PIPA, we've been around for about 15 years now. you know we're a non-profit industry association for anyone who is involved in the provision of property and investment advice and the reason why people was formed many years ago by you know the very best practitioners back in the day was the fact you know that the spruikers were such a huge part of the market and to provide some consumer protection that is because there isn't any regulation in this space because property is not seen as a financial instrument so it was

okay well that's unfortunate that that's happening obviously PIPA throughout the years have been lobbying federal governments to help to see if we can get some legislation in the space we haven't been successful I think it's all too hard for them so what we continue to do is we're a membership body where the very best most most ethical and professional practitioners choose to belong to the association. They choose to abide by our code of conduct as a key plank of their membership of the association. And most of them also complete a qualified property investment advisor training program, which ensures they have that additional level of education out there as well. All of these things obviously provide additional consumer protection

out there and also raises the professional standards of everyone working in the industry. Yeah, brilliant. So just to give us a bit of a taste then, what are some of the key elements of PIPA's code of conduct? It's all about, the code of conduct is all about sort of fostering best practice by raising the standards within the industry, facilitating professional development and market integrity. The number one one though is really about agreeing to disclose any commissions that may be paid to you uh in your sort of you know as a property investment professional um what's what's vital with that disclosure is you know it's trans creates transparency everything is out in the open um it's about everyone obviously knowing uh you know both sides of

of the situation but spruikers they never do that right they will never ever they won't you will present themselves as operating on the buying side of the transaction, but they're really operating on the selling side. You're not buying a property, you're being sold a property. And what you don't know as a consumer is that they are getting paid a significant commission by a bunch of different people, let's be honest, to promote that property to you with the pretense that they are providing you with property investment advice um that's the way spruikers have operated forever that's why how they continue to operate so it's really that commitment to the disclosure of any commissions that might be paid paid and when i'm saying that i'm not talking about you know

every type of commission but you know sometimes there are you know some commissions that are paid for referrals and things like that but it's just about being honest upfront and transparent about the process and and by our members by our members doing that it means that they are already you know far and away uh the the best girls and guys in the industry because they are prepared to to provide that information to every single client that chooses to work with them yeah it's spot on and eliminating uh hidden and secret brown paper bags uh so that the investors know exactly who's getting paid what and why uh really important and we're not that's exactly and at the end of the day you know our members are professionals who charge a fee for service for

their service they deserve to be paid um but generally they they are paid that by their clients they work for their clients they provide independent bespoke tailored advice for that particular person for their individual circumstances so we're not saying you know the disclosure of commissions or payments is not about them not charging a professional fee for their services but it's just about setting the benchmark for transparency. Yeah, spot on. And the old saying that there's no such thing as a free lunch, you're paying for it somewhere is ever more true in the property sphere.

So tell me, given that context then, Nicola, why is it important that investors check regularly who are PIPA members, do you think? Yeah, I think it's really important because we have had instances over the years where people have been saying that they're PIPA members and they never have been. They could be promoting it on their websites,

on LinkedIn, for example, but they actually never have been a member of PIPA. We've also had instances where people have done that, where they are saying that they're qualified property investment advisors when they're not. We have had instances where people have been, you know, they no longer are members of PIPA.

Sometimes they've just not renewed their membership, but it's still, you know, if you Googled them, it might look like that they're still PIPA members, but they're not. And also, you know, our code of conduct, you know, is the backbone of the association. And that means that we take consumer complaints about PIPA members very seriously. We have a legal risk committee, which will go through a due process to handle that complaint. and we have on occasion actually terminated members who were seen who through that process it was found that they had contravened our code of conduct and their memberships have actually been terminated so that's why it's vital like on the PIPA website people can go there and check the membership status of anybody at that point in time and I would suggest that they

do that every year because as I say just because someone was a PIPA member last year doesn't mean that they're a PIPA member this year and it's just vital that well in a way you know it's we are you know smallish non-profit industry association we do our very best to monitor this it would be great if consumers could actually pass on information to us if they do find that people are saying they're PIPA members or they're QPIAs and they're not because that is obviously you know saying that you're a PIPA member and you're not is against Australian consumer law um and we will follow that up but it is pretty impossible for us um to actually monitor monitor that all ourselves but especially it's about consumer protection it's about um investors understanding whether someone

is actually a PIPA member or they're not um year to year because you know most of our members members for year on year year on year year on year but then we do have a cohort a very very small cohort who may not renew for a variety of reasons and we do have some whose memberships have actually been terminated. Yeah that's very important so the what are the approaches that PIPA is undertaking then to ensure that members are upholding the highest professional standards then Nicola? Well that's I mean it's on our website as well consumers are able to lodge complaints to PIPA if they have worked with the PIPA member sometimes we do get complaints from investors where the person is not a PIPA member so we aren't able to help them however we do do

our very best to steer them in the right direction we do have a lot of far more of them than we do PIPA members complaints against PIPA members sorry so but we do have that complaint handling process within PIPA and we do take it very seriously and our legal and risk committee follows a due process uh to investigate um every complaint that may may be lodged by by by a consumer and then um it'll it'll be taken to its natural well not as natural I suppose it's a conclusion but also there is appeals process as well from the member but I must say that this happens very few there's not many instances of that happening throughout my involvement in the eight years that I've been with PIPA um because you know we only take complaints from consumers

on PIPA members and they are very very few and far between. Yeah good to hear and I really want to thank you for the great work that you and the the rest of the PIPA board are doing to really uphold the the standards of professionalism in the industry Nicola and thanks again for your time on the show today. Thanks for having me Bushy anytime. Thanks Nicola well there you have it if you're looking for proven independent professionals to assist you on your property journey you can find members on pippa.asn.au of which we're proud members and strong supporters so 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. Greetings and welcome. Now, if you haven't noticed already, property conditions have shifted from the post-pandemic FOMO hysteria of a seller's market, where buyers were actually falling over themselves to pay anything just to secure a property back to more normal market dynamics where different areas are performing differently and out of sync with many areas tilting back to more of a buyer's market. So what does this mean

to your approach to negotiating and securing a property during this opportune time of changing conditions? Well, to give you all of the good oil, we're joined again by Australia's number one property negotiator and founder of Hello House, Scott Agate. So welcome back to the show, Scott. G'day, Bushy. Thanks for having me, mate. How are you? Yeah, great, mate. Great to catch up with you again. And a really good topic for the change that we're now seeing in property across the board. So to sort of kick that off, we know that the property market can't be treated as one and the same nationally. However, it now looks to be mostly a buyer's market as the pendulum looks like it's swinging. So do you actually approach a negotiation any differently in a

buyer's or seller's market? That's a good question. Not really, is the honest truth. I think the fundamentals stay in play no matter what the market conditions are. So we spend a lot of time focused on a deep analysis of every property that we look at for clients. So that's not going to change in any market. We ask the same leading questions to derive the information that we need to craft the ultimate offer so we can reduce the amount of conditions and really streamline that offer that we put forward to make ours stand out, especially if you're in competition with other

buyers. The only thing I think that probably changes a little bit bushy in a softer market, which is where we're heading as you say is that um i have a bit of a rule of thumb that i work towards a 95 to 97 of the way towards the target price is where i would start my offer in a softer market if i ask a certain amount of questions and i get a feel that there's no other purchases involved i tend to start lower so i might start at you know 90 92 towards where our hard target price is and then just suck it and see in terms of how much competition and how motivated that seller is to move in the market. Yeah, okay. Well, I've heard you say on a number of occasions in recent times

that we're now in what you refer to as a shoulder season. So what does that mean and how does it impact buyers and how they actually negotiate? Well, the way that I look at it with the shoulder season is that everyone's familiar with the holiday bookings, right? You've got the peak summer school holidays in Australia. You've got that cold winter months where it's at its low. and I think we're in that shoulder season. If you relate that to the property market, I think that's where we're at. We've come off a really high hot market.

We haven't quite got down to that cold, cold winter market yet. And we're in that shoulder season. The problem with that is that you've got vendors that are still at that summer high and maybe coming off that summer high, but slowly and begrudgingly. And you've got buyers that are probably at the winter low

because of all the media and the beat ups that we're seeing there. And of course the interest rates and how hard that's biting on people's day-to-day affordability. so there's a real you know imbalance there in terms of pricing and it's dangerous for purchases because you've got agents that are very good at giving you absolute confidence that the value is at a certain level and also that they can create competition out of thin air at a certain level

so buyers have really got to fall back on their analysis and their understanding of market knowledge and their understanding of market depth how many buyers they're competing against at any given time to really get a sense of where they should position that price to make sure that they don't pay an emotional premium and they don't get burnt. So that's my view of a shoulder season in a property market. Yeah. Well, sort of drilling into that a bit more, what are some of the agent games that are playing in this sort of softening market and how can buyers firstly identify them and then navigate around them? Well, I'm getting a lot of bluffing at the moment. So I'm getting a lot of agents say to me, as soon as I pick up the phone, there's another interested party. As soon

as I go to make an offer, I've just come out of the house and I've just had a really great inspection I'm thinking there's going to be an offer in the next 24 hours almost every agent is telling me the same thing and I know why because I sat in that seat for over two decades as you know they've got to create competition because they want to play on buyers FOMO the problem with that is it's very difficult for an uneducated buyer or inexperienced buying that situation that's not dealing with this ongoing you know the average Australian buyer only transacts once every 10 years is it's very difficult for them to understand what is a bluff you know what is bait advertising or price positioning and to be able to see through those games and have confidence but it all comes

back to understanding that market value and if you're watching how many properties are coming on the market and the flow of that listing you know those listings I should say then you'll get a really good sense of how hard it is to replicate that asset and whether you really need to jump and get involved or whether you bide your time because you know there's another two or three of these listings that are coming up every week or every month and you don't have to pay that emotional premium. Yeah, well said. So for anyone looking to buy right now, can you give us one trick that they can apply easily that can possibly impact on their purchase? Absolutely. I think it's getting to those motivated sellers, Bushy, that are seeing all the headlines in the media at the moment and

we've got that negative vibe about bringing their property to market, but they're motivated to sell because possibly they've got to sell for whatever reason, maybe it's an affordability buy or they've already um onward purchased so rather than wait until you can see properties on domain or real estate.com and you're going to compete against emotional end users it's build a strategy around building rapport with the local agents in the market that you're looking at laser focus down to one or two suburbs and find those pre-listing properties and those off-market opportunities so that you can knock out the buyer competition and you'll find those those motivated sellers that are going to meet the market and not hold out for those high summer season prices that we already

discussed. Yeah, it makes complete sense, mate. And look, I really want to thank you for these very helpful hints, Scott. And thanks again for joining us on the show today. My pleasure. Thanks, Bushy. See you. Thanks, Scott. Well, as you can hear, there's no one size fits all when it comes to successfully negotiating the purchase of your next property in these continuously changing conditions. So if you're serious about improving your property purchase success, take advantage of Scott's unique and comprehensive Get Buyer Ready course that you can access now at hellohouse.co forward slash getbuyerready. That's H-E-L-L-O-H-O-U-S.co. And make sure you mention Realty Talk for a special bonus. And if the negotiation process is just all too stressful

and too daunting, just get Scott and the Hello House team to do it all for you. You're watching Realty Talk, your go-to place for all things property. Now, before I leave you, here's a final thought from me. To achieve sustainable success in property, you need to surround yourself with a team of proven independent property professionals with demonstrated property expertise in each and every area, including the likes of a property strategist, an accountant, an investment savvy mortgage broker, a buyer's agent, conveyancer, and property manager, just to name a few. But where do you turn to find trusted professionals who operate under a strict code of conduct to ensure that they're actually going to act with

honesty and integrity to protect your best interests? The answer is PIPA, the Property Investment Professionals of Australia, which you can find at pipa.asn.au. Then all you need to do is click on the find a member tab to locate professionals in your area. And while you're there, scroll down to the bottom of the webpage and click on terminations to reveal their register of disciplinary action that covers a list of individuals who've had their membership terminated or suspended by the PIPA Legal and Risk Conduct Committee because of a breach of the PIPA Code of Conduct, their constitution or other relevant law or regulation. That's more food for thought. And that wraps up this week's show.

Another big thanks to our guests, John Lindemann, Nicola McDougall, and Scott Agger. And to make sure you don't miss another episode of your trusted voice for all things property, subscribe to our Property Hub on your favourite podcast player, where you'll also enjoy the Get Invested podcast delivered to you each and every week. And make sure you sign up on the realty.com.au homepage

to get a free copy of my award-winning book, Get Invested. And while you're there, make sure you check out one of Australia's most extensive range of properties for sale from over 7,000 real estate agents nationally, where you'll even find properties that aren't listed anywhere else. Thanks again to realty.com.au, BMT Tax Depreciation, Apiro Marketing and DM Media for their ongoing support. I'm Bushy Martin from KnowHow Property Finance. Property Finance, I'll get it right eventually. Remember to always get invested in your knowledge before you get invested in your property. And I look forward to seeing you again next week. 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.