Property Hub - Investment Insights & Inspiration - Realty Talk - Victorian growth drivers paint a different picture

Episode Date: August 22, 2024

Victoria has suffered the lowest growth rates across the country since the onset of covid, with median prices declining 4.4% in Melbourne and 7.6% in the regions since the peak in early 2022, according to the latest Core Logic figures. Jacob Caine, head of the real Estate Institute of Victoria paints a different picture of the market there and says “The fundamentals and long term growth drivers for property remain very strong in the Garden State”.   Hear Jacob’s detailed update on the Victorian market as he joins Bushy Martin for this extended catchup. Subscribe for free to Realty Talk on the Property Hub channel, join our community and get more insights here: https://linktr.ee/propertyhubau 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.See omnystudio.com/listener for privacy information.

Hello once again and welcome to the show. Victoria has suffered the lowest growth rates across the country since the onset of COVID, with median prices declining 4.4% in Melbourne and 7.6% in the regions since the peak in 2022. That's according to CoreLogic figures. The fundamentals remain strong. I keep saying this wherever I can.

Nothing about the livability, the attractiveness, the amenity, the appeal of Victoria has changed. That remains the case. And it's still a fantastic place to live and it's still a fantastic place to own property as well. That's Jacob Kane, who is the head of the Real Estate Institute of Victoria, who says the fundamentals and long-term growth drivers for property remain very strong in the Garden State.

Here's Jacob's detailed update on the Victorian market as he joins Bushy today for this extended catch-up. Before we start, I want to thank our supporters and content partners, Realty, BMT Tax Depreciation, Know How Property Finance, Get Rare Property and Apiro Marketing. You'll find us on all podcast players as The Property Hub, also on the Southern Cross Australia Network, Hot Copper and on all social media platforms. 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. Realty Talk and your host, Bushy Martin. Now, the words greatest living investor Warren Buffett is famous for saying that you need to be fearful when others are greedy and greedy when others are fearful. And as a long-term closet contrarian, to be greedy when others are fearful scenario appears to apply to the current state of property in Victoria, which unfortunately has copped the media flogging in recent times and is a bit on the nose nationally.

following a spate of headlines painting a picture of gloom and doom on the back of rental reforms land tax implications and a raft of other tax grabs changes and negative debate with the property council recently reporting that confidence in the victorian property industry is at its lowest point since the covid lockdowns consequently victoria has suffered the lowest growth rates across the country since the onset of covid with median prices declining 4.4 percent in melbourne and 7.6% in regional Victoria since the peak back in early 2022, against the backdrop of a 11.8% national annual growth, according to the latest CoreLogic figures. But contrary to all of the negative clickbait fear-mongering sentiment, from the outside looking in, the fundamentals and

long-term growth drivers for property remain very strong in the Garden State, which creates great opportunity for the savvy investor. So, given this often contradictory and conflicting confusion, it'd be great to know exactly what's going on with property in Victoria and what the future holds. And one of the best people to do this in Victoria is Victoria's current president of the Real Estate Institute, Jacob Kane, or Jake as everyone refers to him as, who's also a director of Ray White CRE, formerly Kane Real Estate. And interestingly, he started his career as a principal tenor with Opera Australia. So I'm sure you'll be singing the Victoria's praises today. So welcome to the show, Jake.

Thanks for having me on, Bushy. It's a pleasure to be here. Now, Jake, I guess to kick things off, we're keen to fill the sort of local property pulks by considering the sort of balance of current and future upside lift as well as downside drag factors in Victoria. And we want to look at that across locations, property types and price points. So let's start with a bit of a look at current property conditions and influences before we look to the future.

So to start things off, what's your overall read on the current Victorian property performance conditions? Yeah, the doom and gloom headline grabbing intro that you've detailed there with regard to Victoria is probably, you know, the pervasive sentiment around property here in Victoria. Those figures that you quoted from CoreLogic are replicated across the various, you know, data collection outfits that the Real Estate Institute of Victoria included.

We track the data and we monitor median prices both, you know, in micro markets and the macro market being, you know, regional and metro Melbourne. So, yeah, we've seen median prices decrease across both metro and regional Victoria. There's a few reasons that are contributing to that. um you touched on the sentiment and the the around rental properties and property investment in victoria the uh raft of legislative changes as well as um most recently the imposition of the

the covid debt recovery levy um which is essentially just an increase in land tax um has uh driven i suppose a number a significant number of property investors to exit the market So that's translated into higher volumes of properties, of homes being on the market, and that's contributed to that downward pressure on prices because despite the fact that our population continues to increase very significantly, particularly through the migrant channel, most of those new arrivals into Victoria are actually heading straight into the rental market.

They don't have the capacity or the appetite to purchase properties at this stage. So, as you said, though, the fundamentals remain strong. I keep saying this wherever I can. Nothing about the livability, the attractiveness, the amenity, the appeal of Victoria has changed. That remains the case. And it's still a fantastic place to live. And it's still a fantastic place to own property as well. Yeah, 100%.

And those lifestyle factors tend to drive most people's property decisions on an increasing basis since COVID and the recognition of the importance of that. But I'd love for you to break it down a little bit more in terms of perhaps performance variations across the regions, property types and price points, if you could, because the medium figures often hide the reality that sits within. Are you able to slice it up a bit for us? yeah absolutely absolutely look and this is a trend that's um it's replicated across most of the the major capital cities and we're even seeing it in around regional centres is essentially um people are looking for affordability you know because the cost of living cost of housing um generally is uh is is just so challenging in the current climate so what we're seeing is the the outer suburbs particularly the west of melbourne enjoy significant growth in terms of

their median prices and that's because the the median price there for a three-bedroom house you know places like melton for instance might be sitting around that 650 000 mark whereas if you come 10 15 k is closer into the cbd that's 1.2 million dollars it's doubled so um that that's just the the law of um affordability and supply and demand right the people will will pursue that And we're seeing that replicated out in the regions as well. So the big regional centres like Bendigo, Geelong, Ballarat, they've become internally around their CBD areas unaffordable as well, right, where historically that used to be a much more affordable option for people.

Now what we're seeing are neighbouring towns or the outskirts of those regional cities start to enjoy that very significant, you know, double digit um growth in terms of median house prices um we also i suppose you touched on lifestyle um we're seeing huge variability along the coastal region so the great ocean road the the mornington peninsula we're seeing um units in those areas come down very significantly but houses go up very significantly why um people are making the decision again to pursue uh lifestyle and affordability simultaneously the median prices in in uh suburbs or towns like bleak gallery um is still comparably more affordable than the sort of equivalent in the cbd or surrounding you know

inner east, inner south, inner north of Melbourne. We're seeing units continue to, across the board, perform or outperform houses. Again, it's a simple equation. They're more affordable. We're having people, it's a segment creep, so to speak, downwards rather than upwards. So people that might have a year ago been contemplating

or trying to purchase a small first home, a house, now they're thinking you know what we'll go down i'll get a decent quality larger apartment but i'll save myself half a million dollars in the process so it could be 1.2 million for a in a suburban house or 700 000 for an equivalent floor space apartment they're broadly the trends again micro markets we see some some some really staggering uh results quarter to quarter it's better as you said to track them across the year that gives that more insight but you know in one of these quarters we saw brighton become the most expensive suburb in melbourne just for one quarter took over to tourac and people were like oh what's what's happening here it was just the result the

sample of properties that are sold within that given you know three month window um and for some reason brighton outperformed tourac but without question tourac remains the most expensive place to buy real estate in Melbourne. Yeah, and there I guess reinforces the danger of relying just on median figures because if you have one outperforming sale in that particular period, it can sort of tilt the results. So taking that longer-term view of where things are heading gives a more balanced view.

But let's sort of break it down a little bit now and start with the supply side. You mentioned that there's a lot of or an increasing number of listings compared to a lot of states where they're actually historically have got very low listings. I'd love your thoughts on dwelling approvals and some of the construction challenges that are also impacting on the supply side, if you could. Yeah, absolutely. Look, the Victorian government in September last year unveiled their housing statement, which had some incredibly ambitious plans and targets for the supply of new homes into Victoria and around them

a suite of measures that were designed to help open up the pipeline for new construction. Now, they had some early successes there, definitely. They formed a body which essentially had the capacity to intervene on planning approvals that were sitting too long at a council level. And throughout the first three to four months post the announcement of the housing statement, they were able to approve around 60, 70% of more than 1,400 developments that had been sitting at council for more than 12 months. Great result, right? But like everything, do they actually get built in the end? Are they going to be constructed?

what's the lead time to see those homes actually become available for the people living in Victoria. So like everywhere, we're struggling with workers. The big infrastructure projects around the country have sucked up a huge amount of the construction and complementary skills and trades that we need to build the home. So we saw our building rates sit below previous years and significantly below the sort of targets that the government

and more broadly society was hoping to hit. So supply in terms of homes that meet the needs of the people that are able to buy them, and we often don't talk about that. Like we think there's more supply because there are more investors selling the property, but who actually wants to buy those properties? You know, like we need properties for families, we need properties for individuals we need properties for couples we need properties for retirees and do we have the mix right yes so um that that's been a yeah jump in you know i 100%

agree it's the segmentation that becomes important it's not the number of properties it's the suitability of those properties to suit the demographics that is the the key factor there And while we might have freed up the approval side of the equation, if we're still reliant on the private sector for new housing supply, then a smart developer is going to hold back pulling the trigger unless he's confident there's going to be profit or enough profit in the exercise. So without going off on a tangent, I think there is a role for governments to be looking at the safety net housing provision and actually stepping into the game rather than pointing the finger and just throwing money at the problem. But I guess that's a discussion for another time. But I'd love your thoughts on that, really. Yeah, I couldn't agree more. I couldn't agree more.

And I like to talk about the sort of the underpinning of the entire housing market sits with social housing. And as a nation, we've shirked our responsibility. Governments, successive governments, it's not left, right, it's not liberal, it's not Labor, it's everyone. In the 50s, we constructed around 15,500 social homes per year. since the 2000s we've averaged around two and a half thousand right when we talk talk about the the dwelling the home shortfall that we have nationwide right now if you plug those if we

had to build at the levels that we built in the 50s for the past 20 years we don't have that problem absolutely yep spot on uh let's jump onto the demand side because i think this is where there's a very good story for victoria you you touched on population and the the migrant inflow and and while yes they might initially be jumping into rental uh there's normally a two-year lag before they then start buying property so there's going to be a big flow-on effect here uh talk to us about your read on the demand side of the equation if you could please jake yeah you're bang on there and that's uh i've had this conversation with with lots of people over recent months is that precisely that, that these new arrivals into our state start off in the

rental market, but they make that transition over time, which means that the future looks really bright. For property investors too, we touched on the sentiment piece, right? That often it's sentiment, not calculation that actually drives the behaviours. And people are Now, landlords, rental providers, as we call them here in Victoria, they feel like they've been through the ringer. They feel like they've gone 15 rounds with Muhammad Ali over the past four years because there's been so much change so rapidly and the conditions, you know, you add in a pandemic

and then interest rates going from 0.1% to 4.35% like that and they're like, whoa, let's get out of here. But they haven't looked really at what their asset has done. you know they haven't looked at the longer term performance they're just they're going on the gut right now it doesn't feel right so let's get out of it but what that translates into is is an opportunity for the savvier investor to pick up properties that um that are probably as low as they're ever going to be particularly when you think migration net migration is really high and if those 600 000 people coming into australia are going to turn into buyers and there's a huge

percentage of them right here in victoria right what's that going to do to property prices only one direction that they're going to go from here and i think oxford economics is has predicted or forecast that the the median price here in in victoria for all dwellings so that combines units apartments and houses will hit 1.16 million by 2026 and we're we're at 940 odd right now so the things are looking good if you can find yourself a piece of victoria right now to call your own um whether that there's a home owner as an owner occupier or an investor um it's it's looking bright 100 agree and we've got that constrained new supply but but very strong increasing population growth then you don't need to be Einstein to work out which way it's going to

go uh so uh you know as I mentioned to you off offline I've voted with my feet we've recently bought property in Victoria for all those reasons that we've just spoken about. So look, Jake, I want you to stay with us because we're going to take a very short break and we'll be back to discuss the rental market on the other side. Finding the perfect investment property shouldn't be stressful. At realty.com.au, we connect you with expert buyers agents who do all the hard work for you. Whether you're buying your first property or adding to your portfolio, our trusted buyers agents will guide you every step of the way. Realty.com.au, your gateway to the investment property of your dreams. Find your perfect buyers agent today. Visit realty.com.au now to get

started. Unlock bonus content now as a premium subscriber. Welcome back to the continuation of our update on Victoria's property future with REIV president, Jake Kane. Now, Jake, let's now turn to the rental market and I'd love to get your initial thoughts on what's happening with rentals in Victoria at the moment. Yeah look the most challenging time probably in the history of the rental market for renters in particular. Our rental vacancy rates have been sitting down depending on who's measuring it even below one percent. Now a sort of balanced market sits around that three percent level that's when there's enough homes available for the renters that are currently looking for property. So we're sitting at 33% of what we actually need or what

renters need to be able to secure safe, affordable and comfortable homes that sort of meet their needs. So that's creating a huge amount of anxiety and stress across the renter demographic. And that is a demographic, as we've already touched on, that's only growing here in Victoria and around Australia and we also need to come to terms with the fact that it's only ever going to grow it's only going to go in one direction our society is shifting towards that mix where home ownership home ownership is coming down and the percentage of lifelong renters or really long-term renters is increasing so that's that's an issue that we're going to have to tackle as a society across a number of levels in terms of shifting our mindset

around what it actually means to be a lifelong renter here in the country. From an investor perspective, the landlord or the rental provider, as we call them here in Victoria, as we've already touched on, the conditions have changed really rapidly. And about three years ago, four years ago, there were 130 changes to the Residential Tenancies Act here in Victoria.

That was followed by the introduction of new minimum standards, which applied to all properties and required significant additional work and maintenance in order to get properties to a certain level. On the horizon, we have new minimum standards that are likely to be introduced in October of next year with a focus on energy efficiency, sustainability credentials within the property. Put in there, the COVID debt recovery levy as well, changes to land tax and um it looks right on the face of it like it's been a really challenging

four years and there's there's no question when you add in a pandemic into the mix there that um things were tough but if you look at the rental yields today as opposed to four years ago they're higher today in fact there is high if not higher than they've ever been before and that's factoring all of those costs you know so again we come back to that point where sentiment's not great metrics are way more attractive you know when you when you actually knuckle down into that so if you have the capacity to be a property investor right now now's the best time in the history of victoria to actually be a property investor and the an observation i make which i made to you offline before too is for all those changes that have come in here in victoria the

reality is that that we're leading in that respect they are coming across australia there's there's no escaping it because precisely that point i made earlier on in in my comments was that we're shifting our idea of what renting is and as a result standards have to come up safety has to come up the rights of the renter have to become more uh comprehensive the equity equality needs to it needs to sort of rule the day in that respect so jurisdictions around australia that haven't been through what victoria has already that's coming to you whether it's today or whether it's next year or a couple of years it's coming so we're really well prepared here in victoria because we've been through it we know what it looks like we understand the complexities we've

got our heads around the systems and the extra work that's required to get properties to where they need to be and we've understood what those changing dynamics look like a little bit ahead of some of the other states around the country. I think you make really good points there because what it's actually doing in Victoria is making the rental market more sustainable from a property quality perspective which yes will be of immediate benefit to tenants but ultimately lifting up the standards of property and the compliance generally from a landlord's perspective is going to make that property more sustainable and more appealing to a rental market that is clearly caught in a situation given the strong demand and limited supply is paying increasing rents and therefore

getting better yields than what we've ever seen. So I think being the innovator and the leader of the pack in that perspective and to some degree the guinea pig really in terms of testing and trying what's ultimately going to ripple out across the country, again, as a contrarian for those who can see the opportunity, take advantage of it while everyone else is, you know, the old fearful and greedy quote that I spoke about from the outset, those that are savvy and can see through that and can look at the underlying fundamentals

and take advantage of it while the hordes fishing somewhere else are going to be extremely well positioned so i love your thoughts on that um uh the i guess something that i would love to get your insights on because you know there's been a lot of commentary around potential changes that might be impacting looking at stamp duty and a whole raft of other issues i've heard you talk about you know just a slight lift in gst uh could very easily uh negate the impact of stamp duty and payroll tax and a number of other things i'd love to get your thoughts on uh what positive changes you think could be implemented that are going to be a win-win for for all parties yeah look standard is the big one you know in any given year 90 000 victorians and that number's

even higher in new south wales and it's you know equivalent you know by population in other jurisdictions as well right 90 000 victorians don't move in a year and that means you know when we talk about the supply side issue of the housing crisis that we're in right now we've got 90 000 victorians which which you know extrapolate that out living in the wrong property not using not right sizing not effectively using our existing housing ecosystem and i know grattan institutes down here modeled out what the economic impact of that is and it was circa five or six billion dollars in lost activity as a result because people aren't living in the right area working in the right area or they're commuting to the wrong place or they're they're living in

you know a ginormous house that they have no they don't want to be in it but they don't want to pay the changeover costs of course associated with stand shooting so change changes to that would be transformational transformational for for you know first home buyers through to retirees to through to right sizing and that would have an immediate impact right we're not talking five years downstream when you know we can we can construct that the amount of new homes that we need to house the people right now that would have a really significant impact um so is that going to happen the week before the state budget down here treasurer palace uh he started talking about it he said yeah look it's on the table which had not happened before it had never been

considered and so we we weren't so naive as to think that we'd get something in that budget you know the the following week but i would suspect that it's under discussion they did They changed the stamp duty situation on commercial and industrial properties down here in Vic. They've transferred through to essentially they're replacing it with an ongoing land tax, which we don't love, right, because, well, it's an ongoing impost on people that are trying to run businesses, small, large, et cetera, and it's yet to be proven

and it'll take some time to prove the efficacy, you know, the underlying principle for them was to get people transacting more in commercial and being able to buy their their business a premise out of which to operate that remains to be seen whether or not it'll have that impact that solution i don't i we do not want that solution right um land taxes is sufficient right yeah as you touched on we we we modeled this out years ago and put it to the state government we know it's not a state government tax we know it's a federal tax but if you increase the gst to 10.45 percent there's 4.45 percent you could get away with nationally stamp duty land tax and payroll tax can you imagine what that would do economically

to this country it would be phenomenal it would be that's that's transformational and when we go 10.45 percent new zealand's at 15 percent the uk is at 20 percent europe's at 20 percent vat like 0.4 half a percent half a percent so um we'd love to see that happen but um but right now we're aiming a bit bit more local let's get some movement on stamp duty well brilliantly said because the golden handcuffs that effectively tie up property yeah and and become that major hurdle to make a change if that's removed then the the flow-on benefits are infinite as far as the exercise going and and such a simple exercise to implement when you think about it just a very small increase in gst and yes that's a national issue but most of the proceeds flow into state state government

coffers as a consequence of it so we're love your insights on that jake we're going to take another very quick break before revealing your thoughts on the future of property across the garden state so stay with us 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. 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. Now, continuing our great feature update on property conditions in Victoria with REIV President Jake Kane, what a now turn to the future. And I want you to pull out your crystal ball, Jake, to get your insights on the medium to long-term property prospects across the state, starting with what ongoing downside drag factors do you envisage in Victoria? Yeah, look, the affordability piece remains a challenge. um and it's an interesting sort of um conflict that that we need to resolve as well as a country right you know the melbourne is the seventh least affordable housing market in the world sydney's the second least affordable housing market in the world now if we meaningfully want to challenge that i think the reality that we have to accept is that wages aren't going to

grow at the level or the pace that we need them to to make affordability to make the the dream of owning a home achievable for that sort of missing segment of our population right now that that look at it and go never going to happen it's never going to happen for us yeah and so that that says well the only other solutions for property prices to come down and and all of the homeowners and investment property owners across australia don't want that to happen so how do we resolve that you know even that the you know the ambition of the the federal and the state governments we've got a target of 800 000 here there's you know the 1.2 million um fed federally right if if we reach those goals what is the impact on property prices you know if we reach um sufficient levels of

housing enough homes for everyone what does that mean for prices um these are things that are that we don't talk about right but there are there are impacts there so look affordability continues to be be the challenge for people wanting to purchase a home and rent a home uh in in victoria and the reality is unless we start really hitting it pulling every single lever that we have available to us that's going to continue to be a problem at least for another two years right rents are going to you know in the current climate you know we touched on that high levels of migration a shortage of available rental homes rents are going to continue to creep up and the pressure on renters is going to become more and more acute um the same the same goes for for housing prices

we've got the interest rates they stayed put today when those interest rates start coming back when they start cutting the market down here is going to go bananas yeah right absolutely bananas so the dream of home ownership again will become out of reach right now the past past 12 months the most first home uh loans being written from any period in recent memory right but that will dry up if if interest rates um cut and then people start coming back in and transacting in a hyper-competitive marketplace, which we have every expectation, particularly given the figures you quoted at the start in terms of where we've come off.

You know, we're the exception to the rule around most of the rest of the country, although I think Brisbane and Sydney were slow last month, but we've got capacity to go back up. So I think affordability is the major issue. Like I said before, the legislative environment, we've kind of done the heavy lifting we're through that we're coming to terms with it right now um we're we're sort of coming out the other side so i think that that's going to remain stable and i think we're going to see around the rest of the country that people are starting to

whoa hold on i can't i have no cause um vacates not an option anymore oh i have to have gas and electrical and smoke done every year every two years that's an extra thousand dollars i'm paying and the calculus will start to change for them too. Yeah, 100% agree. An area that is increasingly on people's lips is the impact of climate change on housing and property generally. It's probably more attuned to what's happening in some of the northern states,

but what's your view on the impact that might be having, given that there is a rising incidence of extreme weather and associated events in the context of Victoria? Yeah, this is an area I'm really interested in. And I think we as a sector in real estate need to be really interested and in tune with it, and we're not right now. That's the problem. So a few things.

Like let's put aside the existential threat that climate change is, right? Put aside the social and environmental imperatives there are to take action in this space, right? The economic imperative is the one, you know, and that's ultimately what we're talking, which which if you don't care about the other stuff focus on that now banks right as of july 1 they have to report on scope 1 2 and 3 emissions now technically their mortgage books are scope 3 so they're looking at resilience right so how whether or not a property can stand

up to the effects of climate change and they're looking at the emissions and going we have to de-risk our portfolios yeah they're going to look across these millions of loans that they have for houses just across australia and they're going to go we either have to cut that out or we have to fix it because otherwise we're not going to meet um our scope three emissions reporting targets right so there's going to be a massive drive down here i touched on earlier the minimum standards around um energy efficiency are changing now the government says and don't get me wrong i love that they're doing it it's terrible timing from from a cost perspective but it needs to happen but the government says it's about improving the renters experience no it's not it's about them hitting

their 2030 2035 2040 and 2050 emissions reductions targets because if we don't do it in the established build environment no government anywhere in the world is reaching their 2050 targets right so that's that's cynical but that that's really what's driving it and that's so so we need to make the change and for property owners and property in investment owners right getting on the front side of this you touched on it before with the discussion around mental minimum standards right yeah if you improve the energy efficiency and sustainability and resilience credentials of your property it is worth so much more right because people are going to have they're going to have to buy this we already have to build at that level the natas went up you know in in vic

and queensland start of may so you have to be seven star to construct gas is going right is not going to be a thing you cannot build with gas in victoria anymore on a new build right so and that's going to happen everywhere um so getting ahead of it that's the opportunity that's the big opportunity for property investors right is to capitalize on that over in in europe when you go on to their equivalent of realestate.com domain view etc they have two beds two bathroom one car park seven star energy efficiency rating you know and you do not want to sell if you've got a two star energy efficiency rating so the banks are going to come on board they'll give money to people right to at a really cheap rate to upgrade your property get in front of it do it

now very well said uh let's sort of uh jump to future growth drivers then we've touched on population and and we had a bit of a chat about lifestyle trends love your thoughts in the victorian context around infrastructure and other growth drivers that you're likely to see impacting on the on the property markets moving forward yeah look we said at the outset you know the fundamentals here in victoria are still strong um we we have the advantage i suppose geographically over say a sydney in terms of um being able to build up and out yeah a little more easily um which which we need to do we need to you know the government all governments are talking about heading to medium density not high density medium density the oecd's showing this right like it

doesn't the equivalent of a singapore we don't need that to to be able to build sustainable cities that you know have access medium density think more like the boulevards of paris and and and that's what we kind of need to aim for um i saw something this morning though that were that basically said that it's unavoidable that melbourne continues to sprawl um that i don't necessarily accept that but you know new research is coming out all the time you know that you kind of have to consider all all aspects but um i think you know from an infrastructure perspective we um we're fairly well placed right we can we can build up in certain areas right and turn them into this this more decentralized concept right so it's the

CBD is not the focal point and the government's got in mind they've identified sort of seven areas throughout um sort of metro Melbourne that they're going to focus some real attention into doing this one that I'm really interested in is in Camberwell I don't know if you know camberwell right but this is an inner eastern suburb or an eastern suburb very affluent the the focal point of that suburb is the camberwell junction it's it's a high-end expensive area right beautiful 800 or 1000 square meter homes you know period homes if they can make it work there if they can get the density up to medium if they can maintain access with the infrastructure that they'll put in place to support it,

then they can do it anywhere. So I'm keenly watching that. The other bit, we're going to continue to have strong migration into this area because we haven't achieved that sort of bursting point from a population perspective. And because of those things, we've got space. We can keep growing out. We can keep building up in those areas.

What about the regions? what's your thoughts on the the future of property in the regions for victoria yeah i think increasingly though those big regional centers so i mean geelong is you know that the gap between melbourne and geelong you know some would argue is that we're one and the same my listeners in geelong would argue vehemently against that and i don't mean that in in real sense right but there's there's nothing there's there's there are suburbs all the way between here. You know, it's like Parramatta and Sydney.

And the same is going to happen. The Bendigo is expanding out. Ballarat is expanding out. And that's people pursuing that lifestyle. They can do it more readily nowadays because, you know, we're still in this world where there's hybrid work and increasingly people are able to do their jobs entirely remotely. So why not go out and get an acre block,

have a beautiful house with heaps of space it's great you know it's healthy you've got really attractive you know growing vibrant cultures um even in these smaller centers places like carnton it's about 60 k's out of melbourne is you know you you could feel like you're walking through collins street in terms of the restaurant choices that you have down there you've got everything available to you you know and you can get a really fantastic home for well it's creeping up significantly it's not super affordable anymore but um but but for less than you're going to pay uh you know you know eastern uh southern or northern suburb in melbourne yeah yeah no word awesome look uh again it just reinforces to me that uh the the long-term

property players are going to focus on the fundamentals if you do to put a bow around all this and sort of summarize the the future opportunity uh what would be the takeaways look we've we've already said it in the simplest terms right now victoria is is affordable comparative to to other places around the country and you know we use the term safe as houses for a reason you know or you have to look at the past couple of days and look at what's happening in the the volatility on the stock stock market and you go can i weather a couple of percent down over a two-year period and then you know sustain growth over a decade where we're seeing double digit growth annually i know where i put my money and and that's and that's in property and right

now victoria presents an incredibly attractive um uh prospect for for whether you're investing or whether you're relocating and looking for a fantastic lifestyle at a more affordable than our neighboring um states uh yeah truly well said and i guess the the thing that's all also worth reinforcing is that it's not unusual to see a a settlement uh or a slight decline of anywhere between around the five percent after an area's gone through some growth and that's that's exactly what we're seeing so those of us have been in property for a long time expect that to be the case and it's but it's also the time when uh contrarians like myself leap on that opportunity So, look, I really want to thank you for your very in-depth insights on the future of Victorian property, which clearly reinforces that contrarian opportunity for long-term savvy investors, Jake.

And I really want to encourage you to continue to share with us on the show. And thanks for being so generous with your time on the show today. My absolute pleasure, Bushy. Thanks for having me on. Join us for more property news each week with Realty Talk and Get Invested. You can do that by subscribing to the Property Hub on all podcast players. Join the conversation on Facebook too. Just search the Property Hub Collective and give us a like and make sure you follow.

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