Property Hub - Investment Insights & Inspiration - Realty Talk: What the figures show really happened in the last 10 years

Episode Date: May 21, 2022

Every day we hear potential investors and property buyers say property can’t continue to grow and go up in value as it has in the past. So let's put that to the test by doing a deep dive into what has happened over the last 10 years, as a precursor to what might happen in the decade ahead.  As the penultimate property of data and trends man, who has repeatedly swum against the tide of popular perception & the herd of negative lemon suckers, to be able to time and time again prove successful in interpreting masses of data to predict what impact it will have on the future of property, there is no better person than Simon Pressley of Propertyology to look at the past, present and future of property, to discover what he has seen change at the macroeconomic down to the micro property level over the last decade. RealtyTalk is your trusted voice in property investment and Australia’s most popular online property show.  RealtyTalk is brought to you by Realty, Australia’s leading search and social property distribution platform that helps investors like you beat the crowd, giving you the earliest access to property opportunities, listings, and insights. Check out Realty. RealtyTalk is hosted by top property investment expert, author, and founder of KnowHow Property, Bushy Martin. Find out how Bushy’s KnowHow team helps investors unlock freedom with finance and property here, and check out Bushy’s podcast Get Invested.  RealtyTalk is supported by BMT, a company that helps property investors save thousands of dollars each year by maximizing tax deductions from investment properties. Find out more.See 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. Hello, welcome to our show. And this week in the show, as we promised last week, Simon Presley will be joining us. bushy looking forward to that simon always um puts a lot of effort and he's certainly done it this week into presenting his thoughts and opinions so we get lots of really good graphics and slides to show as well bushy yeah look uh simon always puts a lot a lot of energy into what he does and it's some really fun facts in turn their implications not in the past but really

good indicators to the future so this is a show not to be missed okay we're going to look back over the last 10 years and a bit ahead too. Simon Presley joins us in just a moment. 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 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 welcome back to the show and bushy as we said in the intro there simon presley joins us good day simon how you doing hello kevin hello bushy nice to see you again jets always good to see you simon you got your lions banners up there too

mate that's good yeah best time of the year gentlemen footy season yeah this could be the year of the lions i reckon simon uh they've been very close but they're looking very dangerous this year, mate. Sorry. You like it two carat away. You don't win premierships in May, but good start. Mate, let's have a look firstly at the big impacts on the Australian property market over the last 10 years

as we bring up the first slide, which looks at Australia 2011 to 2021. What do we see here, mate? Yeah, there's so much that's happened in the last two years with all the COVID restrictions and that sort of stuff. And when you look back over the last 10 years, Kevin, And it's like, oh, my God, you know, it's easy to forget, isn't it? But, you know, we started the decade with a mining boom and then that was, you know, not long after,

followed by a mining downturn. The return of strong property markets commenced with an introduction of foreign investors, particularly from Asia. And our economy's changed with international students and our services sector, international tourists. then into the our agriculture sector really started to take off towards the middle of the decade interest rates remained flat throughout that entire period of time until we got to June 2019 about six months before COVID and the RBA just went whack whack whack with several cuts

there and then of course we've had the last two years of COVID so a lot of big things have happened we haven't mentioned umpteen natural disasters in different parts of the country during the decade as well. We had four prime ministers in that 10 years. It had been revolving doors. We had a GFC. We had the tightest credit conditions in the history of this country for about four of those 10 years.

And our lives changed significantly. We couldn't shake hands and we had to tap elbows and all that sort of stuff. But the orange line in this graphic shows what if we bundle all of Australia's residential dwellings up into one and look what the change in value did over that period of time. You can see that there's a little dotted line there, four periods there.

So right at the start of the decade, property prices broadly were losing value. Of course, the end of the decade was the second biggest growth period that this country's seen. In the middle there, we had two fairly flat patches and they were both caused by tight credit. before we buy the asset we must be able to purchase the liability and afra made it very difficult there um the the columns the um the vertical columns there show the makeup of our

population uh over the 10 year period of time the the blue columns first is uh is the net change between births and deaths and as you can see there it's a pretty consistent um volume every single year population grows from natural births and deaths all the way through but the green columns always have the biggest contribution to Australia's population who oversees migration you see there's no correlation at all between the years when we had the biggest population growth and property market performance um the first um period there at the start of this graph we see property prices went backwards but it was one of the strongest years for population growth in the last decade and we and we ended the last two years with the lowest population growth Australia has

seen in more than 100 years due to the international border being closed but yet we officially had the second biggest property boom in this nation's children 30 years so what a decade gentlemen what a decade what's really interesting to me there uh simon is that there's a lot of talk about the cost of and access to credit uh being big limiters in relation to property values now you know if we look at the gfc and the apra squeezes uh over that period of time yes it's been a little bit of a handbrake, but it hasn't had a dramatic effect. Properties either plateaued or come back slightly, but given the aggressiveness of the actions that have been taken on both rates and macro prudential policy, it hasn't had a big impact. Yeah, well, certainly population growth

has always been overstated. I'm not saying it doesn't have an influence on property prices. Of course it does, but in the overall scheme of things, it has quite a minor influence on property prices what always has the biggest influence on property values is the economic conditions at an individual town or city so the reason that we had that decline in um mostly in the capital city property markets at the start of this decade because australian economic conditions after we wound back the the gfc stimulus economic conditions were very weak um seven out of eight capital cities had a declining median house price in 2011 and six out of eight capital cities um backed it up again in 2012 there weren't big you know crashes um but you know um most capital cities

declined the best performing property markets in those couple of years were more mining related communities because we're in a mining boom but you know that was back in the era wayne swan was treasurer um and in his um media um you know press press conferences we were hearing the term a lot two-speed economy mining was strong and just about every other sector was weak but as we see in the middle of this chart here then we saw the asian century kicking into force and our services sector followed by our agri sector really uh really picked up what's also interesting there solomon when you reflect back on it the sort of musical chairs of their political leaders over that time it's pretty evident that they've had no influence uh on that what's happening in property and they're

pretty much the icing on the cake so when we hear the current political speak in the run-up to the election about uh what they're going to do to the wealth effect we've got to take with a fair pinch of salt yeah probably the well not probably i'd say the biggest influence that they had was the commentary leading into both the 2016 and the 2019 federal election um and heavily influenced by the fact that sydney and melbourne had a big property boom in the middle of this decade the rest of australia didn't but sydney and melbourne had had a big boom in the middle of the decade, and 40% of Australia's population lived there. So the federal election commentary was we're going

to scrap negative gearing, or at least what one political party was talking about, scrapping that. So that directly affects sentiment. A lot of people did not transact in real estate because of the uncertainty associated with that. Now, at the end of the day, the election didn't go in Labor's favour, so negative gearing, I'd say it wasn't changed. There was some changes to it.

They significantly diluted depreciation deductions. but it largely stayed in place. But just the commentary and the uncertainty around it did diminish buyer behaviour. We're going to take a break just now. We'll come back. Simon Presley is our guest from Propertyology. We're going to have a look at real estate demand.

We're still going to have a look at some of the key areas around Australia and what's happened with prices. Stay with us. This is Real Estate Talk. Our guest is Simon Presley and Bushy Martin and I are back in just a moment. 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. Welcome back. Our guest is Simon Presley from Propertyology. Bushy and I are talking to Simon about what's happened over the last decade. Let's bring up our next slide, I think, which is relevant now, Simon, and this talks about real estate demand. yeah so um we added uh we started the decade with nine million residential dwellings in this huge country of ours and we ended the decade with an extra 1.7 million dwellings um here now today 10.7 million residential dwellings in australia of our capital cities so what we saw throughout

the last decade was um significant appetite of our property developers for building high-rise apartments certainly in six of our eight capital cities so a lot of that and a couple of our major regional locations including places like Newcastle and the Gold Coast so five of our eight capital cities we actually built somewhere between 45 percent and 72 percent of all their dwellings constructed in in the last decade were apartments a couple of our capital cities for every 10 new dwellings built seven of them were apartments that's something that's i think that the decade we're talking about um will be remembered for uh real estate transactions there were 4.8 million um residential properties that changed hands in the last decade of which 64 percent of them were

in our capital cities and 1 million um first home buyers entered the property market in the last decade i think that's uh that's quite a check and achievement so about 20 percent of real estate transaction in the last decade were first home buyers. That's a big chunk Simon and a fair portion given their sort of relative ratio of the overall population and I guess a lot of the government stimulus has brought forward that first home buyer demand but what's your read of that? Yeah absolutely so I guess we ended the decade with and it's still available now the first home deposit scheme where um so you know a first home buyer with as small as two percent if you're a um single income parent um you can get you can become a first home buyer with as small as a two percent

deposit and for everyone else as small as a five percent deposit um so you can get into the property market quicker because you don't have to take as long to save your deposit um and no mortgage insurance is required so you know my 52 years on this planet that's the single best first home buyer initiative, you know, I think we've ever had. That's fantastic. Throughout the rest of the decade, it was predominantly the states at different times. There were some initiatives there, waiving stamp duty or, you know,

a rebate if a first home buyer bought a new dwelling or something like that. But those policies, it's how they hold their mouth. They say they're supporting the first home buyer, but it's really an incentive to boost up the construction sector. what this graphic also shows so the three three different colored lines here the blue line first is showing the number of transactions or the number of properties that were purchased in sydney and melbourne combined that's the blue line i'll talk you through these in a second

the yellow line is how other six capital cities all bundled up together and the green line is all of regional australia bundled up together so let's remember that sydney and melbourne nowhere else in Australia Sydney and Melbourne had a property boom 2013 to 2017 what causes a boom is when there's more people transacting in real estate they create competition amongst themselves seagulls fighting after a chip analogy and that and that competition forces prices up so you can see from the far left of this of this chart the blue line trends up that's Sydney and Melbourne's boom but the other capital cities the yellow line was largely flat for that period of time. The green line trended up a little bit. Yes, there were parts of regional Australia

that were performing very strong in that period of time. Focus now on roughly the middle of the chart on that blue line, and you see that that blue line, the number of properties that transacted, reduced. Sydney and Melbourne actually entered a significant downturn there 2017 to 2019. But the rest of Australia didn't enter a downturn. There was nothing spectacular happening but it wasn't like property prices were declining 2015 through to including now hobart has had a spectacular run um and not all but most parts of region australia perform significantly um better than a capital city so if you look at the trend line the green trend line is trending upwards whereas the blue and the yellow trend line are trending downwards so

a lot more buyer activity amongst our regions than our capital cities in the second half of the decade and now let's look at what happened in the last two years of COVID. That green line has gone through the absolute roof. To put some perspective around that, about 35% of Australia's total population live for our regional Australia. But in last year alone, 60% of all properties that were purchased were in regional Australia, hence that big, big spike there. Well, I know you are one of the very early contrarian calls on the regional opportunity way back when. And from memory, I think you were the very first to call Hobart before it even started to

happen. So you've been right on the money for all of that time, Simon. And both in the middle of the decade and both at the same time, we started buying in Hobart in early 2014. And while we were sneaking under everyone's guard and chipping away, I think we bought about 100 properties 2014 to 2016 in Hobart. We were also very active in different parts of regional Australia and remain a lot more active throughout regional Australia today than our capital city markets.

And for the foreseeable future, I can't be strong enough in predicting that the gold will be amongst the regions, not amongst the capitals. That's not saying that we should be worried about the capital cities, but the absolute best performance will continue to be among our regions for a variety of reasons. Simon, what's been the level of capital growth that's occurred, say, around the country in the major centres over the time that we're looking at here? We'll just bring up this next graphic too, by the way.

While we're pulling that up, it was really a decade of two halves. The first half of the decade was largely underwhelming property market performance. There's always exceptions to the norm. But Australia's economy for the first half of the decade coming out of the back of the GFC was, you know, not spectacular. Whereas in the second half of the decade, we certainly picked things up. This first graphic shows that, I guess, more the norm for the first five years of the decade. If you have a look at Brisbane's performance there, 20% increase in the median house price in that first five years. That was more, I guess, an on-par performance for that five-year period of time.

The absolute standout of our capital cities was Sydney. Bowral was officially the best overall. Don Bradman country there. But, you know, what also stands out in this graphic is New South Wales dominated that first five years. And, again, it's no coincidence that New South Wales' economy was the best-performed economy in that first five-year period of time. Interestingly, Comsec, who do a quarterly state-of-the-states economic report, I was looking back on this information the other day. Tasmania was officially ranked eighth out of eight for a good chunk

of this first five-year period, the worst-performed state economy. It's ended the last four years ranked best of the eight economies. So if we now pull up the second graphic, looking at the last five years and what's happened there, much, much bigger numbers than that first chart. The blue columns obviously represent a bit of a sample of what our capital city markets did. Hobart was the best-performed capital city with 91% growth in just five years.

Brisbane, Adelaide, Melbourne, Canberra, they were all sort of around that 40% to 50%. Darwin was the worst at 10%. But we've actually had six separate regional townships where the median house price doubled or better in the last five years. Spectacular growth. It's certainly a very visual confirmation of your own forecast

on the strength of the regions, Simon. So it'll be interesting to see what the future holds in that area. Well, in that graphic there, although there's a bit of a dozen different locations, Propertyology has invested in eight of those over that last five-year period of time. Yeah, rates of growth that are certainly a lot higher than what you would normally expect to receive as a property investor, but absolutely enjoyed.

The other thing that really stands out to us when we look back over the last 10 years, I spoke earlier about there was an overzealous construction for apartments. And when we compared, the graphics we've just been through there shows the change in median house price. So when we actually had a look at, well, what did the change in median apartment value did

over that period of time? So across the whole decade, Sydney, for example, the median house price increased by 140%, a huge number across the decade. The apartment value increased by 77%. Now, 77% is huge growth, don't get me wrong, but it's half the rate of houses. Brisbane's median house price, most of the growth has been in the last two years. Across the decade, it grew by 80%. Apartments have only increased by 25%. Adelaide apartments only increased by 25%.

Houses have increased by about 60%. Melbourne, roughly house prices have doubled over the last decade. Apartment values have only increased by 50%. There's only one capital city where apartment values relative to their house price was exceptionally well, and that's because they don't allow high-rise construction, and that's the city of Hobart. So Hobart's median house price increased by 133%

across the last 10 years, and apartments by 120%. So Hobart's apartment value did better than all the house values in seven out of eight capital cities because they don't allow the high-rise construction stuff. Just great confirmation of the supply-demand equation again, Simon. It's, you know, in all the areas where we've seen the oversupply of apartments, it's had that result. But it's interesting that, you know, government deferring new supply of any housing to the private sector, we've still got this massive overall undersupply, particularly in the housing area, which is clearly putting added pressure on the rental squeeze.

Yeah, absolutely. Let's have a look at, you know, what impact this has had on property values. If we can just maybe bring up the next slide. yeah so what i've got here is um you know looking at how we ended the decade and what are our most expensive um parts of australia to live in what's the what's the biggest median house price across all of australia 24 out of our 28 uh most expensive parts of australia from a median house price perspective are among your regions there are 24 regions there where the median house price is higher than four of our capital cities i mean i could talk to the cows come home about

the myths associated with capital cities versus regions. It's always been a load of bullshit that screws the French, but when you look back over the decade, you see a lot of the crap commentary that was made and then, you know, backed up, well, here's the evidence to show how much rubbish gets reported about capital city versus region. Indeed.

Well, we're going to take another quick break and we come back. I want to talk to you about rents and how they stack up because that's one of the key indicators for us as well. Stay with us. Simon Presley from Propertyology is our guest, and we're looking back over the last decade. We'll take a look ahead as well. Simon Presley is joining Bushy Martin and I.

This is Real Estate Talk. Stay with us. Back in a minute. 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 know-how has helped over 1 900 homeowners and investors secure more than 800 million dollars in property wealth so get set to live more work less and live your legacy want to know how to invest in your freedom visit knowhowproperty.com.au welcome back to the show our special guest is simon presley from propertyology bushy martin and i talking to simon about what he's noticed and some wonderful information here too simon thanks for this let's bring up our next graphic about the annual change in asking rents and this is based on three bedroom houses yes it is so across the um i'll talk about that graphic in a second while people are looking at it but across the decade um median asking rents

in sydney increased by just 10 in 10 years so not much growth at all melbourne's not much more 20 across the decade um the median asking rent today in perth is less than um is 10 less than the start of the decade hobart's had the biggest increase in asking rents up 57 percent uh across the decade um a bit of a sample of what's happened in different parts of regional australia bendigo a 40% increase in rent. Sunshine Coast up 52%, same as Dubbo up 52%. Ballinan and the Northern Rivers of New South Wales up 67% over the decade. Launceston, 69% higher rents now compared to 10 years ago. Wangaratta, most people wouldn't know where that is on the map. Rents are 73% higher today than at the start of the decade. Most of the increase in rents has happened in the second

half the decade which is that graphic you've got up there showing the when i say asking rent so something's advertised now um we see right across australia that there's been large increases um this is looking at the annual cost to rent large increases um over over the last five year period of time so um to rent a three bedroom house for example in cans now you'll pay five five thousand $700 more rent this year than what you would have five years ago some other big ones there Port Macquarie $8,000 more to rent a dwelling there now so on the west very up and down always is in places like Port Helen and Karratha because it's a one industry economy but if you look at a place like Busselton in the southwest of Western Australia it's nearly $7,000 more per year to rent

that house now than the same than five years ago right throughout regional Australia you can see the rents have increased a heck of a lot more than seven out of eight capital cities the exception being hobart and the reason for that the cost of rent is is determined by how much rental supply is available rental supply is predominantly the actions of a property investor the property investor doesn't purchase a property they're not adding a property to the rental pool now largely property investors don't think regions when they think investing they think their hometown or if they're getting a little bit adventurous and they're thinking of investing somewhere other than their hometown,

it's usually a high-profile capital city. So they're continually adding to the rental pool. And the Forgotten Cousins, the regional locations, often don't get thought of. So they're not adding rental supply to it and that puts a lot more upward pressure on rents. And then an event called COVID comes along and people want to escape to the regions

and there was already a heck of a lot of pressure on rents in most parts of regional Australia in 2019. then we get the single biggest volume of movement in human history that's what COVID did and now we've got our rents just going through the absolute roof we haven't invested enough is the moral of the story there. Yeah very foreboding warning signs for what's about to happen in the future which we'll we'll talk to you about shortly but just to sort of round out the picture then around the last decade what's changed as you've seen in relation to the quality and quality of real estate information over that time?

Yeah, it's been interesting. I love this question when you sent it through to me, Bushy, forcing me to think back. At the start of this decade, I think printed newspapers were still pretty popular. I used to still get a lot of flyers from real estate agents in my lecker box. That was a common form of communication.

That's been replaced a lot by a plethora of online stories that we've all become used to. I remember at the start of this decade, I was frequently on mainstream real estate TV shows, whether it was Sky News or Channel 9 or Channel 10. They all got axed progressively over the decade and have been replaced by, you know, you led the way with digital TV and podcasts. You led the way at the start of the decade.

I don't think I'd heard of podcasts. You know, if it wasn't for yourself, I wouldn't have heard of podcasts. You know, now it's a common and very popular means of communicating. There's a lot more opinions now. I think that's just the digital world that we live in. Everyone's got their own platform, their own Facebook page or their own Twitter account, so everyone's got an opinion and therefore everyone thinks that they're an expert.

There's more information available about real estate now, a lot more reports, a lot more data, but what we don't have more of, unfortunately, is more wisdom because we've got more opinions. People think they've got knowledge because they've got a voice, but I'd actually argue it's diluted intelligence. not enhanced it, that there is more information available but we're not consuming – we're consuming more poor-quality information. That's been the problem.

And where are we going to go over the next decade, do you think? What's your view on that? For information? Yeah. Well, I think, you know, data is the new oil, isn't it? You know, I'd love to think that there'd be, you know, clever cookies out there working at all different metrics, different things we could measure.

Personally, one of the things I would love to see, Kevin, would be the frequency of data, especially property-specific data, the core logic stuff of the world. There's a four-month lag on that. You know, in this day and age, I still don't understand how it can take so long for those numbers to be published. So, yeah, but the technology's there. It's just a matter of how quickly can the human brain, you know,

be creative and innovative and come up with new things. But the digital way of delivering messages, you know, that's not going away. Yeah, Brian, while we're on the subject of the future, if we're looking through the front windscreen now, I'd love to get your thoughts on what's likely to change in both the way we live but also its impact on property in the decade ahead.

Well, I think we're going to see forever and a day that property will remain the world's safest asset class. it is shelter at the end of the day it's an essential commodity um you know three out of ten ten dwellings that you know every year for the last 60 years uh three to ten dwellings have been rented i don't think um i don't think that that's going to change um whatsoever i think we're going to um particularly since covert we've all responded differently to cover but the way we live there's definitely been some structural changes um that i've enjoyed observing them unfold over the last couple of years we put greater appreciation for for much of the last decade

there was an insatiable appetite to be living uh with things in your front door you know the high-rise apartment that we were talking about earlier so that we can just literally walk downstairs and go to a restaurant and go to a cafe or walk to work or something like that um the impact of covid um we're now embracing technology we want space more than that living in that confined space the high-rise apartment we want space we don't just want houses we want we want acreages we want big backyards we want um fancy swimming pools we want to create our own oasis um we've got netflix we've got um online shopping we've got uber eats we now just pick up the phone or grab the internet and things are delivered to our door now and that's that's been the biggest

change that i've observed since covid that's the new norm you know there'll be a change somewhere down the track um but for the next decade as far as i can anticipate now that will be the single biggest change home is our oasis um is what i'm calling it the lifestyle movement yeah that you've touched on rents before and that situation's only getting worse what what's your view of the future in that regard and what needs to be done about it uh what needs to be done about it i guess um i don't have any confidence this will happen unfortunately because the people in the higher places their uh their actions haven't been suggesting that they've been listening but we need to think about what actually caused it is a rental crisis um i love australia i'm proud

to call myself australian but one thing i'm horrified is that in a country of 25.7 million people one of the richest countries in the world and we've got good people with good character good rental histories stable incomes um good financial discipline and they are living in tents they're living in caravans now that story is not an exaggeration that is widespread that is happening all over in Australia and it's happening a lot more outside of our capital cities than inside it. What caused it is, people don't like talking about this, but if you want to know the truth, it's politics is what caused it,

federal, state and local. Rental supply is the action of a property investor. Investing is a discretionary action. You do not have to do it. To do so requires financial discipline and a preparedness to take risk in investing in your own financial future. When someone walks around with big baseball bats going whack, whack, whack, whack, whack, that discretionary action, you get less participation. So whether it's a tax policy, whether it's a let's change rental policy, let's take a privilege away from the asset owner and put it in the hands of the person who's renting, all these things, let's make it harder for that investor to get credit, all these things have happened over that decade.

We looked at it in some of those graphics earlier. So there's been a significant reduction in the amount of investor participation throughout the last 10 years. Investor participation is where rental supply comes from. 85% of every rented dwelling in this country is owned by an everyday Aussie property investor, not a government. But the government decisions, federal, state, local, have diminished it. So until they, you know, actually put their hand up and say we made a few decisions that we regret, we recognise that we've caused this problem, investors don't need red carpets. They don't need handouts. They don't need cash thrown at them.

What they just need is clean air. And even given clean air, this mess will take years to recover, years. My fear is what happens in the interim? That family living in a caravan or a tent, what happens? There's nowhere to live. The person who currently does have a detached house, but their rent's gone up by $200 a week over the last two years, what happens when that lease expires? And the landlord goes, well, it's only Jim. It hasn't always been roses for me, but now what is?

I'm going to make hay with the sun shining. You know, the rent's gone up by $50 a week. You can't deprive the investor who's taken the risk of doing that. And if you do, that investor will sell. So the problem gets worse, right? So if you don't pass that legislation, which you shouldn't, then the rent goes up. So that person, I can't afford that now.

So now we've got someone else living in the caravan. Well, the other thing that I think is going to tip petrol on that whole exercise as well, Simon, is the fact that, you know, we've pretty much closed the borders and locked the place up for the last couple of years. We're now starting to open them. There's going to be potentially a big influx of people, given how attractive Australia has become relative

to the rest of the world. What impact is that going to have? Oh, enormous. And look, we do need to, now that it's safe to open up the international border, we absolutely need to encourage overseas migration. As we're having this discussion, Bussie, we have 430,000 jobs advertised in this country that we cannot fill today. 430,000 jobs. It doesn't matter what industry you work. It doesn't matter what town or city you have a business in. You have a job or one or more jobs advertised now and no one living locally to fill it. Now, that's a good thing in one respect because we've got a really strong economy. The full house sign is up for our economy, which is great for property markets. It'll be great in the not-too-distant future for wages. Finally, we'll get some wage growth because we've got lots of jobs and no labour supply to fill it. But so we open up the international border and we're inviting all this skilled labour to fill these jobs.

Again, great for the economy. But where do they bloody live? the 25.7 million people who are here now they're living in tents and caravans i'm not exaggerating now pre-covid we we used to add about 200 000 people per year from overseas migration what do we do if we just add six months of that a hundred thousand extra people where are they going where are they going to live yeah it's it's it's scary stuff i i fear that we may end up seeing a side of a country that we've never seen other other countries around the world we've seen before civil unrest interesting well i mean there's despite that picture i'm hearing a

wealth of opportunity for property investors moving forward what's your take on what the opportunity will be absolutely a lot of commentary recently because we've had our first rba increase in 11 years about, oh, property prices are all doom and gloom. Yeah, it's the same commentary we've heard when the international border closed. Oh, yeah, no population growth, property prices are going to crash. And yet, you know, the two following

years were the biggest boom, second biggest boom in our history. So what we've gone with interest, it's inevitable, we'll have more interest rate rises, right? So instead of going, we're going to have dirt cheap interest rates going to a 15th more than dirt cheap, but they're still going to be dirt cheap, right? But we've

got an economy that's at full house we've got infrastructure boom that's the greatest thing this country's ever produced um there's no there's no job vacancies anywhere we've got an all-time officially an all-time record low supply of properties for sale and for rent these are incredibly strong an incredibly strong underbelly for property markets yep incredibly strong um all the rba rate cuts will do is think of it as the accelerator so the things i was talking about earlier the foundation or the motor that drives the property market the things on the supply side the things on the economy side we've got a really really strong motor the rba is the is the accelerator pedal right so that accelerator pedal um until last month or early this month has been

bang on the floor we're going fast right and progressively the rba is is lifting you know not putting as much pressure on that accelerate pedal. So it will control the rate of growth, but we will still have, perhaps with the exception of Sydney and Melbourne, we will still have growth. And in large parts of Australia, I'm very confident, we will see deep double-digit growth. Wow.

Incredible. You know, what a session, Simon. We're out of time, mate. Unfortunately, we're going to have to go. But thank you so much for your time, Simon, and thank you also for your support. over the last decade. Lots more to come, I hope.

My pleasure, gents. I want to thank you all and congratulate you all. You know, 10 years is a fantastic achievement. 500 shows. You know, I've got great appreciation for the amount of work. It's not just the time that you're on air, but all the work you do behind the air, you know, organising speakers and that sort of stuff.

I've enjoyed being part of it and want to wish you well for the future success of this great program. Thank you, mate. We're going to have you on long before we do our thousandth. Good on you, Simon. Thank you. Stay with us. We'll come back in just a moment.

Bushy and I will give you a rundown on some of our takeaways from what Simon has given us in this show. Stay with us. This is Real Estate Talk. No, it's not. It's Realty Talk. I'm so used to saying that. This is Realty Talk.

We'll be back again in just a moment. 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. Well, that's it. Another show. Wow, Bushy, there's just so much information that comes from Simon and those slides are just brilliant. They demonstrate the point so well. Was there anything in there that jumped out for you? Yeah, I think while the reflection on the last 10 years has been great

in terms of reinforcing the sort of timeless lessons we know, what really picked up my ears was the fact that we're coming into a situation where we've already got a massive undersupply of properties, which is causing the massive rental squeeze. And to use Simon's words, the rental crisis that we're currently enduring. And then we're about to pour hundreds of thousands of more migrants into the mix. So I think we're actually coming into a zone where there's going to be an awesome opportunity for property investors who can seize on that and select and find properties in areas

that are going to attract that sort of demand. Yeah, land supply is going to be fairly important too because this is not going to come from existing. There will be some growth in existing areas, but largely it's going to come from new development areas, doesn't it, which brings about a whole lot more infrastructure, more transport needs and so on. Yeah, totally agree.

I think the other thing that really stuck in my mind as well, Kevin, is the fact that, you know, I've heard a number of commentators in recent times talk about the fact that the regional shift is only sort of a temporary exercise and people are going to flood back to the CBDs. Yeah, well, Margaret Lomas made that point last week, didn't she? She did. Well, the evidence that Simon's just shown us would be contrary to that.

And I mean, I know firsthand, And I'm a person who has been chasing the regions for a while because of all the lifestyle benefits. And as long as the infrastructure is there and the coffee shop's only five minutes away, then I much prefer that sort of a living environment than being sardined into a suburb close to the city. So, you know, from my own perspective,

I sort of have an affinity with what Simon's saying. But I think it's going to be really interesting to see who will be the ultimate winners and losers in relation to capitals versus regions and which regions are actually going to continue the growth in the years ahead. Certainly an interesting insight. I'd encourage you to go back and have another look at the show

because there's so much information that came from Simon. Hey, Bushy, that's it for me, mate. Over to you next week. So I've really enjoyed these few weeks we've been together. Likewise, mate. Particularly enjoying watching you embrace the show so you know i encourage you to you know put your own stamp on it this is your baby so um i'm really enjoying that uh watching that journey mate likewise mate and i i love having you on the

show mate so where i i think uh i would like to to hope that we can continue to do this sort of work together and i guess before we go i'd like to make a another big shout out to our sponsors realty.com.au as well as bmt tax depreciation their ongoing support mate yeah we should talk about bmt um yeah brad beer's been with us now since day one uh we should make a special effort to get him on too um yeah real soon i know he's a regular guest but it would be nice to just have a chat and learn a little bit more about brad beer the man totally no we'll make sure we do that kevin yeah good stuff all right my friend thank you and um you can do the sign off yeah well look uh just before we do sign off again we'd like to uh thank everyone who and

and yourself who have been a meaningful part of the show and continue to support us and give us your time to learn what's happening in the industry and where it's going so keep watching because we're going to continue to be your go-to place for all things property here on Realty Talk 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.