Property Investment & Wealth Creation Australia | The Michael Yardney Podcast

Australia's economy and our property markets don't operate in isolation, so I believe it's good to regularly have a look at the big picture, the macroeconomic factors affecting not just Australia's economy, but the world economy to help us understand what's ahead for us, and I do this once a month in these Big Picture Podcasts with Pete Wargent.

Since this will be our last Big Picture podcast for the year Peter and I will give a short review of what happened over the last year and our thoughts on what's ahead for the world economy, Australia's economy and our property markets.

Economic and property trends you must understand

As I look back, 2021 the year seems to have gone quickly for me, even though I know for a lot of people it has been a slow and difficult year.

It's been a great year for my business at Metropole where we help more people are ever secure their financial future through independent wealth and property advice and advocacy and its been the best year in my memory for the growth of my property portfolio, and I know for most people who owned property it's been a very good year also.

Yet I recognize that some people have experienced tough times related to their health, to their business or financially. And I'm not saying that flippantly – in most cases this was totally out of your control and it just doesn't seem fair does it?

So what's ahead for us? What will 2022 bring?

That's one of the many topics I'm keen to discuss in this month's Big Picture with economic analyst Pete Wargent.

• Lockdowns have been removed in Australia
  • However, Europe seems to be seeing a new wave of Coronavirus
    • The UK's numbers of infection have been high, but hospitalization rates are going down
    • The third set of vaccines is helping to reduce serious cases
  • The economy hasn't performed as strongly as some had predicted the beginning of the year
    • This is because of the Delta strain of coronavirus and lockdown is in Melbourne and Sydney
    • However, analysts expect growth in the December quarter not only to overtake its pre-Delta peak but to keep going.
  • The large war chests Australians have built from saving their cash will help drive the economy.
  • Now that 80 percent of Australians aged over 16 are fully vaccinated and restrictions on activity have been significantly eased, the RBA sees our economy recovering rapidly.
  • Their upgraded economic forecasts will see a buoyant environment in the lead up to the federal election we'll most likely be having in either March or May next year.
  • The RBA said that, with the economy now opening up, the momentum evident before the Delta outbreak is expected to resume.
  • Rising inflation isn't all bad
    • Rising inflation will reduce the impact of ballooning government debt.
    • At the same time, property investors will benefit from a higher range that usually comes along with higher inflation
  • In the September quarter, our current account surplus hit a record $24bn, according to the official data from the ABS, up from the only slightly less spectacular $23bn in the June quarter
  • The pandemic has shown that without students and migrants we face skills and general labor shortages across the nation
    • If the scenario of 250,000 migrants by 2023 eventuates house prices could jump about 5 percent by 2023 and rents would lift about 7 percent.
  • A number of the banks have updated their forecasts for the next few years
    • They all agree our property markets are slowing down in terms of capital growth but will still perform strongly in 2022
    • They also all suggest property values will drop in 2023.
  • It's been a surprise how strong the markets performed and APRA's sudden intervention
  • It's also been surprising that there are unusually low rental vacancies
  • It's been reported that widespread money laundering is contributing to Australia's inflated property prices
    • Australia's weak anti-money laundering policy, flaws with the corporate registry, and the lack of a beneficial ownership register all contributed to the problem

Links and Resources:

Michael Yardney

Metropole's Strategic Property Plan – to help both beginning and experienced investors

Join Michael's Property Update private Facebook group by clicking here

Pete Wargent's new Podcast

Shownotes plus more here: The Big Picture, economic and property trends you must understand - December 2021| With Pete Wargent

Some of our favourite quotes from the show:

"In general, the economies of most of the world are going to perform well next year, aren't they? So we're not operating in isolation." – Michael Yardney

"You're a migrant, I'm a migrant, in fact, most Australians are, and if it's controlled, if it brings in skilled people who are going to pay taxes and buy goods, then that's actually good for the economy." – Michael Yardney

"I'm not sure that a rise of 1% is going to be enough to put people into mortgage stress, especially if it's done slowly, over a period of time." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

As they say - every cloud has a silver lining.

So, what can we take out of the last couple of years of Covid to make our futures better?

Well, in my last podcast I was chatting with Ken Raiss, Australia's leading property tax strategist and director of the Metropole Wealth Advisory and we started to share 20 insights we've learned from Covid-19, in the hope that if you learn from these lessons you could be a better property investor, business person and entrepreneur and that could be your silver lining.

There were so many things to discuss we didn't get through the list, so in today show we'll continue with our thoughts

Whether you are a beginning property investor or experienced professional, I'm sure there'll be something in my chat with Ken that will be of benefit to you.

More Property Lessons

Don't try and time the market

• You can't time the market and investment grade properties gives more options even in periods of downturn

The importance of investing in resilient large cities.

• Look how well Melbourne survived over 200 days of lockdown and six lockdowns
• the fact that Melbourne has a range of different industries is proof of the resilience of investing in large cities

The importance of neighbourhood

• One thing I know many of our Melbourne friends have been missing is their "third place". If our first place is home and our second place is work or the office, it has been the ability to go to a third-place that was taken away. It may be a favorite café, a gym or a place of worship, and even local shops and pubs.
• So, all these features combined will be a major requirement and will create huge demand moving forward. These are all features of the 20-minute neighborhood, that will be built around convenience.

The importance of owning the right assets

• A-grade asset held their own during the downturn of 2020 Maintained value and or quickly clawed back any losses in both value and rents. Improved exit strategies and were easier to rent
• Moving forward A-grade homes and investment-grade properties will continue to outperform.

Houses outperformed apartments

• The gap between house prices and unit prices has never been so high
• Family-friendly apartments in medium and low-density complexes in lifestyle locations may make good investments for those on limited budgets

This cycle was led by home buyers

• Millennials are moving to the family formation stage of their lives and buying houses (moving out of apartments) many taking out the various grants - unfortunately many bought in c and d grade locations and won't get the benefit of capital growth many of these didn't have savings and good money management.

Disappearing middle class

• Look at the demographics of where you invest - look for affluence score of neighborhood

After this boom, we'll enter a 2-speed property market.

• Some have not been affected by coronavirus and others have not
• The neighbourhood is important - avoid dormitory suburbs
• don't be left with a secondary property at the end of this cycle - maybe it's time to swap

Immigration is not as important as we thought it may be

• Despite our borders being closed property value to keep rising, and this was mainly because of upgrade is taking advantage of low-interest rates and Covid changing our requirements for accommodation.
• This also suggests that in general and markets are slightly undersupplied and when the borders open will be significantly undersupplied and this will underpin property price growth

The social transformation of work from home

• Again reinforces the importance of neighbourhood
• Need bigger accommodation and a zoom room

The benefits of maintaining good health both physically and mentally and not being afraid to reach out

Building costs will rise

• Understand your real strengths particularly in business and learn to be flexible to leverage these skills

The power of being a good negotiator.

• Wage growth, business supply agreements, finding the low hanging fruit ie renegotiated interest rates on loans

Links and Resources:

Michael Yardney

Buy Michael's latest book – Negotiate Influence Persuade

Ken Raiss- Director Metropole Wealth Advisory

Get Ken Raiss to build you a Strategic Wealth Plan

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Shownotes plus more here: Even more property lessons we learned this year from Covid, with Ken Raiss

Some of our favourite quotes from the show:

"If you want to become wealthy, you really have to use the power of compounding and leverage." –Michael Yardney

"There's a whole range of new gurus – that happens every time the property cycle moves on." – Michael Yardney

"Unless you grow out to where it is, you end going back to where you are." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

The naysayers and the property pessimist were proven wrong – again!

Despite prolonged lockdowns, no immigration, no international students, the threat of high unemployment, and all the pessimistic predictions for our housing markets, the value of many houses around Australia grew by more than 20% in the last year alone.

Obviously, these are unprecedented times, and we can't blame some of those who made predictions early in the pandemic for getting it so wrong, but now that it seems that we are over the other side – across the bridge that Scott Morrison said he would build for us - what property lessons can we learn from Covid to make it better property investors.

That's the topic of my chat today with Ken Raiss, Australia's leading property tax strategist and director of Metropole Wealth Advisory as we share 20 insights we've learned from Covid-19

Top property lessons we learned from Covid-19

The last two years have been among the most tumultuous in living memory, and yet Australia looks set to emerge better placed than almost any other country and our property markets have surprised almost every commentator on the upside.

So, what can we learn from this?

• The property market is too big to fail - the government and the banks have a vested interest in the property market, so they stepped in when things got tough
• The supply of money is important in fuelling our property markets
• The wealth effect is important for consumer confidence and the government understands this - those who hold assets have benefited from government stimulus - you want to be in the market
• The government has realized that it can spend its way out of a recession – make people feel wealthy and they will spend money in the wheels of industry go around
• Those in the knowledge-based economy, who could work from anywhere because they sold what was in their head rather than make money by using their hands, could work anywhere and more and will continue to do so.
• You can't rely on one income stream
• Cashflow buffers are important – Having plenty of cash savings provides a safety net in case your income unexpectedly falls, or a large expense crops up.
• Financial security gives you a 'sleep at night' factor – Building a nest egg outside of the home and compulsory super provides greater financial strength to weather any storms.
• You can expect the markets to correct
• Don't try and time the market –You can't time the market and investment grade properties gives more options even in periods of downturn

Links and Resources:

Ken Raiss- Director Metropole Wealth Advisory

Get Ken Raiss to build you a Strategic Wealth Plan

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Shownotes plus more here: 20 property and investment lessons we've learned from Covid this year, with Ken Raiss

Some of our favorite quotes from the show:

"For most of the investment properties, and for most people's homes, the bank owns as much as the owner does." – Michael Yardney

"I think one of the lessons here is get a good education because it's going to see you through life." –Michael Yardney

"Of course, in an ideal world, you'd like to be able to forecast, you want to know what's ahead. But we can't, there are just too many moving parts." – Michael Yardney

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

Do you want to learn some investment lessons from somebody who's been in the property game for almost 50 years?

You'd hope to get some great insights and perspectives, wouldn't you?

Well, that's what you going to get in today's show, but it's a little bit different from normal.

As you know I normally interview guests or have my little chats with you in this podcast, but I was recently interviewed by Pete Wargent, a regular on this show, for his new podcast.

And you won't be surprised in learning Peter asked me some astute questions and got me to share some things I don't think I have discussed in public before, including some war stories.

Peter is a great interviewer and I'm sure his audience got benefit from our chat, so I asked Pete for permission to run this particular episode of his show - Pete Wargent's Property Pod - as part of Michael Yardney Podcast - so welcome to today's show and enjoy.

Topics Pete and I Discuss:

• Michael's childhood and family background
  • Michael's family came to Australia from Israel when he was three
  • His parents got their first home when he was eight
• How the idea of property investment came to Michael
  • Michael was impressed by the real estate agents when his parents moved house
    • He thought that he wanted to do that as well
  • He also realized that his friends' parents were wealthy compared to his and that they invested in real estate
• How Michael got the idea to put his experience and ideas into a book
• Why Michael thinks we self-sabotage
  • We feel we deserve a particular level of wealth (wealth thermostat) and sabotage ourselves when we rise above it
• The first house Michael bought and the price he paid
• How Michael would advise someone thinking of getting into the market today
  • Get into the property market sooner rather than later
  • Learn the importance of delayed gratification
  • Increase financial literacy
  • Don't worry so much
• War stories from getting involved in commercial developments
• What Michael mainly focuses on investing in now
• What Michael's endgame is
  • No longer investing for himself
  • Instead, he's setting up for intergenerational wealth
  • Charitable giving is also important
• What Michael thinks will happen to the property market next year and over the next 10 years
• What Michael thinks of the upcoming election

Links and Resources:

Michael Yardney

Metropole Property Strategists

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Subscribe to Pete Wargent's Property Podcast on Apple here or Spotify here

Shownotes plus more here: Lessons from a 50-year property veteran with Pete Wargent

Some of our favourite quotes from the show:

"I saw things at home and I saw the way other people did things, and I thought no, I actually want to do it like my friends' parents were doing it." – Michael Yardney

"I'd suggest that the sooner you get into the property market, the better." – Michael Yardney

"I bought my first property in 1971 or 1972 – and now after 50 years, I finally got it right." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

Success is nothing more than a few simple disciplines practiced every day, while failure is simply a few errors in judgment, repeated every day.

If you think about it, it's the accumulative weight of our disciplines and our judgments that leads us to either fortune or failure.

So how can you become more successful in life, investing, or in your business or profession and have a lower chance of failure?

One of the best ways I know is to study successful people, or even better is to study failures, and then have a mentor by your side to make sure you keep doing the right thing.

In today's show Mark Creedon, founder of Business Accelerator Mastermind and one of my coaches and mentors, and I are going to share with you a list of things we believe you need to understand about investing, the economy, and business.

This is really a follow-on from the last chat we had together a few weeks ago where we discussed 24 things we felt you should know and these were based on the musings of Morgan Housell, my favorite finance writer.

Judging by the number of downloads that podcast got it was very popular and I'm sure you'll gain some insights from my chat with Mark today whether you're a beginning or an experienced investor or a businessperson.

Economic and Business Success Lessons

1. Investment banker Dresdner Kleinwort looked at analysts' predictions of interest rates and compared that with what interest rates actually did in hindsight. It found an almost perfect lag. "Analysts are terribly good at telling us what has just happened but of little use in telling us what is going to happen in the future," the banker said. It's common to confuse the rear-view mirror for the windshield.
2. Study successful investors, and you'll notice a common denominator: they are Masters of Psychology. They can't control the market, but they have complete control over the grey matter between their ears. Try to learn as many investing mistakes as possible vicariously through others. Other people have made every mistake in the book. You can learn more from studying the investing failures than the investing greats. "Investor Dean Williams once wrote, "Confidence in a forecast rises with the amount of information that goes into it. But the accuracy of the forecast stays the same."
3. No one on the Forbes 400 list of richest Americans can be described as a "perma-bear." A natural sense of optimism is not only healthy but vital.
4. How long you stay invested for will likely be the single most important factor determining how well you do at investing.
5. When you think you have a great idea, go out of your way to talk with someone who disagrees with it. At worst, you continue to disagree with them. More often, you'll gain valuable perspective. Fight confirmation bias like the plague.

Links and Resources:

Why not join Metropole's Business Accelerator Mastermind

Learn more about Mark Creedon – Business Coach to some of Australia's leading entrepreneurs

Get a copy of Mark's new book here – Have a business not a job

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Morgan Housell's article mentioned in the show:

122 Things Everyone Should Know About Investing and the Economy by Morgan Housel

Shownotes plus more here: 7 more investing, economic, and business lessons you must understand with Mark Creedon

Some of our favourite quotes from the show:

"It's common to confuse the rear-vision mirror with the windshield." – Michael Yardney

"Rational people don't act rationally when it comes to money or investing." – Michael Yardney

"I think nature has made most of us pessimists." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

One way of getting more finance as a property investor is to get a higher valuation on your properties.

So how do you go about this? How does a valuer evaluate your property – what do they like to see, what adds value, and what makes them nervous?

These are some of the questions I'm going to ask my guest today, Belinda Botzolis, a valuer with one of the leading national firms of valuers, but as you'll soon find out, Belinda is far from a conventional valuer.

And even if you're not about to get a valuation or revaluation, I'm sure you'll find the property tips Belinda has to offer of real value and there's a little bombshell Belinda will leave us with at the end of our chat – but you'll have to wait till the end to hear that.

I'll also share my popular mindset message with you at the end of today's show.

Valuation with Belinda Botzolis

In my chat with Belinda Botzolis, a valuer, we get a sneak peek behind the curtains of what they do, how they value property, and what you can do to improve your valuation.

Topics Belinda and I discuss:

• How Belinda decided to become a valuer
  • After turning to a page in her university's guidebook that explained the Bachelor of Business Property Economics degree and speaking to a family friend who was a valuer, Belinda knew what she wanted to do.
• When Belinda bought her first property
  • She was 22
  • She chose an investment property that she and her husband would eventually like to live in
  • They could have borrowed more, but knew the home wasn't a forever home, just a first investment, so sensibly did not overextend.
• Belinda's advice for those new to the market:
  • It will feel like it's never going to happen, but it will
  • Have a plan b, a plan c, and a plan d
• What people ask Belinda when they find out she's a valuer
  • "Why do you undervalue my property?"
  • People don't realize that property valuations are based on what the property would be worth if it went on auction today.
• The risks that valuers look at
• The unusual properties that Belinda has valued
  • Hoarder homes are most likely to strike Belinda as unusual
• What does and doesn't add value to a home
  • Getting the kitchen and bathroom right matters most
  • Adding a pool might add value, but not enough to give you a return on the investment
• Whether aspect and orientation matter
  • The north aspect is key
• Main and secondary roads are risk-rated. Valuers don't like them.
• Off the plan properties and house and land packages in the outer suburbs can get knocked back by valuers

Links and Resources:

Michael Yardney

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Get a bundle of free eBooks and reports at www.PodcastBonus.com.au

Shownotes plus more here: Discover how valuers assess your property so you can maximize your borrowing capacity, with Belinda Botzolis

Some of our favourite quotes from the show:

"Just like there's never a perfect property, there's never a perfect time to invest, either." – Michael Yardney

"Giving up too easily is a bad habit you should avoid." – Michael Yardney

"It's important to ditch unhealthy lifestyle habits." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

What's ahead for our property markets?

If you're like most property investors, you'd probably give your second garage to know what's in store now that our markets seem to have moved to the next stage of the property cycle.

Sure, our markets are still booming, but there seem to be more headwinds ahead. In light of that, in today's show, I'm going to answer the question: where should you buy your next investment property?

And even if you're not planning to buy soon, I think this episode will be informative for anyone who's interested in property. I'll also share my mindset message about things I would have liked to know at the beginning of my investment journey.

Where would you invest in property in Australia today?

Where, what location, and what would you buy, and why?

And by the way…is real estate still a good investment in Australia?

These questions were recently posed to me by journalists, and I can understand why – they are common questions investors are asking today and they make great headlines for articles.

Everyone would like to know how to find the best property investment locations or Australia's best growth suburbs.

However, statistics show that around 50% of all property investors sell up in the first five years, and of those that stay in the market, 92% never get past their first or second investment property.

So, if you want to outperform the average investor, if you want to develop financial freedom through property investing, then don't start by selecting a location, or looking for that ideal property.

Things must be done in the right order – and selecting the property comes right at the end of the process.

My first recommendation to anyone asking where to invest is to sit with an independent property strategist to formulate their plan.

The benefits of creating a plan with an expert include:

1. It will help you define financial and investment goals.
2. You'll discover whether those goals are realistic.
3. You'll find out what you've done right and what you've done wrong along your financial journey.
4. You'll be able to measure your progress towards your goals.
5. Your plan will help you identify risks.

Understand the three important parts of your investment equation:

1. Your budget

1. Location

1. The right property

Be aware that investors usually need to compromise on at least one of the above.

So, what about that journalist's question- "Is real estate still a good investment?

While most property markets around Australia have performed strongly so far this cycle (other than the inner city of high-rise apartment market), it's important to realize that moving forward we are likely to have a 2-tier property market.

In other words, not all property markets will continue growing strongly moving forward.

Properties located in the inner and middle-ring suburbs, particularly in gentrifying locations, will outperform cheaper properties in the outer suburbs.

While the outer suburban and more affordable end of the markets have performed strongly so far, affordability is now becoming an issue as the locals have had minimum little wages growth of the time when property prices have boomed.

As their priorities change, some buyers will be willing to pay a little more for properties with "pandemic appeal" and a little more space and security, but it won't be just the property itself that will need to meet these newly evolved needs – a livable location will play a big part too.

Considering locations

I would not be investing in regional Australia or in the smaller capital cities.

But more than that I look for an affluent demographic who will be able to and prepared to pay more to buy or rent in these suburbs.

I don't like to fight the big trends.

Why fight with the gorilla?

Other important drivers of capital growth include supply and demand, infrastructure, livability, and amenity.

I look for suburbs where wages (and therefore disposable income) are increasing above average.

These will either be:

1. Discretionary Locations

These are the most expensive locations in our capital cities – the "established money" locations where most of the residents have lived for a long time and where many residents have paid off their home loans years ago.

1. Aspirational Locations

These are the upper-middle-class areas and gentrifying locations of our big cities.

On the other hand, I would avoid investing in the more affordable locations as this end of the property market underperforms over the long term with regards to capital growth and rental growth because many of the owners are young families who have stretched themselves to their financial limits and are often only a week or two weeks away from broke.

People will pay a premium to be in the right neighborhood

What about choosing a property in your preferred location?

In general, there are 3 types of property.

1. A grade properties are the type of assets you want to own, and the type of properties where great tenants want to live, not because they need to, but because they want to and are prepared to pay extra to live there.

1. B grade properties still have a lot going for them, and during hot property markets like we are currently experiencing they still perform well, but their second location within their suburb or the less than perfect attributes of these properties mean they will slump more in downtimes.

1. C grade properties – these are to be avoided unless they're in a great neighborhood and your intention is to demolish the property and replace it with something more appropriate for the location.

Here are some of the factors to look for when selecting an investment-grade property:

1. Buying below the property's intrinsic value

1. A high land to asset ratio

1. A property with a twist

1. A property where you can manufacture capital growth through renovations or redevelopment.

Resources:

Michael Yardney

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Get a bundle of free eBooks and reports at www.PodcastBonus.com.au

Shownotes plus more here: Where should you buy your next investment property at this stage of the property cycle?

Some of our favorite quotes from the show:

"You see, property investing is a process, not an event." – Michael Yardney

"When selecting a location, I would initially start by eliminating locations." – Michael Yardney

"You shouldn't be doing what everyone else does, because otherwise, you'll get the same results they do." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

Are you wondering what's ahead in property for 2022?

Maybe you'd like to know what other Australian property investors plan to do?

Well, that's exactly what we discuss in today's show as we unpack the results of this year's Property Investor Sentiment Survey.

You'll hear what 1,700 Australians feel about our current real estate markets and what they plan to do. And you'll also hear what Covid did to their property plans and how if at all it changed their strategy

You see…they took part in this year's Property Investor Sentiment Survey run by my Property Update newsletter in conjunction with Yahoo Finance

Running since 2011, it offers rich and vibrant insights into how property consumer trends and sentiments have changed over time.

And as usual, I'll share a mindset message with you because if you can change your thinking it could change your life.

What you need to know about this year's Property Investor Sentiment Survey

While we may all be in the same ocean, we are not in the same boat, and while some Australians have lost their jobs or are working shorter hours and have suffered financially, others are doing the same as before the pandemic or better.

Sure 2021 will be a year many of us would rather forget, even though very few of us ever will.

However, for homeowners and property investors it will be a year when the value of their properties will have increased by up to 20% - in some cases, they will earn more from property capital growth than they will from their day job.

1. Investors are more cautious this year

A surprising result this year was that while only 12.4% of the respondents said their household finances had worsened because of the pandemic.

In other words, most Australian households have noticed no real change or an improvement to their family finances, only 55.2% believe now is a good time to invest in residential real estate.

However, 24.7% of respondents plan to buy a new home in 2022 (up a little from 24% last year and 20% the year before.)

1. How did the pandemic affect your household finances

57% of respondents said there was no real change to the household finances, while 28% said their household finances had improved.

This is no real surprise as, despite Covid, lockdowns, and a recession last year, recent Australian Bureau of Statistics figures show the average Australian is getting richer.

We also asked some Covid-specific questions in this year's survey. Some of these questions include:

• Are you considering moving to live in a different location because of Covid 19?
  • Most are not, though they may have been considering it before things began to settle down
• Is this a good time to invest in property?
  • People are less confident this year and less likely to want to invest than they were last year.
• if the Coronavirus pandemic had changed their attitude or approach to property investing?
  • In general, attitudes remained about the same as last year
• Has the pandemic impacted your immediate investment plans in the next 12 months?
  • Most are sticking to their original plans
• Have you requested a mortgage repayment holiday from your lenders?
• Have you received a request for a rental reduction or holiday because of COVID-19 from your tenants?
• Has the pandemic changed your work situation?
• How has the pandemic affected your household finances?
• Do you think now is a good time to fix interest rates?
• Whose advice do you seek (or plan to seek) for property investment advice?
  • About a third of the respondents planned to seek advice from a property strategist or advisor

The bottom line:

It's clear that property investor confidence remains strong and those who can afford to are planning to take advantage of the investment opportunities are housing market is currently offering by buying another investment property or new home if finances allow.

Our survey shows that Australian property investors focus on long-term capital growth, rather than cash flow and many are looking for a property that has the potential to add value, rather than waiting for the market to do the heavy lifting.

While investors will still face a number of hurdles with the economic challenges facing Australia, few have changed their long-term investment plans due to COVID-19.

Links and Resources:

Michael Yardney

Metropole Property Strategists

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Click here to read the full survey results.

Shownotes plus more here: Here's what 1,700 investors think is going to happen to property in 2022, with Brett Warren

Some of our favourite quotes from the show:

"No one's born talented at making excuses." – Michael Yardney

"Many Aussies are in at least as good a financial situation or better compared to when the pandemic began." – Michael Yardney

"In general, people didn't think it was as good a time to invest as last year." – Michael Yardney

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A number of years ago I started making a list of all the things one needed to know about investing.

I wanted to capture the favorite quotes I have read and the lessons I have learned.

This ended up being a more ambitious project than I envisaged, and it remains an ongoing one.

So, in today's show, Mark Creedon and I are going to share with you a list of 24 things we believe you need to understand about investing, the economy, and business, and this list is based on the musings of Morgan Housell, my favorite finance writer, and I'm sure you'll gain some insights from my chat with Mark today whether you're a beginning or an experienced investor or a businessperson.

24 Lessons About Investing and the Economy

Over the years one of my favorite columnists whose articles I read regularly is Morgan Housell who used to write for Motley Fool and now writes for Collaborative Fun

He writes a lot about behavioral finance and why supposedly rational people act irrationally when it comes to money, finance, and business.

A number of years ago he wrote a great column where he detailed 122 things everyone should know about investing and the economy and there were some great lessons to take away from that article. I've pulled a number of these out today to discuss with my business partner Mark Creedon founder of Business Accelerator Mastermind.

1. Saying "I'll be greedy when others are fearful" is easier than actually doing it.
2. When most people say they want to be a millionaire, what they really mean is "I want to spend $1 million," which is literally the opposite of being a millionaire.
3. Daniel Kahneman's book Thinking Fast and Slow begins, "The premise of this book is that it is easier to recognize other people's mistakes than your own." This should be every market commentator's motto.
4. As Erik Falkenstein says: "In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great moves."
5. There is a difference between, "He predicted the crash of 2008," and "He predicted crashes, one of which happened to occur in 2008." It's important to know the difference when praising investors.
6. Wealth is relative. As comedian Chris Rock said, "If Bill Gates woke up with Oprah's money he'd jump out the window."
7. The Financial Times wrote, "In 2008 the three most admired personalities in sport were probably Tiger Woods, Lance Armstrong, and Oscar Pistorius." The same falls from grace happen in investing. Choose your role models carefully.
8. Investor Nick Murray once said, "Timing the market is a fool's game, whereas time in the market is your greatest natural advantage." Remember this the next time you're compelled to cash out..
9. Jason Zweig writes, "The advice that sounds the best in the short run is always the most dangerous in the long run."
10. Billionaire investor Ray Dalio once said, "The more you think you know, the more closed-minded you'll be." Repeat this line to yourself the next time you're certain of something.
11. John Reed once wrote, "When you first start to study a field, it seems like you have to memorize a zillion things. You don't. What you need is to identify the core principles — generally three to twelve of them — that govern the field. The millions of things you thought you had to memorize are simply various combinations of the core principles." Keep that in mind when getting frustrated over complicated financial formulas.
12. James Grant says, "Successful investing is about having people agree with you … later."
13. Scott Adams writes, "A person with a flexible schedule and average resources will be happier than a rich person who has everything except a flexible schedule. Step one in your search for happiness is to continually work toward having control of your schedule."
14. Investors want to believe in someone. Forecasters want to earn a living. One of those groups is going to be disappointed. I think you know which.
15. As the saying goes, "Save a little bit of money each month, and at the end of the year you'll be surprised at how little you still have."
16. John Maynard Keynes once wrote, "It is safer to be a speculator than an investor in the sense that a speculator is one who runs risks of which he is aware, and an investor is one who runs risks of which he is unaware."
17. Our memories of financial history seem to extend about a decade back. "Time heals all wounds," the saying goes. It also erases many important lessons.
18. You are under no obligation to read or watch financial news. If you do, you are under no obligation to take any of it seriously.
19. Most economic news that we think is important doesn't matter in the long run. Derek Thompson of The Atlantic once wrote, "I've written hundreds of articles about the economy in the last two years. But I think I can reduce those thousands of words to one sentence. Things got better, slowly."
20. The "evidence is unequivocal," Daniel Kahneman writes, "there's a great deal more luck than skill in people getting very rich."
21. There is a strong correlation between knowledge and humility. The best investors realize how little they know.
22. Not a single person in the world knows what the market will do in the short run.
23. The more someone is on TV, the less likely his or her predictions are to come true.
24. How long you stay invested will likely be the single most important factor determining how well you do at investing.

Links and Resources:

Why not join Metropole's Business Accelerator Mastermind

Learn more about Mark Creedon – Business Coach to some of Australia's leading entrepreneurs

Get a copy of Mark's new book here – Have a business not a job

Morgan Housell's article mentioned in the show:

122 Things Everyone Should Know About Investing and the Economy by Morgan Housel

Shownotes plus more here: 24 Things everyone should know about investing and the economy | Build a Business, Not a Job Podcast

Some of our favourite quotes from the show:

"We've been investing and in business for long enough to know that there's always going to be things to scare you, but you shouldn't allow them to." – Michael Yardney

"Don't get upset that you can't control those, just take advantage of what you can control." – Michael Yardney

"At least the speculator knows they're speculating." –Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

When you're on the hunt for a new property, there are so many things to consider – location, amenities, capital growth potential and if it's your home you may be wondering is there room for a zoom room or a man cave?

So, what are property buyers looking for when they search sites like domain.com.au? That's what I'm going to be chatting today about with Dr. Nicola Powell, the Senior Research Analyst at Domain.

We will also be discussing other buyer trends that Nicola has uncovered in her research including what buyers are looking for in their neighbourhood, the move to regional Australia, and locations that have significantly outperformed household income.

This is the type of information that will be valuable for you with your beginning or an experienced property investor, so welcome to today's show.

What Nicola's Research Uncovered

How will the pandemic shape consumer behaviour in the future?

I think we will be looking for different things in our homes, in our real estate, and in our neighbourhood, but to better understand what people are searching for when looking for their next home I'm looking forward to my chat with Dr. Nicola Powell, Senior Research Analyst for Domain.

Nicola is the leading force behind Domain's data reports that keep the Australian public up to date on what's happening in the market. She is a well-known property expert, featuring regularly on broadcast and in print media, as well as Domain's media channels.

Buyer trends we discuss

• 2021 was the busiest first half of a calendar year on record with sales soaring above the decade average by 28% across the combined capitals and 60% in regional Australia.
• The Domain Buyer Demand Index for combined capitals reached a peak in March, highlighting the strong buyer competition seen earlier in the year.
• The peak in buyer demand occurred at different times across the capitals.
• Sydney and Melbourne reached a peak in buyer demand sooner than the other cities.
• Buyer demand in Canberra and Darwin remains higher than the other cities, reflecting the underlying demand that remains.
• While current demand across the combined capitals is 17% below the March peak, it has been elevated over winter.
• There is a strong correlation between the Domain BDI and new "for sale" listings.
• In Sydney, affordability has become a key restraint as buyer demand is now on par for houses and units following five months of heightened demand for houses.
• In a post-covid world, we've seen our suburbs become activated.
• The bigger the house, the greater the price growth.
• House prices in some of Australia's more popular school catchment areas have soared by as much as 46% over the past 12 months.
• Parents are paying a premium for homes in locations that make their children eligible for enrolment in high-performing or popular government schools
• The data suggests certain school zone boundaries can have a significantly positive effect on house prices.

Resources:

Michael Yardney

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Dr. Nicola Powell – Chief of Research and Economics at Domain

Domain Group's 2021 School Zones Report

Get a bundle of free eBooks and reports at www.PodcastBonus.com.au

Shownotes plus more here: Identifying changing property buyer trends, with Dr. Nicola Powell

Some of our favourite quotes from the show:

"The buyer demand peaked in March, which is interestingly when capital growth peaked." – Michael Yardney

"I think I've noticed that more of us are looking back to the way previous generations lived." – Michael Yardney

"It's been a cycle of property upgraders." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how