Property Investment & Wealth Creation Australia | The Michael Yardney Podcast

What does the Uber Eats app have to do with the skills shortage?

What does walking down the cereal aisle in the supermarket have to do with our economy and our property markets?

In today's show I chat with leading demographer Simon Kuestenmacher, who uses a number of food metaphors to help explain what's happening in our economy, so if you're a lover of food as I am, and more importantly if you're interested in the property or business, I'm sure you're going to get some great insights from my chat with Simon.

I'll also share a mindset moment about failure with you.

Topics that Simon and I discuss:

• Australia is facing a skills shortage
  • This is happening because of low immigration. Without overseas migration, the country doesn't have enough workers to meet its needs
  • Businesses "raided the pantry" by hiring from the pool of unemployed workers, but the pantry is nearly empty now
• Because skilled migrants aren't available, full employment is near
  • Even some long-term unemployed workers have returned to the workforce
  • But some sectors, like tourism and hospitality, are still struggling to find enough workers
  • Competition for workers may drive some wages up
• However, not all businesses will be able to afford to raise wages. And in some cases, wages might not be the reason they're having trouble finding workers
• Australia needs to get to work on creating its own skilled workers to fill positions, since skilled migrants from overseas are unavailable
  • This involves removing barriers to upskilling
• Companies will need to choose where they fall in the "cereal aisle" – expensive cereal on one side, cheaper brands on the other, and a basic brand square in the middle

Resources:

Michael Yardney

Simon Kuestenmacher - Director of Research at The Demographics Group

As our markets move forward why not get the team at Metropole to build you a personalised Strategic Property Plan – this will help both beginning and experienced investors.

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

Shownotes plus more here: There's no UberJobs app to solve the problem. It's time to try something else with Simon Kuestenmacher

Some of our favorite quotes from the show:

"One of the ways one can have a better GDP and improve your economy is becoming more productive." – Michael Yardney

"We choose to target areas where there's more skill level 1 and 2 workers, where there's more established money suburbs because that's the premium end of the Weet-Mix market." – Michael Yardney

"I think failing is overrated." – Michael Yardney

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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 a better investment in today's market - apartments or houses? That's the topic of today's show.

Now I could give you a simple answer, but I thought it was better to help you understand the thought process behind my decision than give you an immediate answer. Of course, I'll also be sharing my mindset message for today before the end of the show.

So is it better to invest in a house or an apartment?

The change to a new working and home life prompted by the COVID-19 pandemic, combined with a loss of confidence thanks to some shoddy high-rise apartment buildings during the last building boom has seen investors increasingly shy away from investing in apartments.

It seems that more investors are now asking if apartments are still a good investment in the current market.

Well… my response is… it depends.

I remember times when apartments outperformed houses, but for the last decade or so house values have risen at more than twice the rate of units.

And the current property boom widened what was already a sizeable difference in prices.

Of course, historically apartments have been cheaper than houses but the gap in prices has grown particularly wide in the past year.

Some apartments, especially family-friendly low-rise apartments in lifestyle neighborhoods have still performed well and are likely to remain in continuous strong demand.

The Numbers of Apartment Living

The 2016 Census of Population and Housing found that 10% (2,348,434) of all people in Australia spent Census night in an apartment.

This meant that there was around one occupied apartment for every five occupied houses in Australia - compared with one to every seven, back in 1991.

While the number of vacant rental listings has fallen significantly in Brisbane, Darwin, Perth, Adelaide, and Hobart over the past year, Sydney and Melbourne continue to bear the brunt of closed international borders that has left many inner-city apartments without tenants.

Data from Domain showed Melbourne's vacancy rate sat at 4.7 percent as of February 2021 — a massive spike from the same time last year when the vacancy rate was 1.6 percent.

Choosing the right neighborhood

Sure, last year offices were shut and lockdowns were in place but moving forward more of us are likely to continue working flexible rosters and working at home more than ever.

This means gone are the days where our 'home' was simply the place we rest our heads and enjoy some downtime between work and our social lives – the coronavirus crisis has put an end to life as we once knew it.

If you can leave your home and be in short 20-minute proximity – whether that is on public transport, bike ride or walk - to a great shopping strip, your favorite coffee shop, amenities, the beach, a great park, that's the new gold standard of where people want to live.

What matters in a home?

And it's not just the importance of neighborhood that has shifted Australians' views.

The legacy of the lockdowns and the work-from-home-movement have made many Australians reevaluate what exactly they want in the home itself.

All of a sudden people were trying to find space to be able to work, study, and also relax all under one roof - and in many cases, this hasn't gone well.

Prior to COVID-19 more Australians were trading space for place and were embracing apartment living, trading their backyards for balconies and courtyards in inner-city locations. Now we want more space – a zoom room, a bigger yard, and a garage that can be converted to a gym.

High rise apartments: The slums of the future

It's worth pointing out that while large well-located suburban medium-density apartments will make great investments increased substantially in value over the long term, many of the high-rise towers built in the last fifteen years will continue to underperform with poor, if any, capital growth in the foreseeable future.

Of course, these cookie-cutter-style apartment blocks never made good investments.

The sad reality is that today, in light of the many media reports of structural problems in some of these high-rise towers, there is a crisis of confidence.

This sector of the property market has lost the trust of the buying public and confidence will take quite some time to restore as various stakeholders including state and local governments as well as the construction industry including building surveyors and certifiers scramble to shore up the building sector.

Investors are shying away

Historically, a significant volume of apartments were bought by local and overseas investors.

But as I explained, now many of these investors are shying away from apartments, due to increasing concerns about vacancy rates, capital growth, and also because of COVID-19 related concerns.

Highly-publicized failures and defects in high-rise apartments, such as the Opal Tower in Sydney, are also playing their part and dampening demand.

But it's important for investors to remember that not all apartments can be lumped into the same category.

While many new homes are being constructed, the pipeline for new apartment complexes is very thin meaning when our borders eventually reopen and demand for apartments increases from the many new migrants and students returning to Australia, apartment prices will start increasing again as the cost of constructing new projects will be considerably higher than previous building costs.

This will of course push up the price of new apartments and with it drag up the price of established apartments.

Remember, property markets are cyclical

In the short run, returns can be inconsistent, but it's well documented that investment returns eventually revert to their long-term averages.

That is, periods of below-average growth tend to be followed by periods of above-average growth and vice versa

While houses outperformed apartments with regard to capital growth over the last decade, for the 10 years prior to that many well-located apartments grew in value as much as houses did.

The fact the houses have displayed strong capital growth rates over the past 10 years due to appreciating land values, interestingly implies that apartments are currently intrinsically undervalued.

But comparing apartments to houses is unfair

Of course, if your budget allows you to buy a house or townhouse in an A-grade location, that's first prize when considering an investment purchase, but our booming property markets mean that more and more investors will be unable to afford a house in an investment-grade location.

Fact is, the rich are getting richer and they don't want to travel further out and I believe the gap between values in our established inner suburban locations and the outer suburbs will only widen.

Australia's apartment market: The outlook

In the short term….

Over the next year or two, it is likely that there will be less demand for apartments while first home buyers continue to prioritize houses and investors remain wary.

In the long term….

Over the next 10 years, I think we're going to see a shift in Australia's apartment market and a much more substantial increase in capital growth.

Why?

While currently around 10% of our population living apartments, this is significantly lower than the percentage of people living in apartments in similar size western cities to Sydney and Melbourne, where it's not unusual to find 20 to 30% of the population living in apartments.

Then, in light of structural and building problems in recent years, the next round of apartments will cost significantly more to build as builders and surveyors will be forced to avoid cutting corners and risking further scrutiny.

This will, in turn, push up new apartment prices and therefore values of good established apartments.

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 range of my ebooks here: www.PodcastBonus.com.au

Shownotes plus more here: What makes a better investment in today's market – a house or an apartment?

Some of our favorite quotes from the show:

"There's not one property market, so we can't even say there's one apartment market." – Michael Yardney

"These days, the place people want to be is not near the CBD, but in lifestyle neighborhoods where all the amenities are close by." – Michael Yardney

"Watching a movie that excites you, inspires you, makes you laugh, takes you away to another place, that's a good way of turning off your stress." – 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

We're well into the second half of 2021 now so it's a good time to reflect back on the year so far and then look forwards to what's ahead.

Property values across our capital cities have experienced double-digit growth already this year.

And despite the Covid concerns we're experiencing, there's plenty more growth to come.

Clearly, buyers are still out in force – owner-occupiers, investors, and first home buyers – at a time when available supply is struggling to keep up, keeping pushes prices higher.

While much of the commentary is about the micro factors – what's happening on the ground in our property markets – I like to regularly get together with property commentator Pete Wargent in these Big Picture podcasts to look at the macroeconomic factors affecting our economy and the property markets to help give you some more clarity about what the future holds so you can make better investment and business decisions.

Since we spoke last month Australia's economic recovery has continued to unfold, more jobs have been created and our property markets keep surging.

Australia's Property markets

All our capital cities have already experienced double-digit growth this year other than Perth.

Homebuyers and property investors who took a long-term view have already enjoyed significant capital growth.

• The higher-end, more expensive end of the market is outperforming the cheaper end.
• Investors are back in the market.
• The pace of growth will slow but property values are likely to increase another 10% this calendar year.
• Rental growth is slowly starting to pick up as vacancy rates fall.

Australia's households just keep getting richer.

• Australian household wealth grew more in the last year than it did during the preceding three years combined.
• Much of our wealth is due to ownership of property
• A new report from Credit Suisse estimates as many as 1.8 million Australians are millionaires today based on net household wealth (defined as the value of financial and real assets minus debts).
  • And over 3 million Australian adults could soon be millionaires, according to the report.
  • A lot has to do with property and super

The RBA and interest rates

Governor Philip Lowe's announcement telling us that the economy is doing much better than previously forecast resulted in speculation that an interest rate increase may come sooner than expected

Latest housing finance figures

• The value of new home lending has almost doubled since May last year.
• New home lending increased by 4.9% from the month prior and a whopping 95.4% or $15.90 billion from May 2020.
• While the value of owner-occupier lending only saw moderate month-on-month gains, investor lending has gone way up
• Investor lending has now hit the highest level since June 2015 with $9.13 billion of new loans in May, more than double the value in May last year when COVID was in its early stages.
• However, the investor surge comes at the cost of first home buyers, with the number of owner-occupier first home buyer loans dropping.
• While first home buyer numbers are down, the value of first home buyer lending is up, reflecting Australia's rising property prices.

Jobs

• The jobless rate has fallen to its pre-pandemic level of 5.1 percent after the creation of 115,000 jobs in May.
• The underutilization rate is the lowest since February 2013.
• With international borders shutting out foreign labor and fuelling skills shortages in some industries, job ads at a 12-year high, and jobs vacancies soaring, the local labor market could reach full employment sooner than expected.

Population

• Australia's population increased by 136,300 people in 2020. This was the slowest population growth since ABS records began in 1982.
• There were 294,400 babies born in Australia last year, the fewest births in 13 years.
• And there were 161,400 deaths in the past year down by 3.4% over the previous year.
• Over the next 40 years, Australia's population is expected to age and become smaller than expected.

Resources:

Michael Yardney

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

Get your bundle of eBooks and reports here: www.PodcastBonus.com.au

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

Pete Wargent Next Level Wealth

Pete Wargent's new book Low Rates High Returns

Shownotes plus more here: The Big Picture | Economic & property trends you must understand – July. With Pete Wargent

Some of our favourite quotes from the show:

"The markets turned in October last year, and they've gone gangbusters ever since." – Michael Yardney

"We've never had as many first homebuyers, so housing is affordable. Maybe not right in the centre of Sydney or Melbourne, but there are still opportunities." – Michael Yardney

"I can see an employment rate with possibly even a 4 in front of it, moving forward." – 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

My special guest for today's show is Robert Kiyosaki of Rich Dad Poor Dad fame.

I spoke with Robert on my podcast last year at the beginning of Covid when he warned Australians about the challenges for our economy ahead and the opportunities that he felt would come at the other side of the downturn.

Now I didn't agree with everything he said, but I respect that he has taught not only me, but millions and millions of people about the basics of financial literacy, so I was keen to hear his opinions.

Fortunately, Robert's dire predictions didn't come to pass, so I was pleased when he reached out to me again recently to be on my podcast so I could ask him what the biggest surprise was for him over the last 12 months.

You'll hear how Robert's teachings challenge conventional thinking about money and he suggests that you should be doing what the 99% are not doing.

You'll hear Robert speak positively about Australia's opportunities, but you may be shocked by some of his predictions of what will happen before these opportunities arise.

As I said, I don't agree with all of Robert's thoughts, his ideas about real estate, and his forecasts for what's ahead for the economy, but rather than debating him, I gave him the airtime he deserved, and then after our chat, I'll share my views.

So don't panic if you hear some of Robert's extreme thoughts, but please listen to the whole show including my thoughts, and then you'll have both sides of the discussion argument to make your decisions on.

My Chat with Robert Kiyosaki

For many years Robert Kiyosaki has been one of the most respected voices in the world on growing wealth.

He is best known as the author of Rich Dad Poor Dad which is the #1 personal finance book of all time and Robert has challenged the way tens of millions of people around the world think about money.

Some of the topics Robert and I discuss:

• Robert's background and credentials
• What surprised Robert over the past 12 months
  • He believes the United States is desperate and dumping money straight into the economy, rather than through the banking system
• Why real estate is Robert's preferred investment vehicle
  • He likes being able to use debt to buy real estate and lower tax obligations
• He believes that his concepts are applicable to Australia as well as the US because he's made money in Australia using his concepts
• Robert's investment philosophy hinges on self-education rather than trusting the government
• Robert's explanation of his Cash Flow Quadrant
  • The Quadrant uses the letters are "E", "S", "B" and "I". "E" stands for Employee. "S" stands for Self- employed or Small business. "B" stands for Big Business and "I" stands for Investors.
• Why Robert believes that the world's biggest financial crash is on the horizon
  • He believes that we're in a bubble because the US has been printing money instead of fixing mistakes
  • He does not believe the bubble is likely to deflate slowly
  • Robert believes that it's difficult to know what will cause the bubble to burst, but that it will probably be something small added on to a pile-up of things
  • He believes that Australians should not be complacent about their susceptibility to a bubble
• Robert also believes that a home is not an asset
  • This is because he believes that assets bring in cash, while liabilities cost money, and a home costs money
• Robert will be doing a live event with Harry Dent while he will explain more about what he believes will happen and what opportunities will arise from it.

My response to Robert's thoughts

In the show I give you an alternative view on 2 of Roberts assertions:

1. What's in store for our economy and
2. His concept of what makes a good property investment.

Property.

Robert clearly knows a lot about United States Real Estate – where the rules are very different, the tax regime is very different, the markets are very different and the way to invest is very different to Australia.

In fact, if I think about it the way I would invest in real estate in New Zealand is very different from how I would invest in Australia even though our countries and economies are more similar than Australia and the USA.

Our property markets are underpinned by the fact the 10.6 million properties around Australia are in general owned by homeowners – in fact, 70% are owned by homeowners and half of these homeowners don't have a mortgage against that property.

And for the other half that do you have a mortgage, many of them are ahead in their payments while others are using the mortgage to support the purchases of investment properties.

There is not a real property debt problem in Australia.

How I see it is that the way you get income from your investment properties is in 4 ways.

1. Capital Growth
2. Rental returns
3. tax benefits
4. Accelerated/ manufactured growth.

Unfortunately, too many people look for cash flow from their residential real estate investments in Australia and that's just not how it works.

Our economy

When I spoke with Robert last year, he was concerned that Australia would fall into recession as with most countries around the world. And that prediction came true, but the recessions weren't as deep voice disastrous as he expected because our governments have learned they can buy their way out of a recession by spending money.

Australians perform better than most advanced economies and of course, we are still susceptible to coronavirus-induced problems and I won't even discuss the potential geopolitical problems with China, but I see a number of reasons to be optimistic about the future.

1. Global economic growth is recovering rapidly
2. Australian consumers are going to keep spending.
3. Fiscal stimulus will continue
4. Monetary policy remains ultra-easy
5. New migrants will flood into Australia when the borders open

Your home as a stepping-stone

In this new age of property investment, when interest rates are accommodatingly low and mortgages so cheap, present-day homeowners are actually sitting on a potential goldmine.

Far from being a drain on the household coffers, many of us are taking the opportunity to reduce our mortgages faster, contributing extra to our continually shrinking monthly repayments.

In turn, some property owners are building up equity at a considerable rate, with the help of the long-term appreciation of well-located property.

Take select pockets of the Melbourne, Sydney, and Brisbane property markets for instance, where homeowners have enjoyed significant growth on their principal place of residence over the last few years without lifting a finger.

Some of them are leveraging the hundreds of thousands of dollars worth of equity they're literally sitting on (or in) to invest in further high growth assets, while others are cashing in on a rapidly moving rental market and erecting granny flats in the backyard to create quick (and lucrative) accommodation.

Now more than ever, your home can and should be an integral part of your investment game plan.

Resources:

Michael Yardney

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

Robert Kiyosaki's Australian Virtual Event – www.robertandharry.com

Shownotes plus more here: An eye-opening interview with Robert Kiyosaki – the economic shock ahead in 2021

Some of our favourite quotes from the show:

"I think it's important to not go forward with blinkers on, to listen to people with various opinions, especially from people who've got a track record." – Michael Yardney

"Our property markets are underpinned by the fact the 10.6 million properties around Australia are in general owned by homeowners." – Michael Yardney

"First of all, it's not just Australia – global economic growth is recovering rapidly." – 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 of the most difficult aspects of being a property investor comes from the fact that we have competing emotions depending on where you are in the property cycle.

There's fear and greed, overconfidence and loss aversion, panic and euphoria.

We're told there's nothing more important than being disciplined when getting involved in property and investment, but it's not easy when the emotions hang in there.

One of them is fear of missing out, like a lot of people are currently experiencing as they feel the market is moving faster than they can get in. And there there's fear of getting in, which a lot of people were experiencing last year when people were talking about property Armageddon.

So today I have two segments: the first one a chat with property researcher John Lindeman and we have a little bit of a general chat about FOMO and what you should watch out for.

Then I'll share the ten FOMO mistakes I'm seeing many property investors make, to ensure that you don't make them as well.

So, today's podcast will be useful for you whether you're looking to get into property or you're already in property anyway, because as we go through these things, there are a couple of great fundamentals and lessons I'd like you to know.

Some of the Topics John Lindeman and I Chat About:

• FOMO is an emotionally based desire.
  • We don't want to miss out on something someone else has.
  • It's similar to greed.
• You have to respect the market.
  • When things settle down, some people will find they bought the wrong property or overpaid.
• FOMO can move a boom to a bubble when too many investors become involved.
  • That's why it's better to buy in areas that are mostly owner-occupiers.
• There will always be another opportunity, so buy with your head, not your heart.
• Big FOMO mistakes John Lindeman currently sees:
  • Emotion that takes over decision-making.
  • Finding it difficult to wait.
• Have rules that can help you rationally you decide which property to buy so that emotion doesn't take over.

10 FOMO Mistakes

• Not really understanding the nature of the property cycle
  • You need to remember that the property market always moves in cycles. So after a boom, you will see a downturn.
• Acting with heart and not head
  • Allowing your emotions to cloud your judgment means you are more likely to over-capitalize on your purchase, rather than negotiating the best possible price and outcome for your investment goals.
• Diving in or Dithering
  • FOMO causes some investors to act too impulsively, while others freeze up out of too much caution and never act at all.
• Not adhering to their property strategy
  • Successful wealth creation through real estate requires you to set goals, determining where you want to end up, and then devising a cohesive plan to get there.
• Changing their investment strategy.
  • If your aim is to gain financial freedom through property investment this is a critical time to stick to a proven strategy.
• Speculation over Patience
  • Property investment is not a get-rich-quick scheme. Doing it successfully requires patience.
• Not having a finance strategy.
  • Strategic property investors have a finance plan to allow them, not just to buy one property but the next and the next.
• Compromising on Location
  • A property's location will do 80% of the heavy lifting when it comes to capital growth, so don't compromise on it.
• Taking advice from the wrong people
  • You should take advice, but from proven experts, not just anyone with an opinion.
• Buying the wrong property
  • Don't make a snap decision on the wrong property.

Resources:

Michael Yardney

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

John Lindeman – Lindeman Reports

Get our special bundle of eBooks and reports at www.PodcastBonus.com.au

Shownotes plus more here: Warning – Avoid these FOMO errors investors make in a hot property market; with John Lindeman

Some of our favourite quotes from the show:

"It's owner-occupiers that basically create the markets, about 70% of purchases, and it's investors who push it up to its heights - the booms, and even sometimes the bubbles and then also create the slumps" – Michael Yardney

"Currently I'm seeing some buyers so worried the market is going to pass them by that they're compromising their selection criteria just to get in the market." – Michael Yardney

"By approaching property investment with patience and persistence, you will gain far more success and wealth than if you seek out the next big thing." – 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

You heard me say it before - property investment is a game of finance with some houses thrown in the middle.

But the rules of the game are changing in front of our eyes, so today I'd like to explain what's going on with lending, so you have a better chance of the banks saying "yes" to you and lending you more money, with leading finance strategist Andrew Mirams, director of Intuitive finance.

I plan to ask him a number of the common finance questions we're asked when clients come to see us at Metropole, but I'm also going to ask Andrew some of the questions you probably wouldn't even think of asking but are important to know the answers to in today's financial climate, so that at the end of today so you'll have a better understanding of how to approach the game of property finance.

The changing game of property finance with Andrew Mirams

• What's actually happening in the world of finance? Are the banks open for business?
  • The banks are always open for business.
  • They've actually been pretty good through the pandemic.
  • They're working on more responsible lending.
• Are they still talking about loosening the purse strings a bit?
  • Lending restrictions have been over the top a little bit and probably needs more scrutiny.
• Why is it taking longer to get preapprovals?
  • Applications to banks have gone up a lot mostly due to first-home buyers and now investors are coming back as well.
  • Also, lots of workforces are offshore
• We discuss some preapproval conditions borrowers need to understand
• It's important to understand where banks are willing to lend – they restrict lending for certain postcodes and types of property
• Bank loan officers don't necessarily understand business.
  • You can't go to a bank to get property advice
  • The right time to invest is when it's right for you
• Interest rates are important, but the right loan rate is more important. Online lenders aren't necessarily the right answer.
• A finance strategy is much more than an interest rate or fees.
  • Banks are looking at your serviceability as much as your equity.
• Loan insurance can entice banks to increase the loan, but it protects the bank, not you, and loan insurance costs.
  • So, you have to find a sweet spot that gives you the amount you need without paying too much for the loan.

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

Andrew Mirams Director Intuitive Finance

Shownotes plus more here: Understanding the changing game of property finance with Andrew Mirams

Some of our favorite quotes from the show:

"I believe it's important to have a preapproval in place before you go out into the market." – Michael Yardney

"I don't think you should assume the bank is on your side." – Michael Yardney

"If you do the easy things now, you're going to have a hard life later; if you do the hard things now, you're going to have an easy life later." – 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

Property values across our capital cities have experienced double-digit growth already this year, in all capitals other than one.

And despite the Covid concerns we're experiencing, there's plenty more growth to come.

The surge in property value has caused the property bears to go back in their caves and hibernate and our major banks have done an about-face and are now forecasting 20% to 30% rises in property values around Australia this cycle with strong growth continuing for some time.

And the economic Armageddon predicted by some didn't eventuate and we didn't fall off the assorted cliffs that were meant to litter our path along the way.

So, in today's podcast, I'm going to have a chat with Australia's leading economist, Dr. Andrew Wilson, as we look back on what's happened to price growth so far and give you some thoughts on what's ahead.

This year's property growth and what's ahead

No one would have predicted the unprecedented record-breaking levels of high house price growth in the first half of 2021.

The outstanding performer so far this year has been the Sydney property market where house values have increased 17.8% this year alone. In fact, Sydney home values have increased 24.2% in the last 12 months.

Sydney apartment values also increased, but not as much - increasing 7.3% in the last six months and 9% in the full year.

Over the six months of 2021 so far:

1. Melbourne property values have increased 11.8%
2. Brisbane values were up 10.7%
3. Adelaide values rose by 10.4%
4. Perth values increased by 8.1%

Now it's important to remember the capital city of values set their previous records in September 2017 and today values are only around 10% higher than previous records.

In other words, the market did but it always does, operate cyclically with periods of flat or no growth and even periods with property values drop.

How FOMO Affects the Markets

The other critical factor, of course, is fear of missing out (FOMO), a self-fulfilling cycle where those yet to buy in are motivated to do so by the prospect of having to pay more to do so at a future date.

None of these factors look likely to change over the rest of 2021, and it's likely that house prices could rise by another 10% before the end of next year.

Of course, this is just average price growth, and the upper end of our property markets are outperforming cheaper properties, and for the last month, capital cities are outperforming regional Australia which performed strongly during the Covid lockdowns last year.

In due course, the property markets will slow down as affordability becomes an issue for some homebuyers and investors.

Regulation appears to be imminent.

Historically, surging house prices have tended to lead to a deterioration in lending standards and risks to financial stability, giving regulators impetus to tap on the brakes.

The RBA has given fairly strong indications that they won't use monetary policy to this end, at least not yet, so expectations are instead that they and APRA will look to macroprudential controls such as increased interest rate buffers, and limits on high loan-to-valuation and high debt-to-income ratio lending.

Government stimulus measures will continue to be wound back.

HomeBuilder, a major driving force for the market through the pandemic, has now ended, and smaller state housing incentives may also be retired over the coming months. More broadly, the indirect influence of fiscal latitude will gradually be reduced as governments seek to move their budgets back towards balance.

Low immigration will continue to be a drag.

Restrictions on migration have cut underlying demand for housing by around 100,000 dwellings (nearly 50%) this year, and this is one outage caused by the pandemic that won't be switched back on overnight.

Even with a vaccinated population, borders will probably be opened gradually with quarantine requirements remaining in place for some or most arrivals. Immigration will recover slowly.

But currently, with the lack of new apartment construction it's likely we will have a looming undersupply of apartments once our borders are open.

In my chat with Dr. Andrew Wilson as we discuss how despite the doomsayers' dire predictions our housing markets remained resilient last year, but growth was stifled by lack of consumer sentiment

The markets turned in October 2020 and have gone gangbusters over the first half of 2021

Those who heeded the negative nellies lost out, while home buyers and property investors who took a long term view have already enjoyed significant capital growth.

Listen as we discuss how each state government introduced their own set of temporary measures to stabilise the rental markets, prevent evictions and support tenants in hardship.

Rental vacancies in our big capital city CBD's spiked due to the lack of overseas students, no overseas tourists using Airbnb and decreased local tourism

While rentals initially fell, vacancy rates, especially for houses are now falling and the rental markets are tightening.

Resources:

Watch the Property Insiders Video of this session here

Michael Yardney

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

Guest: Dr. Andrew Wilson, chief economist of My Housing Market

Subscribe to my weekly Property Insider video with Dr. Andrew Wilson here- www.PropertyInsiders.info

Collect your bundle of eBooks and reports- www.PodcastBonus.com.au

Shownotes plus more here: Amazing double-digit growth in property so far this year, with Dr. Andrew Wilson

Some of our favourite quotes from the show:

"When people feel about their jobs, when they feel secure about their financial future and employment, they make big investment decisions like buying homes." – Michael Yardney

"Our economy over the last year experienced that V-shaped recovery that we all hoped for, but not many of us expected." – Michael Yardney

"Most successful people fostered accomplishments in their lives by diligently doing things every day, but they also did it by diligently avoiding certain things." – 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 planning to invest in property, people tend to think about "where should I buy, what should I buy, how much can I afford?"

But often they don't think about "who should I ask for advice?"

Since investing in property is a significant financial and personal decision, it's really important to make wise decisions, and it's really important to get good advice early in the piece, because getting it wrong can result in significant financial loss, emotional stress, and a huge lost opportunity.

And if you're in the middle of your property investment journey, it's still critical to ask for advice to make sure you're heading in the right direction.

So, who do you ask for advice? And with so many mixed messages and vested interests out there, who can you really trust?

Well, that's the topic I discuss today with Brett Warren, National Director of Metropole Properties and I hope at the end of the today's show, you'll have more clarity in your options and who you can ask for advice, and what you can and can't expect from your advisors.

And of course, I will also share my regular mindset message with you.

Who Do You Ask for Property Advice?

Our property markets are booming at present but we know that now all markets will perform the same over the long term.

So as a property investor who do you turn to when looking for advice?

A better question may be - with so many mixed messages and vested interests, who can you really trust?

Who investors could turn to for property advice:

1. No One— many beginning investors make this mistake. They think they already understand the market.
2. Friends or family— People do this for understandable reasons, but unless you have millionaires in your family, it's probably a bad idea.
3. A real estate agent— It's important to remember, agents work for the vendor selling the property, not you.
4. A mortgage broker— Brokers are helpful in the finance areas, but not experts on investment-grade properties
5. An accountant— You should talk to an accountant! But about things like tax matters and structuring, not the property market.
6. Financial planners— Financial planners sell financial products, but most are not able to advise on real estate.
7. A property marketer— These are salespeople who really selling "product" for a property developer who is most likely going to make the biggest profit out of the deal.
8. Investment seminars and workshops— Is the person leading the seminars an actual expert who made their money in the market? Or do they only make money by teaching others? It's an important question.
9. A property mentor —It's important to have mentors. Just be careful who you choose and ensure they have achieved the results you want to achieve.
10. A buyer's agent— These can be a great help in selecting the right property, but they don't devise a plan that takes into account your family's future needs and your risk profile.
11. A property strategist – Someone who can help you grow, protect and pass on your wealth using property as a vehicle.

What a good property strategist can do for you:

1. Get to know their clients' hopes and fears to help them achieve their long-term financial goals.
2. Help remove his client's anxiety by simplifying the complex.
3. Develop a long-term relationship with the client and help them see several steps ahead.
4. Recommend proven strategies that have always worked.
5. Offer a list of potential property options and refer their clients to a buyer's agent who is part of their team.
6. Help their clients select an investment property that is the highest and best use of their funds.
7. Help clients avoid big mistakes.
8. Provide perspective, insights, and often optimism.
9. They will also advise their clients to invest their money the way they do themselves.
10. Regularly and objectively assess the performance of their property portfolio

Some things a property advisor can't really do:

1. Predict the future.
2. Find the next hot spot for you.
3. Pick the best time to purchase an investment property. 4. Help you get rich quickly or achieve extraordinarily high returns without taking on extra risks.

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 your bundle of eBooks and Reports at: www.PodcastBonus.com.au

Brett Warren – Director of Metropole Property Strategists

Shownotes plus more here: The right and wrong people to ask for property investment advice with Brett Warren

Some of our favourite quotes from the show:

"Many beginning investors think they understand real estate because they've lived in a house, they've rented a house, they've rented an apartment." – Michael Yardney

"In my mind, it is critical to have a trusted advisor when making property decisions. It's just too hard to do it on your own." – Michael Yardney

"A property advisor should actually be part of your long-term journey. It's a long-term relationship." –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 Australian housing market is going gangbusters and all the signs are the boom is here to stay for some time.

But how do you profit from this current growth cycle?

In today's podcast, I discuss 6 property trends that you're going to see – and hopefully take advantage of – in 2021.

Then, in the second half of the podcast, I chat with property researcher John Lindeman, who will teach us how to profit from this stage of the growth cycle, because if history repeats itself, lots of investors will unfortunately lose money instead of profiting.

My aim is to ensure that at the end of this episode you'll have more direction and certainty to take advantage of our property markets over the coming year.

6 Property Trends to Look for in 2021

• Demand from Homebuyers Will Remain Strong: People have saved money, borrowing costs are lower than they've ever been, and interest rates won't rise for a while. Plus, COVID is under control. These factors will inspire more people to buy and FOMO will continue to drive homebuyers into the market.
• Investors Will Eventually Squeeze Out Homebuyers: Increased competition and rising property values will edge out first-time homebuyers as more investors get into the market.
• Property Prices Will Continue to Increase: Consumer confidence, low interest rates, economic growth, and a favorable supply and demand ratio will all help drive property values. However, some segments of the market will continue to struggle.
• Buyers Will Pay a Premium for the Right Neighborhood: People want 20-minute neighborhoods, with the ability to live, work, and play all within a short distance of each other. And buyers will be willing to pay more to get that.
• Expensive Properties will Outperform: Higher-end properties are leading the way in growth.
• Upgrading Will Be Common in 2021: After lockdown, small apartments will seem to confine, and people who a deposit by not traveling or spending much on entertainment during the quarantine will be eager to upgrade to a bigger and better place, especially given the ease of borrowing money.

How to profit from this growth cycle

Profiting from this growth cycle isn't as easy as it seems. Property researcher John Lindeman reminds us of Warren Buffet's famous two rules that all investors must follow if they want to ensure their success.

The first rule is never to lose money and the second rule is never to forget the first rule.

But if history repeats itself, some investors will lose money even though overall our property markets are booming, Today, John Lindeman and I discuss the things you need to know in order to profit instead of losing money.

Subjects John Lindeman and I discussed today:

• Investors need to make sure they're buying in markets where the growth is yet to come.
• You can't measure growth by the length of time that price growth has been occurring or the amount of growth that has taken place.
  • Growth is revealed by the types of buyers creating the demand.
  • First home buyers, upgraders, downsizers, and investors have different motives and limits when it comes to buying property
  • If we know which group is doing most of the buying, we can estimate when the growth is likely to end
    • Investors are motivated by profit.
    • Owner-occupiers are motivated by affordability
    • In the current market, most buyer demand is being generated by owner-occupiers, not investors
    • Investors can take advantage by buying property in areas that have not yet experienced growth but have the potential to.
  • As first-time homebuyers reach affordability ceilings are reached and their growth slows down, growth will ripple to more affluent areas as upgraders take advantage of the market.
    • So far, not much of this has happened yet.
    • However, this means that suburbs in desirable locations are likely to be next to rise
  • In general, it's better to be in an area that's going to be stable.
  • You also want an area that's in continuous demand.
  • Capital growth has been stronger in the CBD and flattened out the further away you get from the CBD.
  • It was predicted that a lot of people would move to the country post-lockdown, but that hasn't panned out.
    • Once the pandemic and the lockdowns passed, people realized they didn't really want to relocate to the country and away from their work, family, and friends.
  • Many banks, economists, and other analysts get their forecasts wrong last year.
    • They looked at historical events like the Great Depression and the Global Financial Crisis, saw those caused property markets to slump, and assumed the pandemic would have a similar effect.
    • That assumption was incorrect.

Resources:

Michael Yardney

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

John Lindeman – Lindeman Reports

Get our special bundle of eBooks and reports at www.PodcastBonus.com.au

Shownotes plus more here: How to Profit from 6 Growth Trends in 2021, with John Lindeman

Some of our favorite quotes from the show:

"If Coronavirus has taught us anything, it was the importance of living in the right property in the right neighborhood." – Michael Yardney

"Upgraders are now seeing the value of their home increase, and a lot of people after COVID, "I deserve a change. I'm looking for something different."" – Michael Yardney

"You've really got to see property as a long-term investment." – 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

No one likes to fail. In fact, most people would do almost anything to avoid failure.

So, do you want to know the real secret to success? It is not dedication, commitment, hard work, smart work, passion, or even habits.

You're not going to like the answer.

I've heard it said that the real secret to success is managing your failures. In this episode, we'll take a look at some of the lessons we can learn from failure.

• Failure teaches you that success is never guaranteed.
  • Like Winston Churchill once said, success is moving from failure to failure without loss of enthusiasm.
• Failure isn't final.
  • Failures happen, but they're no reason not to start again. Successful people have lots of failures on the road to their successes
• This too shall pass.
  • Failure isn't fun, but it's also not permanent. No matter how much it stings at first, you can move past it.
• Failure forces you to embrace change.
  • When you go through failure, this is basically the universe telling you that there is something you should be doing differently.
• Failure can be a great source of motivation.
  • For people with the right mindset, failure can be a great source of motivation.
• Failure teaches you to stay humble.
• Failure isn't unique.
  • Everyone experiences failure, even the most successful people you know of.
• Criticism doesn't equal judgment.
• Time is the greatest teacher.
• Rejection is a powerful tool.

You can learn valuable lessons from failure. Failure teaches:

• Creativity. If you fail by taking a route traditionally associated with success, you might have to embark on a novel path when you try again.
• Who to trust. When someone – even a friend or family member who you thought you could trust – plays a role in your failure, you learn not to trust them so readily in the future.
• Value. Failure is a chance to take another look at your value and how you can best present it.
• You to listen to yourself. Tune out any non-constructive, negative feedback that comes from failing and focus on building self-trust.
• Over time, failure can build resilience, which is why the pain is a little less each time it occurs.
• What to do better next time. If you can identify the steps that led to your failure and why they had the results they did, you can form a strategy for future success.

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 a heap of special reports and eBooks here- www.PodcastBonus.com.au

Shownotes plus more here: 10 great lessons successful people have learned from failure with Mark Creedon | Build a Business, Not a Job Podcast

Some of our favourite quotes from the show:

"I've often said I'm a real success at failure, but it really does come down to resilience." – Michael Yardney

"If you get it right first time as a property investor, you probably think you're smarter than you are." –Michael Yardney

"Successful people revel in other's success." – 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.