The Property Trio (formerly The Property Planner, Buyer and Professor)

https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: Market update 1. How to keep an open mind when it comes to shortlisted properties Cate shares with our listeners her hot tips for shortlisting properties to inspect. The favourites at the top of your list may not be the ones that make the short list. It is critical to see the properties in person. 2. Government opens the gates on overseas migration Pete shares that the government’s reported figures for overseas migration to Australia are about to increase significantly. This will likely put a pricing floor under the property market, as all the new entrants will need a place to live, putting pressure on rents also. Those who can obtain permanent residency quickly will be looking to buy. Watch this space... 3. Some exciting news from the Property Planning Australia team – introducing the Property Planning software tool Property Planning Australia have thrown away the excels and word documents and now have the ability to provide a tool we can put into the hands of our clients and other Property, Mortgage and Financial professionals. The tool allows you to model up to 4 different Property Plan pathways factoring in all your existing cash flow, income, expenses and future goals right through to retirement, then measure the financial outcomes against your goals. For our listeners who would like to be able to build their own Property Plan with the support and guidance of a property or financial specialist and then be able to then take the reins to tweak or update your plan ongoing, we encourage you to reach out to Property Planning Australia via our website enquiry page. Case study 1. The conundrum This case study follows the journey of Nick and Rachel, who wanted assistance determining their property pathway and how best to use the cash from the business they have just sold. They wanted to purchase an investment property right away but also want to spend around $400,000 on renovations to evolve their home into one they can enjoy and that will meet their needs in the long-term. 2. Introducing Nick and Rachel David shares Nick and Rachel’s key circumstances and of course, their lifestyle and property goals which are driving their decision. Nick and Rachel are a couple in their early 30’s, with two young children, living in one of Australia’s major capital cities. The recent sale of a business has presented some exciting options, and they also expect to receive an inheritance in of around $1,000,000 in around another 10 years which they want to factor into their long-term plan. Finally, they both enjoy working, but they also want to create further flexibility for themselves so they can scale back their employment to 4 and 3 days per week well before retirement. 3. Modelling the scenarios Three scenarios were modelled for Nick and Rachel, to provide clarity on their key questions. When do they purchase their investment property? What should the strategy be in terms of price point and location? When could they complete the renovations on their home? Can they achieve their retirement income goals of $100,000 passive income through property? Can they scale back work earlier? The trio unpack the scenarios. 4. So, what did they choose to do (and what was the compromise)? Tune in to find out which scenario Nick and Rachel went for. Were they successful and what was the compromise?

Got a question for the trio? - https://zfrmz.com/uLtjhyBskV96PY6eJfaI https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: 1. The latest home value index results The housing market is now in its third month of decline, nationally dropping by 1.3%, which is comparable to the onset of the GFC in 2008 and downturn in the early 1980s. Sydney is now showing the sharpest value falls in almost 30 years, while Brisbane moves into negative territory for the first time since August 2020. 2. Median values are not all what they seem David shares some interesting facts about capital city housing markets, which means that listeners should be cautious when looking at median dwelling values between capital cities. It’s much more reliable to look at the median value for houses and units separately, but even then, the data can be skewed. The trio explain why. 3. Rental markets remain extremely tight Historically, capital growth and rental growth would stay relatively aligned. However, the property boom in 2021 has meant that capital growth has significantly outstripped rental growth and is now going through a period of correction. Rents are likely to continue to run for some period of time, while our property values are still exhibiting a decrease, which in turn, is increasing rental yields. 4. Distressed listings on the rise Vendors in distress have increased in seven out of eight states over July. Over the year, the biggest change can be seen in Hobart with a 50% increase in distressed listings, however they are rising from a very low base. 5. Consumer sentiment continues to dive, but is now the best time to buy a dwelling? The trio discuss the latest consumer sentiment data, which as expected is reducing towards 100 for ‘house price expectations’ and is expected to go below 100 in the next month or so. However, the time to buy a dwelling index is showing the early signs of an upswing as home values become more affordable. 6. Lending falls at the fastest rate since May 2020 Total lending fell by 4.4% over June, with first home buyers taking the biggest hit, declining by 10%, the largest decline in 3.5 years. Owner occupiers remained the most resilient, falling by only 3.3%. In other news, certain banks have lowered their 3 and 4 year fixed offerings, as bond yields have peaked and now show a decline, indicating that the expectations for where the equilibrium cash rate will sit has reduced. 7. Unemployment reduces again The jobless rate has reduced to 3.5%, as businesses desperately look for new employees. There is a growing push to enable retirees to return to work without impacting their pension entitlements to alleviate the pressure ... watch this space. Turning the tap on for immigration is also expected to have an impact. In June, the largest amount of student visa applications ever on record was processed. 8. Are we done with 0.5% monthly rate increases? As the cash rate moves towards 2%, we’d hope that as the rate reaches closer to equilibrium, the RBA will slow down on the magnitude of rate increases so as not to over-steer. The trio are hopeful that the we’ve had the last 50 basis point increase, but only time will tell. David shares the news from New Zealand, which was the first nation to increase the cash rate in October 2021 and NZ’s cash rate currently sits at 2.50% Visit the show notes - https://propertyplanning.com.au/market-update-july-22-are-we-entering-into-the-best-buying-conditions-in-this-cycle-have-we-seen-the-last-0-5-rate-increase-why-rents-are-playing-catch-up-how-median-values-can-be-distort/

Got a question for the trio? - https://zfrmz.com/uLtjhyBskV96PY6eJfaI https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: Market update 1. How do rents stack up against inflation Peter shares his research on rental returns over the last 10 years, which increased nationally by 11% for all dwellings. Compared with inflation, which increased by 25.6%, it's a good reminder of the benefits of capital growth focused investment properties. Check out our show notes for the growth rates of rents for each capital city. 2. Closing in on the neutral cash rate Whilst opinions on where the neutral cash rate sits are many and varied, Cate reminds our listeners that we must be getting pretty close. Although economists don't have a crystal ball, no one is expecting the cash rate to reach 5% and the RBA is trying to reach the point of equilibrium quickly. Once the RBA slows down on rate movements, it's like that buyers and particularly those who have put their purchasing plans on hold to wait out the uncertainty, will jump back into the fray. Nothing encourages opportunistic buyers like a slow-down in rate increases. 3. Economists revise down their predictions on the neutral cash rate David shares the early signs of economic inflection which could suggest that the neutral cash rate is may likely eventuate at 2-2.5%. As little as two months ago, money markets were predicting the cash rate would reach as high as 4.5%, however most bank economists now think that it will rise to 3%, with CBA being the most conservative at 2.6%. Money markets have also spiked in July by 5-6%, which brings positive news. Whilst the US is in a technical recession, an argument could be made that they are not actually in a recession due to the very low unemployment rate and other factors. It is also important to note that our technical definition of what constitutes a recession varies from that of the US. The extra mile buyers should go when shortlisting a property 1. Listener Question: "A glass half full question ... as we transition into a Buyer's market, what steps can investors take to be positioned to take advantage of an opportunity that might present itself" The trio start the episode by answering a question from a podcast listener and share their tips on how to get purchase ready, to strike when the iron is hot! Property is a long game and we do need to sometimes remind ourselves of this. 2. What are some of the things we can check online before we even book an inspection? The trio share their hot tips on how to make the most of your internet searches when doing your online research. 3. What things should you be looking out for immediately when inspecting in person? Cate shares with our listeners what to look out for when you visit an open house. Take note, listeners should use more than just their eyes when inspecting the dwelling! Pete shares the aspects of the land to keep an eye out for and why you should stick around for the whole inspection. 4. How to assess a 'workable' floorplan vs a complete overhaul floorplan An illogical floorplan can be a huge pain, not to mention the financial commitment if you want to make adjustments. The trio discuss how to assess the floorplan, which could save you thousands on a planned renovation. However, the floorplan is not everything. For listeners who want to get into a particular location, especially first-time buyers, dealing with a less than ideal floorplan or a more run-down house could be the trade off to get into the best location. 5...

Got a question for the trio? - https://zfrmz.com/uLtjhyBskV96PY6eJfaI https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: Weekly Market Updates 1. Adelaide market losing steam Pete reports that there are not as many people at auction and less offers coming in prior to auction. Whilst the Adelaide market is still on the rise, it isn't increasing at the same rate as a month and a year ago. CoreLogic figures released this week show 0.4% increase over July. 2. Rental squeeze Cate shares an interesting article that she read on the weekend, highlighting the Victorian rental reforms to be a failure and go too far. With the pool of rentals eroding, vacancy rates reducing and rents on the upward trend, are the reforms pushing investors out of the market with their onerous requirements? 3. Where is the neutral cash rate? Dave shares his updated predictions on where the neutral cash rate could lie (2-2.5%). The current cash rate of 1.35% is above the level of June 2019 and almost double the pre-pandemic level. With a 0.5% rise expected today, the new 1.85% cash rate will be the highest since July 2016. This sparks concern that the RBA is going too hard and too fast. Inflation is a concern, but not at the expense of household wealth and jobs. Figures from Westpac show that while 29% of borrowers are a year ahead of repayments, 50% are less than one month ahead. Visit the show notes - https://propertyplanning.com.au/analysing-regional-locations-what-investment-principles-can-be-gleaned-from-the-highest-performing-regions-in-each-state-comparing-capital-city-vs-regional-performance-from-2003-b/

https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: Market update 1. Pick your advisors wisely! Cate shares a recent experience of working as a Buyer's Advocate for a friend. The moral of the story? When you're working with a professional, if you know their work and you trust them, you can get a great outcome, because speed and swift decision making is everything. 2. How will the unemployment rate impact rate rises? The latest figures from the ABS show that unemployment has dropped to 3.5%. This has caused quite the stir, with economists now expecting rates to rise by 0.50% next month, maybe even 0.75%. David cautions that the RBA shouldn't move too hard too fast on rate increases, but it is looking increasingly unlikely that the RBA will move by 25 basis points only. It will be interesting to see what actually occurs next week... 3. Rents playing catch up Increasing rents have been the talk of the town, with rents recently going up significantly. Pete shares some interesting data which highlights that in the last 10 years, rents have not kept up with inflation despite the dramatic increases. How will this inform future policy decisions from the Minister for Housing? We will have to wait and see. Updated predictions for 2022 1. A look in the rear view mirror at the first half of 2022 The trio revisit the predictions they made at the beginning of the year. Were they on the money or did they miss the mark? Tune in to find out! 2. What will the property market do in 2022? What capital growth rates can we expect around the nation this year? The trio review their predictions and lay their predictions down for the rest of 2022. 3. Which capital cities will be the top performers? The trio look into the crystal ball, pour over the data and explain which capitals are expected to top the charts this year. But remember, property is not an asset class that lends itself to short-term investing. The important thing is to plan and strategise for the long-term. 4. How will regional locations fare? Regional locations have again outperformed capital cities in the first half of 2022. But will that continue? 5. Will investors jump back into the market Investors have shown strong increases in activity over 2021 but only a slight increase in the first 5 months of 2022. Is this trend likely to continue? The trio share their insights. 6. Will APRA intervene in the property market? The RBA has done all the heavy lifting with increasing interest rates, meaning that APRA hasn't had to intervene to temper the market. But will the government search for ways to intervene to keep rental prices lower and tempt first home buyers back into the market? 7. Developers and building Residential construction costs continue to climb and builders are flat out with projects, exacerbated by labour shortages, materials shortage and supply chain delays. How long will costs continue to remain high and what impact will this have on the property market? 8. The outlook for interest rates? The trio share their predictions for future cash rate rises by the RBA and at what point they each think will the rate rises end. 9. Rental market forecasts Rents have continued to climb and vacancy rates have tightened. The trio discuss the outlook for rental markets for the rest of 2022. 10. Sales volumes After a record...

Got a question for the trio? - https://zfrmz.com/uLtjhyBskV96PY6eJfaI https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: 1. Markets across Australia dip further over June For capital cities already in retraction, the rate of decline has increased over June, while those still experiencing value growth have seen a definitive slow-down in the rate of price increases. Sydney in particular has made the headlines, with a median dwelling price drop of 1.6% over June, the largest monthly fall since 1989. The trio discuss the fact that these circumstances are not unusual after a period of rapid price growth. 2. Upper quartile feeling the pinch As is typical of rising and falling markets, the upper quartile is leading the price declines and feeling the pinch more than the lower quartile. This has a significant impact on median values, as statistically, the bigger numbers are removed from the data pool. However, it's important to note that quality property is still in high demand, particularly if it sits within the median price range and buyers should not expect a bargain. A key example is entry level family homes where there is simply not enough stock to cover the demand. 3. How capital cities have fared over the last 40 years Cate shares some interesting data collected from the REIA showing annual value growth for each capital city since 1980. Whilst a 1% differential in annual growth compounded over 40 years will make a significant difference to the end result, it's important to remember that there are many facets to consider when investing, such as vacancy rates, insurances, maintenance costs and rental returns. Although one capital city may have performed better than another over the long-term, price points are significant and could mean that it's better to purchase a high-quality asset in a lower performing city vs a low-quality asset in a high-performing city. 4. Market cycle trends The trio discuss the trends in market peaks, which cities were the first to move and how these moves correlate with population size for the corresponding cities. 5. Taking a critical eye to data and median values The trio discuss data and differences between the nation's data houses: REIA, ABS and CoreLogic. As an interesting note, Brisbane is gaining on Melbourne in median values for all dwellings, but a closer look at the data shows that it's not all that it seems... 6. Rollercoaster rents The trio discuss the case of Darwin which has had large swings in annualised rents over the last year, resembling one of the scariest roller coasters in the theme park. Melbourne units lead the charge for rental increases, which suggests that people are migrating back to the city and a supply-side issue could be brewing. To add to the pressure cooker, vacancy rates tighten further across most capitals. How will this impact the property market and who are the buyers likely to jump into the fray? Stay tuned to find out. 7. Listings follow the annual trend and dwelling sales return to normalcy Following the usual seasonal winter trajectory, listings have dropped in Melbourne, Sydney, Adelaide and Canberra. The trio discuss the curious case of Hobart, which has seen a very large increase in listings year on year. Although being a smaller city, it doesn't take many transactions to register some serious numbers. In terms of dwelling sales, the figures are tracking back towards the 5-year average, after a spike in activity last year following an uptake in lifestyle decisions that were put on hold during covid. 8...

Got a question for the trio? - https://zfrmz.com/uLtjhyBskV96PY6eJfaI https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: Market update 1. Investors making a come back Cate discusses the return of the investor. Enticed by less competition, higher rental returns, tight vacancies and longer tenures, investors are coming back into the market and taking advantage of the opportunities. 2. RBA lifts rates Dave shares with our listeners that once again the RBA has lifted the cash rate by 50 basis point to a target of 1.35%. This will flow through to the lending market variable rates. Many economists are tipping that the cash rate could climb to as high as 2.0% or possibly more. The move is largely to tackle the current inflationary environment, with inflation forecast to peak later this year and then decline back towards the 2-2% range in 2023. 3. Understanding vendor motivation Cate shares some hot tips for prospective purchasers on whether you should put in a pre-auction offer and why entry level family homes are still going strong despite the softening market conditions. 4. Adelaide is at the top of the charts over the financial year Pete shares some exciting news for his home town Adelaide which has snuck into the top position over the last financial year with 25.7% annual growth over Brisbane's 25.6% annual growth. Can Adelaide do it again over the calendar year? Interestingly, Brisbane may overtake Melbourne in median house price. Watch this space! Case study #4 1. The conundrum This case study follows the journey of Jason and Amy, who wanted assistance deciding whether they should purchase a home or investment, before or after they have kids, how their cash flow would change as they start their family, what cash savings buffers they should have in place, and how much they should spend and which location. 2. Introducing Jason and Amy David shares Jason and Amy's key circumstances and of course, their lifestyle and property goals which are driving their decision. Jason and Amy are a couple in their early 30's, yet to start a family, living in one of Australia's major capital cities. Their long-term plan was to continue living in a capital city, but thought they may move to a regional area in the short-term to be close to family and have some additional support as they start having children. 3. Starting a family with your eyes wide open The trio discuss the importance of understanding (and being comfortable) with the impact that starting a family will have on your cash flow. This could be the difference between holding on to a property and panic selling when savings start to go backwards. 4. Modelling the scenarios Two scenarios were modelled for Jason and Amy, one to purchase their home now for $1.1M or an investment that could become the long-term home for $1.5M. The trio discuss the pros and cons of each scenario. 5. So, what did they choose to do (and what was the compromise)? Tune in to find out which scenario Jason and Amy went for. Were they successful and what was the compromise? 6. The risks of rent-vesting The trio discuss the dangers of rent-vesting when the desire to get into the long-term family home takes over and some clever ways to work around this proactively. Visit the show notes - https://propertyplanning.com.au/property-planning-case-study-4-do-we-buy-in-the-capital-city-or-region...

Got a question for the trio? - https://zfrmz.com/uLtjhyBskV96PY6eJfaI https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: Market update 1. NSW land tax to put a floor under property prices Looking at quarterly results, the two major cities with the biggest price falls have been Melbourne with 1.4% decline and Sydney with 2.1%. However, NSW will soon be implementing an optional land tax over stamp duty for first time buyers entering the market, which is likely to encourage some first home purchasers to dip their toe in the water and this in turn could increase demand. 2. Pre-auction offers Cate shares some hot tips for our listeners in preparation for today's episode on how to manage pre-auction offers in a cooling market and sometimes a better outcome will be achieved if you wait until the auction. 3. Inflation may take longer than usual to come back down David shares an interesting theory on why rising rates may not be enough to curb inflation. Our lost life experiences over the last two years means that not even rising rates and increased mortgage repayments can curb our desires to go on holidays, see friends and spend extra money on getting social. How to tackle cooling markets 1. A question from our listener Some questions for the pod about how to approach a flat/cooling market. Cate what should you do when you are the only one to show up to an auction and or bid? Peter, how do you approach comparables when prices are falling? How do you take advantage of seller FOMO? I also think a whole pod on climate risk (BAL levels, flooding, future temperatures in capitals) would be good. Keep up the great podcast. 2. When you are the only one at the auction, what are the risks that buyer psychology can pose? The trio discuss how buyer psychology can get in the way and cause obstacles for an opportunistic purchase. If the research has been done and the property is a winner, then ignore the white noise in your head that's saying there's something wrong with the property. It may just be your lucky day. 3. How to value properties in a cooling market Pete explains how valuers actually assess the market value of a property and how comparable sales are used. More importantly, what adjustments valuers make in a rising market vs a falling one. You might apply some decreased percentage overlays to the historical sale prices. The same applies in a rising market, if dealing with a property that had 1% month on month growth, you will need to overlay this growth. 4. Why falling markets are the best time to buy Dave touches on market cycles and why in a falling market, you're likely never to get such a good price on a property ever again. 5. The fear of over-paying We can tie ourselves in knots over paying too much for a property. However, if you hold the property for the long-term, this amount will appear to be comparatively miniscule in the end. A reminder to our listeners, to purchase a property, you have to be willing to pay more than anyone else for it! 6. Why research is the cure all The trio discuss the worst-case scenario of purchasing a property and paying more than what a lender thinks it's worth. Cate explains why this is very rare and quite mitigated if the homework and due diligence is done. Now is not the time to cut corners. Roll up the sleeves and get through as many properties as you can. 7. What do you do if the vendor'...

Got a question for the trio? - https://zfrmz.com/uLtjhyBskV96PY6eJfaI https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: Market update 1. NSW state budget announces introduction of annual land tax to replace stamp duty Stamp duty has already been abolished in Canberra, but Canberra only has one hundred thousand homes. It will be interesting to see how Sydney fares on a much larger scale with one million dwellings. The introductory measures will be in place for first time buyers only, who can opt to pay land tax annually of $400 + 0.3% of the property value. 2. Attitudes towards the property market diverge The reality is that there is a segmentation in the market currently between those who haven't ever experienced interest rate increases vs those who have. Cate explains how this affords great opportunity for anyone who is willing to take the plunge in certain segments of our market. 3. Crypto currencies take a dive Increasing inflation has led towards large rate hikes in the US, with the most recent 75 basis point increase announced this month, which is the highest rate increase in 29 years. This in turn puts pressure on shares and crypto currencies. Bitcoin has fallen by 70%, whilst some crypto exchanges have ceased the ability for people to access funds and make redemptions, almost like a bank denying withdrawal of funds. This is a sure sign that the crypto currency market is facing some serious headwinds. Dave shares the potential upside that these falls represent for those who own property. The various types of sale methods and reasons why each are adopted 1. A question from our listener Hi guys, thank you for such an informative, but entertaining podcast. I've just listened to the episode on "off markets". I am just wondering if you can offer some insights into how to navigate when a property is "on market" but is listed as EOI (expression of interest), rather than a price range? Why might a vendor do this? Do you put your best price forward and declare all your cards, or is there still an opportunity to negotiate? Is it a case of Pete's rotten apples potentially? Thanks team 2. What are the typical methods of sale around our nation? Cate takes our listeners through a brief recap of the various different sale methods used and what factors impact the choice of sale method. 3. Best and highest offer - should you show all of your cards or go for baby steps? The trio discuss what happens when the highest offer is actually really low and the vendor isn't happy with the outcome and Cate shares her tips on when you should actually submit your best and highest. 4. Why wouldn't you auction a property? The trio discuss the market conditions and reasons why a property is selected to be sold via auction. More importantly, when you should not sell a property via auction. 6. As a vendor, what sort of guidance and rationale should you be looking for with your agent when you are considering the various methods of selling? The trio discuss how to field real estate agents and the key questions to ask. 7. What does it mean if the price guide changes? Listeners beware! Cate reveals what a reduced price actually means (and it's not more dollars in your pocket). Visit the show notes - https://propertyplanning.com.au/methods-of-sale-and-what-do-they-say-about-the-property-and-or-the-state-of-the-market-ep-159/

Got a question for the trio? - https://zfrmz.com/uLtjhyBskV96PY6eJfaI https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: Market update 1. Comparing the history of Australia's property market downturns and increases Pete shares a sneak peak of data that he has collated detailing the extent of Australia's three strongest years of property value growth and declines. Without giving too much away, prices are likely to drop, but there is no need to panic. 2. What are the capital growth drivers when interest rates increase? Cate shares her Sunday blog detailing the drivers of capital growth when interest rates are on the rise and predictions for the property market. Check out our show notes to read the blog! 3. NSW stamp duty abolition in limbo David shares news from NSW, where the State Government is looking to abolish stamp duty and transition to land tax. Plans will be announced in the State budget next week, however the Federal Treasurer has confirmed that there are unlikely to be any handouts for tax reform. Watch this space... Interest rate movements and property values 1. Do interest rate movements impact the property market? In this episode, the trio sink their teeth into data going back to 1990 to answer the question whether increases or decreases in interest rates have an impact on the property market. 2. Floating the Aussie dollar and targeting the cash rate David sets the scene with a brief history of why the Australian dollar was floated in 1983 and the benefits this brought to our economy. Seven years later in 1990, the RBA started targeting the cash rate of overnight loans between the banks, which has a powerful influence on other rates in our economy, ie: mortgages. 3. Cash rate cycles since 1990 Since the RBA began targeting the cash rate, Australian's have lived through five rate lowering cycles, four increasing cycles and we've just started rate increasing cycle five. What can be gleaned from history to inform the future? The trio unpack each cycle and most importantly, what happened to property values and the broader economy. 4. Property predictions Dave and Pete stick their neck out and make predictions for the property market: how low will values drop and how long will the current rate increasing cycle last? Visit the show notes - https://propertyplanning.com.au/how-interest-rate-cycles-have-impacted-the-property-market-since-1990-when-the-rba-first-started-targeting-the-cash-rate-and-some-predictions-on-what-will-happen-this-time-ep-158/