We're back with one of our favourite episodes of the year...
Our 2024 Property Market Outlook!
In this week’s episode, we’re breaking down the data from the past 12 months and using our expert experience and economic insights to predict the future of Australia’s property market in 2024!
Here's a sneak peek of what we cover:
👉 The headlines we saw in 2023 (and the #1 biggest derailer the Gov didn’t expect)
👉 The Big Focus of 2024 plus the one critical number the RBA is waiting to change before interest rates drop
👉 Where will the plane land? Interest rates, inflation figures & the easing cycle
👉 The Supply Story: What data reveals about future sale and rent volume
👉 The Rental Story: Will the crisis continue?
👉 The downside risks and critical upsides in 2024
👉 Will property prices grow over the next 12 months?
👉 The most challenged markets and what markets we predict to see growth in!
Tune in now to hear us honestly assess our past predictions and forecast the future of Australia’s housing market!
P.S. The Property Investors Council of Australia (PICA) needs support! As mentioned in “What’s Making Property News”, PICA is a not-for-profit organisation that gives property investors across Australia a voice. Any membership or donation helps. Become a member, donate or find out more today >>
Free Stuff Mentioned
LISTEN TO THE FIRST 20 EPISODES HERE >>
MOORR MONEY MANAGEMENT APP:
👉 Apple: https://apple.co/3ioICGW
👉 Google Play: https://bit.ly/3OT86bW
👉 Web platform: https://www.moorr.com.au/
FREE MASTERCLASS:
- How to Build a Property Portfolio and Retire on $2,000 a week >>
FREE BEST-SELLING BOOKS:
- The Armchair Guide to Property Investing
- Make Money Simple Again
FIND US HERE:
- Website
- Instagram
- Facebook
- Youtube
We're back with one of our favourite episodes of the year...
Our 2024 Property Market Outlook!
In this week’s episode, we’re breaking down the data from the past 12 months and using our expert experience and economic insights to predict the future of Australia’s property market in 2024!
Here's a sneak peek of what we cover:
👉 The headlines we saw in 2023 (and the #1 biggest derailer the Gov didn’t expect)
👉 The Big Focus of 2024 plus the one critical number the RBA is waiting to change before interest rates drop
👉 Where will the plane land? Interest rates, inflation figures & the easing cycle
👉 The Supply Story: What data reveals about future sale and rent volume
👉 The Rental Story: Will the crisis continue?
👉 The downside risks and critical upsides in 2024
👉 Will property prices grow over the next 12 months?
👉 The most challenged markets and what markets we predict to see growth in!
Tune in now to hear us honestly assess our past predictions and forecast the future of Australia’s housing market!
P.S. The Property Investors Council of Australia (PICA) needs support! As mentioned in “What’s Making Property News”, PICA is a not-for-profit organisation that gives property investors across Australia a voice. Any membership or donation helps. Become a member, donate or find out more today >>
Free Stuff Mentioned
LISTEN TO THE FIRST 20 EPISODES HERE >>
MOORR MONEY MANAGEMENT APP:
👉 Apple: https://apple.co/3ioICGW
👉 Google Play: https://bit.ly/3OT86bW
👉 Web platform: https://www.moorr.com.au/
FREE MASTERCLASS:
- How to Build a Property Portfolio and Retire on $2,000 a week >>
FREE BEST-SELLING BOOKS:
- The Armchair Guide to Property Investing
- Make Money Simple Again
FIND US HERE:
- Website
- Instagram
- Facebook
- Youtube
Alright, folks, welcome back to the Property Couch podcast, and this is the week, folks, that we have been looking forward to presenting. It is our 2024 property market outlook. Ben, we are going to unpack our thesis today so that people get a look at the next 12 months.
Speaker 2:What are we going to cover? Well, bryce Ditto, absolutely double click on that. We are really going to just prosecute our thesis in terms of where we see the market going and why, and we're going to look at some of the data that's supporting that particular story, both economically and also those property market drivers. So massive show. Been waiting for it for at the start of the year. Here we are. We're finally here, so let's see what the future holds when it comes to property prices.
Speaker 1:Let's see what the future holds. And, folks, we also look in the rear vision mirror to see what we predicted last year. And how did we go? All balls are out.
Speaker 3:Let's rip into the show, welcome to the Property Couch where each week, you get to listen to two of Australia's leading property and money experts Bryce Holdaway, co-host of Location Location, location Australia on FoxTel's Lifestyle Channel and co-host of Escape from the City on the ABC. And Ben Kingsley, chair of Property Investors Council of Australia and a back-to-back winner of the Property Investment Advisor of the Year Award, and both the partners of the multi-award winning Empower Wealth and, as of more, the Freelife Style Design Act, as well as bestselling authors of the Armchair Guide to Property Investing and Make Money Simple Again. Stay tuned as they bring you the Insiders Guide to Property Finance and Money Management.
Speaker 1:All right, folks, welcome back to the Property Couch podcast and welcome back to YouTube. And how are you, mate?
Speaker 2:Mate, I'm super excited about today's show. We're going to unpack some of the logic behind our thinking, some of the base case scenarios in terms of what we're looking for at the property market for 2024. We'll go around the grounds, we'll state our case, we'll prosecute our argument. So I'm really looking forward to today's show.
Speaker 1:We are mate, and it always begs the question, mate, where do you store your crystal ball for the rest of the year? We pull it out at this time of the year, as does everyone else, so I just wondered where do you keep it in the attic, mate? Do you keep it down near the Collingwood memorabilia? Where is it?
Speaker 2:Well, in theory my crystal ball shouldn't be that important to me because I think in decade, not necessarily in years, but I like to do a couple of updates each year just to get a census check. So I just keep it in the cupboard and it comes out normally around this time of the year and then around sort of August when I'm thinking about how the second half of the year looks. So yeah, that's sort of normally where it sits.
Speaker 1:So what you did there, mate? Telling everyone to lift their eyes? It's not all about crypto balling. As long as you play the decade, it's going to like it. Hey, we do have a big episode today.
Speaker 1:Just a couple of little reminders here, ben. We are on the chase for 100,000 subscribers. So for anyone who's getting value out of our podcast, we're asking you a favor. Could you just hit that little subscribe button? If you're on Spotify, you can do that. If you're on Apple, you can do that. If you're on wherever Google podcast, if you could just hit the subscribe button, that would be super as we work towards 100,000 subscribers by the end of this year.
Speaker 1:Why is that important? Because it just helps us get into the algorithms, ben, that allow us to be dished up in more feeds so that more people can hear some of the information that if you've got value out of, hopefully they'll get value out of it as well. So there's that, ben. Also, our free report is going super well because it is birthday month, and so we are giving out that free report. So if you want and we're not just talking about surface data here, ben that you can scrape off the internet, there is real valuable money, normally payable. Intel on this free report. So if you go to the propertycashcomau forward, slash property report, ben, punch in your details. And I've said it before, I'll say it again Ben, we need to confirm your email. So what will happen is you put your details in and then it'll send an email to your inbox to say is this you? Is this really really you?
Speaker 3:Because we're not going to send it to you unless you can confirm it's really, really you.
Speaker 1:And as soon as you do that, we will then send the report. And that is not us, Ben. That is the big behomoths of the world who are playing the email marketing pirate no police that say if it's not a confirmed subscription, we can't send it out. So that's why that happens, folks. So we've got that going, ben. That report is going off, to be honest, and people should grab it whilst it's still available.
Speaker 2:Yeah, I think in simple terms, we're going to talk macro economics today and we're going to talk what's going to drive the property market forward. But we know that in some of these bigger cities there's also markets within markets and we have talked about. Obviously, affordable markets will probably perform a little bit better, as everything drives borrowing power into those areas. So if you want to then start to get a sense of those markets within markets and look at the demand supply score in those particular areas, you can do that through this report and you can get a lot of the. You know, when we start unpacking the economic drivers that we're looking for and the supply and demand drivers that we're looking for in today's episode, you're actually getting them right down at the suburb level. So that's what's so powerful about this property report. So if you're going to do reasonable due diligence, you need these reports as part of your arsenal to pick good markets 100%.
Speaker 1:And folks, thanks to those folks who are giving us feedback. On our feed too, we've got some feedback from Muzza. That's double Z, triple A here, ben. Just the other day this person said it's a must listen, absolutely brilliant podcast. I've learned so much about property and household finances from these guys and it sparked financial conversations with my six siblings, parents, husband and some friends. As a family, we've been from the lead. Thank you so much.
Speaker 1:I loved that bit where it was just sort of becomes part of the narrative for a lot of people, ben, so I thought I'd highlight that. So, muzza, with twos and threes, if you reach out to us, we will give you a free start and build course just for saying what is on your mind. And the invitation is to everyone. Ben, if you want to give us some feedback, leave us some review and we read it out. We'll also be able to give away a start and build course to you as well. So, all right, let's rip into the show. Ben, my mindset minute theme today I was reading a blog by Morgan house. Where would we be without Morgan house? He's got some good stuff.
Speaker 1:But he goes. There are two ways to use money, Ben. One is a tool to live a better life and the other is a yardstick of status to measure yourself against others. Most of people aspire for the former, but get caught up chasing the latter. Simple, profound, Well, like, how good is that? But one is. One is one is tool to live a better life. The other is to compete yourself to others. And he has, and I've quoted him before by saying happiness is relatively simple. It just gets complex when we start comparing ourselves to others. So just a little timely reminder there, Ben, about which lane you want to play in.
Speaker 2:Keep it simple. Keep it simple, you'll be happier.
Speaker 1:Yeah, hey, our Australian property market outlook for 2024 is here upon us, ben. It probably would be good for us to start by having a quick look in the rear vision mirror. And what did 2023 dish up as a year for anyone that's in the market as a property investor? Well, I don't think this is a surprise to anyone, ben, but there was interest rate rises, and a fair few of them, and that put a little bit of strain on a few households across the country, which was the desired effect for the RBA to try and tame inflation. So there it was, a story of interest rate rises. It was a story of record low rental vacancy rate. It was also record high rents. So a lot of people on the investor side, ben, saw rents increasing to help partly and I say partly offset some of the costs that they were experiencing, because there's a fair bit of subsidies still being going on there. But equally, ben, in the shoes of the tenant, they also had their household under strain too, because they were not only paying more rent, but if they found themselves in a situation where they were looking for a new roof over their head, ben, it was nothing short of hectic for them. Big, long lines, multiple offers in to try and get a rental property and, in a lot of cases, having to bid over the arse just to be in the game. So record high rents.
Speaker 1:There was definitely lots and lots of talk about a fixed rate mortgage cliff bend. Was it a cliff? Was it a hill? Was it sort of just a lean? It proved to be anything other than just. It was a bit like the Y2K bug, ben. It was lots of fear and the lead up but realized that people shuffle in their seat and do whatever it takes to keep the roof over their head. So for some people it was an enormous impost on their cash flow. But it wasn't any max X factor event that a lot of media were predicting.
Speaker 1:And then, of course, the unexpected increase in housing prices. Ben to, not just the media but a lot of economists got it wrong. But clearly, when you have a situation where your immigration policy doesn't match your housing policy, you've got more people moving in here. You've got those people that come here start renting first. Those people have been here for a while, start looking for a property. That underpins everything. So you'll see, when you've got low listings, low stock and that demand, it kind of makes sense that as a headline level there was increase in housing prices, but of course there were stories and buy stories within that. So the year in review, the year in review, ben easier to think about than it is to say, but there was a fair bit going on last year.
Speaker 2:Yeah, there was. I mean, if I unpack it from a economics point of view to start with, a lot of economists naturally think when you got such an aggressive tightening cycle that we saw that we would see an immediate impact in terms of unemployment and a slowdown in the economy, well, obviously that's why they were predicting house prices to fall last year and that didn't happen. So the reason really is because the amount of savings buffers that were built up also meant an obviously positive migration coming into the country. So we had almost the equivalent of the total population of Tasmania, just under 700,000 people arrive in the last 12 months in the country. Now they are jobs positive, usually based on the research. So that has meant that obviously a lot more people were kept their employment. We didn't see that unemployment story change.
Speaker 2:And then also to your point before about loss aversion. We experienced, from a behavioral economics point of view, loss aversion almost two times greater than what we experienced the joy of a game. And so people nutted it, nutted it down and dug in and basically kept making those repayments, even though they were significant higher. So they traded off rather than potentially selling those properties. That meant that listing levels were lower, which is what we predicted comfortably, and that obviously meant that demand did exceed supply during that time, and that's ultimately where we got price growth over the last 12 months, when you think about that in short term economic cycle point of view. So loss aversion kicked in, so we got there right. What we got wrong, however, bryce, was we got the. You know, in our base case scenario, we said that the cash rate was going to finish up around 3.6 on the back of that slowing economic story, which didn't materialize. People continue to keep spending, they continue to eat into their savings buffers for that basically 12 month period, and so we didn't see that, that that slow down in the economy slowing quick enough, and so ultimately, that meant that we got further couple of cash rate hikes into 4.35.
Speaker 2:History might tell us that that's as far as we need to go, and maybe we went one or two too far, but that's basically where it sits. So now we're in a situation where the economy is very much slowing and for those people who are new to us, when you start thinking about the economy, what we try and picture you to think about is a waterwheel, and how a waterwheel is responsible for the economic activity you know, and it's a nice way of visualizing that measurement so as the wheel spins together, the water at the moment that that wheel is slowing down, the size of the buckets are reducing because there's not as much business, investment and that sort of thing going on. So the buckets are getting smaller and the water level is getting lower because ultimately, what the cash rate does is that is really about liquidity in an economy as well. So all of those things are pointing to at least the first half of 2024 being slow up from an economic driver point of view, and we're seeing that showing up in the data as well, which we'll get to in a little later time.
Speaker 2:But ultimately, right call on property prices going in the right direction. Right call on rents. That was an easy one with the immigration story and the tightening in terms of the marketplace going on there. We just got the cash rate a little bit under and so we got that wrong, and so you know we'll live and learn by that. And you know, in terms of that fixed rate cliff, at this stage it isn't material, but obviously that is going to be triggered by what happens with how long the cash rate stays, currently at 4.35. If that stays there for longer and inflation stickier, we might have a little bit of a different story on our hands.
Speaker 1:And also goes to show why forecasting is a challenging game, ben. But the idea here is we give as much foundational basis as to why we made that call and also it also, if we can learn from the past and you've talked to it where we underestimated the ability for people to dip into their reserves and spend what they've got to stay resilient, well then clearly we can make better judgment calls going forward. So let's kick it off today, ben. We are going to do the same thing. We're going to give you a basis around the economy first, then we'll pivot into how we feel that will flow into the property market and then we will bring it home, ben, with a quick look around the grounds at headline level and also give some detail for some folks, for some takeaways. So stick around for that. But where do you want to kick it off, Ben?
Speaker 2:Well, I think the main story is obviously interest rates. Interest rates have both a sentiment as well as a practical outcome in terms of the cost of money and how much demand it's going to drive. So we think about that. We've got to ultimately think about inflation. So I want to start with telling the story of inflation. That is the key lever that's going to make changes in terms of what's going to be happening. So what we want to see in the data is what's happening with business investment. So I'm going to sort of tell a story here that sort of unpacks the levers associated with that.
Speaker 2:So, when a business has basically several levers in which they can pull, given the economic environment they're operating in, so if demand starts falling away in other words, people aren't buying their products they can choose to do a couple of things. They can reduce their prices, which is awesome because that's disinflationary, which is where we ultimately want to get to. But they can also look internally and say well, what are the cost of our inputs in making and supplying our goods? Can we find cheaper ways or ways to increase that? What about productivity? Ultimately, can we make our people more productive in the goods and services that we make and then ultimately, if none of those things can happen, then it really does require layoffs. So we would then remove a number of people in our employment a story, and so they would become unemployed. We would restructure our business to try and get our cost base right, and so ultimately we can keep our profit margins there. But if we decide that we're going to reduce our profit margins in the short term, then we don't lay off those people. So that's the sort of decisions that need to happen and that sort of leads into the story of demand and growth.
Speaker 2:So an economy the idea of an economy is basically you can keep growing it, you improve the standard of living and the quality of life for the people inside that economy.
Speaker 2:And so the things that we're going to be looking at really closely when it comes to economic activity and behavior is consumer spending, and we did see we had some pretty shocking numbers in the January data that we're showing that consumer spending, even on a per capita basis, was definitely going down.
Speaker 2:But even with our growing population, the underlying consumer spending and retail spending was really really poor numbers. So that's telling us that the discretionary money that households had two years ago when interest rates were really low has now been dried up and so ultimately, people are very, very careful in terms of what they're spending their money on. Then, if we look at business spending and I'll get you to do government spending business spending slowing it's definitely slowing down, like their sentiment and their confidence is definitely slowing as they're seeing that economic water wheel slowing down. So they are still spending in some areas of the economy, but in other areas that's certainly on the consumer side that is definitely drying up at the moment as they again start thinking about how they protect their profitability and those types of things before they have to lay off any workers.
Speaker 1:And on the government spending side, bryce, Well, it's still pretty strong, isn't it, ben? And largely around a lot of infrastructure projects that the government have going on. But where that shows up as a challenge in the economy is largely around the demand for labor. When you have someone who's employing who's not, whose focus isn't around efficiency, it's around getting the job done, irrespective of the budget, that provides a challenge. When you've got government spending and private sector spending and private sector people chasing the demand for the labor, and then the demand over here is high, that is where there's an ongoing challenge, because you want to speak to unemployment shortly, but that all plays into that. So, if you've got consumer spending slowing tick, you've got business spending slowing, but marginally tick. But then you've got government spending, well, there's a question mark at best, but clearly there's a cross in that column.
Speaker 2:Yeah, and so all of that then leads to, okay, tight labor market. That means wages growth is good. That's actually really good for medium to longer term price growth in property because it means borrowing power goes up and we've seen some really strong wages growth over the last 12 to 18 months. We're comfortable where that sits at the moment, so we're not seeing any pressures from wages growth, but it is ultimately, I think the biggest indicator and data feed that the RBA is going to be focused in on is the employment or unemployment number. So when the unemployment gets a forehandle in front of it, so when we move from we're down at 3.7, then we're going to have 3.9,. Once we start seeing unemployment at around a four or a 4.1, 4.2, that is really going to start to play on the RBA's mind, because they know that you know, obviously cash rate is a blunt instrument and they know that there's a lag effect both ways. So they know we're in contractory territory in terms of slowing down that waterwheel. And so it's going.
Speaker 2:If we, if we, if we slide down too much, we could do more harm than good. And so ultimately, that's what they're going to be looking at. So that is going to be the first thing that they're going to be watching. So full time employment, part time employment, in terms of hours worked and underutilization of that labor market, is going to be really important for that story. So so we would say, obviously there are others government spending, sentiment and all of those types of things, and consumer spending.
Speaker 2:But now it all goes back to the employment story.
Speaker 2:If, if employment stays strong, that means the economy generally stays strong, that means people are still able to gainfully get income and then spend that money as well, and so that means that interest rates could stay higher for longer because the businesses don't have to drop their prices, they don't have to reduce the inflationary pressure in the cycle.
Speaker 2:So that's ultimately where we sit. So, in terms of the interest rate story, if unemployment starts to go higher, the reserve governor and the board will have to move, and we saw Michelle Bullock at the recent Senate Standing Committee where she spoke last Friday was around this story of we are willing to move the cash rate lower before inflation gets within our and our bandwidth of that two to three percent. So if we see inflation hitting three percent, that could be the trigger for them to start to move on the cash rate. And ultimately, you know, from our point of view, if that happens in the middle of the year, then we're going to obviously see a shift in sentiment where we're moving from a restrictive to an easing cycle of liquidity, and that has a positive impact on the property market, doesn't it, bryce?
Speaker 1:It does. So there's a couple of things that we think about just as general drivers for price in the property market. So on the supply side, you break it up into two parts. One is new and one's established right. And so you want to, when you're looking at the new stuff, you want to measure that by the amount of new completions and approvals, so it kind of gives you an idea of what's in the pipe, so that people can see that right. And then the established side of things. Well, that's clearly measured by auction, clearance rates, the amount of private sale. So that's where we can see what is on offer for us to buy.
Speaker 1:And on the demand side, it's really down to a few factors. First of all, the amount of people, so the amount of demand that you've got, so the population growth and that's migration into the country, natural births, net of deaths, and then interstate, all the movement that's happening where people are going, household size and household size is probably going to get bigger for the foreseeable future largely around the fact that people are going to have to be more creative with their dwellings, because there's not a shortage of bedrooms, there's a shortage of houses or apartments or whatever in its uniqueness. So there is still capacity to fill there. And then, largely, the demand the last demand driver comes from your ability to buy. So that's a reflection of interest rates, which we've seen very acutely over the last three, 13 movements.
Speaker 1:Your level of household income and that'll change too, ben, as we not so much income but the amount of net cash flow, given stage three tax cuts that are about to flow through Any banking credit policies which we've seen over the last decade where there's been any throttling on lending through buffer rates, whether it be amount of loans for investors, amount of loans over 90% or those sorts of things. And then the last thing is just the relative returns. If property is still offering a reasonable return, people will stay there. If the alternative shares, crypto, art, whatever it is provides a better alternative, that people will go there. So we're going to break down some of these things, but that's the rough framework. From the supply, how much new, how much established? And from demand, what's the population growth, what's our household size and what's our ability to borrow sorry, our ability to buy, based on a few things, ben.
Speaker 2:So let's unpack our assumptions in terms of before we give our predictions for the year in terms of how we're seeing the economy and then how we see that flow into the marketplace. So our baseline as we record this in February of 2024, is a minimum of two interest rate decreases, but a possible third one and we see them starting in around August, september. Okay, in terms of the labor market, we see unemployment needs to move into that sort of 4.1 to 4.3 to start seeing the first rate cut and then ultimately, by the end of the year we see that unemployment rate being between 4.3 and 4.5%. Consumer spending is gonna continue to fall in the first half of the year as more of those fixed rates and those higher interest costs and also higher rents affect about 70% of the marketplace. So ultimately we're gonna see consumer spending still to be challenged, which is all part of that. Remember, consumer represents about 55 to 60% of the gross domestic production that we have in this country. So that's obviously sort of effectively over half of the production of growth and in the economy that we're going to get. So that's gonna be challenged. We do see that picking up a little bit as consumer sentiment shifts on the back of some of those rate decreases, definitely a softer landing. I don't think we're gonna have any challenges of a recession unless things get significantly worse.
Speaker 2:We see inflation returning to the top of the RBA cycle range by the end of 2024.
Speaker 2:So we think that inflation will have a three in front of it and then by 2025, we see by mid 2025 around the inflation rate being around 2.5%. Now, in terms of this overall easing cycle, this is the really exciting bit when you start thinking about it, we expect between sort of 100 to 150 basis points of easing as part of this cycle, which means that that will take the cash rate down into the sort of low threes, early late twos in terms of what those numbers look like. So if you're thinking about that and this is why you've got to be thinking in years and decades, not in months and years is basically that's a good news story in terms of bringing it back down to a more balanced remember we're currently in restrictive. We don't want to be in stimulative, but we want to get back to a balanced or what they call normalized. The RBA will refer to it as normalized rate setting, which basically gets the economy moving in a current sense? What about our derailers Bryce? What are the risks?
Speaker 1:Domestic government or political interference in the form of, you know, keep whatever spending they inject into the marketplace which will mess with that inflation rate. So if they were to do that, keep it higher. If the folks, the people, ben, they keep on putting their hands in their pocket and they keep on spending to a level that doesn't tame that inflation genie, well then clearly that will have an impact on what you know keeping interest rates higher for longer and any supply shocks that happen as a result of any of the stuff that's happening overseas, ben, ie high oil prices. That will then flow into the read, that will then flow into the calculation of the inflation number, which will then force the hand of the RBA. So there's a couple of little asterisks, ben, on our base case, which is super important when you're making forecasts.
Speaker 2:Beautiful. So let's now talk to the property data and sort of tell you a little bit of a story about where we see the supply story going, and supply to Bryce's point. Before we look at building approvals, we look at current stock levels, listing levels as well, and also that housing credit story. So let's start by looking at, you know, some of that data, starting with the stock on market. So we wanna look at the sort of medium to longer term projections in here and what we're seeing in terms of where the supply of new housing approvals and that is Now what it's clearly showing to us is, when we look at the decade averages of housing, decade averages of units, we are under supplied. Okay, so that's the only message you need to hear and sort of some of the forecasting out there, sort of saying that we'll be 100,000 property short in that sort of next three to five years in terms of meeting the demand in the market. So that obviously puts upward pressure on property prices. As a bit of an example there, if we actually have a look at some of the recent data that we're seeing in terms of changes in sales volumes, now this is the interesting one to look at. So if we took a snapshot of this data six months ago. Even 12 months ago, we saw and we were commenting strongly about, in terms of sales volumes and listing volumes being as much as 20 to 30% lower than what they had been 12 months earlier and over their longer term average. And so what we are now starting to see when we look at that is the market starting to release new supply and so that's going to be obviously putting pressure on values on the downside, and so it's going to be interesting in terms of what happens here. And that's our first clue about looking at markets within markets. So we're still seeing that there's going to be some markets that have really low supply but high demand, which are going to see the better returns over the next 12 months, and so I think that's an important message when you start to think about those monthly sales volumes and those averages over time. So we predicted this at the end of last year that it was changing. We were seeing more and more properties come to market, and that's now playing out and it's affecting some of the, the growth that's happening in some of those states and capital cities around the country. Let's move now to sort of look at the. What we also want to be looking at here is the new financing in terms of investor and owner occupiers. Now, we always make sure that you understand that investors over the medium to long-assume should be price takers, not price makers. Okay, so we have seen a slowdown in the monthly value of new finance commitments, so that's excluding refinances.
Speaker 2:But we have definitely seen that there's been a little bit more activity after what we saw. We had a property boom on the back of COVID, record low interest rates. We saw the government's housing building program spike up all those approvals as well. So it really is important to understand where it sits in terms of that activity. And we're seeing the confident investor still in the market. But we're certainly seeing some of the investors who may have overgid themselves having to restructure their portfolio from a cash flow point of view because they went too aggressively and so they've liquidated some of those properties. But that sensible investor who's gainfully employed, who's got a nice buffer, who's got good equity in their property we are seeing some of them come into the market as they're seeing opportunity in this particular market. And why wouldn't they when you start to think more longer term about that migration and that shortfall of property supply that's going to be in the market.
Speaker 1:So there's a bit of demand on the ground too. They've been a country, because there is a real disparity between where the just even in the investor like if you go according to CoreLogic, their latest data in New South Wales, investors are over 40%, which is only the second time in the last five years that that's happened, whereas if you go to Victoria, for example, that's in the 20s In Brisbane, you've got a bit more demand as well. So you'll see that there's a real disparity across the state. So we're talking at a headline level here, but you can also follow the bouncing ball and see where some of the demand actually exists from investors, and it kind of on the back of some of the clearance rate activity, which we'll get to shortly as well. That we've seen to start the year as well is interesting to watch, but it's. There's a clear differentiation across the states where a lot of that demand exists for where those new finance commitments are.
Speaker 2:Yeah, and obviously this is the science right. So you're looking at the supply side, which is really a strong story that there's a lack of it and even though some of the new listings are sort of trying to bring that back into balance, when you start to think about the demand story, you're trying to get those nuances right. So let's just think about demand and we'll help educate you in terms of where you see downside risk. So you've got APRA. Obviously at the moment they're throttling that demand, you're obviously. Are we seeing any foreclosure sales? Well, they're not quite around just yet, but if interest rates were to stay at this same high tightening level for 12 months or more, they are naturally going to increase off their record low levels at the moment as people just simply tap out in terms of so they've been holding on. But if unemployment starts to slow down or, sorry, it starts to increase, I should say employment starts to slow down and they just can't find that money to keep covering that property, eventually some of those properties will come to market. Is there a systemic risk in that that we see? No, there's not. So you can put a line through that. In terms of foreclosures, we are starting to see a NAB job anxiety survey also showing that there's definitely an increase in terms of job security and that comes off the back of this slowing cycle. I mean, if you're in retail and no one's coming in your stores and you're gonna naturally feel a little bit well, no one's buying, and if no one's buying, why they got me employed? So there's gonna be a correction in terms of the number of people working part time and full time in that sort of retail and consumer sector as well. Then you've got, obviously, household formation that Bryce was talking about before. When affordability gets really tight, we start to restructure our household formations and we start to look at how we can share in flatmates and sort of start to look at ways in which we can reduce our costs in terms of whether we're renting or also potentially helping out family members if they're going through difficult periods as well. So that's playing into that affordability story which is pushing us all into those affordable markets at the moment.
Speaker 2:We are gonna see slowing migration this year. So just a little context here. Last year we had record levels of immigration. A lot of those were student university students. The Chinese government said you've got to get back to Australia to complete your degrees you can't finish the month, so that forced a lot of extra people into it. So we do know that through natural attrition and through that cycle coming through that, our immigration will probably get back to more normalized numbers, round 180, the sort of that 250 range, which is a little bit more sustainable in terms of what that looks like.
Speaker 2:And then the last one we talked about is this government interference story and that comes in whether it's changes to stage three, tax cuts, but also negative gearing, capital gains tax discussions, the greens getting on their bandwagon. That affects sentiment and confidence for a lot of people, especially if you're looking to invest. And so we just say to people if you have that sort of mindset, get back to the decades thinking, stop thinking in the short term in terms of what that story looks like. But they are the downside risk and I know that there's a bigger number than the upside story we're talking about, but don't think just in the number of the different themes that are going through there. These next lot of upside stories can potentially out trump all of those smaller variables that we just talked to. So the upside story chronic, under supply of housing, interest rates falling.
Speaker 1:Don't ever underestimate the sentiment power of interest rates falling to bring in Because it's interesting with interest rates falling, is it Ben? Because there's definitely a correlation with interest rates falling and property performance, but there's not the same correlation with interest rates rising in property performance. So, on the downside, yes, on the upside it's a mixed bag yeah, 100%.
Speaker 2:And if you think also about like properties are great inflation heads right Over the medium to longer term. It's a really nice inflation heads when you own the property. If construction getting more expensive to build and you own a home, you're getting that uplift in terms of inflationary. But guess what? That's going to come down lower Technology productivity. We're seeing all of the over the next five to 10 years how much AI will increase productivity and that will also mean that there's going to be more challenges around inflation moving forward. But what we have got in this cycle is those real wages growing. So credit to the labor government, the federal labor government. They have been able to get a real wage increase on the back of this higher inflation story. Now, part of that had to do with inflation forcing the agenda on the story, but still you've got to give credit where credit is due. So you start to sort of think about that story in terms of those broader themes.
Speaker 2:And then we want to sort of start to think about that buyer demand. So what sort of data are we looking at from a buyer demand point of view? Well, our demand supply score is exactly where we want to be. And so when we think about demand and supply, what we're talking about here is where are those levels at? When we look at our 17 variables, we can see in terms of Hobart and Darwin are still quite challenged. There's just not a lot of appetite for buying in those particular centers. But then when we start to look at, you know, centers like Perth, incredibly strong, adelaide, really strong, brisbane, strong, melbourne, sydney, canberra and all of that, there's a heartbeat there, but it's not sort of that sort of nosebleed need to get in as much as possible. There's a little bit more patience in those particular markets. But let's talk about it.
Speaker 1:I think we noticed too, ben, was a lot of the demand comes through affordability right. So when you say you know Melbourne and Sydney and Canberra not at the nosebleed territories, because largely a lot of the demand was actually pigeonholed via people's borrowing capacity. So you can see that some of those towns that you pointed out Brisbane, adelaide, perth comparatively speaking to Melbourne and Sydney, they were a hell of a lot more affordable. Plus they people had borrowing capacities that were within the bandwidth that you could afford those states. So you can. It was just a natural progression to see some of the activity pushing there. And just for those who are playing along at home, ben, who haven't been exposed to DSR, you did quickly mention the 17 variables, but what you were quoting is our own algorithm that measures 17 variables that we then bring together with a waiting that allows us to go where does the demand actually live? At the coal face and is the demand exceeding the supply? So just for those folks who are going to go to the coal, and a beautiful segue.
Speaker 2:I mean, we'll talk about auction clearance rates before we move on. But some of those examples of those variables that we're talking about is days on market. That's definitely and it's also part of the location score product and our DSR data product that we also have available. And you can see here, in terms of days on market, we are starting to see a shift in terms of median days on market. We're now up nationally at 44 days before a property is sold. In terms of combined regions and in terms of combined capitals, we're at 29 days. So that's clearly showing us that capital cities still have very much a heartbeat. And then we think about where they were in 2019, 2020, they were up in the 40s, right In terms of, so 45 to 55 in January of 2019, now down at 29 in January of 2024.
Speaker 2:So, make no mistake, there is a clear indication in terms of days on market says that's an underlying mood in terms of where that days on market sort of story sits. And then, if we look at the other one, that's also worth noting outside of auction clearance rates, because really auction clearance rates are a good measure for Sydney and Melbourne, but they are a weak indicator for and a signal for other markets. But so let's look at vendor discounts. What we're also seeing here is pretty healthy in terms of there's not a lot of vendor discounting going on and in terms of a lot of cities and states across Australia, we're basically seeing that the vendor discounts are less than this time this year compared to this time last year, and if we're talking about a market that at the end of last year we were seeing potentially going into a flattening cycle, it's actually sparked up a little bit, and I think that also speaks true to the auction clearance rates.
Speaker 1:Price yeah, auction clearance rates have started remarkably resilient to begin this year, which, as you pointed out, is only a measure of Sydney and Melbourne. But what's interesting about that is the fact that they are very expensive markets relative to the rest of the country and yet you are seeing that really strong resilience. So that is showing a fair bit of sign and it also reinforces the conversation we had earlier about where the finance commitments are. There is a bit of life, definitely in those bigger markets, despite their relative unaffordability at a national level Beautiful.
Speaker 2:And one of our more sophisticated measures is a concept of market cycle timing. So we know that markets move in cycles, all right, and so what you're trying to also predict is when is an upcycle versus when is it the peak of the cycle? And you know how long that upcycle is going to last versus how long it's going to be a short upcycle or whatever that looks like. And so we can see, in terms of the data that we've got there, that there's a really strong early stage cycle in markets like Perth. And so we think, you know, as an example, perth is going to have a sustained bit of growth because it did have, for you know, a long period of time there in, from 2013, 14 to peak to where it is today. It's basically just recovering some of that. So that would be an example of a market that's probably got a lot more to give.
Speaker 2:And then, when you're looking at other markets, where you're looking at, say, sydney and Melbourne, they've had good runs, but you know they tend to go up and down in tighter cycles. And then, when you're looking at Adelaide, it's had a really nice solid run. And then you look at, you know, hobart. That had again another sort of breakout, 20 year run that it normally does every 20 years. It sort of has this run and then you got sluggish markets like Darwin, who's basically not showing any real indications of that. You know that uptick just yet. But because it has been flat for about the last decade, it's logical that that market is going to have some upcycle in the next sort of two to three years as part of that cycle. So that's just.
Speaker 1:I'd like to Ben, sorry just to jump in there, but it's. I think it's important because, as an investor, you got to work out if you're chasing short term gains versus long term gains. And we're always chasing long term because Hobart actually had its day in the sun. It had a nice little spike, particularly during COVID, which was benefiting from a bit of that move away. Darwin as well is off about 6% off its peak, which was a decade ago. Its peak was a decade ago. So the game that we're playing here, that we talk about on this podcast, is the long game, the decades game. So it's it's got a form part of the thinking whether or not you want those short term spikes that you can leverage to get into other markets, or whether you just want two or three properties that you hold for the longer term. So I think that's a reinforcing point, based on the back of what you were just talking about.
Speaker 2:So let's close out the story of the purchasing side and we can really start to see that, on balance, the economy is going okay. There's a lot of people who still got strong gainful employment. We're going to have more of a softer landing than a harder landing at this stage of the cycle and the predictions that we're making, so that bodes well for predicting that property prices are going to grow over the course of the next 12 months. We're seeing early indications for option clearance rates supporting some of that case as well. Just even the sentiment that changes about potentially being at the top of the cycle, seeing inflation coming down. That does change that wealth effect in terms of how people are feeling as well. So it's delicately balanced in regards to we don't want to get over this and start spending too much again and keep that interest rate higher for longer. That's going to have a more damaging effect in terms of where property prices will finish up at the end of the year, but it's very much going to be a case of two halves. So you're going to have a story where now is going to be a really interesting time, probably the most optimum time to be getting prepared to buy and ultimately you're going to have less competition in terms of some of the buying that you're doing, if our predictions are correct and the cash rate does start to come down in the second half of the year. We see with that under supply story that the economics look to be in favour of, ultimately, the value of property. So that's where the buyer is going to be a bit more challenged in terms of getting fair price or a discounted price in terms of what that looks like.
Speaker 2:Now, the other thing we also want to consider as an investors is our overall return is a combination of capital growth, but it's also a combination of that rental story.
Speaker 2:So when we start to look at the rental story, let's start with supply first.
Speaker 2:We do see here that the big indicator of that and the trend indicator that you want to be looking at is what we call the vacancy rates, and we've got a chart up on the screen that we're talking to at the moment and you can really just see that it's quite challenged in a lot of markets. We're seeing vacancy rates of less than 1% in some markets and around 1.5% in others, and now we have seen a little bit of an uptick and I think that's got to do with those international students potentially leaving, because there'll be tens of thousands of those that'll be leading the bigger city market. So we expect that some of the sort of medium to high density city apartment stock there will be a bit of a spike in terms of rental availability in those particular marketplaces. But in terms of the classic housing, single fronted homes, those types of places, they are in short supply right across most of the metropolitan areas around the country and that bodes well for guaranteed rental income to support the holding of those property prices.
Speaker 1:Markets under 1% been and all of them under 1.5%.
Speaker 2:That is ridiculous. It is ridiculous. So it's really clear that with that, as well as, obviously, with the limiting ability to actually borrow money in a lot of cases, the housing approval data being at around 26% below its longer term and even 12 months ago it's basically down a quarter of where it was they're the sort of factors that are going to say that there is going to be a continued rental crisis. That's going to happen over the course of the next 12 months, and it's fair to say that these small business rental accommodation providers, ie us investors we are still at the moment. If we've got a lot of debt against our properties, we're subsidising our renters at the moment and that's roughly to the tune of about a quarter of. We've recovered around a quarter of those costs. So I do expect, when we start to think about what's going to happen from a rental point of view, I suspect we could still see as much as 8% to 12% price growth in some markets across Australia and I think that is a fair estimate in terms of what's going to basically happen. So if I'm an investor, I've got real confidence in the demand story of rents and being able to increase those rents. And just to give you some idea about the most challenge markets Perth we've seen rents go up by 13.4%, melbourne by 10.7%, sydney by 9.7%, brisbane 8.2%, adelaide 8.2, so they're the real strong markets. Rents are falling in Hobart on the back of to that point that Bryce made earlier. Investors chased that market hard. They became the price maker, not the price taker. So now that they've had to adjust with an oversupply of rental accommodation in Hobart, darwin still has also got some 3% growth in rents. And Canberra is another market where I think that has a lot to do with their rental caps and the way in which they're operating that market, which is basically forcing rents down in that particular market as well.
Speaker 2:But that just gives you some idea. When you're looking at the rental supply and demand. And then so we see if we're talking about markets with gross rental yields, I mean you've obviously got to stand out there. Darwin being a sluggish market and not a lot of activity in there, your rental yields are at 6.5%. That's then followed by Perth at 4.6%. So not only are you getting strong rental growth, not only do you have record low levels of supply, you're able to. Then obviously that correlates into building those yield stories out. So Perth is a standout.
Speaker 2:Even Hobart still has a pretty healthy 4.2% rental yield, canberra 3.9, coming into Adelaide 3.9, brisbane 3.9, melbourne 3.5 and Sydney 3%. So my prediction here is really clear that Melbourne could see a 4 in front of its name. If, for the short term, prices are flat in Melbourne, then we could be getting back to those days where rental yields are around 4% in the Melbourne market, which, if you actually take a long sort of 10 to 20 year view, that's where they were back in the day. So this is about what I was saying about thinking in decades as growth potentially slows, because in Melbourne's case it's got a lot to do with the government setting up all of these restrictions and making it very difficult and attractive in the short term to buy those properties. The balancing act there is you get a real spike in terms of rental growth in that rental yield story.
Speaker 1:Alright, let's round this out then. So I'm going to set this up by talking about what the banks have as an outlook for 2024. Pen the big four banks ANZ, cba, nab and Westpac. So ANZ forecast capital city prices to lift across the board 6%, cba 5%, nab 5.4% and Westpac is 6%. That's across the combined capital.
Speaker 1:But we know the headlines don't help anyone. Ben Ainses said the biggest gain is tipped for Brissy at 9 to 10, followed by Perth at 7 to 8. Cba says Brissy is tipped for 6%, melbourne and Perth 5. Nab says prices are expected to list 6.5 in Brissy, 6.2 in Perth and Adelaide at 5.5, and Westpac says Perth is penciled in for the highest growth at 10%, followed by Brissy at 8, sydney at 6, adelaide at 4, melbourne at 3. It's fair to say that there is no collusion going on between the four economists of the big four banks, because there is quite a disparity there, from Perth leading to Brisbane, leading to the amount that we're getting across the board. It's not easy to get a read on the markets just by following the four banks. What do we think would be the base case?
Speaker 2:When you put all of the information together and we're just talking about the capital cities here at the moment it's clear that the variables and the economics and the demand supply story points towards a very strong Perth market. We see that on the ground as well, through our team buying over there, I do suspect. Look, I wouldn't be surprised if we saw double digit growth in Perth market again. I think that is going to be led by the bottom quartile Any sort of thing. Property prices that baseline median price in Perth is going to continue to grow strongly. I think those markets that are in that 4,000 to 600,000 range are going to be the best performers in that particular market.
Speaker 2:In terms of the Adelaide market, the perennial performer at the moment has had a really nice solid run. This is about a sustained growth story that's happening in Adelaide On the back of a pretty well run economy and things going okay in that particular state. Adelaide has definitely got some upside in it South-east Queensland. So we're not just talking about Brisbane, we're also talking about moving down into the Gold Coast and also into the Sunshine.
Speaker 2:Coast Pretty much moose to the border Right up to the border there, in terms of what that's going to look like, we definitely see those markets starting to show some further growth stories over the course of 2024. Darwin I mentioned earlier. I do think that at the end of this year and into the new year people will start looking at Darwin. If they've got, maybe if they're looking for a speculative investment in the short term, I wouldn't. I'm not saying go to Darwin.
Speaker 1:Do experienced investors only apply?
Speaker 2:Yes. Also, you've got to be mindful that those types of markets like Darwin and Hobart will spike and then basically do nothing for a decade. Just be mindful of that. I think the commuter belt is also showing signs, pushing people into those affordability regions. You drive a commute to one to one and a half hours into big capital cities. If you only have to go into the city once or twice a week or whatever, under these new hybrid work arrangements, that will drive those affordable regions in that sort of depending on which state and territory, but in some cases it's probably the four to 500 range.
Speaker 2:But in the bigger city and the bigger states where property is more expensive, you're talking about 600 to 750 price range for those particular markets as well. In terms of what that looks like, you're going to see markets like Townsville and some of those larger regional towns will get a look in from some investors. They've been really underperformers over the last few years. I think again you'll start to see a little bit more of that sort of investor driven story as opposed to we like the fundamentals being an owner occupied driven story. But they will move those markets if more and more of investors get into there. Obviously, the markets that we haven't mentioned. I want to spend a little bit of time talking about Melbourne because I want to put some context around this. Melbourne is a challenged market currently because of the settings around the cost to hold your property, around the restrictive regulatory settings around rental conditions and laws and so forth.
Speaker 1:I see the ATM for the state, then yes, that's right.
Speaker 2:There's no doubt that they're looking at property investment. I've been through a few cycles, bryce, and I've been through a few radios before. We know where this normally lands is once the regulators and the governments work out Actually, we've cooked the books and we've cooked the market they will retreat from those positions and ultimately what you'll see is a rebound in values. I mean, you've got to think about Melbourne and Sydney. They are our gravity centers. They bring in the best and brightest in this country and those people can come and earn really good. They are our knowledge centers, as all of the demographers, the burners, will tell you that you build those big knowledge centers strong university, strong economic drivers. That will be true.
Speaker 2:The problem we have is Melbourne's got a sentiment issue from an investor's point of view.
Speaker 2:So that's, you know that 10 or 20% of buyer demand isn't there.
Speaker 2:So I say that in the short term. But if you're a smart decade investor, what you've got to be thinking about in Melbourne is you're buying counter cyclical, but you've got to be prepared for a potentially flat growth or maybe even a contraction over the next couple of years. But you get 100% of the upside if you're counter cyclical and you're not talking about a market that's small and susceptible to one or two economic risks. You're talking about a completely diversified, integrated, one of the biggest financial centers top 105 cities by population globally that you've got to remember that. So don't think short term when you're thinking about buying in Melbourne. Be greedy when others are fearful. There's going to be a message for the first half of this year, but also be mindful that you just may not get any solid growth over the course of the next couple of years and about then. It's about the government decisions in terms of how they manage their debt, and some of the difficult decisions that they have to make is going to then talk about the next five to 10 years and beyond.
Speaker 1:But the upside of the advantage is you get position and the type of property you're after and also around the fact that the increasing yield story because you've actually had a look under the bonnet on some of the properties that have moved from the market from investors I think that's good intel for share here because that gives a bit of an insight into what that tenant pool, what that property for tenant pool is going to be like, which will kind of give everyone an idea of where that pressure is going to come from.
Speaker 2:Well, yeah, so in terms of I'll have to pick another story for what's making property news because I'll share it now but, yeah, so the bond registrations in Victoria. I've been watching very closely on the back of the major reforms that have occurred and also the recent increase in land tax and the consequences of the investor, and so investors the small business owners are basically some of them are saying that's it. I'm divesting of one, maybe more, of my properties in Melbourne. So we've seen in the latest data released, which was up until the end of September, 7,500 less rental properties available in the Victorian market and that's around 6,500 in the Melbourne market. So to that point and I know currently I'm revealing one of my properties in Melbourne that that rents are definitely going higher on the back of that demand story. So if you're an investor who's coming into a challenged market, it's not a bad thing when you're thinking in those five to 10 and beyond years that you're going to enjoy some improving yields and then ultimately, on the back of that, improving capital growth over the medium to longer term. So that is Melbourne story.
Speaker 2:Sydney isn't as challenged yet, but we're also seeing some of the government rhetoric in there about introducing no grounds, ofictions and a few of those other things. That's going to put a little bit of a question mark on the sentiment and confidence of someone coming into that Sydney market as well. So both of those markets are challenged by affordability and borrowing power. So when APRA changes that story, those markets will potentially move in a positive direction. And remember they are the areas that are also most likely the undersupplied city.
Speaker 2:To Bryce's earlier point about the positive migration story, most people pick Melbourne or Sydney as their cities in which they want to live in, and so that also underpins that underlying undersupply of demand that we critically need in terms of the dwelling stock to meet the markets. And then you've got regulation changing around trying to restrict the NIMBYism in those particular markets as well, which will hopefully then make some of the construction and supply side improve a little bit over time. But you'll also start to see that land scarcity, which is what we talk about in terms of longer term capital growth performance, it's all about the land like no mistake about it in terms of the value of that land and what owner occupies put a price on that, and it's productive use of that land that is ultimately what we as investors also look at as well.
Speaker 1:So that's what around that. And if you've got 3 million people that are coming into this, our population will grow by another 3 million, by about 2028. They got to go somewhere. Some of that will go to Melbourne. That will be underpin, you've got to, as you said, the population of Tasmania coming into this country in terms of migration. The first five years they generally rent, but their goal is, as we've always said, is to take a selfie at the front of their house to say look, this is the reason why we moved here.
Speaker 1:So it's largely a story. As to your point is the Victorian economy is the challenge, but I think with people being able to you know, particularly knowledge workers, being able to work with a laptop, they might be able to get a roll, that's sort of across borders as well whilst living here as well. So I feel optimistic about the baseline for Melbourne. But to your point, I think it's more about increasing yields, getting yourself jockeying for position, making sure you get under the headline, because we always teach people to get under the headline and be very specific about the markets where you actually position yourself for. And then, if you zoom out to 2030, where do you want to hold real estate? Well, we've always said try and have one in Sydney, try and have one in Melbourne. And if this becomes your opportunity to be able to do that and your cash flow allows and your situational hours, who knows, might be the reason for doing it.
Speaker 2:Right. So let's sum up. I think we've really unpacked the story here in a broad sense. I think we've prosecuted an argument in a sensible matter, you know, with informed data. So we know rates are most likely to come down the second half of the year. So our advice to people is to get your, get yourself organised. If this is the year that you're going to invest in property and if you're in a position to move before the masses start to come in, now is a good time to start be thinking about that and start planning for your future.
Speaker 2:Of course, we always put a caveat on here. Job security is everything when it comes to investing in property. There's high entry and exit costs. So if your job is not secure, this is not the time for you. In terms of appra, they won't be able to argue the 3% buffer rule. It'll be unjustifiable. So at some point that's going to come down to either 2.5 or 2% and that's going to move borrowing powers by anywhere between 10 and 15%. And we then expect that with lower cash rates that's sorry, the lower cash rate that's also going to improve buying power by potentially another 10 or 15 or 20%, so that that gives a bit more upside in terms of putting pressures higher up.
Speaker 2:We said this many, many a time, but let's reinforce it to our new members of our community, and that there's always markets within markets. So you need to be borderless. You don't need to be parochial and buying your own state, especially that state's not the right time or it's not the right suburb within that market to potentially be buying those properties. So always go borderless and play the long game. You know we've reinforced that right throughout.
Speaker 2:This messaging of this pod is really about playing decades, not years, and I don't want to finish off on a negatives. But just also make sure that you understand that there is always risk involved in any investing that you do Locally. The biggest risk is really in our government regulatory area. So we're going to do a lot in terms of talking about taxes and arguing the point that small business operators in the private rental economy, the rental accommodation space, shouldn't be treated any differently. So that's going to be a big campaign for this year. When we're talking about negative gearing and potentially, capital gains tax, obviously geopolitical tensions US election is providing a little bit of uncertainty, and then obviously sticky inflation would be those other derailers that we'd be thinking about. But when you think about the probability of those things, you hopefully put them down at the low risk and that means that with an informed mind, with informed data, doing practical research, you should be able to eke out some marketplaces are worth with investing into over the course of the next 12 to 18 months.
Speaker 1:There you go, folks. There's the outlook for the year. So if you are a household that has a secure job, your cash flows will aid proceed. We'd consider that you always have the long game in mind. So you're thinking decades, not years, but look for the opportunities that exist If you are a borderless investor this year to be getting into the market and chasing some of those opportunities as well. But definitely I guess we're optimistic that the single digit growth available this year, if you are willing to put your money into the market and one market in particular, may have a double digit growth as well. So, fairly comprehensive review there. Hopefully that has helped our community form of view. I don't think anyone will be surprised that nothing has really changed for us in terms of our view that some people say well, you guys are always pro property, yeah, because we are a message that says buy two or three of these things, combine it with your super and see in a decade and have a conversation then. So if you are someone who is in a position where you have to be in that accumulation phase, well, why would you sit and wait? Because we do see that single digit growth going across the market there. So there you go, folks. Hopefully that has helped you with your view for setting up what you need to do going forward.
Speaker 1:Hey, ben, my life hack today is it's around sleep routines. Let's get a little older. I'm trying to improve the quality of my sleep. So there's a couple of things that I'm considering here the overall concept that sleep is your best meditation. So I am trying to improve that couple of things no screens, two hours before bed I'm probably four out of seven days. I'm pretty good at that. It's got a bit more to go. I definitely try to eat and drink a minimum two hours before I go to bed. That's largely because I, just once I wake up, I can't get back to sleep. So that certainly helps with that, but also with the quality of sleep. This is one, ben, this is one for you to consider, and this is one that I've been trying on. So those no screens and no food been doing that for a little while and I think that's a good results.
Speaker 1:But this one I came across is when I go to bed, ben, and this this will help for someone like you who does a lot of head miles, like me, for the, for the overthinkers, it's just to sit in silence for 10 minutes and it's almost like you just allow this, this overflow of thoughts, so you don't go from the screen to bed, straight to sleep and all that stuff's rattling around in your head that you dream about, just sitting there and contemplating, because it's like taking a break. It helps promote mental clarity. Ideally it'll help reduce the stress levels, but it just allows us to be present in the moment. So I basically sit there, ben, been doing it for a couple of weeks and I'm just seeing what happens, letting the thoughts go, letting the thoughts go, and then it's almost like I've emptied my mind. That allows me to go knock over and have a sleep.
Speaker 1:So check it out, folks. Let me know. I'd particularly love to hear from the folks, ben, who are also on a mission to increase the quality of their sleep. Please reach out to me because I would love to know the hacks that you've got. There's a couple of other ones Block out Blinds, ben. Get the temperature control in your room as well to get optimal temperature, but bring them in. Folks Love to hear more. Definitely, read out on the podcast, but, ben, there's one for you.
Speaker 2:Well, mate, can I also build on your story? On Saturday night, jane and I had date night. And what do you do on date night? Well, we're continually learning creatures. So where did you think we went? We went to the convention center and we listened to Dr Andrew Huberman from the Huberman Fellow. Yeah, so he was in Melbourne. Jane loves the work he does. I'm just looking at some of his little takeaways the brain body contract, as he calls it, and building on when you're talking about rest, and it's the foundation of a health and performance. And he has the NSDR approach, which is the non-sleep deep rest, which is what you were just talking about before, where you just sit there not sleeping but just doing nothing and then just letting it all flow over you. So there you go, you're on to something.
Speaker 1:Yes, but it's good, mate. I know people have got lots of hacks and all that sort of stuff. They're biohacking their bodies and all that sort of stuff. Just if you're a knowledge worker or you're a head case, if you're always in your mind, it's just like this emptying of your thoughts. Let them run, let them run, let them run, let them run. Then all of a sudden it's empty and it's almost like you feel your body get a bit tired and then away you go straight into sleep. So check it out, folks. But I do want to hear let's crowd source. And, Ben, you've just started the crowd sourcing with Dr Andrew, isn't it?
Speaker 2:Yep Andrew Huberman Lab.
Speaker 1:Yep mate, Nice date night for there. Was that your idea or Jane's?
Speaker 2:Oh no, jane's idea. She's obviously you know, she's on the health side of things. She looks after us in terms of healthy mind, healthy body, all of that sort of stuff. So no, she loves his podcast and I've listened to a few of them. They are fantastic, very well researched, very open minded about all different techniques in terms of how to get the best out of yourself and your body and performance in life. So it was very interesting. Two and a half three hours of him talking took a lot of nukes.
Speaker 1:Definitely keep your wife. She's a treasure. So what's making property news?
Speaker 2:Well, obviously I had the story about the changes to the.
Speaker 1:We didn't have that in the pre-meeting, for me not to bring that up early.
Speaker 2:Well, I think it's, I just look.
Speaker 3:you know we ran out of show we just pulled in.
Speaker 2:We'll talk about a couple of just important points, right, that is that, yes, you know the Greens party is starting to bring up native gearing and capital gains tax and starting it a lot of media again. So we're in the same argument that we've been in, you know, in different cycles. The problem with all of these things is the unintended consequences. Is that really the renter hurts the most? In other words, if there isn't enough of a return on investment for an investor, who's basically deciding where they're going to invest their money? So and in a lot of cases, they're setting up small business rental accommodations and ultimately, if you take that piece of the pie away, then where are they going to supplement that return? They're going to supplement that return through higher rents or if they take their money elsewhere. That means less supply, and so I'll be talking a lot about the different types of reasons why we need a certain amount of rental accommodation. Yes, there is a amount of rental accommodation that supports our most needy, and that's where the government needs to get involved in terms of rental, in terms of social and public housing, but the vast majority of renters who rent in this country aren't renting in that particular space. They are renting for other reasons, transient, whatever changes in circumstances, moving to new places. If you don't have rental accommodation for those people, you miss out on the economic opportunity associated with that. So we'll be building a bigger story around that and making sure that people are informed in terms of what that story looks like, and so that's what's making. Probably news is that there's still this debate going on around treating property investors, small business rental accommodation providers, differently than other small businesses, and if you do that, your unintended consequences are going to be less supply, higher rents and less economic activity and less economic prosperity for those towns or cities in which that critical rental supply is not available. So I'll be on that bandwagon for a little bit.
Speaker 2:Bryce, a quick one, a shout out, and thank you to those kind people who gave us some donations. I'd be honest, I'd like to see a bit more of a donation in terms of numbers, not not value, only what you can afford. But we didn't get a huge number of people and I'm thinking. Well, if I'm an investor, one of the ways in which I can help protect the investment that I've made is to make sure that someone's advocating on your behalf, and that's what Picker does. And so without that funding, we can't do the work that we need to do, which is about getting in front of the politicians, getting in front of the regulators and telling them the truth of the market, telling them what you know, the perspective of that small business owner who runs that rental property.
Speaker 2:If we don't have that organized voice, then ultimately we do run the risk of our voice being drowned out by other political voices who are more well organized, more funded by government money and they're building their cases. So that's what that money does. It allows us to continue to operate, to continue to build out our membership base and continue to give a voice for these small business private rental accommodation providers. So I think it's an important message. So if you haven't yet donated, please go to the picker picker picker pic a. Dot a s m dot a. U find the button. Either become a member, if you're not already $5 or $20 for five years or just give us a small donation if you're an existing member, so we can keep doing the work that we're doing, and I appreciate those who have done that. But I would love a little bit stronger response. If you got value out of this update, maybe that's. That's a way in which you can show that appreciation by giving us a small donation.
Speaker 1:Then you go. Was that calm? Was that that day send? Was that dot net? Don't worry about it, folks. Just click on the show description in for this particular show. There will be a hyperlink so that you can get straight across there and do that. So big coverage today been well done.
Speaker 1:Hopefully that has helped curate some thoughts and ultimately giving you a baseline for how we've arrived at our, I guess revision for what we expect for the remainder of calendar 2024. So there you go, folks, and just a little note that we have a very, very compelling guest in a couple of weeks time been, who we also get to, is at the cutting edge forefront of research in this country. Her name is Eliza Owen. We are super excited to have her on so we can ask us some really cool questions, because we'll be a couple of weeks further into the market and we'll get her insights as well, as she gets access to some of the the brightest minds in the space band and also some of the best data that's available.
Speaker 2:And next week, bryce, we're back into behavioral techniques and some of the research we're really going to. I mean, this is the time of the year, you know, where we're effectively six, seven weeks off the start of the new financial, the new calendar year, where we're making all of our resolutions and we've got all these dreams about organizing our money in the right way. Well, we're going to take you through some of the really powerful things that you can do that's based in research, based in evidence, in terms of building up better behaviors and better habits that will allow you to continue to keep building out and running money management, which will then be a very, very exciting project. And we're going to take you through some of the new financial management which will then obviously grow into investing, which will then grow into wealth creation and building wealthier tomorrow. So that's going to be a big episode next week as well.
Speaker 1:We've got some big up and it's always easy to park at the gym in February than it is January been as the news resolutions start to whine a little bit, and so what you're talking to is, if you're news resolutions around, money is starting to whine a little bit check in next week as we cover that topic, mate. It's always fun to hang out with you, ben. Until next week, mate.
Speaker 2:Knowledge is empowering, but only if you act on it.
Speaker 1:See you next week folks, hey folks, bryce, here again. I just wanted to catch you real quick before you go. If you're new to our community, I want to encourage you to listen to our very first 20 episodes, as the concepts we share in EPS 1 through 20 are foundational principles, pillars and frameworks that you need to know you, to get the best value from our content week to week on our show. My little tip is to listen to it at one and a half speed. Now, for those of you that are time poor and don't have the option to go back to the beginning, don't worry, because we've got you covered as well.
Speaker 1:We've created a binge guide that summarized these foundational episodes into one easy to digest booklet so that you can get up to speed super fast. So go to the show description on whatever device you're listening to now and simply click on the first 20 episodes link to download it straight away. Oh and, by the way, whilst you're there, you'll find a few extra goodies for you, including a link to download our lifestyle by design app more, the home of wealth, speed and wealth clock, and our hugely popular money smarts money management system, as well as how to get free copies of our bestselling books. Now, just a reminder that anything we cover on this podcast is not considered to be financial advice, and we certainly recommend that you seek out expert advice tailored to your unique circumstances, and everything we talk about is general in nature. Folks, I want to encourage you again to click on the show description, wherever you are listening, to access all the free goodies we have for you Until next week.