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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
All right folks, welcome back to the Property Gouch podcast. And today is our favorite day. We hear the questions from you. It's Q&A day. We're talking about the impact of the 2032 Olympics on Brisbane as a property investment destination, and we're also talking about land to asset value ratios. How do you calculate them? What else do we cover then?
Speaker 3:Yeah, bryce, we also hear from Michael and he's confused by the way in which the market is operating and the regulators are organizing the property market. He just confused why there's not more incentive for property investors out there. And finally, bryce, I am on the trail of misinformation. I am fact checking political information that's going out there and I'm telling the truth, all based on the data. So that's what we've got to wait for in what's making property news.
Speaker 1:Well, folks, a colleague supported telling the truth. I'd like to hear that let's rip into the show.
Speaker 4: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 are partners of the multi-award winning Empow Well, co-creators of more the Freelife Style Design Act, as well as bestselling authors of the Armche 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 you, to Ben. How are you this week?
Speaker 3:Well, mate, it's obviously an exciting week for many, many reasons, of one which we'll talk to in a minute, but it's also the start of the 40 sessions. I mean, I'm excited. I'm excited. Raining premiers. You know we're off to face GWS this weekend. It's going to be a good game on Saturday night. So, no, can't wait for another new season of the best game on the planet. So look forward to it.
Speaker 1:And our regular listeners are excited at the swagger that you're showing their Ben to. So for the next, what is it going to be? Next 30 weeks, we're going to have to hopefully see the mighty magpies being not so mighty anymore.
Speaker 3:So that's about it. I'll try and keep it in perspective. I'll try, and you know we've got to keep a lid on it for the first half of the year You're going to stay humble, are you? We'll see, we'll see. I think there's something far more important that's happening tomorrow, which really is, you know, so significant. And what are we talking about there, mate?
Speaker 1:International Women's Day tomorrow, mate. So we're well said. But we thought the way that we could tip our hat to the day tomorrow is not to hear words from you and me, but from the people whose voices really matter in this significant day. So we reached out to significant friends of the property couch and we asked them the civil question what does International Women's Day mean to you? And this is what they had to say Ben.
Speaker 5:I think International Women's Day is really important for celebrating successful, amazing women in our lives, but also highlighting some of the challenges that still exist for women and many different intersections of our society. For me, I'm always looking at the economic, the housing, the financial lens, so it's a great reminder that we still have a bridge to gap when it comes to female financial literacy, wealth gaps and income gaps.
Speaker 6:Hello, what does International Women's Day mean to me? Well, it's about taking the time to look back and be super proud of where we've come from and then also looking forward. Trying to get through all these headlines and a lot of negativity the data does seem stuck against us but getting excited about where we can go because we do have the traits to be financially successful. We really do, whether it becomes in investing the money, traits are there. So the theme for me this year is really on point countering investing in yourself and accelerate progress. I say to everyone, every woman out there, count yourself in and invest in yourself. Knowledge is power and financial literacy is going to help us all become the best financial versions of ourselves.
Speaker 7:Hi, it's Jane here from your Success Club. And what does International Women's Day mean to me? I have to say that it has changed a little in recent weeks. When I first started working, I went underground to coal mines in New South Wales. I was the first female to work there and everyone went on strike because I was the first female to legally work underground in coal mines in New South Wales and, to be honest, I just kept my head down, worked hard and got on with it.
Speaker 7:I didn't buy into affirmative action, I just wanted to get the job done and set an example for other women, which I believe in the last 20 years you know, I've helped to achieve that, not just in that space, in mining engineering, but also in the property and real estate world. However, when the gender gap report came out recently, it really made me think about the inequality. And when I'm reading that companies are paying the same people with the same experience, with the same skills doing the same job up to 40% difference, I have to say that International Women's Day now means to me in an awareness that there is a difference playing out in the world, even in the year that we're in now, and that it is up to us to make a stand where we are, in our own businesses, but with the businesses that we interact with.
Speaker 8:Hi, this is Veronica Morgan Bias, agent Bias, agent Mentor, first home by a coach, amongst other things. Thank you so much, bryce and Ben, for asking me to share my reflections on International Women's Day, and one of the things I do reflect on is how far we have come Now. I'm a child of the 80s and I think back to my first job out of university and how the HR manager pulled me aside and told me never to expect a promotion because one day I'd leave and have children. Now I was shocked. I was fortunate enough to grow up in a household where my father in particular, believed women could do anything they wanted to, anything they applied themselves to do. I should probably specify, but he was this manager in my first ever job out of uni telling me there was no future in this particular company for me.
Speaker 8:Look, thankfully that is no longer okay to say out loud. I also think a lot less people think it internally as well, and just because we're not allowed to say things out loud anymore doesn't necessarily mean that this has vanished from the thought patterns of people in management. But I think, generally speaking, it's not in there anymore. But the fact does remain that there is a gender gap, there's a pay gap, there's opportunity gaps, there's still a lot more male CEOs and there are female CEOs, etc. And women.
Speaker 8:We really are disadvantaged by our very biology and I guess what this brings into sharp focus for me is the importance in my particular field, which is property, of course, the importance of home ownership and for our, as in women's, financial security, especially for women, and it's certainly one of my missions in life. I like to say my mission is to help people make good property decisions, but I also do want to help more women. As I'm developing in the various things that I do, I want to help more women not only achieve home ownership, but do it well, you know, by good assets that will provide them a safety net as well as being a vehicle, if you like, for personal wealth. So I guess that's just some musings from me on this International Women's Day. Once again, guys, thank you so much for the opportunity to speak to you and your audience, and, yeah, I'll wrap it up with that, I think.
Speaker 1:There you go, ben. So clearly for different perspectives, but clearly giving us particularly you and I as mothers here, ben giving us insights into what the day actually means. But, more importantly, from some of those testimonies you've just heard the journey and the progression and the progress that's been made to this point in time with still a bit more work to do but clearly from the mouths of people where it really does have an impact.
Speaker 3:Well, what you heard there is real life examples of the challenges that women sometimes face, and so that's why the whole idea around International Women's Day is celebrating that social, economic, cultural and political achievements. You've got to remember, there are still women around this globe who are ostracised, who are not, as you know, not part of their society the ability to vote in some countries so it really is quite important that we continue to keep shining a light on these amazing women, and obviously there were four great examples of women who are breaking through and also sharing a voice, and so that's why it's important for them to share their stories as well. So, well said, ladies, we support you as to, you know, male, stale and pale males. You know it's important that they get their voice heard in terms of part of that story. So thank you, ladies, for your wonderful contribution.
Speaker 1:Well said. Thank you, ladies. Thank you for reaching back out to me when we wanted to include that on our show, which is really exciting. Hey, ben, we've got a more webinar coming up and it's the best tools for the job. Ben, is the title when what to use when? So tell us a bit more.
Speaker 3:Yeah, so I'm really excited about this. Even though I'm sort of talking through my nose, I can tell I'm pretty nasal. I'm just on the backside of COVID, but anyway, we're going to push through. But, in terms of the webinar, it really is best tools for the job. So we're starting to release a lot of functionality, a lot of tools. There's a lot of data, and now we're starting to release an enormous number of insights. And we've got so much more work to do in terms of how we build the platform out.
Speaker 3:But we're just starting to give you the feedback in terms of, okay, well, what tools do I use? What are the best tools for the job? And so we're just going to work through a couple of case study examples in this webinar where we show you okay, this is perfect to use MoneySmartz, this is perfect to use WellSpeed, wellcop, this is perfect to look at your my Financial Cards and the insights in behind that. So you'll start to see where you can really get some of that value in terms of the practical applications and then, ultimately, the insights which, in the hopeful, will give you the ability to then instigate actions to achieve your goals as part of your overall plan and your journey. So, yeah, it's going to be a lot of fun. We're looking forward to that. So on the 19th of March, 7.30, australian Eastern Daylight Savings Time. So please join us for that particular event, and the registration link is in the show description.
Speaker 1:It is in the show description, but for those people who want to know what the link is, ben, it's pretty easy. It's just thepublicarecomau forward slash. More webinar, perfect, more webinar. So how do you spell more been? Well, I'm glad you asked M, double O, double R and then webinar. Hopefully I don't have to spell out webinar, but put them all together been, make it one word, all lowercase at the end of the property cashcomau, and you can check there. Folks, we're gonna Ben's gonna bring the product team in as well, so you get to ask a lot of questions from the people that are at the cold face as well, so that you can see how this wonderful tool can add Incredible value to the way that you manage your money. With the one number one goal been, trap, trap surplus, because you've got a system underlying your money management that allows you to spend less Then you're not more than you're in trap that surplus and put it to work. So check that out, folks. It's a river.
Speaker 1:Hey, my mindset minute thing today is I'm reading the latest edition of poor Charlie's almanac at the moment. Ben, the original edition was published back in 2005, but there's been an update with another talk, but it's a collection of Charlie Munger speeches, talks and essays Compiled by the author, peter D Kaufman. Right? So some people are saying some incredible things about this book. To timeless class classic Warren Buffett said this book is something of a publishing miracle never advertised yet year after year selling many thousands of copies from the internet site. Someone else has said this book is the best way to learn from Munger. And then the last person said Charlie Munger's insights are timeless. Right, so, pretty, pretty high praise for this book, and I must admit I'm I'm flicking through it and I'm pretty glued To the to the feedback. But here's a couple of bits of gold I've picked up so far.
Speaker 1:Ben and I want us to sort of riff a little bit on these bullet points. But the first one is the money. This is straight from Charlie. The money is not made in the buy, it's not made in the sell, it's made in the weight. Ha, isn't that interesting? And isn't it interesting because a lot of people say you don't make your money when you sell, you make your money when you buy. Well, he's actually been contrarian on that, saying well, stop focusing on entry and exit and just focus on how long you're actually in the game. Then not a bad little piece of wisdom there. Yeah, I mean both.
Speaker 3:It's funny you should say that, bryce. Over summer I also read Charlie Munger by Tren Griffin, so obviously with his passing it got me, inspired me, to sort of grab one of his books again. I've written plenty of books with Warren Buffett but I hadn't actually picked up a lot of Charlie Munger books. But you know that Warren basically says you know, he was the smarts and I was the front man, so obviously you're always trying to listen to that. But back to your point that you're trying to make here.
Speaker 3:It is about, you know, like in the, in the essays that they write, and and Warren Buffett essays, and we buy good businesses that are Fair prices, right that, and then just wait. Do you know what I mean? I think that that is the point. So you know, voting machines, weighing machines, we've talked about that sort of concept before. But this is this is basically saying when good businesses represent fair value, we'll buy them and then we'll just hold them and we'll keep holding them for the long term. And I think that's a really nice way in which he's explained that in that particular caption. And why have I picked up on this point, folks?
Speaker 1:It's because Ben and I believed that the money is also made in the weight. It's a decades game. We spent a fair bit of the particular the last hundred episodes talking a lot to that point. The next one, ben the hard part about the plan is sticking to the plan and I must admit that's become Incredibly apparent to you and I in the unique position that we occupy, because we are overseeing hundreds and hundreds of plans over the years being done and it's interesting to see where people, you know, derail.
Speaker 1:It's not the hard part is actually the action which we talked about. But it's once they've taken the action, it's whether or not they can stick to the plan which becomes part of it. And quite often Someone will say something to us like oh, I made this. They might even say on the summer series to has been. I made this decision. I'm my advisor won't be happy to hear that. So I will know the advisors happy to hear.
Speaker 1:And if it's part of the plan or if we've actually made it part of the plan, it's whether or not sticking to the plan if you've made a little 3% deviation versus 180. That's the real challenging part. But he said that the hard part about the plan is stick to the plan. And he goes a mediocre plan that you stick to Is better than the perfect plan that you never start. So that's the procrastination versus perfectionist angles as well. And the last thing on this particular point is the stick to it muscle is the one that you have to flex, the stick to it muscle. So you can see those last three bullet points were all in a similar thing You've got to stick to the plan, you've got to stick to one that's mediocre is better than not ever starting. And the last one is that's the muscle that you need to flex. So waiting and sticking Ben is two bullets that I wanted to highlight today. Yeah, I think you're right, I mean.
Speaker 3:I think what we've done over four and a half thousand plans now for our clients across Australia, and it's true I mean ultimately they are long term plans right, and you and I both know that our best laid plans can sometimes be deviated by whatever it is Health issues or interruptions and so forth. So really it's about what you're willing to trade off and the judgment calls that you're willing to make as part of that sequential decision that you're doing. So if you've got, if you set a plan and it's got a really nice level of goals, you know, number of kids you're going to have, the lifestyle you're going to try and achieve, the schooling you give them, the experiences you're going to have as a family or travelling, all those things and the wealth is part of providing for that. So if you, if you go slightly off plan that's, that's sort of okay. I mean, ultimately that's a trade off you're making.
Speaker 3:But I think you know what Charlie is is sort of saying is, if you do your best to try and stick to it and you go through that struggle and that sacrifice and the delayed gratification as part of that, tell you what it's a pretty good look on the other side of the fence once you get there and you know, I know I can talk to that story right, I mean nothing over the 25 years, 30 years that I've been investing has had in the early stages was easy.
Speaker 3:There was sacrifice and compromise. I had my mates gone overseas for a year or two and you're hearing all these amazing stories and I'm sitting back thinking, oh Jesus, you know what have I done? Well, I did buy a house that set me up pretty well at 23 and then ultimately, you know now I'm sitting on the other side of that with, with basically work as a choice, not not as a need. So I think that just sort of gives you some idea of the transformation and the and the best and the benefit that can happen from the power of compound and the spat, the power sticking to a plan over the long term.
Speaker 1:Yeah, and folks, I'm thinking about doing something is there's no action in that? You might spend hours and hours thinking about whether you're going to get a plan or buy and invest and probably your buy, share or buy, whatever your asset of choice is, but thinking doesn't count. It doesn't, it doesn't count. There's no action in the thinking. You've actually got to just get in the game. We've already used his invert, always invert been. In the previous episode we did it. So 480 where you can file a retire.
Speaker 1:So chances are I'm going to keep reporting on these nuggets as I go through the book, then as I look to improve the database of mental models that I feel to my life decisions through, because that was the very thing that the Charlie Munger did. If I can, if I can draw from as far ranging topics as I can and distill what I get into frameworks or mental models that when stuff comes to me, I can distill the decisions through those mental models. I really love that. So I'm just a poof, I drop in the ocean on the mental models, that being that man's head. But I aspire to have as many mental models as I can in my head for for me to make our decisions through.
Speaker 3:I think that's a beautiful challenge that you're setting for yourself, bryson, and holding yourself to account on that is going to only mean better things for you and your family in terms of the way in which you conduct your life and set about your life. And I think one of the things that I've sort of started noticing in my fifth decade on the planet is that I am starting to think more in longer term windows than shorter term windows, and if you had to say to that my 25 year self, I was probably thinking in five year brackets. Now I'm starting to think in 10, 20 year brackets, and I think that's part of Warren and Charlie's secret is that they really did start to think in those types of mindsets. And does remind me of Jeff Bezos I've been also recently listening to a couple of reading a bit about his stuff, and you know the premises of Amazon in simple terms is, when he thinks in really long terms, he's saying to himself first consumers ever going to not want the cheapest product? Are they never not going to want a huge amount of variety, and are they never not going to want it delivered quickly to them? I mean, so they're the three things that Amazon have done incredibly well and you know they have been a bedrock of all the decisions that they've made around how they've built out a successful business.
Speaker 3:And I think you know we can learn from those types of things in our own lives in terms of, and then when we think about investing in property, it's like so I'm really starting to think about and looking at data over the decades and the you know the 20s and 30 year blocks and starting to analyze those and seeing if they can detect any patterns in those types of things. And you know we've done a bit of that work in episode 418 when we were talking about sustained growth. Where does that come from? And so you know that's that's another benefit of reading Warren and Charlie's work in is that they really did, very early on, think super long term, and you know the Snickers story is a good example of that. At the chocolate bar that is still the number one selling chocolate bar. I mean, it's that type of genius. And Coca Cola and all the investments that they've made in terms of people are not going to stop drinking soft drink because it's tastes good. Well, you know there's some really clever stuff in that role.
Speaker 1:Well, if you want to, if you want to invest like Charlie and Warren, you could just go do a Charlie and Warren did and that was distilled decisions through mental models, ben and they and they had a time horizon that was significantly large than what most people do, and we've said that before that the the biggest success clue that we get, now that we've done this for many years, is the time horizon. Speak that we hear coming out of a person's mouth is directly proportional to the likelihood of success. So someone's getting a plan and they use the terminology of decades. They are more than likely going to be successful than someone who's using years as a terminology. And, ben, I don't want to. I don't want to leave this conversation on a down note. You said as you enter your fifth decade, are you entering your sixth decade now?
Speaker 3:I'm in my fifth decade.
Speaker 1:Zero to 10, 10 to 22, 20 to 30, 30 to 40, 40 to 50.
Speaker 3:You're now in your sixth. Oh sorry, yeah, I'm in the 21st century, not the 20th century. Yeah, right, yeah.
Speaker 1:So the sobering part about that, mate, is, if I reflect on that, I'm in my fifth decade, which isn't, which isn't amazing, so that's my son.
Speaker 1:My son. First thing he says to me Ben I don't know if I'm talking to this first thing he says to me on New Year's Day this year which was only what? 65, 66 days ago he goes I'll have you new dad, you're going to be 50 next year. So I've just gone from being 48 on New Year's Day to the next day on New Year's Day. He goes you're gonna be 50 next year, which was actually technically true. But he didn't need to do that on New Year's Day, did he?
Speaker 3:No, that's a bit rough. Anyway, no, I'm in my sixth decade. I just I never really counted that first 10 years I really, you know I was, you know wasn't really working out.
Speaker 1:It was preseason.
Speaker 3:Yeah, exactly.
Speaker 1:All right, folks, today is Q&A day. We are going to hear from the people of the property couch, which is wonderful. We get to hear your voices. They are speak pipe questions. I want to encourage you to go to our website, the property catcomau. There's a little button. Press the button and leave your questions, because I really prioritize anyone who's asked us a question by a speak pipe Ben, because it's such a great way to become part of our podcast. The first one is from Jeremy. Jeremy has a question regarding investment in Brisbane for the 2032 Olympic spend. Let's have a little listen to Jeremy's question now.
Speaker 9:Hey, bryson, ben, this is Jeremy from Brisbane. I've been listening to you guys now for approximately five months after I discovered your book. I'm up to episode 95 today, plus the one a week that you release. With this level of immersion, I think I'm actually hearing you guys talk in my dreams. I think I've finally got past the foreign language sign-offs too, which is a big step. I really appreciate what you guys are offering with your knowledge and insight based on your experiences and expertise. It's really helping me personally to make better choices in regards to where I'm going with my investments. Anyway, the question is what do you think about investing in the areas that are being upgraded for the upcoming Olympics in Brisbane? Do you think they will be good up until then and then crash or at least decline, or do you believe that the infrastructure in the area will then support the growth for years to come? Thanks, boys, appreciate your help and keep up good work.
Speaker 1:There you go, Ben Good question.
Speaker 3:It's a great question and I think what you're going to see is that, like anywhere where there's a major event going on and I remember Expo in Brisbane many, many decades ago, obviously, the Sydney Olympics, all of those other things where there's a lot of talk and hype and positive sentiment around that there's no doubt that there's going to be people talking a big game about what that means for Brisbane. In theory, what we are talking about here is yeah, I mean from a property perspective, and we start thinking about that in years and decades what Brisbane and Southeast Queensland is going to benefit from is the infrastructure that goes into place and it's that infrastructure that's going to sustain some of the value that's created. So the hyper phase, that early excitement phase where people I don't know, don't care who it is with buyers, agents or property spruces or whoever are going to talk up that particular market. I'm not so sure about the short term benefits, other than if you convince enough people from a sentiment point of view to jump in, it might have a little bit of a spike on the property prices. But historically speaking, it's going to be judged in terms of the longer term.
Speaker 3:And I say I think Jeremy's making the right question, asking the right question there about what do I think about a long term? Well, yeah, basically, brisbane is going to be beamed out to the world as this very livable city. It's going to beam out the Gold Coast, it's going to beamed out the sunny coast, so we're going to have that surf, that lifestyle, that freedom, all of those things that come with that. But we also just don't let anyone come and set up camp in Australia. You've got to go through a visa process, you've got to you know. So that foreign investment that we're talking about, but if it also convinces, you know, new migrants to come in and start their life in Queensland and build population growth and all of those other things, and then you get an increased economic output and economic productivity, then ultimately, from that point of view, that's where you're going to get that sustained growth.
Speaker 3:And to give you some context in terms of the production that we see out of Queensland, I was just doing this research recently for a talk that I'm doing a 19% basically.
Speaker 3:So Queensland contributes 19% of our gross production in terms of economic activity Now, in contrast to the biggest economic center in New South Wales, which contributes around 31% and Victoria is around 22%. So when you start thinking about it like that, the difference with Queensland is it's right out a long way, whereas the concentration pretty much in Victoria is Melbourne and then the concentration in New South Wales is pretty much Sydney, as an example. So I've started off the conversation, but in reality it's their lasting infrastructure, bypass roads, convenience of movement not so much Validrone's and or sporting centers per se, because they have some niche aspects to them, especially, say, you know, a Validrone which is a cycling track. Not everyone's into cycling or track racing, so maybe not for that type of infrastructure, but certainly for the public infrastructure, the stadiums themselves, for other events and tourism and all of those other things that come into play. That's the way in which I look at it.
Speaker 1:Yeah, because I think there's some legacy effects that Brisbane will enjoy. Obviously, the infrastructure you just talked about, they'll have an enhanced international reputation. So it's you know, you get launched onto the global stage, which means that I think that the the long held sentiment that Brisbane is a big country town that'll be that'll be officially buried from that and it's already signed with that happening anyway. But you know, the tourism will be great, potentially increased business opportunities. But what's what's interesting about the Brisbane Olympics is it's not just Brisbane, as you pointed out, it's going to go from the sunny coast right through to the border on the Gold Coast. So there's. So they'll spread that. And some of the events are also being Sydney and will also be in Melbourne. They're going to use a couple of stadiums for that as well. So spread across the country as well. And then there's also been an investment in the Gold Coast for the Commonwealth Games. So in terms of the infrastructure specifically for the games, yes, there will be some, but it's not, like you know, some of the other cities in the world that have had lots of infrastructure being brought forward in a small, concentrated period of time. So I think it's.
Speaker 1:I think it's good for for Brisbane for a lot of reasons, but I don't necessarily think that you'd want to have that as the reason for investing in property, because, whilst you will have those upgrades to transport and services and many, they will have a positive flow on effect to house prices, no doubt.
Speaker 1:But but the performance is still linked to the national economy, what we credit and monetary policy is at the time we'll still be talking about the housing supply, what's happening politically and is that stable? And then, of course, what are the localized economic conditions in the areas that this particular person, in this case Jeremy, is saying well, is it is these, these areas that are up and coming. Should we be focused on those suburbs? I, my conclusion is that you definitely you wouldn't want to be focusing on those suburbs because of the Olympics. I wouldn't be relying on the Olympics for house growth. I just enjoy the games, for they are and what they will do for your city in terms of the buzz and the energy and excitement around that time. But then we can actually talk to some precedent here in terms of there's there's some positive cities who have received positive post Olympics, being Barcelona and Sydney, but there's a couple that you might want to talk to, that receive some negative impacts post Olympics as well.
Speaker 3:Yeah, happy to chat to this. I mean, what a lot of people don't realize is there was no other actually competing city when Brisbane won, like there was actually no competition. No other city submitted for that particular set of games. And that's because a couple of examples where we've had some significant failures in terms of the economic benefit, so that Greece in terms of Athens, the 2004 Olympics, and also Rio de Janeiro in terms of 2016, when you start to think about the infrastructure costs like Rio de Janeiro, brazil that's that was about 13 billion. Then you had 9 billion euro for Greece in 2004.
Speaker 3:Now, these days, with security risk, the terrorism threats, all of those other things are just escalates. You know the amount of cost that goes into that and that's very hard to recover economically. And so what we've seen in in the poor examples is that the economic benefit you know that flywheel that we talk about just didn't arrive. And then, because we're carrying this enormous amount of debt from the legacy of those two games, those cities then struggle, they go into austerity measures. They can't pay back the debt. The infrastructure that they've built is, they're not maintained at the level that needs to do. So. You've got to be thinking about all those aspects and that's that's where you see those failures. And then you look at Sydney and Barcelona, which were, you know, incredibly positive. I mean Barcelona used as a, as a relaunching pad to reconsider coming visit Barcelona, and now they have millions of tourists coming in and you know they're the types of best economic dollars because, effectively, a tourism dollar that comes in you've done no product, there's been no cost or output to actually bring in that dollar. That output was done in the country of origin and they're coming and spending that money straight into your economy and so that's left Barcelona as being really an international city. Now they also benefit from proximity. So, whereas Australia we're a long haul destination and in terms of a lot of people from overseas, they only get two weeks of annual holiday a year unless they're retired. So in a lot of countries there's not a lot of, you know, sort of buckets of leave. We're very blessed to have four weeks annual leave. Germany, I think, is around the same, but a lot of other countries really don't have that much annual leave. Only in the US, I think, they have 10 days in addition to their, you know, sort of public holidays that they have as well. So getting people to come down to Australia is great from an economic point of view because it just basically brings in all this lovely GDP that we see.
Speaker 3:But it comes back to what we were just talking about. It's the infrastructure that's left behind. We saw Barcelona had great railway systems. If we look at Sydney as an example, you know a stadium Australia was a purpose built stadium. The whole infrastructure out there was purpose built. The train line that went out there.
Speaker 3:And if you look at, you know Taylor Swift's recent concert there, the way they move those 90,000, 80,000 people excuse me quickly through that train system. It was a work of art in terms of that people movement. There's some videos that went around in terms of how you move crowds quickly and the way in which they, you know, put people on the platforms and move them in and the platforms just kept coming through. I mean that's the sort of infrastructure you want and then when you build that, you do get concerts like Taylor Swift and that's why you know she only did Melbourne and Sydney right, because of the big centers that draw the people out of those other centers to make it economically viable to do multiple shows in that and that's a boon for the local economy. It's a boon for tax revenues into that state coffers in terms of accommodation, all of those other things where they also get revenue. So that just gives you the idea of the economic flywheel that's attached to these types of events.
Speaker 3:But to the point being is it's not. It's not the World Cup of Soccer, which really does get a significant amount of people. Most people who come over from overseas are watching their family members compete at the Olympics, not so much. You know, the whole team that they support as part of that story. So it's an interesting one. It's going to be written up about in the media constantly in terms of that and there's going to be some people who are going to basically try and leverage from that to get them to come and buy in that. But really we're going to judge this over the decades and that is what's going to be the economic production that's left behind and that's ultimately going to keep pushing prices higher. So even if you get a little spike, if you don't have that economic output over the longer term you're going to have a flat property market.
Speaker 1:And if you think about the demand side, to Ben, the you talked, you touched on it already, but the ability for these people overseas to be able to buy these properties is limited. They've got to get foreign investment review board qualification. It's for most I have to buy a brand new. So it's more about looking through the filter of just just standard demand with the supply conditions and there will be. There will be a window of time when the Olympics are in that town where people can get short term opportunities to charge higher rents for short term stays and short term accommodations. So there will be some opportunities for windfall for a very short period of time.
Speaker 1:But through the lens or the, to quote Charlie Munger, ben, through the mental model that we overlay for property investment decisions, it's a decades game, not a the big shows coming to town for five minutes game. So largely our, our recommendation here to your question, jeremy, is largely around think more about the economy, the monetary policy, the housing supply, the political stability and the localised economic conditions for a decade, not for a short period of time, and just enjoy the games as they come to town and look. I think the, the international exposure is good and I think the, the, the number of people who want to come to this country and they get a ticket to be able to land here. It may channel a few more up to Brisbane than ordinarily wouldn't be without the exposure and I think that'll have a positive impact on values if supply remains the same. But hopefully that's given you a bit of a context there for you to consider, jeremy, for what was a good question and one that's on a lot of people's minds then yeah, very much so, very much so.
Speaker 1:Okay. Next question is from Bronwyn. She has got a question regarding land to asset ratio. Let's have a quick. Let's have a little listen to Bronwyn's question now.
Speaker 2:Hi Ben and Bryce. My name's Bronwyn and I just wanted to ask a general question in regards to land values. We talk about land asset ratios when purchasing property. I do have a property, and this doesn't need to be generally specific to that property, but the council valuations or government valuations on the land are far lower than what land is being sold for in the area. So I just wanted to understand, when you're looking at land to asset ratios, which land value are we actually utilizing to get our percentages?
Speaker 1:Hey, ben, this is a good one because I think this is on a lot of people's minds too, because, if you, you know, we espouse that the percentage of the purchase price that you pay for any property that you buy ideally has a component of 60% or better for the land to the overall value of the purchase price that you're paying, but at a headline level. That's a great concept. But this is a really good question that we've got here from Bronwyn how do I actually land that plane?
Speaker 3:What does that actually mean tactically when I'm trying to work it out, yeah, so there's a technical analysis that goes on as part of this particular story, and so there's a couple of ways in which you want to be looking at that. One is, yep, you can start with a rates notice where you've got land value, and then in the improvement on top of that land and that's, you know, to Bronwyn's point. That's basically telling us that actually it's a bit under, and that's usually because valuations are done on a two or three year cycle in most municipalities and that's basically why they have that lag effect. But if I can explain it to you in terms of how you attempt to do an estimate because that's all that they are, the same way in which value a general user methodology to estimate what land values are, the best way to do it is this Just imagine yourself going into a suburb and starting to look at lots of different properties and then starting to think about them technically in terms of their value breakdown and their value breakdown is land and then ultimately in the improvements on that land. So if you know the square meterage of the land and then you ultimately know what the ultimate selling price was, and you know the square meterage of the property on top of that land.
Speaker 3:Well, guess what? You can actually start doing some simple analysis and you can start to say, well, okay, well, what's the replacement value of the improvements, ie the property that was on there? So let's say you've got a 300 square meter house that was on that land and you know roughly that that 300 square meter house to build today replacement value is maybe 9,000 per square meter, as an example. So you can then work out hypothetically what's not. That's 270,000, if I've got my math correct. Correct, if that's right. Have I got my math correct? I'm just trying to think quickly. I've still got brain fog from COVID. So if that's 300 square meters, 9,000, that's about 270,000, right? So it's 270,000 is the replacement value of that. So you just subtract that off the ultimate value of what the property sold for and then you'll get a rough idea of the land and then you can start to calculate the land to asset ratio as part of that particular story. That's one way in which we would technically assess that land value.
Speaker 3:Now what you've got to understand is there's different costs for different types of builds. So there's high end build, there's medium builds and then there's low budget builds. So once you work out those rough costs for replacement value. It's then a lot easier to work that out. Now it's really easy. It's really easy if you're going out into new estate areas because you can drive around and see the vacant lots and they're detecting and telling you pretty quickly what the land is worth. And then ultimately you go and see the new builders and they say, okay, we're going to drop a building on that worth X. And then you're going to work that out and we've always talked about a really nice rule of thumb in getting the balance right is 60% in the land, 40% in the improvements, if we're talking about a single free standing dwelling price.
Speaker 1:Yeah. So, bronwyn, I think the biggest hack that you can do is the older the property, the more likely that the land to asset ratio is in the favor that you're after. So think about if you have an apartment that's in a 1970s block and that apartment has one of you're one of 18 in the block versus and you're paying I don't know. Let's just put 700,000 on it, because if you go and spend 700,000 on a new apartment but that new apartment is one of 300 properties instead of one of 18. You can see that the percentage of the 700 that goes towards the actual improvement on top of the land would be higher than the 1970s one, because a lot of that replacement value is been depreciated and because you're in better usually in better locations, the land values increase. So the hack here is the longer the property has been on the land so think 30 plus years the more likely the ratio is going to be in the favor that you want.
Speaker 1:Because what Ben was saying before is you could do it by the council rates, but ideally you want to do it through market value and having a bit of an understanding around what land is selling in the area.
Speaker 1:And to Ben's point, it's not that easy. And again, if you go out to the subdivisions and you see the price per square meter, the blocks are getting smaller so that people can still get into their budget with the house they want on it right. So they're spending a lot for the house and little for the land and obviously, over time, the hope that that density up and that will improve the land value over time. But I think the important part here is if it gets a bit overwhelming or it gets a bit confusing, because there is some technical stuff you can do. You can put some calculations in, as Ben said, and find out the square meter for the land and the square meter for the new build and then you plug those formulas in and then you'll get a calculation that spits out.
Speaker 1:But the hack here is and it's what we've been talking about for a long time established properties number one criteria, and the longer that the property has been in existence as an established property, the higher likelihood you are to be getting the land to asset value ratio in your favour. Which is why one of the reasons why we have the view that brand new kind of outperform established because, pound for pound, you're paying too much for the building versus paying too much for the land, and that's the important part here. So, ben, there's a fair bit we covered there.
Speaker 3:Yeah, beautifully said that last bit in terms of that's why you can never outperform old. I think we'll do some more work on that over time. Hey, for those people watching the video, we'll put it still up right now where there's a breakdown in terms of how those calculations work. I did get my calculation incorrect in the sense that I said 9000 for the square meter build. That's 9000 per square, so you actually need to break that down. Let's say that's 900, which is 270,000. Otherwise, I was talking about a $2.7 million build, which threw my numbers out.
Speaker 3:So apologies for that, but if you're looking at the screen, so watch our YouTube show. If this is something that's really interesting for you from a technical point of view, we've got a still there that will basically show you, and I've broken down all of the conventions, and so if you want to be a technical, you want to do some really technical analysis. This is basically how you go about doing that, and so what we've talked about there is the market value, assessment of the technical value and the inputs that are needed, and then ultimately how those calculations then work themselves out. So it's all in that still. So if you're watching this on video, you'll see that's very difficult, obviously for audio videos, but gives you a good reason to go and check out the YouTube.
Speaker 1:Good chance to subscribe to the YouTube channel then, yeah, good chance to subscribe to the YouTube channel.
Speaker 3:So play along with that, but that's how you do it. So, bronwyn, it is all very sort of you can't just do it on one. It's another little bit of advice. You want to basically build up a series of examples in a location and that's going to get you roughly to where it needs to be. Now each property is going to be different.
Speaker 3:To Bryce's point about the age of the dwelling. So the older the dwelling, the less value it's going to have in the improvements and the more of that is going to flow through into the land. And that's why always, older properties are pretty good from a land to asset ratio point of view, as everyone builds new around you. You sit on the really old property there and you're going to get an outperform result because ultimately your value is going to increase by all of this extra work that's going on and this beautification that's going on in your street and your neighborhood. And you're sitting with this old, beautiful, little, reliable and durable you might even call an ugly duckling that's sitting there and the land value is going up beautifully and you're getting a great return. And as long as it's safe and comfortable for your tenant to be in that you just keep sitting on that and then one day you might turn it into a duplex and turn Apple into Apple Pie.
Speaker 3:So that just gives you some idea of where you know I'm really using my advisor hat now in terms of how we might talk to our staff and our clients in terms of educating them on that particular process.
Speaker 3:But that's it, that's how you do it. Start to build up a log of area properties in those areas and finally, I know I'm rambling a bit here, but talk to a local real estate agent. They will know roughly what the per square meter of land and roughly the per square meter of builds in that, if they're worth their salt, you know if they're really experienced and they know their market. They really, in some cases I've even seen the really elite agents know per street basically what people pay per per square meter of land and that's the technical assessment they do and they've just been doing it long enough to know that those. You know that those land values move over time and they adjust that you know they're quoting as as you talk to them. So as you build rapport with those agents, they might start to give you a little bit of their technical knowledge, and now as well.
Speaker 1:So let's summarize this, ben. So I've got a friend around the corner who, who's not interested in investing in property at all, just wants to pay off the mortgage and that is it. And he says to me Bryce, I'm not, I'm not even in the slightest bit interested in valuations increasing. It's just not my thing, cause all that means to me is the value of my land goes up and I've got to pay more rates. I'm happy for the value of my property to stay neutral, not go anywhere, right? So that's council valuation One side.
Speaker 1:That's how they create the amount of contribution that you make for rates. That's one side. The other side is genuine exchange between a willing buyer and a willing seller, which is the market value. So if you're trying to work this out, ideally you would use it through market value. The hack that we talked about is, the longer the property has been in existence, the more likely you are going to get closer to the land to asset value ratio that you're after. And thirdly then, for for us, the idea of buying something that has more land is clearly the preference over something that more land value is something that has preference and less, which is why we've said go for established as a fundamental flat rule over brand new, because we can.
Speaker 1:We can mathematically prove that brand new cannot beat established just because of the proportion that is, that is allotted to the land versus the improvement on the dwelling. So good question, Bronwyn. Hopefully that discussion has helped you with that. To Ben's point, I'm going to check it on the YouTube channel if you want to see that screenshots. Really helpful, All right. Next question Ben is from Michael and his his question slash statement is around the challenges in addressing the accommodation crisis. Let's have a little listen to Michael now.
Speaker 10:Hi Bryson Ben. My name is Michael. I'm interested in your thoughts on the accommodation crisis gripping our country at the moment. We have record levels of immigration, while we are recording all time low levels in building approvals and building completions. Builders are going bankrupt every day and leaving the industry. We have a school shortage with a lack of tradespeople available to do the work. Material costs keep rising faster than inflation. There's a shortage of land to develop. Increase in interest rates are severely limited the amount borrowers can obtain from the banks and APRA are still insisting banks apply a 3% test on the interest rates charge.
Speaker 10:The only solution government seems to be able to come up with is to is to subsidize build to rent with land tax concessions and massive investment in public housing. But there are not enough trades to build these dwellings. At the same time, the government punishes property investors with higher taxes, increased compliance costs, expectations of ever increasing standards of accommodation provision and taxes on short-term accommodation. This private sector provides 97% of rental accommodation, yet I can't think of one incentive that has been provided to motivate them to build more. 40% of the build cost goes to three levels of government. I feel this needs to be reduced. I would like to see the removal of stamp duty for purchases buying off the plan in order to feed the pipeline for greater supply. This would provide developers the necessary pre-purchases required to obtain construction funding. The development sector has been in decline ever since stamp duty concessions for off the plan purchases was removed several years ago. I'm interested in your thoughts on this proposal and whether you have any other ideas. Thank you.
Speaker 1:Well, Ben, I think that's a pretty good summary of the state of play. It's a wonderful summary.
Speaker 3:It is, and let's quickly just spend a minute. How did we get here? So we've got builders going broke on the back of fixed building price contracts that they would have signed up customers on pre-GFC, and then we saw a supply shock, which meant chronic inflation in terms of the input costs of helping build those houses. So, effectively, the builders were building houses, they were making no money on paying subbies that were charging higher rates which they couldn't cover and ultimately, a lot of those builders just said I'm just going to tap out there's no use in me building at a loss. And in a lot of cases, if they've also a larger builder and they had borrowings that were floating their business with their overdrafts, those builders went broke or went into liquidation. So that then has a flow on effect in terms of OK, the reason why we're not building yet we have immigration coming in which, basically, is putting kindling on the fire.
Speaker 3:And the reason why we did that is because you've got a government who knows that through higher interest rates, which forces an economy to slow, and they want to have economic credentials. They don't want to be running an economy that's in recession, because they want to stay in power. So how do you stimulate the economy? You bring you immigration in and that means there's greater spending. So you avoid a technical recession. But you have a per capita GDP recession. So in terms of the benefit to each capital, per every individual in the population, it's actually going backwards. So we are in a recession from a per capita point of view, but we're just not generally. Now their argument is and to Michael's point is we need these tradies to come in to help build the houses. So we're just going through and this is why it's important to think in decades and we're going through a period of three to five years where there's going to be a really significant under supply and with that under supply there's going to be pressure on price. There's going to be pressure on construction goods, there's going to be pressure on labor because there's competition for labor. So the RBA is pulling the brakes on and that's going to cause a little bit of higher unemployment and that's going to slow the economy down and investment down. So all of a sudden, the builders who are still surviving won't be able to quote exorbitant prices. The whole thing will then eventually sort itself out as supply and demand works its way through, but in the interim.
Speaker 3:Then you've got stupid governments who are sometimes at the state level, who have also borrowed too much money, are then starting to disincentivise the mum and dad investor, to Michael's point, who provides 90% to 7% of the private rental accommodation. Basically, there's nothing in there for them Now. They're willing and able to deliver tens of billions of dollars of investment, but you're not incentivising them. What you are saying is well, we'll incentivise the big end of town, the superannuation funds and the big corporations to do build terrain and we'll give them the tax concessions. We'll waive their land tax whilst we slug higher land taxes in Victoria as an example on to current people because we've got to pay off all this debt that we racked up during COVID. So that is a recipe for short-term disaster.
Speaker 3:And what people understand is, if you start thinking in decades and multiple decades, you know that this too shall pass. But for this time and once the government then realise, actually we've made a stupid mistake here, some of that incentive has to come back in, because if they think that they're going to be able to, the governments are going to be able to find money to build more of this public and social housing, they're kidding themselves. And if they think that big business is going to come in with the level of 40% of cost to build goes in taxes and charges. They're telling us that it's not that easy to make money out of doing build to rent. So these big businesses are telling government you need to give us some concessions and waivers.
Speaker 3:But the mum and dad invested the private small business rental accommodation provider. We're ready to go. Just reduce the 3% buffer rate from APRA and just give us a level playing field and we will stimulate construction, which is what we're doing in Western Australia. We're coming into Western Australia and we're doing a lot of buying over there because the conditions are good for investors over in Western Australia at the moment. They're not good in other parts of Australia. In the short term I've got to stress that in the short term and so you will see, the levers will get changed and new governments will come in and realise the errors of the past governments and we'll see those changes. But this has just got to work its way through the system. But we as active participants in the marketplace who want to contribute to adding to supply, if governments don't listen to us and then ultimately they're going to make the problem worse instead of better.
Speaker 1:Yeah, I think the point that he makes there. I can't think of one incentive. I think that's important because there's been disincentives happening for over a decade and I think that I think and you're going to talk to this point in your what's making property news but the perception that a property investor is a greedy fat cat property investor is it's just becoming a bit nauseating now and it's because the typically you got the big end. So if you think about who's in the game, you got the big end of town. To Michael's point that are getting incentives for Bill Durant, that's one the more likely to be the stereotypical investor that people in the media want to portray. That's usually in the commercial sector. That's usually people who've got a lot more money, a lot more sophistication, a lot more experience, a lot more runs on the board. That's more likely to be in that sector. And then you've got the sector that we represent and that you and I have been engaged in for 25 plus years. And then you talk to those people and they are copying expenses that are much higher than the increase in the rents that they're having, and a lot of them are actually having lots of mental discussions around is this worth it. Should I hang in there? It seems to be disincentive.
Speaker 1:These disincentives are starting to wear us down. Is there still any hope? And if they can't lick their eyes and play the decade game, they fall victim to that. So I think it's happening. But I guess the decision makers who make the decisions don't appear on the surface. I don't know them personally, I haven't had conversation with them. They don't appear on the surface to be skilled in market forces and free markets right. They seem to be skilled in political strategizing and maneuvering and collecting their voter base. I think what helps is we all rally together, we all make sure that no one gets marginalized, but we all come together to say if you've got a housing policy that is out of alignment with an immigration policy and which is out of alignment with the very people who can provide and release some of the pressure immediately to your point around, we're ready to go. When you keep getting those things out of alignment, you are going to continue to get people like Michael writing and going. I'll pull my hair out here. This doesn't make sense.
Speaker 3:Yeah, I mean, obviously Michael has can see the big play that's going on here. And I think to your point, bryce. I mean let's assume and I think it's a fair assumption that politicians and regulators are trying to do what they think is the best interest right they are. You know there's goodwill in what they're trying to achieve here. I wouldn't have thought that that would be any different, but it's the classic squeakiest wheel gets the oil right, and you know so.
Speaker 3:If what's happening here is that there's lots of noise going on around, you know rental crisis and how difficult is for tenants, and so again, they're thinking that they're doing the right thing by, you know, doing something, and so that's what will happen. That's this short-term noise that will point politicians into short-term solutions rather than long-term strategies, and the free market will ultimately win in terms of how that plays out. If you disincentivise too many people in terms of from a risk-justed return point of view, if you disincentive, they'll take their money elsewhere. They'll take their tens of billions of dollars elsewhere and look at alternative investments. And if you understand that we do need 20 to 25% or maybe even 27% of our dwelling or our accommodation to be rental for the mobility of people for the short-term, longer-term movement, for economic advantage and economic growth. If you understand that, then you wouldn't be doing what the politicians of the day and again. All they see is the emails coming into them, the winging, the writing, the letters coming in in terms of how tough it is out there, and they just want to fix that. They just want to. You know, they basically want a short-term solution for a longer-term problem, and that's what I'm saying. The markets will fix themselves. Necessity is the mother invention. Just get out of our way, stop pulling the brakes on us and let us help fix the problem. But if you keep making it harder for us or if you keep ostracising us and calling us the problem rather than part of the solution, this is what you're going to get. You're going to get difficult headwinds and you're going to get a market that's going to be chronically undersupplied for another five to 10 years, and Australia doesn't need that.
Speaker 3:Australia needs the amount of ample rental accommodation available for mobility and for people to have choice, and the market will determine that. But the more regulation, the more interference you bring into the market, the less that will happen. And a good example of that is minimum standards, the changes to the minimum standards in Victoria has meant that there are literally hundreds of properties that would be suitable for lower socioeconomic people, those people who are challenged in finding affordable accommodation. They're off the market because if you let them out and they're proven to be not up to minimum standards, guess what happens? Basically, you get sued and you get fined, and so no one wants to rent out their property if it's not meeting minimum standards. But they're also not willing to spend potentially the tens of thousands of dollars. Because they have to spend the tens of thousands of dollars and guess what? They have to rack up the rent to justify the investment. So these are the unintended consequences of, again, what you would say are good willed people who think they're doing the right thing, but ultimately it causes these unintended consequences.
Speaker 1:There you go. Thank you, Jeremy, Thank you Bronwyn, Thank you, Michael, for your questions. I just want to encourage you. If you want to contribute to the conversation that we're having here on the Property Couch, go to thepropertycouchcomau. Forward slash. No, don't forward slash anything, just go on the home page. There is a little button. It's called Speak Pipe and you can leave us a message and, as I said, I tend to prioritize the Speak Pipe questions, Ben, just so we can hear different voices and hear from the people who support us and make this property couch podcast what it is today.
Speaker 1:My life hack today is from a listener. Today, ben reached out to me on Instagram lambio5. I acknowledged them during the week to say listen, in this week your life hack is coming, but they've gone high price. Thanks for all the knowledge shared. On the Property Couch podcast, I heard your recent call for help resleep quality. I was gifted an Aura ring O-U-R-A Aura ring a couple of years ago and it provides fantastic insights on sleep and stress metrics.
Speaker 1:Two things that I've found to have the biggest negative impact on sleep duration and quality is one alcohol. Even just one glass two to three hours before bed can impact your sleep. And two working late. Also interesting to learn how much is little as 30 minutes extra sleep at night can positively impact your overall sleep quality and health. So thank you, lambie. I appreciate that. I am definitely trying to improve my own sleep quality, ben, so that's a great hack for people.
Speaker 1:I definitely stopped drinking back in 2016, ben, so I haven't had alcohol at any scale. For what's it now? This is now my eighth year. I haven't been totally dry in that period, but I very rarely have a drink, and that's just because it was having a big impact on my health. So it's good to hear what impact alcohol has, because I don't have any lived experience in the last eight years around what that does. That's good little life hack for folks.
Speaker 1:I reached out to the senior leader in our business too, ben, who also has an aura ring, because I haven't tried it myself. But I'm certainly interested in looking at the WOOP system as well. But I reached out to him and I said give me some feedback on these. He goes, I'm not wearing any more, but they are very good. I stopped after six months when the patents became very clear for me.
Speaker 1:My sleep and energy is way better when I stick to good sleep and hygiene, and that looks like low or no alcohol. This was even more important when exercising during the day and then drinking even small amounts that night, mostly weekends. For him, he adopts the three to one model, which is three hours before sleep, no food, two hours no alcohol and one hour Sorry, I gotta do this again Three hours no food or alcohol, two hours no screens and one hour is no liquid and repeat. So this consists and then a couple of things that he said that those insights became even more clear with the help of multiple alcohol-free periods of four to six weeks over the last two years. So interesting sleep quality, alcohol intake routine, some of those things you do before bed. So I reckon there's some good intel there, from not only Lammy but Jamie, who also helped me with some feedback on that as well.
Speaker 3:So, yeah, I'm loving it. I'm loving it on. Obviously, lammy, and also all of those people who gave us their questions, are gonna get start and build courses. So reach out to us, reach out to us, reach out to us and we'll basically get you all sorted out with our start and build course.
Speaker 1:Oh, Jamie might reach out to us and ask for that too. Then I'll leave that for you to let him down gently, All right. What's making property news?
Speaker 3:Well, bryce, obviously we've been picking up on a theme in terms of the debate around housing affordability and also rental increases, because they will continue with the chronic shortage that we've got, and so I have been sort of being paying attention to one of the most vocal voices in this particular space, which is Max Chandler-Mather, and he's obviously the Greens spokesperson for housing, and the Greens party have just recently authorised a, basically a GIF that sort of tells the story about where property prices were tracking before the capital gains tax exemption that the Howard government introduced in 1990 and where they're tracking today Now, obviously through the power of a chart that they sort of show that it's going off on this tangent into this highest stratosphere and they're blaming the capital gains discount as the reason why property prices have accelerated. But when I looked at it, I thought that's actually that looks a lot like a traditional compounding interest chart over time, and so I thought, well, let's do some research on this, and so that's exactly what I did. I decided to do some research in terms of what Max was promoting, and so I'm going to share with you basically what I found. So, bryce, this is what I found. What I did is I used exactly the same data that was quoted, which is core logic or RP data. I put it into our research platform and I said, all right, let's go back from, effectively, january 2000.
Speaker 3:And let's have a look at the performance of property growth across Australia, median house price growth change over that time. And what did we learn, bryce? That compounding, so the CAGA, which is effectively the annual capital growth return, has been 7.33% for 19 years and one month. So that's as long as the data goes. We got that back to 1980 or up. Okay, so that's the change. Now let's have a look at the screen. If you're watching along on YouTube, let's have a look at what actually happened Then.
Speaker 3:I went from that time forward and so what we did learn in the next 23 years and 10 months so I've got data up until November, because obviously we're talking about a 12 month median change was that the growth rate was only 7.02. So, yes, in a value sense it's obviously gone higher, but that's the power of compound. And so it was really clear that the case that they were trying to make the property prices have been accelerated by the 50% concession in actually factually. True, it's just basically continued on its trajectory and in fact, it's growing slightly slower than what it was between the period of 1980 to 2000. It's actually going slightly slower between 2000 and November of 2023. So this is the sort of misinformation that they're propagating out into the marketplace, that we've got to make sure that we have a voice to share and counter that with the facts, and so that's what I did, and so I thought well, that's a bit of property news out there, so I'll share that with you in terms of that. The other thing that I also wanted to talk about-.
Speaker 1:I mean just on that, we probably should put an invitation out to Max Chandler, my brother, to say that he has full right of reply. More than welcome to come and join us on the property. Catch, we will very much have an opportunity to interview him one on one. So, if anyone, can 100% wants to forward, then we're happy to have the conversation.
Speaker 3:Yeah, we absolutely are, and of course, obviously we discuss and debate on Twitter. He never responds to the fact checks that I do from him, but by all means, please also on there if you want to. And coming back to the point that Bryce was making earlier about you know there is a lot of noise and the squeakiest cog gets the most oil. That's what we're up against. We're up against politicians who are just constantly hearing housing prices, rental crisis, the whole thing. If we don't make any counter noise with information and data that supports the misinformation that's being shared, we actually run the risk of further regulation coming to the market, which is ultimately going to impact the investments that we've made as small business owners and ultimately impact the amount of rent that renters pay. The only way rents are going to go down is if there's more supply. The only way you're going to get more supply is if both small business owners as well as big business inject more supply into the market. It's as simple as that. But if you keep treating us, you know, like greedy property investors, as per your note, you know all you're doing is basically creating a divide between the haves and have nots, and that's not going to be helpful for any free market movement or any economic value that's going to be created, Because, ultimately, the wealth that we create in this country is on the back of gross domestic production, which, off the back of that, is our tax receipts, which, off the back of that, provides for our school, our housing and all the things our social needs as well. So it's really important that you've got to keep growing the economic pie and if they miss that, we're going to be in a difficult situation.
Speaker 3:Which leads to my second what's making property news, and I'll be quick on this one. But the New South Wales government is now debating the no grounds eviction policy that's happening there, and you know to the credit, the very, very heavily government funded tendency associations in New South Wales are all coordinating their efforts to basically hit all the politicians in terms of that, against Quikis God getting the most oil, saying that this is a must, needed change that needs to happen. Yet, and they're quoting evidence from an old report which has now since been debunked in terms of the data we've also supplied for that, and Victoria is the perfect case study. So since the introduction of the 133 changes, of which no grounds evictions was included in that, we've seen vacancy rates in Victoria continue to fall from exactly that moment in time where investors small business owners tapped out of their properties, and we're now seeing that's also supported in the rental bonds data and so the registration of rental bonds. We've seen, since March of 2023 to September of 2020, which the latest data we've got we've seen over 7,500 properties be removed from the rental pool. They're gone. Now people might argue, oh, that's great that new people have bought those homes, but the reality is household composition moves and we see different sort of formations of households all the time. So I would be incredibly worried if I was the government in Victoria in terms of the amount of rental stock that's gonna be made available and that's ultimately gonna lead to higher rents.
Speaker 3:And we've seen what happened in Western Australia. They you know there was evidence-based research that was done that said it would reduce the already diminishing level of rental properties available in Perth and Western Australia and they saw a 21,000 rental property decline over the previous I think it was five years before they made that decision. And now they've made the decision to not introduce no grounds of evictions. And guess what? The investors are arriving and there's new investment stock coming into play in Western Australia and that's only gonna be good for their state in terms of attracting business, attracting East Coast investment from small business owners like us, and ultimately it's gonna bode well for a very, very strong economy that Western Australia government are gonna enjoy over the next few years.
Speaker 3:So just highlighting the challenges, the unintended consequences, even though they may be well-meaning in terms of their intent. This is what happens when you start to play with free markets and those consequences. So there you go, Bryce. Just thought I'd share that in what's making property news. It's big, it's going to continually to be a big political discussion. We saw it in the Dunkley Baye election. Housing and property is one of the top issues, along with cost of living, and so all of those mesh into the one big debate that's gonna occur over the next 12 months before we lead into next year's federal election.
Speaker 1:Thank you. Very, very important updates there from what's making property news and again thank you to Jeremy, bronwyn and Michael for their contribution to today's show. Hopefully there was something in that for everyone been. And, of course, as we go into tomorrow, we're just celebrating the incredible women in our lives as we tip our hats to International Women's Day Until next week knowledge is empowering Bryce, 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, one through 20, our foundational principles, pillars and frameworks that you need to know for 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.
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