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611 | Mid-Year Property Outlook 2026

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Australia’s property market has turned, but how far could prices fall? 📉 

In one of our most anticipated episodes of the year, Bryce Holdaway is BACK on the couch with Ben for our 2026 Mid-Year Property Market Outlook! 

Together, they unpack what’s changed since February, where the data is pointing now and what could happen next. 

🏠 Which markets are holding up — and which are starting to crack? 
📉 Could some markets fall 10–15% — or even further? 
⚠️ Which regional areas face the greatest risk? 
👀 What could turn sentiment and the market around? 
💰 Could this correction actually create a rare buying opportunity? 

From falling buyer sentiment and slowing lending to rising listings, changing government policy and higher-for-longer interest rates, Ben and Bryce go around the grounds to reveal what’s really happening across Australia. 

Find out now!  

 

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🧰 Tuesday Toolkit: Cycle Amplifiers
Before diving into the outlook, understand the 7 Cycle Amplifiers influencing property prices in the short term. 
👉 Listen to the Bonus Episode  

🧾 Moorr Property Tax
Make tax time easier. Upload your rental statements and let Opti analyse and categorise your property expenses into the relevant ATO categories, ready for your tax report. 
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🎓 Buyers Agent Mastery
Bryce Holdaway and Veronica Morgan have launched the Buyers Agent Mastery program, helping buyers agents build better, more sustainable businesses while keeping client outcomes at the centre.
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SPEAKER_02

Let's let's all talk about the the elephant in the room. We could be staring down one of the more significant corrections in the Australian property market. That is the sad.

SPEAKER_00

You're tuning in to the Property Couch, Australia's number one property, finance, and money podcast, featuring the titans of the industry since 2015. We're trusted by tens of thousands of investors on their journey to financial peace. This show is powered by more.

Welcome Back, Bryce!

SPEAKER_02

Thanks, Doctor Yes, the number one property podcast show in the country. And that's because one of my best mates and special guests here today, Bryce Holderway, is back, and that's what everyone loves most. I promised a special guest. Here he is. Hello, mate. How are you?

SPEAKER_01

How are you? I've I've uh I've missed the uh the the the weekly roofing. So on a topic like today, how could I um how could I miss the opportunity to come and hang out with you? Absolutely.

SPEAKER_02

Well, it's also you know, we know that these are one of our most popular shows um each year. We do obviously a couple of them a year and and they do really well. And I couldn't I couldn't honestly do a market update without having you along for the ride.

SPEAKER_01

So, mate, it's good to see you. Thank you, mate. I appreciate that. It's good to see you. No, I'm looking forward to um connecting with the audience and um talking about the market because there's some some things have changed since we last had it, although we did sort of talk just post uh budget, but um yeah, there's a fair bit, there's a fair bit of water that's gone under the bridge.

SPEAKER_02

There is, and you've also been busy on building, you know, some services in the marketplace. You want to give us a little sneak peek because we're going to talk about that later in the show. But what have you been up to?

SPEAKER_01

Oh, I think it's um it's more, you know, the work that you're doing with Picker to support the market and previously with Pippa, um, I've teamed up with Veronica to do some supporting work for the market. So we can talk about that later. But I think I think the whole idea is that we all conspire to underpin the strength of the market and create a long-term market. So yeah, um, we'll chat some more, but that's kind of a little preview.

SPEAKER_02

Beautiful. I'm looking forward to it. Now, listen, mate, obviously all the people that, you know, stop me in the street and say, hey, you know, love the podcast and so forth. They that there's obviously some of them who love the footy banter and others who didn't, but mate, we cannot, we cannot start without talking about the Fremantle Football Club sitting on top of the ladder. Can you get two guaranteed two home finals? I mean, a lot of belief. They are unbeatable at the moment. So talk me through.

SPEAKER_01

Stitch up in your voice, Ben. You've got stitch up in your voice. There's something coming. But um, can you believe that the we've had a we've had a hiatus of um footy banter, and it's the first season since 2015 that Fremantle have dominated. It is the irony.

SPEAKER_02

So and so it is the irony, and and here's the thing, right? I mean, obviously, throughout the course of those people who have been with us for a long time in our beautiful community, we've had their trials and tribulations of the Collingwood Football Club and the Fremantle Football Club. So I thought I'd ask Shana, our wonderful producer, to just share just a couple of snippets in terms of some of the conversations we've had in the past around the Frio Football Club, mate. So, Shana, uh, would you like to just uh you know hit play on uh on this little uh audio clip that we've got?

SPEAKER_01

And here's the deal, Ben. If you if you actually go back through the history of that football club having a Friday night time slot, they popped the bed so many times it's ridiculous. But that was that was deplorable, right? Such is the torturous time of a Freo supporter. I've got to get it out of my system, Ben. When you call when you kick a full uh halftime score in any other game in any other part of the country, but but for Frio, it's always a full-time score in the 50s, and then you see them just in front, just in front. I just did to Andrea, I go, and she goes, Oh, you're just such a terrible supporter. I'm like, no, I've seen this movie way too many times. Most weeks I go to the footy, or most weeks I turn on the footy, I'm not, I'm not happy, and uh, so therefore I'm questioning my whole philosophy around I optimise in all these other places, and yet in that one spot I am frustratingly still annoyed. Wow, that is uh welcome back. Thank you for um I do remember all saying all of that, Ben, and I I I would be lying if I didn't say at the beginning of this year there was a few times that I turned the footy off at halftime, only to be surprised that they came back in the second half. So, but thank you for reminding me of my torturous time as a Frio supporter.

SPEAKER_02

There's a lot of belief here, Bryce, and I think it does feel different this time. I think they are playing for each other. There's a lot of belief, and so I hope, I hope this might be Frio's year. So, which would be, yes, the irony there after basically 11 years of doing the bud uh with a bit of frustration as undertones, mate, it would be great to see the Fremandal football club. Wouldn't it be great? Get the silverware at the end of the year, but uh I thought we couldn't we couldn't pass that opportunity up. Let's see how it plays out. Um, you know, maybe we'll check in with you later in the year to see, you know, what transpired there.

SPEAKER_01

But uh I'm do you know what I'm disappointed the most in, Ben? That Shana was part of that with you. Like I expected it from you, but to get it from our producer Shayna, that's just seriously. I I uh I might have to have a little word with her.

Housekeeping: Case Studies + Moorr Property Tax

SPEAKER_02

And how's my form on going? My phone's going off in the corner. I'm like, it's all right. Anyway, so yes, we've got a lot coming up in the mid-year property market update. But before we do, a couple of quick housekeeping things, Bryce, our book, this book, the $3,000 a week become a number one seller. Um, we have updated the case study. So our team here, Bryce, had done a great job in updating the seven case studies plus we we launched the book on May 27th and May 12th, the following year.

SPEAKER_01

The case studies weren't the old the old text trick.

SPEAKER_02

So, yes, it is a record, but obviously the important thing is now available. So if you did join the wait list, fantastic. That'll be coming out to you. Those recordings will be coming out to you now. If you do want to get access to those recordings, we have opened a window. And what we need is a review from you. Take a screenshot of it and then send it to us to info at the propertycouch.com.au, and then we'll organize access to you for the next couple of weeks. But also in the more platform, you can reach out to us through the help area of more, and we'll give you access to those videos that both uh Polly and Ben put a great amount of effort and time into in terms of getting those done. So thank you to the team for that. Uh and that's obviously an important thing. They are excellent ways to understand making the invisible visible. So we're really appreciative of you uh for doing that, and obviously we'll give you access to those new updated recordings as well as also the PDF version of the information as well. Now, in addition to that, the other housekeeping thing, Bryce, it is tax time at the moment. And all of those people who have residential properties, this is the time they've got to pull all of their paperwork together and get all of their, you know, update their spreadsheets and all that and send it off to their accountants. Well, we have updated the more platform. Bryce, you'll love this. Check this out. You can now go in against your property asset, so the investment property, and now you'll see and upload the rental statement. You upload the rental statement, and Opti, the AI assistant inside the platform, will analyze that rental statement and it will automatically allocate all the expenses into the relevant uh ATO categories to allow you to basically organize your rental property in preparation for your tax report. So you'll then be able to produce a tax report and then send that off to your accountant. No, I mean the time saves. I did it all the other week.

SPEAKER_01

No shoeboxes anymore.

SPEAKER_02

No, that's so I I put um 15 rental statements through uh on one of our properties and it was a dream. It did not make one mistake. You can get you get a chance to obviously audit it to make sure it's right. And if you don't know, if there's a unique expense in there that you haven't seen that's been charged on the rental statement, we also give you the list in terms of the ATO list of expense uh categorizations. You just go click and it creates the new card and records it there and then memorizes that for the future. So it is a time saver, mate. It is a it is so I I just want to let everyone know the more platform is obviously free to use. You can set up your property portfolio on there. We are bringing in a lot more features, and yes, we will eventually one day have uh extra features under a subscription model, but it but all the fundamental basic uh model, including if you want to do it all manually, that will remain free. So for those people who are doing everything manually on that, you can still do that. Your money smarts, all of those types of things. But there will be certainly some open banking features coming in there and also some really enhanced features for managing your property investments uh and portfolio and also doing future research on the platform as well. So thank you, mate, for allowing me to uh to have a moment there.

SPEAKER_01

Well, I think it's important for the listeners to know that there's not only is there a solution for them, but um now in in the current environment that we're in, you don't even have to plug any data in. It's amazing. Yeah, it's getting better and better and better.

SPEAKER_02

Now here we are, mate. We're into obviously the mid-year property market updates. And uh I want to remind people that on the Tuesday episode, so if you're listening to this uh on the Thursday, you can't wait for this update. Go back to also uh listen to the Tuesday episode where we talk about the cyclical amplifiers, right? So these are the cycle amplifiers that allow you to understand the response in the short term to price movement, um, not necessarily the response to long-term directional price movement, but these are the things that influence price movement in the short term. So we're talking about credit availability, tax policy, income and employment, supply constraints, external shocks, expectation sentiment, and of course, interest rates. So we unpack that. And of course, that's going to be part of the flavor in terms of what we're talking about today, because the reality is that the conditions that we now find ourselves in is that we could be staring down one of the more significant corrections in the Australian property market. And I'm talking about the corrections that potentially as big as 10 to 15%. So a proper correction, not just an adjustment in price, but in some markets, we would expect that. In other markets, we expect some of them also have the risk of going greater than 20% in some of those regional markets as well. So that's why this update is uh really important. But Bryce, it also speaks to uh what you and I have done and why we are the trusted source when it comes to sharing this information because we don't sugarcoat things, we call balls and strikes. We understand that, you know, if the market is doing what the market's doing, we're really trusted to tell the truth. There's no hyperbole in terms of what we're doing. And as you see us going through the data today, you'll understand what we mean is what's going to be challenging in the short term. But this doesn't change the long-term directional output, does it, mate?

The Elephant in the Room: A Major Correction?

SPEAKER_01

No, it doesn't. I think I think today we're going to go, okay, this is this is what we thought back in Feb. This is the reality of now. Let's unpack what was the gap and and caused it in between. Um, we're also going to talk about what we think will happen uh going forward. But there's also um, as per our usual pragmatic approach, we're going to give you uh a suggestion of what you should do next, right? But ultimately, um for me it's um if you know we've we've said for a long time, Ben, that that the the language of an investor will determine their success, right? So let's let's all talk about the the elephant in the room, right? There's there's some there's some pain for some balance sheets that people don't love, right? And you and I don't love it either, but we're not we're not actually investing for 2026, we're investing for a a longer time horizon. So I I'm fully uh appreciative of someone whose window is right now that they actually need their values to stack up, where they might be in the retirement cycle where now is when it was, uh when it's needed to be. So I get that. But for the majority of the people that are listening, um, the message would be no no different to the dollar cost averaging message that exists in the equity market, that you if you have got a long enough time horizon and you see what's going on, you may just think I'm I'm an investor irrespective of what's happening, um, because my my um my North Star is in the 2030s, or for some people in the 2040s. So we'll unpack that in detail. But I guess um, you know, there's some people that'll be really in pain, but for the majority of investors, um, we're gonna we're gonna tell you what we think you should do next.

Our February Forecast: What We Got Right

SPEAKER_02

Well said, well said. Let's uh so let's talk about that because uh again we like to build on these series of updates that we give. So in the February outlook, we had these assumptions on the upside. So we said short-term positive demand impacts the property price market will continue because of tight supply. So the red tape uh in the marketplace, the labor shortages and building material costs meant that new supply coming to market was going to be challenged. And that was obviously, we know that supply is the enemy of capital growth. So it's important to understand that. We also understood that continued population growth would push demand further in both obviously people who wanting to buy property as well as the rental side of the equation as well. We said that the government's incentive for first home buyers with their 5% guarantee was bringing demand forward. And so we expected further demand in that area to also collide in some respects with the investor demand. So conditions for investors at the time looked strong because obviously we had tight housing supply, tight rental supply, and we did see some real strong animal spirits. Um we were talking about that last year, weren't we, Bryce? In respect of, you know, we were saying there's just too much animal spirits going on in the market. So there was a bit of warning about the speed of growth that we were seeing in some particular markets.

SPEAKER_01

Yeah, there's some there was a there was a ton of hubris in the market, Ben. There was a couple of operators that um um were belligerent, aggressive. And um I think when you I think what we've learned from all of this too, Ben, um, and we're gonna touch on it more as we go through, but when you treat um the basic need of a roof over your head as um a primary investment vehicle, then that that's challenging um and unless you do it with some tempered measurement around it. And I think I think there was uh a loss of the fact that we're trading, you know, it's the only investment market in the world that's not dominated by investors, which is residential property, and and it started to lose a little bit of its essential um form. So I think that I think the animal spirits is um is important to double click here because ultimately I think the changes was around that. Um and I think it was I think there was some uh you know a handful of loose operators that were um belligerent, um uh lacked humility and were very, very um prolific in their um public profile that allowed them to um to get a message across. But I think ultimately what we've seen, uh we couldn't have predicted um you know what happened in May, but you know, back then we we called it out and um here we are.

SPEAKER_02

Yeah, I mean, and you've you've also you know you think about some of those investors themselves, they drank that Kool-Aid, and they also potentially believe that you know it's an easy property market, quick gains were you know, I think a normal sort of circumstances, and that's not the case. And that's what we were trying to warn people against. We'll continue on because we've got some data on that coming up. The economy, obviously, unemployment holding up, so record levels of government spending in the care economy and just generally uh in terms of infrastructure spending has put a lot of pressure, uh downward pressure on employment, which meant that obviously people could get access to credit and go for go forward in terms of their investment plans. We said some further uh upside benefits could have been immigration numbers overshooting the estimates. Now we're seeing the government starting to look at ways to go slow, but back then um, you know, we were seeing the overshoot when it came to the number of immigrants coming into the country. Um, we also said that the government will potentially provide further stimulus uh in terms of demand and supply because politically, you're back to your point, Bryce, the social license between housing affordability and housing inequality that was going on there, you know, people not being able to get in. We always know that this government, because it's political, are going to spend money on it. So we said there could be some further examples of that. And we saw, you know, shovel-ready locations also being stimulated to obviously get further supply to market. But you mentioned before, Bryce, what we were saying before about the animal spirits. And this chart here from our good friends at Cotality, and obviously looking at ABS data, you can see the 10-year average uh in terms of the activity of investment in those particular locations compared to, you know, as I said, that that 10-year average. Now, where it should be sitting is around that sort of 30 to 35 percent. But you can see here in a lot of markets, Northern Territory, obviously um Western Australia, uh, South Australia, Queensland, you know, you had numbers bordering on 40 to 45 percent in some extreme cases, New South Wales. So there was this perception that the conditions in market were so good. Um, and the the hyperbole that was going around that created that particular story. And I think, you know, that's where you and I were getting nervous um about the the speed of growth in those markets.

SPEAKER_01

Yeah, agreed. I mean, that chart's compelling. You know, there's only uh there's only Victoria that's close to its average, um, maybe New South Wales, but everyone else is grossly um out of out of favour. So yeah, look, um, I think I think you and I would agree that something needed to be done. Um we we also agree that we wouldn't have done it the way it has been done. But um, you know, that that that's a compelling chart there.

SPEAKER_02

Yeah, and I think, you know, and obviously good news is everyone's got the the message around the ACT that it's it's a lemon location to invest

Cash Rates vs Property Values

SPEAKER_02

in property uh because of their tax settings there, but we haven't necessarily seen that in some of those other markets. The other thing that I want to bring up at this point in time, and you're looking at the next chart, and for those who are on audio, try and get access to some of these charts because they're quite compelling if you can watch it at a later time. But what I've done here is we've overlaid the cash rate compared to the long-term typical value of property prices, all you know, units and houses across Australia. And we can see that obviously during the GFC, after the GFC, we had where we had that supply shock, um, inflation started going high. So we had this ratcheting up of multiple interest rate increases in the cycle where we got the cash rate to 4.35. And then we felt like we'd tamed inflation and then we started seeing rates come down in um you know in the back half of 2025, only um to see inflation uh you know get uh ahead of itself again. And we started to see those three increases. But when the politicians, uh particularly the Labour Party, because we're seeing a significant write down on the value of property across this country, when they're arguing that it's just everything to do with interest rates rising, um, that's a bit of a false claim, considering that you can see here that when interest rates did get to 4.35, um, property prices were still growing. In fact, as interest rates were going up, um, you could still see the market was still increasing. So I think it's important to understand when when we're talking about this data, what we are talking about is human interest and human behavior and what they're doing in these points of time. And so once people feel comfortable, because right now we're in the we're we're in the storm, uh, winter has arrived, people are unsettled, sentiment is unsettled in this area, and so we're starting, we're seeing this uncertainty play out uh in the property market off the back of that. So, but I just wanted to put that as a placeholder and we'll circle back to that conversation. Let's now move into the downside recap. So, this is the things that we said look, here's what we don't know. These are the variables that were sort of potentially going to be playing out. So, inflation and higher interest rates, tapering demand for both owner-occupier and investors. So we have definitely seen that playing a role. Then we've obviously seen rising unemployment. Obviously, when interest rates go up, the the RBA's job is to try and slow the economy, and that also impacts unemployment, lending restrictions, affordability constraints, then those animal spirits that we spend a bit more time talking about. And again, that's why we are the trusted source because we call those balls and strikes. So too much investment's Speculation in certain markets, driving up values. And we then said, look, that's that's that's here and now because we knew interest rates were going up, and that was what was going to happen around lending restrictions with APRA and so forth. But here's what we said further. What if APRA and ASIC also bought in some other regulatory enforcements? We were calling on the government to basically stop the amount of trust lending that was going on because that was also artificially increasing demand in those regional market purchases. Then we said the May budget, we had we had word that Labour were looking at capital gains tax reforms. And Bryce and I were supportive of, you know, you know, there was too much speculation going on the market. We needed to craft up policy that would allow for a slowing down in the short-term speculation, but making sure that we had that long-term rental supply as part of that. And we said if the economy slows further than we expected, then increase unemployment, that would be downside risk. And government interference in terms of those property taxes. Not just the federal government, but we're talking about land tax, we're talking about rental reforms, minimum standard conditions, all of those things that we're just adding cost layers across the market could also potentially taper the demand and interest in residential property at that time. Immigration policy changes, which we're starting to see play out, that's becoming a political football. Um, and then compliance and insurance blowout costs to run our private rental accommodation businesses. Then, Bryce, two days later, the US strikes on Iran, literally the day we released the pod, and then we saw obviously a global oil price spike. Um, and then I'll quickly round out this summary before we see the impact on that. And then in May, not only did Labour announce capital gains tax reforms, but they also dropped the bigger bombshell, which was the negative gearing uh changes that they made, um, which has shocked the property market in total. So it hasn't just impacted investors, it's taken all the momentum out of the property market. And you can't pick up a mainstream media paper today without, you know, the gloom and doom and the correction uh that's happening in the market, and and it's really impacted market sentiment.

SPEAKER_01

Well, it show it shows um it shows your vintage too, Ben, when you're saying picking up a paper, because I don't think anyone picks up a paper anymore. But um I think um what it what it shows, Ben, and I I think this is a good learning point for our for our um podcast community, is it shows what happens when incentives are in play, right? So when you have like we've now seen what happens when an incentive is removed, what's actually happened to the marketplace. And I guess I guess that's probably been the um the frustrating part around, you know, there's lots of there's been lots of narrative, but when you have someone who makes a decision who doesn't take risk for a living and who has um income in perpetuity when they leave their office, um making decisions for people who too take like capital just moves like the the assumption that the capital would just blindly move into brand new is is only is only a decision that could be made in a spreadsheet. Whereas if you just if you just think about the basics, I I always say this to everyone, I've probably said it a million times on this podcast, there's a there's a wonderful book called Freakonomics by Lubner and Levitt. Um, and essentially I can summarize it. Um, economics is the study of human incentives, right? So the way that we had had the conversation, a lot of headspace that you'd put into it in the in the multiple roles that you'd done, was essentially to say, let's actually, let's actually align the incentives so that we actually get the behaviors that we want. So, for example, if people can't remember what you pitched at the time, Ben, was capital gains tax should be no capital gains tax for the first 12 months and then tiered 10%, 20%, 30%, 40%, 50% that could only be available to you once you held the property for five years or more. So what that actually does is is actually what is actually happening now is people are actually looking at the incentives and then making decisions around that. The other thing that um was proposed at the time, Ben, largely for you and your role of um the Property Investor Council of Australia picker, was you said, okay, let's let's let's give the incentive to the investor to stay in the game for the long term, so we take away through the capital gains tax mechanisms. But you also said, why don't we actually let the first investment property enjoy the spoils of the negative gearing? Um, maybe the second one enjoy the spoils of needed gearing, but from then on you're on your own. If you want to go and build an empire and you're resourced to go and do that, you don't do that on the taxpayer's purse. And some would, some wouldn't. But what it would have done is it would have left the incentives in place for the people to do long-term investing, and you wouldn't have you wouldn't have actually had um I well, we of the firm view, you we wouldn't be in the situation we're in. I was chatting to Tom Panos and he was talking about the fact that um he's seen lots of cycles, he's been in the he's been in the market for four decades. Um he goes, I've never had a day where not only have we had um, you know, he said it's not unusual to have auctions where there's no there's no results on the day, but he goes, it's really unusual to have no results and no registered bidders on any of the properties that we purchased. So I just think that, you know, as we as we look back to the February uh assumptions and then we have a look at to the downside. A, we we never predicted um the attacks on Iran, but we're probably we're not in our wildest dreams predicting what we had. Like we knew that we'd been dancing with the devil before in the 2019 election. We knew that there was still work to do, we knew we had a a treasure that was more biased towards um um removing it, we knew we had a prime minister that was more biased towards keeping it, but here we are. But ultimately, we've now just had a case study of of incentives at play and what happens when you get incentives out of alignment.

SPEAKER_02

And here we are. Yeah, I mean, and to be thinking to your point around the models and the spreadsheets, they changed the incentive to try and drive um investment in new, but the reality is that investment into the new and where that new is going to be placed may not necessarily deliver them the results that they're looking for. So the shock could be, and what played out between 85 and 87 was a real shortage of rental accommodation in the right areas. And I think that's what's gonna play out here as well in our middle rings and inner city areas. Yeah, that's what's gonna play out. Yeah, well, that's already passed. But it but that the point I'm the point we're making here is that you're gonna have a real shortage of rental accommodation in those middle and inner city areas, but you'll have plenty of rental out in the in the new greenfield, new build areas, and you're gonna have build-to-rent, you know, in terms of that. But that's what we're playing against. We're playing against the government who is intentionally trying to bring the value of properties down. And, you know, I was talking to Tim Lawless uh recently, and I said, Tim, a change of a change of eight percent, looking at your you know, your 12.4 trillion dollars of value in residential property, a change, a movement of eight percent wipes off one trillion dollars. One trillion, that's a thousand billion dollars. And to put that into context, Bryce, our economy, our global US, you know, US dollar economy is only $120 trillion a year. So $1 trillion of value is wiped out, but the debt's not wiped out. So the reality is that that has that has a dramatic effect in terms of wealth effect and people's um attitudes

What Changed? The Chain of Events

SPEAKER_02

towards how they spend things. So look, I'm gonna recap and that and we're gonna look at some of the data points as part of that story. So, what do we see as these chains of events? We saw domestic demand inflation. So this is before what happened with Iran. So government spending and consumers accepting higher prices got us to that domestic-led inflation. So that moved interest rates higher up instead of down or remaining flat. Then the US bombing of Iran sent that amplified that shock in terms of the upside of inflation. Uh, that put more pressure there in the consumer sentiment and business sentiment, which we're going to look at in a second, was also impacted by those, by that movement. And obviously the interest rate pressure remains on the upside. So we've now got a situation where we've got um potential of even one more increase before the year's out if we can't get on top of inflation. But we will now see interest rates remaining higher for longer because we've got a productivity problem, which means that interest rates will only come down if we can get on top of inflation. But we're not getting on top of inflation because we're not introducing higher productivity measures, we're over-regulating everything. And so the economy can't breathe in the way in which it's operating. So, and of course, the federal government's tax grab was an absolute stinker, and that created the market and economic shock that we're now dealing with. So we saw changes to capital gains tax on property. But the biggest stinker in our view was the killing off of aspiration in this country around shares and business capital. So that that in itself doesn't create the mindset that we need to continue to grow the economy, which when we grow the economy, obviously that means that we get better living standards across the board. Change the negative gearing, Bryce talked about. And then not to mention, we've also got trust and company adjustments that are going to be happening in the future.

SPEAKER_01

Can I just have a quick um can I just jump in there, Ben? Sure. What's what what I just really want to um labour on your point around the aspiration, right? Because that is that is that is the saddest part, if I'm honest, um in all of this, because because of our time, your yours and my time horizon, the negative gearing changes and the capital gains tax, that's that's just the the waves that you ride, right? But um the the just the commentary and the um um the anecdotes of people, you know, the the next Canva or the next um you know unicorn company, they're not looking to set up here. They're they're actually looking to set up in other taxation environments, whether that's um New Zealand, whether that's Singapore, whether that's the US. And I think that anyone, anyone who like if you haven't thought about this, like if you if you don't have an economy that grows the pie, um the the standard of living gets worse for everyone over time, right? You only have to look into the UK to see that lots of money has moved out of that market. You know, a powerhouse financial center, people are moving their money out of there. And that is now the narrative um that is happening here. And then you have the and and then the other thing too is the um the amount of new business, like um the treasurer's recently applauding the fact that under their watch of late the there's been this massive increase in new businesses starting. Like um that is that is actually the the what wealthy have done for the for an eternity, and if they've gone and spoken to their accountants and they've said, well, you know what? The the fact that you were going to distribute to your um your trust, and then if you want to distribute that to your bucket company, you'll actually pay the 30 cents and the 47 cents, so it'll be 77. So no one in their right mind is going to do that. So, like Kerry Packer said back in the 90s, if you're not doing everything you can to minimize your tax, you've got to get your head read. So, what people are doing, guess what? Guess what they're doing? They're actually going and getting companies set up and in in putting holding companies in between their trading companies, so they've got a company tax environment that is less than the marginal tax environment and knock me over with a feather. The rich people are still doing what they've always done. They either move their capital somewhere else or they'll get their capital invested here and they will find a way to minimize their tax. But guess who gets impacted the most? Middle Australia. And effectively, the people who um are the voter base of um the people that they they claim to be representing, like ultimately are the people that are going to be paying the most. So I just I'm just the most saddened and most disappointed by the the sentiment that you point that you made before around just that aspiration just getting a little bit of it dying. It's just that's the worst part.

SPEAKER_02

Mate, I can pull on a lot of threads there, but I'll just pull on the the main one, which is yes, um, because of the grandfathering, uh, you and I, and a lot of investors who have offset accounts and all that, we can just move money around and we're not impacted at all. But for the first-time investor who wants to get in and wants property as part of the vehicle to get in, this is going to restrict their ability to get in until they have reasonably good incomes um to add to their portfolio. Now, you and I have always said one or two good properties held for the long term in concert with your super, that's what the book talks about.

SPEAKER_01

We're in print. We're not going to 65 properties, we're going to get two. No.

SPEAKER_02

This is so so we think that that there might be some changes that might happen off the back of that. But to your point, yes, those companies that

The Data Is Starting to Tell a Story

SPEAKER_02

are being set up are holding companies, they are not trading companies. So let's see how that plays out. Now, in the spirit of moving things along, what I've got is what I've got here now is the sentiment story. So back in February, um, we can see here that time to buy a dwelling, long-term average is a reading of 119.5. So that's in the optimistic uh optimism side. Um, that reading in February was sitting at 84. So people were feeling, feeling um that the housing market and affordability was tough. Okay. But house price expectation index, its long-term average was 129.4, but it was on a terror. This is what we were saying before about speculation and everyone's belief. It was sitting at 173.9, basically saying that everyone, property prices are always going to go up. They're never going to go down. And so that was the challenge in the market. Now, fast forward to the time of us recording this, we've got the July data here. And so time to buy a dwelling is still pretty much sitting unchanged. So people are still now, it's moved up and down a little bit, but the house price index, which is basically house price expectations, has collapsed from 173 down to 118. So this is people basically saying that they think values are going to go down further. And a lot of them are sitting on their hands waiting for that. Now, that is creating pent-up demand. Okay, so everyone's gonna go, all right, well, I'm gonna time this well. So just keep that as a backstory in terms of, and so because we're gonna talk about what the uh what those release valves are going to be later on. Let's move now in talking about the loan commitments, and I'll just give you a bit of data here. So again, this is the June quarter. So we've really only got a bit of May and a bit of June in here. So we expect these numbers to decline even further. But we can see here the number of investor loans fell 8.6% in the quarter. The um the fall of investment loans in the June quarter was the largest since September quarter of 2022, when all of those interest rates were starting to tear up higher. And then annually, growth in investor loans slowed from 19.4 in the March quarter to 8.2. So, sorry, 2.8. So there's been a collapse uh in terms of that annual number. So we'd expect that to go down. But here's the problem that the government have got owner occupier loans also fell by 3.3%. Now, the owner-occupier loan is the blue line, so that's a big number, right, compared to the investor loans. But we can see that that has also fallen and it fell by 3.6% in that March quarter. Uh, sorry, it's it fell uh by 3.3% in the June quarter, and then owner occupiers overall is 1.6% lower, and first home buyers also fell. So it's the perfect storm that the government's created. First home buyers aren't coming in, which was all about this intergenerational uh inequality that was being, you know, sort of now we've got this problem. So it's completely shocked the entire market. And then I'll get you to make a comment just off the back of these points here, Bryce. We also see that the good news is with the 5% deposit guarantee, we're starting to see a little bit of supply coming on in the freestanding houses. But we can see the choppiness in the in the units when we look at the 10-year decade average. Um, and then you can also see here the unit markets are a little bit more volatile. Now, that's a good sign. It means that some of the government incentives are starting to bring further supply on. But remember, supply is the enemy of capital growth if the demand falls out of the market. So this is also a bit of a headwind when you put those two things together. So the behaviour is showing up in the data, isn't it? Well, 100%, yeah.

SPEAKER_01

And you know, supply is the enemy of capital growth. So removing demand, increasing supply, that's um, you know, why we have the trajectory that we do for the property market. Uh throw on top the um the incentive stuff that we've just talked about. And again, here we are.

SPEAKER_02

Yeah, I want I mean, and I I probably should be even more clearer. It's excess supply is the enemy of capital growth. Because if you've got supply coming on and you've got demand meeting that, then it there's no problem. But when you've got supply coming on and no demand behind it, then you get that excess supply, and obviously that puts downward pressures.

SPEAKER_01

And I guess part of the uh the building approval issues too, Ben, is they they they then took away where a lot of pre-sale gets done through the decision to change self-managed super fund, which um it blatantly goes against the the goal of increasing the supply to the tune that they want to get those 1.2 million house um homes built. Um the in you couldn't make this you couldn't make this stuff up.

SPEAKER_02

Well, no, I mean, and and obviously by closing it out on the you know effectively the 10th of August, you've just created an enormous rush of uh self-managed super funds buying before the deadline. So that that rush is now over. And so we've again we've got a situation where some of the numbers that are supporting the values in certain markets, that that that that demand pool is now gone, gone completely gone. And so we're seeing, I mean, you know, we were hearing all different stories of of last minute sales going on and and people sort of saying, well, I don't have time to buy something. Like that's again, we we don't play heavily in those spaces because of a reason. We're not into speculation, we're not into those types of things. Where we plan for the decades, not plan for the for the weeks, months, years.

SPEAKER_01

Ben, it just proves how incentives work. It's just another example of how incentives work. You know, there was a deadline, people were trying to get in, there was all sorts of tomfoolery happening around it. And then on the other side of that incentive, um, or in this case, removal of, guess what happened? So it's like it Yeah, all right, let's move on.

SPEAKER_02

No, let's move on. Look, uh obviously now again, we're we're sitting where we are today more broadly. We've seen the banks readjust

Around the Grounds: Where Markets Are Turning

SPEAKER_02

their forecast of the corrections um down around 7 or 8%. We think that in some markets it's gonna be more severe than that, and in other markets, we think that they've overquoted um, you know, exactly how far it might fall. But again, it's it's a belief system now. So if everyone believes that house prices are gonna keep falling, then they will because it's all about behavioral activity that's going to go on. So there's got to be an argument and there's got to be, again, a circuit breaker in terms of what happens. But we do think that the conditions are pretty difficult for markets. Now, what we're gonna do in the last couple of updates, what we've done is we've gone around the grounds in supply and demand, but we now have some unbelievably um you know intelligent data that flows into our systems. And I'm gonna explain to you quickly on this chart what you're currently looking at. So, what you're looking at here is effectively the listings and sales activity across the Greater Sydney market in this case. So you can see here that new listings between one and 30 days is in the orange. Listings that have been on the search portals are between uh in the light blue there or the aqua blue are between 30 and 60 days, and in the purple, that's between 60 and 90, and then red between um 90 and 180. So that starts to become what we call stale stock, and then then you've got obviously over 180 days, and of course, the vendor has a choice here. The the vendor can then potentially pull the property from those search portals, and we refer to those as delistings, so we we can't find evidence of a sale, um, or we've obviously got the sold data there as well. Now, in this chart, what we can see is that there is, and this is why you need to not just look at one month in isolation. And you've got to remember that this is uh data up until the end of July. So we've got a bit of May, and then we've got June and July, but that's when we started to see that you know the rug pulled off, the shocks starting to impact uh all of the announcements. So we obviously we've got Cotality, you've got prop track who. Releasing their monthly performance hedonic indexes. So the market's being told and the general public's being told the property prices are going down in certain markets. So that creates that sentiment challenge and the question mark in the market. So we can see here when we look at the unit market in Sydney, it's actually not too bad. Like in other words, we're not seeing a greater number of listings. In terms of sales absorption, we're still seeing a reasonable amount of sales absorption, but we are starting to see some slight trends in the data where, you know, the stale, the aging of listings is increasing. And then obviously you're seeing an increase in delistings. But this is actually not the worst market we're going to take a look at in terms of what's actually happening in the field. I'll bring you in, Bryce, to talk about obviously our two bigger markets. And you can see here now I've switched over to the housing market. And so this is now starting to show up. You can see listings are increasing. You can see, you know, the aging profile, those look some of those listings starting to get stale. And then obviously you can see an increase in the delistings, which effectively means that people have decided to pull those properties from market. So a good example, Bryce, wouldn't it be that if you're an investor and you want you've had a good run with your property and you want to try and time the market, if you can't get it out, you just take it off market because you've got the grandfathering. But this is potentially some investors maybe testing the market, seeing if they can get a sale. But if they can't, they're pulling it off the market as well.

SPEAKER_01

Yeah, I think I think the I think the grandfathering is a big part here too. Like people, people, once they sell, um, they they they lose that. Um and I think that plays uh I think that's playing more into some of these decisions than than um meets the eye.

SPEAKER_02

But um yeah, I think there's definitely there's definitely some who are holding and and and again, I mean, for an experienced investor who are sitting in capital city markets, there's really and and you've got a 20, 30, 40 year view, there is nothing to see here. It's just part of part of the cycle that you're gonna go through as properties move higher. But if you're trying to trade markets and time markets and those type of things, and especially if you're in some of the the regional markets and those type of things where you where you have risk of economic concentration um and you've seen the property markets you know go up in the last three or four years by 70 to 100%, you you know that that there's going to be some people who are like gonna get some nervous footings around that. So I'll just quickly take us through some of the other markets. We can see here we've got the Melbourne unit market. I mean, the interesting thing for Melbourne unit market is you can see that the overall listing numbers are down. The trend is somewhat down there. And in terms of the over 180 days, it's not too bad. And the delistings feel cyclical when you look back uh, you know, right through the data that we've got back to March of 2022. So again, I think the unit market's going to hold up a little bit better in the Melbourne market and the Sydney market than what we've seen. Then you've got the housing market in Melbourne. Um, and you can see there that there has been a clear increase in activity uh that's been going on in terms of listing activity, and you can see the aging profile. So, you know, again, when you're looking at these types of things, you're going to say, well, it's clear that there's downward pressure on property prices in the Melbourne market looking at this data that we're seeing here for houses. So again, buying opportunities as part of that. Now let's look at the Brisbane unit market and housing market. These markets are telling a different story. So you can see right up until the end of December, a really strong story on market. So you can see the long-term trends where you know stock on market is moving comfortably, absorption rates, um, sales activity are really strong through that sort of uh 2025 period, but then all of a sudden it switches. So you can see in the February, March, April, listings start to go higher, the aging profile is starting to expand, and you're seeing a few delistings starting to appear. So this is a market that's certainly over its peak, um, is now going to move into a correction phase. And then when you look at the Brisbane market for houses, the story is more dynamic in the sense that we're starting to see a real correction in terms of new listings coming through. And that stock is now flowing into 60, 90 day holding periods. And even look at the spike in the 180-day period and the delisting. So people who might have thought that they can time the market or or want to get out here haven't really got much going for them if they're thinking that there's going to be some underlying new buyers coming through. And remember, this is also when the self-managed superfund uh market was in place. So we do expect, uh, and we already know um based off our own data that that the Brisbane market is in correction uh in terms of what's happening there. But you can start to see that the the dynamics playing out.

SPEAKER_01

Yeah, you can. And you think about some of those like Melbourne and Sydney have been unaffordable for a while and and had not attracted a lot of the investor market. Well, not as much in comparison to, you know, South Australia, Queensland, Western Australia, for example. So it kind of makes sense that when you take um so you know, a large percentage of the people that were investing in those markets out, um, you see the results you can see there on the screen.

SPEAKER_02

So, okay, let's move on now. We're going around the grounds. Perth housing market doing something similar, all right? So again,

Adelaide, Hobart, Darwin + Regional Markets 

SPEAKER_02

phenomenal period through 24-25, um, eight or nine active interests on multiple listings, uh, the market really moving strongly through its cycle. Uh, you can see literally zero D listings, um, you know, lots of uh sales conversions happening there. And I want you to take an interest in the scale of each market. So, you know, because that that is the the benefit of the capital city markets is their depth of population, their spread of economic activity, and ultimately their attraction of new migration and new population to those centers. But we've definitely felt that the Perth market has turned. And so when you're in the Perth market, that's fine. Again, taking a long-term view, but you can start to see basically that market is starting to move into. Now, again, look at look at its listings in 22, 23, you know, around 18,000, 17,000, 18,000. We're still down only just over 15,000. So historically still low supply, but that market is now starting to move back into a more balanced market. It still has a very strong economy there, but we're not seeing that sort of rapid price growth. And we would expect that that market will move in to a negative read over the course of the next couple of months and certainly be in a correction phase or a downward pricing phase throughout the course of the second half of this year and into early next year. Let's go now and have a look at um Adelaide. Same sort of story. We're now starting to see stock levels overall coming back to their sort of 22, 23 levels, um, a really strong period through 24-25. But now again, the aging profile of the listings, and also you can start to see those delistings coming up there where some of that stock isn't moving. So people uh are waiting for the next cycle. So they'll they'll park those properties uh potentially to Bryce's point, rent them out as part of that particular story. And then Hobart, it's an interesting story because it still has, you know, when we look at the actual overall listings, it's a very small market. You can see, look at the number of sales activities. You're only seeing sales activities in the hundreds, whereas in those bigger markets, we're talking about sales activities in the thousands. And of course, in our big agglomeration economy markets in in the high uh early 10,000s in terms of transactions, that are also happening uh more broadly across a six-month period. So you can see what's happening here. Um, but Hobart feels like it's okay. It hasn't had any pressure in terms of new listings uh coming through, but we'll be watching that. But the aging profile is starting to change a little bit in that particular market. And the listings are also starting to pick up. So again, that buyer shock, that demand buyer shock is there. Then finally, let's have a look at Darwin. Um, we think Darwin is still recording uh price growth, but we expect, based on our early indication data that we're seeing here, that that price growth will be done shortly and that will also start to move past its peak in terms of this price cycle that it's currently going through as well. Now, um I'm just gonna round out uh a couple of um rest of markets. So this is regional markets, uh, but in the interest of time, I'm just gonna highlight a couple. You can see here in regional New South Wales for houses that it's actually holding up okay. We're not at peak stock levels. Um, it's going okay uh in terms of its market, but um not as challenged as some of the markets we're about to show you because it hasn't really had that strong a run as some of those other markets have. You can see delistings are definitely increasing. Sales activity has fallen away a little bit, but listings aren't necessarily spiking overall. Now, when you look at also Victoria, we can see that those listings are increasing back to this historical peak levels, and we can see a change going on through this marketplace at the moment as well. So delistings are certainly starting to show up. So people again are pulling their properties off market, and we can see what's happening there. But the one that really, you know, sort of puts a bit of an alarm bell in my mind is rest of Queensland. And we can see here, yes, look at the you know, the terrific um sort of absorption that went on in terms of listing sizes there. So it's had a great run pretty much through December of 22, right through to December 25. But now, you know, like in terms of the delistings, the actual levels of listings going on. So I suspect there's gonna be a lot of investors who have to make up a decision about if they're going to get out of market, uh, what are they going to do? Because they've probably missed the boat. And so now they're gonna be in this sort of conundrum around, okay, well, if they have missed the boat, what are they gonna do? Are they gonna re-rent it

Regional QLD: Alarm Bells Are Ringing 🚨

SPEAKER_02

out uh and then potentially try and release whatever equity is in there? But we're seeing the paper profits price, aren't we, in terms of evaporating off the back of that story?

SPEAKER_01

Yeah, I think um by nature, when the music stops, there's meant to be not enough chairs for everyone. And I think that um when the music stops on some of these markets that you've highlighted here, particularly this one that we're seeing on the screen, um, that that is that is the challenge that we as a as a body of work over a long period of time have been trying to, you know, any anyone can make money when when it's um you you've got to protect your downside. And here's here's where we're working out who has protected their downside or not. And in some cases, if you're giving back your paper profits and then but then for n not getting back to where you were for some time, um, that becomes a challenge for some people. And in and in some strategies, there was an encouragement to do multiples in some of these um locations. So I think um yeah, I I I I, as you do, fear for some of these people.

SPEAKER_02

No, I mean, uh and this is what we're talking about it's it's the whole market that obviously gets affected, right? So it's not just investors. So we feel for the first home buyers who have taken advantage of the 5% deposit guarantee in these markets, and they're going to be in negative equity uh for a period of time. Where we we're disappointed in the complete wipe out um of you know, potentially what we're talking about before of upwards of a trillion dollars of private wealth. And where, you know, those paper profits um that were so well spruked um by buyers agents who created a hyperbole into some of these markets. There's going to be some significant corrections in our view. And again, this is obviously our outlook in terms of what we think is going to be happening.

SPEAKER_01

To your point around negative equity, Ben, the the there was a politician. I'm trying, I'm I'm really trying to rack my brain, and I can't think of the top of my head, but they were recently um being interviewed saying that um uh was it was it on Sunrise? Anyway, they they you know we're talking about how do you the question was how do you feel about the first home buyers who are now in negative equity? And the response, Ben, was alarming because the politician was talking about how they were in front of their payments, so therefore they can't be in negative equity. So a very strong misunderstanding around what negative equity actually is. No, no, it actually means they paid a price that's now significantly lower than what they paid, and so they're now sitting on paying a loan for something that's not worth it. That's number one. Number two, I saw another interview um with um our Prime Minister, and no, it wasn't talking about um the Japanese Prime Minister, that was another one. But um the the conversation was around um, well, what some investors, this is what he said, what some investors were doing is they were they were stacking all of their um their investment uh lending onto in um all of their lending onto an investment property so they could maximize their tax action. No, no, that's not the tax law. No, it doesn't matter what the security is.

SPEAKER_02

That's right. They were they were releasing or getting higher loans against their investment properties.

SPEAKER_01

That's not that's the law of tax equipment. It doesn't matter what security you're using, it actually matters what the purpose of the loan. And Mr. Prime Minister, that's always been the case, that it's been the purpose of the loan. So the reason I raise those two things, Ben, and obviously we're um uh we're we're disappointed by the education game because we want to educate people. Yeah, the the the challenge is that the people that are actually making the decisions are not fully across the let their own legislation. And some of the like if that's some of the motivation for why they well uh you should you shouldn't be going in public and saying that because you're wrong. You're blatantly wrong. So um okay.

SPEAKER_02

Well said, mate. Well said. Look, so let's let's bring it home in terms of um so you know, we talk about stock on market,

The Headwinds Facing Property Today 

SPEAKER_02

days on market. Well, that's blended into what you've just seen there in terms of that inventory management and and the absorption sort of stuff that we're basically seeing in the market. That has unintended consequences in terms of what's going to happen around stamp duty revenues for state governments and the higher debt levels and all of those other fun things that we haven't even touched on. But let's let's now just bring home, and this is why most people who are, you know, on the on the side of being uh cautious and potentially fearful, this is what we're talking about in regards to the headwind. So inflation staying higher for longer. We can't see a way out of that at the moment with the current settings on fiscal and monetary policy and the poor productivity levels, interest rates staying high for longer, property prices falling further, and then obviously the wealth effect that then impacts general spending in the economy. And so that means the economy cools further. Um, and we've talked about the the water wheel effect in terms of as the economy slows and as it, you know, the water levels fall, it doesn't collect as much water. So the economic activity starts to dry up. And that's a real concern in our minds, more broadly, about the overall economy. That obviously leads to increasing unemployment. We're also starting to go back to the 70s and 80s, where unions are demanding and striking for higher wages to combat the cost of living, which has really been created through the fact of um obviously not necessarily much productivity. So, and as I said, productivity is going nowhere. So, you know, and the risk of stagflation, because what we're also hearing some other property commentators who are spruking um what will change is they're saying, well, if the economy collapses, interest rates will come down. Well, that doesn't happen under stagflation. What actually happens is interest rates and inflation stays high and obviously unemployment goes higher. That's stagflation. And that's what the RBA desperately is trying to avoid, but won't be able to avoid if we have a collapsing economy where we can't get on top. Because the RBA is not going to drop um their interest rates if inflation is high. They just won't do it. Okay, and so ultimately it's an important balancing act in terms of getting that sentiment and confidence back in market. And that's what, to Bryce's point around aspiration, has collapsed

What Could Turn the Market Around?

SPEAKER_02

because we've seen this economic uh policy shock uh based on what the government's trying to do. So, what will be the circuit breakers? These are important to understand because what is going to be happening is there is absolutely a lot of pent-up demand that we will see starting to build up as this cycle starts to play out. The circuit breaker is obviously if we get good inflation prints, um, that then obviously means that interest rates could ease or at least stabilize. Now, you saw what I showed you earlier with the 4.35. When interest rates stabilized at 4.35, property prices can still go higher. Doesn't mean everyone can play. You've still got those affordability constraints, but you certainly um can see once people feel a little bit more at it at you know, at ease that you know, that all of these shocks are going to dissipate, then we could potentially start to see that pent-up demand showing its head. And we've seen in recent auction clearance rates where interest rates got, uh sorry, clearance rates got below 50%. The last couple of weeks they've been improving a little bit. So there is still a fair bit of pent-up demand in there. We would also think that if APRA came to their senses, because if you go back to the cycle amplifiers, availability to credit is also important. So for the uh for APRA to have um assessment rates at 9%, 8.5%, it's ridiculous. And so they're stopping the flow of credit and capital into the market, and that's creating less demand as well. So we think they are going to be part of those main circuit breakers. But Bryce, this is what we wanted to talk about. So as we close out this session, what to do? You know, um, because obviously this two shell pass, and we want people to think in decades, not just in months and years. So I'll start by basically saying equity release whilst your values are somewhat higher, right? So if they're if they're gonna so if if the value keeps falling, you want to be able to grab some equity out against the property value here. So when the cycle turns around, you potentially have a deposit ready to go, or you can use that money, deploy that money sensibly. It's not equity release for personal um use. That's not what we encourage. We're encouraging equity release for future investment activities. Bryce, the second one, what can we do about refinancing?

SPEAKER_01

Yeah,

What Should You Do Right Now?

SPEAKER_01

well, uh banks, banks are looking to offer um uh brokers opportunities to create new business, right? So there's an opportunity here for um, whilst you're releasing equity to sharpen rate. Um that's that's not unique to um uh any this period of time. We've said that over the journey, but but there's an opportunity here right now to to take advantage of that. So you want to refinance um uh to a better rate wherever you can. And of course, that feeds into our investment savvy mortgage broker conversation. That um that that is, you know, for a lot of our clients, that's already been proactively started. But for some people that are listening to this, you need to be talking to your investment savvy mortgage broker to start firing up those two things.

SPEAKER_02

Yeah, and I think um what we are seeing because banks are in the business of lending money and they've seen their demand shock also hit their numbers. We saw them earlier. So we do expect that you know overall lending could drop by 20-25%, which means that the overall activity in the property market could fall by as much as 25 to 30 percent. So they're doing certain deals under the under the counter deals, you might call them, um, with brokers to win new business or to win business across. So there's no new debt being created. How do we win back uh market share from existing lenders? So we're starting to see a lot of activity happening in that space. So that's why being close to your investments have your broker. And if you don't have one, we would love to have those conversations because we are doing a fair bit of refinancing to some of these deals. And of course, we're one of the largest brokering businesses in Australia. Um, so we obviously are very fortunate in the relationships we have with different lenders to be able to get some of that special pricing in terms of what we look for there. So that's just a little side note there. Um finally, or not finally, opportunity to upgrade the family home. We're seeing a heap of this. Okay, weaker competition. Um, we're seeing that the family home is now effectively the tax haven at the moment. So people are saying, well, what an what a what a great opportunity to basically get to a better location, whether that's a better school location, whether it's a better convenient location with lifestyle and amenity and utility in that location. So we're people we're seeing people starting to run their numbers on whether they can afford to upgrade uh into a better area. And uh, and so whilst yes, they've got to still sell their current. Home, and in some cases, they might turn that into an investment because the grandfathering opportunity there, because you can obviously grandfather negative gearing on your existing property. So we're doing a lot of modeling for households that are looking to potentially keep their home, but then also upgrade to their new home, or if they have to sell their home but get into a better location, because again, it's capital gains tax-free. So we're seeing a big opportunity there. And of course, for the smart and savvy investor, Bryce, what are we seeing for them?

SPEAKER_01

Well, there's an opportunity to invest. You've got yields that are increasing. And for those

Is This the Opportunity Investors Waited For?

SPEAKER_01

people who have the time horizon that we talked about at the top of the show, um, this is this is the time that you've dreamed of. This is the time that you've dreamed of actually being able to get into the marketplace and buy something where the competition has been diminished, where um a correction is typically where the balance of power swings from the seller to the buyer. Well, that that that swing has happened. Um, and if you if you are, if cash flow allows and your ability to go and buy uh an investment property is um something you can do, then then great. Because I think I think what's forgotten in in this Ben is just because you can't negative gear doesn't mean that that that um some markets still do okay. Um and in some markets they'll do really well, because we still haven't um turned off the immigration tap. There's still demand in certain areas. And I think I think when like we've said it a couple of times in in this um podcast as well, you know, things like property prices will fall further, you know, uh they could drop, you know, eight to fifteen percent. Like so they're the they're the blanket statements. But if you actually spend the time to look under the bonnet and see where there is areas still that have competition, um, and remember there's 15,000 plus suburbs. And then if you just have three broad categories of apartments, townhouses, and houses before we even get more micro than that, that's 45,000 market segments. Um, that when someone says the market's going to drop 15%, it doesn't apply to all 45,000 segments. So I would say um, you know, recapping, release it, release your equity, get a better deal, um, maybe look to upgrade the family home because the the disparity between underpinning and the top end dropping is you know a rare opportunity for you. And then for those, for those who are the the the true long-term investors, um um now could be a good time.

SPEAKER_02

Be uh be greedy when others are fearful. And and look, we'll finish off with that chart that the you know, this is obviously a totality chart. We've got it in the book, we talked about it a lot around capital cities and regional towns. So prices don't always just trend up. They have they go through these cycles. We can see evidence of those cycles in both the um capital city markets and also the regional markets on the chart. We can see all the events that have occurred. And so if you have a mindset of, oh my God, you know, it's it's going to collapse the whole thing, you're going to miss these opportunities. So the smart money always sees opportunity when quality is great and value is good. If quality of what you're buying is great and you're buying it a great at a great price, you know, that's what Warren Buffett always said. Oh, I'd I love buying companies that I'll hold for the decades when the quality of the business and I can get them at the at a at the right price. Well, that's what's happening and what we're talking about here as part of this cycle. So we would be saying to those people, it's time to prepare and get ready for some of those opportunities. And if you're going to do it yourself, um, that's great. You obviously are going to start to put in some offers that might be low balling. But if you want help as part of that process, there's always businesses that have been around for the decades, not just for, you know, the last sprint of property prices that have been going up and the speculation and the spruking that's been going on the market. Try and go to the trusted sources and get measured advice around what's right for you because we are going through winter uh in this correction cycle. We understand that's going to be the case. There'll be less activity out there, which gives uh important buying opportunities.

SPEAKER_01

So and I think too, then the um the it's you know, a lot a lot of our clients are actually asking us for help around buying for owner occupiers as well. So it's um yeah, you know, part of that point around upgrading, there's you know, there's still still some nuance around that. So um, you know, for people that want help around that, we can help them there too.

SPEAKER_02

Yeah, well, the upgrading, the downgrading, all of those types of the owner-occupier activity as to your point price, it really has increased um significantly

Raising the Bar with Buyers Agent Mastery

SPEAKER_02

in the last three to four months, and we expect that to continue as well. So, mate, that's uh that wraps us up now. Uh, I want to talk about you know what you've been up to with Veronica. You've been working on uh an important project for the for the industry, and I'm I'm really pleased to uh to hear about that. So tell us a little bit more about what you're up to.

SPEAKER_01

Yeah, well, uh we got the band back together, Ben. So we've talked about that um when when I caught up previously. But um look, uh the premise is really simple that um uh buyers agents um I think that some buyers agents have been um uh attracted into the industry on the pro on the promise of a get rich quick um scheme. And so we think that there's um, you know, when you're building a business, you've got to attract, you gotta convert, and you've got to deliver, right? And so I think I think um a lot of the training has been around how to attract, but not very much on how to deliver. And so Frank and I got together, we started Buyers Agent Mastery. It's a it's a coaching and mentoring um business that helps buyers agents who want to build a profitable buyer's agency business. So it's for people who are just starting out and they want to know what good looks like. We we have a start program. Um then we have a grow program for people that have been doing it for a little while, but they they they want to systemize it and make it repeatable and make it easy. But but ultimately it's sort of mixing two two things that I love. Um, one is you know, property and buyers agents, um, and two, um, I I I love the art and the science of of building a business. So bringing the bringing the two together. And then obviously my um investment background, um Veronica's owner-occupier. Um, she's got an investment background too, but she's got owner occupier uh boutique business in Sydney, which is you know a tough market. So um between the two of us, we we see it as a a platform to help underpin on the buyer's agent side, you're underpinning from the from the investor side. We've got Pipper that's underpinning from the professional side. So it's you know, we see it as our contribution and and perhaps a legacy to the industry that serves us really well where we can we can help buyers' agents be better buyers' agents.

SPEAKER_02

Well, and it's needed, right? I mean, iron sharpens iron. You guys have got a wealth of knowledge and experience in that space. And, you know, I I was on one of those forums recently where you know some people are still talking up certain markets and saying, you know, buyers' agents are still buying properties for their clients in these markets. And I just go, wow, what data are they looking at? What how how how are they reading the data? Or are they reading the data at all? And are they just going with the vibe? Right. And and you know, because I worry about you know what those outcomes for those clients will be in those areas where economic concentration is, you know, is close in on itself. So you only need one or two industries in that particular regional market to collapse. So, you know, teaching people about commutable regional markets versus remote regional markets versus agglomeration capital city markets and so forth is really important, fundamental stuff. Because if these wise agents want to do a great job, they'll get the privilege of potentially serving that client again in the future. And if they get that wrong, um, because there's an enormous amount of responsibility, and we're not saying everyone's perfect and we don't know what's going to happen in terms of external shocks. So go back to the cyclical amplifiers, the cycle amplifiers we talk about, those are the things that need to need to be in good shape to be able to move demand and supply in the short term to put price pressure over the longer term. But then you then you start to saying, well, if my buyer's agent um is attracted by you know big revenue that they can earn as opposed to the benefits of the customer and what's going to be delivered. And if they're not, you know, providing me with the knowledge and research to do that work, then maybe they're not the right one for me. But to for you guys to be able to put that information out there and help them fine-tune those is a credit to you, credit to Veronica in terms of the work that you've got.

SPEAKER_01

You're raising a really good point, Ben. I think, I think um the the the central premise of the property couch and everything we've done is has always been around keeping the client as the center of everything, right? And I I worry that the premise of some of the buyers, not all, there's a like there's you know, Veronica and I have um we've got the buyer's agent mastery podcast, we get all the the old the um the OGs and we ask them about what they've done to stay in the game for a long time, to to ultimately provide a resource to these new um entrants to what it takes to be um in for a long time. But I think you raise a really good point that um when when your motivation is the amount of money that you can earn um versus the outcome for the client, that's a problem. And two, you know, it goes back to the enthusiastic amateur line. There's there's a bunch of people who love property, they wanted to get in the game, they saw it as exciting, they saw it as a way to, but if you if you if you don't understand the basic of what it takes to deliver and on, you know, what does good look like? And how do you you know make sure you do no harm? And how do you make sure that the client has a really great experience? And you know, those those things are um are really fundamental and important. And you know, I guess anecdotally, I remember one of our team was telling us the story, Ben, um, where uh a listing agent who they'd done uh a number of transactions with, um great relationship, would ordinarily ring up and say, Hey, look, I've got this one either off market or pre-listed. Um then they started the narrative started changing to, hey, listen, I'm I'm interested in um talking to you because I like doing business with you. But what I'm gonna do is if I act in the best interest of my client, which is the seller, I've got to go and re ring one of the one or two of these green buyers' agents and give them the the magic, um, the magic dust that they want to hear, which is um off market. And then they all get very excited because then they can they can fulfill on the the marketing promise that I'll get you something off market, and they just say, Listen, we just want to go and see if they'll pay a silly price because they're green and wet behind their ears, and um, and then I'll be doing the best thing by my client. And if that doesn't work, we'll come and deal with you at market. Well, that's that's that's frustrating for anyone who's been involved in the market for some time and anyone who wants to play the game for a long period of time, as Empower Wealth does, because like really we're we're losing to you going and seeing if someone takes a really big swing, and unfortunately that's what they were doing. Um, yeah, so yeah, just to um just to create um uh an underpinning of of what it takes to actually run a business, what it takes to actually care about the client, um they're the fundamental premises that we're going after.

SPEAKER_02

Yeah, so I mean my recommendation if you're interested, if you love property and you're interested in a career in this space, you know, where you're first first exploring this, or also if you're gonna, again, iron sharpens iron, if you want to take your skill level and execution level to that next level, then why not check out what Bryce and Veronica are up to? Um we'll put some details, mate, in the uh in the show description so uh so people can learn a little bit more about what uh what you've got on offer there. So but thank you, mate. It's always good to uh to catch up uh and have a chat and have a yarn about the market. Um we're we're moving into a an interesting time, an opportune time for some um and another time for others to just sit back, let the let the storm pass over uh and do nothing. But there are some opportunities out there, and we've given you instructions in terms of uh taking action of what to do. So thanks, mate.

SPEAKER_01

No, thank you. Um thank you for having me back on. It's been fun to have another front row seat at one of the sharpest minds in the country. I know you'll quickly um downplay that, but um, yeah, mate, it's uh it's you know you put a lot of energy and effort into um getting the the detail and the content to try and serve our community, which you do really well. So thanks for having me back on.

SPEAKER_02

Absolute pleasure, buddy. And remember everyone, as part of the property catch crew and community, knowledge is empowering only if you're happy.

SPEAKER_00

Hey folks, Opti here, the Smart Money Sidekick Inside More. Just one quick thing before we sign off. If you're new to the Property Catch community, welcome. One quick tip to help you get the most value from the show. Our first 20 episodes cover the foundations we build on every week. And yes, listening on one and a half speed is totally acceptable. If you're short on time, download our free binge guide. It distills those episodes into one easy read with heaps of visual diagrams, alongside free tools inside more, your all-in-one financial home, to help you organize your money and plan your next best move. Check out all the links in our show description. And just a quick reminder before you go anything we cover on this podcast is general in nature. It's not considered to be financial advice, and we certainly recommend that you seek out professional advice before making any financial decisions. Once again, everything mentioned is linked in the show description. Ready when you are catching into it.

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Ben Kingsley

Host
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Bryce Holdaway

Host