S2E4: How Immigration is Affecting the Australian Housing Market

Joe and Michael are talking about immigration. Oh boy... 

This isn't about race, so if that's what you're here for, you're not welcome. This is about how immigration policies are affecting the economy and contributing to the cost of living crisis.

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Transcript

00:00:00:02 - 00:00:20:02
Joe
Hey, guys. Joe here from It’s Simple Finance. and on today's episode of the finance show with Joe, Michael and I really delve deep into Australia's migration. Why do we have so many people moving to Australia? Why is it become such an issue outside of racism and how this has affected our housing market? It's going to be a lot of good insights in regards to how you can prepare yourself for the future.

00:00:20:02 - 00:00:39:16
Joe
What sound investments you can make to increase your net wealth and prepare yourself for retirement, and where the best places to buy in major capital cities are to. One. Protect yourself from prices increasing or. Two. Really take advantage of this migration.

00:00:39:18 - 00:00:50:04
Michael
Welcome to the finance show with Joe. He's Joe. I'm just some schmo. And today we're talking about immigration. this is going to be a fun one. I'm looking forward to it.

00:00:50:04 - 00:01:06:15
Joe
This episode has nothing to do with race or racism or anything along the lines of that. It is going to come up. we're going to be extremely gentle about it. But in this episode, we're going to be talking about why migration has become such an issue in Australia in regards to the property market, and not because of anything else.

00:01:06:16 - 00:01:07:01
Joe


00:01:07:02 - 00:01:12:22
Michael
Yeah. Yeah. These are these are economic reasons, not because, we just don't like them. Okay.

00:01:12:24 - 00:01:29:16
Joe
We really need to tap into this because, from what I've noticed, every news report, every Reddit thread, every single thing about property has all led back to the same cause and effect migration. So, Michael, yes, I'll let you take the home on this one.

00:01:29:22 - 00:01:55:11
Michael
Why is migration such an issue in Australia? Because historically this is something that Australia has done for, I want to say, maybe last 30 years roundabout to prevent ourselves from falling into recession. It's what prevented us from copping the worst of it from the, the GFC and whatnot. So why is it a problem now is, you know, is our history coming back up to haunt us, or is it just like, not really preparing for the future? Why is it a problem?

00:01:55:11 - 00:01:56:02
Michael


00:01:56:03 - 00:02:21:21
Joe
Well, yes, I know our history is coming to haunt us because between 2020 and 2022, we weren't letting anyone in. We weren't letting Australian citizens back into the country. planes, I think, had one person per four seats to come back to Australia. So airlines were running at an extreme loss bringing people back to Australia. And that was just saying, if this okay, we're not even going to allow planes to go to Australia.

00:02:21:21 - 00:02:32:17
Joe
And it was an extremely limited amount of people being allowed back into the country. I know this for a fact, because my wife moved back from New York to Sydney.

00:02:32:19 - 00:02:34:18
Michael


00:02:34:20 - 00:02:43:08
Joe
She moved back from New York to Sydney in 2021 and she told me she goes on my flight. I think there was 20 people. I had to stay in hotel quarantine for a couple of weeks.

00:02:43:09 - 00:02:44:06
Michael
Oh yeah.

00:02:44:08 - 00:03:01:17
Joe
So there was minimal people allowed into the country, but because there was minimal people allowed into the country, there was also a minimal amount of resources, human resource allowed into the country as well, which dropped out unemployment rate all the way down to 0.9%.

00:03:01:17 - 00:03:03:12
Michael
It was something ridiculous. Yeah. It was.

00:03:03:12 - 00:03:04:08
Joe
So hard to find people.

00:03:04:08 - 00:03:07:08
Michael
Almost as ridiculous as the cash rate at the time.

00:03:07:10 - 00:03:09:12
Joe
It was so hard to find people to work.

00:03:09:18 - 00:03:10:01
Michael
Yeah.

00:03:10:07 - 00:03:28:01
Joe
And because it was so hard to find people to work. It just caused this issue where number one, you had people that were employed not being efficient, which has dropped our efficiency all the way. I think our GDP is the lowest amount amongst all the OPEC countries, like producing as in farm work.

00:03:28:05 - 00:03:30:22
Michael
Okay. let me rephrase. Per capita GDP.

00:03:30:22 - 00:03:49:20
Joe
Per capita GDP, was amongst some of the lowest. So they said we need to open up Australia and we need to start letting people in just to be able to take on jobs so we can increase the unemployment rate so we can increase competition so we can increase efficiency. Yeah. At the same time, they also cut building approvals.

00:03:49:23 - 00:03:58:16
Michael
So we talked about the inefficiencies last week with approvals at the local level and whatnot, and the bureaucracy involved in the politics involved.

00:03:58:17 - 00:04:13:17
Joe
That's exactly right. So the issue that's starting to stem from migration is, yes, we need more skilled migrants. Yes, we need more people to come to Australia. Yes, we need to increase our population. Our population is 28 million people. 27, 28 million.

00:04:13:20 - 00:04:14:23
Michael
Something like that. Yeah.

00:04:15:00 - 00:04:19:06
Joe
And we have the same landmass as continental US.

00:04:19:07 - 00:04:20:01
Michael
Yeah, I think so.

00:04:20:05 - 00:04:31:22
Joe
It's like you take Australia and you literally lift it and you put it in the United States of America, and it pretty much fills it out. The United States has a population of 400 million people. Yeah.

00:04:31:24 - 00:04:38:12
Michael
But it's the big difference is, is that the US doesn't have just one big desert in the middle of it.

00:04:38:14 - 00:04:45:23
Joe
Landmass aside. Yeah, yeah, it it's very similar. Yeah. Oh, yeah. In landmass. Okay. I'm not saying we have to have 400 million. No no no no.

00:04:45:23 - 00:04:47:08
Michael
I won't you won't be possible.

00:04:47:10 - 00:04:52:20
Joe
I'm trying to say how underpopulated we are. Yeah. We're a country where about 300 years younger and.

00:04:52:22 - 00:04:54:08
Michael
Oh, yeah, yeah, yeah.

00:04:54:10 - 00:05:04:15
Joe
All across America you've got places like Michigan and Cleveland that have saved. But they're not really CBDs. They look like Wollongong. no offense to people in Wollongong, but hey, it is what it is.

00:05:04:17 - 00:05:07:00
Michael
I was going to say no offense to people in Cleveland.

00:05:07:02 - 00:05:25:02
Joe
But I know we're funding them. We're going all out. But that's the reason why we've had to increase our migration so much. We need people in the country. We need to start really focusing on our population levels, because we're not going to be able to keep up with the rest of the world, but we haven't done it in a way that is sound at every single government level.

00:05:25:04 - 00:05:42:16
Joe
So right now in Australia, well, in February we let in 100,000 new people. Okay, this isn't just like I can't even explain how many buildings or how many new dwellings do you think was approved in the month of February?

00:05:42:18 - 00:05:46:10
Michael
Oh, I think I saw it was something like 7 to 8000 or something like that.

00:05:46:11 - 00:06:02:07
Joe
8000 new dwellings, 8000 new dwellings. We've got 100,000 new people and 8000 new dwellings. That means that it is now expected that 12.5, not 12, 12.5. People live in every dwelling and cut.

00:06:02:07 - 00:06:04:16
Michael
One person in half.

00:06:04:18 - 00:06:23:15
Joe
But it's it's genuinely insane to think about because you like what house has 12.5 people living in it, 13 people living in it, and you have to ask yourself the second question behind that. That is just for the new people. That is just for the migrants. That doesn't include our own population increasing and our population aging.

00:06:23:17 - 00:06:41:13
Michael
And that the big thing is the aging population more than, more than anything, because out and we're following the trend of most developed, most developed Western nations. It's actually not even Western just developed nations. once you reach a point, you have an aging population and we're not really replenishing it. You're seeing it in Japan, you're seeing a lot of places in Europe and stuff like that.

00:06:41:18 - 00:06:51:19
Michael
And that puts strains on the welfare system with the pension and obviously health, and stuff like that. And that's just increasing, that's contributing to our current cost of living crisis.

00:06:51:20 - 00:07:11:18
Joe
It's, it's a massive contribution to it. So really have to ask yourself what direction is Australia headed in and can we start keeping up. And it's really starting to look like, no we can't because as we discussed last on on the last episode, you need $285,000 to be able to afford a house in Sydney. Just that's your average household income.

00:07:11:18 - 00:07:14:07
Joe
Just to afford a normal house, like a $1.6 million house?

00:07:14:07 - 00:07:14:23
Michael
Yeah.

00:07:15:00 - 00:07:19:22
Joe
So we have to start really asking ourselves, why are we doing this?

00:07:19:24 - 00:07:42:09
Michael
Yeah, I saw so I saw a report in the Australian Financial Review. They just did it in January. So a little outdated but still so they, their theory so drew to the sharp rise in the working age population. Thanks to migration, we are very, able to avoid recession towards the end of 2023. So 2023 was not a recession year.

00:07:42:11 - 00:08:03:15
Michael
2024 is still up for debate, but we'll see. so basically that's how we avoided recession. And the theory was, well, the working theory is that over time, these migration, this migration will ease labor and skill shortages that would prolong inflation. Because remember, immediately after Covid, inflation was what everyone was talking about and cost of living and stuff.

00:08:03:17 - 00:08:15:07
Michael
and that's where, and so basically what it's come down to is Aussie families have it harder. They have a much harder than usual. It's short term, painful long term game. That's the working theory, according to the Australian Financial Review.

00:08:15:07 - 00:08:39:16
Joe
So I'm completely against that as a working theory, because the reason why our inflation is so high is because our government is spending money in ways that we've never seen them spend money before. I think I discussed it in an episode previously, but, Darwin has recently approved this new housing bill where, you know, the Australian government is going to come in and provide social housing at $5 billion.

00:08:39:18 - 00:08:59:22
Joe
And then I looked at the report, and it was some insane statistic that they're building the house for in Darwin. I think it's like $780,000 per dwelling for a house in Darwin that's considered social housing. So social housing, a lot of the time is the lowest form of housing. It is four walls, brick veneer, maybe even timber, with some cladding.

00:08:59:24 - 00:09:02:09
Michael
Go drive through Mount Druitt. You'll see what we mean.

00:09:02:09 - 00:09:20:11
Joe
Yeah, that's exactly it. you know, you say the old social housing, that way. But you will seriously say these houses are built to spec. They're not built to, you know, modern to have modern features. You don't have a fireplace, for example. You know, you might not even have working air conditioning in a lot of these properties.

00:09:20:13 - 00:09:38:14
Joe
so the labor government is spending money in a way that is out of control. Now, every government spends money that is out of control, and they're always, you know, trying to assist their lobbyists in one way or another. But we really need to start holding the government accountable, because that is the reason why that is such a huge reason why our inflation is so high.

00:09:38:14 - 00:10:04:16
Joe
We're spending money without having checks and balances. You know, Adam Bandt went out there and spent $963,000 on private jets. this is the leader of the Greens party, net zero. They're bashing on every single door. They bashing on every single door saying, hey, we need to achieve net zero for carbon emissions, but this guy's taking a private jet to go to parties in different locations.

00:10:04:16 - 00:10:09:10
Michael
Yeah, I only saw the headline. I tend to not look into those things just because I'm sick of it.

00:10:09:10 - 00:10:27:03
Joe
But but that's the thing. So we really need to start asking ourselves where is the inflation coming from? Because I know for a fact and I'm I'm working with people at the ground level and at the middle level. I'm not working at the highest level yet, but a lot of the loans that I deal with, between 100 and $50,000 to maximum $8 million.

00:10:27:03 - 00:10:44:12
Joe
And I'm just talking about residential mortgages right now. I'm not talking about the business loans or the commercial loans, anything of that nature. But with a lot of those loans that I am working with on a personal level, it's people just trying to get ahead. Yeah, it's just people saying, hey, I can save myself $300 a month. That's my kid going to childcare.

00:10:44:14 - 00:10:49:12
Joe
a lot of the inflation is imported, you know, petrol is that $2.20 a litre.

00:10:49:14 - 00:10:52:05
Michael
Which is like it's kind of wild that we import our petrol.

00:10:52:08 - 00:10:59:10
Joe
But it's even wild that the Australian taxpayer or the Australian public is being forced to pay this sort of amount, where.

00:10:59:10 - 00:11:01:12
Michael
We're one of the most taxed countries in the world.

00:11:01:18 - 00:11:18:08
Joe
Stamp duty to buy a property, you need to pay stamp duty. Yeah. For the transfer of cost. Now the Liberal government got rid of this and they tried to introduce something where it was yearly stamp duty. And then labor government literally scrapped that entire thing and got rid of it nine months later as soon as they got into power.

00:11:18:10 - 00:11:27:03
Joe
But that's a massive thing. Why didn't we charge it yearly for people that were purchasing their first home? Why are we taking it away? And you realise a lot of it is because of government spending. Yeah.

00:11:27:03 - 00:11:37:06
Michael
The government heavily relies on taxes from property, purchases and transfers of sale and stuff like that. Like heavily. It's almost like 50% of state revenue.

00:11:37:08 - 00:11:38:05
Joe
Look at tolls as well.

00:11:38:10 - 00:11:39:19
Michael
Hey, that's. Yeah.

00:11:39:21 - 00:11:41:12
Joe
So for me to drive.

00:11:41:14 - 00:11:43:00
Michael
The tolls in Sydney, for me.

00:11:43:00 - 00:11:51:03
Joe
To drive from Sydney, of Sydney, from where I live. Yeah. To Alexandria, you know how much are paying tolls each way?

00:11:51:05 - 00:11:52:12
Michael
like 20 bucks or something.

00:11:52:14 - 00:11:54:04
Joe
$28 each way.

00:11:54:06 - 00:11:54:15
Michael
Yeah.

00:11:54:15 - 00:11:58:17
Joe
So $56 a day I'm spending to get to and from work.

00:11:58:17 - 00:12:03:01
Michael
And this is why I catch the train.

00:12:03:03 - 00:12:05:15
Joe
Without petrol being include petrol $2.25 a litre.

00:12:05:15 - 00:12:20:07
Michael
Right now for me I consider driving a luxury now which a lot of people don't because Sydney is not really built where we built a kind of like an American city where like driving is kind of the default mode of transportation, rather than somewhere like Europe with trains and busses and stuff.

00:12:20:07 - 00:12:24:11
Joe
So you you're saying this okay, driving is luxury I agree.

00:12:24:13 - 00:12:29:07
Michael
Oh no. That's just how I feel about it. Now I'm not saying whether that's right or wrong, it's just how much it costs.

00:12:29:07 - 00:12:33:04
Joe
But you are correct. But unfortunately for a lot of people you have to drive.

00:12:33:04 - 00:12:33:24
Michael
Oh there's no choice. Yeah.

00:12:34:05 - 00:12:58:02
Joe
Because right now I don't have a train station in the five closest suburbs around me. There is no train station. And even if I did have a train station, I didn't have a train that can directly take me to the office in Alexandria. I have to go from Sydney. I'm sorry. I keep saying, Sydney. I have to go from Padstow to Redfin or Riverwood to Redfin, and then I have to switch to be able to get to the office.

00:12:58:02 - 00:13:01:14
Michael
Yeah, I have to switch at central to get to Green Square.

00:13:01:16 - 00:13:23:17
Joe
How insane is that? Just for me to be able to go to work? Oh, I know that started to. Green square has a direct line by Riverwood to no, not Riverwood. model to Green square doesn't have a direct line. Yeah. And how insane is that? That even if I want to go for the items or I want to go for the things that are more affordable, I can't.

00:13:23:22 - 00:13:24:10
Michael
Yeah.

00:13:24:12 - 00:13:28:12
Joe
I physically can't. And that is just because of the place that I was brought up in.

00:13:28:14 - 00:13:48:00
Michael
Yeah. And it's and it includes places, especially in western Sydney where there are, where there's few and far between like stations, if you're lucky enough to be at one of those suburbs that have a station close by, then. Yeah, you can catch the train and no problem. But if you're going to like that northwest and that southwest region, actually the southwest is not bad, but the northwest, forget about it.

00:13:48:00 - 00:13:49:00
Michael
You have to drive.

00:13:49:02 - 00:13:55:19
Joe
But then we say this as a problem that instead of investing in more trains, in more tunnels.

00:13:55:19 - 00:13:57:24
Michael
Or you can argue that they are with the Metro and stuff like.

00:13:57:24 - 00:14:03:14
Joe
That. Look at the Metro has taken over ten years to be built. Yeah, maybe even longer.

00:14:03:16 - 00:14:08:16
Michael
Yeah. I don't know what the projection for that was, because it was never going to be a short amount of time because I got to dig those tunnels.

00:14:08:22 - 00:14:31:22
Joe
I agree with that. Yeah, but it's still not built. Okay. Yeah, yeah. 2024, the year of our Lord. It's still not built. You're looking at all these items and how much it costs and stacking up. And then on top of that we've now increased housing and the cost of that. So we need to really start considering to ourselves how are we going to how are we going to fix this affordability crisis.

00:14:31:24 - 00:14:35:13
Joe
Have you been have you traveled much? Have you been to Paris? Have you been to New York?

00:14:35:13 - 00:14:39:14
Michael
Yeah, I've traveled to Europe and Japan. Okay. I've never been to America.

00:14:39:14 - 00:14:42:04
Joe
We are starting to become a lot more like Japan.

00:14:42:04 - 00:15:07:13
Michael
Yeah. I've noticed, or based on the articles I read a lot, a lot of the issues. Japan's further along in the in these issues. same thing with, South Korea as well. They're very similar. So aging populations, lack of housing, labor shortages, just because people are retiring and and then there's welfare stress with, taking care of old people because what are you going to do, just throw them in a ditch?

00:15:07:13 - 00:15:08:12
Michael


00:15:08:14 - 00:15:18:22
Joe
That's exactly what you look at in a city like Tokyo. You look at Okada, you look at, even parts of Kyoto. I know it's a really old part of Japan. Like they're vertical moving.

00:15:19:03 - 00:15:31:18
Michael
A lot of these, especially, South Korea and Japan. It's not quite like China, where you've got that space to sprawl. Not that China really does that, but they're very limited in their space, so they have to be very efficient with it. So they went tall before we did.

00:15:31:24 - 00:15:38:15
Joe
Okay. Thank you for understanding that point. Because this brings me to my next point. Why not proven these sorts of buildings?

00:15:38:17 - 00:15:59:00
Michael
Yeah, I don't know. I don't really understand why we don't build taller buildings. I know that there's a level of tall building where it's, not great for both environmental reasons and, like, economic reasons, why it costs heaps to upkeep and stuff. But there is a sweet spot, I think. I think it's between ten to 10 to 13 levels that that's fine.

00:15:59:00 - 00:16:00:07
Michael
Like that's very sustainable.

00:16:00:07 - 00:16:06:15
Joe
Yep. But they haven't done that. you go to Paris and everything now, I don't think anything is over 13 levels.

00:16:06:17 - 00:16:14:00
Michael
That's a historical reason. They want to preserve the, historical setting and facades of Paris. So that's a different. That's different. But I agree with you.

00:16:14:00 - 00:16:28:05
Joe
Yeah, but it works. Yeah. And this is the issue with the migration right now. And this is the issue with Australia right now. We've got the government spending too much money on themselves, way too much money on themselves and then increasing our taxes.

00:16:28:07 - 00:16:32:13
Michael
Because when you say that they're spending money on this House, can you extrapolate on that a little bit?

00:16:32:15 - 00:16:51:17
Joe
I mentioned it last week. There is a pool of sick leave that council workers can take. Yeah, there is no overtime. There is no, cross. There's no crosses, there's no checks, there's no, check of balances when it comes to council because they're not in there for long enough for people to hold them accountable and say, hey, why are you spending so much on this?

00:16:51:17 - 00:16:52:17
Joe
Or why are you spending so much?

00:16:52:17 - 00:16:57:01
Michael
And they also don't have a bigger profile, so no one's going to get mad at them. That's that's readily.

00:16:57:01 - 00:17:03:01
Joe
That's exactly right. And then we're spending so much money on travel for a lot of these politicians.

00:17:03:03 - 00:17:13:17
Michael
that's kind of part of Australia. Nothing's really close outside of the cities. Like if you even in the cities, if you were if you need to go to Penrith from the CBD, going to take you a good hour and a bit, I understand.

00:17:13:17 - 00:17:32:14
Joe
But every level of politician is billing their travel expenses to, the Sydney taxpayers or they try and taxpayers. this is a whole other level. Okay to it is another level. They're not checking what people are charging. So Sydney Airport is privately owned. I think Macquarie Bank still owns them or someone else. Tourism. But it's a privately owned airport.

00:17:32:14 - 00:17:40:24
Joe
It's not government owned like other airports in the world. To park a plane overnight, it's usually supposed to be about $20 an hour.

00:17:41:01 - 00:17:41:11
Michael
Right?

00:17:41:11 - 00:17:44:07
Joe
Okay, guess how much they charge the Australian Labor government?

00:17:44:12 - 00:17:46:13
Michael
I'm going to say like $10,000 or something.

00:17:46:13 - 00:18:02:11
Joe
$6,000 an hour. Six hours. And no one checked it. Yeah, no one checked it. They go, oh, it's okay. Bang. They have an unlimited like balance sheet to be able to afford or to be able to pay this stuff. So it's like we need a government to govern the government, you know, or someone to check in on this stuff.

00:18:02:11 - 00:18:20:05
Michael
It's kind of part of that anti-corruption stuff that, that they were trying to put, I don't really know where we're at with that. I know there's a state one. so they were trying to do that on a federal level because the previous, liberal government is kind of why they lost the election at the state level, despite being or.

00:18:20:07 - 00:18:42:20
Michael
No, no, no go forward. Yeah. Like the I mean it was it was very clear no matter what how you feel about Gladys, Gladys Berejiklian two previous Premier and now she was done for corruption and she wasn't the worst offender as the as the Royal Commission found out, the Liberal government, state government. We don't know about the federal one, but anyway, the state government was found to be doing a lot of dodgy stuff.

00:18:42:22 - 00:19:03:16
Michael
The labor government as well there, particularly in the pocket of the Gaming Commission, although some of the liberals, but to a lesser extent, so there's no win, but because there is, what is it ASICS? ASIC? Yeah, ASIC. I'm thinking of the shoes. Yeah. Because they have ASIC and stuff like that. We were able to catch that and prevent that.

00:19:03:18 - 00:19:11:06
Michael
So now they can't do that as much. But there's nothing preventing that at the federal level. So there's no one who polices the police. You know.

00:19:11:06 - 00:19:32:04
Joe
And that's the issue that we have right now. We have an Australian government that said, okay, we need more migrants to be able to afford our stuff so we can raise tax levels so that we can somehow continue on our cushy jobs. Like, it just doesn't make sense to me anymore. you know, the highest paid job in Australia is basically a politician.

00:19:32:04 - 00:19:32:12
Michael
Yeah.

00:19:32:17 - 00:19:33:01
Joe
Okay.

00:19:33:02 - 00:19:34:16
Michael
Because your federal.

00:19:34:18 - 00:19:37:14
Joe
Salary might not be as high as what we discussed in the last episode.

00:19:37:14 - 00:19:38:16
Michael
And I think it's.

00:19:38:19 - 00:19:59:02
Joe
But they're allowed to be compensated for all of their expenses, travel expenses, office expenses. Yeah. you know, any of their staff that works for them? They're expenses by the government. For example, right now, I own my own business, okay? And I have to generate my own income, and I have to pay my taxes and everything. But to have every single person employed, okay, I need to be paying them a salary.

00:19:59:02 - 00:20:05:02
Joe
So I have a break even analysis on. I need to go through that. I don't have a break even analysis. I go, how much do you cost? Oh, okay. Perfect. Yeah. You hired.

00:20:05:04 - 00:20:06:07
Michael
Yeah. What?

00:20:06:09 - 00:20:27:01
Joe
You know, like, it just it's absolutely insane to me. So why is it become such a big issue in Australia? Why is it become such a big issue in property? It's because right now we don't have the checks and balances on one item. Okay. Where the Australian government is charging us so much to be able to keep, you know, all they all these politicians are employed and their salaries are so high.

00:20:27:03 - 00:20:31:00
Joe
But the other issue is they're not efficient enough in getting things done.

00:20:31:02 - 00:20:31:23
Michael
I have no reason to be.

00:20:32:03 - 00:20:39:14
Joe
Exactly. No one is saying bashing down the door. Well, now we are. But no one previously was bashing down the door saying why is my approval taking so long?

00:20:39:16 - 00:21:01:03
Michael
It's it's it's interesting and it seems a very Australian thing to do is that we just copied. We just take it what the government says, we just do it. Like you look at other places, France raise the retirement age by two years, two years riots. I'm not saying right or wrong, but the public reaction that happens in Australia.

00:21:01:05 - 00:21:22:12
Michael
Oh well, yeah. What are you going do, boiling frog? We don't care. I, I don't know why we don't care. you know, we say that we're a laid back country, but, like, we're not because you can't even have a beer anymore. Make noise after 1:00. Yeah. You look. Yeah, I don't know. There's something there's something about the Australia like the Australian populace right now in the Australian attitudes to government.

00:21:22:16 - 00:21:35:05
Joe
I think the biggest issue is we're so far away from everything else. Well, what are your options? If you live in Australia, you're going to pick up and move to the States. It's 15 hours away. What if things don't work? Yeah, it's still cost $2,000 to fly back to this country.

00:21:35:07 - 00:21:47:04
Michael
And also the US is not it's not, great right now economically speaking, in terms of like setting yourself up and having those having that safety net that somewhere like Australia has.

00:21:47:04 - 00:22:07:02
Joe
So I think the issue really lies in we see how great Australia can be because it's so far from everything. but we're not living up to our potential. And I think that's where people are really starting to get upset. And I think that's why I'm so upset about a lot of these things, because on my end, I want to help more people.

00:22:07:05 - 00:22:29:14
Joe
I want to be able to help more people get more houses. I want people to be more financially stable and better equipped for their long term future, and they can't be. They can't be because we are lacking in efficiency. You said it before, we're a laid back country. I said it in the last episode. Look at the look at the busses or look at, you know, any political stance.

00:22:29:14 - 00:22:37:02
Joe
These things cost money. And when these things cost money, someone needs to get paid and they don't care as long as they can fulfill their promise.

00:22:37:03 - 00:23:01:16
Michael
That was like, I was talking with my with my dad about this during during the Covid lockdowns when they were handing out, job keeper payments. And we were like, oh, this is sweet. I work half the time and I get paid the same amount, which was awesome. Yeah. but we were both saying it's like it's we're going to have to pay for it eventually, whether it's immediately after the lockdowns or sometime later.

00:23:01:16 - 00:23:05:01
Michael
But we this is we're paying for it now. We're in a cost of living crisis.

00:23:05:01 - 00:23:14:08
Joe
We are genuinely paying for it now. We were printing, I can't I can't remember how much we printed, but every Australian was getting $750 a week tax free.

00:23:14:10 - 00:23:19:09
Michael
And then there were the businesses like Harvey Norman that just abused it. It was several big corporations as well.

00:23:19:10 - 00:23:23:18
Joe
They killed it. They made a killing. Woolworths was the most profitable. It had ever been and so was Coles.

00:23:23:18 - 00:23:25:03
Michael
And still they,

00:23:25:05 - 00:23:42:03
Joe
I think I've pissed Michael off to another level. If anyone viewing this, you've seen Michael's face just go more and more red as this episode has gone along. these are my recommendations on how to fix it, and these are my recommendations on what you can do to protect yourself in the future, to set yourself up for retirement, or to be able to just set yourself up for the future.

00:23:42:03 - 00:23:57:21
Joe
Yeah. Number one, buy a fucking property. Okay. And that's easier said than done. But when I say buy a property, I'm not saying to you go and spend $1.6 million in Sydney, that's impossible. You are 18 to 25 years old. Guess what? You probably want to go on a few benders before you go and spend money on a property.

00:23:57:21 - 00:23:58:11
Michael
Yeah.

00:23:58:13 - 00:24:16:21
Joe
I know, personal experience. I jumped off a sign at McDonald's into a bush. I didn't need to do that. I did it to impress my friends. I was 18 years old and I was stupid. When I got older, I started to realise, hey, I need to invest in property. The wise man learns from his mistakes. The genius learns from the mistakes of others, learn from my mistakes.

00:24:16:23 - 00:24:34:22
Joe
My mistake was other than invest in property. Soon enough, if I did, I probably would have been worth a lot more money than I am now. Yeah, now I'm sleeping four hours a night and working 20 hours a day just to be able to get to the point that I should have been at eight years ago. These are the suburbs that you can really get ahead in.

00:24:34:24 - 00:24:37:14
Joe
Number one look at Campbelltown.

00:24:37:16 - 00:24:38:13
Michael
Oh yeah.

00:24:38:19 - 00:24:40:05
Joe
Undervalued as all hell.

00:24:40:05 - 00:24:41:00
Michael
Absolutely.

00:24:41:00 - 00:24:50:19
Joe
35 minutes away from Sydney CBD. And you could still purchase properties in that area between 500 and $800,000. Now talking about apartments I'm talking about freestanding houses land.

00:24:50:19 - 00:25:06:18
Michael
Yeah. My cousins live out there. They've got a very big well, I mean, they bought ages ago and I imagine it was cheapest chips at the time. Yeah I mean it's still it's still cheap and Campbelltown is like I know it's got some people give it a bad rap and everything. It's not, it's not that bad or anything like that but a nice place.

00:25:06:24 - 00:25:26:12
Joe
Campbelltown is as rough now as many I was 20 years ago, I grew up, I mean, I, I feel like I can get back to that stage, you know, like 20 years ago. Yes. Okay. Keep your wits about you. Don't do anything stupid or even looking at certain investment in the infrastructure there. Have you seen the shopping centre?

00:25:26:14 - 00:25:27:03
Michael
Oh it's awesome.

00:25:27:03 - 00:25:27:20
Joe
Yeah, it's.

00:25:27:20 - 00:25:28:23
Michael
It's MacArthur and.

00:25:28:23 - 00:25:43:03
Joe
Stuff. Yeah. They've got a beautiful restaurant district in the in the shopping centre now. They've invested heavily in trying to build that community up. Yes. Is it still low socio economic. But guess one you can really snatch up some opportunities there with some positive rental yield.

00:25:43:04 - 00:26:02:24
Michael
This is and this is a lot of people. They don't want to tell you that you're wrong for wanting the best. But you that's you can't start there. Yeah. Like I know you want to live in Bondi. you can't you have to. Especially in the in the current housing crisis, look where you can buy, not where you want to buy.

00:26:03:01 - 00:26:16:16
Michael
You what look what you want to buy once you've, you know, it doesn't you don't even necessarily have develop a portfolio or an investment portfolio or anything. You just need to get ahead and just get some sort of financial stability. You can tap into that equity in Campbelltown. You don't have to live there forever if you don't want to.

00:26:16:21 - 00:26:18:19
Michael
Who knows, you might even like it.

00:26:18:21 - 00:26:22:02
Joe
Is your name just sort of. You just been listening to me for that long,

00:26:22:04 - 00:26:24:08
Michael
I think it's starting to rub off on me, man.

00:26:24:10 - 00:26:40:05
Joe
I think I'm interviewing myself right now. I'm just having a conversation with myself. He's. Michael is 100% right. Don't look at everything as a full stop. And this is going to be your property forever. Yeah, look at it as a journey. And guess what? You have to get active on your journey. If you want to live to be 90 or you want to live to be 100, my.

00:26:40:05 - 00:26:57:01
Michael
Parents did the exact same thing. My dad's bought in Mount Druitt. He bought a property in Druitt, sold it. We moved to Parramatta. Then we lived with with my grandparents in West Penn Hills. And then he managed to buy up in Glen, Oregon. You jewel? Yeah, it's just step by step.

00:26:57:03 - 00:27:19:02
Joe
That's exactly right. What are you going to do? We live in a generation of instant gratification, and you really have to prolong that gratification now in order to be able to get ahead. Another suburb that you could start looking at around Sydney is look between the Sydney and London, areas and look at areas like Ellensburg, look even further south, look at Carmel that's still on the water.

00:27:19:02 - 00:27:34:14
Joe
Look at Fairy Meadow. Okay, you're not quite well known yet, but you're right next to woodland. Don't look at Sutherland. Sutherland. You could still get some good options. Through there. Yeah, all of those suburbs. Waterfall, even Heathcote, Engadine. You are purchasing for lower Mountain?

00:27:34:16 - 00:27:35:11
Michael
Engadine. Macca's.

00:27:35:17 - 00:27:56:19
Joe
That's right. Scomo. But you are purchasing at a lower cost or you're purchasing for a lower amount. Yeah. To be able to take advantage of the Sydney prices. You look at those suburbs and you look at the way that they behave. They follow the same trajectory as other suburbs do. If not, they perform better because you put you're buying at a lower price point.

00:27:57:00 - 00:28:16:08
Michael
Yeah. But yep. You go, no, no, no, I was just saying and don't get mad at the headlines and stuff and like, don't start getting mad at migrants either. It's not their fault that this is happening. There are ways that you can. Like what? Like we've been saying like start build yourself up, look outside of where you want, look where you need to go.

00:28:16:10 - 00:28:34:24
Michael
Yep. like some people are trying to use this as an excuse to bash, people of different backgrounds. I've seen quite a few people start bashing Indian folks, which is unfair. Completely. Yeah, like it's not their fault. They're just taking opportunities that are given to them. They want they want better lives, just as everyone else here. that's why they moved here, you know?

00:28:34:24 - 00:28:35:17
Michael


00:28:35:19 - 00:28:40:22
Joe
That's exactly right. And if you look at these individuals, a lot of them are the hardest working people that you'll find. It is.

00:28:40:22 - 00:28:41:16
Michael
Absolutely.

00:28:41:16 - 00:28:42:23
Joe
And all they're trying to do is get ahead.

00:28:43:02 - 00:28:43:11
Michael
Yeah.

00:28:43:14 - 00:28:48:14
Joe
Just like the rest of us. So and guess what? They are willing to do the jobs that we aren't a lot of the time.

00:28:48:19 - 00:29:08:13
Michael
Yeah, I like I've seen it like I've seen there's two conflicting headlines that I have from the Australian. So we've got a murdoch rag like I can't stand it, but like this is the kind of stuff don't don't buy into this one. One headline they did in January 2024 Australia close to recession. Has immigration numbers jump ahead by 30 years.

00:29:08:19 - 00:29:24:06
Michael
All right then just a couple months later student visa slowdown could push us towards a recession. So which one is it? Too many people or not enough people is going to cause a recession. Just focus on you. Don't get mad at these people coming from overseas. It's not their fault. They're not causing this.

00:29:24:06 - 00:29:47:01
Joe
They are not the the issues, stemming from the housing crisis, the level of bureaucracy to get anything approved and basically governments charging way too much money or way too much in taxes to be able to get things along, along the way. another thing that I want to highlight, to be able to protect yourself or to be able to prepare yourself for the future, because we're talking about migration, we're talking about the cost of living.

00:29:47:01 - 00:30:06:04
Joe
We're talking about, you know, how much things have been increasing. Look, inter-state as well. Really need to start looking interstate and seeing what's available for you. For example, Geelong, Victoria's second, second city. okay. About same size as on. But you look at Geelong, you can still snatch up houses there for about 450 grand.

00:30:06:07 - 00:30:07:06
Michael
How's Newcastle doing?

00:30:07:11 - 00:30:17:22
Joe
Newcastle. Fantastic. Yeah. That's another city that you can really tap into. You can buy properties on the cheap and you can achieve that exponential growth. And that's what we want.

00:30:17:22 - 00:30:21:00
Michael
Is there work? We’re just talking to our producer, he’s from Newcastle.

00:30:21:02 - 00:30:24:06
Joe
Mid okay. It's mid so it exists but you gotta look for it.

00:30:24:06 - 00:30:36:21
Michael
So yeah look it worked again work towards it's easy to say go buy regional and go to the second cities. But the reason why the property prices in these capital cities are going up so much is because frankly, this is where the work is.

00:30:36:21 - 00:30:47:15
Joe
Yeah, that's exactly right. The last thing I want to highlight to really get ahead or to assist yourself, and you're going to look at me and you're going to go, wait, what? How's that one? Go look at your subscriptions.

00:30:47:17 - 00:30:48:24
Michael
Oh yeah. Yeah, yeah.

00:30:49:00 - 00:31:09:05
Joe
I've been wanting to highlight this point for a few episodes. I forgot to mention it a couple episodes ago, but watch your subscriptions because you can be saving yourself $250 to $300 a month without even knowing it. I went through my subscriptions the other day and holy Lord, oh my God, I had like $400 in subscriptions racked up a month.

00:31:09:10 - 00:31:10:15
Michael
What were you subscribing to?

00:31:10:20 - 00:31:22:05
Joe
No, no no, listen to this. I had I had iStockphoto. I didn't realize iStockphoto was constant. They increased my prices to $150 a month. I used to spend like $50 a month. And this is for marketing materials and marketing purposes. Yeah.

00:31:22:06 - 00:31:24:02
Michael
It's a it's literally stock footage.

00:31:24:02 - 00:31:44:05
Joe
Stock footage, $150 a month. So stock photos, I can go on Google and find these stock photos easily now, or I can use AI to generate them for me. Yeah. Number two Disney has increased from like ten bucks a month to $25 a month. Netflix has increased from 13 bucks a month to $25 a month. Yeah. Stan Kayo Sports is $28 a month.

00:31:44:05 - 00:31:53:02
Michael
Kayo is the biggest fucking rip off of. I fucking hate Kayo. But I have to have it because I love formula one.

00:31:53:04 - 00:31:54:06
Joe
That once you hit.

00:31:54:06 - 00:31:56:17
Michael
Once again. Fuck you, Murdoch.

00:31:56:19 - 00:32:08:19
Joe
Do you hear this amount of money that we need to spend? Yeah. Just to be able to get to, like, a basic level internet. Oh, no, I can't cut that off as a subscription, but.

00:32:08:21 - 00:32:10:02
Michael
internet is is just required.

00:32:10:02 - 00:32:23:08
Joe
Now. No, no, no, but, I had a gym app and that was costing me nine bucks a month. I had a sleep app that I didn't even know I had. Okay. Asleep app was costing me $4 a month. You think to yourself $4 a month or ten bucks a month, all this kind of stuff.

00:32:23:12 - 00:32:24:20
Michael
It's always building up.

00:32:24:22 - 00:32:41:05
Joe
If you've got 40 subscriptions, a $4 a month, guess what? That's going to be $160. And guess what? You're probably not paying four bucks a month. It probably said $3.99 for the first month, and then it's, and then it switches to recurring $3.99 a week, and then you look at your same, oh, $3.99. That's fine. That's $16 a month.

00:32:41:07 - 00:32:52:05
Joe
So watch your subscriptions so you can get ahead. Because I'm telling you now that is going to kill your bank account faster than anything else in Australia.

00:32:52:07 - 00:33:10:19
Michael
Now the here's my pro tip as well for saving some money to in similar vein, buy an old Xbox One, stay home and buy games for about 3 to $5, or get Game Pass. You will save so much money by staying home and play. Can I ask you?

00:33:10:22 - 00:33:31:18
Joe
I can I ask you something about that. So my favorite games. I haven't played a video game since 2009, 2008 and that's just me. Naturally. I just got bored. Yeah. And I couldn't be bothered learning more games and these controls and stuff. Apparently games are expensive. Now, somebody in Japan spent $39,000 on the I sports or something.

00:33:31:18 - 00:33:56:10
Michael
Like everything else in the world, video games are more expensive. It cost of living and inflation has hit that too. It's yeah, it's now a minimum of a hundred $110 for a new release game to buy the game. Yeah, to buy the game. And then if you buy a game like FIFA or any of the sports games from Asia specifically, they are going to try to get your money through microtransactions, which will cost.

00:33:56:12 - 00:33:58:04
Michael
I mean, there's no there's no ceiling.

00:33:58:04 - 00:34:13:10
Joe
So can you explain the microtransactions we've got? We've deviated so much, by the way, we started with migration houses. How much do these buildings cost? And now all of a sudden we're on microtransactions from AI. But it all comes back to the same point of how to set yourself up for the future and why these things have become issues.

00:34:13:10 - 00:34:30:17
Michael
Look, I know you FIFA Ultimate Team. You want to buy a pack? Let's just say a pack costs five bucks. Immediately. That's not heaps of money. Yeah, but you want to keep buying those packs and there's no reason to stop you from buying those packs either. Also I don't know if it, I don't know if they're still doing the packs.

00:34:30:17 - 00:34:33:21
Michael
I know there was an NBA game that had a literal slot machine in it.

00:34:33:21 - 00:34:35:12
Joe
Yes, I played that one.

00:34:35:12 - 00:34:49:16
Michael
Yeah, that literal slot machine so you could get I don't even know what you could get. Cosmetics, maybe players I don't know. But it was it's gambling. It's literal gambling. Literally banned in the in Europe I think it is actually Australia loves gambling. So yeah.

00:34:49:20 - 00:35:13:16
Joe
Definitely not banned it, but it's just, if you want to get ahead, if you want to start looking at Australia as a whole, you need to start understanding why these costs of livings are going up so high, why we have such an issue with certain things you need to look at. Okay. Why has migration happened? Well, we didn't let to we didn't let people in for two years and we needed to replenish that.

00:35:13:16 - 00:35:32:00
Joe
That's why labor came out with a net migration of 4 million people by 2028. Some something like that, something like that. That's why we're letting in 100,000 new people per month. You need to understand why the building crisis is happening, why are things so much more expensive, or why the house is so much more expensive? It's because they were dodgy developers back in the day.

00:35:32:01 - 00:35:50:08
Joe
Yeah, we're just getting things across a lot, and then all of a sudden their houses or their buildings started to fall apart. Yeah, okay. We had the self-certification that wasn't working and that's why there's so much more bureaucracy. You need to understand, hey, how can I get myself ahead? Because right now, at present moment, I don't think I can.

00:35:50:10 - 00:35:52:00
Michael
Yeah. And it's really difficult.

00:35:52:03 - 00:36:09:20
Joe
You need to look at it and go, okay, this is how I can get ahead in life. This is how I can build for a better future, for a better Australia. And the way that it is, is looking at the different pockets. Australia is going to keep growing. Yeah, don't think of anything as a full stop. Don't look upon diet and think to yourself, oh, the property is worth $4 million.

00:36:09:22 - 00:36:24:10
Joe
I can't afford that. So I'm never going to buy a property. Go look at the other suburbs. Go look at places you can invest in because they're going to grow at the same rate. There's only so much land in Bondi and that's going to keep going up. There's only so much land in botany and that's going to keep going up.

00:36:24:10 - 00:36:28:00
Joe
There's only so much land in Parramatta and that's going to keep going up. So look.

00:36:28:00 - 00:36:32:03
Michael
Just look at New York, Manhattan Island. Yeah, there's they literally have nowhere else to go.

00:36:32:03 - 00:36:52:05
Joe
And they keep going vertical. Yeah. And the prices still keep going up. But that's it. You got to look at it like that. And at the end of the day follow the same steps of the people in the past. Look for land, look for houses or look for amenity. The closer you are to amenity, the more expensive the property will become.

00:36:52:07 - 00:37:03:15
Joe
The close, the more land you have, the more expensive the land is going to become. And at the end of the day, with growing population, this is how you're going to be able to set yourself up for success and for your financial future.

00:37:03:16 - 00:37:06:04
Michael
Yeah, and you need to need to be willing to make sacrifices.

00:37:06:04 - 00:37:10:07
Joe
That's exactly right. That's a big one, too. you know, we deviated so much on this episode.

00:37:10:10 - 00:37:12:15
Michael
We did, but I think we got a lot of good stuff out of it.

00:37:12:17 - 00:37:29:13
Joe
Don't I feel as if people are starting to understand, okay, why this so much migration? Why is it become such an issue in Australia? Yeah, but at the same time, I feel like we've been able to help people understand, okay, these are the issues, but this is how you can protect yourself in the long run. Because in ten years time, we might have another migration issue.

00:37:29:15 - 00:37:46:07
Joe
and in ten years time, you want to be ahead of where you are today. Yeah. And just by doing those small things, canceling your subscriptions, looking for those little pockets of investments, speaking to a broker, I think. Yeah, I haven't even mentioned myself. Speak to a broker and find out how much you could actually borrow, because you'll be surprised.

00:37:46:07 - 00:38:04:10
Joe
I had somebody contact me the other day and he's like, oh, you know, I've got this, I've got that. And I sat there with my jaw like, and I was like, dude, you know, you can afford like a $1.8 million house. He goes, what? And I go, yeah. And I go, what? What have you been doing? And he goes, you know, me and the wife, we putting money aside for a holiday?

00:38:04:12 - 00:38:23:10
Joe
we've put aside, like $95,000. I was like, what? I was like, this is insane. Like, you can literally afford a property of this amount. So speak to someone who speaks to a finance professional because they can get you in the market earlier, and you can start making your money work for you. And I think that's the most important thing.

00:38:23:10 - 00:38:28:19
Joe
Yeah. Anyways, guys, as always, my name is Joe. Hey, some smoke your eyes.

00:38:28:20 - 00:38:33:04
Michael
I'm sure you not hear me go on about microtransactions earlier.

00:38:33:06 - 00:38:48:04
Joe
We want to thank you all for listening to this episode of the finance show. Joe, if you need any help with your personal finances, visit us at. It's simple.com that you you need help with refinances if you need help with purchases, if you need help with debt consolidation, I know that's a big one. Guys, speak to us. We're more than happy to assist.

00:38:48:06 - 00:38:51:03
Joe
Thank you again and we can't wait for the next episode.