The Finance Show With Joe

S2E7: Why You Should Buy in Regional Australia Right Now!

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You should be buying in regional Australia right now if you're interested in an investment. Why? Well, the boys spoke to special guest, Emmanuel Michael, a buyers agent who has seen some explosive growth in regional Australia, particularly in Western Australia. 

In fact, it's not just the regions with great prices for entry and potential for growth, but Perth too. The WA capital has now become the most affordable capital city in Australia but there are some restrictions for investors. 

Follow us for more property news and mortgage advice!

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Michael:

Welcome to the Finance Show with Joe. He's Joe, I'm just some schmo and this is Manny. I was going to mention there was a special guest, but I like this way better. Anyway, today, what are we talking about? We're talking about Perth. We're talking about regional Australia, talking about property, all the good stuff. What are we talking about?

Joe:

There are a couple of articles that have come out recently and I thought to myself I'm good with money, I'm good with debt, I'm good with consolidation, I'm good with refinancing, getting the equity out. What I'm not supposed to be an expert in but I think of myself a little bit, as is the property market, because I'm supposed to just be able to give general advice. So I thought to myself we need a strong guest on here today to be able to assist us with this, and I've brought my friend, emmanuel Markle, onto this show today. Manny has started his new company called Investor Mate. He's been operating for over a year now and the great thing about Manny is he's in these markets, he's got the success stories and he's able to actually provide us with the evidence of basically why everyone's moving regional. So, manny, thank you for coming on to the show today.

Manny:

Thank you for having me, gents. I'm very excited to share some knowledge about regional markets and how things have been performing and what we've been doing for our clients, especially over the last 13 months. So yeah, thank you for having me today Anytime mate.

Michael:

So there was a recent article that came out yes, so dwelling values rose 2.1% in regional Australia in the last three months from up to April 2024, which is the fastest quarterly growth rate in the last two years, outperforming capital cities by quite a bit. Did you say 2.1%?

Joe:

in a quarter. Yeah, in a quarter. So that means they could go up 8% in a year.

Michael:

Potentially, Potentially, yeah, in regional markets, in the regional markets, that's Australia-wide, which is pretty nuts, and the best of all of them is Western Australia. Okay, top dog.

Joe:

I'm just trying to understand. So I've seen Blacktown, I've seen suburbs in Sydney grow by like 16% in the last seven months, but that's expected, because people fly in to Sydney, they fly into Melbourne and they're like, okay, this is where I'm going to put my base in, this is what I'm going to do. But then we're seeing suburbs in WA like Geraldton, which I've never heard of. Like Geraldton, which I've never heard of, which is like an hour and a half north of Perth, which went up 39%, which is insane.

Manny:

Yeah. So look with regional pockets right. They are a lot more affordable in comparison to what we're seeing in Sydney and Melbourne capital cities. So that sort of creates an opportunity where the average Aussie today at least all of my friends that I know here in Sydney can't afford to buy a $1.5 million property. It creates opportunity in these regional markets. What?

Joe:

we're seeing is we're seeing a lot of people. They've got money, they've got hardworking people and they bloody can't afford to buy anything in Sydney. And I know this first, so I see it on the lending side. So what I'm seeing on the lending side right now is hey, Joey, I want to buy something in Sydney. Okay, fantastic, Do you want to buy an apartment? No, Okay, then you can't buy in Sydney.

Michael:

I don't know if you saw?

Joe:

did you see my recent reel that blew up? Oh, yeah, yeah. So I compared the housing affordability in the 90s to now and the median household income back there back then was like 32k, and then the median household income now is like 92 000, which sounds good sounds but at 92 000, you actually can no longer afford to buy anything in sydney.

Joe:

I think the maximum you can borrow with 92 000 is 450 grand or 540 grand, depending which lender you go to, because of the interest rates. What can you buy in Sydney for $540,000? A one-bedroom unit in Bondi maximum. Yeah, I don't even think you can get that.

Manny:

No, not, even Not in Bondi, maybe Penrith.

Joe:

That's pretty much it. But then we're also seeing on the other side of everything. We're seeing affordability drop down in Melbourne. We're seeing a drop down in Brisbane. So it's a conscious decision. Okay, the Australian dream is buy property. It will go up, but they can't get into the market. So this is I think this is like just what's going to end up happening. Perth is just going to climb up.

Manny:

I think working from home really changed that as well. Right, we don't have to be in capital cities anymore. Sydney and Melbourne obviously big employment sectors. But when you can work from home, you can live anywhere in the country, right? Yes and no you don't want your brokers living in Busselton right or Bunbury.

Joe:

Where's Busselton? No, but it's like it depends on the job role, and I understand COVID pushed a lot of work from home practices. If it's a large, okay, this is the best way to put it. If you're a graphic designer and you work behind a computer and your art is fantastic, you've got fantastic marketing and you've got, you know, everything going for you, top to bottom fantastic. You can work from home. You can be one of those digital nomads.

Michael:

Yeah, and you're a freelancer as well. Yeah and so regional does sound right.

Joe:

But if you're a solicitor, okay, your father used to be a solicitor, right? Barrister, barrister, wow, first of all, barrister, you have to be in court, okay, you can't be representing high level people from behind a computer. There's a certain energy that's attained in with the in-person stuff. Even in-person podcasts mean you can shoot shit as much as we want over a zoom call, but in person there's serious energy, there's laughter, there's there's body language and stuff that's attained and a lot of businesses now have also like I think there's very few that it's like completely remote.

Michael:

now it's all hybrid. I like hybrid because I like going into the office, but some people like to just be at home. I don't disagree with hybrid. I like hybrid too. Yeah, because everybody likes hybrid, like one or two days at home.

Joe:

Like I need to. For me personally, I need to be able to sit there and do just number crunching for two, three hours. I'm certain you're the same. Yeah, just plug away with no distraction. That's exactly it. So I need that.

Joe:

Like, if I go into the office, I know for a fact that you know someone's going to have an issue over here. People are going to want to go for large. Hey, let's go get a coffee. There's going to be those outward distractions. So I agree with the hybrid model. But, like bringing it all the way back around, not every job is going to be able to offer the work from home at the same time.

Joe:

So I understand why Sydney has gone up so much. I understand why Melbourne and Brisbane are going up so much, and I believe that Australia has done themselves a disservice by not investing in Perth or Adelaide sooner. That's what I believe and that's probably why we're starting to see the boom now and the Australian dream going back. People want to buy houses, they want to live, they want to be able to grow wealth, they want to prepare for retirement. Essentially, everybody wants to get to a stage where they don't have to work 16 hour days like we all are right now because interest rates are so bloody high. Everybody wants to get to that level and unfortunately, it's very difficult for people to get to that level right now, and that's why we're seeing the growth in Perth. We're seeing the growth in the regional towns.

Joe:

I disagree with you in the sense that Australia needs to provide this. I think Australia needs to think to themselves if we've got main CBD hubs, we need to build the right infrastructure around them so they act like proper CBDs. I know the new train line's coming in Sydney, but but what the F? Is Sydney's transportation system or roads? They're the worst things I've ever dealt with.

Michael:

I quite like Sydney's train system. It's not perfect, but like when it's running, it runs exactly how it goes.

Michael:

The problem is if it gets away flip a coin, whether or not it's running that day yeah but like when it, when it works exactly how it's supposed to, which is, frankly, like most of the times, like nine out of ten times it's working how it's supposed to. I can predict it, I can always get to and from at the same at the right times and everything. Yeah, it's not perfect and it hasn't been have improvements, but it's not the worst thing. The buses forget about it. Just start that again.

Joe:

But, like you see, like median salary is 92K, houses are 1.6, 1.7 mil, it doesn't make sense and it won't get better.

Manny:

I mean, if you have a look at the data with regards to population and what's happening over the next 12 months, right, we're expecting anywhere between 600,000 to 700,000 migrants to come into the country, and they're skilled migrants, so they're going to be wanting to come to areas like Sydney, like Melbourne, like Brisbane, for employment and we're not keeping up with these levels of demand because supply is decreasing. We're not building anywhere near the amount of new homes that we need to be and the government's not doing anything to incentivize developers, builders.

Joe:

No, they're handcuffing them if anything Right. We're seeing developers and builders just I don't want to say be starved because they're developers and builders, but we're seeing developers and builders go through serious issues just to be able to get a development going and people are like, oh, why'd this developer go bust? They've got ample amounts of money, so they're supposed to build, take on all this risk, take on the seven years warranty and break even or lose money for what? That's the government's job to be able to provide social housing, not someone who's trying to start a business and grow.

Michael:

Was that how it worked before, like in the 80s and stuff like that, when there was the big social housing boom? Was that our private developers building that? It was a mix of both, a mix of both.

Joe:

I know for a fact that the government used to contract out. They used to go to a private developer or a private builder, but then they'd pay them for it. It was a trickle-down effect. The contract of sale or the social housing or something along the lines of that would say the government's name, but then on the other end of it it was a developer, builder that was profiting on the side of it. Okay, that's why you see a lot of the old social houses that were built cheap. Yeah.

Michael:

But yeah, going back to everything, perth, this is why Perth is booming, no, but this is honestly why you can get house and land.

Joe:

And we're seeing some serious statistics here, like 2.1% in a quarter for regional Australia. Geraldton, which I discovered is a suburb today, is up 39%. And then we're seeing Rockingham Fremantle. They're $750, $850 to buy there now, and then you've got some serious success stories as well.

Manny:

Yeah, very exciting success stories which we'll come into. But I think to your point before, joey, where our clients who live here in Sydney they're first-time buyers or first-time investors. They're on pretty good salaries, but they can only afford to buy for $600,000, $650,000, $700,000. And, realistically, if they don't want to live in a one or two bedroom apartment somewhere, well, their only choice is to rent vests. So that's becoming a very popular strategy I'm seeing for Sydneysiders. Can you explain rent vest, rent vesting, yeah, so living where you want to live, renting where you want to live and buying investment properties across the country where you can afford, yeah, yeah, okay.

Joe:

And so with rent vesting, I think that term has changed in the last five years because it used to be correct me if I'm wrong but it was like invest in the same building that you're renting in, or something like that, like I heard someone explain it to me at Lendlease once, like that. Sorry for that lady, correct me if I'm wrong, jump into the comments, destroy me, I don't mind, it's good engagement, like an apartment building you own one and rent another one.

Joe:

Yeah, yeah, yeah, it was like buy the three-bedroom, rent that out and then rent a one-bedroom unit for yourself, which isn't a whole. I think she was just trying to make more sales.

Manny:

Yeah, maybe she was trying to sound a bit smarter than she actually is.

Joe:

Oh.

Manny:

OK, I've never heard someone refer to rent vesting like that. Okay, so If?

Michael:

I bought a three-bedroom apartment in the same building. I'm going to live in the three-bedroom apartment. I'm not going to go into the one-bedroom downstairs.

Joe:

Okay, so have you got any clients, or have you had anyone that's rent vesting at the moment?

Manny:

Yeah, yeah. So pretty much all of my clients that are young, in their sort of 20s, and they want to live in a little bit nicer areas in Sydney, right, like Coggera, rockdale, they want to live down in the Shire, they want to live in Bondi. They're not buying a property in these areas in today's market right, two-bedroom apartment in Coggera you're looking at $850,000, $900,000, right? Do you want to buy one of those properties or do you want to maybe rent there for 700 per week in rent and then go and invest elsewhere in the country?

Joe:

So when you're talking about 700 per week in rent. Is that for one bedroom or two bedroom units?

Manny:

Well, two bedrooms in the St George region in particular, right, but I guess the point that I'm trying to make here is let's say, for example, you go and buy a 900 or a million dollar property here in Sydney, what are your mortgage repayments going to be?

Joe:

I think it's about $6,600 per month, somewhere around that per month, depending on the mortgage, the rates, all that stuff. But you're looking between $5,800 to $6,800, basically yeah.

Manny:

So that $950 or $1 million unit in Coggera that you can pay a mortgage on $6,000, or sorry, pay a $6,000 a month mortgage on that property, would you? Does it fight like financially right? Does it make more sense to potentially buy that one property and tie yourself into that one apartment and pay $6,000 a month or maybe rent that property for $700 per week and then free up your cashflow to then and free up your servicing to then go and buy a property interstate?

Joe:

That does make a lot of sense. But do you know what the difference is? Let's say I was earning 100 grand a year. I'm renting one bedroom in Cogger and I'm renting it for like $350,000. Yep, Do you know what roughly I'd be able to afford in Perth? Or you know, just like what have you seen previously in the market? Are we seeing people be able to buy $600,000 homes, $700,000 homes?

Manny:

Yeah, yeah for sure. So, look, the market's actually increased at a very rapid rate over the last 12 months. So we've been helping our clients invest in Perth for anywhere between sort of 12 to 15 months, so March last year. So over 12 months we've been investing quite heavily in Perth and we've seen suburbs go from 500 to 600 to 650, like completely defy our expectations, right? But when you still look at 650 to 700,000 in comparison to Sydney, Melbourne, Brisbane, it's affordable and that's what's driving people to invest in these areas.

Joe:

I think people need to stop looking at ROI and start looking at return on capital, and not a lot of people know what return on capital is. What do you want to see? Explain the difference. So return on investment is you buy an investment, it's $700,000 and that grows to $800,000 or 850. In that case your return on investment is 22.5%. Let's call it Something along the lines of that, right, Because the initial investment was 700K but 850. And then the investment has grown to 850, right. And then the investment grows to $850,000, right.

Joe:

But if I purchase a property for $700,000 and my initial capital is $70,000, and then that grows to $850,000, my return on capital is actually like 200%. So I haven't invested $700,000 to make $150,000. I've invested $70,000 to make $150,000. Yeah, okay. So let's say property $700,000, mortgage is $630,000. So there's my $70,000. If I wanted to sell the property tomorrow, it'd be worth $700,000 or $700,001. But what we're seeing in Perth is like three months later, instead of it being worth $700,000, it's worth like we saw a 22 percent one recently where it went up to like 850 and it's like so I put in 70 grand and I made 150 grand in three months. For doing what? For purchasing a property and paying stamp duty. Like you can't save at that rate, you can't put money in the stock market at that rate without some insider trading going?

Joe:

on Like that went up better than Bitcoin.

Michael:

You heard it here first Property's better than crypto. I think they've heard it here a few times.

Joe:

But honestly I think that's actually better than Bitcoin and I think people need to start looking more at ROC as opposed to ROI, because the more they look at the return on capital, they're like, oh wait, if I say 50 grand, then I make 200 grand in a year. That's going to set me up a lot longer long term than if I put in 50 and I make I don't know 100 grand. I don't know. You know where I'm going.

Manny:

Yeah, yeah.

Joe:

But tell us, I want the listeners.

Manny:

I want the viewers to hear the serious success stories of Perth. Yeah, one of the most exciting success stories which I definitely wanted to talk about is a suburb called Morley in Victoria. It was a client of ours that purchased there in March last year, sorry this year, sorry March this year. So March 2024, they bought March 2024, which was three months ago, sorry March this year. So March 2024, they bought March 2024, which was three months ago. They bought for $600,000. We purchased that property off market.

Manny:

So for the viewers that don't know the difference between on market and off market, an off market opportunity is a property that will never hit real estate or domain right. So, generally speaking, when you're looking at purchasing property, you'll have to go on either realestatecom on domain, you have a look at the listings that are online and you start to inquire. You're dealing with real estate agents and you'll find that your offer keeps getting pushed up and pushed up for it to be considered because you're competing with eight or nine or ten other offers on one particular property when we look at off-market opportunities. For whatever reason, the current owner of that property doesn't want to go on realestatecom. There's various reasons to that, but that's what is considered an off-market opportunity.

Manny:

We bought this off-market for our client. Our research showed that at the time we purchased this, three months ago, the property was worth $650,000, but we were able to buy it for $600,000 because the seller was in a position where they needed to sell that property quite quickly. So we bought that property for $50,000 under market value In three months' time. That property right now market value. If my client was to resell that property, they would sell it for a minimum of $680,000. Yep, if my client was to resell that property, they would sell it for a minimum of 680. Yep, and their mortgage broker, excuse me, did a CBA refinance valuation and it came back at 737,000. So that's 137,000 uplift in three months.

Manny:

They were able to break their guarantor. Their parents' guarantor released that in three months' time. So they used mom and dad as a guarantor because they didn't want to put cash towards the property. In three months we discharged that guarantor.

Joe:

I'm just going to do the quick math on this. What was stamp duty in Perth? For $600,000? I believe about $20,000. $20,000. So $620,000? And they borrowed the full amount, right, correct? Okay? So $620,000 and they borrowed the full amount, right, correct? Okay, so $620,000. I've got $740,000 on top of that. Some quick division on that. That's literally 18.1% in three months. Something ridiculous like that. Yeah, it's somewhere around that In three months' time. 18% ROI, not return on capital. This guy didn't invest anything. He used his parents' property as a security guarantor and I need to dispel this notion. I need to talk to people out there. It's too expensive. If you have the opportunity to use your parents as guarantor and they're willing to let you do that, throw away your pride and get into the market For sure, because there's no other way.

Joe:

That's it. It's actually stupid. It's actually stupid now for somebody to turn around oh, I want to do it on my own. Yeah, good luck. You're not going to have the money for 40 years. Yeah, that's it. Everything is too expensive right now, like groceries, I think I've paid like 900 bucks a week now, or intense. It's dumb now. Yeah, but that is an amazing story. So they were able to refinance, get their parents off as guarantor in three months time. Yeah, like I. I hope people in property are listening to this because they will hear the significant growth that's occurring, definitely Over there.

Manny:

Which suburb was that? That was Morley, so it's as well. The best part about that is it's a 10, 15-minute drive from Perth CBD, north or south.

Joe:

It's west of the city but 15-minute drive, so another cycle that we need to break in our heads as Australians or people from Sydney west is good. In Perth that means you're closer to the beach. So western suburbs are better over there than the eastern suburbs, correct?

Manny:

Correct.

Joe:

Yeah, yeah, yeah, okay. So just let's dispel that notion like the West is still the best.

Michael:

you know what I mean West is best here still Kendrick Lamar, baby Kendrick Lamar.

Joe:

No, but that's just absolutely like just an insane story. That person probably set up for retirement.

Manny:

Yeah, well, they set up definitely to buy the next investment property. Are they buying something else? We're talking about it, yeah, okay.

Joe:

We're talking about it. So have you started to look for other little off-market opportunities?

Manny:

Yeah. So we're always in the market looking for off-market opportunities. The way we do that is really our network of you know, sellers, agents that we're constantly reaching out to and building relationships with and we get off-market opportunities every day come through our inbox in Perth, in Adelaide, in Brisbane, and I really think that's the biggest benefit of using a buyer's agent. Not to say it because I am a buyer's agent, I know it's very cliche, but if you go on realestatecom and you try to inquire on a property in Perth or Adelaide or Brisbane in today's market, I wish you the best of luck because you're competing with eight or nine other offers on that property and you'll have to overpay to get it.

Manny:

I think in the grand scheme of things, look, overpaying for the property to get the right property in the grand scheme of things is irrelevant. If that property grows by $200,000 in the next five years, what's an extra 15 or 20,000. But when you're using the help of a buyer's agent and you're paying 12, 15, $18,000 to that buyer's agent to potentially buy a property for you, that's 50 grand under market value. You get all the data, you get all the research, you get all the guidance.

Joe:

That's, in my opinion, much more valuable than trying to I like buyer's agents and I've gone on record saying this before. I like buyer's agents because auctions yeah, I hate auctions.

Michael:

Okay Did you go to auction when you bought? No, not when I bought, we bought off market. Okay, how good was it. I didn't have to really do anything. Look, testimonial right there it was pretty straightforward. I won. Okay, very nice that was it.

Joe:

I went to an auction and all real estate agents are fucking anyways. I don't disagree like they this is a problem with the Sydney market especially. They'll say guiding, yeah, guiding at X amount.

Manny:

Guiding at here.

Joe:

Yeah, yeah, it's not even here it's like six feet below the ground. It was guiding for one, two and guys opening bid, like one of the guys that really wanted the property. He just right out the gate. It's one, five and then the property ended up going for 2-5. But like at 1-5, I remember I grabbed my wife's hand and I go come on, let's go, and she goes what?

Joe:

And she goes no, no, no, we're still in it. And like our limit was 1-6. And I was like Ali, we're done that guy's startingbidding me, he was hungry, it was like eight different bidders and it was like one, five, one, six straight away.

Joe:

I was like, babe, we're out, we're out, let's just watch, let's see the end. But we're not stretching ourselves any further. On this one, we're done. But that's why I like buyer's agents. Like you know, some buyer's agents or everybody think they could be an investment specialist. But just like mortgages, just like anything, look at the testimonials online. Just go online and just see what people say. If people are saying good things about them, go with them. If they're online and they're giving information on hey, this is a good spot to invest in. Hey, this is a good spot. Hey, this is a client of mine that made money in three months.

Joe:

Hint, hint nudge, nudge of mine that made money in three months. Hint, hint, nudge, nudge. Hey, maybe give them a shot and actually listen to them, because it's better than sitting on your hands and just praying to god that, oh yeah, property's gonna fall into my lap. Yeah, you know, there's one topic I want to talk about, michael, real quick. Um, after perth, after everything, yeah, there's a list there in your laptop the five worst performing suburbs, five worst, five worst performing suburbs. Five worst performing suburbs.

Joe:

Oh five worst performing capital cities where, like, the least amount of growth, was that on your laptop.

Michael:

No, no, but I mean the worst performing region. I've got the regions, okay, the five worst performing regions. So the worst performing regions New South Wales and Victoria, right down the bottom, like Ballarat and Port Macquarie, both down 2% in the last three months Yep, although, like Ballarat and Port Macquarie, both down 2% in the last three months, yep, although Batemans Bay went up 6%. Okay, but that's actually rental yields, let me see. Okay, so investor lending year over year in New South Wales was 31.8%. So we've still got a strong investment market, still strong, but in comparison to WA, that's 39%, yeah, so stronger.

Michael:

And Queensland is down 28.5% market still still strong, but in comparison to wa, that's 39 percent, yeah, so stronger, and queensland is down 28.5. I think we're noticing that queensland in general, particularly brisbane. Everyone, like last couple years, we've all been saying how expensive and crazy, uh, sydney and melbourne have been going, so everyone's been looking towards brisbane. Brisbane's now catching up. Okay, everyone's buying up in brisbane. So if you're looking for that sweet deal in Brisbane, it's still there, possibly, but it's a lot harder to find.

Joe:

So, ranking them all, new South Wales and Victoria are right at the bottom, right at the bottom.

Manny:

I'm going to go on record to say this, though I think in the next 18 to 24 months, victoria is going to see a shoot up, michael.

Joe:

We've talked about the best. What were the five worst performing regional states? What's the rank All?

Michael:

right, so I'll go from bottom to the top. Okay, Right at the bottom. Victoria, new South Wales, queensland, tasmania, south Australia, western Australia, the territories they're not on the list, they're not on the list. Tasmania was third. Tasmania is the third best. Wow, it's pretty nuts I know for a fact.

Joe:

But I've always said Tasmania, I've always hopped on about Tasmania doing well, and that's because climate food and it's like a big college town yeah.

Joe:

Yeah, like the tallest building in Tasmania. Have you been to Tasmania Tallest building is like 13 stories high. That's it. Wow, yeah, like I think it's bigger in Illawong. You know, I wouldn't be surprised if that apartment building's got a little bit more stories than that 14 stories. But like you look at the two worst performing and it's so like there's such a juxtaposition Like they're the best performing cities, like in New South Wales and Victoria, but their regional is the worst and it's just not catching up. And I think a big reason why is number one Victoria sucks, but number two it's cold. It's like there's a reason why nobody wants to live in regional Victoria. They have not developed a second CBD to the level that Sydney has. So Sydney has developed Parramatta, which is the third largest economy in all of Australia, which is like that's insane. I didn't know that statistic.

Michael:

It's an amazing.

Joe:

Parramatta I think Penrith is in that catchment as well.

Michael:

Basically, it's a CBD. As it goes up until the mountains, you hit Penrith.

Joe:

It's literally the third most powerful economy in all of Australia. It's like Sydney third most powerful economy in all of Australia. It's like Sydney-Melbourne power, which is amazing. So you've got that, and then you've got Wollongong, which is an hour south, and if you go through Wollongong, wollongong's twice the size, three times the size of Perth CBD.

Michael:

Again, that's a stat that blows my mind.

Joe:

Yeah, no, perth. Like Wollongong's huge and that's performing well as well. Like Wollongong's huge and that's performing well as well. But Victoria Geelong is not performing anywhere near as good as they hoped it would. We've seen people buy properties there for 500K and it hasn't grown Like it's still at 500K.

Manny:

Yeah, the satellite cities in Victoria are like so far and in between each other. They're so spread out so like Geelong's, an hour, I think, away from Melbourne CBD you have Bendigo and Ballarat. They haven't done the best job at connecting these satellite cities back into the CBD. They're working on it. There is infrastructure.

Joe:

There is a lot of government spending in these regional pockets, but yeah, that's why I heard recently there was a mass exodus or they're trying to get rid of a lot of investors in Melbourne.

Manny:

Well, there was a decrease in population due to COVID. So during COVID, obviously Melbourne got hit the worst.

Joe:

No, no, no, they didn't get hit, the worst they had dictated there. And closing down everything, seven lockdowns in a row.

Joe:

Seven lockdowns, I think they're the most. It was them and like a random city in South Africa that had the two longest lockdowns in the world and it's like what? Like that doesn't make sense to me. But yeah, melbourne was like no wonder why people left, like why would you want to live somewhere where you can't? I think it was like walk outside. I remember the funniest thing I still remember about that whole fucking debacle is we could fly internationally from New South Wales and Sydney in and out of the country and like freely, like no hotel quarantine, and Melbourne couldn't leave five minutes from their house. Yeah, and no wonder why there was a mass exodus. And there's a reason why property prices haven't increased at the same level as sydney's, correct?

Manny:

well, if you're, if you're declining in population, right, what's what's the demand doing?

Joe:

it's also declining yeah, um, they've got middle child syndrome in that city where they're just like oh, but we have this, oh, but we have that, and it's like that's fantastic, like cool, where's your beach? Um and I always kind of say that, and it's just so brisbane is the middle child.

Michael:

are you still brisbane? Yeah, because what's Brisbane got going for it? Really, they've got a brown river.

Joe:

But I feel like Brisbane's more like the youngest child, Like people just go up there. They don't really have beef with Sydney or Melbourne.

Michael:

They're like oh, you're from Sydney, Cool.

Joe:

That's all origin rolls around. Yeah, exactly. Right now they have beef. Yeah, I think it was. This episode is going to air in two weeks, so I hope I'm not going to be eating my words 100%. But no, victoria like the regional parts of it. I just think it's no surprise, mainly because they haven't built the infrastructure, they haven't tried to build the infrastructure. All the infrastructure in Melbourne goes back into the CBD. Let's get the CBD better, cbd better, cbd better. They don't focus on, as you said, the satellite cities. Yep, and I think you could pick up some like house and land packages for like $250,000 on the coast of like between Victoria and New South Wales. Yeah.

Michael:

So what you're telling me is I'm moving to Victoria, but they don't grow, but they don't grow. But do I have a house to live in?

Manny:

How are? But? They don't grow, but they don't grow, but do I have a house to live in? How are you? Going to go to the office how are you going to host this podcast?

Michael:

helicopter to lo one all this money I'm saving in the helicopter pad and everything, oh mate if you want to do that, goodbye one man, you pay.

Joe:

You pay your ten thousand dollars an hour for a helicopter. Have you seen these deals like floating around for Melbourne Victoria?

Manny:

To be honest with you, I haven't really been focusing on those markets for established properties because the data points aren't really too strong. You have population decreasing, you have pretty low yields. It's not the right formula for investment. However, I will go on record to say this now that Perth, now that Adelaide, now that all of these other pockets in the country are becoming very expensive, I see there's a good opportunity to be investing in Victoria over the coming 12 months. Rental yields have been increasing. Population is growing. Infrastructure spend is increasing. It's starting to get back to a point where all of the metrics they're starting to tick the boxes. They're not quite there yet. The yield is still considered low in comparison to other places in the country, but the yields have been increasing, which is positive. So you're seeing momentum in.

Joe:

Victoria, Momentum's building for sure. Is there any super indicator as to why? Or is it just because everything else has done its part? Perth's rentals are now on par with regional Victoria. People are like well, I would rather invest in regional Victoria than I would in Perth, because I'm getting the same price, different state.

Manny:

Yeah, yeah. And also you know the level of infrastructure that's going into some of these regional hubs In Victoria you have, you know, wind farms and all that. Let's cut that part out. That was shit, okay.

Joe:

You're seeing a lot of infrastructure spent in Victoria at the moment as well. I think we're seeing wind farms. Am I correct in saying that?

Manny:

Yeah, yeah.

Joe:

Yeah, and.

Manny:

I also heard like solar farms, yeah, renewable energy, like hundreds of millions of dollars being spent in certain pockets, not every regional we spoke about that on our budget episode.

Joe:

Yeah, yeah, yeah. And I wonder if there's any coal in Victoria.

Michael:

Probably not. I reckon there's more in Western Australia.

Joe:

To wrap things up, Manny, where are you seeing? If somebody wanted to buy tomorrow and they were going to contact you, what snippet of advice would you say to them? Where would you go to start just having a browse at some?

Manny:

properties For sure. I think, above everything else, sitting down with a professional and really getting to understand your goals, your objectives, the strategy that you are focusing on how much can you borrow and building a plan around that. For some people higher income earners potentially having a negatively geared property is going to be the right strategy. For others that have a $4,000 or $5,000 a month mortgage repayment on their principal place of residence here in Sydney but have a huge amount of equity, maybe a neutrally geared property is probably going to be the right option for them. So I think, depending on your individual situation, depending on your scenario, depending on your goals and your objectives, there's going to be certain locations, certain areas, certain price points and, more importantly, certain yields that are going to be more comfortable for your strategy and your situation. Right, so it's not a one size fits all, but I'm a very big fan of Perth and Adelaide at the moment, genuinely just because of the price points. You can buy a very good investment property between the prices of 600 to 650. And you're getting very strong levels of rent 5.5% 6% in Perth and 4.5% to 5% in Adelaide.

Manny:

A lot of people complain and say interest rates are too high and I can't afford this and I can't afford that and I'm paying $5,000 a month in my mortgage repayments. But then they go out and they're fine dining once a week. They're buying lunch out every single day. They're buying coffees every single day. Maybe just drink a coffee at home instead of buying two coffees a day at the cafe. And there's your $50 a week that you can. The right investment property should only cost you $50 to $100 a week to hold that property. I've got to go speak to Manny.

Joe:

I'm getting screwed On that note. I've been Joe, that's I'm Schmo and that's Emmanuel Michael, who you can see at wwwinvestormatecomau, and your Instagram is Emmanuel.

Manny:

Investormate underscore and my personal Instagram is Manny97 underscore. Don't go on my personal one, just go on the work one. Julie noted.

Joe:

All right, we'll see you guys for the next episode and thank you so much for coming on, Manny. Thank you.

People on this episode

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Joseph Daoud

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Michael Lozina

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