The Finance Show With Joe

S2E11: How the Real Estate Market has Changed

• It's Simple Finance • Season 2 • Episode 11

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Ever wondered how the magic happens behind high-stakes real estate deals? Meet Karem Lakiss, co-founder of Mayfair Real Estate, as he takes us on his remarkable journey from working in his family's service station business and with Emirates to becoming a real estate powerhouse. Karim also dives deep into how social media has revolutionized the real estate landscape. 

Get ready to hear about some jaw-dropping real estate transactions, including a scenario where a $16 million home is purchased for a buyer's daughter. Learn the true importance of property styling and how professional stylists can turn a home into a buyer's dream.

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Michael:

Welcome to the Finance Show with Joe. He's Joe. I'm just some schmo. We've got a very special guest today Karem Lakiss from Mayfair Real Estate Welcome.

Karem:

Thank you, thanks guys, thanks for having me, Karem.

Joe:

I'm so happy to have you on you and I have been trying to tee this up for months now.

Karem:

It's been a while.

Joe:

The bloke went to Lebanon, he went to Dubai. He was cruising around the world whilst the rest of us had to endure winter. He had the time of his life, but thank you so much for coming.

Karem:

No, thanks for having me.

Joe:

It's a very funny story between Karem and I. Karem actually used to be my landlord over in Belmore, so when we first started in Simple, we were moving around and we were just trying to find the best office space, but you were the first person to actually give us a tenancy and you gave us office space. So I've always been grateful to Karim because he actually gave us the opportunity to be able to work as a team and, you know, work from a certain hub and really build a culture. So thank you so much, karim.

Karem:

No, thank you for joining us. That was a new venture for us. We bought that building and we had no tenants, so we kind of helped each other. It was a good synergy.

Joe:

It was definitely a good synergy. So, Karem, I just kind of want to start this off with introducing you. You're a real estate agent and you specialise in Belmore, Belfield. Can you give us the certain suburbs that you're taking care of at the moment?

Karem:

Yeah, so we are based in Belmore. So the business is Mayfair Real Estate, owned by myself and my business partner Chantal. We specialise kind of in Canterbury, bankstown but inner west sort of. So Belmore is a little bit unique where you can go out into the Canberra Bankstown district like suburbs like Le Canbar, greenacre, bankstown, but then also venture back into Belfield, roselands, kingsgrove, enfield, into the inner west a little bit Dulwich Hill, marrickville. We've had a few good sales in Marrickville so it's very encompassing in terms of where we can go geographically. But as I say to most people these days, I don't believe you're capped by where you are anymore. I totally believe that real estate has transformed so much in the last few years with the help of social media that you know, as long as you're a good agent, you can market correctly, you can probably sell anywhere you like.

Joe:

How did you get your start in real estate?

Karem:

So I'll try to be very short with this story. I started real estate my career in October of 2015. So I was, like in my early to mid-30s sort of Previous to that worked with Dad in the service station game since I was a kid, since 14 years old, working in family business, transitioned out of that at the age of 30, worked with Emirates for about three years at Sydney Airport as a ground handler for him and then realised it was a great job but just wasn't what I wanted to do. Always loved real estate, always loved property. Obviously, I like to speak, and you'll find that out through this podcast. I love the art of negotiation and just helping people. So I went and got my licence while working at Emirates and then pretty much quit. Once I got my licence, reached out to a friend of mine in Bankstown that owned an agency. He gave me a shot. I did two years with him and then my business partner, chantal, encouraged me to jump on board and we started Mayfair. And here we are.

Joe:

So I need to understand something Now. If you go office, you will see a massive monopoly.

Michael:

I was going to ask is Mayfair like Mayfair on the monopoly board? That's exactly what it is.

Karem:

It's the most expensive property on the monopoly board, so the name actually came from a good friend of mine years ago, before I was even thinking about doing real estate. He mentioned once and then, when we were thinking of starting real estate, me and chantal were like what could we call it? And I made the suggestion and we're just both like, yeah, this is so us. It's not traditional, it's a little bit gimmicky, which is what we wanted. We wanted a fresh approach. We still want to be conformed to the usual.

Joe:

Yeah because when you walk into you know Mayfair and Belmore, you don't feel like you're in an old school 90s real estate agency. It's such a dynamic work environment. It's very cultural. I think the average age of the employee there's like 25 or 27 or something.

Karem:

We're a very young team, yeah.

Joe:

So it's just such a. It's refreshing, I think that's the best way to put it. I feel refreshed going in there and then I'm guessing that's a massive point of difference for your clients as well Like they walk in and they're like oh, this is a lot more energetic than you know. Going to I'm not going to name names but going to another real estate agent.

Karem:

Yeah, 100%. And that was our point of difference. Like from the start we started Mayfair with a mindset of saying we didn't want to do what everyone else was doing. I like to think I identified pretty early the start of like social media and what I could do for real estate, and that my old employer will kind of cap with what we can do in terms of video production and stuff. No one was doing videos back then for real estate, so we always wanted to be a little bit left of field and that's our personality, like if you can't be who you are, there's no point doing it, right? So I'm only genuine to my source. I can only be who I am. So our office is very funky. There's speakers in the roof, there's a bar in the office. You've seen the bar. We've got a gong in the office.

Karem:

I mean Like we're just, it's who we are, we don't change it. I swear I heard what I wanted to hear. I heard bong. No, definitely not a bong, a gong G-O-N-G.

Joe:

Liam, get the TikTok camera out. So just to deviate away from bongs, can you just give us a little bit of insight as to what you've seen in the real estate market over the last five years?

Karem:

Well, it's been a rollercoaster ride, hasn't it? I think everyone's copped it.

Joe:

Yeah, In Arabic we call that kalnoha.

Karem:

Yeah, most definitely. Look, I think… Going back now four years, maybe COVID, I think, really changed the game for everyone. I still remember, vividly remember, I had an auction on the Saturday on the day where we had the first COVID breakout in 2020, and they were like literally shutting things down on the Saturday. They were like they're going to cancel auctions, they're going to cancel open homes. And I had a vendor call and I was selling a property in Belfield the brand new duplex, and it was stressing. It was like what do we do? Do we cancel it? I'm like I've got buyers, I think we go, I think we proceed, let's just get it going.

Karem:

Thankfully, we sold it. We broke a record during those times. But then I remember it was like the world was going to fall over. Everyone was like property prices are going to drop. The world's going to like the sky is going to. It was a deceased estate, about 500 plus square metres, beautiful street, beautiful property, and I could not get one person interested in it and I was like what is going on? This thing is a diamond in the rough. I encouraged everyone. I could think of developers come, you can build a duplex on it. Overlooks the golf course. No one wanted to touch it Eventually sold it for $2 million. That property today would sell for $3 million in a heartbeat.

Joe:

Really.

Karem:

Property today would sell for $3 million in a heartbeat, Really In a heartbeat. And I've still got guys calling me today that I spoke to back then saying to me I should have listened to you. I told you all no one fucking listened to me.

Joe:

This is what I've been trying to tell people for months and months Just get into the market. And one key thing that I like to bring up is councils are not approving new dwellings and land runs out, and the way that Sydney is positioned is they can't go any further east than Bondi.

Karem:

It's Bondi, and then there's water.

Joe:

There's no islands. We don't do that stuff that Singapore does, where they reclaim land.

Michael:

Yeah, dubai, did that too. Yeah, that was Dubai, where they do. Is it called rec, right? Yeah, dubai, the palm tree thing.

Joe:

Was that Dubai? That was Dubai, when they do. Is it called reclaimed land? I think that's what it's called.

Joe:

Japan does it as well, so we're limited with the amount of properties or new properties that are going to be released. Yeah. And then on top of that, with the building commissioner coming in and high-rises being on the down like nobody wants to live in an apartment anymore because of strata fees, and you know all the things that come with it, we now see properties are just skyrocketing Land houses. Anything that's new build, I'm imagining, is selling for quite a lot, yeah new builds have gone through the roof.

Karem:

Further to what you're saying, not only is it becoming scarce with land, but the building cost is astronomical. Yeah, so what's happened is land prices have gone up, so building prices have gone up. So how do they justify it anymore? How does a builder now pay overs for the land? Then it's costing him double to build. So where's he going to get his gross realisation from? Yeah, the client Probably not. Yeah, you know, I try to always educate my buyers and say look if you have to do it yourself, but it doesn't always correlate that way. No, you know what I mean. So it's getting dicey out there.

Michael:

Yeah, I mean, there's so many builders who feel like closing down recently. Do we have a number for that? We talked about this in another episode.

Joe:

Yeah, it was like yeah, I think it was like 56 shut down in the month of July or June or something.

Michael:

Yeah, where do they make?

Karem:

Because I heard that builders the costs have gone up, but they have to keep their prices low to remain competitive, because someone else will just come in and cut them off.

Michael:

So what do they do? They close.

Karem:

D on't well, there's nothing you can do. And don't forget, immigration is not slowing down. No, In fact, it's doubling and tripling.

Joe:

Don't bring that up.

Joe:

So yeah well we all know it. Apparently, I'm on an ASIO list because I've been telling people off well, telling Anthony Albanese off, just being like, hey, mate, like there's a lot of kids, kids under the age of 25, that can't afford property right now because of the level of migration. I'm not saying stop migration, I'm a migrant. You know, my brother and my sister were born in Lebanon. You know my parents are Lebanese. I'm a first-generation Australian. I'm just saying just pump the brakes a little bit. You know, like I understand, we need to keep the economy going. They can't do anything about interest rates because inflation is still high, but like we've got to do something. You know, and we spoke about this off camera, you're not seeing many buyers under the age of 25 in your areas, are you Not?

Karem:

in my areas, I mean, the medium house price in Belmore is probably about 1.2, 1.3. And like that's a three-bedroom that needs a lot of work, yeah Right. So a brand-new duplex, for instance, $2 million is your entry level.

Joe:

Wow.

Karem:

So not many people can afford those ranges, especially in the lower end of the market. So a lot of my buyers yes, they are kind of 35 plus what I am seeing is a lot of downsizes as well buying brand new properties. So maybe they want to enjoy the last part of their lives in something really nice and well done Boutique.

Karem:

Yeah, 100%. And also parents assisting their children, buying homes, and a common conversation is if I don't help them, who's going to help them? I need to get them to the market. I need to get them to the market, whether it's a unit or if it's someone more wealthy and they can afford to buy themselves, their child, a nice big home, so be it. And I've had a couple of those stories as well.

Joe:

I had a borrower recently contact me and he's in his 60s. He's done very well for himself. You know. He's done commercial properties and everything and, as we all know, property just keeps going up. He has three kids and he gifted them $500,000 each to go and buy a property. That's insane, okay, like I hear that and I'm like whoa, that is like cash, like not, not, not.

Michael:

He's the one who's got it under the mask.

Joe:

Yeah, yeah. But I just kind of like heard that and I was like whoa. But then I thought to myself like this guy's actually helping his kids out, this guy's really like just making sure his kids are set up Similar to what you said. If he doesn't help them, who's going to?

Karem:

Because the Similar to what you said. If he doesn't help them, who's going to? Because the government doesn't. Well, I've got one better than that, if you've got time for a really quick story.

Joe:

No, no, go, shoot, shoot, shoot.

Karem:

I was selling a property in Roselands last year, met these buyers an older couple, husband and wife, walked in shorts, t-shirt in thongs, unassuming, you know, I've always learned a rule in real estate ever. Anyway, they came in, it was a brand new great home. Price guide was about 3.2, 3.3. Comes in, sees me and he's like, yeah, looking for my daughter, I'm like no problem. He walked around, came back and saw me. He goes I really love this house, I really love it. He goes you can't come here today. I go what are you looking at spending? Like, what's the budget? $4 million to spend for each child to buy him a house. He goes I've bought him all a house and this is the last one. And in my head I'm like what? And he goes it's all cash. He goes no finance, it's all in the bank, $16 million In the bank. So I'm like, okay, so we bring the daughter through. She doesn't like the house and I couldn't believe her. I would have just hated it.

Michael:

Yeah, I would have just been like yeah, thank you.

Karem:

Anyway, I met them, like last September, I stayed with them. I stayed with them Because I knew I had a red hot buyer. When you identify a buyer, you always want to sell them something right? Yeah, I listed this other gorgeous property in Roselands earlier this year in.

Karem:

February and I called him straight away. I go, mate. His name Came to the open. I had 30 people in the open home. He shows up, he looks around and he just goes back to the house fresco. He just sits on the lounge, hums out and the daughter came through and he goes. I'll wait until they're all done. They're all finished and he goes. What do you want for it? I go, mate three will buy it today. He goes. All right, he goes. I'll come you Monday evening. He goes. My daughter's not sure about the living room. I brought them all through. Everyone came. She was worried about the couch and the configuration so I made everyone reconfigure the styling. We picked up couches. Are you talking?

Joe:

about styling.

Karem:

Yeah, because she couldn't work it out. We picked up couches, we moved couches, I opened up the dining for her. I reconfigured the whole layout. I go, it works. I'm like done. He's like all right, let's do a deal. I'm like done. 2.95 million, sign the contract the next day.

Michael:

Soldi I, I'm just like damn I'm just a luxury, to just be like I'm not sure if the styling's gonna work, I'd rock up and go to a house and go.

Karem:

It's a house yeah, yeah, how much. Well, these are the things we do as agents. Right, you got to get a deal done. Like I turned into a removalist that day. Like we, we changed the whole home for her.

Joe:

I've got to just explain styling to our viewers and listeners. So whenever we're selling a house or we're getting a house valued, you can bring professional stylists through Correct. Am I correct in saying that these are individuals that will come in and uplift the value of your house through furniture artwork, everything.

Karem:

So any brand new property that I sell, it is a mainstay that I encourage my builders or my vendors to style the property because, number one, it's going to photograph way better. Number two, you can't do a video with an empty property, and video content is how we now push it further down the line and get more eyeballs on it. And number three, when people walk in, they want to envisage how they're going to live in this house. If a bedroom is small and you put a bed in it, all of a sudden it doesn't become small anymore. You alleviate concerns, you show them how things will look and they fall in love with it a lot better. So styling is a non-negotiable. Five years ago no one wanted to know about it. Six, seven. I remember when I first told someone house, are you crazy? I'm like that. Five, six grand will get you 30, 40, yeah, believe me. So now it's a mainstay.

Joe:

So the first time I ever experienced styling was, uh, 2018 lend lease. We're selling a bunch of apartments in the city and I was working at macquarie at the time and, uh, one of my clients was purchasing a property in there and they're like, oh, it's three buildings over this showroom. Come and have a look. And I walked in and they've got the furniture and they've got the stone. It would have cost them a million and a half like $1.5 million to fit out this commercial suite in the Lendlease building.

Joe:

And the one thing I remembered more than anything was the smell. And then I came home and I spoke to my brother and I was like everything in it smells so good. And he goes yeah, because they're trying to hit you with every single sense. They're trying to hit you with the lighting, they're trying to get you with the touch. They're trying to get you with. You know the smell, everything, everything that you hear. They're trying to get you with that to make sure you sign the contract of sale. And I go yeah, that's right. And then he turns to me and he goes did you want to buy one? And I go I was trying to think of every single dollar. I had to try and buy one of these properties. I wish I did, but like it's absolutely necessary, because if I walk into an empty shell and it smells like six-day-old food, I'm not going to buy that.

Karem:

No, there's no imagination. You can't see yourself Like. I've heard it a million times. People walk into an empty house. They're like oh, I don't know, I don't know if my dining table will fit, I don't know if I'll get a lounge in here. They just they can't see the vision. So we need to show them the vision. We need to really put it out there and show them this is what you're buying, this is how it's going to look, Makes sense, it's 2024.

Joe:

Yeah, however, belmore I know personally just because of my community Belmore, roselands, punchbowl, condal Park, chester Hill, Bass Hill every auction has 100 people there. Yeah, why do you think that the property is so much more in demand now than it was, let's say, eight years ago? Or what's the difference to 2024? Is it CDC compliance? Is it because people are more aware of duplexes? Are people more aware of townhouses? What do you think it is? Why do you think the auctions are a lot more packed?

Karem:

I think first and foremost is supply is down. You look at all the key indicators, realestatecom domain, all these guys, they'll tell you listings are down. So naturally, in an environment where supply is down, demand is always going to go up, because you've still got people every day getting married, getting divorced, passing away. Real estate is always going to turn, no matter what right, in a down market or a hot market, it's always going to be real estate. But what we're seeing is there's no shortage of supply and also a shortage of supply of brand new builds as well. So when they do come on the market, you have this influx of people that they can't get enough. For instance, there's only one brand new dwelling for sale in Belmore at the moment, in the whole suburb. It's a duplex that I'm selling and that's across all agents Across the whole suburb. Wow, there's one. You go, look at it, there's one. I mean, traditionally, belmore's not a huge suburb Like we've probably got about 14,000 dwellings Like so you don't get. It's not a suburb that we have 30, 40 listings on at one go. Yeah, but it's the only brand new duplex for sale in the whole suburb. Wow. So, traditionally, what do you think's going to happen? Supply and demand. So that's a big key indicator.

Karem:

I think I think interest rates skewed the market when they were so cheap during COVID. A lot of people got used to that rate, weren't aware of the rates that we probably were subjected to a little bit more in the early 2000s and the late 90s. So we've seen that, we've been there, we've done that. But everyone's kind of waiting. I feel like everyone's kind of saying waiting for rates to drop, waiting for rates to drop. But the opposite's going to happen. You get one rate drop and they're going to be charging down the field, like Mel Gibson and Braveheart. I'm telling you I can see it. I can see it. Freedom, yeah, literally, literally, just like coming down and they're going to be pouring in. So my dad taught me a really good line a long, long time ago. I'll never forget it. And he goes real estate is you buy expensive today, cheap tomorrow. I'm trying to understand that in my head.

Joe:

It's expensive today, yeah, it's cheap tomorrow, yeah, you know that is 100% correct.

Karem:

Never forget it.

Joe:

Yeah, I'm going to use that in my daily mantra. Now you buy expensive. Today it's cheap, tomorrow that's it.

Karem:

He said it to me when I was a kid. I was at an auction with him in Mount Lewis never forget it and he missed out on a property and he was so angry with himself and then everyone was like don't worry, it was too expensive. I remember he said to me he's like real estate is cheap it's expensive.

Joe:

Today it's. You know, we've bashed Melbourne all the time, but when people think of Australia, they think of Sydney, yeah, they think of Harbour Bridge, centrepointe Tower, opera House. They come here and we are getting that high amount of migration like you spoke about earlier. We are seeing the shortage in demand, so I think you're 100% correct in saying that. I do have one particular question, though. Is it duplex sites that are extremely in demand across all your suburbs?

Karem:

Yeah, A lot of guys will call me builders and say, do you have anything, a duplex site? And I ask them are you particular on where Some people really like to build in a particular suburb? Because they just know it really well. Others are like as long as it stacks, because they just know it really well. Others are like as long as it stacks If the numbers are right, if I can buy and build and sell and I'm making a profit margin, I don't care where it is.

Joe:

There's one suburb I want to talk about, it's Belfield. Yes, have you done much work there? Yes, so I was on the phone with my cousin I think it was last Saturday or the Saturday before he missed out on auction who last few weeks he goes, oh, the property. I was capped at 3.25. The property went for 3.8. And I actually sat there and I said to him over the phone I go in Belfield and he goes yeah, Belfield, and growing up for me Belfield was never a prominent area Like it was. Belfield was just next to Belmore, next to Lakemba kind of thing, yeah, but now it's like considered a pristine area. It's a very hot suburb. What's the?

Karem:

demographic, like who's moving into there? So, a lot of young families, yeah, lots of young families, and it's a combination of a couple of things, right? So, as you said, belfield is in the middle of Belmore and Strathfield and Enfield yeah, hence the yeah, belmore Field and Philstraffield yeah, a combination.

Michael:

Very, very creative.

Karem:

Yeah, doesn't have a train station, right? Some people's mindset with that is quite weird. When I speak to buyers they like the fact there's no train station because they associate train stations with noise hoodlums. Whatever, the case is probably back in the day and not so much now, but that's one thing. It's got a really, really good school, primary school, st Michael's. It's got a great park. They've just upgraded Rudd Park. They've done a track and field around it. It's got good cafe scenes, nice restaurants.

Karem:

You're a stone's throw away from Belmore so you can catch a train and get to the CBD. You can drive to the M5. You can drive to the M4. You can get your kids in a school in Strathfield. So you don't have to go spend $10 million in Stratford and buy an affluent home. You can spend three and a half to four maybe in Stratford and buy a really kick-ass home and still get your kids into the high-end schools in Stratford. Wow. So it's got this community factor around it. Like it is a very community suburb. Everyone knows each other. Like I'll drive through Belford and I can pick out this person lives here. This person lives here. This person lives here. I'm actually selling a gorgeous brand new duplex in Belford right now at the moment, and we're getting inundated with inquiry Like it's just a hot suburb. I'll give my cousin Issa.

Joe:

Your number, yalla, you can sell him something, then Okay.

Karem:

I've spoken to him. What Issa Dayoud yeah.

Joe:

Yeah.

Karem:

He was one of my groomsmen. He lives in the townhouse. Yeah, yeah, yeah, I've seen him.

Joe:

Are you selling his townhouse or is?

Karem:

that We've got to find something to buy first, but yeah, I already know him. Yeah, yeah, yeah.

Joe:

Once you look at us and you see the height and you see the facial features, you're like, oh wait, you are cousins.

Karem:

Now that you've said that, I make the correlation.

Joe:

Can we put a picture of Issa and I next to each other? Oh, fantastic, he's going to be so upset that I'm mentioning him on this. Yeah, I think that's all the time that we have for this episode. If you want to catch, if you need any help with finance or if you need any help with your home loans, you can reach us at wwwitsimplecomau and you can find Karim at mayfairrealestatecomau.

Karem:

On Instagram is Mayfair Real Estate and also myself, the social agent on Instagram.

Joe:

That's some schmo. My name is Joe, that's Karim, and thank you for tuning into this episode of the Finance Show with Joe.

People on this episode

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Joseph Daoud

Co-host
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Michael Lozina

Co-host