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The Finance Show With Joe
Welcome to the Finance Show with Joe hosted by It’s Simple founder, Joseph Daoud. We chat about the financial issues facing ordinary Australians from managing the cost-of-living to investment strategies in order to help you make more informed financial decisions.
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The Finance Show With Joe
The Top Performing Suburbs in Each Aussie State
Curious about which suburbs in Australia are thriving and why? Join us on The Finance Show with Joe as we explore the incredible growth of areas like Gables and Lismore in New South Wales, where family-friendly environments and innovative social housing initiatives have sparked impressive property value increases. We break down the factors making these suburbs attractive, from desirable schools to resilient rental markets, even in the face of natural challenges like flooding.
Despite the downturn in Melbourne, the Victorian capital still has property hotspots, where a buyer's market is flourishing despite legislative hurdles.
We explore everything from cyclical market patterns to the political ideologies shaping economic climates.
Follow us for more property news and mortgage advice!
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So what are the top performing suburbs across Australia? Tune into this episode so you can find out which suburbs actually ranked best, with a few surprises in between.
Speaker 2:Welcome to the Finance Show with Joe. He's Joe, I'm Jess, I'm Shmo. We're going to be talking about the top performing suburbs in the last 12 months in each state, which is funny because recently I think it was something like two thirds of all suburbs in Sydney not even in Sydney in Australia are declining in value, but that hasn't stopped others from absolutely booming. Let's start with New South Wales, our home, because it's simply familiar to us.
Speaker 1:Guess who's back? Sydney's back, tell two friends, but no more than that. No, sydney's back.
Speaker 2:Tell two friends, but no more than that. No, sydney's booming like crazy. It is Particular suburbs.
Speaker 1:Yeah.
Speaker 2:And for particular reasons.
Speaker 1:So at the moment, we've got Gables, yeah, which has 33% growth, we've got Lismore at 23.1% growth, yeah, and then Chester Hill at 22.4% growth.
Speaker 2:The gun capital of Sydney.
Speaker 1:Okay, explain that one for a second.
Speaker 2:I have no explanation. It was just a thing I saw on the Wikipedia page. I don't know why that's happening, but it is a thing. These are registered guns as well.
Speaker 1:So, as mentioned, top three suburbs in Australia Gables Sorry, not in Australia Top three suburbs currently in Sydney In.
Speaker 2:This is for houses.
Speaker 1:Okay for houses, gables, lismore. So Gables at one, lismore at two, chester Hill at three. Yeah, okay Now.
Speaker 2:Gables. Where is that? So? Gables is actually where my parents used to live. It's up in the hills. It's one of those planned suburbs, okay, and allegedly it is so good that it's setting the standard for other planned suburbs. So, is it like near Rouse Hill? Yeah, it seems to be up in and around Rouse Hill, Kellyville, that sort of stuff.
Speaker 1:Why has this suburb in particular been outperforming the rest of the hills, Like? Why is this one, you know, at the 33%? Is it because of the town planning? Is it because of the dwellings that are going up? Is everything brand new cables on the ground?
Speaker 2:Yeah, okay, so up is everything. Brand new cables on the ground. Yeah, okay, so it's. It's because it's all new that's, that's the big one. It's family focused, so a bunch of new families are moving in there there. There's like 4 000 dwellings there, so there's like options as well and the school is a big draw. There's a private school there, the santa sofia catholic college.
Speaker 2:Okay, apparently that's highly desirable okay as are most schools in in the hills. But that's a new one, that isn't that, I assume costs less than something like Oak Hill or something like that.
Speaker 1:And that suburb in itself like being in the hills as well. For some reason, sydney seems to be sprawling more that way than the southwest way.
Speaker 2:Yeah, I would assume, because the hills, frankly, a lot of people are just moving there for money, like they've got money, there's money there.
Speaker 2:And there's big, big lots of land. Like I said, I grew up in and around there. It's really nice, it's quite idyllic. It kind of looks like the Shire from Lord of the Rings in certain areas, the less developed ones. A lot of it now is like you know how? Like if you go southwest Sydney and you go to one of those new pop-up suburbs, the houses are like really close together. Yeah, that's not happening in Gables you get like an actual backyard as far as I'm aware.
Speaker 2:So the zoning and how the properties and stuff are built out, they're really nice. They are expensive. This is not a budget suburb but it's doing very well.
Speaker 1:So you're seeing 33% growth on expensive suburbs as well. On the opposite end of that is Lismore. I don purpose as well. On the opposite end of that is lismore, so I don't know much about lismore. Uh, lismore has never been considered like a you know, super desirable, highly sought after area. But 23.1 percent growth means there's some serious business happening there up near the border, queensland.
Speaker 1:So, funnily enough, I don't know anything about lismore, though funnily enough, you mentioned lismore actually refinanced the property there recently and client had purchased for 300 grand and it is now worth like 560, so that client's got like 70 growth.
Speaker 2:Obviously he bought it ages ago and you know it's grown a long-term investment it was a long-term investment.
Speaker 1:but this recent 23 boom we refinanced that at the start of the year, yeah, so he's probably feeling the boom now and the reason why Lismore is performing so well is they actually help with a lot of social housing out that way. So there's a lot of good rental yield to be made from the government. You're seeing a lot of NDIS providers go out that way. The rental yield there for this particular property I'm just going to point it out he purchased it originally for $300,000. It's worth $560,000. He was getting $1,200 a week. He was making an 11% rental yield. He originally purchased for $300,000. So it's got 11% yield Now if you take the yield from what he originally purchased. So let's say he bought it for $300,000 originally and he was making that $56,000 in rental income. That's about 17%, 16% somewhere around that. So he's done remarkably well. That also surprised me, though, because they got hit with floods a couple of years ago, if you remember.
Speaker 1:So there is flood zoning and that's what restricts the postcode, so it does limit people from investing there. But I want to talk about the third one in particular. Yeah, Chester Hill. Chester Hill is booming like crazy Now. We spoke about it on the last episode of the day.
Speaker 1:Yeah, we mentioned it, the reason Chester Hill is booming so much is because of the new CDC laws that are out as part of their council. Essentially and I'm going to re-explain this for all of our listeners If you purchase a property and you want to build dwellings on it, you want to do townhouses or duplexes or anything like that, essentially, what happens is you have to well, you used to just submit a DA get the development approval and then you could start construction. This was taking far too long and it leaves the door open for NIMBYs and protests.
Speaker 2:Correct, because once you submit a development application taking far too long and it leaves, it leaves the door open for nimbies and protests correct, because once you submit a development application, what ends up happening is all your building plans.
Speaker 1:Everything goes up online, it's all public. It's all public and people have the right to protest. Okay, I don't like the height limit, I don't like this, I don't like that oh, this is going to block my facade or I'm not going to be able to see those sorts of things and that's why it's taking so long. It could take 12 to 18 months to just get a da approved now, especially because council doesn't have enough employees working and, you know, churning out and making sure that these things are actually approved.
Speaker 2:So is that actually why things are taking a little longer to get approved? It's more like they're just understaffed like councils.
Speaker 1:Oh, yes, they're understaffed and councils are lazy in general.
Speaker 2:Okay, yeah, we all know it. I thought it was a bureaucracy thing, like just too much paperwork type of thing.
Speaker 1:They've introduced a lot more paperwork. Council workers have to do a lot more paperwork and I've been told by certain individuals that have worked within council that it's a 9.30 to 4 pm job. Man, that'd be sweet Shut up to 4 pm job, and that'd be sweet shut up, um. But if, essentially, if you, you finish up at 4 pm, yeah, nobody works overtime. And if you do work overtime, someone will pull you aside and say, hey, making everyone else look bad. You can't be doing that anymore. And because they've added the extra layers of paperwork and all the bureaucracy and all the extra certificates that you need to get a da approved. That's why it's taking 12 to 18 months, as opposed to a process that used to take 6 to 9 months to get an approval right.
Speaker 1:Cdc bypasses all of that. So a CDC is a Complying Development Certificate. Essentially, if you adhere to the rules of the council. So let's say you've got land lot size of this big, you can use a floor space ratio of 0.45%. You have this much of a height limit. You have this much of a setback from the boundary. You have this much frontage. Each house needs to be this wide you are then applicable to go for a CDC and essentially you have an approval in about eight weeks and you'll be able to start your construction literally eight weeks after lodgement. So it's a much faster process. And what happened in Chester Hill is they started to allow duplexes to be a part of their CDC. People were seeing the lots of land for $600,000, $700,000, older houses, because if have you ever driven through Chester Hill, yeah yeah, I catch a train through it.
Speaker 1:Okay, you got the old weatherboard houses. You know it was a very low socioeconomic area. There was a lot of housing commission there. There was a lot of I'm trying to frame this nicely Dero's.
Speaker 2:Look, it is what it is. It just wasn't a very desirable place in Sydney to live it wasn't.
Speaker 1:But now, because of the CDC laws, essentially people are looking, they go okay, it's got 16 meters of frontage, I could buy that house. I can get it for 1.2 mil. I can go get a CDC. It's a two-month wait. I'm going to have the property tenanted. In that time I'm still going to be able to cover my home loan repayments and a little bit more. Fantastic, I get my CDC approved. What happens after that? I can go build the duplexes. I can build the duplex One and two go up side by side. Let's say each dwelling costs you anywhere between $250,000 to $300,000 to build. All of a sudden you don't have one dwelling. That's worth $1.5 million after construction and everything. You've got two dwellings that are now worth $1.5 million. So essentially you might spend $1.8 million to get everything off the ground, plus interest costs. Let's call it, let's round it off. Let's go to two mil. Okay, if you sold each of those properties for 1.5 mil each, you're still making a million dollars. You're still making a 33% profit on your original investment.
Speaker 2:Yeah, it's pretty great. I mean it's, it's right there you know, the land is right there. It's what we were saying before. The land is what's valuable. It doesn't matter that there's a weatherboard house.
Speaker 1:Sorry, correction, you're actually making a 50% profit on what you did. So because of that and because of the proximity to Bankstown, punchbowl, greenacre, strathfield, the M5 is there, george's Hall is right there. You saw a lot of Lebanese people who are blue collar. You saw a lot of Lebanese people who are blue collar. You saw a lot of Iraqis. You saw a lot of my people.
Speaker 2:I was going to ask you are the ones putting the?
Speaker 1:duplexes up the labs. It's my nationality and they're blue collar.
Speaker 2:They're tradies, they know how to build. They have the construction businesses on their own.
Speaker 1:That's what they know. I guarantee you 80% of Lebanese males are tradies of some-.
Speaker 2:Some description, yeah.
Speaker 1:In some capacity. Essentially, what ends up happening? Okay, perfect, I can go buy this. I do want to. This is how I'm going to make a million dollars in a year. And they just kept buying and recycling, buying and recycling. So now, when you drive through Chester Hill, there's an auction on every street every weekend and you're seeing these old weatherboard properties. You're seeing these old, non-complying properties selling not because of the house that's on it, but because of the potential. Yeah, because they can see the vision they can see. If I do this, I'm going to make a 50% return on my money. I'm going to make a 60% return. I'm going to be able to set myself up for the future.
Speaker 2:And even if they're not selling to people who maybe don't like outside of the Canterbury Bankstown area, it doesn't really matter because it's desirable for those people who live in that area and, like you said, people who live in those areas are the ones that are building this stuff and seeing this opportunity. So if you're close to the major hubs of Bankstown, liverpool and all that sort of stuff, you're close to family, you're close to, obviously, a lot of infrastructure and stuff and train stations.
Speaker 1:What's not to like and also still more desirable than an apartment.
Speaker 2:Yeah, Speaking of apartments, the three leading unit growths in New South Wales. God, that was a good sentence. Anyway, Linfield's the top of the list 33.7%. Do you know what's going on with Linfield?
Speaker 1:Jesus. 33.7% on a unit yeah, that's amazing. And then we've got Queen Bay and East. I don't know where that is.
Speaker 2:It is a country town 23.4%. My guess I don't know what's going on there Some country town near the ACT.
Speaker 1:Okay, and the last one, we all know, elizabeth Bay. That just sort of makes sense 20.2%. But that's still a huge growth, especially for apartments. Now, the reason why we bring that up is a lot of first home buyers. Their first purchase is usually an apartment. Yeah, it's what's way more affordable. It's more affordable. It complies with all the schemes. You know, the first home guarantee, the first home owner's grant. You know, because they've got certain price brackets, you can't go buy a house in New South Wales and expect to be able to get a step duty exemptions and be able to apply for the first time guarantee.
Speaker 2:You're just not going to be able to afford it. You might even have a good job 70 to 100K still nothing.
Speaker 1:But an apartment you can afford, yeah, it's reasonable and you're more than likely still going to be applicable for their schemes. But the thing is with apartments is, once an apartment is built, it's built. You can't go make structural renovations. You can't go install a pool. You can't go and install a sauna or another bedroom. There's no extensions that you could do to it. The apartment's the apartment. Yeah, got neighbors everything so they don't grow as rapidly as anything. That's a freestanding home.
Speaker 2:No, I feel like the only reason they would grow is if the suburb or location is desirable.
Speaker 1:Well Elizabeth Bay. Yeah, the suburb or location is desirable, well Elizabeth Bay. So that's what I kind of want to bring up. Elizabeth Bay not a lot of development is happening that way and, as we know, in Sydney in particular, they're restricting the amount of DAs that are being worked on, especially in those affluent areas. Why? Because people can't be bothered to listen to cranes or they don't want the traffic stops.
Speaker 2:Again, a lot of it's a bit of NIMBYs as well, and they want to preserve the character of the sub. There's a few different reasons, but I agree. Yeah, you don't want to put up with all that stuff.
Speaker 1:But that is exactly why 20.2%, like it's gone up, it's spiked up. So if you purchased an apartment there for $600,000 last year which was very possible it's gone up to $720,000. Now people think to themselves, oh, my property's gone up in value. What does that mean? That's usable equity. So let's say I bought something for 600K and then it's gone up to $720,000. That $120,000 gap that is money that I can potentially tap into if I could service it and then purchase another investment, and then purchase another investment.
Speaker 2:And so it goes.
Speaker 1:But that's how Australia is. I've said it multiple times on this podcast we're not a tech-based country, we're not a service-based country, we're a property-based country.
Speaker 2:Oh, boy Real estate. That is the big thing here.
Speaker 1:Do you know what? When I've traveled and I've spoken to Americans don't get it, it depends where. So I was in Michigan, detroit, detroit and my cousin was like how much are you guys buying properties for? I'm like they're about a million dollars, yeah, I was like what? And he goes how much rental income are you making off them? And I'm like about $800. He's like how do you guys make money? And I'm like what do you mean? And he's like I'm buying things here for like $250k and I like 500 bucks. Okay, still not making money. It's actually pretty good.
Speaker 2:I was going to say that sounds good. Yeah, no, no, no.
Speaker 1:The property doesn't grow.
Speaker 2:Yeah, it's not growing up in value, it's just the rental income.
Speaker 1:So they're cash flow based apartments. Yeah, oh, okay. So I've bought this apartment, I laid down some capital and the rental yield covers the mortgage, and then I make a certain percentage on top of that, and that's my growth.
Speaker 2:Yeah, okay, but it's not the property value.
Speaker 1:It's not the property value. Yeah, that's the difference. New York sparks up in value. There's only so much New York, there's only so much California, there's only so much Florida, miami, right, but there's a lot of the middle bit. The middle bit that you can find properties in America, good suburbs.
Speaker 2:Ridiculously cheap 400K. Yeah, Ridiculous, which is what like 800 here.
Speaker 1:But they don't go up. No, they don't grow in value. So, explaining that to individuals here, you can make money faster and a lot of it and a lot of it, and the negative gearing laws allow you to be a professional investor. This country is actually set up for you to succeed as a property investor.
Speaker 2:I mean it's almost a slam dunk, obviously still to do your research, but like if you're on the property ladder and you're just smart with what you do.
Speaker 1:Yeah, let's go to the next state, victoria.
Speaker 2:This is an interesting one because there was some growth, but it is nowhere near compared to what Sydney was. So top three for house price growth leaders Ivano 17.3%, diamond Creek 13.2% and then Coburg North 12.8% In comparison to Sydney's, which is already like a lot of suburbs in Sydney are going down, but 33% was the top one in Sydney and it's only 17 in Victoriaoria victoria actually has suburbs in melbourne, melbourne, cbd.
Speaker 1:Oh yeah, okay, where it's cheaper to buy a property than it is to rent one so I think I was. I think I was looking at the statistics. It's the average mortgage in melbourne north was like 2800, and then the average rent for that suburb was $3,000, which is $200 more expensive. So you're actually better off buying a house if you have the capacity to obviously in Melbourne North than compared to renting.
Speaker 2:Yeah, I've heard that. So both Diamond Creek and Coburg North. The reason they've been seeing such strong growth is because of first home buyers specifically. They've been catering towards them. Those areas are not actually well, they weren't highly desirable, but because investors are basically selling out of Melbourne, it's great for buyers in Melbourne.
Speaker 1:But gentrification, you have to look at property always in the short and long-term gain that can be made. Melbourne right now, everyone's saying the investors are leaving the market. Property is so cheap. It's doom and gloom. As someone that's bought and sold a lot of property in his time, I'm looking at this and I'm like where are the bargains? And everyone's like, oh, but you're going to lose money. Well, I'm going to lose a percent, 2%. It's already at the bottom of the market.
Speaker 1:I understand the investor side of it. You're a little bit weary Melbourne, Victoria, those sorts of areas. It might not be a good idea for you for your first investment, because you're going to be sitting there You're stressing oh my gosh, why isn't this thing making money? I'm going to give you the perfect example. We had a client purchase last year in Perth. We've spoken about this countless times.
Speaker 2:A million times.
Speaker 1:They purchased a dual key. Okay, so they had a house and had a granny flat Four bedroom on the front, three bedroom on the back, three car spots, three bathrooms in the front one and I think it was two bathrooms in the other. They bought it for like 550K. Okay, they bought it for 550 and three months later he was sitting there and he's going it's a lemon.
Speaker 2:It hasn't made money. All this kind of stuff. One year later it is worth 1.1 million dollars.
Speaker 1:I was gonna say that just sounds like it's gonna make money, yeah, okay. And he's like oh, yeah, thanks, thanks for organizing the finance for that for us guys. We really appreciate that and I'm like yeah, you just like, you just made 550 000 okay, it's not.
Speaker 1:It's not in your back pocket. If you do sell, you do have to pay a 30% capital gains tax. You do have to worry about those things. But if you decide to refinance remortgage and then tap it to other markets and such, that's where you're going to find the advantage. Now that property is worth $1.1 million. If he taps it to equity and buys another property in Perth worth $1.1 million, is that going to grow by 100% again? No, we're seeing interest rates come down. The market's going to be less competitive over there and it's going to be more competitive in areas like Sydney and Melbourne. So what are we going to see? Melbourne is cheap right now. Melbourne is probably going to go on another run.
Speaker 2:Yeah, why wouldn't it? People want to live in.
Speaker 1:Melbourne. They want to live there.
Speaker 2:Okay, and invest where people actually want to live, it will go up, even if it's not within the next three years.
Speaker 1:Because people want to live there. Exactly. Okay you mentioned it previously with Gables and now look at this.
Speaker 2:okay, so we're looking at Ivanhoe, diamond Creek and Coburg North Coburg's nice okay, yeah, I don't know anything about Melbourne, so I can't work for it.
Speaker 1:I'm running the lead here, Okay, but Ivanhoe and Diamond Creek if they're catering to first-home buyers and they're catering to early family, a lot of first-home buyers because of the borrowing capacity, a lot of first-home buyers right now are actually earning high five figures, low six figures. They're earning good coin. So you're going to get a lot of affluent, smart individuals, Especially yuppies, except the kids.
Speaker 2:What's a yuppie? Well, yuppie is like a young professional right High salary, low expenses, Kids and their lingo, yuppies ain't old. I learned what Riz was the other day. Well, yeah, okay, that one's newer, A yuppie. I learned that in school in like demographics. Yeah, no, that's a bit of a different one. But yeah.
Speaker 1:So, looking at these opportunities, there are parts of Victoria that are doing really well and then we've got some units as well. So the top three units, location for units in Victoria over the last 12 months we've got Blackburn at 22.1%, box Hill at 11.1% yes, they have a box hill in Melbourne too and Surrey Hills they have one of those too at 11%, surrey Hills in particular. But each one of these they've all seen significant overseas interest since COVID.
Speaker 2:Yeah, a lot of skilled migrants are moving towards there and going into the units because I would assume you know you've already spent the significant amount to get to Australia, establish yourself in Australia. You can't be spending over a million dollars on a house.
Speaker 1:This is my favorite thing that you've added here there's more sales than purchases by investors in Melbourne.
Speaker 2:Yeah, they're fleeing essentially the analyst that I drew this data from. They believe that that's happening because of unfavorable investment taxation and changes to tenancy laws that are then making this less attractive. Basically, it means there's more work involved and it's not like the investors are like there'll be no investors in Melbourne. That's not the case, of course not.
Speaker 1:No, I'm about to go buy a few of these things, exactly, yeah exactly.
Speaker 2:It's just there, it's just a bit more effort. Well, I mean, just get a property manager, you don't have to worry, I went on my rant.
Speaker 1:The last episode. Okay, we've got Queensland as well, so the top performing houses are in Kingston. I know Kingston quite well Callum Vale and Coongal. So Kingston 29.2% growth, callum Vale 26.2% growth and Coongal 26% growth. I have literally been to Ottawa, canada, more times than I've been to Queensland, so I can't comment too much on this. All right, I don't know where these suburbs are, I don't know how they're performing, where they're performing and stuff, but I'm definitely going to look into each one of them because they're doing quite fantastic. It always seems like Queensland has different random pockets that are beginning to boom.
Speaker 2:Yeah, these pockets are allegedly booming because they are riverfront properties. Already nice because you get water views, brown views, but whatever. But there's that cross-river rail project, so basically you can cross the river easily via public transport instead of buses and stuff like that. So that's jumped these values up tremendously because now it's not an isolated thing on the opposite side of the river.
Speaker 1:Then we've got for the units. We've got Annerley at 31.3%, woodridge at 29.4% and Main Beach 28.3%, and then we're still seeing Southeast Queensland land remain highly valuable, especially in suburbs with older homes and generational wealth. Yeah, it's pretty crazy. It does make sense. It's probably the coolest part of Queensland. Not cool as in like oh no, no, like temperature cool Temperature cool like southeast anything further north.
Speaker 2:It's also where most people are in Queensland.
Speaker 1:So South Australia has got some significant growth. So for the houses, jesus fuck me All right. So at number one we've got Daverin Park at 37.9% growth, mano Parra at 33.7% and Elizabeth North at 31.3%.
Speaker 2:Big growth. Big growth in South Australia, almost as big as Western Australia. We never talk about it.
Speaker 1:And then for units, we've got Mawson Lakes at 46.7% and then Mount Gambier 48.8%. So I have a feeling these properties are booming and I'm probably right, because whoever can't afford WA is now looking at South Australia. In Davenport Park, homes are available under $500,000 still. So, as I mentioned previously, if you're earning 80K a year, your maximum borrowing capacity is probably around that 500,00050,000 mark somewhere around there. So properties at $500,000 are super affordable for you and there's probably more buyers in that market.
Speaker 2:Yeah.
Speaker 1:There's a lot more people earning an average salary or the median salary, that's by definition by definition.
Speaker 1:Then there is people earning the top 1%. Where does the top 1% live? They live in the most affluent suburbs in New South Wales. They live in the most affluent suburbs in Victoria, Queensland. All the above, They've got their spots. They've got their spots, but their homes are worth the $8 million to $10 million range, those sorts of things. When you have properties that are available under $500,000, that means there's going to be a lot more buyers in the market because there's a lot more people at the media.
Speaker 2:Yeah, first-time buyers are the big reason these prices are going up in South Australia. I would assume most of them would be locals and stuff like that. It's the same thing with the units. The units are seeing massive growth, almost 50% growth in South Australia. Mawson Lakes 46.7%. Mount Gambier 48.8%. That's huge growth. This has got to be first-time buyers.
Speaker 1:It is, A lot of people do relocate to Adelaide. There's a lot of work there. Oh well, there you go. It makes sense. But another portion of it is we're actually seeing some parts of Northern Adelaide become unaffordable for people too.
Speaker 2:Yeah, yeah.
Speaker 1:So it's just actually fantastic for anyone that's invested there before. I actually helped a friend when I first first started getting into property. This was 2015. So nine years ago I am old he purchased a property in the Northern part of Adelaide for $300,000. And that is now worth like 1.8 mil.
Speaker 2:It's insane. And we, you know, like we said, we've been talking about Western Australia and Perth so much. Here we go and we're, we're, we are up to it, Okay, and the Perth house prices are doing remarkably well.
Speaker 1:So Armadale's up 42.9%, yeah, camillo's up 41.7%, and then Parmelia's up 39.7%. This is for houses.
Speaker 2:Yes, this is for houses.
Speaker 1:For units. We've got Gosnell's at 38.9%, Armadale again at 33.2% and then Rockingham at 28.9%.
Speaker 2:What's going on in Armidale? People really want to live in there, regardless of what it is.
Speaker 1:It just seems like it's a booming area, so overall prices have surged 23% in the last year, driven by relative affordability and constraint supply. Population growth and rental availability in Sydney and Melbourne has driven people out of these cities and sent them to WA.
Speaker 2:We've been talking about this for months. This is exactly what's going on.
Speaker 1:Inner city areas have become unaffordable, so developing areas like Armadale are going up and lots of young professionals with high salaries, so we've got some digital nomads out there.
Speaker 2:I would assume so, or at least like professionals who are looking to invest.
Speaker 1:It's going to start just being a little bit more steady now with the growth and then, once interest rates cut start occurring, people are going to start investing locally.
Speaker 2:Yeah, well, that'll make sense, unless I have a… Unless everyone starts moving to Adelaide in South Australia. No, no, and that's the next big one, I think Darwin.
Speaker 1:It's too hot, too hot and too many sharks. Sharks or crocodiles, what's up there? Both?
Speaker 2:Ah, I'm pretty sure it's both Michael Haldi, I am 28.
Speaker 1:Okay, I'm 33, turning 34. So I would have been 23. I would have been 22 years old when perth went on its last, last run, oh, when, after it collapsed, right? No, this is before it collapsed so there was a massive mining boom between 2011 to 2014, yeah, and what occurred was we had a lot of individuals, we had a lot of fifo yeah, it in fly out in WA and property was booming. Yeah, okay, perth property market, perth property market China said we don't want any more iron ore.
Speaker 2:Yeah, we got into a trade tiff with China.
Speaker 1:So iron ore at the time was priced at around $113 and then it crashed to like 56 bucks, something like that.
Speaker 2:So like over half its value.
Speaker 1:So we saw a lot of the FIFO workers the fly in, fly out lose their jobs and because of that, rental demand started to decrease, and that's bad news for investors. We saw individuals when I first got into banking, so this is three years after the property started to crash. We saw $2 million mortgages on properties that were now worth $500,000. Jesus.
Speaker 1:So we saw properties that declined that heavily in value because they didn't have enough buyers there. They didn't have enough people actually wanting to live in Perth. It was all dependent on the investment market.
Speaker 2:And now you're suggesting that things are different now.
Speaker 1:I've mentioned it many times. They've invested in sporting, they've invested in the city, they've invested in infrastructure. They've got luxury boutiques in Perth now.
Speaker 2:I've heard that you get all the benefits. I've heard about Perth, that you get all the benefits of living in a major city, but it's quieter, it's a bit more relaxed, like Sydney. At this point it's go, go, go. Yeah, I imagine Melbourne's not too different.
Speaker 1:No, Melbourne, they're a little bit more kickbacked.
Speaker 2:But you know what I mean. Like it's still like go, yeah, yeah. Like it's a major city, there's a lot of people, there's a lot of noise, whereas Perth isn't like that. There it's quite good the quality of life is what I'm trying to say.
Speaker 1:If you remember, when Manny was on this episode, we keep referencing all the older guests, but when Manny was on here he even mentioned it. He goes they're trying to invest in the unoccupied market.
Speaker 2:Yeah, they limit investors, right they?
Speaker 1:don't want people coming in short-term rentals. They don't want the market to crash again, because we saw a lot of bankruptcy, we saw a lot of people get into trouble.
Speaker 2:Well, 2 million to 500,000, that tells you everything. Yeah, no, no, that was a very, very strange situation.
Speaker 1:That's insane. But they've invested in sporting, they've invested in all these things, and China is also investing in Perth as a tourist destination. Now.
Speaker 2:Yeah, same time zone, because we're not currently fighting a trade war with China right now. They lifted all the tariffs, including on the wine.
Speaker 1:So there you go, yeah, so we've got a lot of freedom In saying that, though I don't think it'll crash, but I do agree, it'll steady off now, it'll grow. It'll steady off, it'll grow, it's just not going to grow 45% every year.
Speaker 2:It'll steady off, it'll grow. It's just not going to grow 45% every year. No, it's not going to be crazy growth. It'll be far more sustainable growth, sustainable.
Speaker 1:But that also all depends on if they do start cutting the interest rates.
Speaker 2:Yeah, look, people seem very confident that interest rates are set to tip very soon. Like the specific when no one quite knows, it's either as early as next month or as late as the beginning of next year.
Speaker 1:Please, God be soon.
Speaker 2:Well, you were saying on the last episode that you reckon they'll drop the rates in time for Christmas, so people have actual money to spend for Christmas, because that again contributes to the economy.
Speaker 1:There's an election coming up.
Speaker 2:There's an election coming up. How's inflation doing? Is that under control?
Speaker 1:That'll be the big thing. So inflation is down to 2.7%.
Speaker 2:It has to be like 2.5 or something to be sustainable. Is that what the goal is.
Speaker 1:The issue is inflation. All these statistics lag yeah, okay. So consumer confidence, people spending, it's not high, right?
Speaker 2:now. No, it's way low.
Speaker 1:A lot of the inflation is because of imported things, household things, electricity, groceries, bloody Colesworth out there jacking up the prices for everything. In saying that, though, things are still not quite where they were, and I'm not going to say pre-COVID, I'm going to say like pre-2016. Yeah, yeah, okay, pre-covid. We had a lot of back and forth between Liberal and Labour. Everyone thought Labour was going to win, so people weren't-.
Speaker 2:Oh, this is like the Bill Shorten election, yeah, and people weren't overly excited about the economy.
Speaker 1:They weren't investing in it. Scomo got back in somehow Like it was a literal no.
Speaker 2:No, because he wasn't the Prime Minister, because he got-. Scomo jumped in like a couple months before the election and everyone's like I don't really know who he is, but we're gonna vote for him anyway no, no, that was long before that scum scum was around for a while no, I know he was around, but he wasn't the prime minister and he wasn't up for election until that election and. But he wasn't and he didn't become prime minister only until, like, yeah, like six months before the actual election I want everybody to fact check michael.
Speaker 2:I'm 100 sure he's wrong okay but anyways, what year was this election?
Speaker 1:2019, 2018 I'm pretty sure it was a 20 2019 election. Because of all that, that we didn't get a really good run and understand whether we couldn't predict the market. We couldn't predict the economy. You know, because if labor comes in as we know labor they're left-leaning, they're a little bit more based on socialism. They spend a lot more money, as we've seen. Um, they don't focus so much on big business. They focus more on unemployed benefits and those sorts of things. So it's two very, very different ideologies between the political parties. And so, when it comes to inflation, we haven't really seen people be confident in the market in a long, long time. It was like Harambe got shot and everything changed in the world. Like that was it. Look, we know this.
Speaker 2:This is fact, all right.
Speaker 1:I want to thank you all for listening to this episode of the Finance Show with Joe. What do you think about the top performing suburbs all across Australia? Let us know your thoughts in the comments below. As always, I'm Joe, that's, I'm Shmo. If you need any assistance with your finance, hit us up at wwwitsimplecomau.
Speaker 2:PS, I was right about the election, were you actually?
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