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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.
Join us as we discuss finance, mortgages and home buying in Australia!
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The Finance Show With Joe
How Trump's Tariffs Really Affect Australia
Joe and Michael explore how Trump's tariffs are reshaping the Australian economy through currency devaluation, interest rate changes, and property market shifts, with surprising benefits for some and challenges for others.
Overall, these won't affect Australia too negatively, in fact, they might actually improve things for the Australian economy as we look to other markets, particularly China and Europe.
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DISCLAIMER This podcast contains general financial information only. That means the information does not take into account your objectives, financial situation, or needs. Because of that, you should consider if the information is appropriate to you and your needs before acting on it.
Trump saw an opportunity to completely disrupt China. I always say tariffs is the most beautiful word to me in the dictionary Tariff or tariffs.
Speaker 2:This is the director. During this trade war, China might start looking towards Australia for more favourable deals and stuff like that, so that's good for our economy generally speaking.
Speaker 1:So what happens with that sort of stuff is, all of a sudden, they've lost an export partner. Our GDP is heavily dependent on export. The only way we're going to be able to avoid a recession or further deflation is if we devalue our currency. We will become a more attractive trade partner. The tariffs are going to affect you. They're going to affect you in a way that you don't see on a macro level, but on a micro level you will have more spending power, but unfortunately, we don't have the savings at the moment.
Speaker 2:My advice is Welcome to the Finance Show with Joe. He's Joe, I'm Michael, and today we're going to be talking about the Trump tariffs and how they affect Australia. Or do they affect Australia? I can't imagine they don't affect us. They're affecting the entire world.
Speaker 1:Oh man, this is. I've got juices flowing through me because it's. This sounds kind of gross. I'm excited. I'm not excited because the tariff implication affects us on a global scale, not so much. It's actually beneficial on a micro scale. So the individual in Australia is going to be I don't want to say better off, because we're always going to get fucked somehow.
Speaker 1:But me outside, looking in, using my previous qualifications as an economist, the individual is actually going to benefit and there's several reasons why. But before we get into that, michael, yeah, highlight what happened okay.
Speaker 2:So just so everyone is aware and you're not, you know, you're not glued to your screens constantly. So australia copped the 10 10 baseline tariffs that every country in the world copped from the us, correct? So we've got that. The important thing is still an animal. They're still an aluminum. Fuck steel and aluminium tariffs.
Speaker 1:I'll say it five times, I can't even say it once.
Speaker 2:Uh, those are at 25 percent. Um, we do have items exempt from us tariffs. This includes timber and lumber, copper, semiconductors, semiconductor manufacturing equipment and select pharmaceutical products. Some other things to note is that the US only imports 0.6% of Australia's steel, iron and aluminium exports. The US only buys 5% of Australia's total exports period. So early estimates. They also suggest a $27 billion loss for Australia, which is about 1% of Australia's total exports period. So early estimates. They also suggest a $27 billion loss for Australia, which is about 1% of GDP. That's under the worst predictions. Our largest export to the US is beef. 25% of US beef imports come from Australia and that's actually mostly due to the US drought, which has really affected cattle farming there. So it's actually risen to 30% in 2025. So that's where we're at. Those are the numbers to keep in mind.
Speaker 1:So I love a good trade war and we are a speck on Trump's radar and that's why he did 10%, because he was like, oh, I can't show.
Speaker 2:Well, literally every country in the world copped 10%, even that island that doesn't have any people living on it. I saw that one, the fucking penguin island, got 10%.
Speaker 1:But Trump saw an opportunity to completely disrupt China Completely, and what I mean by that is, I think, how much of America's imports are from China? It would be 30% something. It would be a huge amount because you go to any Walmart or you go to any one of their stores. Everything is made in China. China currently has a housing issue before any of this.
Speaker 1:So, a lot of their housing was backed by government and a lot of their housing was backed by their own institutional funds. So whenever you hear about Chinese money, it's the same players and they're all around the world. They're the reason why Vancouver went so high. It's why Sydney's property market went so high. We all know what it is. They were building in their own country and they had invested a lot of money, and a lot of their money that they leverage comes from exports.
Speaker 1:So all of a sudden if an American company needs to pay 84% to import something in they're obviously not going to bother. They're not going to bother, they're going to find another resource. Oh, canada makes porcelain, for example.
Speaker 2:Argentina has beef. Canada's a poor example. Now they're going through their own little tiff right now.
Speaker 1:Don't get me started on them. Don't get me started on them. Yeah, um, but what he saw was an opportunity to completely cripple the chinese market. Yeah, by destabilizing the housing market, because now you've got all these institutional funds that were depending on profits from their exports and now they're not getting a cent, and this is what's interesting for Australia.
Speaker 2:We might like I don't know what's going to happen with China, Because China is essentially the manufacturer of the world. That's where most manufacturing comes from.
Speaker 1:They've got 1.4 billion people. They're going to build stuff.
Speaker 2:It happens. Well, they can also just do it at the most competitive rate as as well. That's why manufacturing is not in the us. Yeah, um uh. But for for for australia. During this trade war, china might start looking towards australia more, um, you know, for more favorable deals and stuff like that. So that's good for our economy generally speaking. Yes, that's just more money. Um the downs, like, obviously, from china's point of view, we're not exactly going to plug up the gap that the us. We don't even have like a half the population that the us does.
Speaker 1:Yeah, so we've got one tenth or one eleventh their population there you go.
Speaker 2:We're not plugging that gap is what I'm trying to say. So, yeah, we might get more you, more you know, and Europe as well. So for the consumer like us, individuals potentially, but the real big one that we think we might benefit from is lower interest rates, sort of across the world, because as global demand for capital goes down, interest rates also go down.
Speaker 1:Do you know the reason why they decreased our interest rates?
Speaker 2:No, not the economists.
Speaker 1:Well, they had an emergency meeting, so there's a number of factors that went into this emergency meeting. Our GDP is heavily dependent on exports.
Speaker 2:Yeah.
Speaker 1:I've mentioned it countless times, but we've built on iron ore mining beef, as you mentioned earlier Mining agriculture and education.
Speaker 2:are our earlier mining agriculture and education their biggest exports there?
Speaker 1:are big, biggest exports. So who got affected? Very quickly, you've got gina reinhardt, you got rio tinto, you've got, uh, bhp, you've got all the big companies. So all of a sudden, there, I think, I think gina lost like 250 million in a day or 200. It was a large amount of money that she lost. Yeah, yeah, um, paper money. It's not actual money, but it was was. Oh no, my shares are worthless.
Speaker 2:Yeah, the value has gone down.
Speaker 1:Our chief economists actually made a very good move, and a lot of people won't be aware of this, so they would see the interest rates go down. Mind you, this pissed me the fuck off, but we'll get into that later. When your interest rate goes down, that means the value of your dollar is actually cheaper, yeah, which means more people will export and they'll trade with you. So let's say the euro stays the euro, like that doesn't change. Australia drops their interest rates and all of a sudden, what would cost you a dollar in europe costs you 50 cents in australia. Do you remember back in the early 2000s when they filmed the matrix here and mission impossible and everything?
Speaker 1:oh, yeah, yeah it's because filming was 50 cheaper than what it would be in america and you get, and you get all the benefits of being in america as well.
Speaker 2:It's not like our cultures are that different and no.
Speaker 1:So what they did was they called an emergency meeting at the Reserve Bank of Australia and they said guys, the only way we're going to be able to avoid a recession or further deflation because we're going through some serious like inflation is coming right, the fuck down right now.
Speaker 2:Yeah, yeah.
Speaker 1:The only way we're going to actually be able to reduce this is if we devalue our currency. We will become a more attractive trade partner with a lot of the world europe. It's very hard to devalue their currency because they all depend on the euro and there's 40 countries that depend on it it's, it's a lot, it's a lot of countries yeah, and it's.
Speaker 2:This is what the third biggest economy in the world or second biggest economy no, third, but it's something that occurred.
Speaker 1:The second reason, and this is also conspiracy Joseph in the room. All right, do we have a hat I can wear?
Speaker 2:for conspiracies, we'll get the tinfoil hat.
Speaker 1:Yeah, like we need some sort of garbage bag or something for these sorts of moments. But we saw GNI, we saw all the big companies. They get their GDP affected. Yeah, these guys borrow money so that they can produce their institutional banking is insane. You will see Amazon borrow $125 million and pay it back two days later.
Speaker 2:Yeah, we've mentioned this on previous episodes.
Speaker 1:yeah, so what happens with that sort of stuff is, all of a sudden, they've lost an export partner. Regardless, 0.6%, 10%, whatever it is, we've lost an export partner. This individual has lost $250 million. She owes Commonwealth Bank of Australia X amount of dollars in some sort of facility. Yeah, okay, she doesn't have $250 dollars sitting in cash in a bank.
Speaker 2:she might, but I like to imagine her jumping into like a pile of money, like scrooge mcdark but she doesn't have that.
Speaker 1:She's got paper money, it's, it's in shares, it's in her name, it's in the companies that she owns yeah, it's not.
Speaker 1:It's not liquid money no so, and she might owe the money and then all of a sudden, if her shares drop, her ability to repay that money drastically goes down. That she owns, yeah, it's not liquid money, no so, and she might owe them money and then, all of a sudden, if her shares drop, her ability to repay that money drastically goes down as well. Yes, I yet again conspiracy Joe in the room. I'm of the belief that those interest rates dropped significantly. They had the emergency meetings when they realized the larger companies are going to be affected the most. They didn't give a shit when the everyday showing was gone, homeless or no, you know, inflation was sky high and people couldn't afford their groceries. Look at walworths. Walworths and coals are the perfect example. Nothing has come of that inquiry. No, they've spent 80 mil. How much did they spend on the inquiry?
Speaker 2:80 million dollars, 800 million it was, no, it wasn't 800 million, but I thought yeah, it was a significant no. No, 80 million is not nothing to sneeze at, but it wasn't 800 million, no no, no, no they.
Speaker 1:They spent a significant amount of money on that inquiry and I have seen nothing come of it. I have not seen a refund. I have not seen guys, you have to drop your prices 30%, your price gouging. I saw a video the other day a box of Coke costs $50. 24 cans of Coke costs $50. It's a case of beer. When did we become so stupid as a society that we thought that that was something that we like? When did we become brainwashed and think to ourselves yeah, that's a good buy.
Speaker 2:Well, we've only got the two major supermarkets who own half of everything, like each own a half of everything. It's like Woolworths, west Farmers and the Woolworths Group.
Speaker 1:You know I think, for every dollar spent in Australia, I think 65% of it goes through those two companies. It's insane. That's what I mean.
Speaker 2:Like it's a duopoly rather than a monopoly, which is not. I guess it's minorly better. No, yeah, but it's really. It's not. You don't want a monopoly.
Speaker 1:Yeah, but as we can see, as soon as tariffs were declared, all of a sudden, hey guys, oh shit, we've got to pay our money back. All right, make it cheaper. So this coming Tuesday, rba's meeting oh yeah, yeah, there's been so many reports of inflation is now down and we're looking at this statistic and we want the Australian individual to be able to spend money again. Yeah, they need us. They need us back.
Speaker 2:All of a sudden, consumer spending is important again.
Speaker 1:It wasn't important two years ago, but now, all of a sudden, australia needs to re-stimulate the market. They're not going to look at the exports. They're not going to look at the exports, they're going to look at the individual. I won't be surprised if there's a new change in the BCA, the Building Code of Australia. I won't be surprised if that happens to get more people actively purchasing homes. Perfect example Labor's come in with an extension of the first home guarantee policy, where they are now increasing the price caps to $1.5 million for New South Wales-based properties, and I think Victoria is $1.2 million. Huge amounts, yeah, yeah, yeah, from $950 to $1.5 million.
Speaker 2:Well, I guess because the median prices have gone up. Like, what's the median price in Sydney now? $1.2?.
Speaker 1:Yeah, somewhere around there, all it's going to do is increase that. It's going to increase economic activity. It's going to increase uh, you know, the average build, the average builders dependence on bricks and timber because, guess what, they're going to have more buyers coming knocking at their doors because they've got more pre-approvals. Yeah, I'm not opposed to this, because I'm going to be busier, okay, and we're going to be able to facilitate a lot more lending. But there's underlying issues. People think, oh, he's just done this because he can, he's obnoxious, he doesn't know what he's doing. I'm telling you now that bloke went in there and he's like I'm going to destabilize everything. I've already got X, y, z set up with Elon Musk and I'm going to make sure that I am the most profitable man out of this room afterwards.
Speaker 2:Look, yeah, I'm not, no, no, I'm just straight up. I'm not an economist and, in terms of something like this, I don't know what the result could be. I couldn't even predict it and I just don't have much of an opinion on it because, as I was mentioning earlier, like Australia itself doesn't get impacted too severely in a negative way, especially because we didn't retaliate, and it's not because, oh, we didn't retaliate, because we're Trump's lapdog or whatever like that.
Speaker 1:We are Trump's lapdog.
Speaker 2:No, no, no, I know, but it was an economic reason not to retaliate, because if we retaliated, gdp would go down 1%, unemployment would rise by 0.25%, but the inflation would go down still.
Speaker 1:You said something there Unemployment would go down 0.25%.
Speaker 2:No, no, it would go up 0.25%.
Speaker 1:No, no, it would go up 0.25%. No, it would go up 0.25%. There was a report last September where Michelle Bullock, the governor of the RBA, said unemployment is not where we need it to be. Yet she said that, she announced it and she goes we need. Unfortunately, interest rates will remain this high until unemployment comes to the level that we need it to be at.
Speaker 1:I'm going home and you know me, I'm going to do a rant on instagram about her and those words, because I want to see what's this. Can you do you have the internet on there? Yeah, can you look up the statistics of unemployment last september? Michelle bullock's were alike and what she spoke about. Go and chat to APT, you'll find it all there. But that is the perfect example of we're going to switch, we're going to do a 180 and we're going to turn this into a negative spin on Trump as opposed to something that we wanted.
Speaker 1:Because, if unemployment increased due to the Reserve Bank of Australia's rates being that high, and then they slowly brought them down and everything, then they would be like oh look guys, we did it, but because an external factor came in and caused it all. That is the issue. That is the reason why they say no, no, no, no, no, we're going to decrease interest rates. We want people to work again. Get fucked, Sorry. Furthermore, whilst you're doing your research, and stuff.
Speaker 1:I'm just going to keep rambling here. Furthermore, behind all of this is the inside trades that are happening at the moment. They announced the tariffs, walked it back three days later and I think Ivanka Trump or one of the Trump kids net wealth grew by $100 million.
Speaker 2:Yeah, I've heard calls about insider trading and things like that and market manipulation.
Speaker 1:So I'm going to, as somebody that's been around, that it all exists, yeah, yeah, where there's smoke, there's fire. There you go, that's it.
Speaker 2:Yeah, I wouldn't be surprised, but that's just my bias.
Speaker 1:He's in for four years. After that, he's not allowed to be in anymore. So he's probably taking advantage now and being like, okay, these are all the deals I'm going to make and this is how I'm going to do this. Or and the guy's crazy enough he might actually be thinking to himself hey, this is how I'm actually going to fix shit, because he is. When Trump first got voted in in 2016, it was chaos Week after week. It's this, it's that, it's this. And then, three years later, you had a massive uproar of individuals all across America being like no, we want him in. They rigged the vote. These are fake votes. Dead people will vote Like just anything and everything and conspiracy joking and go even further. But what I'm trying to highlight is he's been in for four months.
Speaker 2:Yeah, 100 days marked, was it the other day?
Speaker 1:Yeah, he's been in for four months. By the end of the year, everybody could be singing a different tune. In two years' time, they could be singing a different tune. In two years' time, they could be singing a different tune.
Speaker 2:Yeah, look for me. I'm sitting and waiting because I don't know Like. I have my opinions on the social issues, but when it comes to the economic stuff, I know when I'm out of my league I don't know what I'm talking about. I'm not going to pretend like I do.
Speaker 1:So I just want to give some strong tips to our listeners.
Speaker 2:Whoever you are singular um if you know who you are, if you were planning to travel this year, don't oh yeah, I was literally in in the uk when the, the trump, the, when the sorry the tariff chaos was happening. When it was, it went this and then the markets went nuts and then he backflipped and then it went nuts again and then he went back again and everyone's like I don't know what's going on and I'm like I need pounds. I need some pounds sterling please.
Speaker 1:It's too expensive.
Speaker 2:Yeah.
Speaker 1:And it's too expensive to travel outside of Australia.
Speaker 2:Right yeah, just travel domestically, byron.
Speaker 1:Bay is pretty cool, but I'm just going to highlight I think our dollar reached 56 or 52 cents.
Speaker 2:For the US dollar.
Speaker 1:Yeah, that is extremely weak.
Speaker 2:We are $1.56 for one US dollar.
Speaker 1:No, but our low was like oh the low.
Speaker 2:Yeah, it was $1.56, actually, let me flip this around.
Speaker 1:Yeah, I think Let me flip this around I?
Speaker 2:yeah, I think let me flip this around you're throwing numbers at me that don't make sense when I first read it. Okay, one australian dollar is 64 us cents. That was the lowest, um. That's what it is right now. Yep uh. On the 8th of april it was 60 cents. Um, that was the. That's the low 60 cents so.60.
Speaker 1:So if it's trading at $0.60 on there, that means you're buying it at about $0.58. If you're at the airport, $0.52. You are going to get ruined if you try and travel overseas right now. Absolutely ruined.
Speaker 2:Yeah, I was lucky that the pound sterling thing only went down like $0.02 or something like that, rather than anything like crazy. I mean, on the graph it looks very dramatic but in terms of my actual spending balance, like maybe a dollar or two more, but you're not the type of person to spend stupidly either. No, there's that as well. Yeah, the more you spend, the more it actually starts to make a difference.
Speaker 1:But I was only like a couple hundred dollars here, 22-year-old me gone, absolutely gone.
Speaker 2:The bloke would not like, like he'd come back with no shoes. I had to sell a kidney man.
Speaker 1:no, like I'm just remembering, like just the boys trips we used to have, you know parties, all that sort of stuff, and I'm just thinking to myself, wow, like, thankfully our dollar was strong when I was there because, wow, I was a stupid kid.
Speaker 1:Yeah, like that's it, and all I'm trying to say to our listeners right now is hey guys, if you're going to do some online shopping, don't use American websites. You're going to get smashed. Make sure that, if you are going to travel, try and go somewhere that might be cheaper Japan is really good right now Japan, new, zealand, domestic.
Speaker 1:Yeah, they're close by. Don't go to europe right now. That is extremely expensive. Yeah, um, and you're going to be there, they're going to and they're going to when I travel. I've got money put aside for rip-off money because I'm going to get ripped off by some person some taxi driver, someone's going to rip me off at some point in time as it's, or as you just expect to pay more for things exactly so that 200 could quickly become 300.
Speaker 1:Whilst I'm overseas, just for speaking, just for taking a client call in the middle, like whilst I'm traveling or something oh, do you have your phone number switched on or how you would?
Speaker 2:uh, you couldn't turn it off. The dream, the dream, and I definitely switched mine off when I travel now.
Speaker 1:This is how bad it's gotten. When I travel now, I am researching the flights for hours to see how strong their wi-fi connection is. Allison just sleeps, she, just sleeps, she. You know she just hangs out.
Speaker 2:Sarah does the same thing. I'm jealous, I'm just sitting there.
Speaker 1:Yeah, I'm sitting there, I'm answering Teams messages for the most random. I'm getting emails from lenders. I'm just like guys. It's right there. It's a salary sacrifice. Every doctor has it. What are you doing? And, unfortunately, the world that I live in is quite often source dependent. It can't come from. Michael Azina cannot be sending an email on behalf of Joseph Dalwood. It has to be coming from Joseph Dalwood. Yeah, yeah, okay, that's how you've got to be able to process loans and unfortunately, I have to have internet on the fly.
Speaker 2:Well, I guess that's why they have it Like. There were people near me who were doing that. No one was taking a call as far as I was aware. They were definitely on their phones and laptops doing tippy-typing and all that sort of stuff.
Speaker 1:The US dollar is going to be a very powerful thing again in the coming times. It's always been the centralized currency. It's backed Since World War II, yeah, but I think they recently brought gold back in as like the number one thing that's backing it. I'm not too sure I've left those days behind me. Are we back to the gold?
Speaker 2:standard. Yeah, that's crazy.
Speaker 1:It's precious metal.
Speaker 2:Yeah, we haven't done that since one of the World Wars.
Speaker 1:I actually can't remember which one it was. I think it was just after Vietnam. To be honest, I think it was after that. Why didn't we get rid?
Speaker 2:of the gold standard. This is just for my own curiosity.
Speaker 1:For the individual that's it 71,.
Speaker 2:By the way, I was close, I said 68. Yeah.
Speaker 1:Going back to everything, back to Michael's questions are the tariffs really going to affect the everyday Australian? Yes and no.
Speaker 2:Yeah, it's not scary or as dramatic as one might think or at least for Australians. I can't speak for the rest of the world.
Speaker 1:It's to a point that they're dropping the interest rates. This is the scary part that you have to think to yourself and I always say just get in the property market because you'll fucking make money. I said, was it this episode or the last episode? The average savings of an Australian has gone down from 39,000.
Speaker 2:Last episode.
Speaker 1:the average savings has gone down from 39,000 to 29,000. It's a very important factor. So property is more expensive than what it was three years ago. I think it grows at 11% or 12% a year across Australia. Rent is more expensive 19% more expensive. So people have less savings. They've got less of a chance to have a house deposit. People who already have property are going to have the opportunity to borrow more money on those properties to go buy extra property. So there's going to be a larger inequality gap that's actually created with these interest rates dropping. It was very similar to COVID, if you remember in COVID you had the 0.1% interest rates, cash rates, sorry.
Speaker 1:You had a 0.1% cash rate, but you also had the business owners benefiting the most.
Speaker 2:Oh yeah, because they were getting the job seeker stuff.
Speaker 1:Yeah, they were getting job seeker, there were other government funds and people were making record profits through COVID.
Speaker 2:Yeah, which the whole point was that it was economic activity was going down.
Speaker 1:And the average employee was spending money like crazy online shopping, going out to restaurants anything.
Speaker 2:Everyone bought an Adidas tracksuit.
Speaker 1:It's different now. We don't have the government stimulus. If Albo comes out and he says job seeker, I'm going to be like what? That'd be crazy, lose my marbles. But that's where the inflation came from the first time. Yeah, yeah. And if interest rates drops this time okay, they drop a percent the first home buyer is going to experience more expenses. The person that bought two years ago is going to be fucking cheering. They're going to be so happy. The person that bought this year is going to be so excited.
Speaker 2:Almost two years.
Speaker 1:But they're going to be so happy because their properties are going to shoot up in value. And why? And I keep going back to the exact same point Supply, and it's all about these tariffs, it's all about everything.
Speaker 2:Supply and demand, supply and demand, we're going to let it pour out Simplest concept to know in economics.
Speaker 1:We're going to let in more people, we're not going to approve as many dwellings and we're going to make it more expensive for a developer to build.
Speaker 2:And we're going to make it more expensive for a developer to build. Okay, Demand goes up.
Speaker 1:supply stays where it is. Final point before we end this episode. Do you know why?
Speaker 2:a lot of the developers are moving regional. I assumed it was cheaper construction costs.
Speaker 1:No, no, construction costs are actually more expensive.
Speaker 2:Oh, because you've got to transport the materials and stuff there.
Speaker 1:Yeah, Cheaper land land, yeah, makes sense. When you are a large-scale developer or a builder of sorts, your biggest cost land purchase land purchase, stamp duty, land tax, holding costs yes, so you'll buy the block of land.
Speaker 1:You've got to get a DA on it. Da takes time. It used to take 9 to 12 months. Now it takes what was it like? 18 months or something? 18 to 24. So, instead of you being able to quickly act, get it going. You can't. So if I go buy a block of land in Parramatta and it costs 10 times as much to buy it in Parramatta than it does over there, I'm not going to buy it in Parramatta because I'm running a business and you've also got to pay the holding fee or holding tax, whatever the hell it's called, and while you're waiting for that approval and all that sort of stuff.
Speaker 2:So you're not making any money. You're not making any progress. Makes sense.
Speaker 1:So they say to themselves okay, well, we don't have as many buyers here, because for us to be able to sell an apartment here it has to be a million dollars. And how many first-home buyers can afford a million dollars? None, literally. Yeah, I ran the numbers the other day. Okay, no, no, no, you know what we'll do. We'll attract the investors. We'll go and we'll attract the investor market, because investors can borrow, yeah, and someone who's a first-time buyer will. And they think to themselves I'm going to save, I'm going to do stamp gd, everything. Fucking. Open a book, come see me, I'll draw pictures. Okay, and I'm about to go on one of my rants. I'm about to get really aggressive. You can't just no, but I've just. I, I'm, I crack the shits because people don't, they don't pay attention to what's happening For people to get their visa in Australia. What do they need to do, michael?
Speaker 2:I would have no idea they need to complete three.
Speaker 1:I think it's anywhere between three months to two years of rural work. So you need to go to the outskirts, okay. So you're going to your mill drawers, you're going to your gold bins. These are the areas you need to go to to work for two years.
Speaker 1:Okay, the developer, the smart developer, isn't sitting there going to himself yeah, cause I'm going to go build a duplex. Do you know what he's saying to himself? Okay, you know what? The cost of land in those areas is going to be so much cheaper. I'm going to be able to build so much more because the government wants me to build there, to build those towns. And then, on the other side of that, I'm going to have active tenants straight away. Why am I going to have active tenants? Because we're letting in so many people. And guess what? I'm probably going to be able to achieve pre-sales because Michael can get pre-approved for an investment loan of 800,000. So Michael might be able to buy two properties and he might be able to positively gear them because they're going to be $500 or $600 or $700 each a week in rent.
Speaker 2:Yeah, Positively geared property. The dream right I know, look it up to the stars.
Speaker 1:But this is what people aren't seeing. They're thinking to themselves oh, I've got to go compete with this person, I'm going to go do this, I'm going to hire better trades. No, no, no. The smart developer is aiming towards regional and rural Okay, and they know that they will be able to achieve pre-sales. They'll be able to do the house and land packages and you see them all the time Dual key occupancy. I've got a house and I've got a granny flat in the back and you're going to be able to rent both for $850 together. That exists because of migration. And when interest rates go down, don't go. I'm not allowed to say it because I'm connected with some people. Don't go buying something that will depreciate in value if interest rates went up. Go buy something that is finite. And what is something that is finite?
Speaker 2:Land, land.
Speaker 1:Why do people prefer land? Because they don't want people knocking upstairs, knocking downstairs. I could smell the person's food. I can hear people screaming across the other-.
Speaker 2:A couple having an argument next door.
Speaker 1:yeah, yeah, that's the reason why because there's privacy. Also, strata's expensive, but that's another thing. The main reason is truthfully privacy.
Speaker 2:Yeah, yeah, and it's also part of the Australian dream, you know.
Speaker 1:Correct.
Speaker 2:To you know, yeah, yeah, picket fence, all that sort of stuff.
Speaker 1:So going back to what I was originally saying. Going back to what I was originally saying, which I know, I've tangented off a million and one times, as we always do here on the Finance Show with Joe.
Speaker 2:What is on topic?
Speaker 1:That is how the tariffs will affect us. The interest rates will go down. You'll have people that already own property looking regional. They'll be able to buy more of those properties. We'll bring in more people because we'll be like, oh no, economy's not working, We've got to bring more people. We can't fit them in Sydney. Go to Goldman and guess what? The smart person's going to be already invested there and making money.
Speaker 2:Yeah, I mean it's about time that a region of Australia also gets some development, just in general.
Speaker 1:No, no, disagree with that entirely. I disagree. Like people are like, oh, it's about their damn time all this stuff and those places get development. I agree with that to a point, but man, it's hot okay let's talk about the climate.
Speaker 1:Okay, like no, no, even even like um, like up towards newcastle and things like that along the coast, like it doesn't have to be okay, good, all right, I just I just mean outside of the, the major cities in general man, there's like northern parts of South Australia that, like bro, you're going to have sweat coming out of places you didn't know existed. Anyways, I've gone to Bankstown now. It's been the Finance Show with Joe. If you don't want to learn about tariffs, you can listen to this episode, because-.
Speaker 2:I don't even think we learned anything today.
Speaker 1:Basically, to summarize this show the tariffs are going to affect you. They're going to affect you in a way that you don't see on a macro level, but on a micro level. You will have more spending power, but unfortunately we don't have the savings at the moment. The average australian doesn't have the savings. At the moment, people who are already landholders and property holders are going to benefit the most. People who have not yet entered the market. They are going to benefit the least, and my advice general advice that should not be taken seriously speak to a financial advisor or financial professional is speak to a mortgage broker. Get yourself in the market, Because I haven't seen a single policy from the government this weekend that says this is how we're going to increase housing supply. They've just been throwing random hot keywords. Anyways, thank you so much for listening to the Finance Show with Joe. As always, I'm Joe, that's Michael, and if you need any help with your finance or your property needs, you can contact us at wwwitsimplecomau. He won't answer, I will and yeah, we'll go from there.
Speaker 2:That's right, I won't answer.
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