.png)
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!
Follow us on our pages;
www.itssimple.com.au
Instagram: @itssimplefinance
Instagram: @thefinanceshowwithjoe
Linkedin: www.linkedin.com/company/itssimple
The Finance Show With Joe
Capital Growth is the Game, Cashflow Keeps You Playing
Looking to grow wealth through property but can't afford your own backyard? JP Gabriel, founder of Investr buyer's agency, reveals to Joe and Michael his powerful strategies for navigating Australia's challenging property landscape.
JP shares his personal journey from tech professional at LinkedIn to successful property investor, building a portfolio across three states. He tackles head-on the biggest conundrum facing potential buyers today: "I want to buy my own home, but I'm either scraping the bottom of the barrel or I can't even buy something I really want to live in."
JP explains his investment philosophy: "Capital growth is the game, but cashflow keeps you playing it." He draws brilliant parallels between property investment and stock market strategies, asking why young investors chase growth in tech stocks but often prioritise yield in property.
For those weighing interstate investments, JP offers data-backed insights on the Queensland versus Victoria debate. After "nine years of growth in a four-year period" in Southeast Queensland, he believes Melbourne now presents compelling opportunities as the only state where housing affordability has actually improved.
Whether you're a first-time investor or looking to expand your portfolio, we're providing the strategic clarity needed to make confident property decisions in today's complex market.
Follow us for more property news and mortgage advice!
▸Website - https://itssimple.com.au
▸Instagram - https://www.instagram.com/itssimplefinance/
▸Facebook - https://www.facebook.com/itssimplefinance/
▸LinkedIn - https://www.linkedin.com/company/itssimple/
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.
the biggest conundrum that they have is I want to buy my own home, but I'm either scraping the bottom of the barrel or I can't even buy something I really actually want to live in A lot of people in Sydney.
Speaker 2:they face the same pain point that you just brought up with they can't buy their own backyard anymore.
Speaker 1:Capital growth is the game, but cashflow keeps you playing it. Very rarely will you find people our age buying stocks like CBA, BHP, Rio Tinto. Why? Because they are dividend yield stock. But there is a very strong reason why everyone our age are in the accumulation phase are buying Google, Amazon, Tesla. Interesting why? Because they want to buy in at 10 and sell out at 20. And that is capital growth. So why would people treat the way they invest in property differently, the way they invest in the share market.
Speaker 2:Mount drew has outpaced cash okay by 20 since 2020. There was a mansion that sold in mount drew it for 2.3 million dollars. It's starting to become a market where, if you take advantage of the land, you will accelerate your wealth quickly Queensland or Victoria right now.
Speaker 1:It's a million dollar question how long have we got?
Speaker 3:Okay, so Welcome to the Finance Show with Joe. He's Joe, I'm Michael and we have a very special guest today. Jp, how are you going? Thanks for having me, guys.
Speaker 1:Thanks for having me. He's definitely special guest today. Jp, how are you going? Thanks for having me guys. Thanks for having me. He's definitely special, he's special.
Speaker 2:I'm extremely excited to bring JP on, because JP and I have been collaborating recently and just discussing how we could work together. He's got a very similar personality to myself, which you guys are about to get to know, but on top of that he works in a new buyer's agency. You guys have been around for about 18 months now, am I correct? Yeah, that's right.
Speaker 1:So just I was just saying, before I incorporated the business in February of last year, my background before that was actually working in tech. So I worked at LinkedIn for five years, some other tech startups and stuff, and then people often go. You know well, how did you get into that? I bought my first investment property back in what 2018, I think it was and you know I had a good year at work and I thought, oh, you know, I should probably do something with this and I've got. You know, my cousin who's a builder, other cousin who's an architect, his wife's a town planner. People around You're not Arab at all are you.
Speaker 2:It has to be from West Australia, yeah it has to be With that network.
Speaker 1:Yeah. So since then I built up a portfolio, you know, across Queensland, New South Wales and Victoria, and I'm super passionate about anything and everything investing. So, yeah, my business is called Investor.
Speaker 3:How you nailed the name Investor, or simply dropping an O, is incredible.
Speaker 1:I have no idea. I mean, I think the naming convention I really like. I think because I come from tech. Naturally they love putting the R at the end of something you know. Tech, company with sipper with an R? I don't know. Drink tech, I don't know. You get my point, but the fact that I'm now the domain. I have no idea how I did that, but I just got lucky.
Speaker 2:Same happened with me with it's Simple. I had people ask me. They're like itsimplecomau was available. I'm like yeah. That's great, I'm like I'm genuinely surprised about that, so it's great to hear how you started off. The business is called Investor.
Speaker 1:Yes.
Speaker 2:You're focusing on investment.
Speaker 1:I only work with investors.
Speaker 2:When did you recognize that was your niche?
Speaker 1:Yeah, okay, when I talk about my business, I talk about myself. How humble of me. And that's because I believe, as a small operation, with just me and one or two other kind of support staff, the business is built around me and people's trust in me as a person and people hopefully trusting me enough to be doing the work for them to achieve the results. So, to come back to your question, when did I decide that was my niche? I am an investor at heart. I achieve the results. So, sorry, to come back to your question, you know when did I decide that was my niche? I am an investor at heart, like you know, and….
Speaker 2:I am the niche Exactly. Sorry, we're full Stallone there. Judge Dredd 97.
Speaker 3:He's got the headphones.
Speaker 2:He's like Jesus, all blokes go on death.
Speaker 1:Yeah, so I'm an investor, right. So I said to myself okay, the only way that I can serve people is in the way that I know best, and what I know best is property investing right. And I made it my business to read the blogs, to listen to the podcast, to read the books. The first book I ever read that was actually given to me by a friend of mine. It's called my Four-Year-Old Property Investor, by Cam McClellan, and it's written from the perspective of this guy, Cam McClellan. He actually has his own buyer's agency, I think it's called OpenCorp Plug OpenCorp.
Speaker 2:Everyone's got a buyer's agency. These days.
Speaker 1:That's right. A lot of Egyptians, apparently I. It's written from the perspective of a father explaining property investing to his four-year-old daughter.
Speaker 3:Oh, so it's like an. Explain it like a five. The subreddit.
Speaker 1:Exactly, and you know, it was kind of like this whole Pandora's box. I'm like, wow, there's such depth to this topic and to this world, and yeah, so that's kind of how I started my journey. Then I bought my first property and, you know, at the time, you time, I bought a duplex site because I want to buy a duplex site. That's what everyone wants to do.
Speaker 3:Don't worry about it, I'm building them soon.
Speaker 1:I made it my business to understand investing from the ground up. I bought my first investment property in my own backyard in Greystains, because that's what you do when you just say, okay, I'll buy my own backyard. That's what I'm most familiar with.
Speaker 2:They say dupees everywhere.
Speaker 1:And that's the thing.
Speaker 3:I haven't even developed it, I'm just sitting on it, but it's yeah, good block, or what have you, and it's funny, I um the year I bought it.
Speaker 1:Uh, I found an article. My dad had sent me an article from 2018 saying sydney worst property downturn in. However many years trying to, like you know, basically scare me off.
Speaker 3:Yeah, yeah, yeah, it was just funny, like so pull the trigger.
Speaker 1:And then I went back to my broker and I'm like, oh my god, that was so much fun. And I remember I signed the contract physically, not the docusign yeah, I don't know why.
Speaker 1:it wasn't even that long ago, like seven years ago, um, and signed the contract gray sand shops, and I remember how deflated I felt and I was like, wow, like I can't believe that's over. Like I loved it, I loved the whole process of it and went back to my broker and he told me get fucked. Like you got no money and you have no equity, so go away. Then 12 months later I went back to market I was like, oh cool, I've got $650,000. What am I going to do? Can't buy in Sydney. Then I started exploring the concept of investing interstate Brisbane, ended up buying something there. That's how the whole investing thing and the interstate portfolios built out. It was just out of necessity.
Speaker 2:I couldn't afford to buy in my own backyard anymore, so I had to. I was forced to look elsewhere. You know so a lot of um, a lot of people in sydney and in our personal inner circles. They face the same common pain point that you just brought up with they can't buy their own backyard anymore. What are the most common pain points that you're seeing?
Speaker 1:so I'd say the most common one, or the, I'd say, the biggest conundrum that they have is I want to buy my own home to live in. And you would hear this all the time. Right, I want to buy my home to live in, but I'm either scraping the bottom of the barrel or I can't even buy something I really actually want to live in. So should I buy? Should I scrape in in Sydney and buy something I don't want to live in, or should I just consider buying an investment? Right? So people are at that rent vesting crossroads. I would say that's the biggest conundrum and you would see it just as much.
Speaker 2:I actually had a rant and I disagreed heavily with rent vesting for a period of time, but unfortunately, due to the lack of supply in Sydney and Sydney being the largest economic hub of Australia, we don't have enough supply here. So we need people to consider rent vesting, because that's the fastest way to grow equity and not rely on cash savings to be able to purchase a property.
Speaker 1:Yeah, and you really nailed it there, right? Because let's just say that someone decided that they were going to spend their $650,000 or $700,000 in Sydney, decided that they were going to spend their 650 or 700 in Sydney. The problem with those assets is number one. Usually, if you're buying a 650, 700k property, that's not the property you actually want to live in long term. You're just buying it to get in here. It's a stepping stone. It's a stepping stone and the problem is that stepping stone is not going to give you the pace of growth that you need to keep up with the property that you really want to buy. So let's just say, the property you want to buy today is worth one and a half million dollars, but you can't afford that. So you go great, I'm going to buy a 700K property If that 700K property is not in a market where the supply is limited and there is strong demand for it.
Speaker 1:Case in point let's just say an apartment in Parramatta. Not only are there a lot of apartments in Parramatta in Parramatta, right? Not only are there a lot of apartments in Parramatta, right, but the differential between the cost of a unit and the cost of a house is not in any way disparate. In the same way. It is like in Bondi, for example, a house in Bondi will cost you $5 million, but a unit will cost you $1.5 million. That's a huge difference. Whereas in Parramatta, you can drive 10 minutes away and you can still buy a house for 1.5, but a unit will cost you 800 grand. That's not a huge difference. So therefore, the people haven't been forced into the unit market.
Speaker 2:Yeah, yeah, yeah, there's an oversupply.
Speaker 1:Yes, there's an oversupply right. So therein lies the problem. If you're going and buying an underperforming asset, you're doing yourself a disservice when you want to buy that home in the future. I don't know if I've explained that well enough.
Speaker 3:No, no, I get it. So basically, let's say you wanted to live in Parramatta and you wanted to buy that unit to live in. That's fine, that's exactly right. But if you wanted to actually grow your capital and all that sort of stuff, your equity not a great idea.
Speaker 1:Exactly, yeah, exactly goes out the window if you actually want to live there.
Speaker 2:But usually what I see is people buying subpar properties or assets in order to get them to a place where those assets just aren't going to take them. So the assets that you're assisting individuals with, they are either capital growth or they're cash flow positive, from what you're telling me. So when you're helping people try and buy in Sydney, but they don't have enough equity right now, they don't have enough funds you're assisting them with purchasing an accelerated asset in another location so that two, three years' time they'll have the funds to be able to purchase in Sydney.
Speaker 1:That's right and, mind you, I'm agnostic as to where I buy. I'm not attached. Of course I can't spread myself too thin, I can't be buying everywhere at once, but I have you know, I make it my business to understand where I want to buy, based on a certain type of brief. So, for example, if someone came to me one and a half million, I would well and truly consider Sydney as a like a very viable investment. But they're a very viable option. But there are like there are thresholds, right. If someone naturally in my head, if someone comes to me, says I've got 700 to spend, right by default.
Speaker 1:There are not many assets. I would buy in sydney for 700 grand, but if someone said to me, oh, I mean 1.2, I'll go. Okay, cool. There are some apartment markets that I would well and truly buy in, like I own an apartment in ramwick that's performed really well. Right, because, again, all the demand in that specific market ramwick, eastern suburbs, what have you? Northern beaches is the same right. All the demand in that specific market Randwick, eastern Suburbs, what have you? Northern Beaches is the same right. All the demand has come out of the housing market into the unit market Because it's more affordable, because it's completely unaffordable Housing is completely unaffordable.
Speaker 1:Same thing, yeah, yeah exactly but exact same point. But yes, I'm agnostic as to where I'm buying, any you know one of three locations any one time, but usually the first two are the ones that I'm spending most of my time on. That's just because of the nature of top people I work with, so usually I'm I have, you know, an area that I'm buying in, that is you know, sole focus is on the capital growth.
Speaker 1:Then the second one is a balance of the yield or the cash flow and the growth, and then the third is just pure and out of cash flow. But I don't have many people in that third bucket because most people in there you know, most people that I know in my network and people that I work with are in their 20s, 30s, early 40s and they're still in the accumulation, the build phase.
Speaker 2:You said something there that I really liked it was in regards to the yield. Could you just touch on that subject just a little bit more? Like you have people, they're just trying to ensure that they've got, you know, enough cashflow to be able to maintain these sorts of properties.
Speaker 1:Yeah.
Speaker 2:Could you just get into? That a little bit.
Speaker 1:So one of my favorite things to say like I didn't come up with it, there's variations of it out there in the market is is that and I'm a firm believer in this right Capital growth is the game, but cash flow keeps you playing it.
Speaker 3:Ah, yes, I've seen that around. Yeah, you've seen that around.
Speaker 1:Some people say capital growth gets you out of the game.
Speaker 2:Oh, I'm using that every day now. Wow, okay, perfect.
Speaker 1:And my point from that is that the whole point and I feel really passionately about this, maybe even just as passionately about you and the Labor government potentially I don't know if I was supposed to say that you talk about it- all the time.
Speaker 2:Why am I so blank? No, no no. It wasn't a negative thing. It was more of a Labor government.
Speaker 1:Don't say that around me. You triggered him. He must not be named.
Speaker 2:We've only got 30 minutes.
Speaker 1:man, you don't want me to go um yeah, so you know, I firmly believe that capital growth is the point of property investing. Yeah, and I'll give you a good kind of analogy, and usually when I say this makes it like it makes even more sense to people. Right, very rarely will you find people our age or people that are building their asset base. We're not absolutely minted going and and buying stocks like CBA, bhp, rio Tinto, at&t, coca-cola. Why? Because they are dividend yield stocks. They pay an income. You go and dump a million dollars into one of those stocks, you get a really good cash return, a dividend, every year, right? But there is a very strong reason why everyone our age are in the accumulation phase are buying Google, amazon, tesla. Why? Because they want to buy in at 10 and sell out at 20. And that is capital growth.
Speaker 1:So why would people treat the way they invest in property differently to the way they invest in the share market? Correct, right? Because the point is growth. So, yes, yield is important. Cash flow is important. Because we don't want to go broke, right, if I could buy vacant blocks of land and sit on them, I would do it. But why I can't do it? Because I'll, literally you need cash flow, I need cash flow. So to me the point of the dwelling is just to provide an income. The value is in the land. The land appreciates, the building depreciates.
Speaker 3:Yeah.
Speaker 2:Just, I do want to ask you one thing. So my first investment I'm just going to highlight this was an apartment in Wilco, A three-bedroom apartment. It did well because it was a three-bedder I didn't buy a two-bedder and I bought it off the plan and great builder. Everything was fine. That was both cash flow positive and it achieved I'm not going to say tremendous capital growth, but it achieved good capital growth. What we're trying to see now, or what we are seeing, is a lot more people be under the age of 30 or under the age of 40. They're more accepting to the risk because they know the reward on the other side of it is better off. Is that what you're saying?
Speaker 1:Yeah, definitely I think that. Look, it all comes down to what are people comfortable with.
Speaker 1:For example, I'll never say to someone you should be definitely two or three grand out of pocket per month on this property, because at the end of the day, everyone's circumstances are different. So the simple question I ask people is based on your current expenses, what, in addition to this, can you afford to cash flow out of pocket? And if the answer is nothing, jp, I need the property to be neutrally geared, then that is okay. Nothing, jp, I need the property to be neutrally geared, then that is okay, as long as you're being truthful with yourself around what your comfort level is. So you know to your point. A lot more people are becoming more comfortable being a little bit out of pocket because they're, you know.
Speaker 2:The low gratification.
Speaker 1:They're starting to understand that, okay. Well, the point of buying this investment property, or buying this investment in general, is that hopefully, it will either help me get to that family home one day when I build equity or I can build equity I can continue to reinvest into, you know, the growth of the portfolio. Right? Because that's the beautiful thing about property is that when we put $100,000 into the property market, we don't get $100,000 in the market as we would with shares, right you?
Speaker 2:get a million dollars. You get a return on capital.
Speaker 1:Exactly right. You get a return on your, you know, a $700,000, $800,000, $900,000 asset, which is the beauty of property. And then, when you add additional properties to the portfolio, you're not just again adding another $100,000, you're adding another million, right? So every time you have this small amount to deploy, the bank's giving you this much, which is the beauty of leverage and why people are now starting to go. Okay, well, I'm not going to be hell-bent on my yield or my positive cash flow what have you but I'm going to focus on, you know, I'm going to focus on the growth.
Speaker 1:And I think that there's a lot of misinformation out there around yield and cash flow. And look, don't get me wrong, I'm not claiming to know everyone's situation or say that people should be out of pocket, but I think that people need to know that. You know, if you have two people and one of them has got a neutrally geared or positively geared property that hasn't grown in value, and you got this guy who's got a property that's been out of pocket 1500 bucks a month yeah, for the same amount of time this guy who was out of pocket will say, oh my god, great investment, it's doubled in value. This guy will always come back and go oh, it was shit. Even though it's paying itself off, it hasn't grown in value like well, not shit. But my point being is it's it's opportunity cost? Yeah, yeah, we only have a couple of purchases we can make.
Speaker 2:You and I are both very Arab At every Sunday barbecue. We hear it, we hear it. We hear oh, I'm doing this because and this is how much money this person made on this site, or this is how much money they made on this investment in Perth or WA or Victoria or Queensland. So it is a Australians are property obsessed, but we do need to be able to facilitate that, and I feel like, as you said, there is a lot of misinformation out there that does push people in the wrong directions. How do you push through that misinformation? How do you implement data to show your clients? This is the area to achieve this goal and we can recommend one, two, three properties.
Speaker 1:Yeah, nothing I ever tell you or ask you or recommend to you will ever be based on gut feeling. Everything will always be grounded in data and I would say from day one I will swear by it that if I ever say anything to you and you come to me and say, jp, have you got the data to back that up? And I will show you a graph, a metric, a chart that will speak to the narrative as to what I'm telling you. Right? So you know, for me, like the data is super important, because it truly means that I am agnostic and I'm not applying any sort of gut feeling or this is I feel about that market. No, I'm literally looking at the data to make observations. And you know, I used to think and don't get me wrong this stuff is still important, but I used to think it still matters, but not as much as I used to think it does. Right, infrastructure, where's the nearest train station, the shopping center? You're taking shots at me, bro. Oh sorry, cut it out. No, no, no, no, no.
Speaker 2:Look, I guess my point is no, no, no, I'm enjoying this. You're challenging me because this is my big thing.
Speaker 1:That stuff is important. But I think the interesting part of it about that is, for example, like let's just say, let's take a simple one like a train station or amenities or what have you right think about? And I'm trying to think of an area around here like lagana 90 owner, 90% owner occupiers, very, very strong capital growth, very desirable area to live. I don't think there's a lot of infrastructure in Lugano. I don't think there's not a lot of infrastructure in Durrell, in Kenthurst.
Speaker 3:No, there isn't. From Durrell Right.
Speaker 1:So my point is that there's just some fallacies in some of these beliefs. Just some fallacies in some of these beliefs again, not saying that they don't matter, they're not important, yeah, but there is so much more. There is so much deep. There's so much deeper levels of data stock on market percentage, inventory levels, hold periods, um affordability, indexes for demand, um socioeconomics, like there's a, there's a, for example, there's a socioeconomic index that's released by the abs. That's called the IRSAD, which is the Index of Relative Socioeconomic Advantage and Disadvantage. Yes, of course I want to know that Melton City Council is building a brand new hospital. Is that going to bring a lot of jobs to the area and a lot more people who are going to live close by? Of course, right, but my point is there is a lot more data available that speaks to even deeper what is actually going on in these areas.
Speaker 2:Time on market? Is it investor or is it a lot more on occupiers in the area? Is it families? How long are people keeping owning their dwellings?
Speaker 1:Exactly right Hold periods, exactly right Bang on.
Speaker 3:I'm curious because I had this thought. I was having a conversation with my dad the other day and we were talking about property prices and stuff and yada, yada the usual thing. Young people can't get into the market. But he was saying why don't they just buy in Mount Druitt? You can find houses there that are $300,000, $400,000 just to get you started. Would you recommend something like that, because I know Mount Druitt is not exactly. Let me stop. So I did a video on this the other day.
Speaker 2:Mount Druitt has outpaced cash okay, by 20% since 2020. What is outpaced cash? Sorry, I don't know the growth. So let's say you had $50,000 in 2020. Today it'd be worth $60,000 because of inflation. Oh, right, right right, mount Druitt has outpaced that by over 20%. Okay, so Mount Druitt as a market. There are no houses for $300,000, $400,000 there anymore. It's all apartments. And the median house price in Mount Druitt right now and thank you for bringing this up, because I did a video on it the other day and I feel like a genius now is $958,000.
Speaker 2:Yeah crazy $958,000. Please show your father that this is the I'm not saying the issue with your father. Love you dad.
Speaker 1:But isn't that funny how, like the like, what would have been considered and branded one of the worst suburbs in the country by you know it's, it's it's just reputation. Yeah, it's reputation like has and I my man of mine bought there. He invests in property even long before I did. He bought there for like 350 grand. It was worth like a million bucks.
Speaker 2:I've got even better than that. There was a mansion that sold in Mount Druitt for $2.3 million.
Speaker 1:I think I saw that $2.3 million Blew my mind.
Speaker 2:But you look at the area, the median income level is like $1,400 per week. That's the median household income. So you're seeing a 47% rental rate in that location and you think to yourself okay, the people that are renting there are just going to get pushed out even further. You're going to have a lot more individuals who live in Sydney at the moment. I know my kids now. They're going to have to look at Mount Draw as a desirable area in 20 years' time because in 20 years, those the individuals who suffer socioeconomically and don't have the advantages that other people do, they're going to get pushed out of the market and they are going to be pushed towards regional towns like tomba, for example. They might get pushed out there, or they might get pushed out to another regional town like um clifton, for example, or they might have to go to mildura. It's, it's. It's starting to become a market where, if you take advantage of the land because I always mention this there's always a limited supply of land.
Speaker 2:In sydney, we've got the beach here, we've got the blue mountains here, everything in between. It's when to take all kind of thing. If you can take advantage of the land, you will accelerate your wealth quickly. Just take that example of mount drewitt. You know? Median house price 633 in 2020, median house price now 958 or whatever it is yeah, because I'm looking at.
Speaker 3:I'm looking at the now. So you can buy an apartment in mount drewitt for about 400 000. That's pretty consistent throughout and I saw there's a few of them they call them villas on here I don't know what like. I'm assuming they're like townhouses and duplexes.
Speaker 1:They're around 600, might be like a granny flat, yeah, yeah there were three bedroom things and they were.
Speaker 3:They're around 600 at 650 and then once you start getting to actual houses, it's going 750 plus.
Speaker 2:So, for example, the villa that's already been subdivided, you can't make improvements on the land, exactly yeah. So when people say, oh, but you could get a villa for this much, that's fantastic, don't get me wrong. However, you are still unable to do anything extra to your property yeah, when you have a house land freehold title, that's when you well, that's, that's the big capital growth.
Speaker 2:Yeah, that's the big capital growth and that's the stuff that we started to see really spiking value in mount druid. Yeah, um, we have dragged on that topic for a little bit. I do want to ask you Queensland or Victoria right now it's a million dollar question how long have we got? No, no, I'm good, okay.
Speaker 1:So I'm a huge fan of just and look again. Property is not about timing the market, but I'm a big fan of understanding property cycles and where each markets are at and look. The reason why that's important for me is because every one of my investors well, not every single one, but a lot of them have different time frames. I sometimes get people say to me I need as much growth as I can get in 24 months, believe it or not, and I need to sell the asset like, believe it or not. I get people like that who are like, oh, my time horizon is two, three years, but then for the most part, people are medium to long term, right, but. But it's important for me to understand because where I buy for someone that's got a five year, five year time horizon or four year time horizon is very different for someone that's got 10, 15 years behind them to let the asset grow, right. So, um, queensland or victoria. So some context or some background on that, right? Um?
Speaker 1:And I actually went up to to watch um, to, to see a guy speak. His name is michael matusik. He's a like a very well-known property market analyst and commentator, flew up to Brisbane for one of his workshops and he talked a lot about Southeast Queensland. But essentially what we've seen in Southeast Queensland in particular if we're talking about Queensland but Southeast Queensland, let's hone in on that is we've seen more or less nine or 10 years of growth in a four or five-year period Astronomical. I bought a property in Tingalpa in Brisbane in 2021 for $670,000. I just got it revalued at $1.27 million or something like that $530,000.
Speaker 1:In 2021, I bought it. That's absurd. Four years.
Speaker 1:Four years, right. So again, that alone doesn't tell you the story. So that data point alone on its own does not tell us the story. That, oh, this area is going to cap out. But then if you go and have a look at the affordability index for those same suburbs or those areas and you see, oh cool, it was somewhat affordable, tracking up, tracking up, tracking up Then from like 2021, it's gone like this no-transcript, the demand, right. So it was definitely undervalued before, in the same way that Perth was probably undervalued, didn't do anything for a really long time. But now I believe and again, this is not just my opinion, like there are other commentators out there that believe the same thing is that I believe that South East Queensland is like a bit overvalued and I'm not saying there will be negative price pressure, but I believe it will just be not as strong as somewhere like Melbourne which, for example, from 2012 to 2022, right, did doubled in value, right, so it did 100% growth. From 2022 until now it's down about three to 5%.
Speaker 1:Victoria was the only state in the country where housing affordability got better over the last three, four years. That's the craziest thing to think, because all we've been hearing about housing affordability, housing affordability it's been terrible right. Victoria got better. Not only that, but PropTrack had released some data last year and that's why I started buying in Melbourne like 12 months ago is because PropTrack also came out with some data that said the amount of new lending commitments in Victoria was higher than any other state. So above WA, queensland, New South Wales, whatever the other states are, All the rest Before I miss one.
Speaker 1:Yeah, so big fan of Victoria. I believe it's undervalued, the long and the short of it is. It's deviated from its long-term growth pattern in the short term, which is a good thing, because then you go cool, the long-term pattern is good, but the short-term is shit. Therefore, that presents an opportunity should revert back to its.
Speaker 3:Yeah, because, like it doing that, it's sort of a sign of a healthy market, isn't it?
Speaker 1:It's the sign of a market that has that naturally will. There is going to be pent up demand. It just goes like this For whatever reason it just does so.
Speaker 2:Some of my wealthiest clients are from Melbourne and the debt on their owner occupied property or their principal place of residency is so much lower than what they have to pay in New South Wales. Yet they own and operate businesses in this state. So we have seen a little bit of a migration down there because you're able to purchase houses in Hawthorne, you're able to purchase houses in Toorak Very expensive, prestigious areas for 40% less or 50% less than what you can buy in New South Wales their million-dollar ring. So Sydney's million-dollar ring, I think, extends. I think it's a 40-kilometer radius. Yeah, it's ridiculous.
Speaker 1:It's basically the whole city.
Speaker 2:It's 45 minutes outside of Sydney and then. Cbd and once you're 45 minutes outside of Sydney CBD, you're either north of Hornsby or towards Hornsby, yeah, yeah yeah or Penrith, theirs is only 15 minutes.
Speaker 1:It's like 10Ks. It's like no joke, 10ks Like. I just bought a property, an auction for a client 430 square meters in Pasco Vale South, which is 7 kilometers out from the CBD Three bed, one bath for 1.1 million, 7 kilometers out, like crazy, seven Ks out Nice, in a really good pocket. I'm crying in Sydney.
Speaker 2:I just hear that and I might be fake crying. I'm excited about that opportunity because I'm looking at it and I'm like they're going to have a massive owner-occupied state, which is a good thing, because the more owner-occupiers there are in a location, the more people reinvest into that area and focus on the upkeep and focus on the improvements, infrastructure and stuff like that. Look at Rose Bay's council, rose Bay. You go down there. All the streets are nice.
Speaker 1:Everything is pretty, the grass is mowed.
Speaker 2:You don't see any issues, but that's because it's an owner-occupied area. You don't see people. Oh yeah, I'm going to buy an investment property in Rose Bay. Here's my $1.8 million deposit for an $18 million house. No, they want to live there, and so what we're going to see is Victoria. It might not look like it now, but what you're going to see is Victoria actually improve socioeconomically, because people are going to be focusing on improving where they live. All right, jp, you and I could talk for about 20 hours about all this stuff, so I'm going to get you on again. I need to get you on again because, bro, you are untapped.
Speaker 1:I'm going to have to like how much knowledge you got. Stop it, I'm blushing over here.
Speaker 2:I've got to get in there, you know. So a few questions, so I like to do well, I don't like to do this. This is the first time I've done this segment. That's good. I borrowed this from my good friend, melissa, who's also a broker. I was on her podcast, but she did a rapid fire question segment and I actually love this. So I'm going to start shooting off some rapid fire questions and you just told me the answer to it Okay, all right, you ready? Yes, all right, let's go, should you pay off your debt off early.
Speaker 1:No, you're better off buying another investment to pay down that debt quicker than you would if you were paying your principal down.
Speaker 2:Fantastic Coffee or tea Coffee. Early bird or not owl, early bird Beach holiday or city escape, just Favorite guilty pleasure TV show.
Speaker 1:Oh shit, I was just watching Severance. I heard that's quite good Unbelievable.
Speaker 2:My wife's been watching it every day I think, oh mate, it's so good, it's the first couple episodes are slow, but it's unreal.
Speaker 1:Favorite drink after work Ooh.
Speaker 2:Doesn't have to be alcohol.
Speaker 1:Yeah.
Speaker 3:I know.
Speaker 1:I wasn't going to be alcoholic. I have to have my cup of tea before bed, okay.
Speaker 2:And final question Pitch yourself in three emojis.
Speaker 1:Starry-eyed emoji Yep Banana. I don't know why.
Speaker 2:It's not an eggplant, it's a banana.
Speaker 1:I don't know why it just came to my head. Okay, third emoji the sideways laugh-crying one.
Speaker 2:Okay.
Speaker 1:You know that one Ruffle a mayo.
Speaker 3:In our practice round I said eggplant splash beach, clip that, clip that.
Speaker 1:That's gone on socials Done.
Speaker 2:Anyways, guys, Thank you all so much for listening to the Finance Show with Joe, as always. If you need any assistance with your finance, whether you're looking to refinance, whether you're looking to invest, whether you're looking to tap into some equity or you need a debt consolidate, you can contact us at wwwitsimplecomau. Jp. Throw us in your plugs.
Speaker 1:Yeah, thanks for having me on. Guys Appreciate it. I thoroughly enjoyed it. If you want to find me, investorcomau, invest in the letter R or you can hit me up on my socials Investor Property on Instagram and even on LinkedIn, jp Gabriel. I post a lot of thought, leadership and educational content there too. Nice Thanks, ap Gabriel. I post a lot of like thought leadership and educational content there too.
Speaker 2:Nice Thanks for having me, guys, fantastic. Thank you so much for coming on and we'll see you next time.
.png)