The PROPERTY DOCTORS, Sydney Australia Novak Properties
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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1414 Wheres The New Property Cash Coming From? My Last 5 Sales
Money never disappears – it simply moves. This fundamental economic truth drives today's property market as cash flows from traditional sectors into new investment channels, creating unexpected opportunities for savvy investors.
The latest market analysis reveals a fascinating shift: investors are now outbidding owner-occupiers for premium properties, defying conventional wisdom. In one remarkable example, an investor paid $1.445 million for a two-bedroom apartment with plans to convert it to three bedrooms – a price typically reserved for emotional buyers rather than calculated investments. This signals extraordinary confidence in rental returns and capital growth potential.
Where is this investment capital coming from? Self-managed superannuation funds represent an increasingly powerful force, with Australia's super assets ($3.8 trillion) now exceeding the entire ASX capitalisation ($3.5 trillion). Business owners with substantial savings are choosing property over business reinvestment or equities, particularly favouring commercial assets with development potential. One recent sale involved a DA-approved boarding house site expected to generate $600-700K annually, purchased by an investor specifically seeking passive income streams.
The timing couldn't be more strategic. While the recent election has officially concluded, market sentiment had already begun shifting months earlier, driven by anticipated stability and predictability. This demonstrates how property decisions reflect future economic modelling rather than merely reacting to current events.
Perhaps most telling is the surge in commercial property leasing – traditionally an early indicator of economic expansion. When businesses commit to new premises, they're expressing confidence in future customer growth, completing a positive feedback loop throughout the property ecosystem.
Ready to capitalise on these emerging trends? Follow the money, understand where energy is redirecting in the market, and position yourself ahead of the next wave of opportunity. The savvy investors are already moving – don't miss your chance to join them.
I've been wondering where the market's coming from, from people that are buying. At the moment. We're going to talk about our last five sales, where the money came from and what that's got to do with our economy at the moment. Stay tuned. I'm the ringleader, so what's up? Josh Rapshot?
Speaker 2:Mark Novak.
Speaker 1:Real estate agent Extraordinaire.
Speaker 2:Where is the new property cash coming from? Mr Novak? The last five sales. I think it's started to heat up again post-election.
Speaker 1:Yeah, look, it's only been a little couple of days, but I found that the activity or the sentiment was laid down probably as much as a month ago or two months ago and that's when I started seeing a difference in the market. It's a little bit like the interest rates. It it's even though they haven't gone down this month. I think the certainty and the predictability is pretty good. Is is pretty apparent. So people are sort of modeling what they're going to do off the back of how they feel. And yes, the elections were only two days ago, you know, during the weekend three days ago. But people have still been modelling around that for the last two, three months, I reckon.
Speaker 2:Definitely. I think a big, big talk is probably about the consumer confidence in the market. About the consumer confidence in the market because that generally shows you the stability and the strength of the market at the current time, based on people spending money. So I think I've definitely seen a big push in that area. And, to anyone that doesn't know, consumer confidence is just basically the general consensus around the current and forecasted conditions for the economy. So generally, if things are looking up, you're going to see people transacting, you're going to see things moving, prices increase, that sort of a thing. It's a good environment, whereas on a downturn of consumer confidence, that's where we see things where low sales, people not wanting to spend the money because they're unsure of the conditions moving forward. So definitely a really big factor in a sales environment, whether it be real estate, whether it be down at Bingley, harvey Norman it is a massive factor on the economy.
Speaker 1:Now I do hear people saying, yes, it's tightening up, but what are you seeing with your last five sales? Tell me about those people that have purchased um, tell me about where they got their money from, tell me about why they bought the motivation and things like that, because I, I, I think people find it really interesting to go to just know, oh my god, who bought that or that or that um. If you want to talk about the properties, cool, and if you want to talk about the um, the people, cool, but let's just not mention them together on the same property.
Speaker 2:Yeah, give it away. Um, I'd say funnily enough, over the last five sales, probably generally majority of it has been in investors. One in particular that I'd like to note is I had a property down in Oaks Avenue fantastic top level two bedroom apartment, and what I did with the buyer there is where they're actually an investor. Funnily enough, generally when you see with these residential properties, the people that are making the highest offer are generally people that're going to live in it because they've got emotional attachment or they pay over what the numbers make sense on to what a normal investor would buy. So it was really surprising to see them come in on at the top level and for what would be considered a highest rate in the building.
Speaker 2:What they've done in there is we've arranged a bit of pre-access with the original vendor. They'll be putting in a third bedroom in this residence, so turning it from a two-bed to a three-bed. That's smart, exactly, and then they will be renting that out. I'm taking over the management for them there as well. So you know, in that scenario, perfect, because what I like to do is we'll have a renter lined up for settlement, so essentially it settles and then it's leased the next day.
Speaker 2:So I thought that was quite interesting that you know it was on the more expensive end of your two bettors just under $1.445. But again, you normally see an owner-occupier pay higher than what an investor would. You know, you definitely see that the investors are out there, they're looking, they're confident and to make a sale like that over someone that was looking to live in the place, I thought that was really interesting and probably interesting for people to hear that you know investors are coming in over the top of people looking to buy for themselves in the aim of making money. So definitely opportunity out there. So I thought that was a really interesting one.
Speaker 1:And also like to give you an idea. I just sold a offer accepted on a cafe and the guy bought a storage unit about a million dollars. Late 40s in the meat business, late 40s in the meat business been dedicated to his business for probably 30, 25, 30 years. Kids are a little bit older.
Speaker 1:Some people I'm finding out, or this particular person, was stuck with cash and when you're working you know one o'clock in the morning, 14-hour shift, starting at one in the morning, 14-hour shifts, like a dog and you're sort of a bit of a leader in the industry. I think that you know. It's sort of one of those things where you know you've got reward there and these guys have investments to be made for their future and they've got options like invest back in business. They've got options like invest into the stock market or they've got options like invest into the property market. So there is an example of someone there where it's just like the actual monies, um, the, the, the savings They've worked like so hard I actually know these guys personally and so hard and again, that's another example of where the money's coming from.
Speaker 2:Yeah, definitely, I think, touching as well super Over at that project for the Rodborough French's Forest we've had. I couldn't count on my fingers how many people that have bought these storage units through super, a self-managed super fund. So it seems to be a growing landscape there of, you know, using that untapped pool of funds Interesting, yeah, to get themselves into the property market or expand their their already you know the portfolio they already have. Um, yeah, I think it's, it's.
Speaker 1:It's quite interesting that that whole superannuation and and that entering the market oh, ladies and gentlemen, if you want to, if you want to, if you want to know where the money is going and I said this during covid um, money doesn't get burnt or buried or destroyed, um, it gets transferred. So when the times of covert hit and it wasn't, and it was hard times as a business owner I was looking at okay, I accept that, I accept it. Now that I accept it, where is it going? Where is the money going? Is it going? Is it going offshore? No, is it going, um, into offices in the cbd? No, where you know.
Speaker 1:So I think you follow the money, you follow the. So again, I'll say it energy and it goes back to energy. Uh, energy doesn't all money doesn't get burnt or buried. You can't actually stop energy, it just gets redirected in different places. So, in short, guys and girls with this market, have a look at where the energy is going when it's coming out of one sector. Look at where it's going. Super is bigger than the ASX. The cash in super is bigger than the ASX. The ASX is at $3.5 trillion capitalised and Australian super is 3.8 in cash. Our pot of super is bigger than the entire ASX. So where's the money gonna go?
Speaker 2:exactly right, exactly right. It's a big kitty waiting to be untapped and I think, um, it's definitely going to play a part in the next 5, 10, 15, 20 years for sure, probably more so than what it has in the past, um, especially with the idea of how hard it is for the you know odd Tom down the road to put together funds these days with the cost of living. So I really think that is going to be the piggy bank that was never touched that all of a sudden can start to help you.
Speaker 1:So tell me about Buyer 4 and 5.
Speaker 2:4 and 5. To uh to help you. So tell me about buyer four and five. Four and five. So I had another one down in um, just down on people water roads, uh, there was a da approval for a boarding house. I think it was 21 um 21 units and then a commercial space downstairs, um. So that's right in front of the major bus. Stop down it down at dy there there. So I believe they're looking to start construction as early as July.
Speaker 2:Now there was thoughts of renting it out for a year and delaying construction, but they're looking at getting right into it. So that was just a family. They're an out of suburb family, but essentially we're looking for a passive income um that you know, just these boarding houses. There's not too many opportunities where you've got the ability in the stability of property and you're still tapping into that high rental um demand uh of the area. So they thought it was a no-brainer um. Basically they've they've gone to a builder now um and they'll start building up um. It's going to be a pretty interesting build there because it's sandwiched in between two blocks, which is how they got the da approval to go up um.
Speaker 2:But that was something like. The figures on that were somewhere between sort of 600 to 700 grand a year gross. Um, so, yeah, once we, once we sat down, I took them through the side, I showed them a couple of other boarding houses we have in the area and how well they rent, um vacancy rates, um that that really sealed up the deal because, um, you know, we, we do have a lot of experience with the boarding houses. I believe you know we've got the ones up at bell rose, the ones manly vale, um, and they rent really well. Um, so it was, it became a no-brainer in the end. So they were also another investor looking for passive income and ended up down at 822 Pitwater Road, dy.
Speaker 1:Unbelievable. And the last number, five of five buyer. Tell me about that one.
Speaker 2:So probably again, these would probably be a couple of storage units. A guy looking to essentially put his super into something. He was looking at a couple of storage units. We've got a really good relationship over there, so what we've been able to do was probably fuse a few storage units into one bigger one, and the idea here, guys, is he's put three together. He's got the ability to use the three as one big storage or, closer to completion, he may make the decision to lock one of those off or lock both and keep one, um, and and take advantage of that that short-term capital growth we see in those areas and and get the functionality out of the use of the uh, the one you'll keep or the two he'll keep again, investor, that's interesting.
Speaker 1:Back to super and and I just feel I know we're on time pressure here but back to super. I've sold to a couple of people that have had, for example, a million dollars to spend in their super. The reason they bought four is every three years they're going to sell down one of the four because they're 200K, 200k, 200k, 200k and they're all like when I get into my mid-60s I'll sell one, when I get into my late 60s, I'll sell another. Very interesting, there you go. So there's deals happening out there. There are investors out there, there are owner-occupiers out there, but are investors out there? There are owner occupiers out there, but it's, yeah, things are ticking along.
Speaker 2:Yeah, and just quickly, guys. One thing I did want to point out last couple of weeks I've seen a huge change in the rental space for commercial properties, and what that tells me is adds to that point about consumer confidence. You don't go starting up a business unless you have you think you have customers to sell to. So I've seen a real big uptake in properties that had no interest prior or now getting offers on rentals that are pretty substantial and now turning into deals. So I always see that as a big point of change. Once you know those wheels start turning, it follows its way up the ladder. So I think that's really exciting. So I wanted just to highlight that point. Um, before we finish today, have a great day.
Speaker 1:See you, guys. Thanks.