Unaffordable Twaddle
Hotspotting
The silliest people skulking around the edges of the property industry are the shallow attention-seekers who pump out nonsense reports claiming that no one can afford to buy property – not because it’s true or useful, but simply to drum up some free publicity for the business who is the source of the misinformation. The shallowness and pointlessness of these reports is demonstrated by the results being seen in property markets, which emphatically contradict the notion that most people can’t buy homes because they’re unaffordable to the vast majority. We are constantly inundated with...
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Negative Gearing
Hotspotting
It’s remarkable how many politicians think that the solution to every problem that afflicts the housing market is to scrap negative gearing and make other changes to drum investors out of existence. Want to fix the rental shortage? Scrap negative gearing. Make housing more affordable? Scrap negative gearing. Facilitate the construction of a million new homes in Australia? Scrap negative gearing. The illogic of these attitudes – and the way they run counter to the truth – is quite remarkable. And, while it’s become quite common for politicians and others to recommend the end to negative...
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Financial Freedom Starts at Home: Pay Off Your Mortgage In Record Time
Hotspotting
Tune in to the latest episode of the Hotspotting Podcast with your host Tim Graham who sits down with special guest Scott Parry, founder of Crown Money. In this informative and eye-opening webinar, Scott shares his journey from starting out as a young mortgage broker to founding Crown Money, a company focused on helping people achieve their financial goals and becoming debt-free. Crown Money clients on on average pay off their mortgages within 12 years, and Scott is calling a client every 23 days to congratulate them on being debt free! The episode dives deep into the topic of mortgages and...
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State of the States
Hotspotting
One of the fundamentals of understanding real estate dynamics is remembering that real estate markets are local in nature – and they are influenced by the local economy in which they sit, far more than by national factors. Although economists and journalists often refer to “the Australian property market” and predict what will happen with “Australian property prices”, the reality is that there is no such entity as the Australian property market. Take a look at the price growth results among the eight capital cities for last year and you will note that some had boom growth, some had...
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Interviews with the 1% - Kate Hill
Hotspotting
Are you ready to take your investment journey to the next level? Look no further, because we have exciting news to share with you! We are thrilled to announce our new Hotspotting pre-recorded interviews with some of the top 1% of Australian investors who own 5 or more properties. As you may know, in the 2020-2021 financial year, only 0.87% of investors in Australia owned 5 or more investment properties. But what do these successful investors know that the majority don't? We have sat down with a number of them to get exclusive insights into their strategies, tips, and personal journeys....
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Divorce and Dollars: Managing Real Estate and Relationships with Sallyanne Hartnell
Hotspotting
Join us on this enlightening episode of the Hotspotting podcast, where host Tim Graham welcomes Sallyanne Hartnell from Reflect Coaching. An award-nominated Relationship and Divorce Coach and podcast host of "Reflect, Reclaim & Liberate," Sallyanne is on a mission to transform the divorce experience, helping couples reorganise their lives and family dynamics post-separation with dignity and less drama. In this episode, Sallyanne sheds light on why she might be the professional "no one wants, but many need." We explore the intriguing intersection of divorce and real estate, discussing how...
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Melbourne Property Growth
Hotspotting
There are numerous reasons why we think Melbourne and Victoria is worthy of consideration by property investors, notwithstanding the concerted efforts by the state government and some local councils to force investors to sell up and get as far away from Victoria as possible. Melbourne and Victoria are underpinned by one of the nation’s strongest state economies, according to CommSec’s State of the States report, and there has been a notable uplift in sales activity since the start of 2024, pointing to elevated price growth as the year unfolds. But perhaps the most compelling evidence,...
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First-Home Buyers vs. Investors in the Property Market
Hotspotting
Media loves the storyline that first-home buyers are competing with wealthy investors for properties – and losing because investors apparently have a huge advantage. Like so much that’s written and spoken in news media about the housing market, it’s a work of fiction. The polar opposite is, in fact, the truth. The biggest competition for first-home buyers in the market is not investors, but home buyers other than first-time buyers. The largest cohort in the market, at any point in time, is home buyers who already own a home, have equity in that home and are upgrading – or, in some...
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Location Reports: Your Real Estate Game-Changer!
Hotspotting
If you want to sell real estate, very often the greatest selling point is the location. If the location has … a strong diverse economy creating jobs, a steadily growing population with strong increases projected well into the future, good existing amenities and a significant spend on new infrastructure … then it has many of the credentials for capital growth. The problem for many real estate professionals - in taking advantage of growth factors like that in their location- is accessing all the key information, analysing it and then presenting it in a way that’s easily...
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Webinar Replay - Why Melbourne Makes More Sense Than Perth
Hotspotting
Want to get into a key market BEFORE prices start to take off? Feel that you may have missed the boat with media favourite Perth? In many ways, the answers to these questions are the essence of smart investing. Most property investors are herd animals, diving into markets when they read that prices have risen 15% or 20% in the past year – or 50% in the past three years. Buying in such a market means you are likely buying at – or after – the peak of the market. The smart money would have been there 2-3 years ago – and is now focused on places that are early in the growth cycle....
info_outlineMedia loves the storyline that first-home buyers are competing with wealthy investors for properties – and losing because investors apparently have a huge advantage.
Like so much that’s written and spoken in news media about the housing market, it’s a work of fiction. The polar opposite is, in fact, the truth.
The biggest competition for first-home buyers in the market is not investors, but home buyers other than first-time buyers.
The largest cohort in the market, at any point in time, is home buyers who already own a home, have equity in that home and are upgrading – or, in some cases, down-sizing.
These are buyers who are older, with equity, higher incomes and borrowing power – and they can easily over-power a young novice in the market.
The biggest problem for first-home buyers is not investors, it’s the incredibly high costs of getting into the market because of the policies, decisions and actions by politicians and bureaucrats.
Just take a look at the cost of a house-and-land package anywhere in Australia. Given that the cost of constructing the average brick-and-tile house is now close to half a million dollars, not including the land cost, it’s hard to find a new home in a housing estate for under $700,000. It’s considerably more in the biggest cities.
The greatest lie of all is that investors have a big advantage over first-home buyers in the market. Presumably media says that because of their persistent misunderstanding about negative gearing.
The reality is quite the opposite. If it comes down to a competition between a first-home buyer and an investor, the first-home buyer has several big factors in their favour.
First-home buyers have high levels of government assistance, whereas investors do not. Quite the opposite, investors increasingly face major impediments from government.
First-home buyers are granted stamp duty concessions, so they have to pay little or nothing compared to the massive tax imposed on investor buyers.
Investors are slugged with much higher interest rates by lenders, so that if you have a first-home buyer and an investor of similar ages and incomes, the first-home buyer has considerably greater borrowing power and therefore has a competitive advantage over the investor who earns the same income.
Keep in mind that, according to the latest research data, most investors are young, on average incomes and need to buy as affordably as possible, which means they cannot pay high prices for properties in competition with other buyers.
Investors have several other disadvantages compared to home buyers.
As well as paying higher interest rates, they pay higher council rates and they pay higher rates of insurance. And they have to pay taxes that home buyers do NOT have to pay, including land tax and capital gains tax.
The only potential positive on the investor side of the equation is negative gearing, which in some cases, but certainly NOT ALL, may reduce the amount of tax the investor pays – but that does nothing to increase the investor’s borrowing capacity or ability to pay a high price for a property.
The whole narrative around first-home buyers being priced out of the market by so-called wealthy investors is a lie.
And indeed, the latest official data on lending to buy property shows that there has been a 13% increase in first-home buyer activity this year, compared to the same time last year.