Hotspotting

Prepare to embark on an exciting journey into the realm of hot property markets with Terry Ryder and Tim Graham! Terry & Tim from Hotspotting, are dedicated to providing the most accurate and unbiased research to help investors make informed decisions on where to buy. The Hotspotting Podcast brings you the latest data, trends, and market statistics, along with in-depth discussions on growth areas and the larger factors impacting Australia's property landscape. Terry & Tim regularly feature special guests from around Australia to share their industry insights and expertise to help investors cut through the noise. Whether you're a seasoned investor or a first-time buyer, this show is a must-listen for anyone looking to build their knowledge and make smarter investment choices. Terry Ryder, with over 35 years of experience as a specialist researcher and writer in residential property, offers expert insights that are completely independent and free from outside influences. Tim Graham has been a buyers agent and mortgage broker for over 13 years along with working in real estate all over the world. Join us on the Hotspotting Podcast and discover the hottest opportunities in the Australian property market today!

Interviews with the 1% - Kate Hill 04/26/2024

Interviews with the 1% - Kate Hill 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. Our pre-recorded interviews bring you valuable knowledge and advice from Australian property experts who walk the walk and practice what they preach. Learn from their mistakes, successes, and unique perspectives on property investment. These interviews are a must-watch for anyone looking to build a successful investment portfolio and achieve financial freedom. With over 71% of investors owning only one investment property, we understand the challenges and uncertainties that come with growing your portfolio. That's why we have curated a series of interviews that exclusively feature investors with multiple properties. They represent the top 1% of Australian investors and have achieved remarkable success in their investment journey. Our pre-recorded interviews are available for you to watch at your convenience, so you can take in all the knowledge and insights at your own pace. Hear firsthand how they navigate the ever-changing property market and make profitable investment decisions. You'll be able to walk away with practical tips and strategies that you can implement in your own investment journey. About Kate Hill Kate is an avid property investor with many years of firsthand experience buying and researching real estate. She founded Adviseable after many years as a Property Coach and Mentor. An accomplished Property Investment Adviser, Kate has facilitated hundreds of successful property investment purchases and has been named among the top 2 Your Investment Property magazine’s Advisers of the Year in Australia. She has also featured prolifically in the national media, commenting on TV, the press, radio and podcasts. Kate is the co-author of the book The Female Investor: Building Wealth Security and Freedom Through Property Kate’s success as an adviser can be attributed to her keen sense of matching property with buyers, her knack for identifying outstanding property investment opportunities, and her tenacious negotiation skills. It’s these qualities that enable our clients to feel comfortable throughout the purchase process knowing that she’s in their corner. Kate has a significant and growing property investment portfolio herself, and her personal philosophy is simple; “focus on results, and always buy property with maximum growth potential”. When she’s not immersed in research material in an effort to uncover the latest property investment hot-spots, Kate enjoys competing in ocean swim events, long-distance running, cinema or relaxing with a good book. www.adviseable.com.au /episode/index/show/hotspotting/id/30993358

Divorce and Dollars: Managing Real Estate and Relationships with Sallyanne Hartnell 04/25/2024

Melbourne Property Growth 04/23/2024

Melbourne Property Growth 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, pointing to growing strength in the Melbourne market in particular, is the latest population data from the Australian Bureau of Statistics. The ABS figures describing population growth in 2023 are largely dominated by Melbourne. While the annual growth rate for Australia was 2.4%, Melbourne rose 3.3% - which was the highest in the nation except for Perth. The National Top 10 list for the fastest growing local government areas in Australia – that’s the percentage growth rate for the year - included three Melbourne LGAs, with the City of Melbourne the No.1 fastest growing municipality in the nation. The Nearby City of Yarra and the City of Melton in the western suburbs also made the top 10 national list. In terms of LGAs with the largest growth, the actual number of new people added to the population, four of the national Top 10 were in Melbourne – the City of Melbourne and three outer-ring growth areas, the municipalities of Wyndham, Casey and Melton. At a suburb level, most of Australia’s fastest growing suburbs are in the Greater Melbourne area. That includes the nation’s fastest growing suburb, Rockbank in the western suburbs of Melbourne. Of the top 12 fastest growing suburbs in Australia, 9 are in Greater Melbourne. And of the nation’s top 30 fastest growing suburbs, 16 are in Greater Melbourne. Now, to be clear, we’re not suggesting that population growth is the over-riding factor in choosing where to buy real estate. It’s one of many factors to take into account. But, considered alongside all the other factors, it’s a pretty strong endorsement of Melbourne’s prospects – it’s a tale of growth and the remarkable thing is, Melbourne hasn’t delivered any major price growth recently. That, I believe, will emerge later in 2024 and beyond. /episode/index/show/hotspotting/id/30945698

First-Home Buyers vs. Investors in the Property Market 04/23/2024

First-Home Buyers vs. Investors in the Property Market 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 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. /episode/index/show/hotspotting/id/30945543

Location Reports: Your Real Estate Game-Changer! 04/23/2024

Location Reports: Your Real Estate Game-Changer! 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 accessible to potential customers. Many people in the industry just don’t have the time or the resources to do all that. That’s where Hotspotting’s unique custom reports service comes in. It saves you time and it projects your business as professional, informed and successful. The Hotspotting team can create location reports on individual suburbs, clusters of suburbs, local government areas, towns and regional cities, and on major capital cities. The reports are provided with the client’s branding and location details, as well as (if you choose) the Hotspotting brand to provide the assurance and credibility of an independent third-party research source. This is a custom report service you cannot get anywhere else. Our customers love it. One of them says ... “Hotspotting was a pleasure to deal with when arranging my Custom Report. As a buyer’s agent for many years, I was astounded by how much effort and research goes into their reports. Their communication was great and I am extremely happy with the final result.” And another of our regular customers commented … "The research provided by has been an integral part of our success and the growth of our business. The ability to access independent research reports on the locations we believe are best for our clients, with our branding, has made it easier to show our customers the merits of the places we think have the strongest growth credentials." We love to get feedback like that, because we regard our custom reports as one of our most important product services.If you would to find out more our Hotspotting’s exclusive custom reports service, contact me on or go to the hotspotting.com.au website and select “products” on the menu at the top and then “custom reports”. /episode/index/show/hotspotting/id/30945488

Webinar Replay - Why Melbourne Makes More Sense Than Perth 04/17/2024

Webinar Replay - Why Melbourne Makes More Sense Than Perth 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. That’s why Melbourne makes more sense than Perth for property investors seeking to buy strategically for capital growth. The Melbourne market, in simple terms, is situated where Perth was three years ago, before prices started to rise and rise. The Melbourne market is underpinned by one of the nation’s strongest state economies and boosted by population growth amongst the highest in the country. It hasn’t had the price growth of other cities in the past year but has had a big uplift in buyer activity recently – often a precursor to elevated prices. And vacancies are ultra-low, putting upward pressure on rents. To find out more about why Melbourne and Regional Victoria should be strongly considered by property investors, join leading national buyers’ agent Kate Hill of Adviseable in this webinar recording hosted by Hotspotting founder Terry Ryder. In this webinar, you will learn …. **Why now is a good time to consider Melbourne and Regional Victoria **Which metrics point to capital growth in Victorian markets **Why recent rental reforms should not deter investors **Which price points are attracting the greatest buyer demand *Why attached dwellings need to be considered *Which Melbourne suburbs and regional centres deserve the most attention To connect with Kate Hill, you can reach here at or /episode/index/show/hotspotting/id/30859528

Interviews with the 1% - Arjun Paliwal of InvestorKit 04/15/2024

Interviews with the 1% - Arjun Paliwal of InvestorKit 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. Our pre-recorded interviews bring you valuable knowledge and advice from Australian property experts who walk the walk and practice what they preach. Learn from their mistakes, successes, and unique perspectives on property investment. These interviews are a must-watch for anyone looking to build a successful investment portfolio and achieve financial freedom. With over 71% of investors owning only one investment property, we understand the challenges and uncertainties that come with growing your portfolio. That's why we have curated a series of interviews that exclusively feature investors with multiple properties. They represent the top 1% of Australian investors and have achieved remarkable success in their investment journey. Our pre-recorded interviews are available for you to watch at your convenience, so you can take in all the knowledge and insights at your own pace. Hear firsthand how they navigate the ever-changing property market and make profitable investment decisions. You'll be able to walk away with practical tips and strategies that you can implement in your own investment journey. About Arjun Paliwal Having begun the 2010s with lofty ambitions of becoming the top dog at the Commonwealth Bank of Australia, a decision to maximise his “worst case” has led Arjun Paliwal to the man he is today. Almost six years ago, Mr Paliwal decided to pour all his eggs into the InvestorKit basket – and he hasn’t looked back since. Recently, InvestorKit was named the Buyer’s Agency of the Year for the second year in a row at the REB Awards, a proud moment for the business and a ratification that their modus operandi to become “the most trusted data-driven buyer’s agency for successful business owners and professionals looking to scale their business” is coming to fruition. www.investorkit.com.au /episode/index/show/hotspotting/id/30822903

Real Estate Influence on RBA 04/15/2024

Real Estate Influence on RBA Part of the obsession by economists with interest rates as the only thing that matters in the housing market is the notion that the Reserve Bank spends a large amount of time discussing the housing market before deciding what to do about interest rates. As with so many things, economists are wrong about that. One of the most popular definitions of insanity is doing the same thing over and over again, but expecting a different result. My own definition of insanity is the average Australian economist discussing real estate. In essence, those two definitions are essentially the same thing. Economists, especially those working for the big four banks, tend to believe that everything that happens in residential real estate is dictated by trends with interest rates. In their simplistic view of things, rising interest rates means falling prices and falling interest rates means a property boom. They’re utterly wrong about that, because there are always forces more powerful than interest rate movements dictating what happens in real estate – including, right now, the serious imbalance between supply and demand. The other thing economists and other commentators get wrong is their belief that the property market is the over-riding influence in RBA decisions about interest rates. In reality, the property market has little or no impact on RBA decisions. There have been repeated RBA statements over the years telling us that the board does not consider its role to include control or influence the property market. We have seen it in their decision making in the past couple of years, when the prime consideration was trying to bring down the rate of inflation. So now we have a string of mistaken assumptions from economists leading to the forecast that real estate will struggle late this year because the expected cut in interest rates won’t happen. The first mistaken assumption is that the board will decide NOT to cut interest rates later this year because property prices are rising. As I said, they have made it clear they’re fundamentally not the regulators of the real estate market. The second mistaken assumption is that cutting interest rates would cause a property boom - or that keeping interest rates at their current levels will suppress the market. Economists are clearly not students of history. In the late 1980s we had interest rates rising and rising to levels far higher than today and ultimately as high as 17%, if you can believe that – and despite those obscenely high and rising interest rates, property prices kept rising and rising. It was one of the most spectacular property booms in the nation’s history. In the early years of this century, we had several years of interest rates high and rising, and property prices kept on increasing. And then again last year, 2023 had repeated increases in interest rates and – notwithstanding the doomsday forecasts of economists – house prices rose strongly in most locations, including well above 10% in a number of our capital cities. Meanwhile, the years before Covid had extremely low interest rates but property prices were falling and in 2020, the year of the lockdowns, interest rates went to record lows but there was no property boom (although prices did show moderate growth). When markets boomed in 2021, it was driven by a host of factors, including a high level of government incentives and spending to generate economic recovery. So, in summary – whether or not the Reserve Bank decides to cut interest rates later in the year will depend on their view of inflation and the state of the national economy. Events in the real estate markets will NOT dominate the conversation. If they do decide to cut interest rates, it will NOT generate a property boom. The big factor will continue to be the shortage of dwellings, regardless of any decisions about interest rates. /episode/index/show/hotspotting/id/30821613

First Home Buyer Activity 04/15/2024

First Home Buyer Activity If you tune into news media regularly, it’s easy to form the view that the prospect of young Australians buying real estate is remote, if not impossible. There are daily headlines telling us that it takes 10 or 15 years to save a deposit, or that most young Australians have given up on home ownership and that young adults are doomed to a life-time of renting. As is so often the case with mainstream media and their love of negative sensation, the reality is quite different. First home buyers are highly active in markets across Australia. But first, let’s look at some of headlines with which we are afflicted every day in Australian news media: “Housing crisis escalates as affordability worsens”. “It’s insane how much you need to save to buy in Queensland” “Melbourne home seekers need to save $250,000-plus to buy a home” “Cost of living crisis holding back first home buyers” And the most spectacular of them all … “The Australian Dream crashes into the affordability brick wall”. One article in the Fairfax media declared: “Aussie home seekers are being made to come up with hundreds of thousands of dollars in upfront funds to buy a home.” How did they come up with such a finding? By focusing on a 20% deposit (which you don’t need), the median house price (which is ridiculous because FHBs don’t buy at the median price) and always houses, never units which are the dwelling of choice for more and more people and are often half the price of houses in the same suburb. In other words, the objective of those media outlets was not to be informative or helpful – it was simply to create a screaming headline (and the truth is optional). And that article with the headline “The Australian Dream crashes into the affordability brick wall” ? The intro to the article immediately contradicted the headline. It said: Westpac’s Home Ownership Report shows an increase in the share of Australians aspiring to own a home. The survey found 44% of Australians plan to buy a new home in the next five years, up 9 percentage points since July 2023. So what’s really happening out there in first-home buyer land? The latest data from the Australian Bureau of Statistics shows that, far from being priced out of the market, buying activity by first-home buyers has increased recently. The figures on loans to buy a home show that the number of loans to FHBs rose 4.3% in February, compared to January, and were up 13.2% compared to a year earlier. The figures showed that the number of FHBs buying homes was broadly in line with pre-pandemic levels. National Australia Bank senior markets economist Taylor Nugent said first-home buyers were proving resilient. He said higher mortgage rates were not proving much of a hurdle for first-time buyers. In addition to that, research by the Commonwealth Bank finds young Australians are also a dominant force among those buying investment properties. It found that the most active age group among those buying investment properties is the cohort aged between 27 and 42, the one know as Millennials. That group accounted for almost half of investor property purchases in 2023. CBA said investors are getting younger, overall, because of the growing incidence of people getting into the property markets as rentvestors – i.e. people who choose to rent their homes and buy an investment property. So, is home ownership a fading dream for young Australians? According to the data, rather than the media rhetoric, the answer is emphatically NO. The dream is very much alive. /episode/index/show/hotspotting/id/30821488

Home Building Costs 04/08/2024

Home Building Costs Want to know why housing affordability is so poor in this country? The answer, in simple terms, is because the cost of building new houses is so high – ridiculously, obscenely high. The cost of building the typical house in Australia has risen 53% in the past three years – and it now costs close to half a million dollars to build that home. And that’s just the cost of the house. It doesn’t include the price of the land. Who’s to blame for this situation? Primarily, overwhelmingly, it’s government. Politicians and bureaucrats. They keep making decisions that add to the cost of creating new homes. Just three years ago, the average cost of building a new house was $320,000. Now, early in 2024, its $490,000. Government meddling with the housing industry, and their obsession with using the housing industry as their go-to cash cow when they need to raise money, has caused the average cost of a new house to blow out to almost $500,000. It’s not the usual suspects that journalists and economists and politicians like to blame for poor housing affordability. This has got nothing to do with negative gearing, or foreign investors, or mum-and-dad Australian investors, or government grants to first-home buyers pushing up prices. It’s purely and simply the constant addition to the cost of creating new homes by politicians and bureaucrats. A couple of years ago, a research study revealed that between 35% and 50% of the cost of a new house-and-land package – depending on where you are in Australia – was taxes, fees and charges by the three levels of government. Imagine that reality. That every time someone builds a new home in Sydney, half of the cost they’re paying is taxes and fees to government. Stamp duty, land tax, GST, capital gains tax, application fees, infrastructure charges – and many, many more. And then there’s the cost of red tape – delays and additional costs caused by bureaucrats. But that’s just the background. Every year the cost of building a new house grows larger because governments keep changing the rules and regulations – always in ways that add to the costs of construction. New regulations to make houses safer. New rules to make houses more accessible. New laws to make houses more environmentally friendly. New guidelines to make houses more aesthetically appealing. Now you might think that those measures are all good things. If houses are (allegedly) safer, more accessible, new energy efficient and better looking, that’s all very positive. But if you feel that way, you cannot then complain about poor affordability, because you’ve just declared your support for measures that have added massively to the cost of creating new homes for young Australians – thereby causing a further deterioration in housing affordability. The problem of government taxes, legislation and red tape pushing up the cost of housing has been exacerbated in recent times by the shortages of tradespeople and materials. Why are there shortages of tradespeople? Mostly it’s because governments around Australia have been trying to spend their way out of the problems of the Covid era with major, new, headline-grabbing infrastructure, which is pulling skilled people out of the home-building industry. The infrastructure projects that are scheduled to happen in the next five years total $230 billion – at current cost estimates and we can be sure they will blow out to a lot more – and that means the workforce needs to grow 127% to provide the workers and tradesperson required to build all that. And this will make matters worse for the home building industry. Master Builders Australia says that the main reasons the cost of building houses has increased so much are ... Increased building approval times High taxes, particularly land tax The shortage of workers The high cost of materials Most of the blame for that sits at the feet of government – politicians and bureaucrats. /episode/index/show/hotspotting/id/30726013

Regional vs. City Growth 04/08/2024

Regional vs. City Growth We’re constantly asked at Hotspotting whether it’s better to invest in the regions or the capital cities – and whether you get higher capital growth in the outer-ring suburbs of our cities or the so-called prime inner-city locations. Now, there’s no definitive answer to questions like that, because there are so many different scenarios to consider – and, at the end of the day, it comes down to the performance of individual local markets and you simply cannot generalise. But, based on the evidence of where the highest capital growth has occurred in the past four years, I would have to say the best performers have been found in regional areas and the outer-ring precincts of capital cities – NOT including Sydney or Melbourne. PropTrack, which is Hotspotting’s preferred source of property data, has analysed capital growth since March 2020 – which is when the Covid lockdowns started to happen.It shows that home prices have increased 40% in the four years since. But the growth in the combined regional areas has been 54%, compared with 35% in the combined capital cities. So there’s your first answer: based on this evidence, the regions have out-performed the cities overall. When you divide Australia into the 15 major jurisdictions (eight capital cities and seven state or territory regional areas), the top two areas are regional and six of the top nine are regional precincts. Regional Queensland ranks No.1, with home values up 66.5%, followed by Regional South Australia, up 66.2%. The next on the list are Adelaide in third place, Brisbane fourth and Perth fifth. Then, in order, come Regional WA, Regional Tasmania, Regional NSW, Regional Victoria and, in 10th place, the ACT. You’ll note that those are the top 10 on the list of 15 jurisdictions, and Sydney and Melbourne haven’t featured yet. Sydney ranks 12th out of the 15 and Melbourne ranks 14th – or second last. So there’s a fairly emphatic answer: the regions have undoubtedly out-performed the cities – and the best performers among the cities don’t include the two biggest ones. Adelaide home prices increased 64% and Brisbane 63%, to be the strongest capital cities on capital growth over four years, compared with 35% in Sydney and just 17% in Melbourne. When PropTrack looked at the individual locations within the regions and the cities, the Top 10 list of locations for capital growth in the past four years comprised regional centres and the outer ring areas of capital cities. The Wide Bay region of Queensland was the top individual area on price performance, with values up 80% in four years. This notable growth region includes regional centres like Hervey Bay, Bundaberg, Gympie and Kingaroy – all places which have featured in recent years in our Hotspots reports. Next was Ipswich City, in the outer south-west of Greater Brisbane, followed by the Outer North of Greater Adelaide – both up by more than 75%. At Hotspotting, we have strongly advocated Ipswich and northern Adelaide LGAs like Salisbury, Playford and Gawler in the past several years. Fourth on the list was the Gold Coast, which rose 74% in the four years. It’s notable that 9 of the 10 locations on the national top 10 list are in Queensland and South Australia. And here’s a final thought. What I’ve just described is what’s happened in the past four years. Thre’s no guarantee the same will happen in the next four years. As we often tell people, the past does NOT inform the future. But it’s worth noting that, based on the metrics we use at Hotspotting, we do expect Brisbane, Regional Queensland and Adelaide to be among the best performers on price in the next year or so. /episode/index/show/hotspotting/id/30725988

Victorian Markets 04/08/2024

Victorian Markets The smart money in real estate buys in key markets BEFORE prices start to take off. The essence of smart investing is NOT buying in over-heated markets like Perth but targeting locations that have the credentials for long-term growth but are currently at a low point in the cycle. And right now, the location that meets those criteria better than most is Victoria, particularly Melbourne. 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. That’s why Melbourne makes more sense than Perth for property investors seeking to buy strategically for capital growth. The Melbourne market, in simple terms, is situated where Perth was three years ago, before prices started to rise and rise. The Melbourne market is underpinned by one of the nation’s strongest state economies and boosted by population growth amongst the highest in the country, enhanced by overseas migrants and students. It hasn’t had the price growth of other cities in the past year but has had a big uplift in buyer activity recently – often a precursor to elevated prices. And vacancies are ultra low, putting further upward pressure on rents. To find out more about why Melbourne and Regional Victoria should be strongly considered by property investors, there are two keys actions you can take … Tune into my April 17 webinar featuring leading national buyers’ agent Kate Hill of Adviseable – and get our Victoria Hotspots bundle, featuring our reports on Melbourne and on Regional Victoria. These two great sources of key information will explain …. Why now is a good time to consider Melbourne and Regional Victoria Which metrics point to capital growth in Victorian markets Why recent rental reforms should not deter investors Which price points are attracting the greatest buyer demand Why attached dwellings need to be considered Which Melbourne suburbs and regional centres deserve the most attention /episode/index/show/hotspotting/id/30725968

Interviews with the 1% - Matt Wilson 04/07/2024

Interviews with the 1% - Matt Wilson 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. Our pre-recorded interviews bring you valuable knowledge and advice from Australian property experts who walk the walk and practice what they preach. Learn from their mistakes, successes, and unique perspectives on property investment. These interviews are a must-watch for anyone looking to build a successful investment portfolio and achieve financial freedom. With over 71% of investors owning only one investment property, we understand the challenges and uncertainties that come with growing your portfolio. That's why we have curated a series of interviews that exclusively feature investors with multiple properties. They represent the top 1% of Australian investors and have achieved remarkable success in their investment journey. Our pre-recorded interviews are available for you to watch at your convenience, so you can take in all the knowledge and insights at your own pace. Hear firsthand how they navigate the ever-changing property market and make profitable investment decisions. You'll be able to walk away with practical tips and strategies that you can implement in your own investment journey. About Matt Wilson Matt is the founder of WT Capital & the chief storyteller. He started his career not in property but in the 3 Michelin starred kitchens of Paris, after returning to Sydney he brought an unseen level of service to the emerging buyers advocacy space. WT Capital was founded with one goal in mind, to deliver the highest quality service throughout each property transaction. /episode/index/show/hotspotting/id/30721788

How To Multiply Your Wealth With Subdivision 04/03/2024

Apartment Revolution in Real Estate 04/03/2024

Apartment Revolution in Real Estate At Hotspotting we’re always on the alert for evidence of CHANGE that will influence property markets. The great potential in residential real estate is that change is always happening, opening up new possibilities for growth. One of our catch-cries at Hotspotting is that THE PAST DOES NOT INFORM THE FUTURE. Poor performers of the recent past can become the nation’s leaders of the near future. One of the biggest trends we are tracking, under the general theme of change, is the rise and rise of apartments – challenging the dominant paradigm of real estate. That paradigm, still widely accepted in the real estate industry, states that houses always outperform units and townhouses on capital growth. But that is undoubtedly changing. We are seeing growing evidence that more and more buyers of various sorts are opting for attached dwellings – be they units, townhouses or apartments. Buyer demand in locations where units dominant the dwelling mix - or are a significant part of the dwelling mix - has been rising notably for the past 12 months. Suburbs where units dominate the dwelling mix are now among the most powerful markets in Australia – which makes our Top 10 Apartment Hotspots report essential reading for investors seeking opportunities in 2024. Those seeking out well-located and affordable apartments include older people downsizing from a large family home. They also include … young people seeking an affordable first step on the property ladder; lifestyle buyers seeking low-maintenance, lock-up-and-leave options in good locations; overseas migrants from countries where unit-style living is the norm; and investors seeking affordability and higher rental yields in good locations. In inner-city precincts in our biggest cities, houses can typically cost over $2 million, but apartments can be bought in the $600,000s and $700,000s in the same suburbs in many cases. The rental yields are also significantly higher, a key consideration in times of higher interest rates – although it needs to be remembered that apartments do entail additional costs like body corporate fees. But the most noteworthy data relates to capital growth. In a growing number of locations throughout Australia, apartments have recorded larger increases in median prices than houses, both in the past year and over the longer term. At Southport on the Gold Coast, apartments are considerably cheaper than houses, sell faster, have higher rental yields, have recorded bigger price growth in the past year – and the long-term capital growth rate is close to 10% per year. There are many, many more examples like this across Australia. So there is a significant list of good reasons why apartments are attracting growing demand from a range of buyers. And that means that the dominant paradigm of real estate is looking decidedly shakey. /episode/index/show/hotspotting/id/30657483

Media Negativity 04/03/2024

Media Negativity I’ve been in and around news media my whole adult life and I STILL haven’t got used to the way journalists these days can look at a set of numbers that are overwhelmingly positive but find the only negative – and make that their headline. Somehow, journalists have formed the view that we’re endlessly attracted to screaming negatives and don’t want to hear about anything UPLIFTING that’s happening in the world. Recently, one of the major real estate data firms published data on the property ownership rates for women and men in Australia. This was topical because there’s a lot of focus on ways that females are financially disadvantaged, including with the level of super the average woman has at retirement, compared to men. So the findings of this analysis by CoreLogic was a strong and positive story, because overall it showed that women are more likely to own real estate than men – only slightly, but that finding would have surprised a lot of people. In some age groups, such as Millennials and Gen X, women were significantly ahead of men on property ownership and with the oldest grouping, Baby Boomers, it was fairly even. Only with Gen Z, those aged under 30, were males more likely to own property than women. So, overall, a pretty positive story, right? Well, no, many reporters managed to turn this into a negative, by focusing their coverage on the only age group that was less successful for women, the Gen Z cohort. Sadly, typical. In another recent story, the Pain and Gain report from CoreLogic showed that, in most market jurisdictions across Australia, the vast majority of sales in the past 12 months had been profitable for the vendor. In Brisbane, every suburb had recorded growth for vendors, both for house sales and unit sales – a 100% success story right across the city. It was similar in Adelaide, Perth and Sydney – close to 100% of suburbs had delivered house price growth and unit price growth for vendors in the past year. But a lot of the media coverage found a negative for their headline. In Melbourne, 82% of suburbs recorded annual growth in unit prices – but the media coverage focussed on the 18% that didn’t. “Nearly one in five suburbs recorded price falls,” shouted one headline. There are myriad examples of media’s desire to focus on – or create – sensational negatives, with little or no attention to the potential positives. Every day, across Australia, there are articles describing the rental shortage – which doesn’t fit the definition of “news” because everyone KNOWS there’s an under-supply of rental homes – but it’s very rare to see anyone write about potential solutions to the shortage. It’s even less likely that you will see anything published that sets out to help tenants seeking a decent place to rent. Housing affordability is seen by journalists as a hot button issue and they write about it endlessly, but usually only from the perspective that it’s hopeless for wannabee first-home buyers, that it takes decades to save a deposit and that they’re doomed to a lifetime of renting – although, clearly, none of that is true. It’s very rare to see anything published that HELPS young buyers, with advice on how they can get into the market. The degree to which news media is disinterested in being HELPFUL to people – focussing instead on startling everyone to create clickbait – is quite distressing. In news media, the oldest adage of all – If It Bleeds, It Leads – still applies, sadly. /episode/index/show/hotspotting/id/30657468

Interviews with the 1% - Marion Mays 03/27/2024

Interviews with the 1% - Marion Mays 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. Our pre-recorded interviews bring you valuable knowledge and advice from Australian property experts who walk the walk and practice what they preach. Learn from their mistakes, successes, and unique perspectives on property investment. These interviews are a must-watch for anyone looking to build a successful investment portfolio and achieve financial freedom. With over 71% of investors owning only one investment property, we understand the challenges and uncertainties that come with growing your portfolio. That's why we have curated a series of interviews that exclusively feature investors with multiple properties. They represent the top 1% of Australian investors and have achieved remarkable success in their investment journey. Our pre-recorded interviews are available for you to watch at your convenience, so you can take in all the knowledge and insights at your own pace. Hear firsthand how they navigate the ever-changing property market and make profitable investment decisions. You'll be able to walk away with practical tips and strategies that you can implement in your own investment journey. In our latest episode of 'Interviews with the 1%', we are excited to host Marion Mays, the founder of Money Strong In this episode, hosted by Tim Graham, Marion shares her property journey that started with buying a commerical property as her first investment, followed by a string of multiple investment properties starting at the age of 25 before finding herself in a dysfunctional relationship with a 7-month-old child and having to lean on her portfolio to not only provide a safe shelter for her and her son but also to fund 15 years worth of family court litigations. This is a remarkable story of resilience along with a great reminder that real estate not only provides great shelter and wealth creation but also security for when things turn bad. About Marion Mays Marion is the Founder of Money Strong- a boutique professional mentoring firm that advocates financial literacy and proactive wealth accumulation for Women and men. Marion lives by the philosophy that “Every woman should own one little black dress & one piece of real estate in her own name”. /episode/index/show/hotspotting/id/30561303

Australian Population Surge 03/25/2024

Ignored Rental Solutions 03/25/2024

Ignored Rental Solutions The politicians and talking heads of Australia are willing to consider or recommend ANYTHING as a solution to the rental shortage – anything EXCEPT the only thing that will work. And which, incidentally, would be really easy to implement and would have much faster outcomes than the many crackpot schemes that are being suggested. Every day mainstream media is full of articles about the rental crisis – with an emphasis on extreme situations, sensationalist headlines and the demonising of landlords as the arch-villains of the situation. There are also growing instances of “big idea” solutions – and media loves those as well. Some have suggested we can solve the crisis with pre-fabricated homes. Others have suggested converting dis-used or under-utilised office space to apartments in inner-city areas. There are moves by state and local governments to force people who use short-term letting options like Airbnb to switch to permanent rentals, but independent university analysis has shown that this won’t fix the shortage – because fundamentally Airbnb is NOT the problem. Some states are fining people who own properties that APPEAR to be empty, such as holiday homes owned by a family for use by family members – but that won’t have any material impact either – because this, too, is not the cause of the rental shortage. There have been suggestions of re-purposing refugee facilities or Covid quarantine facilities or army barracks as rental accommodation for the needy. The Greens, in their collective madness, announced in the lead-up to the Queensland local government elections that they would take Brisbane’s biggest horse racing track from its legal owners and turn it into thousands of cheap homes – all for about $40 million, they said - apparently regardless of the reality that the legal owners of the land have rights and the value of the land is, realistically, measured in the hundreds of millions of dollars. But media lapped it up and gave it enormous mileage, even though it was pie-in-sky, pixie-eyed, idealistic nonsense, with no practical merit whatsoever. There are constant references by politicians and commentators to the need to build more dwellings, although that is NOT the solution to the rental shortage. In terms of housing affordability, media is full of alleged solutions like tiny houses, or pre-fab houses, or land-lease arrangements (where you own the house but not the land, on which you have to pay rent). All of this fluff in the media is a distraction from the real issues and the only viable solutions. We have to provide incentives, rather than discouragements, to the people who provide over 90% of the homes that are rented in Australia – mum-and-dad property investors. And politicians at all levels of government have to stop treating the housing industry as a cash cow, because THAT is the main reason why dwellings are so expensive in this country. /episode/index/show/hotspotting/id/30524608

Past Doesn't Matter 03/25/2024

Past Doesn't Matter One of the factors we’re constantly searching for, among the thousands of markets across Australia, is CHANGE. We’re on the look-out, every day, for locations where the performance of the property market is set to go to another level because of major changes in the local economy. We sometimes surprise people by recommending areas that have a POOR TRACK RECORD on capital growth. But, essentially, we don’t care about the PAST when we’re choosing locations to recommend. We’re only interested in the FUTURE. When we find a location where a major program of infrastructure development is under way, or there’s a big change in the local economy - and we feel confident that this will generate elevated demand for real estate in the area - WE DON’T CARE if that location has delivered minimal growth in the past 10 years. Our process, fundamentally, is about the FUTURE. Let me illustrate the point with some case studies. In the July 2020 edition of our most popular report – the National Top 10 Best Buys report – we listed the Sunshine Coast as our No.1 pick. With the benefit of hindsight, it may appear to be a case of the bleeding obvious. But, at that time, it was quite different. NO ONE wanted to buy Sunshine Coast real estate back then because its track record on capital growth was terrible. At that time, the long-term capital growth averages of most suburbs ranged from 1% per year to 3% per year. A 10-year growth average of 3% per year means it would take 24 years for property values to double - and property buyers want much better than that. In the iconic suburb of Twin Waters, the median house price had dropped 13% in the previous 12 months and the long-term growth average was just 2% a year. The vacancy rate for Mooloolaba at that time was above 3%, the precinct around Kawana and Minyama was 3.5% and at Noosa it was above 6%. Why would anyone want to buy there in 2020? You would have to be mad, right? But anyone who DID follow our recommendation, and bought on the Sunshine Coast in 2020, would have experienced, in the next three years, some of the most spectacular capital growth anywhere in Australia. The median house price at Coolum Beach rose from $700,000 in mid-2020 to $1.35 million today – and median unit price rose from $450,000 to $800,000. The median house price at Sunshine Beach rose from around $1.5 million at the start of 2020 to $3.5 million by the start of 2022. It more than doubled in two years! And the median unit price rose from $800,000 in 2020 to $1.5 million today. At Twin Waters, which had such a poor record in 2020, the median house price rose from $800,000 to $1.5 million by mid-2022. There are many, similar, examples throughout the Sunshine Coast market. So, WHY did we recommend a location with such as bad track record in 2020? Because we didn’t care about the past, we were focussed on the future. Infrastructure projects totalling over $20 BILLION were under way or in planning. It was a no-brainer that this would transform the Sunshine Coast market – and it did. Here’s another example. We were recommending locations in Perth in editions of the Best Buys report in 2021 – three years ago. The April 2021 edition of the report featured the City of Rockingham, an affordable bayside precinct in the south of Greater Perth. At that time, most suburbs of Rockingham had long-term capital growth rates of MINUS 1% or 2% per year. In other words, prices there were LOWER in 2021 than they were 10 years earlier! Why on earth would anyone recommend a location where property owners had lost money for the previous decade? Because we could see THE CHANGE coming – in that location and in Perth generally. In the suburb of Golden Bay, the long-term capital growth average in early 2021 was -2% per year. The median house price, then, was $330,000. Today it’s $515,000 – it’s risen almost 60% in three years. At Port Kennedy, it’s gone from $350,000 to $550,000. There’s been a similar outcome for every suburb in the City of Rockingham in the past three years. But at the time we recommended it, these locations had capital growth records that were among the WORST in the nation. Now, here’s the key thing:- Most real estate consumers would rather buy in an area where prices have grown 50% or 60% in the past two or three years, than buy in an area where prices have shown little growth recently. There are far more people wanting to buy in Perth NOW, at the peak of the boom, than there were in 2021 before the boom started. This makes little sense to the team at Hotspotting. We would rather buy in a location with strong future growth credentials when that market is DOWN, than when it’s at its peak. But many investors, it seems, need the APPARENT security provided by recent high growth. That attitude, we believe, shows a lack of understanding of real estate dynamics and fundamentals. Here’s the key learning from this: DO NOT let a poor track record prevent you from buying in an area that has future growth potential. The past is often irrelevant. What matters is the FUTURE. /episode/index/show/hotspotting/id/30524193

The Doubling Game with Andrew Courtney of Plenitude Wealth 03/20/2024

State Laws Make It Worse 03/18/2024

State Laws Make It Worse When you have a major national crisis caused by the shortage of a key product, you take steps to facilitate an increase in the provision of the thing that’s in short supply. Right? And that would logically involve providing incentives to the people who supply the commodity that’s scarce - or otherwise creating conditions that make it easier for them to create more of that commodity. You would, wouldn’t you? Well, you would think so in a sensible world, but that’s not what happens in Australia. Not in the housing market, where the opposite happens. Federal, state and local governments keep making decisions that make the rental shortage worse and the general under-supply of new dwellings worse. In the housing market, there are two things that have a serious under-supply: there’s a shortage of new homes being built and there’s a shortage of properties available for rental. Many people think it’s the same thing – that you fix the rental shortage by building more homes, but that’s NOT the solution. They are two separate (although related) issues and both problems are getting more and more serious because politicians keep making them worse. We need to build a certain number of new dwellings each year in Australia to keep up with population growth, fuelled in part by overseas migration, and the formation of new households. In recent years, Australia has fallen well SHORT of the numbers of new dwellings needed, for a host of reasons. The Federal Government has an ambitious target of 1.2 million new homes in five years but there is no chance of this being achieved. One of the key reasons that we WON’T build enough new homes is because state and local politicians keep making it harder and more costly to create new dwellings. We already have a situation where UP TO HALF of the cost of creating a new house-and-land package is government taxes, fees and charges. Studies have shown that the taxation component of a new house ranges from 35% in cities like Brisbane and Melbourne, up to 50% in Sydney. Politicians keep tinkering with the design of new dwellings – in theory, to make them safer, or more accessible, or more environmentally friendly – but every time they change the rules affecting the construction of new homes, they make them more expensive. That’s the affordability problem in a nutshell. All levels of government using the housing industry as a cash cow and milk it for revenue through a range of taxes, fees and charges. And they keep making dwellings more expensive with supposedly well-intentioned new rules. They also contribute to the shortage of new homes and the higher cost of new homes by taking people resources out of the home building industry to build headline-grabbing new infrastructure projects. Many big real estate projects, such as high-rise apartment developments across Australia, have been scrapped because the developers can’t get the tradespeople they need or the materials they need, and because the costs are SO HIGH that building those projects is not financially viable. In the ACT, the Territory Government has introduced new rules for the personal liability of directors of dwelling providing entities, including not-for-profit organisations like community housing providers. These rules are so severe that it is likely to cause a mass exodus of builders and community organisations from the ACT, thereby worsening the housing shortage there. Here’s one of the consequences of these poorly drafted laws: if you join a board of a community housing provider today, and they have a house that was built five years ago and it has defects, you can now be held personally liable for the costs even though you were not on the board when it was built. This has come about in Canberra because the Greens, the most destructive force in Australian politics, have a share of power in the ACT government and they regard anyone involved in the housing industry as the enemy. Make no mistake, if you own a business or if you are an owner of investment real estate, the Greens regard you as something close to a criminal who needs to be squashed. They are obsessed with the notion that property investors are all rich bastards who own 10 or 20 properties and are monstering their tenants and ripping off the tax system. This is patently and blatantly false, but the Greens are not interested in hearing any alternative viewpoints. They are the petulant brats of Australian politics. And I’m pleased to observe that, despite all their posturing and grandstanding, the Greens failed to have any impact on the election for the Brisbane City Council, the biggest LGA in the nation, or on the two state government by-elections held in Queensland at the same time. There’s no doubt that the serious and unprecedented shortage of rental properties across Australia has been caused by political decisions that have made investment ownership less and less attractive. Vacancy rates have been falling steadily for the past five years to the current unprecedented low levels – and you can chart the decline in the number of available rental properties with a series of state government decisions which have made ownership onerous and caused more and more investor owners to sell up and get out. Australia’s best real estate analyst, Simon Pressley of Propertyology, confirms that there have been 20 major state government legislations in recent years, all of them detrimental to the owners of investment properties. He points out that the Australian population has increased by 3 million in the past eight years – but, in that time, the number of homes available for rental has DECREASED 58%, and the number of homes listed for sale has DECREASED by 36%. Those are incredible numbers which explain, in simple terms, the seriousness of the shortage crisis. And the politicians – mostly state governments – who have caused this dire situation are still doing it. They continue to make decisions and pass laws which make it worse. They keep slamming the people who are the source of the product that’s in short supply. Investors who own in Victoria are selling up and getting out in large numbers, because Victoria is by far the most unfriendly state in Australia for property investors. They have increased existing taxes on owners and they have introduced new taxes on the people who supply the product that’s in short supply. There are big increases in land tax, a new absentee owner surcharge, a new short-stay accommodation levy and a new vacant residential land tax on empty homes. There’s also a new construction code which increases the costs of new dwellings and there are restrictions of rental increases. James Kirby, wealth columnist for The Australian newspaper, commented on 15 March that the taxation nightmare imposed by the State Government was the reason why Melbourne is the worst-performing residential property market in the nation. As a result of these measures, in just one month, the vacancy rate in Melbourne dropped from 1.5% to 1.0%, a huge change in such a short time frame. And, believe me, it will get worse. But it’s not just Victoria. Every state and territory has made changes that shift the power balance to tenants and/or increase the costs of owners, causing more and more investors to sell. South Australia has recently launched changes to its tenancy laws. The political statement says: “New rental laws have been passed by the Parliament of South Australia to improve protections for tenants WHILE BALANCING THE RIGHTS OF LANDLORDS.” That’s the political rhetoric. Here’s the reality: there are 17 major changes, all shifting the balance to tenants. For example, reduced rental bonds, a ban on rental bidding, restrictions on what you can ask tenants when they applying to rent your property, limits on rent increases, new rights to tenants to sub-let, new penalties on landlords for various breaches (but none for tenants), restrictions on ending tenancies, more rights to tenants in disputes, the notice period to end tenancies increased from 28 to 60 days, a limit on inspections by your property manager, you can’t refuse pets, and new rights to tenants to make modifications to your property. And the measures which balance the rights of the property owners? Well, there are none. And that, in simple terms, is why we have a chronic rental shortage which has no end in sight. It keeps getting worse, because state governments keep making it so. /episode/index/show/hotspotting/id/30415748

Property Investment: Media vs. Research (Featuring Hotspotting Best Buys Report) 03/18/2024

Property Investment: Media vs. Research (Featuring Hotspotting Best Buys Report) The most successful property investors that I know have some features in common and making decisions based on research is one of the key ones. But those people are relatively rare. It seems to me, from observing the behaviour of investors for the past four decades, that more people make investment decisions based on media soundbites than on genuine research. Far too many people are leaping recklessly into the Perth property market because mainstream media keeps telling them that prices are booming and will keep on booming, backed by commentary from real estate people who have a vested interest in prolonging the Perth boom for as long as possible. At Hotspotting, we think this media soundbite approach is fraught with peril and that many of the people piling into the Perth market at the moment will regret their decisions, made in haste without proper due diligence. It’s a reflection of those views that the new edition of the National Top 10 Best Buys report does not include any locations in Perth. Based on detailed research, we think this market has peaked and will not be the national leader on price growth in 2024, as many are predicting – or hoping. We think there are other, better places for people to be putting their money – safer, less volatile, less heated markets with good potential for capital growth. Our choices for good locations to buy in 2024 are based on research-based knowledge of the key trends that are driving demand in the best locations across Australia. We’re not focused on short-term sugar-hit gains – rather we’re focussed on places we think will do well in the medium to long term. We base our choices on economic factors, on demographic trends and on the locations of influence from big infrastructure developments. At Hotspotting, we are constantly on the look-out for evidence of change in property market trends and in individual locations. Places that have been weak performers on capital growth in the past can become the leaders of the future, because something major has changed in that market – often caused by the development of major new infrastructure. Sometimes it’s a significant demographic shift – such as the trend which has seen growing numbers of people leaving the biggest cities and moving to smaller cities or to regional areas, in search of a different and more affordable lifestyle, enabled by technology. More recently, we have observed a surge in demand for units and townhouses by a range of different buyer cohorts, for a host of different reasons – and this is changing one of the dominant paradigms of real estate – that houses outperform units on capital growth. All of these factors are reflected in our new edition of the National Top 10 Best Buys report. It’s our most popular report, because it’s the one that considers all the events and trends happening across Australia – and identifies the markets with the best prospects for future capital growth. /episode/index/show/hotspotting/id/30415718

Interviews with the 1% - Episode 6 - Nicola McDougall 03/18/2024

What caused the Housing Crisis - With Terry Ryder & Simon Pressley of Propertyology 03/15/2024

Shortage Continues 03/14/2024

Shortage Continues The chronic housing shortage that we’ve been hearing so much about lately is getting worse – and will continue to get more and more serious. Three major measures of the supply of homes, both for purchase and for rent, are heading in the wrong direction for a nation that needs solutions from our politicians. Building approvals continue to fall when the nation needs them to be rising, loans for the purchase of new dwellings are also heading in the wrong direction, and vacancy rates continue to go lower, when the one-third of households that rent need them to rise to take the pressure off rents. And what are our state and federal governments doing to solve this crisis? Well, collectively, they’re making it worse. They keep passing laws that make owning an investment property more and more onerous, causing growing numbers of owners to sell, thereby reducing the rental pool and making vacancies worse. They also keep adding to the costs of creating new homes, which makes it harder for the building industry to provide the new supply the nation needs. The Federal Government has set the grand target of 1.2 million new homes over five years but, as is so often the case with politicians, they haven’t thought much about it beyond the press conference. When the Government says it’s going to build 1.2 million new homes, what it really means is that it hopes the building industry can somehow deliver its target - without actually having any policies to address the problems which will mean this grand objective is unattainable. All the latest data shows how far behind we are in terms of achieving this goal. Currently, the production of new dwellings in Australia is the lowest it has been in 12 years. Approvals to build new houses showed an almost 10% decline in January, compared to December. Seasonally adjusted, the January numbers were the weakest since June 2012. In the past 12 months, there have been approvals to build 101,000 new houses, the lowest in more than a decade. The ABS data shows that new house approvals have fallen in four of the past six months – and there is a clear pattern of decline in new homes at a time when we need it to be picking up. Meanwhile, the Housing Industry Association says that the number of loans issued for the purchase and construction of new homes fell by 4.2% in January and remains at its lowest level since 2008. HIA Chief Economist Tim Reardon says lending for new homes was at record lows in 2023, and this downward trend has continued into the new year. The trend surprises no one in the housing industry, where there is widespread cynicism about the Federal Government’s grand announcement, without any policy substance to deal with the many issues that plague the home building industry. There continue to be shortages of materials and tradespeople, costs continue to be high, elevated interest rates don’t help and we continue to see building companies go broke week by week. Australia is currently having a boom in infrastructure construction and that has sucked a lot of resources out of home building. State Government and local council meddling with the process continues to cause costly delays and to add to the cost of building new homes, making it increasingly difficult to operate profitably. The weakness in building approvals nationally is being seen at a state level as well. In Victoria, the number of houses approved for construction has dropped to the lowest level for over a decade – with approvals in January the lowest since October 2013 – and this in a state where the State Government had said it would build 800,000 new dwellings in a decade. Victoria has one of the weakest situations in the nation, not helped by having the highest property taxes among the states and territories - with new imposts being imposed in 2024 to further discourage investment and construction. In Tasmania, building approvals have dropped 30% in the past two years. Indeed, in January private sector house approvals fell in all states, including by 17% in Victoria and by 13% in NSW. The third measure of the chronic dwelling shortage is vacancy rates for rental properties, which have been dropping steadily for the past 5-6 years. They were already at historic lows across Australia but the latest vacancy rate data shows them going lower still. The national vacancy rate recorded by SQM Research fell from 1.3% in December to 1.1% in January, with vacancies falling in all eight capital cities. State and territory governments continue to make decisions and pass laws that are detrimental to property owners, causing investors to sell, thereby reducing the rental pool further. Investors owners are already faced with massively increased costs through higher interest rates, increased council rates, rising state taxes, higher insurance premiums and increased maintenance costs. Years of detrimental decisions by governments has created this chronic rental shortage and it continues to get worse. The Victorian State Government is introducing a raft of measures in 2024 which collectively are a major discouragement to property owners – and more and more investors are selling up and getting out of the Victoria. It’s significant that, according to the SQM Research figures, the biggest decrease in vacancy rates was seen in Melbourne, which dropped from 1.5% in December to just 1.1% in January – a massive change in a single month. Another property data source, PropTrack, also puts the national vacancy rate at 1.1% - but a third source, Domain, has an even lower figure – just 0.7% in February, down from 0.8% in January. This is a new record low, according to Domain, which says the mismatch between low supply and rising demand is an ongoing challenge for tenants amid rapid population growth (boosted by overseas migration), a strained construction sector and rising property prices locking people into renting for longer. According to the Domain figures, six of the eight capital cities have vacancy rates below 1%, including just 0.3% in Adelaide and in Perth. All of this information presents a grim picture for the supply of homes, both for sale and for rental, across Australia - and means that prices and rents will continue to increase. /episode/index/show/hotspotting/id/30369493

Fair Value 03/14/2024

Fair Value They say that insanity is doing the same thing over and over again and expecting different results. By that definition, many of the nation’s most high profile economists are insane. One of the defining characteristics of Australia’s leading economists is that they will never change their theories about housing markets and property prices, no matter how often they are exposed as being wrong. The senior economists working for the big banks continue to discuss the entity they call “the Australian property market” in terms of interest rates as the biggest factor of influence, despite having their views cruelly exposed by the results of 2023 (when they all predicted prices to fall 15% or more because interest rates were rising, only for prices to rise strongly). Their forecasts are ALWAYS wrong because they think it’s all about interest rates and they refuse to admit that their simplistic mindset is flawed. So they keep getting it wrong. But perhaps the greatest example of refusing to let go of pet theories, despite repeated failures, comes from the senior economist for AMP Capital Shane Oliver, who gets my award as the worst forecaster of property price trends in the nation. Oliver has long had his nose out of joint because property prices refuse to behave themselves, according to his world view, and because housing is “over-valued”, according to his cherished theories. It was Oliver who famously went public in 2005 to declare there would be no growth in property prices across Australia for the next 10 years because property was massively over-valued back then. Here’s what he said in 2005: “House prices are at least 25% over-valued and may not start to rise again for another decade. It will take 10 years for rents and wages to catch up with house prices and there will be no rise in the housing market until they do so.” But, of course, property prices did indeed rise between 2005 and 2015 – a lot. According to the ABS, Sydney’s median house price rose from $494,000 in 2005 to $864,000 in 2015, while Melbourne increased from $320,000 to $570,000 and every other capital city had similar increases. There were also big increases in median prices for apartments in ALL of the capital cities. So how could a senior economist for a major national institution get it so wrong? Essentially, it’s because of the belief that house prices should be intrinsically linked to other factors like rents, for example, as declared by Oliver back in 2005. But there is no evidence I’m aware of that this linkage exists. In my 40-plus years researching and writing about Australian residential real estate, I have never seen any evidence that the level of house prices is dictated by residential rents, or influenced by them in any way. House prices rise because of competition in the market. If a house is for sale and there is more than one person interested in buying it, this will tend for put upward pressure on the price. This is particularly so in an auction situation, but can also happen in private treaty sales. This is notably so in recent times, with ongoing strong demand for properties (inspired in part by strong population growth, boosted by high migration levels) at a time when supply is historically low. We are not building enough new dwellings and there is a shortage of listings of properties for sale, relative to buyer demand. So, prices are rising. Competing buyers at an auction don’t spend any time thinking about rental levels, keeping in mind that the vast majority of buyers in the market are home buyers, not investors. Now, here’s the broad definition of fair market value used by the people whose job it is to estimate such things, property valuers: “The estimated amount for which a property should exchange on the date of valuation between a willing buyer and willing seller in an arm's-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.” You will note that there’s nothing in there about connections with residential rentals or current wage levels. It’s simply about the price arrived at in a competitive market. But, despite being so spectacularly wrong about what would happen to property values in the decade following 2005, not to mention his forecasts for price outcomes in Australia in the past several years, has Oliver discarded his theory and sought something more credible? Sadly, no. Oliver burst into print again in early March to declare, again, that house prices have outstripped what he terms “fair value” in many parts of Australia. He published an analysis, for want of a better word, that found that house prices across Australia were over-valued by “more than 29%”. In Sydney, he said, houses are over-valued by “almost 33%”, which means the median house price needs to fall by $458,000 to be considered fair value, according to his beloved theory. Brisbane was over-valued even more, by 33.5%, and Canberra by 31%, while in Melbourne it’s 26%, according to Oliver. What he is saying, effectively, is that everyone involved in the housing market – buyers, sellers, valuers, buyers agents and selling agents – are all idiots behaving foolishly. How has he arrived at this stunning conclusion? By comparing price levels with rents, in the same way as a price-earnings ratio for shares – the same method he used back in 2005 when he was so utterly wrong with his forecast for house prices for the next 10 years. Here’s the big difference: everyone who buys shares is an investor; most of the people who buy houses and apartments are not investors, they’re home buyers, and they don’t spend a single moment considering how the price they are paying relates to how much rent they could get for the property – because they plan to live in it themselves. Oliver’s belief is that property markets should work the same way as equity markets in determining value. But the key point is that they DON’T. He may think they should, but they DO NOT. Never have – and, I dare say, never will. I note that the head of Australian economics for Commonwealth Bank, Gareth Aird, strongly disagreed with Oliver’s assessment in the same articles that published it. Aird said that “over-valued” was a strong term and commented: “Unless you think house prices are going to fall, you can’t call them over-valued.” Well, exactly. Current price levels have been determined by the free and open market, as they have always been – and, far from being over-valued and therefore set to fall, dwelling prices are set to rise in 2024 in most parts of Australia. Meanwhile, Oliver clings to a theory that was spectacularly wrong almost 20 years ago and has contributed to his extraordinary track record of failed forecasts about property prices since then. /episode/index/show/hotspotting/id/30369483

Interviews with the 1% - Episode 5 - Simon Pressley 03/08/2024

The 1% Podcast: Secrets of Australia's Most Successful Property Investors 03/07/2024

The 1% Podcast: Secrets of Australia's Most Successful Property Investors Australians are passionate about real estate and over two million of us own investment properties, while many more have aspirations to acquire property to grow their wealth and provide for their retirement. But while the nation is full of people with ambitions in real estate, the reality is that relatively few people are successful with property investment. As a nation, we’re not particularly good at property investment. The official data shows that while more than two million Australians participate in property investment, 72% have just one property and another 18% have two. That’s nine out of 10 investors with just one or two properties. Those who have a portfolio - owning five or more properties - are less than 1% of the total. The question is: why do so few achieve success with property investment? I think it’s fair to say that most people come to real estate investment with ambition. There’s often a dream of acquiring multiple properties and funding retirement with the proceeds of those real estate assets - possibly even retiring early. But the data shows that most people get stuck on just one or two properties. Why is it so? Our experience with investors and prospective investors suggests a number of reasons:- Many investors are herd animals, who jump into the market when they hear or read there’s a boom happening, rather than having a defined strategy heading towards a clear objective. Far too many people are unwilling to invest in good advice and information before spending the big dollars on buying a piece of real estate – and that’s the worst kind of false economy. Many wannabe investors are wait-and-see people - they find myriad reasons to procrastinate and avoid making decisions and moving forward - the next RBA board meeting, the result of the next election, the negative forecasts of economists, and many others. For all of these reasons, many investors make a hash of the first investment - buying in the wrong location, paying too much or failing to do proper due diligence and ending up with a property that doesn’t perform. This makes it hard to move forward to acquire more properties. The objective of the Hotspotting team is to help as many people as possible avoid these mistakes and make a success of property investment. As part of that goal, we have created a podcast focused on the 1% - the special cohort of people who have created a substantial property portfolio. In “The 1%” podcast, we interview some of Australia’s most successful property investors and advisers to find out the keys to their personal success and to learn how others can follow their lead and be part of the elite few who make it big in real estate investment. There’s no better way to do property investment well than to follow the example of those who have made a success of it. /episode/index/show/hotspotting/id/30265683

Internal Migration Driving Real Estate 03/07/2024

Internal Migration Driving Real Estate Internal migration, which means people moving from one part of Australia to another, continues to be a major driver in real estate markets across the nation. The trend we call The Exodus to Affordable Lifestyle is still pumping, with large numbers of people relocating from the biggest cities to regional areas in pursuit of a different lifestyle at cheaper prices. The latest data and analysis from a range of sources, including the Regional Australia Institute and real estate data company CoreLogic, confirms that this remains a major demographic force, with major consequences for real estate. It was not, as media has incorrectly portrayed, a trend generated by the Covid lockdowns. It has been happening for much longer than that and it continues to be a significant force. Queensland has long been, and remains, one of the nation’s chief beneficiaries of this mass movement of people in search on affordability and lifestyle, powered by technology which has enabled more and more people to work remotely. This has impacted real estate markets across the state, from the Gold Coast at the NSW border up to Townsville and Cairns in North Queensland. In the new 2024 edition of Rising Stars, a report written by Hotspotting in conjunction with the nation’s biggest comparison website, Canstar, Queensland is ranked as the regional market with the strongest prospects for the coming year. The Rising Stars report uses five key metrics to rank the 14 major market jurisdictions - the eight capital cities and six state regional markets - on their prospects for growth in 2024. Queensland was rated the strongest regional market and ranked fifth overall among the 14 market jurisdictions. It ranked in the top 4 nationally on three of the five metrics – sales activity, short-term price growth and infrastructure spending. It also produced solid ratings on vacancy rates and rental growth. The combination of its solid performance across a range of measures has resulted in a strong overall ranking – and gives substance to the expectation that Regional Queensland markets will be among the nation’s out-performers in 2024. /episode/index/show/hotspotting/id/30265653

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