The early indicators that pinpoint what’s happening in property

Paul offers insight into Australia’s buoyant markets, discusses whether the median house price in Sydney could hit $1.5 million and the reasons as to why property markets haven’t crashed like many economists predicted at the beginning of the year.

If you like this episode, show your support by rating us or leaving a review on Apple Podcasts and by following Smart Property Investment on social media: Facebook, Twitter and LinkedIn.

If you would like to get in touch with our team, email [email protected] for more insights.

TRANSCRIPT:

Welcome to the Smart Property Investment Show with your host, Phil Tarrant. Hi, everyone. How you going? Phil Tarrant here, host of the Smart Property Investment Show with Paul Glossop. We're recording. We're on the marvels of podcasting. We're broadcasting. We're doing everything. Mr. Glossop, how you going? Very well, Phil. Thank you for having me as always, mate. It is. And for everyone out there, welcome. How you going? We're recording this from Momentum Media Headquarters, which is the business behind Smart Property Investment. Paul, you've known us for many, many years, and thanks so much for your engaging insights into property markets through your business, Pure Property Investments. How is things going, mate? Things good? Well, I guess defining good, but in the general terms of, I guess we typically measure, we're a pretty good early indicator of what's happening in the markets to be fair with level of inquiry, with where people are at with finance applications, with where people are at with refinancing, extracting equity. Usually a pretty good barometer of what's happening in the market because if valuations are coming in good, people are more buoyant, they can extract equity, they can move forward. From those basic metrics, probably even more so the last two to three months, so probably from about July onwards, once we've probably got to the point of understanding a few of the key things, which have probably kept people on the sidelines, made people a little bit more trepidatious as to what they want to do and where they want to do it. For the major markets, everywhere bar Melbourne, to be honest, it's very, very buoyant. Okay. So we're going to have a chat up there. For those of you at home, you'll hear me talk about this a bit, situation awareness, ground truth. So this is the sort of the matrix of information that you have as a property investor to make sure you're doing the right things at the right time. So for me, one of them is chatting with buyers, agents, or property strategists, and actually understanding what's happening at the now because property data often takes months until you actually start seeing trends starting to appear. So you need to make sure you're covered right across every single part of the market, but information sources information to build your map of how the world is, and therefore you can make more informed decisions.

So I wanted you to come on today just so we can pick your brain about what's happening in the market right now, and see if we can dispel some of the fake news, hashtag fake news that may be out there right now. And I don't want to go too much into that, but a couple of stories on smartpropertyinvestment.com.au over the last couple of days, Paul. One was, it was written by one of our columnists, why Sydney could hit $1.5 million, so we'll have a chat about that. And the other one was, why property markets haven't crashed. So if we go back in time to March, COVID-19 hits, a lot of the banks come out and they say, yes, we're predicting worst case scenario, 30 plus percent decrease in property prices. Now that hasn't happened. What will happen moving forward, who knows? The government has just handed down the federal budget last week. So we know what sort of stimulus is in the market, what's happened up until now. Property prices haven't changed that much. There have been some dips and some changes and that's been based geographically differently. Melbourne's very different to Sydney. So let's kick off then. And the basis of this is that, let's look at the headline indicators, what you're seeing now, data merged with real ground truth of you operating on the frontline across Australia buying properties for your clients. Why Sydney could hit $1.5 million, that's the median value. That's what we're talking about, right? Yeah. What do you reckon? Hashtag fake news. Look, I definitely, I personally probably have had this opinion and our companies held this opinion relatively solidly for the last three or four years. And if we look at that being a price point and going back to what is Sydney average house price in Sydney at 1.5 mil actually mean, it means somewhere around about a debt to income ratio or a DTI, which is a lot of what mortgage brokers use as far as how much do you earn on an annual basis versus how much is the mortgage, potentially being in excess of 20 times in certain areas. Now that sounds like a very, very large number and to a lot of people who probably don't understand what does that mean compared to other markets, it might look like something that you're thinking, wow, that's completely unrealistic. And if it does get to that point, then we're in a huge issue, but you've got to reflect on other markets, which actually have traded in that realm for quite some time, areas such as Hong Kong, Singapore, Dubai. You've got markets there, parts of New York, parts of London, parts of Paris that have been in these realms. And then you start to compare, well, what does Sydney look like versus those markets? Are we a geographically locked market with limited supply, with very stable incomes, with a very good quality of life, with all the other metrics that attract talent and higher income earners, business owners, and the ability for people to earn more money? You kind of look at it on that front to say, well, it actually is very possible. Supply itself is very limited in Sydney in particular. You've got rivers, you've got oceans, you've got national parks. And to be fair, I think in the next 15 years, once Badgerys Creek itself is pushed out towards the Blue Mountains, and we've got down towards the Campbelltown, Norellan, Camden areas, which are pretty much going to be hitting national parks, we've already hit the borders down south towards Cronulla, and we've got the Royal National Park, which literally won't change. We've got the northern beaches, which are hitting right up towards Palm Beach, and you've got the Hawkesbury region, which can't change. Everything along the coastline in between is already built out. We're seeing density changes in between. That is the norm.

So the couple of the bigger catalysts as far as cheap interest rates and access to money, as far as credit is concerned, those things are actually playing out right now. And we've just had the announcement of the changing of the responsible lending laws, which have been in place for over a decade. That's one of those big pieces of the puzzle, which is going to play out next year. So lots of information. So you called it a debt to income ratio, right? Correct. Yep. We've got papers every now and then, and there are some global benchmarks, I think originated by the World Bank or somewhere or other, which looks to frame the economic health of property markets globally based on a standardized metric, and that is how much does the average person need to earn in order to buy a property, and what is that debt to income ratio? So that's standardized, right? Australia is high on that already. Absolutely. As a nation, we're high on that already. Yep. And we've always been high on that. One of the criticisms that Australia has from global counterparts is that you're completely out of whack what people are earning for a living versus what they're paying to live in a house, right? And that is a huge criticism on Australia globally, and they say it's not sustainable. And a lot of people use this as a metric for saying there's a property bubble, and that bubble will burst because that's not sustainable, because it's different from the rest of the world. Now, the argument against that is that, well, Australia is a big place. It's only got 25 million people. Only a very small percentage of Australia is actually habitable, and therefore, that's one of the drivers for this particular case. You spoke about Hong Kong, very small place. You spoke about Singapore, very small place. So you start looking for clues in these trends and dynamics. Going up to 20 times, did you say? Yeah, over 20 times. At 1.5? That is really high on the index, so that wouldn't be all of Australia, that would just be capital cities. No, and to your point, Sydney. Sydney primarily and Melbourne. Yeah, correct. Sydney. And the guy who's here on smartprobleminvestment.com.au is talking about that particular dynamic. And you know what? Who would have thought 20 years ago that the median price in Sydney would be a million dollars, which is what it is right now? It's farcical. And then you've got to look at, well, what's the increase in wages, which has actually been obviously pretty sluggish in the last five, six years as well. Yeah. But for people who can't afford $1.5 million as a median value price, what happens? They just don't live here. And this is the point where if you've got ... It's an average. I think that's the biggest point that we have to make here, is that we're talking an average, and it's an average house price. The reality is there's going to be affordable corridors, and there is in each of those very expensive markets right across the board as well. But it doesn't mean that all of a sudden you go from that debt-to-income ratio of seven times as the barometer. We're at seven now. It's about nine. Yeah. It depends on what you look at. It's about nine. But the reality is that these people have got credit somewhere, somehow. But the big factors that are at play here is Sydney as a market, you've got some other things which are going to influence it to allow it probably to push well beyond the barriers that it's at right now. Supply is a big one, which there is ... And there has been a limited or a deficit in supply in Sydney more or less on average for the last 25 years. And we've gone through some pretty significant rezoning changes to allow for density increases, zoning from R2 to R3, R3 to R4, so on and so forth. And that's not going to change. Because as much as we might think we're coming out of now a big shift in the way we live our lives due to COVID, yes, there might not be the same desire to be in areas that we're in right now, be it North Sydney, where you've got high rise and larger offices. You might not need businesses to set themselves up en masse in the North rides of Sydney, in the central CBD areas of Sydney, but you're still going to need them set up somewhere.

The reality is though that people are still going to want some of those other factors which have got nothing to do with proximity to work. They're going to want good access to healthcare. Now that's whether you're a youngster, whether you're starting a family or whether you're elderly, you're going to want good access to healthcare. If you have a family, you're going to want access to good schooling. And those good schoolings, they don't exist when you go out to far more regional areas. You typically have a section of one or two. You have less choice. You have far less choice. And even though you may be able to work remotely, you still want to have that social network. So friends, family, not everyone moves at the same time and they'll still want to have some sort of accessibility to them. You're going to want a lifestyle factors, you're going to want a community. All those things can't be replaced with what Sydney or what Brisbane or what Melbourne or Perth or Adelaide or Hobart, all these markets will have it. It just might mean that I believe that you're going to see a disbursement of where people see true value. So $1.5 million, it might be that people look at that acreage on the fringes because they want a bit more space, but they know they're still sort of within eyeshot of all those major factors that they're going to want. But we're still going to be in a position where we're going to be highly desirable. We've got big jobs creation. We've got a couple of hundred billion dollars in stimulus from a federal government that's just been announced, which we've never had, not just in a generation, but literally in a century. We're in a position where we're just never going to see the same level of stimulus. So that coinciding with interest rates that are going to be sitting at realistically sub 3% for the most part for at least the next three years, you can see that there is a lot of impetus for what's going to happen in the next one, two and three years. So catalyst for positive price growth, and that's good for property investors who are currently in the market. We'll have a chat for people who aren't currently in the city market and whether or not it's right for them, but it's a really unique environment because what we're seeing is the marriage between demographic shifts driven by COVID. So the way in which people will act and behave as humans moving forward, and therefore the shelter they need as a result of it. And we're staying in Sydney because of what we're talking about, but that's largely relevant to Melbourne as well. A lot of people that don't know Sydney and understand Sydney, we're recording from Sydney right now, but we're right across every property markets, but Sydney is essentially a collection of mini CBDs. We talk about Liverpool, Campbeltown, Parramatta, Blacktown, Hornsby, Chatswood. Out towards Penrith. Out towards Penrith. You've got Penrith itself. Then you think about Macquarie Park. Southern Shire where it's got its own hub there. You've got in between that now, you've got all areas that are sort of building along those. And you kind of look at those train arteries and you start to see that there's little mini CBDs popping up. And I do believe that we're in the area or the early stages of a big shakeup into how businesses will say they're happy. And I can attest to it within my business. I've got team members working in remote offices because A, they don't want to work from home. It's not productive and it's not necessarily possible or capable, but they don't necessarily have to travel to a head office. So there's a hub which allows them to get work done and it's a plug and play model. And I think that's going to be something which we'll see probably change a bit more permanently. And it's going to fundamentally change the property market dynamics. Definitely. And I'm very happy and maybe because I am the visionary that I am, that I invested heavily in certain areas of Sydney about 10 years ago, which are now smack bang in the middle of a hotel. I think of Blacktown, for example, and that's where I grew up, but they're building like skyscraper universities out there now, right? Think of Bella Vista, look at Liverpool. It's bonkers the way in which it's changing and people won't be moving forward or necessarily won't be having to commute to one central CBD location for employment. They're going to be going from all over the joint.

So what does that mean for current property investors? So if you have invested in Sydney in the past, do you think you'll be doing okay moving forward? I think it comes back down to stuff that hasn't ever changed is that you've really got to make sure that what you're owning is able A, to be afforded. And the biggest challenge that Sydney investors will have is cashflow. And this is the thing that we can't just all talk about, oh, it's going to be a booming market one and a half mil average house price in the next five to years, potentially as a headline grab. Because what does that actually mean for me to own a one and a half million dollar house with potentially an 80% LVR mortgage, $1.2 million at 5% interest rates, that's a lot of money. You're talking 50, 60 grand a year just to cover interest. If we're talking 3% interest rates, we might be on a much lower scenario. And that's fine potentially for the short term. So we're in that unique scenario where even if you've got record low yields in Sydney, which are probably more hovering freestanding houses between two and a half and maybe 4% on a good day, if you go further out towards the fringes, right now under cheap money rates, it's actually very attainable. And this is the crazy part. We're in this a bit of a unique scenario where I think if you looked at money or looked at property and then said, I've got a $700,000 corner block in Seven Hills, which I might put a duplex on the next three years, it might only get 400 bucks a week. The reality is, is that that's actually not that difficult for a lot of people to be able to hold if they're on an interest only scenario. However, fast forward three to five years, if we do get the inflation out of this mass stimulus that we're going into the economy now, and all of a sudden we go from interest rates at 3% to interest rates at 5%, that's a different scenario. And you can't just rely on rental growth to be what's going to tick it up and make it all affordable. So it's still a fine balancing act. And going back to my earlier point, like trying to capture all this information to make an informed decision can be bewildering right now and more than ever before, but let's go to a quick break. When we come back, I want to dig into that a bit more, back in a moment.

Welcome back, everyone. Phil Tarrant, host of the Smart Problem Investment Show with Paul Glossop, who is the Managing Director of Appeal Problem Investment now, discussing how you make sense of this market and some of the information within it right now. We're talking about the median price in Sydney to hit potentially 1.5. And you know what? It will at some point in time. It's just a matter of when. I completely agree. It's just a matter of when, and it's going to be hard to pinpoint that. But I'm sure there's some smarter data analyst people who can tell us exactly when that's going to take place. And if you're listening to this right now, get in touch, editor at smartfinanceinvestment.com.au and we'll have that discussion. But here's a headline grabbing question for you, Paul, to see how well you can answer this. What's the most complicated the market has been in terms of moving parts for property investors in the last 50 years? And by that, I mean COVID changing demographic behaviors of how people will operate and work moving forward, cheapest money in all time, the government coming out saying it's going to be relaxing some of those responsible lending requirements, mortgage brokers now having to operate in best interest duties, proliferation of lending options for Australians, innovation happening in lending, moving forward, cheap rates. If you've got a job, you're probably in a good position. Is it more complicated now than ever before? And say yes or no. No. And I'll probably double up with that no, is I actually think for me, what this probably has spelt out over the last six months is the fact that property in general is quite possibly the easiest investment vehicle to understand. And you can look at it when you compare probably the other main investment vehicle, which most look to create wealth with, and we all probably are unconsciously with our super funds in the back or anyway in the equities and the shares market, is the fact that you look at graphs that probably commenced as of March in Australia on the holistic Australian aggregate property market versus the Australian share market in that same time. And I'm not going to speak about the share market in general, but I will look at it from a tumultuous sort of scenario that has played out in the share market. And this isn't the only time and it will never be the only time that that happens versus what's happening in the Australian property market. It is extremely predictable. And there are realistically some really basic aspects which play out over and over and over versus when you're talking about other investment vehicles, there are so many things that there are at play, which are completely out of your control. But what we have proven again in this pandemic is the fact that Australians will do anything they can to retain their asset. We have 97% of all properties in Australia are at a positive equity position. We've gone from what was perceived to be a fiscal cliff again, coming back out of that interest only cliff. If you don't recall back in 2013, 14, we're talking about this interest only cliff of 2018, 19, because we're going from this mass amount of money that was lent on interest only basis, which was going to turn there. That never eventuated. We've gone to the point now where September's come and gone. All these mortgage holidays, which are played out for six months, well, I think we've gone from what was close to a million loans now down to around about 250, 260 odd loans in that position that have gone back to making full repayments. And people are proving time and time again that they will hold their assets, they will work the second job, they will sacrifice on that new car, they will sacrifice on that holiday, they won't go out. That's what Australia is doing.

Going back to that earlier part that we're talking about of why is Australia different to most other property markets is that we perceive the great Australian dream as exactly that. Whether it's home ownership or investment property ownership, we know that it's an asset class which has time and time again proven, whether it's in one year or 10 years or 25 years, it's proven to consistently repeat what happens and that's growth. Is this a complicated area or is this a time where you've got to be extremely cautious? As always, you play out your due diligence and you do everything you need to do to understand it, but it hopefully proves to anyone who's sat on the sidelines or been naysayers to say, well, I don't really know if property is a vehicle for me. Well, look at it in the last six months, look at it in the last six years, look at it in the last 25 years and tell me a time where if you didn't stay in the market that it's been for the worst. So what you're talking about here is one of the positives of an asset class in property. Property is slower than pretty much every other asset class because it's a lot less liquid, right? It's hard to trade property and it's expensive to trade property, point number one. Point number two, if you get it right, it's largely idiot proof. Stocks and shares, you play the share market, eats up idiots for breakfast. Every day. I've been one of those idiots, many a time, I'm sure you have been as well, where you get tempted for, and not just in the share market, by may I add, but I completely agree with you. And I think if I was to look at one last thing that's changed or is probably playing more so out in the favor of investors and from property perspective versus shares and equities as well, is the power of leverage. And we bang on about leverage all the time, but not only is the power of leverage where buying or investing $100,000 in all normal terms gets you a $400,000 investment versus a share market $100,000 for the vast majority of the time is $100,000 investment. But that $100,000 invested into a $400,000 asset on an 80% LVR is borrowing that money at 3%. That has never been the case. And this goes back to property being, don't get me wrong, there's a lot of idiots in property and I've been one of them at certain times. I'd like to say less of an idiot than more of an idiot. Debatable. Debatable, but the fact that property is largely a safe investment, unless you're an idiot, is the reason why you have leverage. So what that means is that a bank or a lender or someone with money is happy to partner you on your property journey because it's largely easy to get right and it's hard to get wrong. And therefore they're happy to have a lot of skin in the game to join you on that journey. But the idiots get it wrong and their houses get repossessed. And a lot of that is through sometimes, and I don't want to be flipping about this, like by no fault of their own. So COVID, for example, has caused a lot of good property investors and businesses to fail when necessarily it shouldn't have done that if COVID hadn't existed. Putting business aside, but with property as a property investor, if you invest correctly, you buy the right assets and you don't over-leverage and your property is largely neutrally or potentially positively geared, you should be able to weather a COVID environment. True? Unequivocally. Which is why, as an investment vehicle, investment class, property largely out-competes other asset classes. And there's so many different ways we could go down that pathway. But I mean, even if we look at the real basics of the fact that the banks, the big four banks and non-majors as well, came out in March to guarantee and to give everyone who applied for a six month loan or mortgage holiday, do you think they did that because they wanted to? Well, I think the RBI and treasury knew that they needed to work with the banks to say, we need to stop a mass amount of property coming to the market at the same time, which in turn will create a huge amount of oversupply in a market, which all of a sudden tanks property.

So there's levers that are pulled in the property market because we are so intrinsically invested in it as a nation that will ensure that if anything's going to fail, property in general will be the last thing that the federal government will ever let fail. Well, this is reason number one, is where most Australians hold their wealth. And therefore, if you have Australians who are wealthier because of property, the government has less responsibilities when those people hit retirement. Rule number one, very, very simple. Number two, you look at banks' balance sheets, they generate a lot of their profit based on their real estate investing. And that is partly with property investors. Banks need to deliver money to shareholders, therefore they like to lend money on good property and good property investors who can help them manufacture money. And to close a loop on that, most Australians, if they have a retail fund or an industry fund, probably hold bank shares. So they want profitable banks to be generating money so the cycle continues. So the government, corporate Australia, is highly connected and committed to the health of the property market. Now, that doesn't say that the regulators or the treasury will let property run rampant. There is some really smart people making sure that property in Australia doesn't go up too quickly in value, or certain market dynamics will change the way in which property behaves. And you only need to look at, Paul, requirements from APRA around limiting interest on lending or lending to investors, which we've all been through over the last three to four years, right? Yep. Yeah, I completely agree. And then I guess the last piece of the puzzle is that once you realize, and I think this hopefully gives people a little bit more overarching confidence in where and what has played out over the last six months and how that's going to reflect on the next five years and probably going back to some of the major factors here is why Sydney could potentially be a $1.5 million market in the not-too-distant future. And that's not just saying it's Sydney. There are other markets, and it doesn't have to be the 1.5 mil benchmark, but remember when you're starting pretty close to $1 million average house price in Sydney now, but Brisbane as a market, Perth as a market, they are in a position where they will likely be one of the biggest beneficiaries of what's happening from a total stimulus, a total jobs creation, a total lack of supply, additional benefits from the 10,000 first home buyer scheme, deposits that they're limiting them to, 5% deposit capitalizing or being able to avoid LMI, no stamp duty, government grants, about $50,000. There are so many target stimulus packages in some of those markets, although we're talking about Sydney 1.5 mil, I'm not necessarily saying that Sydney is going to be the number one performer over the next five years. There's probably going to be a handful of other markets which will outperform, and they don't have to be in that one, one and a half to a million. Are you going to tell us where they are? Let's go to a break before you know it. It's like a TV show, it's like MasterChef, is he going to burn the steak? We'll be back in a moment.

Welcome back, everyone. Phil Tarrant, host of the Smart Property Investment Show with Paul Glossop, Managing Director, Pure Property Investment. Now, Paul, before we enter the break, we'll sort of, in that transition, talking about Sydney 1.5 million average, which is going to happen. Sydney will hit a median price of 1.5 million. You know what? Newsflash. Sydney, at some point in time, will hit a median price of $3 million. Yes, it will. One day. One day. Maybe our grandkids' day, right? Maybe. Who knows? But this is what property does. But why haven't property markets elsewhere crashed? And before the break, I stopped you by telling me- Did he burn the steak? Did he burn the steak? You're talking about Perth. You're talking about some of the other beneficiaries of this wider government stimulus, and all the other macro and microeconomic stuff going on right now. Why haven't the other markets crashed? I would suggest that this is a number of different factors. Because this is a story on smartpropertyinvestment.com.au, which you flagged. Yeah, absolutely. I think, and if I look at markets crashing, realistically, the worst market that's performed over the last six months is clearly Melbourne. And that market, it's not taking any genius to figure out why. And that's been literally the stifling of that economy through a mass lockdown, which is only emerging very, very slowly. And that's not allowed for the transfer of credit, and also has more or less on mass shut down both the rental industry, as well as the real estate space on trading in and out of property. If you do look at it, though, on mass, outside of Melbourne, the Geelong markets, Mornington markets, down towards Frankston markets, Ballarat, Shepparton, these markets, as much as these markets have actually been affected by COVID, and they have, they've been out of trade. So the actual market dynamics have actually been okay. But the things that have stopped it, the same things that we've talked about from a holistic level is the fact that the only real thing missing from the entire piece right now in Australia is probably going to be the actual additional population growth. That will come probably towards the latter half of 2021, and then start pushing forward when we're going to have skilled workers. And I can guarantee that if they're not already, we're not seeing it, we're going to see huge push from federal government to push out towards a marketing plan instead of visit Australia from a tourism perspective. They're going to say, come and live in Australia. If you're a skilled person, we want you. And we're one of the best places to be on earth, so you're going to be attracted to us. So they're going to be putting that out there because they're going to want these people who are straightaway ready to hit high paying jobs, paying good taxes, as well as students who are going to pay good money to become students in Australia and on all likelihood on a higher percentage stay in Australia to become those higher income earners, higher tax receipts, and put pressure on the housing market. Those factors aside, we've had mortgage holidays, we've had cheapest rates that we've had on all time. We've had job seeker, job keeper, we've got- Job maker. Job maker. We've got reincarnations of versions of that, which won't stop. And again, going back to why we won't fail on the property market is they won't stop until we're nowhere at that equilibrium of saying, yes, the economy's back to the ability to sustain itself. We've also had the actual flow of credit to good borrowers.

To your point earlier, Phil, you're talking about if you had a job and you had equity or a deposit and you were looking to buy an asset and you could hit the serviceability calculators, banks are open for business and- It's a golden era for these people in terms of property investors. Unequivocally. And I think that's the big part is that we actually have more ability to access credit if you're a good borrower, and that's only going to improve. And when we look at areas from a rental perspective, when you take out of the equation some of the markets which you hit immediately, be it inner city Melbourne, inner city Sydney, and to a lesser extent inner city Brisbane, where you had a mass amount of students had to exit, you had a mass amount of holiday makers had to exit overnight that went from those short-term rentals to more long-term permanent rentals. Once that flood of the market was absorbed, we're seeing it now. That majority of other markets are actually holding their normal- I've got markets in Brisbane in freestanding houses in that 15 to 25, 35-kilometer radius that are sub-1% vacancy rates, where a year ago they were 2% vacancy rates. Perth was three years ago 5% vacancy rates in the freestanding housing market, and most markets that we're buying in there, sub-1% vacancy rates. And ultimately, and a very interesting stat I actually was reading through maybe only last week is Australia actually trades at a net deficit from a trade surplus from the amount of money that- And one thing that I was always considering is that, okay, we're not going to have the holiday makers, so tourism and hospitality is going to be hugely affected by the lack of people coming in here, but we actually trade at about a 1% deficit of total money spent in Australia by Australians leaving. And this is a wild part of why we're actually not going to see that same issue. As long as our interstate borders can remain somewhat open, we actually spend more money Australians when we travel overseas, we're in the top three categories, because we stay longer, we spend more versus what we actually collect from the tourists coming into Australia. So we actually aren't losing any money there per se. We just don't have the demand on housing, whether it be rental or long-term immigration, that actually would otherwise be putting pressure on those things. Yeah. Australians probably stay at home more, I think, at least for the next period of time. And there's a huge campaign getting launched, I think, today or tomorrow around this, to get Aussies to travel if- And we spend money. And we spend money. And we're happy to spend money. We spend more money than almost any other country on our holidays. And we're going to spend that in Australia for the next 12 months minimum. I know, I already have. I mean, I'm a classic example where I typically go overseas with my family once a year. We couldn't do that this year. And that was usually back to my wife's homeland, but that couldn't happen.

So therefore we've done two trips inside the state, but just going down the coast to go for a surfing holiday, staying for a week. So what you're saying, on-site caravans are the investment class that you need to be invested in. Absolutely, absolutely, yeah. There's so many different ways we could go down that, but I absolutely think that where those, I mean, I'll take that back. We joke. No, no. But I do- I mean, a caravan park's probably not a bad investment. Oh, well, yeah, if you can get in the big four, but COVID probably didn't help that from a cashflow perspective as well, but there might be some cheap ones floating around. But ultimately the money's there. I mean, and this comes out of the fact that you only have to look at the South coast of New South Wales or parts of the border with Victoria. You would think that we came out of the worst bushfires this country's ever seen that decimated these holiday towns. They got no trade over the summer holidays during Christmas, et cetera. And then all of a sudden you backed that up with COVID, no Easter break, no winter break, no spring break. And you're thinking, well, those markets should be on their knees. The reality is they're not. Those markets, I was literally down the South coast a couple of weeks ago of New South Wales. And this was an area which was very picturesque, but middle of nowhere. And it is a market that is as buoyant as it's ever been. This is the reality of the fact that we're spending money and the money stays there.

Okay, so if I was listening to this, I'd go, all right, that sounds all really good, guys. Tell me something I didn't know. Yeah, property jargon. Tell me something I don't know. Property jargon, yeah, yeah, yeah. Okay, good, good, good, good, good, good, good. What do I do about it? Don't invest in onsite caravans. No. But as a lifestyle asset, why not? Timeshare. Timeshare. We don't want to joke about it. That's good. Yep. So out of everything you know, and you're one of the more informed people I know in property in Australia, where do you invest? If I'm playing the game for the next three years and I'm looking for growth in a market that's probably primed to be as consistent and probably more predictable than any, I'd be looking at freestanding houses and I'd be looking at them in all reality if I was any budget from a sheer percentage growth perspective, I think Brisbane's probably gonna be one of those markets, not new, not attached. I'd be looking at freestanding on a decent block of land within close proximity to amenity, as close to either water, rail, university or hospital as I could. And I'd be also probably looking at as a close second to that parts of Perth and similar scenarios, either close to water, close to airport, close to rail, as well as close to hospital, university amenities and larger blocks of land which have more utility of that land in the future because there is big demand for changes to zoning in both those markets and their economies are in a good position, supply is very low, vacancy rates are very low, unemployment's reducing. They're probably the two markets which I would suggest we'll probably see better capital growth percentage over the next three years than the vast majority of the markets. Okay, so a lot of information and for our listeners who are experienced property investors have probably got a lot of that. For those that less so, go back and listen to this again but if anyone wants to pick your brain, can they? Absolutely, I encourage people to do it. They can hit me up purepropertyinvestment.com. There's a literally inquire now, they can schedule a meeting directly with me just by jumping on the- And you'll actually get Paul Glossop talk about all these things? Absolutely, yeah. It might be, I mean, depending on when they look in that they could book in literally the next day, sometimes it might take a week or two but I'll give away half an hour of my time to anyone who wants to book in a time with me.

Okay, and if someone's gonna have a chat with you, what would be the three things that they need to think about to have a positive discussion with you? I think being very clear on what they actually want to do, not just in the next two weeks but in the next 10 years. So having some sort of numerical or time-bound goal allows us to formulate a very clear plan. Having a clear understanding of your numbers before you come into that discussion, what are your properties worth? What's your income? What's your savings? If you understand your borrowing capacity, very, very useful. And understanding a little bit more about what your preferences are. Are you prepared to invest interstate? Do you wanna invest close by because it's gonna be your first investment? I'm not there to dictate what you should and shouldn't do, I'll lay out some facts. But having probably those three key things will allow people to get a lot out of this conversation, but also hopefully come out of it with a much clearer blueprint of where and what they can do next. Okay, that's good outcomes. Thanks, Paul, I always enjoy it. No, thanks, mate, it was good. Good job. Nice one. Remember to check out smartpropertyinvestment.com.au if you're not yet subscribing to our daily morning newsletter. It's the first thing that's happening in property. Smartpropertyinvestment.com.au, our social media, Smart Property HQ is where you can find us. And please keep those reviews coming on wherever you listen to this right now. The team here get a real kick out of it. As I've mentioned many times, I've got the easy job, I just stand here and chat behind a microphone for half an hour, but there's a big engine behind this, very committed and passionate streaming professionals, and they get a kick out of seeing your responses. We'll see you again next time. Until then, bye-bye.

The information featured in this podcast is general in nature and does not take into consideration your financial situation or individual needs and should not be relied upon. Before making any investment, insurance, tax, property, or financial planning decision, you should consult a licensed professional who can advise whether your decision is appropriate for you. Guests appearing on this podcast may have a commercial relationship with the companies mentioned.