TEITR 417 (Annual Wrap-Up)

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[00:00:00] Veronica audio: In this episode, we take stock of where the property market really sits. As we head into 2026, the forces is already in motion. The pressure's building beneath the surface and the shifts that are quietly [00:00:10] altering the way buyers, sellers, and investors need to think. Prices have been rising across the board.

[00:00:15] Veronica audio: The lower quartile is still running the fastest, and rate cuts keep slipping further away, [00:00:20] add tight rental markets, weak construction pipelines, and global instability, and you've got a landscape that's anything but settled.

[00:00:26] ​

[00:01:04] Veronica audio: This week rather than making predictions, you know, we'd never do that. We're unpacking the factors that could shape [00:01:10] markets in the year ahead, policy settings, consumer sentiment, borrowing capacity, supply constraints, and where investors are already repositioning themselves.

[00:01:18] Veronica audio: And we'll break down what smart buyers and sellers [00:01:20] should be considering now the risks to avoid, the signals to watch, and the decisions that should not wait for perfect clarity. Chris, let's kick this off bluntly. Given [00:01:30] everything we're seeing at the end of 2025, is there any credible argument that 2026 will be easier for buyers or we heading into an even tighter faster market?

[00:01:37] Chris audio: so easier to buy. I don't think so. [00:01:40] So, you know, it can be interesting to what investors do, like old investors, not new investors entering the market. What, how do they sort of feel around. This interest rate shift. I do wanna preface this, right? We're [00:01:50] set, we're recording this at the 11th of December.

[00:01:53] Chris audio: and I think that matters, right? Because things are moving quite fast in terms of people's expectations are always changing. Like, and [00:02:00] I think if the biggest lesson I've probably had over the last four, five years is. Jumping at shadows and, because interest rate expectations have been wildly going up and down, you know, when [00:02:10] there was zero, it was gonna go to two, then it went to four, then it was gonna get dropped, and then went back up and, you know, with just over the last couple of months with a couple of bad, inflation numbers and then all of a sudden our rate [00:02:20] expectations have shifted from, you know, a couple more cuts, maybe even two, three more over the 2026 to potentially one or two increases.

[00:02:29] Chris audio: Right. And so. [00:02:30] That could even shift in another month when this publishes. Right? And then secondly, it could shift by the time the market opens up in February. But if you think about if this [00:02:40] was happening in three or four months time and the expectations is that rates are gonna stay high all the way through 2026 and potentially go up, I think what you'll find is that I don't think [00:02:50] first home buyers would really care too much.

[00:02:51] Chris audio: I think they'll still enter, there will still be some people that are concerned about buying their first home. But unfortunately, most first home buyers, The ones in the market are the [00:03:00] ones probably doing the best financially. You know, they're ones who are, they're confident around their income, and I think investors will still stay there.

[00:03:06] Chris audio: You know, like it's just such a big, strong part in the market. You know, [00:03:10] whether rates drop or not hasn't really been a reason why they're buying. And, I just wonder whether current investors will type the bail. Like it just becomes too much to hold all these mortgages. [00:03:20] Plus they're under a lot debt stress on their home.

[00:03:22] Chris audio: We saw a lot of investors bail two, three years ago, maybe less in 2025. but homeowners, like if you own a [00:03:30] home like rate uncertainty at higher rates means that you're less likely to upgrade or less likely to want to take on more debt. and the jumps are quite big to make, so it's usually quite a lot more [00:03:40] debt and you'll just sit on your hands.

[00:03:41] Chris audio: And I think that's what we've seen over the last two, three years is very tight listings of good quality properties. And if you likely think rates are gonna go up next year, [00:03:50] then you'll just sit on your hands. I think it's gonna get harder to buy next year, particularly in the housing market in our capital cities.

[00:03:56] Veronica audio: So, first. [00:04:00] If you assume that what interest rates do, whether they stay the same gap up or go down, has a universal impact on the property market in Australia, then we're going to get into [00:04:10] trouble. Because if you look, you know, say 2023 for example, when rates are rising, prices were also rising in some of our capitals and they were falling in others [00:04:20] or stagnant, you know, so the whole country doesn't uniformly react to rising or falling interest rates.

[00:04:27] Veronica audio: And I think that's important for us to all to remember [00:04:30] that as an individual, the impact of changes to interest rates will impact, individuals differently. And there's, you know, in different areas with more debt, [00:04:40] for example, you're gonna have much more sensitivity to rate rises. So where you've got a lot of first home buyers or a lot of brand new properties, that sort of thing.

[00:04:48] Veronica audio: but you know, how do [00:04:50] you explain the crazy prices that Brisbane. Perth and Adelaide for example, had in the same environment that Melbourne had price falls and [00:05:00] Hobart had price falls and Canberra had price falls. You know what I mean? So, I just think we need to add a nuance here.

[00:05:04] Veronica audio: That's all. Because obviously the very fact that within weeks we had a change from [00:05:10] expecting at some point in first half of 2026, a lot of people, a lot of banks, talking about rape falls and it's. Swung to potentially rate rises at some [00:05:20] point. you know, that's a total about face in terms of the conversation.

[00:05:23] Veronica audio: But also, you know, we haven't done our full forecast report for some years now. Sort of got sick of saying the same thing over [00:05:30] and over again. You know, 95% or, you know, maybe At best 15% have got anything worth, paying attention to. But we did one year, we actually did it on our interest rate forecasts.

[00:05:39] Veronica audio: They were [00:05:40] just as bad as price for forecasts. So, it's interesting to watch what's happening, what's changing, and be aware of that. But I guess I don't want any listeners pinning any [00:05:50] decisions onto what we say about it, is what I'm trying to say there. I.

[00:05:53] Chris audio: obviously we we're just talking about sort of, I think the questions around is it gonna be easy to buy? I don't reckon at wool berken it would be [00:06:00] harder to buy particularly good houses You really wanna upgrade what motivates you?

[00:06:05] Chris audio: Yes. It's life. Yeah. My kids are gonna high school, but what really makes it is if I don't [00:06:10] do it now that I'm gonna regret it and because I'm gonna have to pay or it could run on me. I think a lot of upgraders are like, well, hang on a sec, you know, I've got a house, rates are high. Why [00:06:20] would I really want to go and take on more debt?

[00:06:21] Chris audio: You know, the market's hardly running. It's, yes, it's getting more expensive, but, I don't really wanna take a big mortgage on, but if, for example, rate cuts were coming right and. All of a sudden [00:06:30] there was this real expectation that, that there was gonna run on them. I think you'd find that a lot of people want more to transact.

[00:06:35] Chris audio: and so you can see in

[00:06:36] Veronica audio: they wanna jump in early. You're saying they wanna

[00:06:38] Chris audio: yeah, like if you look at [00:06:40] Brisbane's listings in houses, like it's just where prices are going up. Yeah, absolutely. But you know, a lot of people can't afford to do that, so they get stuck in houses and so houses are just [00:06:50] ridiculously tied up there. and others like Perth and Adelaide, et cetera.

[00:06:53] Chris audio: So yeah, prices are going up. Doesn't mean people are selling. It's just. Listings are also, you know, a reason why prices are [00:07:00] going up. and you look at like CoreLogic sort of, you know, five year average listings and where they are today, they're like well down.

[00:07:07] Chris audio: and you know, the, this typical [00:07:10] sort of autumn and spring period, like, it's like, oh, it just disappoints every year. Right? And if you compare that to say 10 years ago, it's like really dire. and so I just reckon we're gonna [00:07:20] have. Uncertainty It just gives people, particularly people wanting to upgrade, you know, less desire to,

[00:07:26] Veronica audio: listings in Sydney have been pretty high. every, [00:07:30] it's certainly in spring and when I say pretty high, we are cracking 1500 auction listings a week for a number of weeks, and that is hugely high. Like, I'm trying to remember which [00:07:40] year it was. I think it might have been 2023. I don't think we cracked 1,200 one week ever in that year So I'm pulling this outta my memory bank. So we've actually seen quite a lot of weeks, [00:07:50] and so I, I do track this on a weekly basis and I've, we've seen a lot of weeks this year that have been big weeks. prices have held up in the face of that, but as a buyer's agent who's [00:08:00] been on the ground, in the buyer's agency space coming out to 19 years now, it's always hard to find a good quality property.

[00:08:08] Chris audio: All right.

[00:08:08] Veronica audio: always more sort of [00:08:10] junk on the market than there is good stuff. you know, so that's always a challenge even when you've got lots of listings, even when you've got no listing, you know, listings are tight. the quality properties always a [00:08:20] challenge. That's something that I think a lot of buyers to when they enter the market, if they've been sitting there spectating, just looking in, you know, on the portals and just sort of.

[00:08:27] Veronica audio: Casually looking at what's selling or [00:08:30] what's around. They often have this sort of false sense of security that's gonna be easy to find what they want. And the minute people get ready to buy and actually start actively looking, the feedback we [00:08:40] often get is, oh, listings have dried up. It's like, no, it's just, now you're properly looking.

[00:08:45] Veronica audio: You're pick. And, you know, you're discarding the vast majority of them. And so [00:08:50] I think that there, there is that sort of awareness that a lot of people don't have until they get active. so yeah, it will be difficult if you wanna buy a good quality property. I think it will continue to be difficult, across the board.[00:09:00]

[00:09:00] Veronica audio: One thing I'm gonna ask you, and you may or may not have this on top of your head, but I wonder like. as we sort of come to the end of this year, or in end of 2025, if you look at [00:09:10] totalities, charts for the November charts, every state and territory was in, in the black, you know, in terms of positive growth, to varying degrees, of course, and in every [00:09:20] quarter old, they do it in sort of bottom and top quartile, in the middle, and in, in all segments.

[00:09:25] Veronica audio: All positive, right? That hasn't happened that the entire country has been in [00:09:30] growth mode, since 2021. I don't think, I don't recall it. That, and that was unusual back then. So that was a really interesting thing to, as we, come to the end of 2025, there's obviously a level of [00:09:40] confidence, and positive sentiment out there.

[00:09:42] Veronica audio: People don't list their properties. Alyssa, they have to, or if they feel like they're gonna get what they want, and obviously there's buyers out there paying [00:09:50] enough money for enough owners to feel like they're getting a good deal and they sell the properties and therefore prices start rising.

[00:09:56] Veronica audio: Right. So that's across the board a level of positivity. But I wonder, do [00:10:00] you know this off the top of your head, have you got across this, you know, of the, say, Brisbane, Perth and Adelaide? 'cause those three cities are still in, in growth mode. I'm not even gonna talk about Darwin really, [00:10:10] but, Is the owner occupies driving more Brisbane price, bracket price growth versus investors in the other cities? Do we know that? Is

[00:10:17] Chris audio: we could find that out 'cause you can easily, you can see that [00:10:20] investor lendings. As part of the CoreLogic report is, and you can see long-term averages of how much percentage of investor lending, is there. And I think it's up across the board, to [00:10:30] be honest, in every state it's higher, and that's just because, investor lending's just been really popular over the last couple of years.

[00:10:36] Chris audio: Interest rates are higher. I've got equity. There's a whole [00:10:40] episode we'll do on sort of risky lending, um,

[00:10:42] Veronica audio: that coming up.

[00:10:43] Chris audio: that we'll do, and we'll talk about some of those things that are getting shut down. So I do think it's gonna be interesting to see how much investors, [00:10:50] but I think a lot of investors are trying to play where first home buyers are buying, because that's a good bet right now.

[00:10:55] Chris audio: Like, you know, they often, it's a similar price point. Investors don't wanna spend millions, they just wanna [00:11:00] spend, what they've got. And they don't wanna, they think if they spend too much, it's too risky. And I think it makes a lot of sense is, well, where a lot of first time buyers gonna buy with this 5% deposit [00:11:10] scheme, what's really attractive to them?

[00:11:11] Chris audio: If I'm an investor, can I sort of take advantage of that extra demand and also get a good asset? and if it goes to a first time buyer and they're [00:11:20] dominating the markets, then it's a known occupier sort of market rather than an investor market. And it could be a good decision. So I wonder if. We still see investors retreat from the regions, you know, [00:11:30] they're running outta regions to go to do, they start all going back to the capital cities.

[00:11:34] Chris audio: And I just think the first time buyer thing is,if the market's even moving a little bit, right? It doesn't [00:11:40] make it, it's an opportunity. Cost of not taking advantage of that scheme can be quite a lot, you know? and so I wonder just if that scheme sticks around all the way through 2026.[00:11:50]

[00:11:50] Chris audio: More and more people find out about it. More and more people think, hang on a sec, I speak to a broker. You've got 20,000 brokers now, you know, 80% of the market share. So, you know, a lot of people talking about and having [00:12:00] conversations, reactivating sort of interest of old leads and you know, old people who thought about buying their first home.

[00:12:07] Chris audio: and, you know, friends doing it and taking advantage of the [00:12:10] scheme and telling their other friends. I wonder as that scheme continues on next year, if, if, there's more and more interest in it and if the investor lending sort of continues. But when you look at sort of the, I [00:12:20] mean, I do focus a lot on these things, You do need to break it up between houses and apartments. and if you look at sort of Brisbane way down on 20 21, 20 22, [00:12:30] usually 30,000, now it's 15,000, you know, and it's been like that for the last three, four years. you know, Perth, way down Adelaide, way down. Hobart and [00:12:40] Canberra, you know, are a bit of an issue.

[00:12:41] Chris audio: and Melbourne's a pretty high, you know, that's, that's why the, you know, market doesn't kick is there's just a lot of choice when listings and choices really [00:12:50] tight. that puts a lot of steam in the

[00:12:51] Veronica audio: But you are talking total listings. There not new listings, right?

[00:12:54] Chris audio: Total listings. Yeah.

[00:12:55] Veronica audio: and that's because those other markets have been booming and so everything's been snapped up. And so a [00:13:00] slower market is gonna have total listings at a higher level, and it's gonna be longer days on market. And as you say, more choice and I.

[00:13:08] Veronica audio: When things dry up, you know, [00:13:10] it's almost like every buyer sitting on the fence gets off all at the same time. And so this will happen, you know, every market's in a cycle. Right. Sydney's been in a very flat cycle for the last couple of years. At some point it will [00:13:20] kick off again. Melbourne's been in the doldrums for, what, seven years and at some point that's gonna, that's gonna take off again.

[00:13:26] Veronica audio: What are your thoughts on, okay, so you've got first home buyers and [00:13:30] investors all competing in the same. same price brackets, and that's been happening for some time. as you said, we've got an episode on risky lending and risking investment, sort of practices, shall we say, [00:13:40] coming up in a couple of weeks.

[00:13:41] Veronica audio: what that does though is, does pit more investors against first home buyers and then you get it, you get the people that have sold to them [00:13:50] right now, if their owner occupies upgrading, that's then gonna sort of. Trickle into the next price bracket, right?

[00:13:56] Chris audio: yeah, I do think it's a bottom up sort of boom, right. If [00:14:00] someone's selling that property. And I think that's often forgotten about if it was an apartment that yes, there's some first time buyers being great assets, but some are just basically buying new investments that people didn't perform that well for [00:14:10] them.

[00:14:10] Veronica audio: Yeah. There

[00:14:11] Chris audio: buying the high density apartments. and the investors wanted to get outta that for years, they just haven't been able to. And then all of a sudden, you know, this happening definitely in Brisbane apartments, not so much in Melbourne, [00:14:20] and it would definitely be happening in Sydney.

[00:14:21] Veronica audio: You know, you think about all the high he density sort of postcodes. You know, a lot of them older builds that aren't great as well, like newer, older [00:14:30] builds that are built poorly. So 10, 15

[00:14:32] Chris audio: yeah, exactly. That's, it's sort of old now, but not really old, like the art deco stuff. But, I think that's an issue here.

[00:14:37] Chris audio: So those investors are bailing and [00:14:40] whether they've got much equity and not, depends on what they did years ago and, but they have built more equity and what are they gonna do with that? Like, do they then take that, pay off their mortgage and then that gives them the borrowing capacity and the [00:14:50] equity then go to upgrade their home?

[00:14:51] Veronica audio: Probably. I do think though that, you know, just reading social, pages with investors that have bought debt, assets that have [00:15:00] sat on negative or no growth for. Sometimes a decade or more, when they start to see some growth, they're just so relieved to get the hell out of there. I don't think they really are [00:15:10] thinking about putting that money back into property, but I think if you know anybody who's selling their home to a first home buyer and it's been, you know, the value is inflated accordingly, all of a sudden they've got more [00:15:20] to play with in the next price bracket.

[00:15:21] Veronica audio: So,

[00:15:22] Chris audio: I think you're right. So, exactly. So if it's like a first time buyer that, you know, a couple, they bought the, a pretty good apartment saying Sydney and, or a house in [00:15:30] Brisbane and they bought it for whatever price, and then that's gone up, say 500 grand. Right. You know, or 300 grand. Then they paid that property off 'cause it was their home and then their equity's gone [00:15:40] from, 400 to 700 because of the price growth. And then they're gonna say their incomes have gone up since they purchased and their life's progressed, and now they're having kids. And the 5% deposit schemes pushed [00:15:50] up their and ha and the upend hasn't moved as much because the growth is, is more subdued at the more high level.

[00:15:57] Chris audio: And if they are doing well financially, and they can borrow a [00:16:00] decent amount, you know, with their incomes. Then they can afford to make that jump. So it's the 5% deposit actually is pushing prices up from the bottom. but there's a lag on that. and you know, it, not [00:16:10] everyone can take advantage of that because even though they've got well equity doesn't mean they've got enough borrowing capacity to them because house prices have gone up so much more than apartments.

[00:16:18] Veronica audio: But in some cities [00:16:20] that opportunity's gonna be greater than others. Like in Melbourne for example, you know, that opportunity to upgrade if you're selling to, you know, a first home buyer is fantastic, even in [00:16:30] Sydney. You know, as I said, we've had a two years of very steady, modest, very modest growth, almost a flat market, right?

[00:16:37] Veronica audio: So, low single digit [00:16:40] growth per annum, you know, like, that does provide opportunities, especially when the, the lowest, uh, quartile is The hottest market in the last, say, quarter, of the year. So it, [00:16:50] so that, but that opportunity, that door will shut. that door will close. And so I guess that's something that, if you're in that category that you should be certainly thinking about.

[00:16:59] Veronica audio: What do you think about [00:17:00] downsizes? I.

[00:17:00] Chris audio: yeah, it's an interesting one that, that's a good point to the market. I think that leads into our building. Boom. Sort of other factors. I track this story, like I'm a little bit obsessed [00:17:10] with it. Understand as zoning, what's getting approved, what's getting marketed,it's sometimes getting, markets don't even approved or it's not getting, it might not get built, but it's getting, they're trying to get it approved with council [00:17:20] and you've got a whole register on major projects in New South Wales and you can.

[00:17:23] Chris audio: There's a bunch of websites you can track this stuff on quite and like literally daily, there's a lot of people who are [00:17:30] obsessed over this for many years and I'm kind of entering this world, but, there's so much happening. It's just crazy. And does that really change it for downsizes? You know, if your suburbs gonna really [00:17:40] shift, think about like the premium suburbs of the old nimbyism where you thought it would never change till you go, right, I'm outta here.

[00:17:46] Chris audio: Like, like, which is fair enough. Like I don't want this suburb to.

[00:17:49] Veronica audio: [00:17:50] you're out of the or it finally, they get an opportunity to actually downsize and stay where they've lived for maybe last 20, 30 years.

[00:17:58] Chris audio: Well, yeah, but they, so they have to [00:18:00] downsize though. Exactly. So they, that's the, it's a catch 22. They might say, yeah, I'm out of here. I'll buy one of those new apartments, but I'll sell my house. And

[00:18:06] Veronica audio: To a developer.

[00:18:07] Chris audio: Yeah. And, or to a developer, [00:18:10] or do you just, if you're just on the skirts of. Because there's always the one that wins, and then there's the one that loses that doesn't sell to a developer.

[00:18:17] Chris audio: And if you are closer with that or you just go, [00:18:20] you know what, this is not what I thought signed up for. I wanted a little quiet village and I wanted to know everybody, and all of a sudden it's all this high density. A lot of people, you know, potentially will bail and go to other [00:18:30] areas. And I, I'm, sort of want to track that story.

[00:18:31] Chris audio: I think it's a massive shift that can't be underestimated. and that's why it's happening in Sydney. I think it's the canary in the coal mine for other cities. Right. Brisbane's got [00:18:40] planning changes going through Melbourne has,

[00:18:42] Veronica audio: a lot. Look, the thing is though, and this is one of the issues there, that there are people that are in those development corridors, [00:18:50] their lives then enter into limbo because if I'm about to up outgrow it. You know, I can't sell it.

[00:18:57] Veronica audio: No buyer's gonna buy it. If it's now in a development zone, [00:19:00] you know? my neighbors aren't ready to sell or they want too much for it. We can't actually agree on how we're gonna go about this, and I'm stuck. what's the point of investing in my property? I'm not even gonna maintain it.

[00:19:09] Chris audio: [00:19:10] Yep, absolutely.

[00:19:11] Veronica audio: and so I actually think it's a bit of a cruel, it's quite cruel I think in many cases.

[00:19:17] Veronica audio: I've spoken to a number of individual [00:19:20] homeowners who are really personally stuck because of this and, you know, it's all well and good to just these blanket rezoning and say, we've gotta get more housing. There's [00:19:30] people that don't have houses, but, to. Then commit individual families into this sort of limbo where they cannot move on with their lives at a time where they [00:19:40] would otherwise move on with their lives, I think is really tough.

[00:19:43] Chris audio: there's winners and losers, right? This is this NIMBY versus MBI sort of debate. I'm not in politics. I [00:19:50] don't write, you know, I'm not coming up with these all, I'm, I'm sort of an observer of it and saying this is a huge shift. And if, you know, for example, if you had a property that was gonna be affected, absolutely [00:20:00] be emotional 'cause it's gonna affect you individually.

[00:20:01] Chris audio: But if you just look at a city level and think about, as, you know, five, 6 million people here and state government's doing this, and they're overriding councils and the developers are doing this. [00:20:10] There's gonna be massive consequences with reshaping the, what's valuable under this new world versus the old world.

[00:20:17] Chris audio: And 'cause there was a lot of intrinsic value [00:20:20] built into these suburbs that was based on, getting a park and having quite streets and feeling safe and low density. And if those things are now no longer there [00:20:30] as much, then people are like, why would I pay that for the property? And does that mean people bail?

[00:20:35] Chris audio: And I dunno, I think it's just going to play out. Particularly when start things start happening. I mean, [00:20:40] lodging a, a DA is one thing, but when n six of your neighbors knock down and there's a, you know, six level building going up and you are just up the road, you go, hang on a sec, is [00:20:50] this really what I want?

[00:20:51] Chris audio: You know,

[00:20:51] Veronica audio: Well, that, I mean, that's a no brainer. But the problem is that you know, if you are one of the six neighbors that banded together, all agreed and actually found, you know, it's a [00:21:00] willing vendor or a willing buyer, that's fantastic. But if your little cohort, your little neighborhood isn't quite as is, on the same page, you know, like that's shit, [00:21:10] that's really shit.

[00:21:11] Veronica audio: because

[00:21:11] Chris audio: they bail? That's what I mean. So

[00:21:12] Veronica audio: who are they gonna bail to? Right? They're gonna bail to a speculator who's gonna basically land bank it, hoping that those recalcitrant neighbors might [00:21:20] actually at some point, all need to sell, right? So like, it's who are they gonna bail to and at what cost? So, you know, I think that's tough.

[00:21:28] Veronica audio: obviously it only impacts a small [00:21:30] percentage of all the downsizes out there, but, you know, it's an interesting. Thing to watch. And I think the other thing we've been talking about a lot over this year about the construction [00:21:40] pipeline is that it appears that, the most, profitable type of development has been the higher end apartment development, which is.

[00:21:48] Veronica audio: Typically the type of [00:21:50] property or the type of stock that downsizes would attract it downsizes to. there's opportunities, I guess, coming to downsizes that isn't necessarily coming to the rest of the [00:22:00] marketplace. And that's a change because we've, you know, across the board we've had a real shortage of three bedroom apartments for fragment sake.

[00:22:06] Veronica audio: Those real house size apartments, you wanna call it that. that's sort of interesting too, because that [00:22:10] definitely changes. It's all and good. There's development happening and there's new dwellings happening, but that's, it's one segment of the market. it's at the higher end of the market.

[00:22:17] Veronica audio: let's face it, it's not necessarily helping old people [00:22:20] that can't get into the market.

[00:22:21] Chris audio: Yeah, absolutely. It's gonna be interesting to see what actually stacks up, right? what they can actually make money on. What can they actually sell? It's all good and well getting these approvals, but can you actually then go find [00:22:30] enough downsizes that want to live in them? You know, it might be okay for a four lot, and I don't know how well they're selling, right?

[00:22:36] Chris audio: That's definitely data that I would love to find out. and there's some real estate [00:22:40] agencies that's focus in this space, right? And they've gone. Maybe 10 years ago they were selling, you know, 600 apartments in this, big high, you know, now they're just selling, you know, 600 apartments.

[00:22:49] Chris audio: They're [00:22:50] selling it over like 60 different projects, you know? I think there's a huge amount coming. So I think that's a story to track together with sort of the return to work working from home. [00:23:00] Like how does that keep playing out? Obviously it was five days home for, you know, 21, 22. Now it's still at three.

[00:23:08] Chris audio: You know, one day in the office, two days in the [00:23:10] office, three days, four days, five days. does that go back to the old way because it's sort of, that's been the trend and you know, if we are back in the office, say four or five days a week, for a [00:23:20] vast majority more, yeah, there's still people working from home.

[00:23:23] Chris audio: I think that sort of will affect the markets, you know, not just in Sydney, but you know, around the country. I think,

[00:23:28] Veronica audio: Well, regional markets, that's gonna [00:23:30] impact, you

[00:23:30] Chris audio: Yeah, absolutely. Yeah.

[00:23:31] Veronica audio: and you know, that's been the big success to our sort of post COVID world. But how sustainable is that? And certainly not all region. I mean, look at both sides of, you know, they're both [00:23:40] peninsulas on other side of Melbourne, maybe not Geelong so much, but certainly in the morning to Peninsulas been suffering, they're in the doldrums.

[00:23:45] Veronica audio: I guess the Victorian story is a little bit different to the rest of the country, but, [00:23:50] you know, the work from home, there's pressure on that, and who wants a big commute anymore? So those properties are gonna, uh, you know, watch out Northern Beaches. I say, Chris,

[00:23:59] Chris audio: yeah, but I [00:24:00] also think that part of the beaches is one of the things. I mean, that's where I live, right? So track this stuff like, does. High density in the east, or low and north shore, or up in North Shore, like you've seen what's [00:24:10] happening around KRA and Gordon and that's crazy.

[00:24:13] Chris audio: The whole thing about living up there is around being the schools and the

[00:24:15] Veronica audio: Mm-hmm.

[00:24:16] Chris audio: And if that village thing's not gonna be what you want. The kids are leaving school soon and you don't [00:24:20] need to get, then where do they go? The beaches haven't got the train line. Right. And so the, it's really hard to increase density when they say they haven't got the infrastructure there for it.

[00:24:27] Chris audio: Right. And so their argument is, well, [00:24:30] we'll just do it in sort of. Around Waringa Mall and maybe do it down Manley Beach and a few here and, um, And whereas the east suburbs, you know, go look around what's happening around Edgecliff Station in the eastern [00:24:40] suburbs. It is absolutely crazy. and together in Bondi Junction, there was a, just this week, you know, some fights to increase, heights on, in Bondi Junction again, like, let [00:24:50] alone the W Train station.

[00:24:51] Chris audio: So that's a huge story. Obviously I'm talking Sydney centric here. The work from home. Obviously AI was a huge story this year and you know, we're all gonna lose our jobs. I think people have [00:25:00] probably anxieties dropped a bit as they've used chat GPT more, but I think that's a great story to sort of track, you know, how does it actually, change our job landscape?

[00:25:08] Chris audio: does it create more jobs [00:25:10] than we lose? Yeah. What happens to our job markets is a big story, you know, this year.

[00:25:15] Chris Bates: I'm on a personal mission to help more people make better property decisions. You know, most people don't [00:25:20] realize that they can cost themselves hundreds of thousands of dollars over the medium to long term when they make property decisions without all of the information that they need. And what I do is help [00:25:30] people with tricky real estate problems, which offer masqueraders simple questions like, should I sell my investment property because the interest re payments are hurting, or should I buy before I [00:25:40] sell?

[00:25:40] Chris Bates: Or the other way around. You could connect with me and access all of the tools that I've created to help you make better property decisions at Veronica Morgan dot com au. And there you'll [00:25:50] find resources for first home buyers, details about my buyer's agent mentoring program. You could connect with my Sydney based property management and buyer's agency teams, Australia wide [00:26:00] vendor advocacy.

[00:26:00] Chris Bates: Or ask me for introduction to the small group of buyer agents that I would personally recommend across the country. That's Veronica Morgan dot com au.

[00:26:09] Chris Bates: If you're considering a [00:26:10] property move, which is buying your first time, upgrading, renovating, or investing, the team here at Alcove would love to help you think through your decision and get the finance right.

[00:26:19] Chris Bates: Please go to [00:26:20] cove.com au to reach out.

[00:26:22] Veronica audio: Yeah, and Regional markets are interesting to watch because a lot of the commentary I on them is really just, it's focusing on what's [00:26:30] happened since COVID it's ignoring what happened before and whether or not we're actually in a permanency a, a state of permanent change or whether, you know, this is a new world or whether [00:26:40] it actually will go back to what.

[00:26:41] Veronica audio: Was previously the norm, you know, in terms of work from home and where the demographics of people living in these sort of coastal and sea change and tree change areas. So [00:26:50] that is something to watch and I, I'm not that confident that the regions will continue on the trajectory later on.

[00:26:57] Veronica audio: And again, we are gonna talk about regions [00:27:00] in more detail in. Couple of episodes. 'cause I think there's a lot of risky behavior in some regions. So I guess be careful is where I'm saying there, you [00:27:10] know, we've talked about supply, you know, listings and new construction. We've talked about demand, you know, coming from an increased investor lending and also first home buyer, [00:27:20] incentives.

[00:27:20] Veronica audio: we've talked about interest rates because we don't really know what's gonna happen. there is a, a level of, of positive sentiment around the market, as [00:27:30] we mentioned about totalities data is saying, showing that all markets, in the positive. What do you think has led to that and do you think it's sustainable?

[00:27:39] Chris audio: [00:27:40] it's interesting, right? So the Westpac, which I was just trying to, gonna bring up, as you said that the Westpac, consumer sentiment sort of forget the name of the report. It's like the property housing [00:27:50] report. Anyway, there's a time to buy index on it and it is like off the charts like it's 16, 17 year high, no, no time to buy the, price expectations.

[00:27:59] Chris audio: And [00:28:00] so. That has been, that's been recorded and it's like a very well respected survey. and it is off the chart. So people are just overconfident and expecting massive [00:28:10] price. I don't think the time to buy is really that high. Like a lot of people are like, think it's not, even though they're expecting prices to go up, they don't think it's a good time to buy, which is a bit counterintuitive.

[00:28:18] Chris audio: I think they know the interest [00:28:20] rates are high and do you really want to take on this risk? Is it a good time to do it? but yeah, there's just huge confidence and think this rental crisis, issue is [00:28:30] really, you know, encouraging people to buy. I think that's what's really, supported prices the most.

[00:28:34] Chris audio: I think a lot of investors bailing over the last years rent's going up through the, a lot, up a lot. And it [00:28:40] just really supported prices a lot under higher interest rates because people are like, well, I don't wanna rent. Yeah, that looks better on paper. Yeah, I would save money if I rented, but. I don't wanna get [00:28:50] kicked out.

[00:28:50] Chris audio: And I really do wanna own a home. If I remember back, say five, six years ago when there was that share economy debate, like they no own nothing. You know, the next generation will [00:29:00] own nothing and they'll never own property and Gen Z don't wanna own, they just wanna share, like, that was the argument.

[00:29:05] Chris audio: But I think we'll find that the younger generations want to own just as much as every [00:29:10] other generation. if not even more so. 'cause what they're going through in recent years.

[00:29:14] Veronica audio: And we talked about this before as well, the minute you have kids, your attitude towards property change when you had [00:29:20] kids,

[00:29:20] Chris audio: Oh, absolutely. Yeah.

[00:29:21] Veronica audio: that, you know, and that is all of a sudden people want stability. they want a house, they don't want an apartment. You know, there's.

[00:29:27] Veronica audio: There's, I'm happy [00:29:30] not to be walking distance to the nearest bar anymore. I need a backyard or. Parks or whatever it is, you know, you, your priorities change. And I think, you know, millennials, well definitely if the younger [00:29:40] millennials might not have kids yet, but, you know, millennials are certainly having kids.

[00:29:43] Veronica audio: gen Z well, my daughter's Gen Z do not have a child yet. Please, just back right off. but you know, that [00:29:50] soon they'll start, the older ones will start thinking about it. Jenna, for an hour in the workplace. People in the workplace whose birthday start, you know, with 2000 or something. [00:30:00] Um,

[00:30:00] Chris audio: I know there's freshmen, there's some footballers that are like born in 2010 and they're like lighting up the world stage. But I think the intergenerational wealth, I was blown away over the last 2, 3, 4 years how much that [00:30:10] came down.

[00:30:10] Chris audio: When you look at all time hires on share markets, you know, baby boomers don't crypto investors, but let's say, you know, so let's forget about crypto. property prices, their [00:30:20] investment properties have been going up. Yeah, great red return on cash. Their super fund's doing really well.

[00:30:24] Chris audio: that money's, if you look at household wealth. It is only much higher than it was two, three years [00:30:30] ago. That money's still there. People are still dying, you know, grandparents are still dying and great grandparents. And so that money is coming down and it is coming down. and I think we'll see that [00:30:40] continue because,you know, that just makes sense that wealth is just there.

[00:30:42] Chris audio: You know, think about this person's downsizers that are cashing in. They might put some for their own retirement, but a lot of that will go to the kids and then the [00:30:50] grandkids, and then they'll re-leverage it into property. So I think that's gonna be a, obviously this is a have. Have nots, but that is absolutely gonna happen a lot [00:31:00] over, you know, 20, 26 and beyond.

[00:31:02] Chris audio: we're kind of only at the start of the baby boomers dying off, if I can say it in, in a nice way. but that's kind of where we're getting to.

[00:31:09] Veronica audio: [00:31:10] And look, you know, we've had lots of, lots of episodes where we've discussed around the sort of the social contract around rising prices and problems with our cities that become unaffordable [00:31:20] for people who are. The backbone of our cities, you know, the cleaners, the baristas, let's face it.

[00:31:26] Veronica audio: That's such a freaking privileged thing to say really. But [00:31:30] teachers and ambos and nurses, et cetera, et cetera. So there are real issues, you know, structurally, particularly when you look at a city like Sydney and in the affordability here. But, you know, [00:31:40] be that as it may. We can't deny the facts. You know, the facts are that there is that wealth in the system and that wealth is increasingly the, you know, the bank of mom and dad is what [00:31:50] the fifth largest lender that wealth is increasingly being directed towards younger generations to help them continue to, own property and getting to the property [00:32:00] market.

[00:32:00] Chris audio: yeah, I mean, one thing we haven't chatted about, I've just thought about is, is bank lending. obviously this is our space. Obviously we get updates from all the banks. You know, credit growth's kind of the [00:32:10] way that they measure it. Like every bank wants to grow their loan book, right?

[00:32:13] Chris audio: that's the name of the game. And they're all restricted in terms of how much they can lend because APRA's got this [00:32:20] assessment buffer. It's 3% above what current rates are. And you know, there's just. There's not as many transactions in the market as well. They don't want to do these refinance wars because they've [00:32:30] realized that they just cannibalize, they just eat each other's books.

[00:32:32] Chris audio: They don't really grow. They get 10 new customers and they lose 10 new customers. So they all sort of had this sort of truce, the last sort of [00:32:40] two, three years where they all didn't undercut each other, after they. Basically wiped out all their, you know, basically, loyalty tax they were making. Geez, I didn't agree with.

[00:32:49] Chris audio: So [00:32:50] they're gonna have to come up with innovation and they're gonna have to move into new lending and try to open up new ways to grow credit growth. Obviously they've all gone into business banking, in, in recent, in [00:33:00] 2025. but then that's hard 'cause businesses, you know, are nowhere near, you can't really do it in commercial lending.

[00:33:04] Chris audio: There's been the rise of private credit in the last few years. So, while I think that'll [00:33:10] still continue, I do think that the banks and not so much the non-banks, it's such a small part of the market, but the banks will have to start to come up with innovation and there [00:33:20] completely will be risk on, they'll just try to, I guess, this 5% deposit scheme.

[00:33:23] Chris audio: But that's just a government thing. There'll be ways of trying to increase lending. Now we've started to see 40 year [00:33:30] loans. I think we'll start seeing more interest only we'll see relaxing around self-employment and bonus income and lending on shares. and I think that this will, [00:33:40] will be the way that the banks try to increase their credit growth and,we can already see it.

[00:33:44] Chris audio: And I think that's gonna be interesting because that means more lending, right? let alone when interest rates come down [00:33:50] and they can lend more or ara step in, reduce the buffer. People will start taking on, you know, bigger mortgages just because they take on a longer mortgage. Right? or just 'cause they can [00:34:00] borrow more because the bonus has counted a hundred percent, not 80%.

[00:34:03] Chris audio: Or they'll look at the last year in business, not the last two years. and so I think that'll be something to watch in 2026. It's just the [00:34:10] appetite of banks. 'cause access to credit is a huge part of the market. Like if it's easy or hard, it really determines. If you think about the Royal Commission in 2018, really tight credit.[00:34:20]

[00:34:20] Chris audio: Really hard to borrow. Market crashed pretty quickly.

[00:34:22] Veronica audio: It did,

[00:34:23] Veronica audio: particularly in Sydney and Melbourne at that time. It'd been both been booming So there's pent up [00:34:30] demand. at the end of the year off, you see also bio fatigue. certainly pretty much, you know, I track, auction clearance rates in Sydney. it's a really important metric and in [00:34:40] Melbourne it's an important metric as well, less so in the other cities.

[00:34:42] Veronica audio: and you can really see bio fatigue in auction. data, Because you can see that the clearance rate really falls off a cliff. [00:34:50] generally it starts in November, but it really bites in December and usually that coincides with a lot of spring listings and pent up, you know, the growing total listings, but also new listings.[00:35:00]

[00:35:00] Veronica audio: So, but when you have really exuberant markets as well, like even when we did have that last boom in Sydney, Melbourne, which has sort of ended in the middle of 2017, it ended because [00:35:10] it was a royal commission and you know, changed lending rules and there's a whole bunch of things happening at the time.

[00:35:15] Veronica audio: But other booms, what I see as buyers just get [00:35:20] over it, you know, that gets to a point. Like, so I wonder and I look at sort of Brisbane, Perth and, Adelaide in particular, which seems to have just. Had a resurgence. a lot of [00:35:30] people thought that they passed their peaks in terms of their growth phase.

[00:35:33] Veronica audio: but all of them seem to have rallied, right? And I just wonder at what point buyers are just gonna get fatigued. It gets to a point where they [00:35:40] enough, it doesn't feel like value anymore. I'm not gonna compete anymore. so that will be interesting to watch. 'cause at some point that will hit these markets.

[00:35:49] Chris audio: Yeah, [00:35:50] I do think there's, but it's interesting to say bi fatigue now, just like you say, does, how does it change over sort of January, February, um.

[00:35:56] Veronica audio: Yeah, it usually comes in hard. I come back [00:36:00] hard.

[00:36:00] Chris audio: does the market, does a lot of this stock that is on the market now, does it get snapped up over this next couple of weeks? Like does it just really, is it really dry?

[00:36:09] Chris audio: do [00:36:10] listing numbers, you know, and is it really late in January? Do they start coming? You know, is it just really dire and do buyers come back with a new vigor to sort of make it happen?

[00:36:19] Chris audio: Right? Like [00:36:20] and I think at the moment I would say no. Like, because there's so much negative news around the economy and where inflation's gonna be. And I reckon a lot of people just aren't in that would feel like they just want [00:36:30] to like be patient.

[00:36:31] Veronica audio: Same we talking about an overall, confidence and, you know. Is still growing at the end of the year. Like even though we've seen clearance [00:36:40] rates fall off, price growth across the board is still there. Like I think that there's actually, there's a foundation to this market at the minute that, that sort of surprised me when [00:36:50] I sort of dug into the numbers a bit.

[00:36:51] Veronica audio: What normally happens after Christmas though? And so the auction markets behave very differently to private treaty markets because with auction. you need [00:37:00] three, you need four weeks. Really, effectively, a campaign is over three weeks, so you're not gonna list something, you know, first week are back in January because you've got Australia Day in the way, you know, and you're [00:37:10] not also gonna list stuff in the last week of December because you can't run a camp, an auction campaign over the Christmas holidays.

[00:37:16] Veronica audio: But if you're in a private treaty market, you can bring a new property onto market in [00:37:20] 24th of December if you want to. Yeah, sure. Market's gonna close for a couple of weeks, but you know, the first day back that property is available to be purchased and some markets. agents stay, uh, stay, uh, [00:37:30] working.

[00:37:30] Veronica audio: Not a lot of solicitors do, so there's not much happening. but so, but with private treaty, that really is a two week lag where an auction market says that can, depending where the public [00:37:40] holidays land, it can be a five or six week lag. And what you do see is buyers come back renewed and invigorated after, Christmas holidays.

[00:37:49] Veronica audio: The [00:37:50] ones that. Got over at the end of the year, they're back. Plus you get new ones. And that's why in an auction era you will see the clearance rates peak generally in February. So often it's the [00:38:00] highest clearance rates of the year are in February. So unless you're in an absolute year, that's gonna take off booming.

[00:38:05] Veronica audio: But most, that's a typical pattern. So, we can see that in auction [00:38:10] markets you can't see it as clearly in private treaty markets. and in private treaty markets. is that's, that has less of that pent up demand. Swirling because there's no auction campaign starting. So that's something to be [00:38:20] aware of as well in the new year and quite often when we sort of hit the market in February in Sydney and we, we are watching this and we're seeing this exuberance, we're always the [00:38:30] back of our mind, is this, this the gonna take off and continue through the year?

[00:38:33] Veronica audio: Or is this gonna be the normal February hump? You know, and then the rest of you goes back to normal. So that's the question you've gotta [00:38:40] be thinking about.

[00:38:40] Chris audio: I mean you said there around property markets, they naturally sort of, you know, slow down and, you know, people get over it. I think people do that as well with shares and other asset classes. [00:38:50] They go, look, I'm just not gonna keep on pumping up the share price past this point.

[00:38:53] Chris audio: I just don't see value. And I wonder if we're, you know, stock markets, you know, if they go up [00:39:00] their stairs and down the escalator, right? Like it's, they can crash really hard and really fast. And when they happen, that is blood bath. It's all over the news. [00:39:10] You know, and some of them they bounce back pretty quick, right?

[00:39:13] Chris audio: Of most, you know, volatility. Then they go and they go back to even higher highs. It's just the way it works, but sometimes it isn't. [00:39:20] And you know, it can be some quite severe. And so, you know, it does a little, you know, whether it's a. I dunno, bankruptcy or AI company gets found out or something that [00:39:30] triggers a bit of a stop market crash and investors or bail and or a crypto crash or gold crash.

[00:39:34] Chris audio: And how does that impact things in, you know, does that really affect, consumer confidence? so I [00:39:40] think that's something just to be aware of that could happen every year. But I do think that, you know, when markets are at all time highs, the in chance of a big stock market crash is higher.

[00:39:49] Veronica audio: up. [00:39:50] Yeah. Well look at what happened in April. April of 2025. You know, like it died. God, I wish I'd just actually, I mean.

[00:39:57] Chris audio: Yeah. Bought some of the NASDAQ back then.

[00:39:59] Veronica audio: Yeah, I didn't, [00:40:00] you know, and it's stupid 'cause I, I sort of invest regularly. I, I just didn't get myself into gear. It's weirdly enough. What I have actually done is I made sure as a result, because I just [00:40:10] didn't get myself organized in time to take advantage of it.

[00:40:12] Veronica audio: I have, since then though, increased my cash holding so that next time it happens, I'm ready. So I didn't have [00:40:20] to sort of reorganize myself. So I've looked at that and went, yeah, that was a missed opportunity. I won't miss it next time. But that's the way I look at that. I mean, some people rush to safety, you know, they rush to [00:40:30] property if that sort of, we get that sort of volatility in, in other asset classes.

[00:40:33] Veronica audio: So, but I think we always have to remember as we're at great pains to say that property, yes, it's an investment, but [00:40:40] primarily it's a roof over people's head security. There's a lot of, and it's not a tradable asset for most people because they're not gonna. Well, A, it's not that liquid, but B, they're living in it.

[00:40:49] Veronica audio: [00:40:50] It's not something they sell out of, get back into, you know, they don't play it like you, you can play the share market. So we have to think differently about it, even though often we talk about it in the [00:41:00] same terms.

[00:41:00] Chris audio: population thing, that's gonna be a huge story, right? It's already, you know, we've got, people sort of marching on the streets. It's a massive in the news, you know, [00:41:10] almost every week. you know, a lot of people are blaming that for all our problems.

[00:41:13] Chris audio: It's convenient.

[00:41:14] Chris audio: know, how, how that happens, how that plays out. But you've got a very pro government, both labor and [00:41:20] liberal for development, right? because they can see just dwellings commence is just way down. But building prices have gone up. It's not feasible for builders. A lot of [00:41:30] builders have lost, gone under, you know, have built all, have lost all their sort of liquidity or their buffers over the last few years are less risk appetite than they were say five years ago.

[00:41:39] Chris audio: [00:41:40] So they're not gonna take on any project that's not gonna make financial sense, you know, they're just not gonna play that game. You know, they'll, builders were undercutting each other and just basically buying work, you know, in COVID, [00:41:50] right. I don't think building prices are gonna go down, particularly obviously when you've got roads and Olympics and all sorts of trains and all sorts going

[00:41:58] Veronica audio: the rate of [00:42:00] growth of pri uh, building materials and,inputs has gone down, but it actually hasn't gone backwards, you

[00:42:06] Chris audio: yeah, that's right. Exactly. And there is still a lot of people that can't afford [00:42:10] to upgrade. Like, you know, you've got stem duty selling costs and Yeah, it costs to do a renovation is higher. That doesn't mean you need to do the whole hog, like you can just do a [00:42:20] more moderate renovation. and people are still doing that, right?

[00:42:22] Chris audio: Like, you know, obviously, and it makes sense to do it potentially because house prices have gone up and they can afford to do it with the bank. And think just [00:42:30] overall, while we're talking about all this new development, it's not typical, the old developments. It's not high density apartments.

[00:42:35] Chris audio: It's not Greenfield housing estates, it's still, I mean they're pretty [00:42:40] flatlined, but it's pretty dire the building industry really. you know, and the amount of dwellings that we're sort of completing is way down. Like we were doing here, few, about [00:42:50] 50 to 55,000 sort of, a month. and we're doing sort of 40 to 45 now.

[00:42:56] Chris audio: So we're like well down on sort of the previous [00:43:00] boom in 2017.

[00:43:00] Veronica audio: It is interesting too because I see a lot of houses just wandering around. I spent a bit of time in Melbourne, wandering around the streets of Melbourne, wandering in the streets of Sydney. I [00:43:10] see a lot of, houses under renovation, so people are investing in their own homes. But I tell you what, as buyers, the un renovated properties, [00:43:20] they are not that popular.

[00:43:22] Veronica audio: Buying a property to renovate is much less attractive to buyers than deciding after you've been in your [00:43:30] home for a few years, that you are gonna renovate it. You know, it's, there's a really different mindset and so I, I often find that mismatch quite interesting, that there's clearly an appetite for individuals to renovate their homes, [00:43:40] but people don't necessarily wanna be buying un renovated, you

[00:43:43] Chris audio: I didn't haven't got enough cash plus borrow capacity to sort of. Of do it, you know, because it's actually quite hard, much [00:43:50] harder. I've personally went this is to actually, you know, you put a little bit in for the deposit, you borrow a lot from the bank, which is easy when lending's quite easy and you can borrow a lot time of your income.

[00:43:58] Chris audio: And then you put the rest of the money in the [00:44:00] offset account and then you do to do your Reno, right? Or to then go and do a construction loan to then borrow and do a reno is actually quite hard because you've gotta have even more [00:44:10] equity. And there's a process and time to do it, and there's risk involved.

[00:44:13] Chris audio: And when there's risk involved, you want more buffer. And so, you know, it makes sense. Like right now if you are gonna buy and you're leveraging up, [00:44:20] like you don't really wanna then go a leverage up and then leverage up and take risk, and we're doing builds. and when you've got no confidence around building costs and the time to do it, and so, and a lot of people have left [00:44:30] it too late as well.

[00:44:30] Chris audio: So not only are they, they're upgrading a bit later than they wanted to, so they haven't really got the. Those years up their sleeve, they kind of need the space now. 'cause they've got the kids that, you know, getting a bit [00:44:40] on and they, they can't buy a two bed and turn it to a four bed because they've got two kids going to, to school and high school.

[00:44:45] Chris audio: And, I feel like that's happening a bit as well. and investors aren't doing it as well. I think our [00:44:50] investors aren't sort of doing the reds. It's like, it's just, it's a lot of risk when potentially the reward's not there. 'cause the cost to build is just so high. Why would you renovate your investment properties?

[00:44:59] Veronica audio: You just [00:45:00] would just leave them, you know? Well, it's easy to rent. Property's out as long as they're in good condition. You know, like, so it can be dated daggy, but good condition. I've got, you [00:45:10] know, one house that I've always intended to renovate, but what's my incentive to renovate it at the minute I don't need to. so at some point of time I've may or may, I may not ever renovate it.

[00:45:19] Veronica audio: Now [00:45:20] I've always sort of would, but maybe I won't. maybe I don't need to. but anyway, we. We will often wax the ripple and bang on about all this sort of stuff and have these sort of wild ranging chats. We hope that you've [00:45:30] had some benefit out of the sorts of things that we are thinking about as we enter into 2026.

[00:45:35] Veronica audio: the big message from me anyway, is that when you are [00:45:40] buying, you need to be strategic about it. You need to be thinking about what you're trying to achieve long term. I think too many. Investors that I, [00:45:50] I meet, in sort of short term financial pain because cash flows are tight. And certainly if you are moving into an environment where interest rates are starting to go up again, it becomes tough.

[00:45:59] Veronica audio: And [00:46:00] a lot of, investors, feel that that pinch of cash flow, it's, it is tough. And one of the things that I sort of say quite a lot is that the first 10 years of owning a quality investment property are painful [00:46:10] because you often, it takes time for compounding to sort of see the benefit of capital growth.

[00:46:14] Veronica audio: but you will be out of pocket. You're gonna have to keep investing cash flow into [00:46:20] that. When things like interest rates go up, insurance costs go up, you know, there, there might be some maintenance that bites, you know, it feels like, oh, this is just, no, [00:46:30] this is not working. This is not for me. And so I always think that you've got to remember, property has to be a long-term view.

[00:46:36] Veronica audio: You have to have a long-term vision. You have to have a [00:46:40] plan behind it before you go in to do it. And that the, there's a lot of noise out there about where should I buy, where's the next location to go off? None of [00:46:50] that matters in the long term. If you buy a good asset in a good area with good foundations and you can ride out those bumps of a market, but that only works if you're in it for [00:47:00] at least 10 years, preferably 20 or more.

[00:47:02] Veronica audio: That's the one thing I probably would say that, you know, we are talking about volatility stuff that's happening right now in reality, [00:47:10] long-term thinking, it really, none of it should matter.

[00:47:12] Chris audio: I mean, you make a good point around investing and we've really avoided this regional investing [00:47:20] phenomenon. We have got concerns around that and the whole multiple property strategy, we haven't been pushing that at all. We could easily have been on that [00:47:30] way forever.

[00:47:30] Chris audio: And we've been anti off the plan when everyone was saying all the way back when we were doing this at the start, you know, we were anti all that we've, and we. We know that there's been a lot of momentum [00:47:40] investing there and you know, and I think what those buyer agents are also doing are basically investing their client's money.

[00:47:46] Chris audio: Right. And you're making a gamble. And often, I don't feel like it's on long-term [00:47:50] fundamentals. It's basically trying to base and capture speculation on markets. And and I do think you gotta be a bit careful with that. Like when, why I talk about investing is I'm saying, well, [00:48:00] you know, what you're trying to do is get an asset because most people wanna buy and hold.

[00:48:03] Chris audio: If you don't ask those investors what their plan is, well it's buy and hold.

[00:48:05] Veronica audio: Yep.

[00:48:06] Chris audio: Well that is that really the thing you wanna buy and hold forever for the next 30, 40 years. [00:48:10] And most investors are, you know, at least looking, you know, got 20, 30 years to retirement. Like they've got long timeframes. And it doesn't mean you have to sell it at retirement.

[00:48:16] Chris audio: You could hold it for another 10, 20 years into retirement.

[00:48:19] Veronica audio: Hmm.

[00:48:19] Chris audio: [00:48:20] if you think about it like that and you think about a 30, 40, 50 year timeframe, you're gonna hold this property. Are these the properties you wanna hold? And yes, you can make money here and you pay capital [00:48:30] gains tax and then you have to trade it and then you might get it right and you might then get into a capital sitting.

[00:48:34] Chris audio: But these markets don't stand still, right? and yeah, maybe someone might have be a bit [00:48:40] frustrated if they bought a house in Melbourne over the last five years and go, but the power person who bought a good house in Brisbane, you know, back in 2016, they've done all right. probably done all right in Sydney.

[00:48:49] Veronica audio: but they [00:48:50] would've sat for a number of years thinking, when is this gonna do something for me?

[00:48:54] Chris audio: Absolutely. Yeah, exactly. it didn't tick in 20 16, 20 17. It was 2020 and they went through the roof. Right. [00:49:00] but yeah, they bought a, you know, an older house on a good street, you know, with good aspects and a quiet, you know, et cetera close to. So they bought a good asset and they just waited and then time and [00:49:10] maybe they're gonna go through a platter period.

[00:49:11] Chris audio: It doesn't mean they sell, they're gonna hold it. Right. They know that that's a, a good asset in, in 10 years after that. Yeah.

[00:49:17] Veronica audio: it's like value investing. It's like, you [00:49:20] know, if you have done the work to buy a good asset in the first place. You just then have to trust that you did the work and be patient

[00:49:28] Chris audio: yeah, and it doesn't make sense to sell. You [00:49:30] don't really wanna sell a net if you bought 700 ounce square for 1.6, well, this is actual clients I can think of. Like, you don't wanna then go, Hey, let's call it 800 ga grand of net [00:49:40] gains. You know, like 200 grand of capital gain tax. No thanks. It's covering itself.

[00:49:44] Chris audio: I'll just leave it there. and so, yeah, I think, um, obviously we've had a good year. Obviously another 50 episodes [00:49:50] done. I think we're eight years in. We have, you know, no plans to stop this. if you're worried. and we'll have 50 new guests next year. we'll learn a lot, hopefully you will too. and if anyone you [00:50:00] think we've missed or conversations we haven't covered, please send them through.

[00:50:04] Chris audio: because yeah, we're always looking for new angles to discuss.

[00:50:07] Veronica audio: Love it. Happy New Year.

[00:50:09]

[00:50:09] Veronica Morgan: [00:50:10] If you have a question that you'd like us to answer in an upcoming q and a episode, you can send us a voicemail or written question via the website. The elephant in the room.com au. [00:50:20] Or you can email us directly at questions at the elephant in the room.com

[00:50:25] Veronica Morgan: au.

[00:50:25] Veronica Morgan: If you like what you're hearing, please share this episode with others you feel would benefit. And [00:50:30] while you're at it, why not leave us an iTunes review? Five stars would be great. I know that sounds a bit cringey, but we have it on good old authority that every review helps make it easier for other [00:50:40] people to find out about us and hear what our amazing guests have to say.