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The podcast series "Confessions of a Property Investor," hosted by Catherine Andrews, delves into various aspects of property investment in Australia. It aims to demystify the property market, offering insights and practical advice for both novice and experienced investors. The series covers a range of topics, including bank interest rates, property cycles, investment strategies, and market trends. It addresses common fears, misconceptions, and challenges faced by property investors, providing expert opinions and real-world examples. The hosts also discuss the impact of economic factors and lifestyle choices on property investment decisions. The series is designed to educate and empower investors by providing them with the knowledge and tools needed to navigate the Australian property market successfully.
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Welcome back to Confessions of a Property Investor. I'm Catherine Andrews, Managing Director of Chase Wealth Australia. Today, we'll be talking about the property market insights for quarter one of 2024. And with me, I've got none other than Michelle White, Director of Qualifications, the numbers girl. - Thanks for having me. - Yeah, you're welcome. You're welcome.(...) - All right, Michelle, we're gonna keep this one quick. Okay, Aussies wanna know what's happening with property. Is it going up? Is it going down? I'm gonna keep it simple. What happened with property in Q1 of 2024?(...) Why don't you tell our listeners quickly what resistance you may get from people that probably don't have an investment property, but think they know everything about it. Can you tell us what resistance you get with their view on the market?
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- Oh, easily, Catherine.
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(laughing) Okay, so resistance number one, how do we really know what's gonna happen with the property market?
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It's almost as if the last hundred years of-- - Didn't exist. - Ongoing growth hasn't occurred.(...) It's as if we haven't gone through some of the hardest times in our generation in the last five years, yet made it out more profitably.
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- Yep,(...) go on. - Get me, you get me?
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Property is something that even if it does take that short-term plateau, it always comes back again, Kath, and you know it yourself just as much. It's sometimes hard to put that into words and facts for somebody to really understand, even when it's right in front of them. - See, I've had it with those people. No, I've had it, okay? I'll tell you why I've had it. You can speak statistics and numbers to them. They're not listening because they know better. You said it well through the velvet glove of sarcasm. Which is true, but let's just let all our listeners, and there's the excellent ones out there that are humble enough to acknowledge, hang on a minute, maybe these girls are right. Maybe these girls do know what they're talking about. I mean, we wouldn't have been in business 20 years if we didn't. - That's it.(...) - So let's make it clear.(...) Even though the rates have jumped up, and even though they're sticking, we haven't seen a rate reduction since, oh my God, how long has it been now? - 2020, we're coming on four years. - 2020? - Yep.
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- Wow. - Yep, when the RBA put their rates to the record low of 0.1% in 2020, that is the last time we saw a rate drop. - That's a second wow from me? - Yeah. - Wow. Okay, that's, I didn't know that. I wasn't consciously aware of that, to be honest.
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But what we can still see, like you so rightly said, through that time, we've had COVID and all that, where property went up. Just in the last quarter, Australia-wide, property took a steady jump of 1.6%.
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Go to property, Australia-wide.
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And that's something where you probably think, yep, and I'm gonna tell you something else that's probably, nine times out of 10, people look at property increases or property values when they look at the affluent areas of a town or a city. Looking at Melbourne, for example, you would look at areas like Tewarack, South Yarra. Those areas have increased in their value. They're probably plateauing more out of the others because there you've got five,(...) six million, seven, $10 million homes, even more than that. So that doesn't matter if they plateau out a little bit. Where we're seeing growth is you're more suburbian, 20 kilometres out of the CBD or more, and regional areas. And regional areas include areas like Tamworth, in New South Wales.(...) You've got areas like Mackay, in southeast Queensland. Areas where you think, would I really buy a property out there? Well, for five, $600,000, you would, if it's gonna give you growth and you would tenant.
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So they're the areas that are helping increase the average medians, Australia-wide. And then what's happening is the actual cities themselves are probably not going up as much as what we'd like.
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One thing I did discover as well is that Brisbane and Sydney, so Sydney has the highest average property median in Australia.(...) Guess who it's followed by?
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- Did I hear correctly? It's changed over from Melbourne. - It's changed over from Melbourne to Brisbane. - Wow. - Yeah. - Wow. - Yep.(...) So Brisbane sits at about $895,000 as a median for property and Melbourne's dropped to 745,000. - Wow, gosh. - But that's because Melbourne had a massive boom over the last 20 years and it's the affluent. And I don't like using the word affluent, but it is those areas where you would look at,(...) top end. - Yeah. - Is another word for it. They're the ones that grew hysterically in Melbourne over the last 10, 15 years. And they're just taking a rest. They're just chilling at the moment.(...) But the regional areas in Melbourne are still growing. Mornington Peninsula is one.(...) Out Geelong Way, Lara is another. Torquay, Jadjuk, areas where you used to get holiday houses to buy land out there is in Armstrong Creek,
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which is down that one. - Armstrong Creek, we've watched grow from its early days. - Yes. - Yeah. - Yes. - So those areas are still growing.(...) So overall,(...) another thing that probably leads to growth that's happening would be supply and demand.(...) - Kath, very much so. The population movement through Australia is just working in our favour so drastically that it's actually at a point where we simply cannot house the people that we have moving throughout and into Australia.
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- Well, they're saying that councils now are not approving as much construction as what they were, probably because of the material costs and the amount of builders that went under. Overall, 12,000 homes were approved for construction in January,(...) roughly minus a quarter, a quarter less below the decade average and well below the 20,000 average monthly run rate of approvals. So what's happening is they're almost approving 45%(...) less than what they normally would. However, the population is growing. So where are we gonna house these people?
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- You're right. - So the demand is going to be that you may not see it now, but it's coming. And over the next 12 months, you can start gonna see an influx of people with nowhere to house them. - Yep, yep, spot on. That coupled with reduction of rates that are on their way at some stage, coupled with the tax cuts that are coming into effect from the next financial year, property is at the moment the perfect cauldron for massive, massive growth. - Yeah, it is. And they're saying property upswings are pretty much(...) something that does follow rate rises when they start to come down, the property market comes out of its trough and it goes into an upswing, but we're not just relying on the rates dropping. I think it's gonna be supply and demand more than anything. - That's what's kept it going today. - Yeah, yep. So overall quarter one, 2024, looks great. It went up. I haven't really seen it not. Even if it's 0.3 of a percent, it's still going up. It's more than I could say for other things in the financial industry.
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I won't go there. - Loving your style. - I won't go there. But look, overall, don't be scared. What's the worst that could happen when you invest in property? Let's say the worst thing happens and it drops by 5%.
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So? - It's only coming back again. And it comes back faster and harder. - That's right. - So overall guys, property is the way to go. You know this.
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Michelle, again, with our listeners and potential clients, what are some words you would leave them with? So when you do pick up the phone to talk to them, they know who they're talking to. What would you tell them? What is a statement of advice you would give them? The reality of growth. - Ooh, we, okay. Reality of growth, guys, number one. I know, but it's okay because honestly, I'm so passionate about what we do and how we help our clients. It's all about understanding the market, understanding your position as potential and future investors and holding your hand and guiding you through what appears(...) to be a really difficult way of building wealth and knowing that the property market will always work in your favor when structured the right way. And we've got you there.
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- Yeah.(...) Is that what you were after, Carol? - Yeah, well you meant that. She meant that. That came from the heart. - Truly. - You meant that from the heart, Michelle. - Truly. - And it doesn't matter what statistics we give people. At the end of the day, we know what we're talking about. We'll help mitigate their risk. We've got the professionals to do so. Do they have the guts to do it? - That's the question they need to ask themselves. Do you have the guts to do it? - I love it. All right, thanks guys. Appreciate you joining us and we look forward to seeing you at our next episode. Take care. - Thanks for having me. - See ya. Bye.