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Jump on board this week's episode of 4one4 Property Co. The Property Pod, as friend of the show and principal of RAMS Hobart, Andrew Leggett, returns to talk about the recent interest rate rises and what it can mean for you.
Andrew also runs us through the recent sale and purchase of his own property- Another cracking episode of everyone's favourite Tasmanian real estate podcast.
A fun and accessible look into Hobart and Tasmanian Property with 4one4 Property Co. Real Estate Agents, Patrick Berry and John McGregor
John McGregor
Tried to run a this is very much an experiential open home rather than just to, you know, take names, kick ass sort of thing. Hmm.
Patrick Berry
Now let's get.
Aaron Horne
Back to how we run on time. That's. That's J. Mac's motto. Going was going to. I know you're listening to the property. All right, guys, welcome back to the Property Pod, your weekly engagement into real estate here in the Hobart marketplace. I'm your host, Aaron Horn, and it gives me great pleasure to be joined once again by real estate agents.
Aaron Horne
Here at 414, I'll probably go Jodie McGregor and Patrick Barry. Welcome back, boys.
John McGregor
Gentlemen.
Patrick Berry
How's it going, everyone?
John McGregor
Lovely to see your faces, as always.
Aaron Horne
Yeah, we missed you last week, buddy. You were you out with the spicy couple we had the week before that. Where? Part of the spicy cough? Yeah. You then. Must have been my turn kissing and smooching him.
Patrick Berry
Okay, let me make exactly that.
John McGregor
We've got to remove those hug sessions.
Patrick Berry
When I told you they'd find out.
Aaron Horne
Look, it's good to have you back. I know you're feeling a bit under the weather. You're actually in the wars. You've got busted thumb, a spider bite on your leg. You've had a spicy cough, as you literally I thought that coming through this week, you just had a really rough time of it.
John McGregor
It's brutal. It's very hot. Yeah, it's I've got to get to air to get it sorted. So that'll be the end of it hopefully.
Aaron Horne
Yeah, they might just love it. I'll just.
Patrick Berry
Tell him all.
John McGregor
That they've done all right in a good run.
Aaron Horne
I reckon what you should do is get that massive pen you've got, which is, you know, this fat. Oh, huge thing. Just get the thumb chopped off and have it installed on there as a.
Patrick Berry
Contract by the contract.
John McGregor
I love them because it still would have been grabbing of the palm in there too. So it's quite good. But what is.
Aaron Horne
Poignant.
John McGregor
Yeah, yeah. In Alaska. I'll ask the documents.
Aaron Horne
Yeah. Just say they're doing amazing things with surgeries these days.
Patrick Berry
Body modification. It's a big thing these days. Exactly.
Aaron Horne
Yeah, yeah, yes. All fun and games in the studio. Once again, the thing we're quite excited about is we brought a friend of the pod, Andrew Leggett, back in the the king of Rams himself. He's come to say goodbye. We've been it's been a red hot minute between shows, my man.
Andrew Leggett
Yeah, it has been a little while speaking because if we're going to get invited back to the building, it's all right.
Patrick Berry
It's been a slow week for us to figure out something to talk about. Yeah. So are you back? Right.
Aaron Horne
Well, speaking of health issues, like I think last time we had you on your kicking fit, next thing we know, you're down on the count with the jack jump, a bite or something.
Andrew Leggett
Along the lines. You've had a bit of a delayed anaphylaxis, which knocked me on my ass for there for a little bit that now we've got through that.
Aaron Horne
Thank God. Look, it's so good to have you back. We we have missed you on the pod. And, yeah, it was it was so good when you were filling in in the seat back in the day. And yes, we are if you've been listening along, which I'm sure you have been, you would have noticed that. Yeah, it's been a bit of a bit of a battle to get the crew together for this year and and get everything running.
Aaron Horne
But we're running strong and we're kicking butt at the moment, too.
Andrew Leggett
Thanks again for having me.
Aaron Horne
And not a problem to to kick everything off before we get into any of the heavy stuff. I did want to kind of run over your living situation at the moment because I believe things may have changed or in the process of changing since last time you're in the studio, you want to give us a rundown of what's been happening in the world of Andrew Leggett and his family.
Andrew Leggett
Yeah, so my wife and I decided to cash in on the on the healthy market that was and decided to move a little bit closer back into the city. So it's all pretty much a done deal now. I'm just waiting on move dates and and settlement. Yeah. So you're.
Patrick Berry
Moving to Rosetta link.
Andrew Leggett
It. Yeah. Yeah.
Patrick Berry
It was actually about 100 meters away from my house, which is what the catalyst was for me to move myself. I could say like an hour ago. Wait until we move on to where it's time to move.
Aaron Horne
So yeah, give us a rundown of kind of the process of what happened. I know like it's kind of sometimes we pump up our own tires in here, but give it to a stride as you can. How do you find the process of selling? I assume it was a follow on for Property Guy.
Andrew Leggett
It was.
Aaron Horne
It was just one of the wanting to make sure that we were talking out of school. But yeah, give us just give us a rundown of how it all went kind of you were kind of working with Pat initially, but then you kind of teamed up with Sam alright as well to, to kind of build a mega team and.
Aaron Horne
Yeah. How did the process go and how did you feel about it all.
John McGregor
Well. And did you follow any of your own advice.
Andrew Leggett
Well actually that's the thing. It's I have been on here a few times and I said, this is the process, so this is how you should do it. I did none of that.
Patrick Berry
You're on your own way to say to me when you're in the city.
Andrew Leggett
Yeah, that's right. Now it gets a little bit worse, which I don't know if I've actually touched on this with you guys, but Rene and I did make an offer on a property whilst we were in isolation with Cove It sight unseen.
Aaron Horne
Oh, so you've luck. You've pulled out all stops and you've been like doing the traditional online shopping way. I've got so much time on my hands, I'm just doing whatever I can. You roll into a house like it's not even just like I bought some wild undies that like a light up or something.
Andrew Leggett
Yeah, it wasn't. It wasn't like a standard Amazon order. No. So this house looks good. Sent the parents round and the old man said, yeah, she put an offering.
John McGregor
So it's.
Andrew Leggett
Yeah.
Aaron Horne
And I was, I was not over this plans. Okay. So you've put the offer inside I'm saying. Yeah. Which yes I'm pretty sure we haven't recommended in the past but sweet.
Andrew Leggett
Yeah. The agents come back and said if you just come up a little bit, you might be successful. Yeah. And it was at the pointy end already, so I said no thank you. Yeah. Interestingly it was just around the corner from the old stomping ground up up near Purdy.
Aaron Horne
Oh, yes. Oh, who was I talking to? We were talking about that end of the world when you were living up there and Simon Deighton and such over the weekend.
Andrew Leggett
Yeah, so we missed out on that one.
Aaron Horne
Okay. I'm going to say this doesn't sound like Rose Attic.
Andrew Leggett
No, not to missed out on that one and sort of went back to the drawing board and I looked at I looked at the financials to see roughly what was what was possible, but never lodged an application.
John McGregor
Okay.
Patrick Berry
I guess working work we normally like is for our purchases to be preapproved.
Andrew Leggett
Yeah, that's right. I rang Pat and said, Hey, how much can you sell my house for? Um, didn't even come out and have a look. We just looked at some data law and I thought, okay, yep, that's close enough. I looked at a few properties. There's nothing that was really jumping out at me. And then my wife said, Alright, come and have a look at this one.
Aaron Horne
So I guess in your heart of how you decided that the offer that you were making in isolation wasn't fully in isolation of just kind of like a on the spur of things. It was like, no, we really do want to make a move and and change things up. So it wasn't just kind of willy nilly. We've got to move.
Aaron Horne
Now, this was actually a calculated thing where you've decided we are looking for a new place.
Andrew Leggett
Yeah, it's sort of just it just happened.
Aaron Horne
It just ran. You just ran with it as you were going?
Andrew Leggett
Yeah, we sort of discussed the idea of moving. Yeah. And then, yeah, next minute we've made an offer.
Patrick Berry
So you're our favorite type of buyer? The passive. Passive, impulsive buyer. All say dollar signs while I sort of make you feel a certain I'm really here.
John McGregor
Yeah. So I.
Andrew Leggett
Ended up at an open home just above Rosetta.
Patrick Berry
Barrett out Rosetta Heights.
Andrew Leggett
Residence and I spent the bulk of the time talking to the agent, so I didn't really. I had a walk around the property. Yeah, it felt good, looked good, but didn't really take too much in mind. He asked. You could take a contract and have a chat about this and I hear my wife behind me say, I've got the contract we're making an offer.
Patrick Berry
Okay, what's another tip for listeners? Don't let a real estate agent here that's said, yeah, keep that on the down low and.
Andrew Leggett
So of course I knew that we'd be subject to sale. I thought, No, no, I know we're not getting this house.
Patrick Berry
Yep.
Andrew Leggett
And then, yeah, I found out that the offered by and accepted subject to sale. So we had to go in in a guy mode because there was renovations that had to be done on our house, out a tree and, and this is.
Patrick Berry
Probably the big difference. So I think with why you were successful in getting your buy started, why you were successful in winning the other home, was that when the decision when you got the word that you'd got the property, it was just full steam ahead. Oh, but renos were happening like decluttering was taking place and the transformation of what it was like before you did the work to the day the boys went, did the photos was huge.
Patrick Berry
Just looked like a completely different house.
Andrew Leggett
Yeah.
Aaron Horne
So I guess that comes from Yeah. Knowing that the button needs to be hit and you've got to have motivation of like, we've got this place we can get it if we just do. This leads to like touches which were recommendations from Pat and Sam and then also knowing like these are the things I've always dreamt of doing.
Aaron Horne
Let's get them finished. Like even just that landscaping at that front little section saying the photo from kind of when it was needed ammo. So then when it became this beautiful little kind of, oh, you can park six.
Andrew Leggett
Garcia Yeah.
Aaron Horne
Massive difference just and literally, like John will always say, taking the box out of like you don't roll and oh, I mean really good difficult part because there is a part Cassie and then Mike you want over in that little bit.
John McGregor
That eliminated the idea that once a in here they'll do a back out. Well there's actually plenty space when you get in there.
Andrew Leggett
Yeah. Yeah, that's right. Sorry. So I've got signed the contract with the four and four and we've got the property listed. All was looking excellent with the open home book and then phone call from my good mates said I've got this bicycle, you know.
Patrick Berry
I love that. Oh he strikes again.
Aaron Horne
I actually, I had actually discussed with him having like a wine tasting kind of thing at the open. I'm just being like really sell the idea of it's like on an old vineyard space that have one, be kind of wine, have blackcurrant juice and just make that like kind of come on the wine tour of what's sometimes called crosswords.
Aaron Horne
Crosswords, come on the wine to have questions and things I got as far as a golf like I mean it's part didn't you upgrade didn't you get Paul the.
Patrick Berry
Same except this is our group team.
John McGregor
Yeah that's the already because the cassette that I identified the buyer bought it and same name and Shelby.
Aaron Horne
So there you go it just goes to.
Patrick Berry
Show of the open because he didn't meet his end.
Andrew Leggett
You know. I mean, I just.
Patrick Berry
Did something myself.
John McGregor
But we did have the coffee van, which is great because where there was myself and Marilyn, so when she took the details, I got Dom to order up the coffee for them. And then the first thing for me was to walk around and point out the different elements in the history of the home while they waited for their coffee.
John McGregor
Once the coffee was ready, then they were ready to go on the tour. Yeah. So they had this, you know, it was a nice experience. We didn't get the one aspect of it, but they got it was it did feel more like a, you know, a wine tour in that sense, as opposed to just Let's rock up. They get your name and walk through and do your own thing.
John McGregor
They had a full history of the house before they even walked in. Yeah, excellent. It was. We tried to run it. It's. It's very much an experiential open home rather than just to, you know, take names, kick ass sort of thing.
Patrick Berry
Now that was again, we ran out of time.
Aaron Horne
That's that's Max Smarter.
Patrick Berry
I'd love to see a T-shirt that reads Take Names and.
John McGregor
Yes, it's a it's it's an image.
Aaron Horne
So so yeah. Obviously you've had the full time effort. I actually didn't realize it went across the gamut of kind of everybody. But yeah, open time went well and you were able to achieve what some would have said was impossible by selling in the short period of time and getting what you wanted and being able to Yeah. Chase your dream home.
Patrick Berry
It says he doesn't didn't follow any of the rules himself, but he did. He got the place ready. And like in this market where it is a little bit quieter than what it has been like, he was able to make sure the home had everything perfect in it and present it correctly. And so he did go that extra step that a lot of people don't, but they're going to have to start doing that more as we start to shift into this new marketplace.
John McGregor
The conversations that we're having are very, very different than the conversations we're having. Six months ago. And are you noticing the conversation with your clients changing, too?
Andrew Leggett
Yeah, they certainly have. Yeah. Borrowing capacity has become a bit of a beast.
Aaron Horne
So so again, I always claim to be the layman on the show and I feel like I can kind of say I know a bit more about real estate now, but I still know nothing about all this interest like I really am. At the bottom end of the I luckily went in with you guys at a fixed rate, which seems like I won that bet.
Andrew Leggett
Yes.
Aaron Horne
But can you explain what's going on in the world of interest rates and inflation, all this stuff at the moment? To a layman like myself and.
Andrew Leggett
A lot now you need to give yourself more credit when.
Patrick Berry
You work in the room with that real estate dotcom event the other day.
Aaron Horne
Oh, yeah, baby. Bringing it home. Bringing home the bacon.
Andrew Leggett
Right. So a Reserve Bank is saying we need to slow inflation and to do that they keep lifting rates, banks keep passing rates on. So rates have gone from staying in the one. Yeah. To sort of early threes mid thirties at the moment for owner occupied. And then of course as I've touched on in the past we had a buffer rate to that for assessment purpose.
Aaron Horne
Yeah, for.
Andrew Leggett
Sure. So we know that someone is good for a much higher rate.
Patrick Berry
So you're still applying the buffer, right. So before when it was at one or 2%, it was like you're assessing it four or five from memory way. Yeah. So is that buffer now seven and eight for instance. So the buffer still exists. It's just at a higher.
Andrew Leggett
Yeah, that's right. Yeah. Someone that was we were looking at serviceability for say 5.25, that buffer might be now at 7.5. So capacity has come down and plus cost of living has gone up. So it has it's it's shifted things for people, definitely. Yeah.
John McGregor
And is that been surprising to your clients to hear that like that new information or are they and are they drastically under assessing their living expenses sometimes to.
Andrew Leggett
Now I think will the interesting thing is with living expenses we don't look at specifically what what they are spending so we go through and ask the questions. But there is a there's a threshold. So if they understated the their living expenses, the thresholds, he's higher. We adopt the higher figure.
Patrick Berry
Okay. So yeah. So if they say off only spending $100 a week on food and you your data suggests that, you know 250 is the the minimum.
John McGregor
On average people want to spend X.
Patrick Berry
Do you apply the average. Yep. But if they said sorry, we're spending $300 a week, you sort of take them there. And if that sounds right, that's it.
Andrew Leggett
Yeah, it tallies it all up. Yeah. If there's anything over what the actual deemed cost of living is, that gets loaded in as an extra expense.
John McGregor
Okay, yeah, that makes sense.
Andrew Leggett
Yeah.
Patrick Berry
Cool. So a word of advice is what I'm hearing. Leggett is under quite everything, and then you just help them up to the minimum where it's going to be rather.
Andrew Leggett
Than having the extra. Okay. Can you spend 100 bucks on groceries?
Aaron Horne
But we were investigating pretty lean. Yeah.
Andrew Leggett
Right.
John McGregor
Well, I know from the conversations we're having with first time buyers, which, you know, is the the beginning of the driver of a market, generally speaking, is I'm hearing them say, what else are you got, you know, or.
Aaron Horne
Okay, so rather than before being like, I've found a place that's okay, I'm just going to put an offer in anyway. It's kind of yeah, well opening up to say let's say three or four places before we if the pinch doesn't feel as.
John McGregor
Tight, I don't want a rush taking my time, you know, because the, the, the general messages coming from the, the greater market use, etc., it's not the same pressure that it was. So there's not that, oh my God, you know, things going in overnight or prices going crazy. This the message is changing in some ways I suppose people psychology with that and they are taking a little bit more time looking at a few more houses and also to because they have the capacity to do it.
John McGregor
With that said, the there are still the properties. There are, you know, garnering, you know, 15, 20 people getting those multiple contracts, but they're not just spread across the board. They've highly specific as opposed to, you know, it's the exception rather than the rule.
Patrick Berry
Yeah, it seems to be like, well, in our marketplace, the two bedroom units in Moonah Glenorchy still getting those 30 or 40 people to an open home. But then you've got a big family home. It's getting, you know, five or six. Exactly. It seems to be that the you know, there's no set sort of understanding as to why some properties are still more popular than others.
Patrick Berry
But I can only assume it's like the two bedroom units are a lot cheaper than the family homes. So maybe they're in the budget where people are still able to to buy, so they're still popular. So we're like it's describing someone that might have been able to afford that three bed, one bathroom house is now having to change their buyer.
Andrew Leggett
To shift their focus a little bit.
Patrick Berry
Yeah, so the prices a lot.
John McGregor
And I guess with that too, Andrew what's the is it a sense of urgency that change from your clients? Have they what are they asking you at the moment? What are you saying? What are the conversations? How has that changed for you personally as well?
Andrew Leggett
So yeah, it looks from what you've said, I'm seeing something similar. So it's gone from someone's coming in and saying, Oh, look at this house, I want this house I'm going to buy this house to. What do you think of this one? I'm looking at a few this weekend.
John McGregor
Oh, okay. Yeah. So they're even asking you for opinions rather than give me the house.
Andrew Leggett
Oh, yeah. And as you guys do, we offer that the comprehensive property reports. So and we, we explain that in our interview process that if they see something I like reach out, get you a report. Yep. So that's sort of just sort of went by the way I saw it, it was just people coming back. Yeah, we've got a house in the contract too now.
Patrick Berry
Trying to be a bit more educated on what they should offer.
Andrew Leggett
Yeah. What. What do you think? How does this one stack up? What does this one look like? Do you think there's going to be any issues with valuation, etcetera, etcetera?
John McGregor
Yeah. Yeah.
Patrick Berry
And how have valuations been?
Andrew Leggett
Not actually, not too bad.
Patrick Berry
So its value is still say that the contracts that are coming through are worth what people are paying for them.
Andrew Leggett
Yeah. In terms of purchases, no issues. Refinances have been interesting. Quite a few valuations have come back a lot lighter than the clients expectations or what our core logic data said as well.
John McGregor
And this property properties purchased within people bought in the last 12 months or just a general refinance just a.
Andrew Leggett
Just a general refinance. Yeah.
Patrick Berry
I think tend to say that affair between any marketplace is that when there's a contract on a property, the valuer is able to say, well, someone was prepared to pay that for the property. So they find it easier to value up a home. Like a great example. Over the last two years you've been you know, you get your press and Roy Patterson valuations done before you go to market on a property and quite often you'll sell it for more than those people then need to get it valued in finance and the valuation comes through.
Patrick Berry
Correct. And to the deal. Sorry. Yeah. So it seems that value is when they don't have a contract to base a price opinion on. They seem a lot more reserved than they are. If the property's on the open market and they're able to talk to the agents and how many people get through, how many offers.
John McGregor
Can we justify?
Patrick Berry
Yeah. Can we. Yeah. Is this fair market value for the property?
John McGregor
Yeah, absolutely. And I guess too with that this coming landscape with people being concerned how they can be on a secure property, I mean, there are the government still has those little bit of extra schemes like homes here and stuff like that have been raised to $600,000. The thresholds have changed. So, you know, there are avenues, I suppose, Andrew, where, you know, people can go to secure those loans that they otherwise wouldn't have even 12 months ago.
John McGregor
Is that right?
Andrew Leggett
Oh, definitely, yeah. There's been a great enhancement on that. On the homes. Yeah. Yeah. So yeah, change the income thresholds, change the deposit requirements and it's, it's it's going to be fantastic for the first home buyers.
Patrick Berry
And I think as we've spoken about it before as well, John, it's now not just brand new homes but existing homes as well. So yeah, that's how hard it is to build at the moment. They've opened it up to existing properties as well and you know, we'll probably look into that in the future episode to really unpack what that means for those buyers.
Patrick Berry
But I think there's a real opportunity for first time buyers out there to get back in the marketplace. At the moment there's competition, a bit of wiggle room to negotiate. Yeah, but it's something that they haven't had access to for probably the last three or four years. And you know, we've rent starting to go back up and, you know, getting harder to find a rental property.
Patrick Berry
I think there will be people that you know, will be able to make the move from being a tenant to a property owner over the next year or two.
John McGregor
Yeah, I'd love to see that. I know from, you know, the practitioner's perspective, it is nice to actually spend a little bit more time in these relationships helping people find a home in a much more calm environment, I guess you'd say, rather than just, you know, being I'm seeing so many faces rather.
Patrick Berry
Than taking names and kicking out.
John McGregor
Even from our jobs just a little bit where, you know, we we have to really nurture that relationship with buyers because they the you know, the that's where the value is a lot of the time because when there's not as many people looking, they're not throwing contracts at owners properties. Well, we have to work that. And they it may be a case they've looked at it twice and then they disappear for months.
John McGregor
We call back, okay, now I'm ready to buy that house now. Yeah. And they'll take their time as opposed to being like pets before. And are you being. If I have a client which is passive, it involves look back.
Aaron Horne
I think I think we'll wrap it up there. There might be some more stuff to dove deeper into. I think there's some more interest rate rises coming or there seems to be info that maybe I think.
Andrew Leggett
The writing's on the wall.
Aaron Horne
Yeah, yeah, yeah. So I think.
Andrew Leggett
There's going to be a few more.
Aaron Horne
And so just before we go, is it doom and gloom or is everything going to be okay? Like what's.
Andrew Leggett
All right? Look, I still think it's just going back to normal. Yeah, we've been blessed with low rates for a lot of people that have bought their first time in the last couple of years. The thing is, wow, this is awesome. This is pretty cheap, but it's just going back to normal.
Aaron Horne
Yeah, just setting back the status quo and then we'll just move forward from there.
Patrick Berry
Yeah. And if you are worried, just go find a baby boomer and ask them and they'll say, back in my day, 75, I've been isolating. Yeah. So if you ever feel bad about the right now, but just go find someone to talk to that's old and you'll. You'll feel better.
Aaron Horne
Right? About right. I would keep that in mouth and also. Well, mate, thank you so much for coming in and joining us once again. Thanks for running through your your little side story there. We look forward to the Google Review popping up soon. Just saying how awesome four and four is.
Andrew Leggett
One store. Oh, all right.
Aaron Horne
Thanks a lot. Thanks for coming back into the studio. I hope you're feeling a bit better after your little time away with the coffee. And good luck with all your other surgery to get you some fingers.
John McGregor
All I could imagine next week I've got an eye patch to see how that has.
Aaron Horne
I think comedy skit awesome thanks for listening to the probably put guys that way we'll be back next week with more and more show.
Patrick Berry
Say.
Aaron Horne
Bye.
Andrew Leggett
Bye. I've been listening to the property.
Aaron Horne
Both recorded and edited by Foreman for Media House in conjunction with.
Patrick Berry
The full one for Property Code. This podcast is General Information Only and the thoughts of views expressed is the opinion of our panel and listeners should always then use their own investigation into any topic we discuss to ensure they fully understand their own situation.
John McGregor
It does not constitute and should not be relied on as purchasing, selling, financial or investment advice or recommendations expressed or implied. And it should not be used as an invitation to take up any agent or investment services. No investment decision or activity should be undertaken on the basis of this information without first taking qualified and professional advice.