Twenty 18 was a very interesting year in the property market where we saw the peak of both
Melbourne and Sydney as well as seeing those markets going backwards a little bit. I think
southeast Queensland and Brisbane did go up throughout the years. I correct, yeah. I think
golden had four percent. Sunny coast did almost seven percent in Brisbane. Surprised everyone
doing almost three percent. So when you guys are thinking that everything's over for the
Australian property market because Sydney and Melbourne have gone backwards. That's
not necessarily the case over the entirety of Australia. And so looking at those results
from 2018, I want us to take some time today to interview Ben. Bit of a different vibe
here. I'm going to be interviewing him because this is his specialty is is 2019 a good time
to be investing in property and we were talking about the different markets, talking about
the Australian market as a whole and also talking about met you guys and your investment
goals.
So initial thoughts. Ben, what are you thinking? Going from 2018 into 2019 with the current
state of the Australian property market, the biggest thing that I've noticed in terms of
the last five months in the Australian market is a nationwide shift in sentiment and we
know that investors and humans are creatures of habit and when the herd moves one way,
generally the rest of the herd moves with it and so you know anybody that's invested
in shares understands this. Anyone that's invested in Crypto, anyone that owns a business
or is in a job that is in an industry where cycles actually have an impact, would understand
this. Anyone that's an investor understands that things go up and down, but people's sentiment,
which drugs the marketplace has moved from. Okay, let's see what happens to our. Okay,
let's sort of see what happens and just watch it for a little while.
Yeah, so obviously we had, was it 2017 and color? I'm not sure if the 2018 was that frenzy
in Sydney and Melbourne where people were just buying property sort of mid seventh,
2017. I felt like it was the top of New South Wales and then I think by the end of 2017,
early 2018, it was the top of Melbourne, so there'd been actually topped out for a lot
longer than people expect. Like I, I believe the current downturn has been running for
almost 18 months now in Australia. We just haven't really noticed. Yeah, people just
haven't noticed that it was an actual downturn. Like when you look at indicators that I look
at, um, it was pretty clear to see, you know, Perth is almost down 25 percent now from its
peak or sorry, Darwin's almost 25 percent down from its peak pervs 15 to 20 percent
down depending on whose data Sydney's now.
Ten percent down from its top depending on the suburb and Melbourne's, you know, potentially
again whose data three to seven percent down. So it a wide. We've been moving in this direction
for awhile. It's just that maybe has really been hammering home for everyone for the last
six months. Yeah. So while they, Brisbane different, like why did Brisbane grow in this
market when Sydney and Melbourne went backwards? Um, there's a number of reasons why. And again
for 2019, um, I think it's going to be a relatively flat year. In fact, I believe it's going to
be a year in most marketplaces. Sydney, Melbourne, Perth, and Darwin as well where property prices
will continue to go backwards. I don't see Brisbane or southeast Queensland running away
as a whole. I mean running away like Sydney and Melbourne, 10 percent plus growth, the,
you know what I mean, like crazy speculative growth.
Um, but certain suburbs are performing extremely well in south Queensland right now. Like I
got a text this morning from rory, one of my clients we bought from a suburb 21 case
in the city for him. He's like, then just checked out quarterly growth three percent
this quarter. Just checked out 12 months growth of 10 point nine percent. Good effort night.
And I'm like, fuck you bro. Sydney's gone backwards by Chad present. You're not 20 percent
on where you were going to vegas and we're having a laugh about it together, but why
I want to frame the conversation is to, you know, it's, it's definitely not a year where
everything you buy is going to turn to gold. Certain markets in Brisbane and southeast
Queensland and I think southeast Queensland will be Australia's top performer. Hobart's
still might keep running away, but who the fuck wants to own Haber?
Seriously, like not when it's gone up by 50 percent in four years. Whereas Brisbane didn't
have that run when Sydney and Melbourne and Hobart and everything went up. Brisbane, it
just steadily increased. It didn't have dramatic double digit growth. Yeah. So Brisbane actually
hasn't had any meaningful prospect at all were coming into its 11th flat year. And what
do you mean by flat? Yeah, flat year to me as a year without any double digit growth.
Okay. So it's still growing. It's not completely flat line, zero percent growth. It's growing,
but just not. If you look at core logic in the last 10 years, it's done zero point nine
percent per year. So it's done less than one percent per year for a decade now, Brisbane,
which is pretty close to the heart, they just there, but it's not telling too much, but
that's the problem with averages because certain suburbs in Brisbane have done 60 to 80 percent
in 10 years.
Others have gone backwards by 20 percent. Others have just tucked away it three or four
percent. So average is you've got to be careful of. But the reason Brisbane is doing well
is one, it's been flat for a long period of time to according to the ABS, more Australians
and moving to Brisbane than anywhere else in Australia. Right now I'm three. We've got
$43,000,000,000 worth of guaranteed projects in pipeline, private and public that I can
see between Goldie, Brisbane and sunny coast over the next seven to 10 years, which is
just huge amounts of work with the current labor force we can't delete. Um, another thing
that's really interesting up here is that wages have been growing exponentially because
there's a shortage of skilled labor. And so the average household income in Brisbane vishy
we'll finish higher than the average household income in Melbourne.
I remember seeing that. We did a video on this where the average income in Brisbane
is higher, but housing affordability in Melbourne was obviously off the charts compared to Brisbane.
It's 57 percent more expensive in Melbourne to buy than it is in Brisbane right now. And
people in Brisbane on average earning more than people in Melbourne.
Yeah. So when we look at long term trends, you know, history suggests that the next 10
years, based on the last 50 years worth of cycles looks nice for Brisbane. It's, it's
the time of the cycle where things historically overnight and to 20th. So who do better up
here? Um, you know, an, uh, an issue that we had in Brisbane at 12 months ago. It was
a big topic of conversation that was all over the Australian majors. Brisbane is chronically
oversupplied by city units and we thought we're going to have 10 years worth of oversupply.
It's caught everyone by surprise. But according to mark Matousek now Brisbane's the only unit
market in Australia where it's under supplied from property fucking perspective like just
shows you, you know what I mean, to take everything with a grain of salt and I think 2019 is definitely
one of those years where you can buy the hype and most people will and smart investors like
you and I like it. There is serious buying operation.
So can it be a good time to buy in 2019
she. Yeah. Yeah. Like I mean do you want to, do you want to buy when everyone else is buying
at the peak for a profit or do you want to strategically buy the right market at the
right time at the bottom? Like I wouldn't be rushing out and buying Sydney or Melbourne
because even if they've dropped by 10 percent, they're still up 80 percent where they were
six years ago. Like Brisbane and Sydney have a ways to go. I still believe that they are
correct by between five and 10 percent. HTC, like there's still a full for Sydney and Melbourne
before we hit bottom. Yeah.
And obviously we don't have a crystal ball, so none of this don't take this as fact.
Just check out the videos that we're doing in 2015, 16, 17 where all of this stuff has
been documented for like three years.
Well that's the thing we were talking about when everyone was going crazy and Sydney were
like, this has to peak too soon. This just seems excessive growth. What is going on here
are just. I feel like we were talking about that, yeah, 18 months, two years ago that
we wouldn't really want to look at investing in those markets. And we've always talked
about, look at the Herron, todd white month in review report. Pick the markets that are
at the bottom or that are starting to increase rather than markets that are peaking or near
the top of their market cycle and investing in the right time in the market is really
important. And we've always talked about that as well as investing in a way that you can
be cashflow neutral or cashflow positive. Yeah, like
Chico Thousand and 19 and 28 going to be what I believe the two best years of buying from
a sophisticated investor point of view in Australia in the last decade. Why is that?
It's hard to say without being technical, but if you look at the time can go technical
and then I can explain it in layman's terms. So what we're coming into over the next two
years is the mid cycle. Slow down. If you know anything, if you had a history in Europe
or America, you know that a crazy amount of accuracy, good last two years he's made socket,
slide down, has happened and Australia is no different than America. We're so connected
to the global economy now that damaged sokolow recession points equal a midsize recession
points loosely and what a mid cycle, slow down point represents. People feel like the
whole world is going to fall on it's head right now.
Like that is a sentiment out there. People can't differentiate because they don't know
the history of what is happening right now, which is a point where generally stock markets
will get hammered in the next two years. Particularly the American one, which is ran away in the
last couple. I don't know about you guys, but I've been getting 30 percent returns in
my super fund for the last two years straight. I don't feel like that's sustainable growth
in the stock market. Um, because the Australian stock market is that pretty much flat since
the last ship, say it might not get this hammered, but it was still get hammered. And so what
happens is stock markets get hammered. Business sentiment and consumer confidence declines.
American might go into a recession if trump doesn't cook the books and allows it to happen.
John already cooking the books, Europe's cooking the books lack.
Everyone's doing their bit to like keep the show on the road right now. Um, and we entered
these point where property prices in some markets can go flat, some markets they'll
decline and we've started to see that in Sydney and Melbourne now. And you know, as an investor,
as a short term, as a person who's looking for short term opportunities without doing
major development, the next two years is going to be hard. But as someone who's got a 15
to 20 years strategy that wants to use smart timing to by far out, there's an opportunity.
So mid cycle, slow down is different to a full blown recession. So you get slow down
in the market. Obviously things drop a bit, but you don't go into full recession mode
like we did back in 2008. It's like less. Yeah, like because right
now when you're getting blamed, Berg in America, reporting that it fuck apple has $257,000,000,000
of cash sitting in their reserve and all of the big hedge funds around the world going
into cash right now and said that they can take advantage of the next two years and this
weight reporting front front page of the website that mom and dad investors at all in in America
and that across the world. A bunch of the tallest buildings are getting opened up in
the next year and all of these other indicators that you can look for for me will
point. So it's just that indicator of access that everyone's put everything into the market.
No one's got anything left to put in the building. There's excessive buildings. You coming to
the peak of the market. Then if people don't have anything left to put in and people are
selling, then it's,
you know there's the show stops, but the show only really stops for one and a half or one
to two year period and then because it might look like people that are all in. But what
I was trying to say there is institutional investors have a lot of cash in the bank.
Smart investors have cash in the bank right now to take advantage of these conditions
and companies like apple just have all of these cash that, that don't know what to fucking
do with it. They're not the only ones in the world that are in that position after a really
good run over the last seven years. And so people confuse this point as it's gonna be
like bank values. It's going to be government values. It's going to be like world war three.
It's going to be blood on the streets and certain people that are over leverage will
get hurt.
But what happens at the top of the cycle when we get to like a recession, depression, like
a JFC or you know, the 19 nineties like major recession that we had or before that it was
like 19, you know, just after 1970 type thing where people get fucking smash, like a depression.
Depression is apples or an apple doesn't have cash in the bank anymore. Like the institutional
investors have just bought the heart in such a way that they're all in all of the governments
around the world over leverage. All of the banks are over leverage. Every single person
that you know has been buying stocks in property like a magnum because it's running like crypto
did at the end of last year. Two thousand 17 and nobody can bail anybody out because
everybody's stuffed.
Yup. And so with that coming into that mid cycle, slow down, why does that make it a
good buying opportunity in 2019
anytime when not everybody's all in and when people are sitting back for no good reason
except other people around them and sitting back or fucking Carl on the today show told
people that, you know, they shouldn't be buying property, you know, like what the fuck does
a TV presenter now that anything except what to read off the other side of this rain. Like
it's not their core business, it's not. You know what I mean? So like anytime as Warren
Buffet says, when other people are being scared, I think represents a buying opportunity, particularly
when some markets have been running very, very hot for a period of time.
Yeah. So, but when people will be scared that investing in property, the market's going
to go backwards and then they'll lose money.
That's one possibility. Like at any time you invest in anything, you know, I'm not saying
go buy Sydney, Melbourne, Perth, Darwin, Hobart, or any regional market that's had a good run
over the last seven years. Today. Like this very, very good.
Picking Your markets in 2019, there's going to be less markets that will look awesome
and it's not going to be like buying in Sydney three or four years ago where you just going
to have a run. You really need to pick your market in 2019 and pick the right suburb within
that market as well. That's going to be. I know we've talked about this for years, but
that's going to be more important than ever if you want to see success.
It's one market right now, which is southeast Queensland and I already believed that the
taste is because it's run by 40 to 50 percent in the last five years that no one's seen
reporting on that Brisbane, North Brisbane, parts of the sunshine coast might represent
those short term. Who knows what's going to happen in 2019. All I know that there are
more and more and mold buying opportunities in this market right now than I've seen in
quite a while. And if you're an investor with a 15 year approach to doing this, then you
know, you might be buying somewhere close to the bottom in Brisbane right now. It could
drop by five or 10 percent in the next two years. Who knows how bad things are gonna
get. But you're some, your according to Herron, Todd White, bis shrapnel, corelogic, Michael
Matosich where somewhere very, very close to a bottom or a rising market phase now in
Brisbane.
And after, you know, we've had one other period in the last 50 years where we had 11 years
without a double digit growth year. Yeah. This would be like the first time in proper
recorded property, data history that way going into a period as long or as what for so long.
Like with more population, with more jobs, with more income, more infrastructure infrastructure.
Plus what Brisbane and southeast Queensland traditionally doing this second half of every
major 20 year cycle, I just, you know, I think 2019 it's going to be amazing, but it's better
than buying in 2021 when it's gone up by another 10 or 15 percent.
So what sort of investment should people be looking at in 2019 or what sort of strategies
should people consider that's different to what they should have considered? Maybe in
2016
you can't buy everything because the tide is not lifting all boats anymore. And in fact
over the next few years we're going to say a lot of people, you know, call it out because
the tide is dropping in some markets in some areas. Um, I think like always we should be
buying property with longterm potential for quality capital growth. So quality capital
growth, potential, low maintenance properties that are easy to rent in suburbs with chronically
under supplied vacancy rates, property, the great cashflow like you and I always talk
about, or the ability to add great cash flow through a granny flat and property with the
potential for some upside. So even if the market goes flat or backwards by 10 percent
in southeast Queensland in the next two years, you've bought it at a good price and you bought
something with potential to add some value. And if the market doesn't go flat or backwards
in just nine times, then you might be able to move yourself forward when other people
around you can't.
Yeah. So it's basically everything we've been saying for the last couple of years, which
is to pick your markets well, pick yourself a within that market. Well buy the right property
in that suburb or what the people in that suburb one and look for good cashflow as well
as opportunity to add value to the property. So basically it's a more risk adverse strategy.
You're not just investing in something for the capital growth, you're investing for the
long term growth, not just the next couple of years, but then also being in a good safe
and solid cash flow position where you're making money from the rent of that property.
So even if the market does drop by five percent, you're still making profit and you've bought
in the right area so that you get that long term growth.
It's just going back to the absolute fundamentals of property. Now. I've been working with a
lot of clients in Sydney and Melbourne this year as of you and I've been really doing
some analysis on the market this year as well, and if I think about Sydney right then I'll
look at the central coast, Newcastle and I look at Woolongong and then if I look at Melbourne
and I'll look at the Mornington peninsula in Melbourne or I look at the genome genome,
Jalong Peninsular in Melbourne to buy into Jalong. Right now you're probably looking
at 800 K for a high quality home, walking distance to the beach, maybe more anywhere
in the Mornington peninsula anywhere close to the city. You're looking at way over one
to one point 5 million bucks now. Anyway, walking distance of the water in Woolongong.
We're talking about well over a million bucks now for high quality home.
Same with the central coast. Same with Newcastle, like to be in the quality areas and these
are all just little tin towns like these are all regional market sitting next to a major
metro market and the price points is sitting at the new like seven figures, million dollar
price tags. You can buy houses on the beach in Brisbane that take all of those boxes that
we just talked about, 450 to 500 k right now like that. Two to three times cheaper and
Brisbane is going to be the actual size of Sydney and Melbourne. It's not going to be
a little jalong that he's hoping on like a high speed rail to make it part of Melbourne.
It's not Mornington peninsula, which is a lifestyle thing. Sixty ks away from the city
of Melbourne and Brisbane city. You know what I mean? Like artist think Brisbane represents
so much value right now or you've got to say that Woolongong, Newcastle, Jalong all inflated
by about two to three times their actual value right now and I just don't think it's that.
So that gets me excited. Like when I start comparing product, there's product and income
versus income and number of people moving versus number of people exiting and infrastructure
projects and potential because it's been so flat for so long, it just gets me excited
and then you overlay in election year when people sit on the fences because all my God,
there's a new government, like there's no correlation between government in America
or Australia or Europe over 38 period and price point. It might be temporary, but it
always swings like there's an election year. Like there's potentially an American recession
towards the middle to back of end of next year. Maybe in a small list. Ryan recession
over the next couple of on paper. Like a technical one is just shitty sentiment. There's, it's
hard to get money from the banks right now for some people
like these others. Hard for some people, easy for others.
So easy for people that are just getting started. So easy for people that are in good financial
position. So easy for people with good jobs and good incomes. And so all of those things
to me like, you know, as a 15 year investor looking at the Patriots, I'm like, yes, like
by the debt, not the top, you know, like if your stock market invest in like a bunch of
my friends are you by the 10 percent deeper every year, every three years you buy the
15 to 20 percent tip every seven to 10 years, you buy the 30 percent, Dave and I'll look
for the deep. I'm not like looking to buy a top of market so that this excites me. I
don't run away from it.
And that's one of the biggest things I've learned through investing in Crypto is by
the deal until the 26 k that was like a speed rating where like a crash course in market
cycles is cryptocurrency and obviously property works different to that and they're on different
cycles and stuff like that. But if you believe in something by the dip, if you believe in
property investing as a fundamental way to build wealth than buying the dip shouldn't
be scary. Especially if you're choosing the high quality markets. The right time in the
cycle, if you're buying something that's generating passive income through positive cashflow so
you can see out those cycles and still make money, then why wouldn't you buy the dip and
don't
you know when I took it, when Ryan and I are talking about Australia, we're not saying
you know by Sydney that went up by 90 percent and by the 10 percent gap in Sydney, like
Sydney is completely overvalued. If you understand your history in the next 10 years, the next
10 years, don't look great for Sydney from a, you know, longterm capital growth perspective
over that period because history shows that Sydney always comes out of a GFC. Well and
then for the 10 years after that, because it looks so hard, it doesn't perform as well
as some other markets in Australia. Now, I'm not saying history's going to repeat, but
you can learn from this history and you know, Brisbane, if, if at the end of next year or
the year after it's been flat for 11 or 12 years, it gets even more exciting to me because
it's just like at some point that's got to replace, you know, and you know, that that
stuff gets me excited.
Like don't lie Melbourne in the next year, don't by Sydney in the next year, like sit
on the sidelines and suck it and say there. But if you are thinking about achieving financial
freedom over 15 to 20 years and you have money and there is an opportunity to do something,
then wrap your head around southeast Queensland. Don't take our word for it. Look at what the
IBS is saying. Look at what Matosich saying, look at what Paul logic vis htw are all saying.
That's just information that we're feeding to you based on what we're reading from analysts
in the market. And you know, um, I get excited about a buying opportunity where sentiment
shocking. So think 20, 19 from what I hear can be a really exciting year to buy if you
have good fundamentals and it's very dangerous, you need to buy if you don't know what you're
doing.
So make sure you have a plan, work your plan, you get very educated about the market, the
suburbs, the property type. Yup. I'm all just do what everyone else is gonna do for the
next three years, sit on the sidelines and then you know, that's, that's an option for
some people as well. You know what I mean? Like sometimes doing nothing can be better
than doing something. But for those of you that have a simple plan like buying a couple
of houses, adding a couple of granny flats, knowing that you can do that for $400 in Brisbane
right now, like how much cheaper is it going to get bang than 400 k within 20 days of Brisbane
right now. Like how much cheaper can it go?
Exactly. Alright. So hopefully this has been insightful to you guys looking at 20, 19 as
a year to potentially invest in property. I hope that you take these, these tips, this
advice, this the way that we're looking at the market. Just thoughts with a grain of
salt. Yeah, taken with a grain of salt. Apply your own strategy to it would everything through
the lens of your own strategy and what you're trying to achieve to find the best properties
that suit you or to decide whether or not 2019 is a year that you want to invest in
the property market. There's going to be some great buying opportunities out there. There's
also going to be some high risk markets out there that may go backwards as well, so obviously
you'd be very careful in 2019, but it can be a great opportunity to move yourself and
move your health forward and move closer to your goal of financial freedom if you buy
correctly.
So I hope this has helped you. If you want to get clear on your goals, if you want to
talk to the team over at pumped on property about the current state of the market where
they're at. If you're thinking about buying, but you're nervous, you're not exactly sure,
you can book a free strategy session with a team over there. If you got on property.com
dot a u, you can book in a time that suits you, have a conversation over the phone, talk
about your situation, where you're at, where you want to be, and whether or not this is
a good time to buy for you and what markets you should be looking at. Then you can choose
whether to work with pumped on property, get their help if you want, because obviously
they specialize in the southeast Queensland market or you can go out and invest yourself
and make those decisions yourself as well. So again, check out on property Dotcom Day.
You took a free strategy session time that suits you. Otherwise we wish you the absolute
best of luck in 2019. Whatever you decide to do. We hope that you have a great year
and we hope that you finished a year closer to your financial goals, closer to your goal
of financial freedom
or united. Say One thing man, and I don't want to end the video and you're like a morbid
way, but I do want to say we'll. Anyway. I'm going to just as a disclaimer, the only thing
that I know about markets is they go up. Sometimes they go flat sometimes and sometimes I go
down. If you're an investor that still chasing short term returns like any of those things
could happen in the next 12 months to two years for anyone in any type of stock business,
property, commodity in the world right now, but if you're an investor looking for value
either the next 15 years and you are using that value investment driven approach. Then
buying these little opportunities that come up when they come up with confidence and not
expecting anything for the first five years from a meaningful perspective. Then the next
couple of years will represent an incredible opportunity in the right area and for some
people the next couple of years will be the years where they took money out of what they
made in Sydney or Melbourne. They tried to do more of Sydney and Melbourne and then I
ended up losing money like these are the top two years where people can get burned too,
and I just, I want everyone to tread with caution and go from a low risk approach, you
know, make sure to different ideas from a different bunch of people before you take
action at all people that are taking action, but in a lower risk way. So don't just take
what we say
no out there. Get look at different sources of inflammation. Gives much information. Educate
yourself as much as possible before you go ahead and invest. Yeah, no, it's great. This
is great and people love this. Thanks so much for tuning in. Everyone, go ahead. If you
haven't set your strategy for 2019, check out the video that me and Ben did on how to
get your strategy right for 2019. That will just really set you up for a great year. Otherwise,
we wish you the best of luck. Thanks so much for tuning in. Until next time, stay positive.
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