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Dear Fellow Property investors,
Did you know that Property Investors are swallowing up even more of the housing market?
In Australian politics there are relatively few issues outside of foreign policy that the two major parties can agree on. But there is one issue where both sides ostensibly agree: greater levels of home ownership.
In the run up to the last federal election, then Opposition Leader Anthony Albanese promised that a Labor government would help people achieve the “great Australian dream of home ownership”.
“For too long Australians who have worked hard have been locked out of the housing market by flat wages and rising prices, unable to even get a foot in the door let alone a roof over their heads,” Albanese said
Opposition leader Peter Dutton shared similar views on home ownership with the press late last year: “the best way to empower Australians — to make them masters of their fate — is through home ownership.”
The leaders of the major parties sharing this view on home ownership is nothing new. Over 70 years ago there were debates in federal parliament not too dissimilar from todays, in which the leaders of the Coalition and Labor made their case on which party would do a better job building more new homes and getting more Australians into homes of their own.
Rhetoric collides with reality
The peak rate of home ownership was recorded 57 years ago as part of the 1966 census, at which time 73 per cent of households owned homes. More recently, the Australian Institute Of Health and Welfare (AIHW) recorded a home ownership rate of 71.4 per cent in 1995. As of the latest data from the 2021 census, the home ownership rate has dropped to 66 per cent.
This raises an uncomfortable question for the nation’s leaders. After spending more than $20.5 billion on grants, concessions and other cash grants to first home buyers in the decade to 2021, home ownership rates have not risen, but instead have continued to decline.
Solely based on the decline in the proportion of households who own homes, there around 560,000 households who are renting today who would have otherwise been homeowners if the home ownership rate remained as it was in 1995.
Rise and rise
Despite rising levels of home ownership being the stated priority of both the major parties their policies have achieved the polar opposite. The AIHW data instead illustrates a very different trend: the rise of the property investor.
In 1995, 18.4 per cent of households rented from a private landlord. As of 2020, 26.2 per cent rented from a private landlord and this is arguably somewhat distorted lower by the snapshot being taken during the pandemic.
If we extrapolate that on to the current number of households as determined by the ABS, private landlords have roughly 810,000 more tenant households today than they would have if the ratio of private landlord held housing to overall housing stock remained the same as 1995.
Today’s market
According to data from the ABS, over the last 12 months 33.4 per cent of new mortgages for existing properties have flowed to property investors. In terms of new mortgages overall including construction loans and brand-new properties, that figure rises to 34.3 per cent.
By dollar value the proportion of mortgage lending flowing to investors recently hit the highest level since 2017, hitting a share of 36.2 per cent of all new housing finance.
With investors holding 26.2 per cent of occupied housing stock, this level of activity implies a growing proportion of the nation’s housing stock once more flowing to investors, unless otherwise offset by a much greater proportion of owner occupiers making fully cash purchases or investors selling out of the market at a greater rate than they are buying in.
[Music] hey everyone it’s Conrad Bobby here CEO of investors Prime real estate and bestselling International Au of Australian real estate investing Made Simple welcome to today’s video on why the smartest investors are back in the market and I’m going to talk about some of my most successful clients that are buying the 78 n 10th property right now in in this market and made lots of money in the last 24 months and 12 months I’m also going to talk about the 10 top charts of fundamental drivers of the current property Market as well and I’m going to share with you some of my thoughts about the best suburbs that have performed in Melbourne in the last 12 months and which areas to Target which areas to avoid and also just generally my ideas about the differences between investing in house to land Estates tow houses and apartments because this time around especially we are in the property cycle there’s going to be a lot of opportunities to make money in the short term and long term so welcome today’s video I’m very excited to be here and uh let’s get into it now before we get started bit of a disclaimer um everything today is purely for educational purposes only I’m not here to give you any Financial advice I never met you I don’t know your Financial Risk profile or financial standing so by all means before you implement anything make sure you speak to a professional a mortgage broker financial planner but before you do make sure they have the exact exact results that you want to achieve otherwise there’s no point talking to them and the only guarantee that I’ll make is if you don’t do anything you’re going to retire asset reach potentially asset reach but cash flow poor dead broke at 65 which is where the average Australian unfortunately ends up we’re the luckiest country in the world and I’m seeing people retiring on a million dollars in equity with no ability to draw the equity out relying on the government pension living a life of quiet desperation which is not ideal and you know what people are living longer and longer now I mean I’m seeing people in my gym at 6570 Pumping Iron 5 days a week taking neutr bullets these guys are going to be living for another 20 or 30 years so you got to make sure when you get there at the very least you’re going to have some quality of lifestyle and that’s what these videos are designed to do my whole YouTube channel guys is just designed to teach you about where the money is where the risk is which are is to buy which are is to avoid um and learn from other people’s mistakes and from other people’s successes because remember success always leaves Clues uh bit about myself for those who have never heard me speak before I’ve got a YouTube channel um which I do a video from time to time I’m pretty lazy I work a lot with my private clients but also I don’t actually work that hard guys um I’m financially independent um I have six holidays a year I work pretty much Monday to Friday 10:00 till 536 pretty much and I switch off and I have no inclination of working any we beyond those hours um apart from the odd weekend event that I do speak at so I I am pretty pretty relaxed with my content but um if you go back to my videos a lot of the topics haven’t really changed last 10 years only the landscape has changed the fundamentals just don’t change I’ve also got a degree in real estate mortgage breaking um deployment financial services financial planning the most important thing is guys that I’m a proper investor myself it’s not about the letters after my name it’s the it’s the the amount of money in my in my bank balance and the amount of properties that I have I’ve got a multi-million dollar property portfolio here in Melbourne that has allowed myself and my wife to live a very comfortable life um and uh and that’s why I’m sharing the information with you purely just to give back with there’s no vested interest There’s No Agenda I’m not a developer I’m not pushing a particular suburb guys there’s 480 suburbs in Melbourne I don’t need to make a suburb look better or worse than it is it is what it is I’m in the market all day long I’m 47 I’ve been doing this now for 27 years guys at a very high level and I get things 99% of the times correct and you know people ask me why is say successful in predicting hot spots in Melbourne and predicting suburbs and growth patterns before they emerge well if you’ve been in the same market for 27 years okay which is over a quarter of a century guess what you’re going to pick up a few Clues so I’ll be doing the same stuff over and over and over for a quarter of a century which which makes me feel very old and and um you know you you you learn from the best and I learn from the best I I hang out with people that are much more successful than myself and richer than myself developers um accountants financial planners lawyers property investors who have accomplish a lot more than I have and I learn from them and I give you all the information bundled up in these YouTube videos I’m also an author of the Australian real estate investing Made Simple book which has gone number one multiple times on Amazon and various other platforms over the years in fact I’ve been number one and two many times my second book is Australian property Finance Made Simple which teaches you how to pay off your mortgage in record time so rather than spending 30 years on your mortgage I teach you how to pay it off in 15 or less depending on how you structure it and how clever you are um and and once again I really want to thank you guys for supporting me and buying my book for those who have never bought my book jump on to real estat made simple.com you can pick up my book and a bunch of free information including an online video course which I throw in for free which is 10 hours of content or you can check out my book on finance.com which is also available on my website or you can jump on to any good Bookshop out there and check these out as well so it’s it’s entirely up to you um also what I want to do guys just because you’re here and I’m a big fan of education and I always tell people the difference between you today and two years from now is the books that you read and the people that you meet if you don’t change nothing will change and if you don’t plan for things to happen no one’s going to knock on your door and make you wealthy guys it’s people become Wealthy by Design and yes it’s it’s expensive it cost time and money and remember time is more important than money because you can always get more time you can’t get more money and once and um sorry it’s the opposite you can always get money but you can’t get more time and once your time runs out that’s it so the most important asset that we have is time and unfortunately I see a lot of people run out of time to invest to build up wealth this is a long-term game that takes 10 15 years to really unwind you need to have at least two Tire property Cycles hit your portfolio so my home study and on my educational online video course if you like is normally worth $497 but if you stick to the end of this video there’ll be a download link you can access that information immediately after this video and start educating yourself and this really this information has took me decades to to learn and Implement um so it’s it’s Priceless you know I mean how much can you put on that in terms of value I me if you don’t Implement it’s worth nothing if you implement it you can build a large property portfolio of 10 Properties Plus and change your whole financial destination so definitely as my gift to you just for being here and supporting my YouTube channel um definitely stick stick to the very end and I’ll give you a download link for that now interesting thing if you watch my YouTube videos during covid-19 I was telling people that the Market’s going to Boom over the next 3 years and there was a lot lot of people that were questioning me on LinkedIn especially through private messages saying come on Conrad how can the market boom how can the market potentially even go up the real estate agents are all locked down you can’t do auctions you can’t do inspections blah blah blah right and all I said to those people is look you’ve got your degree I’ve got my degree I know what I know you know what you know let’s just do a bit let’s just do a bet for $10,000 I’ll put 10 grand in my solist trust account I reckon that melbour will double digits in a particular period of time youon go negative let’s do RP data call logic stats for January let’s see what happens and you know out of all the economists and all the so-called experts that were questioning me on LinkedIn none of them had the balls to put 10 grand behind a name which which either means they don’t have faith in what they’re saying or they haven’t got 10 grand both of those are really bad reasons anyway eventually there’s a number of them made the gentlemen’s bet would be for a dollar and uh guess what I won they were wrong in fact since preco house prices have gone up by 40% in four years and that’s the median growth pattern collectively throughout the major capital cities in Australia remember Melbourne cityy and brisman is pretty much you know 70 80% of the value of the market now yes it’s always a good time to buy at the bottom of the market you know we we I always talk about um it’s it’s time in the market not timing of the market you know because the reality is I said many times before what if you get to the bottom of the market it’s a magical point that you’ve been waiting for 10 years and you something happens in your life where you can’t borrow the money that you needed to maybe your business went bad your relationship went bad or maybe interest rates have tripled and there’s no good stock on the market which is exactly what happened in November December January 20223 you know we got to the bottom of the market I was tell telling people this is the bottom of the market okay and guess what do know honestly there was nothing exciting on the market to buy so for those of you who think you’re going to time the market I have never met in 27 years any successful property investors that have managed to time the market correctly and exploited as a strategy now yes it’s nice to buy at the bottom I’ve bought properties at the bottom many times but I’ve also bought at the peak of the market overpaying for properties because I knew how good they were so just like Warren Buffett remember and Warren Buffett says this all the time he would rather overpay for a good stock then underpay for a bad one and I’m the same I have specifically been in o and and bought properties where I’ve overpaid for them I had negative equity for the first two years but I knew that the next 10 years those properties will catch up surpass the negative equity and then do double digit growth for the rest of the time it’s all about quality over quantity guys remember it’s about buying Rolexes and Mercedes not Camry and seyos there’s nothing wrong with Camry and seyos they just don’t go up in value they depreciate into their worthless and nothing scrap metal so if your intention is to to make money which is what we’re doing we’re here to make money out of property we’re not talking about unoccupied emotional living we’re purely using as a vehicle to make money the most important thing to understand is stick to the fundamentals it’s time in the market not timing of the market and never ever sacrifice quality over quantity which is the biggest trap that people fall into now currently um you know there’s a record amount of investors that have just come back in the market um and you can see that in Melbourne for example um in terms of a lending percentages um in Victoria 32.2% of loans were done for housing uh commitments to property investors so property investors now are back in a big way in Melbourne buying properties but these are sophisticated investors they have equity and experience not so much firsttime investors these are investors that have a lot of equity they have the whole network set up a lawyer accountant financial planner mortgage breaker a banker or both and they’ve had buffers in place and they’re waiting for the right time to strike these are the best Capital Growth areas that occurred for the December quarter 23 um from this is from the main and you can see there these are some of the areas that they’ve been targeting and they’re interesting areas because some of them are highend sub some of them are not so highend so F Troy 16.4% medium price 1.6 million this is for the touch houses and by the way people ask me this all the time what are units units or apartment houses and Tow houses are the same because there’s a lot of tow houses built in F try that are bigger than the original Victorian properties in terms of square meters and size so I’ve saw a lot of properties in petroy triple story tow houses on a small footprint but in terms of like the three bedroom three bath double lockup garage that double the size of some of the single front Victorian properties and Edwardian properties that are everywhere in F try and including the original Terrace homes so Caron F try Exon area they the reason they’re buying up in those areas is because very high rental yield there Carlton Fitzroy Collingwood especially you’ve got massive increases in in um in rentals therefore the recent increases in interest rates have been nullified by the increase in rental yields and investors are you know very smart investors are always hunting around for good rental yields bwood 11.9% bwood has been really destroyed by the university um campus there by um by the tast Deacon and so forth so it’s really become an area where every house is getting chopped up into into tow houses and this is bwood towards not the churak end it’s the other side so I’m talking about closer to Deacon um you know it’s an area where you’re also chasing yield uh and I understand why they are because you can put for Sho into in the four-bedroom townhouse and get a return of 7% 8% rental yield rather than you know putting one family in then getting a return of three or 4% so bills be very popular marong not a fan um always overd veloped wouldn’t touch it ChatOn chatton now has become really Boutique in fact I was blown away the other day and I used to live in ChatON in um Atkinson Street uh which is just near Etherton Road um and um chatson now is becoming really high-end in fact the same developers that are developing mulvin are now spilling over into mulvin eastn chatson for the first time so you you you’re seeing tow houses selling now for $2 million plus building highend tow houses like they do in Brighton Brighton East and those areas which have never happened before chat needs to be a nothing suburb just a home brand boring Suburbia apart from that little Milk Bar Street of Shops next to uh just on Atkinson Street there is nothing in ChatOn apart from chaston shopping center by the way which is massive and I actually like the chaston shopping center it’s it’s you know we went there last year I parked like four kilm away from the car from sorry I was I was in the shopping center and eventually when I looked at my app my car was 4ks away from me so it’s like where’s the car uh it’s about an hour that way it’s too big it’s dysfunctional so there’s there’s functionality I think Temple Stow is a much better or Doncaster shopping center is a much better Shopping Center or even Southland chat to me it’s like it’s like a massive cancer just keeps growing taking over suburbs you know suburb will like it I just don’t like it it’s too big but anyway going back to making money when not he talking about which shopping centers I frequent or like chatson is really cool now because it’s going double digit growth because there’s a lot of Cheaper properties in chadon very boring all the 60s and 70s houses on Big Blocks they’re getting ripped down and they’re putting high-end properties there you’re going to see double digit growth from chatson for a long time Mont Alber North always in the top 10 sub best subs in Melbourne it’s not a surprise um so Mont Alber North buy anything you can and hold it never sell it it’s one of the top 10 best suburbs in Melbourne in terms of prestige school zone safety proximity to City everything southa you know southa is is overpopulated with Apartments now I mean it’s you know I used to love Chapel Street but now there’s so many high density Apartments everywhere and there’s so many people on those streets I don’t know maybe I’m just getting old and grumpies just to me there’s no there’s no attraction in southa anymore I’m honestly go to the tour end but look it’s doing well you know land is very expensive because potentially you can buy an old townhouse or a house and eventually is going to be redeveloped into high density Towers you could clean up lower plenty is pretty much a lifestyle change people going away to low plenty like they’d go to donvale park Orchards to get away from society to get a big 6,000 4,000 square meter Block it’s beautiful there it’s green if you’re working from home I don’t even know why people live in Richmond in those areas you know it’s just I’ll be living out there as well M and kill obviously a majority of the stock that I sell is is around the Bayside but you know if I was working from home in it or something I would be living in Alam or Don Vil you know on a big block with a swiming pool Tenon Squad and everything else why would you be in Richmond in a little shoe box with all the drug heroin addicts walking around because you got good coffee in Church Street Richmond he gives a about coffee in church richm I got the best coffee machine in my house from Italy I make a better coffee than anyone in Richmond so it’s just it’s a funny thing Bowen also Bowen’s been redeveloped really into the mcmansions you know in the French provincial MC Mansion so it’s got okay growth Vermont South massive blocks massive subdivisions happening in Vermont South and killer as well um you know just value for money um Big Blocks um good good manies so these are some of the areas that investors have been targeting um hard in 2023 24 these are the top 10 trends that are shaping the Australian property market right now in 24 and I’m going to give you some some idea why it’s such a good time to get into the market and it’s always a good time to get in people asking when’s the best time to get in well when’s the best time to go to the gym whenever you can right it’s not once a month for 10 hours so remember the most sophisticated investors have a plan of consistent implementation consistency over a long period of time will win than sporadic actions of high high energy you know so what I’m saying is if you go to the gym five days a week you’re going to get more results than if you hit the gym once a month or 10 hours same with property you just buy as much as you can whenever you can throughout every part of the cycle but you focus on quality and fundamental you don’t go and buy sporadically emotionally because it’s a hot spot and you just go all in you know and I’ve seen people lose money and for God’s sakes don’t buy house and land packages in Melbourne they don’t work population change the albanesi government has opened the floodgates to migration migration has peaked at 680,000 people which is crazy 56% of those people went to Melbourne and Sydney because that’s where all the jobs are so we’re seeing a massive massive increase in migration the excuse is we’re building government infrastructure projects and we need more skilled labor I completely agree I’m a migrant I came over from Poland with my mother in 1985 so I’m all for migrants most of my friends are migrants however I don’t think half a million plus is good policy we have to bring Less migrants in and build the infrastructure the roads the properties the hospitals the child care facilities the schools and roll out that infrastructure so the migrants that coming actually can have a good quality of Lifestyle rather than just opening up the gates letting people in and hoping we can keep up with with property um builds which we can’t that’s why there’s a deficit of of hundreds of thousands of properties per which will’ll never be able to catch up to and that’s something that’s that’s going to happen and going to drive the market it’s actually quite good you know I was saying to a friend of mine when the labor government W I’m a liberal supporter is I should actually change my vote because every time lab comes in unintentionally they they destroy the economy or they impact the economy I should say to such an extent the property prices always boom did you know every labor government that’s been in in in power since World War II has also um coincided with a property boom Market in Australia but it’s unintentional they actually want the opposite effect they’re just so useless the pen Wong um and and the albanesi government is so useless because they’ve never run a business in their life that whatever they try to implement actually has the opposite unintentional impact on the market which is why you’re going to be paying more for new houses and what that’s why you’re paying for so much money in interest as well because it is what it is but anyway I love them because I’m making a lot of money doesn’t impact me see all my increases in petrol and food I also said by my properties going through roof so I’ve got Equity I can’t even know to do with so it’s fantastic it’s great for landlords I just feel bad for people trying to get into the market and a lot of my audiences are are people trying to get into the market um so net overseas migration unprecedented in terms of what happened the argument is yeah we had the lockdown as you can see that 2020 so we had no people coming in during Co and then we should let them all in no because during that time over 2,000 developers and Builders went bus so if we let in all these migrants even if we went back to the original volume we haven’t got the industry anymore to create the volume of houses that are required for these migrants cuz remember if you’ve got 600,000 migrants coming in let’s say there’s two per per family unit you need 300,000 new homes we’re are building 180,000 new homes per year we’re about 120,000 behind you know it’s huge it’s 12 to 15,000 per month in deficit so they’re going for established properties and that’s why the rentals are going up and that’s why you end up paying more for properties now it’s great news for Landers like myself who have a lot of properties because all my properties are going up because they getting pushed up by this inequality in the market but you know it’s unsustainable it’s bad business it’s even bad for just traffic I’ve noticed even driving around mbour I do a lot of driving um around Melbourne in my S63 AMG um which I love um and I love electric cars because for every 10 electric cars you’re off setting the carbon footprint on my S63 AMG and I drive it not in eco mode I drive it in aggressive sports mode just so to let you know um for all the leftwing uh work people that are listening to my YouTube video that you released my YouTube video uh you know why would you um but um anyway just the traffic on the streets in Melbourne is incredible during pick out of traffic it’s just there’s so many cars now not so much in the city because a lot of people don’t work in the city but just outside the city in business parks in various uh business centers it’s just it’s just becoming really congested so we need to kind of be more strategic than allowing the volume of people that we have allowed to get into the country I’m all full skilled migrants by the way so I am not here to say we don’t need migrants I’m a migrant we need migrants all my friends are migrants let’s just be smart about it guys let’s just do a lower volume and let’s the let the infrastructure be built first because they’re going to have problems with kids not having access to schools adequate Child Care Facilities etc etc immigration as a population growth so this is another another chart of showing you what’s happening in terms of population growth and you know it’s just it’s off the charts guys it’s off the charts um but natural population increases is stagnating people having less and less kids because it’s expensive to have children so people are deferring having children um death rate is is is going up a little bit because the baby boers are now reaching the kind of 80 90 year old uh um age but you know natural increases on decline because people are deferring children having children later focusing on the career a lot of people see in the 80s you pretty much you hit 20 you save it for a few years you buy a house land package and pop out a your kids now people are waiting to 30 mid-30s to buy the first properties because it’s so hard to save a deposit and they’re having kids in the mid-30s and having one child you know a lot of having one child or two maximum this this notion of having three four five kids unless you’re in a regional town somewhere you know oh it’s an accident which happens uh you know it’s it’s not going to be it’s not going to be the reality for most people financially and economically overseas net migration the normal amount that we should be putting in like in my opinion and look at this data from 1900 look at 1950s yeah World War II finishes and you can see there we’ve had 880,000 coming into the country now 80,000 is not enough back then it was was quite High given the infrastructure levels but I would say 150 one you know 160 somewhere around there per year is is definitely manageable and we can see their 560,000 so if you just look at that as a as a as a thing in itself without looking at anything else forget about interest rates forget about GDP forget about the economy forget about even location advantages right people pay a premium for safe areas school zones all the stuff that I teach it’s just supply and demand guys 566,000 600,000 people coming in right and we’re not we haven’t got the houses and people have to live somewhere because you can’t just live on the street you can’t be homeless in your car the number one necessity for these migrants is to secure a dwelling as soon as they can then they get a job they sign a contract they pass the probationary period they save a deposit a lot of them are bringing money over from China and India uh or other countries that are coming over with cash but they can’t qualify for a loan and it takes about 12 months usually they needed to get the tax returns done here before they qualify for a loan and then they buy their house so you’re going to see a massive massive increase in housing Demand by next year when this this wave of migrants has come in into the country secure with their jobs and they’re all high income skilled labor you know they’re not these are not guys that are doing fruit picking someone on the farm for 60 Grand a year they’re coming in at IT jobs 120 130 160 doctors you know GP Specialists so they’re coming in for high paying jobs which is which is great um and they’re going to be in the market next year so what do you think is going to happen next year when these bulk of people a majority of them know money is dead money why make your landlord Rich when you can make yourself rich right what are the things going to happen when they’re going to be coming back in the market and buying up houses and there’s not enough new builds they’re going to be going into the the pool of established properties well just going to Boom it’s going to go nuts and going to go crazy you don’t need to be a rocket scientist or as W bush said Junior rocket surgeon to understand that concept so this is why we have rentals peing and going through a roof I mean we’ve had rentals increase of 30% guys for for um for tow houses apartments and houses depending on the area some of the stock that I’ve been sourcing because you know my story I’ve always been targeting the Bayside area so my office is silda my favorite area to Source properties is Albert Park Middle Park P Melbourne s kill the West Elwood Brighton East Brighton and then right down the coastline right all the way Black Rock Sandringham and definitely places like Menton Bal morz edth aspendell um Chelsea Bon Beach I don’t like caram anymore I think it’s overpriced caram was good 10 years ago and I was doing caram up to about seven years ago I don’t like caram now and pis leg forget about it but before then yeah really good value for money um and then Inland I’m doing a lot of Eastern suburbs but especially waterfront properties and properties around the beach or within accessibility to the beach and good schools the rentals for those properties has gone up just literally unprecedented 20 30% per year which never seen before because normally rentals go up by indexation maybe a little bit of a premium depending on the suburb but to go up by 30% so we’re talking 700 to 1,000 1,000 to 1300 I mean think about it so those people are laughing all the way to the bank because those prop are cash flow positive but it takes a specific level of knowledge to find those properties and Target those properties and by the way House of land packages they’ve done nothing in rentals because the Market’s oversaturated with house and land packages so in terms of terms of the index in terms of um you know in terms of rental yields I mean it’s just been crazy um for what’s been happening great great for landlords really bad for tenants and remember there’s always going to be tenants now that are completely priced out of suburbs where normally they could afford to live in which is which is unfortunate drawing approvals are down as well record high for houses apartments and Tow houses because we’ve lost 2,000 Builders and remember for every Builder and developer I mean especially in Victoria the problem is this a lot of tradies have gone to Queensland during Co right and I don’t blame them because all these Builders and developers were getting busted they W getting paid they had nothing keeping them here so they went to Queensland number two a lot of Traders left the industry and got into government infrastructure projects where instead of getting 100,000 per year they’re making 200 250 per year so I know a lot of Traders theyed they were really experienc 10 years plus in the industry they go why should I be stuck on the roof somewhere all day in the sun I can go and work for the government for 250 Grandin a year without any skills so we we’ve we’ve had a big chunk of our skilled um building uh you know labor force leave the industry and exit not only that for every developer and build that went bus think about the casualties they took down with them think about how many subcontractors didn’t get paid the landscaping companies um the little guys you know that were there that were own 20 30 40 50 100,000 they went down as well and some of them have never recovered so we have a a real I guess hul in the industry that has not been filled it’ll take probably a decade to be filled and the other thing is kids these days don’t want to become Carpenters or sparkies or plumbers anymore they want to develop an app and make a billion dollars online or they buy want to buy crypto their ghost to the Moon they don’t want to be you know doing Plumbing all day and crawling under the houses it’s not cool to be a Trader anymore like it was when I was growing up in the ’90s I be the ’90s like if you’re a plumber or Tyler you’re on 140 Grand a year you’re probably driving a pors Mercedes now all these kids want to do apps they wanted to be on social media you know all this other stuff no there isn’t this kind of the culture is it’s very negative towards the trades which is unfortunate and I think we’re going to pay for it as a nation just with um with high construction costs and materials um and labor costs which would translate to more increases in property prices and that’s why there’s a combination of massive amount of people coming in dwelling approvals are down right for those reasons because we just can’t create the volume um and not there’s a lack of confidence in the market as well so people are just buying what’s available and that’s why prices are going up so high also and this is the reflection of construction because if you look at 2018 when the index was 100 construction materials have gone up by 140% since 2018 I know developers like I was I was talking to one of my developers Derek from Corona homes he’s doing a development in Chelsea um on Beats of the highway um just off windburn Avenue and um he was telling me that he did another project six years ago just next door in wimon Avenue and today cost him 100% 120% more in the same build construction materials to build that you development so what do you think is going to happen to prices of those properties that’s a big driver so just replacement cost guys which is which is just the land and construction materials is one of the biggest drivers of property prices you know right now it’s forget about all the other stuff just that is is driving property prices that’s why people tell me the Market’s going to crash in Australia it’s always some foreign do in the market some guy in Germany or America looking at some chart oh it’s unsustainable it’s going to crash are you are you for real you’re not seeing all these things that I’m seeing at the at the ground level and that’s that’s the biggest problem and so dwelling approvals are down from the norm record level lows so you know got record migration record low um approvals uh property prices going up rents going up record high materials going up and inflation’s even tracking above what what the Reserve Bank of Australia wants it to to be tracking that’s why all these properties are going to go up now just because everything’s going up doesn’t mean you should be part of everything so I’m going to give you some really quick thoughts about apartments versus Town House versus house and land now I’m going to do another h video just on these and I’m going to unpack this in detail because it’s I want to get into specific suburbs and and areas but for for the purpose of this video I just want to give you a quick summary just so you can get a bit of a taste of what’s happening in these sectors apartments are a freaking disaster in Melbourne guys forget about apartments avoid them like a Tina Arena concert or kennyg concert right in terms of the the last 40 40% of all apartments that sold during December quarter lost an average of 6% so apartments are just doomed in Melbourne we don’t want to live in apartments guys no wants to be on balconies and especially during covid-19 you know people got trapped in the apartments it was very miserable where people like myself we had a massive massive backyard you know I had a gym I had everything swimming pool which I have um and and I was very comfortable I I didn’t even suffer during covid-19 I felt guilty I should have suffered you know but I didn’t I was really happy uh did a lot of powerlifting uh enjoyed myself had a great coffee great Cinema room big massive backyard very comfortable so Apartments massive problems number one they don’t work fundamentally there’s no land ownership with Apartments I think they’ll do okay with terms of like Capital growth potential just just construction materials alone are going up by 25% this year and also because of the cladding issues and because of all the stuff with mascot um properties in New South Wales those going to be a a review of the type of um there be a massive inquiry by the government into construction materials into Apartments so just construction and replacement cost is going to drive prices up by 20% 25% but really they’ve done nothing last 10 years guys we’ve got clients I deal with six mortgage breaking companies that I refer clients to I had many mortgage Breakers give me examples from time to time where a client bought a two-bedroom uh two bathro onec car garage apartment in docklands or south South Bank for 680 10 years ago uh with water views and now we’re to a 650 and they’re paying $4,000 you know p in owners Corporation fees I mean what’s the point you might as well just invest in shares or you like property being so difficult with contracts and all the stuff you got to do there’s no point just buying an apartment hoping for the best yes I’ve seen apartments in Brighton caner B low very like Boutique like there’s six or seven in the block they’ve got Courtyards they’re in the school zone they’re in a quiet Court they massive three bedroom three bathrooms or four bathrooms three car spaces they’ve done well they they do 10 11 12% but they’re about $1.5 to $3 million so the only reference of Apartments going up in value those ones one and two betters disaster completely even three betters have underperformed so to me stay away from them house the land packages well we’re just continuing to to to create new SS of the future in Melbourne so you got 96 house on land states around Melbourne it’s a disaster if you watch my video on The Great Australian house on land trap um you’ll explain what the issues are we have extremely poor standards of planning in House of land Estates um the infield ones are okay okay like Doncaster Golf Course for example that’s going to be fine but the ones on the outskirts of the city in all directions by the way so so in every direction so whether it’s Point Cook trigger out t or or north of like south merang or then your barracks and packing them they’re a complete disaster guys they they cookie cutter blocks are getting smaller and smaller now blocks are 500 you know the old blocks of 600 700 now 250 280 the tow houses basically with a big 30 square home on them they’re getting hot because the roofs are all black so the temperature 6 to 10% hotter in the summer than normally um people renting in there there’s crime it’s a disaster okay and I’ll do a lot of videos about this and and I can sell you house and land by the way I’ve got access to all the states in Melbourne if you want to buy a house in Point Cook or south moring or bar and pack of them come to me I’ll sell you one because people say oh you’re just bagging them because you can’t sell them oh no I can sell them and I can sell them through the best developers in Melbourne I just can’t be bought guys that’s the problem and I own I know what the reality is I drive through these Estates every day and I drive through them rather than going oh GE this looks nice good the hell happened here you know and there are nice house on land State some of them have done really well with trees the problem is most of them 99% are completely dysfunctional and you’re going to be paying for it you’re going to have gangs roaming those suburbs which is already happening and there’s no opportunities for kids and they’re going to be breaking into homes and cars not a good thing guys unless you want to be in a world of pain and I did a video on this called The Great Australian house in land um trap about tan and triina because I had 70 emails about this topic every time I do a video about triger t people oh we bought a property in Trigo I don’t care okay because if you bought in Richmond or if you bought in s Kon Melbourne or YoVille you would have quadrupled your money okay the problem is that these areas are dysfunctional and so in this video it’s not even me talking about it I have locals talking about how bad the areas are so if you guys ever want to buy a house of land package in Melbourne I encourage you to watch this 1our video on my YouTube channel um from from a year ago explaining what the the traps are of of that um and by the way if you still don’t believe that then come to me know so you one of those beautiful house on land uh packages um you know whoever you want metric on build um but I guarantee you’re going to get 4% 5% growth just at indexation you’ll never get beyond that townhouses are it guys townhous are it because you’re you’re you’re building a property in an established suburb with all the infrastructure transport schools Prestige proximity to City Water you’re not paying land tax remember land tax is a killer now if you buy a th000 square meters of land right it’s going to with an old house on it with two or 3% rental yield it’s going to kill you you can’t mathematically buy 10 old houses on Big Blocks anymore with current interest rates at 67% and land tax where it is remember you’re buying a townhouse in in let’s say you’re donc cast you’re buying a th000 square meters of land for 1.5 million or you can buy a nice townhouse for 1.5 million 100 square mil of loan now people say well why should I buy for 1.5 100 square meters of Landing Doncaster where I could buy a thousand true and the house will outperform the town housee as just as comparing assets the town town housee will do 7% the house will do 10% but if you want to buy 10 of them you can’t mathematically buy 10 old blocks with old houses on them because LX will kill you you got a 10 to1 ratio just with LX because each townhouse has a very small footprint so you can put 10 tow houses on 1,000 square meters plus your townhouse gives you high depreciation and high rental yield no one wants to rent an old house in donc Casto with three bedrooms one bathroom it smells like a dog from the 60s with green kitchens right the rental yield is 2% but the townhouse will give you four and a half 5% that’s why mathematically see it’s all a question of finance and the this is the reason why I do these my Live Events people ask the wrong question they say what’s the the highest performing the best performing property Doncaster yeah it’s an old block with an old house that’s not the right question to ask the question is what kind of property in Doncaster can I buy that will enable me to replace my income over 10 years and the answer is a townhouse see one is a financial question one is a Capital Growth question remember a finance strategy will always override a property selection strategy I’m just choosing Doncaster because it’s like a average upper middle class suburb it’s a great area to Source in I I’m a fan of Doncaster Temple St since day one no problems you know sourcing so where we are in the property cycle at the moment remember there’s a peak of the market decline bottom of the market growth of the market and remember I know I sound like a broken record guys but I’m doing it for your own good it’s always timing the market not timing of the market but we were at the bottom we’ve moved now in in fact in January when I did this update you can see that it’s from January 24 we’re at the bottom of the market now in March 2024 we are in fact at the state of recovery and same with April by the way no change um so we’re at 7:00 on the property clock going up to 9: now most of the growth will be from 9 to 12 from 9 to 12 you’re either going to have property or you’re going to be wishing you got properties because that’s when the craziness occurs that’s why get my popcorn out and I just watch all the people bid at everything and buy everything at Crazy Prices and I ring up my bankers and increase my lines of credit so I do what’s called counter cyclical investing at the peak of the market when everyone’s buying I’m refinancing locking in my loans of credit at the bottom of the market I’m buying properties based on fundamentals because the fundamentals don’t change as I said before it’s lovely to buy at the bottom of the market if you can lovely no no objection but it’s not a sustainable strategy because you never if you get there if it’s only the bottom that you buy you might get there you you won’t be able to get the some money you be maxed out potentially like like we were 6% interest rates we could have bought at 1.9% in fixed for 10 years or five years so the if you’re waiting for the bottom to to materialize you be waiting for the rest of your life I’ve never met one successful person that has managed to time in the market and create a strategy out of it yes every one of us if you’ve been in it long enough I’ve been investing now for for for a long time you will hit the bottom many times but it’s not a sustainable strategy it’s not something that you can you can do and once again remember all the doom and glooms were predicting the Market’s going to crash during Co and what happened in 23 December 22 and 23 picked up again it’s going back again it’s always the best time to buy at the bottom but remember inflation now is forecasted to go down we’re going to see interest rate cuts by mid year to late this year no got a crystal ball but I think there’ll be a number of cuts towards the end of the year and definitely next year 25 there’ll be interest rate cuts um and then the market will be stimulated again but the biggest stimulation will be not only just interest rate cuts and people coming into the market because rentals are so expensive and why make your land Rich we can you can become rich it’s it’s those 600,000 migrants that are going to be passing their probationary periods in their jobs they’re going to be getting their first mortgages to buy the first properties and a lot of lot of them might be going into Point Cook or baric they going to be going to establish areas Elwood silda P Melbourne Clifton Hill Richmond YoVille right Boutique suburbs they’re going to be working from home and those areas are going to boom on the back of this recent migration flood and you’re going to be the part of it you’re be watching the whole craziness occur now remember the market has a psychology of Cycles this is actually from the from the stock market but the same thing we have at the bottom we have disbelief right oh it’s then hope recover is going to happen optimism oh my God the Market’s going up belief time to get invested right and then I’ll buy more yes your for is at the peak Everyone’s an expert at the peak right everyone because whatever you buy you g make money this is where the stories come out oh I B int trig andina for 290 now to 600 yeah but the opportunity cost is you could have bought in other areas that have outperformed that suburb because remember it’s all about opportunity costs versus one versus another then then the market has a correction okay and then people go oh my God what’s happening it’s going down anxiety denial Panic sell sell jump out the window and it goes back up again dollar C averaging guys it’s an old concept I stand by it buy whenever you can buy because it’s so hard to get alone it takes so long to get Equity released you got to get devaluations you got to get m stocks it’s months and months every transaction that I’ve done over the last 27 years has been painful it’s always oh they want more pce sleeps they want more tax returns they want this they want that trust Deeds so it takes so long so many months just to get Equity release and then takes months to find the property and then it takes 90 days to settle minimum one transaction could be six six months even more so property is something where this timing of the market is irrelevant it’s about just consistency buying as much as you can and when the market goes up providing that you stuck to the fundamentals like all my invest all my clients have done you’re going to look really smart you can be at the restaurant say did you know we bought in Carlton for 700,000 it’s worth 1.6 now really oh my God you’re so lucky you can be one of those people now in fact what’s happening at the moment is the last 12 months this is why I say stick to the fundamentals the top 10 earners in Victoria have been blue chipped and these are suburbs where people have more made more money in 12 months in capital gain than their income they earning in the suburb so every suburb in in Australia has a per capita income earning Ratio or amount and then you have Capital Growth so in turak for example now by the way people live in Trak usually have trusts and business structures and various other structures that hide the true income that they derived but there’s there’s the amount they declare so in TR has going up by 237,000 in medium price Canterbury 160 which means that that 160 is greater than the average income of a person in Canterbury bwin 156 southa 136 s hills Mont Albert Willis Hill B North Middle Park and Puck Orchards stick to the fundamental suburbs guys you can’t go wrong these are not the sexiest suburbs they might not be the hot spots but they are the the best subs in Melbourne for long-term game and that’s why the smartest people stick to the fundamentals you know stick to the brand name suburbs forget about these hotpots I always get these articles about hotspots like have you ever been to that area you know always written by some person from Brisbane or from from some girl that’s 19 that’s never even been in the market remember there’s four types of property investors which one are you there’s the analytical compulsive information gatherer usually coming from a technical industry like engineering science um these investors will spend months conducting mark diligence they they’ve usually watched the market for 5 or 10 years a lot of engineering people analyzing charts crunching numbers and then the market doubles and their service ability gets destroyed they don’t buy anything they usually end up at paralyzed due to over inflamation overload uh analysis paralysis as I call it you’ve got to break this habit guys you got to stick to the fundamentals and take a leap of faith and get in there’s also the get rich quick Gambler which I’m really concerned about I’m seeing some of them they just want to get in and then you know their background is multi-level marketing or alternative medicine they’ve always some potion and no one knows about but they know about it it C was cancer makes you look like Elvis when he was 20 you know um but no one knows about except for them and a couple other people but it’s going to be the big thing always the biggest thing ever you know it changes the whole world AC doesn’t you know 25 years ago I was I was invited to these companies oh it’s the biggest thing it’s going to change everything and 20 years later no one’s even heard about it again and the company’s deregistered um Alternative Energy healing Fitness green drinks and they love conspiracy theories they love Bitcoin they love anything new and shiny right and they will just jump onto hot spots they go to hot spots and they end up buying chinchilla and Newman and lose all their money so you’ve got to I think it’s a question of Education as well and and also um delayed gratification with these people the comfort zone investor is majority of investors out there 72.8% of investors in Australia have one investment property in one house you live in Bentley and then you buy a house in Bentley East 4 from where you live so can drive around every time you go to work you drive by the property it’s roughly the same property that you live in you live in a four-bedroom brick veneer property in Bentley on the 700 K block and you buy Bentley East for 650 uh on the 650 block roughly the same as your property and that’s it no depreciation no strategy nothing just oh it’s it’s but we know Bentley Bentley is a good area it’s Center roads good schools yeah fine but but that’s not a strategy guys that’s just you just bought something so most people buy property within three or four CES of where they live so they can keep an eye on it so they’re driving by the property they can go oh it’s gone honey the house is gone it’s it’s just an empty block number 16’s gone it’s just there’s two house there’s nothing some some took it overnight and they they took it they disappeared there’s no Advantage guys of driving around your sub that you’re investing in you got property managers are good to Earth being there physically doesn’t add value to the property okay so don’t invest in your comfort zone where you live unless it’s a good area to invest in fundamentally okay so if you’re living in um I don’t know Richmond invest in Richmond okay even though I hate Richmond as a suburb if you’re living in St orband don’t invest in St orans okay it’s a good area for Capital Growth nothing is going to happen in s noens the attractive Serv the active I they could be attractive as well could be attractive but the active Savvy property Savvy property investor is 0.9% of all investors that end up owning more than six investment properties they’re the ones who develop a system they’re the ones to get educated to get the team behind them and they create a system of investing and they’re the ones that win the game and that’s all it’s all about guys that’s why I run my Live Events I write my books um I do this YouTube channel cuz I want to teach you a system methodology if you haven’t got a system you are planning to fail and they’re the ones I want to work with so if you want to work with me I’m definitely open to having a discussion with you about helping you build your property portfolio ultimately this is what most people do hear no evil see no evil um speak no evil they just sit there and watch the whole Market go up again and hoping for the correction that will never eventuate remember the smartest investors are back in guys 32.2% of loans have been written to proper investors in Victoria the back question is are you going to be one of them are you going to go from where you are now to the level where you need to be in order to take your slid of the action so I hope you enjoy the video guys if you’re interested learning more a couple of things I’m running Live Events again in Melbourne in my office in silda uh from time to time called the real estate investing Fast Track weekend they do book out very quickly they’re $47 per ticket and you get my hard copy of my book Australian real estate investing Made Simple it’s a big book 690 Pages it’s a manual on how to build and structure your large property portfolio from scratch and I Do cover a lot of chapters in my actual today event in my office um things I’ll be covering just to give you an idea is you’ll discover Advanced Property investment strategies or learn specific real estate finance and due diligence methodology that will give you the confidence and skills to start building your property portfolio as as soon as you leave the event on Monday on Monday you can in the market know exactly what to buy where to buy I’m going to give you an Insight on how to understand property cycle state by state exactly how to H in with laser like Precision Melbourne hotspots in 24 and and Beyond how to identify and distinguish between the right type of properties to invest in I.E house and land townhouse apartments also how to pay your mortgage offering record time and use the equity and savings to build your property portfolio in your spare time and also how to best structure your first second and third property investment um in a way that can that can pay off your bad debts and you can keep focusing on accumulating good debts step mcache also will talk about things like DSR ratios how to understand the formulas the banks use to work how much money you can borrow we’re going to cover 18 ways to supercharge your borrowing capacity and this section by itself is prices because you only need one way one distinction that will teach you how to go to the next level to get alongar you know it’s not about learning 50 things at these these events guys people walk away with one or two distinctions they make a huge impact in their life one or two things can change everything not 50 things um I’m going to teach you how to pre-qualify your mortgage broker so 19 critical questions to ask your mortgage broker to work out whether they’re good or not and most mortgage brokers in the industry I would say are terrible to average there are some good ones we know them and I’ll show you how to find them um you’ll learn the 12 most commonly deadly mistakes in finance that people can make all the time and how to avoid them and then how to structure and balance your property portfolio between cash positive and negatively gear Properties Plus much much more so these events are tickets of $47 you can upgrade to VIP if you like um you also get the home study as well online video course um which by the way you can access for free right now if you go down to the link below there’s a link below which gives you instant access to that online ation um you will get a copy as well by going to the event you get a more recent copy version and this is um 10 hours and and a major and and a manual of um I think it’s 400 pages so that’s a really good one it depends on which one we recorded because they’re all very different from each other and some of them are shorter some of them are longer um so you can get access to that right now 10 hours of video and 265 page manual also if you’re interested for some of you you can have a 60 Minutes strategy session with myself um you don’t need to go to the live event but I encourage you to at least watch the online video course where we can take an idea develop into a plan and develop into an action plan because remember most people die with goals they never actually Implement them which is unfortunate um and the plan is everything if you fail to plan you plan to fail so you want to make sure you have a whole team around you that can actually take your plan your idea from concept to implementation most people spend their Liv going from A to B like this to waste so much time and remember once you get to 65 guys it’s very difficult to borrow money you know so you want to get a lot of money in your 30s and 40s and then then kind of take it easy in your 50s and 60s and consolidate you don’t be taking too much dead and risk in your later years because if you go under you can’t come back okay if you go bankrupt in your 30s seven to 10 years later you’re back from zero with the experience which means you can still rebuild but if you go back up at 6570 you’re probably never going to recover so I’ll show you how to get from A to B with the least amount of effort maximum efficiency um so you get an hour consultation with myself where we work out where you are where you want to be and I’ll give you some feedback about how to get from A to B um I’m also give you an introduction to my mortgage breaker accountant property lawyer conveyancer quantity surveyor insurance broker property manager financial planner my whole te so I’ll give you my whole team this is some of the team that I work with here and having a team is one of the most important things you can do as a property investor without a team without a good financial plan good mortgage broker you’re going to find it very challenging to build large property portfolios especially good accounter and a good mortgage Braker you really need to deal with people that are themselves very successful investers and multi-millionaires stepen mcclutchy and James Blake are some of the best mortgage Breakers and accountants that I’ve ever worked with I’ve known Steven now for over 25 years James 21 years um there got lots of clients with huge property portfolios and they’re doing this all day long they’re the kind of people you need to surround yourself with if you want to become successful so if you haven’t got a team I’ll give you my team that I work with and and I’ve used them personally to build my wealth and and build up my property portfolio um so you walk away with a real strategy paint by the Numbers guys it’s it’s foolproof literally now you got qualify for the strategy very simple you don’t have to do any kind of special task the minimum cheapest properties that I sawce are $695 so you got to have at least 95 Grand as an individual borrower because then you can kind of service 700,000 in fact now it’s probably around about 100,000 you need as an income I don’t have anything under 700 in Melbourne they’re just it’s impossible to build uh no one’s going to build anything under 700 that’s worthwhile so 695 700 is like the cheapest entry level investment property that can justify sourcing if you’re a couple um you need to be on kind of 140 120 um with a bit of equity you need about 120,000 Equity to secure a property so if you’re interested in having a consultation with myself free of charge no strings attached just fill out that form uh if you’ve been to live it or just email me directly Conrad investors prime.com and just put in the headline free strategy session requests and I’ll reply to you and we’ll booking them at mutually convenient time we’ll catch up over Zoom um go through your situation and um yeah happy to help out happy to have a chat and helping you build your wealth through property investing it’s been great guys thank you very much for tuning in for this video um this is Conrad Bobby subscribe to my channel and I’ll see you on the inside [Music]