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The Property Trio

By: Cate Bakos David Johnston and Mike Mortlock
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  • Summary

  • Formerly The Property Planner, Buyer and Professor, our show rebranded in 2023 to The Property Trio.

    Residential property is the only asset class we live in, it is where we raise our families, and it is our most expensive investment, yet property advice remains unregulated. Our objective is to educate time-poor professionals through deep insights from our experts who have provided thousands of Australians with personalised advice and education spanning two decades. In a climate where we are overloaded with information and one size fits all recommendations from the media, well-meaning friends and family and so-called advisers, we will distill the raw truth from the ill-informed.

    So join the Property Planner, David Johnston, The Property Buyer, Cate Bakos and the Quantity Surveyor, Mike Mortlock as they take you on a journey of discovery through the maze of property, mortgage, and money decisions to empower you to create your ideal lifestyle!
    Copyright The Property Trio
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Episodes
  • #259: Home Building & Development Project Perils - Tackling Escalating Expenses, Development Finance, Project Overruns & Their Impact

    #259: Home Building & Development Project Perils - Tackling Escalating Expenses, Development Finance, Project Overruns & Their Impact
    May 27 2024
    Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM

    This week, we unpack a fabulous listener question from Melissa. "What advice would you give to those of us who have construction loans were the build is dragging and we're being squeezed between increasing rents, increasing interest rates, and increasing construction costs?", she asks. "And what advice would you give to anyone considering a construction loan? "

    Cate steps through some of the planning, building and environmental issues that can threaten a build or renovation.

    Mike sheds light on the flow-on effects that are triggered by planning and building delays. From overcapitalisation to materials surcharges, council enforced orders and others, there are some serious risks that must be considered by those who decide to build or renovate.

    How can renovators avoid some of the stressors? Dave has some good tips...

    How many people consider the contractual details, milestone payments, additional costs and cashflow considerations? It can be tricky to navigate these points, but Mike has some great ideas he shares with the listeners who are considering embarking on a build or a renovation.

    How long should people spend in the planning phase? Mike sheds light on some of the elements that get missed at the design phase. Did you know that approximately 60% of defects occur at the design phase?

    The Trio share their advice for those who are thinking about a construction loan. Construction lending experience is critical, and Cate and Dave chat about the key differences between traditional, established-property lending versus construction lending.

    And what is an "as-if completion valuation"? And what is the process that needs to be followed? Mike gives us some valuable insights into the role of a Quantity Surveyor.

    ..... and the gold nuggets!

    Cate Bakos's gold nugget: There are three things that Cate thinks are really important to nail. 1. understand the budget. 2. work with someone who will work to your budget. 3. have a very good strategic finance person on your side.

    Mike Mortlock's gold nugget: "Make sure the contract is reviewed!" Having an firm understanding of all of the important elements is so valuable for those who are building and renovating.

    Show notes: https://www.propertytrio.com.au/2024/05/27/home-building-and-development-project-perils/
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    42 mins
  • #258: Market Update April 24 – Brisbane, Adelaide & Perth Juggernauts Continue, Unit Demand Rises, Federal Budget Rental Relief & Trajectory

    #258: Market Update April 24 – Brisbane, Adelaide & Perth Juggernauts Continue, Unit Demand Rises, Federal Budget Rental Relief & Trajectory
    May 20 2024
    Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM

    Mike kicks off this episode, and directly following Budget Night, the Trio chat all things Federal budget. From the lack of new property initiatives to questioning the impact of the Federal Rental relief, one thing is obvious. The Labour government are acutely aware of the need to see inflation rates reduce, and we are less than one year out from an election. The budget could be described as tame, but that doesn't slow the discussion at all for the Trio.

    April’s increase takes the current growth cycle into its 15th month, with housing values up 11.1% since the trough in January last year. However, almost every capital city is recording stronger growth conditions across the lower value range of the market.

    The shift towards stronger conditions across lower value markets can also be seen between the housing types, with growth in unit values outpacing house values over the past three months. Hobart was the only city where houses recorded a larger gain than units over the past three months.

    Regional markets have shown a slightly stronger quarterly growth rate over the past five months than their capital city counterparts, following a 10-month period where the combined capitals index was outperforming. Regional Victoria (-0.1%) was the only rest of state market to record a decline in values over the rolling quarter. Nationally, rents were up 0.8% in April, a slightly lower rate of growth relative to February and March when the national rental index rose 0.9% and 1.0% respectively.

    As Dave points out, Although rental growth may be tapering, supply remains extremely short and the trend towards smaller households seen through COVID has been slow to reverse, further amplifying rental demand. It is likely rental growth will remain well above average for some time yet.

    In April, the national gross rental yield rose to 3.75%, the highest reading since October 2019, up from a record low of 3.16% in January 2021. Vacancies continue to remain tight, although a subtle ease is evident from last month to our current month, with more than half of the capital cities increasing slightly.

    Dwelling sales look to have moved through a cyclical peak in November last year. Although the monthly trend in home sales is highly seasonal, the less seasonal six-month trend has remained relatively flat since the November rate hike. Estimated sales over the past three months are tracking 8.6% higher than at the same time last year, and about 5.1% above the previous five-year average.

    Listing volumes tell an interesting story, and as Cate points out, the rate of new listings is remarkably 'normal', in fact it's slightly stronger than the past five year average. However, the total listings tell another story. Demand is exceeding supply, and older listings are now being snapped up by buyers. The trio canvas what the possible driver could be, and they determine that old stock, (in particular, units) could be the reason. Given the the relative outperformance of units in most capital cities, this possibility doesn't seem all that extreme.

    In an effort to cover off the Consumer Sentiment Index, we turned to the ANZ Roy Morgan poll given Westpac's index is yet to materialise. Consumer Confidence remains very weak, sitting at its lowest level for the year.

    Show Notes: https://www.propertytrio.com.au/2024/05/20/ep-258-april-market-update/
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    53 mins
  • #257: The Comprehensive Guide to Townhouses – Performance, Selection, Property Planning and Development Projects

    #257: The Comprehensive Guide to Townhouses – Performance, Selection, Property Planning and Development Projects
    May 13 2024
    Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM

    Cate circles on on what technically defines a townhouse. She shares an example and talks about the differences between apartments and townhouses when it comes to land on title.

    Mike asks a tough question, "How do townhouses perform, as compared to houses?" but as Cate points out, it's not a hard and fast rule. There are elements that can bolster up the value (and performance) of a townhouse such as vista, prestigious locale, water views etc. Of course Land to Asset Ratio comes into play, but it isn't fair to classify all townhouses the same.

    Dave talks about the complexities of buying a townhouse that is yet to have it's subdivision registered. This is technically deemed an 'off the plan purchase' and this does carry lending risk for some buyers. But what can buyers do when they need to move in to their new home by a certain date, but title registration is delayed? Cate shares an interesting possible solution .... a license agreement.

    Cate runs through the various subsets of units; apartments, villa units, and townhouses. She breaks down the hierarchy of land ownership for each subset and details some of the formats of townhouses and common land versus no common land. And how do some townhouses qualify for no owner's (or strata) corporations?

    "These types of townhouses are inherently more valuable".

    The Trio delve into the attributes that developers look for to optimise their profits on a multi-unit development site, but Cate also talks about some of the investor mistakes associated with medium-density development activity areas.

    What are some of the attributes that Cate looks for when assisting developer clients? Tune to find out...

    Lending is not always straight-forward or easy for developer finance and Dave shares some of the categories of lending and LVRs, from small-time residential to larger-scale commercial. Buckle in for some valuable, technical insights and explanations, and Cate points out the risks.

    And what are some of the things that developers get wrong?

    ..... and the gold nuggets!

    Cate Bakos's gold nugget: Bedroom count can create a difficult compromise. Is the bedroom too tight? Is the proportionality of the unit not feeling right? You have to ask yourself the question; "Have you bought yourself a lemon?" Overcapitalisation risk challenges the profitability of making changes, so buyers need to search in the right area for the right townhouse.

    Dave Johnston's gold nugget: If a townhouse is going to be a stepping stone home or an investment, it can be quite feasible for first time buyers. Dave implores buyers to consider buying into a great location that is close to where they would ultimately like to live in their family home.

    Mike Mortlock's gold nugget: Mike likes townhouses! Provided, of course, that they are well-located. He notes the stronger rental yields, but his concern is that of scarcity.

    Show notes: https://www.propertytrio.com.au/2024/05/13/all-things-townhouses/
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    47 mins
Economics Personal Finance
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