Episode 159 | Why hasn’t the property market crashed? | Eliza Owen, Core Logic

Economists anticipated an inevitable property crash, but where is it?
‘Forecasters’ have been holding their breath for the property market to crash for years, it was only during Covid that it looked inevitable. They said it’d be at the peak of Covid cases, the tightening of restrictions and of course the ‘September cliff’, but here we are and the property market is holding strong and banks are even turning away potential customers due to being stretched thin from an influx of new pre-approvals. The question is: where is our long promised crash?

We can’t get enough of the superb Eliza Owen, welcoming her back for the fourth time! Eliza is Core Logic’s Head of Residential Research and author of various Core Logic reports and articles, most notably their Pain or Gain report. In this episode we look back in hindsight on the performance of last year, and why the property market has not crashed despite mainstream media and revered economists expecting.

Here’s what we covered:

• Why hasn’t the property market crashed?

• Where has listening been hit the hardest?

• How have Brisbane properties performed over the Covid period?

• Is the property market slowing down during the holiday period?

• How have capital cities performed differently from each other?

• What type of properties have been hit the hardest?

• What areas have already seen an uptick in new residents?

• Are we going to experience an undersupply of apartments in the near future?

• How does the loyalty tax work and is it unfair or just competitive?

RELEVANT EPISODES:
Episode 157 | 2021 Forecast
Episode 135 | Eliza Owen
Episode 115 | Eliza Owen

GUEST LINKS:
https://www.corelogic.com.au/news/why-didnt-australian-housing-market-crash
www.homebuyeracademy.com.au/workshop

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: https://linktr.ee/veronicamorgan

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au

Send in your questions to: questions@theelephantintheroom.com.au

EPISODE TRANSCRIPT:
Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…
This episode was recorded on 15 December, 2020.

Veronica Morgan: Predictions about falling property prices came thick and fast. Once it was obvious that COVID was going to put a large chunks of the economy into lock down these range from an optimistic 5% dropped the standard bear warnings to brace ourselves for a 40% crash. Yet none of these forecasts have proven to be correct. Why hasn't the Australian property market crashed.

Veronica Morgan: Welcome to the elephant in the room. This is the podcast where we love to talk about the big things in property that never usually get talked about. I'm Veronica Morgan, real estate agent buyer's agent co-host of Foxtel's location, location, location, Australia, and author of auction ready. And I'm Chris Bates mortgage broker. Before we get started, I need to let you know that nothing we say on here can be taken as personal advice. We always recommend you engage the services of a professional. Don't forget that you can access the transcript for this episode on the website, as well as download our free fall or forecast report, which experts can you trust to get it right? The elephant in the room.com did I use

Veronica Morgan: Joining us today is Eliza. Oh, and head of residential research Australia at core logic. Eliza will no doubt be familiar to you all. She's been on the podcast a few times and we spoke to her about the potential impacts of the coronavirus on the property market. In episode 115 at the beginning of April. Now, with the benefit of hindsight and all that amazing property data she has access to Eliza is here to share her analysis and what's happened to the property market in 2020. Welcome back, Eliza. Thanks. Thank you for having

Chris Bates: Me. I love your report A couple of weeks ago where you said you know, the title was why didn't the Australian housing market crash. I mean, there was a lot of consensus here that was going to crash obviously, but what did you learn from sort of putting it together?

Eliza Owen: So at the beginning of COVID-19, we were trying to gather any insights we could on what might happen to the property market based on how it had performed through previous negative economic shocks. And we noticed that housing market values had been fairly resilient even increasing through events like the.com bubble burst and the Asian financial crisis. And even during the early nineties recession, the peak to trough in the national

Eliza Owen: Housing market value was only about 4%. So I think just really trying to help people reconcile how you can move through the biggest economic contraction since the 1930s and still see property values increase or begin a recovery trend. And just making that really clear so that we could have, I guess, better foundations for discussions around, for example, housing affordability, where there will be people finding they have less hours work or lower levels of income, more competition in the labor market. Meanwhile, property prices are rising. So just really trying to frame why the housing market didn't crash and how to make sense of that. I, I thought it was quite important.

Chris Bates: Well, yeah, I mean, I guess it's, now that we're sort of potentially on the other side of that, COVID sort of thing. We don't know if it's 20, 21 is lot 2020, but you know, what are some of the key learnings you kind of supported the property market and why? It didn't just fall off a cliff, which lots of people were sort of all the banks were predicting, you know, 10, 15% drops, you know, the usual property bears are out there saying thirties and forties, but w what do you think really supported at that? So it's fine. Maybe now we had a huge spike in unemployment.

Eliza Owen: The biggest thing was the reduction in the capture rate and how that influences the cost of mortgage debt. And I think, you know, initially we did see, it's not like prices didn't fall. We did see an initial shock with the onset of COVID where I think the amount of uncertainty and the amount of unemployment did weigh down on the property market, but the peak to trough decline, wasn't 10% nationally. It was 2% nationally. So low cost debt, the RBA has reduced the cash rate by 65 basis points over the year. It's now sitting at a record load 0.1% and, you know, historic analysis conducted by the IBA tells us that a 100 basis point reduction in the cash rate can lead to an 8% increase in property values. It's sort of the midpoint of outcomes. And it looks like that relationship has held through this period, particularly as it's converged with a fairly strong recovery, not just in the economy, but in consumer sentiment, consumer sentiment has risen about 15% over the past two months which is just an extraordinary rebound and consumer sentiment.

Eliza Owen: The index itself is sitting above 100. So that record low cash rate has converged with this incidence of people feeling like things are much more back to normal, even if that isn't quite the same for everyone. The second major factor that helped to insulate the property market, I believe has been mortgage repayment, deferrals where this institutional response. And, you know, I've talked to you guys before about how institutions really do have a role in ensuring that the property market, it remains stable. And so the Australian Prudential regulation authority stepped in with the I guess, facilitated banks to be able to defer mortgage repayment, deferrals it even extended that facilitation. So initially we were thinking all, there's going to be this big mortgage cliff in September, where everyone's going to have the rugs whipped out from under them. And of course, that bridge got extended right to March next year on a case by case basis.

Eliza Owen: So mortgage per payment deferrals essentially meant that people who didn't want to sell didn't have to sell, which I think prevented an influx of distressed sales potentially coming to market. And what's interesting is that the longer that policy has been extended, the more of a recovery is happening underneath that. So we saw that mortgage repayment, deferrals peaked at 11% of housing loans. I think it was in may, which was the peak and that since come down to just 4% of housing loans, which is still a lot, but it's come down pretty significantly. So that's the second big thing that I think has helped. That's helped keep listings levels. Low stock is still very low and that's put, I think, upward pressure on prices. And the third factor is basically the idea that this particular economic downturn was a managed downturn in the sense that it was the government stepping in and physically restricting the operation of business that was in the social consumption space.

Eliza Owen: So namely things around the arts, hospitality, tourism, and the, the, the people who work in these kinds of sectors, where, where the job loss has been most significant according to data from the Hilda survey published by the RBA basically analysis has taught us that people working in those sectors are more likely to be young and they're more likely to be renting. So the nature of job loss hasn't necessarily had a direct impact on mortgage holders, as much as it has renters. And so that I think has potentially preserved some stability in the market as well.

Chris Bates: It's interesting you say that around diet manufactured sort of government response and no restrictions because the downside, when you look back at Asian financial crisis, the JSA 87, a lot of there was a banking crash, a trust in the system and a flight to safety where all stock markets sort of no one knew what tomorrow would bring and everyone was rushing for the Hills, but That happened in the stock market, but it quickly bounced back. Right? So yeah, it's, it's, it's a different sort of downtown or, or tough time compared to a banking crisis and why you probably finding it, you know, the stimulus and bounce backs being a lot faster because there are underlying trust issue going on with institutions. It's more a case of, can we work if we can work, let's work sort of thing.

Eliza Owen: It's a very different kind of downturn. I mean, there's still that going to be impact from it. I mean, even considering how businesses operate when they've had to become used to being less labor intensive, say, and more technology dependent or more capital dependent that could have a lasting structural impact on the labor market. But I, I think we have seen, I'm not going to say V-shaped recovery, but a fairly strong recovery across indicators, like household consumption the level of jobs and consumer sentiment, which as you say, have kind of haste and a bit of a recovery and I guess confidence in the housing market as well. And of course, just coming back to that fundamental that we've seen throughout historic negative economic shocks, which is that the housing sector itself is slower to transact. It has longer hold periods. And as such does not have as much volatility as say the stock market or, or equities or whatever.

Veronica Morgan: Thank God for that. Yeah, it's interesting that, you know, the distinction, I guess, around where the PR the majority of the job losses and, and those people typically are renters, not owner-occupiers or homeowners. And obviously if they're renters, then it still impacts the property market because the landlords will be impacted if they can't afford to pay the rent. And that we do know about buildings with vacant you know, a number of buildings that I can think of off the top of my head, you know, that have apartments that are vacant, that have been struggling to, to relate. They're starting to come on the market as sale. So it's like, there's a, there's like two speed market, you know, there's the apartment market in areas of over supply and then there's houses, right? And it's like, goes back to the old fashion days. You know, our houses are much better investments than apartments. It's sort of, you know, it's like, Oh, well, right now it sort of feels very much that that is the case. How much separation is, are you aware of, in terms of the data that sort of tells us two different stories?

Eliza Owen: Yeah, that's a great point. Veronica and I, I, I think what's been interesting about looking at trends in the rental market more generally is that a lot of the loss in rental incomes has been concentrated in areas where there is a high proportion of investment properties, where there has been high exposure to overseas migration because international border closures where the vast majority of international visitors are initially renters, that's impacted certain markets more than others. The portion of people working in sectors like tourism, hospitality in the arts. So ultimately the trends that we've seen for example, across analysis, we've done from Brisbane, Sydney and Melbourne is that it's the inner city rental markets that have been most impacted if you can sit up Melbourne rental incomes. So the unit asset, and this is even just across the whole of the greater metropolitan, the rental change over the year has been a decline of 7%.

Eliza Owen: And that's across the greater Metro. If you look at the changing rents for just in a Melbourne, you know, it's getting towards 10%, the losses across rental incomes are also correlated with losses in dwelling values. And so again, in a Melbourne is where we've seen the value of properties dragged down a bit more as well. Because yes, as you say, a change in rental income is going to influence investor pricing and valuation of what, what they're going to pay for a property as well. And on top of that, the actual investor participation in the market has been declining certainly through COVID before. So for the past two years, ever since there was that temporary cap on interest only lending. So even investors who are trying to sell, who are struggling to get rental income, to help subsidize or cover their mortgage a finding they might not have as many buyers because of that declining investor participation. So you know, that that's certainly a dynamic way in a city rents have come down. Interestingly, the periphery of CBDs and regional Australia have generally seen if not an increase in rents, a kind of stability and rents. And I think again, that kind of comes down to a less exposure to overseas migration and things like that.

Veronica Morgan: There's the danger really is this, is this the danger playing out of, you know, all of that investors stock, you know, all those, those buildings built specifically to be marketed to investors. Now you've got an over, over supply of vacant vacant properties because of course owner-occupiers typically haven't been the target market

Eliza Owen: For sure. I mean, there's elements. I don't actually know the data for the investor lending space, to be honest, but information published by the IBA reminds us that people who have struggled with their mortgages during COVID because of job loss or income loss and that sort of thing. There are capital buffers that, that people have there are buffers that people have in terms of prepayments. So, you know, we I, I've gotta be honest. We have seen a pretty strong uplift rental listings across inner Melbourne in particular. And I'm not sure how much of that is distressed and how much of that is just pent up vendor demand coming out of a long periods of restrictions. But I, yeah, I think until we have more data it's you know, I'm not completely alarmist about it yet, but certainly there are there has been more of an impact.

Eliza Owen: Investors are definitely quote unquote, the loses, I would say, of the COVID pandemic, especially in those inner city markets. And, and more than that, the, the rhetoric right around. So when we saw the mortgage repayment, deferrals were extended by AHPRA in their facilitation until March, 2021. On top of that, we had CBA coming out and saying, well, they're going to have a moratorium on the full closure of loans where someone's been impacted by COVID until September, 2021. But a lot of the rhetoric around that has been about keeping a roof over people's heads, not helping people keep their second or third or fourth investment

Chris Bates: Property. So

Veronica Morgan: I think in that sense as well, like politically, there's more of an emphasis on assistance for owner-occupiers And that would make sense. He's not, and there's not a lot of sympathy out there for investors having extra properties when there's still the affordability debate. Right. Yeah, for sure. '.

Chris Bates: But I guess that's the worry going into 2021 is that investors start to come back into the market. Cause nothing kind of makes me happier than saying first home buyer percentage rising as a percentage of all purchases. I think it's, you know, especially if they're doing it right, but you know, and then the upgrade is always going to be, be proud of the market downsizes, et cetera, but it's when investors start rising, like they did in 2013, 14, 15. And as that happens less, that first-time buyer sort of starts to decrease. And then you start to get these discounted content from, you know, young families and couples. And then it's, you know, usually the, the baby boom is, or the, you know, the gen X that are buying their properties and then you start to crack a social issue, I guess, where inside, we don't want that to happen again, but I kind of feel like that may be happening next year, just because rates are so low,

Eliza Owen: I think it might occur in smaller capital city markets. Indeed. You know, we're already seeing it rebound a bit in Hobart. I think the portion of investors in terms of the portion of mortgage finance for the patches of, of property had bottomed out a couple of months ago. I think it bottomed out in August and as of September, October had started to increase again, what we're seeing across the smaller capital cities, even though rent rental markets in Hobart had recently taken a hit Hobart dwelling still have the second highest rental yield of the capital cities with the gross rental yield of 4.6% across the dwelling market. And then you've got in Perth, for example, rental incomes have increased a whopping 8% over the year to November. Investor participation is very low. And I think what may happen is that we'll see that participation bottom out either this year, early next year, and then potentially start to climb as investors look for you know, an asset investment that that can deliver potentially a positive cash flow, which you might get in some of those markets, as you say, because of those record, low mortgage rates.

Eliza Owen: And WIA is somewhere where first turned by a participation has been exceptionally high relative to the other States and territories. And yeah, I think that's a trend I'd be looking out for just given the increase in rents and the long correction we've seen in the rental market. So it'll be interesting to see if that plays out

Veronica Morgan: Sorta interesting because Perth like the medium price of house price in Perth is sort of low compared to what you think, you know, for pub for a capital city. Right. And is that because would that be because it's maybe intrinsically undervalued in some way?

Eliza Owen: I think it's to do with a just the extent of the mining boom and bust and how confidence has played into that. I think there's a kind of recency bias where people think that because Perth has enjoyed such a long decline that that would probably continue to keep happening, but there is a point in the cycle where dwelling values get down to a point that people are just willing to stop paying for them again. And that's reflected in the higher participation of first home buyers and our neuro occupies in that market. And that's reflected in the, you know, bidding up of, of rents is that market has tied in and corrected. And I think it's something where investors may start to take advantage of that. I mean, that's just my understanding of how the markets have performed cyclically is that an increase in rents will usually get whittled down by an increase in investor participation. I'm not sure if it COVID and potential risks or even the awareness of the boom and bust in the mining sector would have implications for how that changes over time, if it's that relationship with change. But I think it, it just seems like something that makes sense to me, but I could be wrong. I've been wrong before.

Veronica Morgan: The other side of that coin is, is in a booming market where vendor expectations, overreach, the willingness and capacity of buyers to meet, meet them. And,

Chris Bates: You know, I've seen it many, many times where all of a sudden you sort of get at that point with where you see competitive auctions passing in because the owners just have their expectations have just gone crazy. And then clearance rates start falling and people start talking about falling prices, cause clearance rates up falling. And they're not recognizing it's necessarily that actually the owners are just called greedy. But this happens in little Marco forums and, and I've seen it be in sort of a more wider spread to at different times. Is that something that you would also anticipate?

Eliza Owen: Yeah, I mean, I think that's something that you see at the cusp of a change in the cycle more broadly. I mean, I think you're describing a cycle, right. And what I'm describing really well, the human nature, I, there is an element of stickiness there where interest rates, you know, might start to change or affordability constraints may, might start to tape a growth in, in the property cycle and, and vendors may have an attachment to what they think a property is worth based on what's happened in the market over the past few years, but that does eventually have to change because otherwise they can't make a sale. Right. So but yeah, you definitely do see that for sure.

Chris Bates: Well, one of the things I always track on you do an amazing sort of monthly report. I'm always quick to download it when it's available for free on your website and always look at the listings sort of numbers. And you can just say for the last, say, five years listings across the board have been, you know, down as a nation, but when you sort of deal a little bit deeper, it's not across every city. You know, I sent an email when I caught up holding up, but it's other cities where listings are just down dramatically. Can you give that listeners a bit more context of where listings are really low across the country?

Eliza Owen: Great observation, Chris, and thanks for plugging the monthly chart pack, right? Yeah, so absolutely a trend that we've observed through 2020 is that transaction activity has been very volatile in response to social distancing restrictions. So basically it was a fairly cohesive or uniform rather trend where new listings volumes had plummeted by around 30% or around 50% rather at the onset of stage two restrictions nationally. Now we're at a stage where when you compare the volume of listings that are coming onto the market across Sydney and Melbourne, they sort of are relatively stable. They're sort of starting to match what we saw in the equivalent period of 2019. However, across the smaller capital city markets, we're still seeing listings volumes are very, very low. So if you compare the total stock on the market across Darwin, for example, sitting at about 40% lower than what we saw in the same period of 2019 of course, part of that's because it's Darwin and the numbers are always a bit more volatile when, when you're dealing with lower numbers there.

Eliza Owen: But Perth, Adelaide, Brisbane listings volumes are about 20% below where they were this time, last year across Perth and Brisbane about a third lower across Adelaide. And I think that's where we've also seen more divergent performance across the capital cities as well. So Canberra, Hobart, Adelaide, and Perth and Darwin as well. They've all seen dwelling value increases since the onset of COVID-19 and low stock levels are a part of that. Sydney and Melbourne, I think they might be a bit more maybe uncertainty or motivation to sell. I, I w I do wonder if you know, there's just people kind of staying put amid the pandemic, maybe not wanting to move or not wanting to sell. And maybe that's why we're seeing stock on market is relatively low. There may also be a lack of information as to whether it's a good time to sell property, whether you're expected to get the best price. You know, when you're in a recession

Veronica Morgan: That, or the weed thing about that is if you're looking in say Perth and Darwin, well, they've had a shocker of a decade each. And why would you suddenly stop putting your property or not put your property on the market at a time when prices start moving? Like, isn't that a bit paradoxical that higher stock levels when there's no price growth or negative price crisis. And like, obviously the lowest levels I should say, contribute to price growth, but then you think, Oh, goodie. Now it's time to rush, rush on the market. We're waiting for this, or is it human nature that sits there and says, Oh, great, we're on the, I'm on the beginning of a boom. I'll wait. Now I don't really know the answer. I'm just, you know, positive.

Eliza Owen: I'm not exactly sure either. I sort of wondered if it wasn't the initial shock from COVID where people were resistant to sell their property because of the economic uncertainty and people perhaps anticipating that they wouldn't get the price that they wanted, whether that's continued through the rest of 2020, and there's still that uncertainty. But I do think I, I feel like a fairly notable trend, especially among regional markets, is that people have been less inclined to move, which may speak to the relatively low levels of stock on the market as well.

Veronica Morgan: Although there's plenty of people from Sydney and Melbourne that wanting to move to regional areas.

Eliza Owen: Yes, potentially. Yeah, I think yeah, so I mean, the regional, the regional versus Capitol city is one, that's got a lot of attention through COVID and we have seen regional markets out outperform in terms of capital growth over the year. So the combined regional Australian markets have risen by I think it's about 6% Yetis. So combined regional markets are up 6% in value of the year compared to the combined capital city markets, which are up two and a half percent. And a lot of that it's been very difficult to discern whether that was actually caused by people moving from cities to the regions or whether that was some other factor, right. Relative affordability something around the, the different cycles of, of capital cities versus regions. And usually we wouldn't really know until we get the regional migration data from the abs, which was set to come out in March next year.

Eliza Owen: The abs did release a provisional migration data set, which gave us some insight into movement between capital cities and regions. It wasn't down to the sort of detailed very granular level, but it was sort of that capital city versus rest of state region, that data showed that in the Melbourne Victoria that dynamic in the June 20, 20 quarter during the West of economic and an initial stage two restrictions, there was a big movement from the metropolitan to the regions. And it was significant on what we'd seen in the same period in 2019. So instead of a net migration position to Melbourne of an additional, 150 people that we serve in the June quarter of 2019, it was nearly 8,000 people that had left or, or a negative net position of 8,000 from Melbourne. Wow. Yeah. So there was this surge in people moving from Melbourne to regional Victoria in particular, but the same story wasn't evident across new South Wales. It wasn't evident across Queensland. So I think in some aspects that narrative, while it's very easy and it's very comfortable to fall into in terms of explaining regional price growth I don't, I'm not confident we've got all the data we need to fascinate on that trend.

Veronica Morgan: And so besides a lot of people making decisions based on these, you know, a lot of my clients are talking about, Oh, well, maybe I should just invest in these regional areas. I, Whoa, Whoa, Whoa. You know, I feel like we just don't know enough and we don't know how permanent this is going to be. And also, like you say, you don't have enough information to make these assumptions that this is an ongoing thing. So that's actually quite interesting that you say that there's a discrepancy from one state to the rest of the country when they're mitigating, Oh, saying this stuff, you know,

Eliza Owen: Well, when you see it anecdotally, and perhaps if people go off a gut decision, maybe that is better than waiting for the data. Because once all the.is out, I don't know, you may have missed a but, but, but what I would say is you know, population is fluid as we've seen through this period potentially as well, but there are mitigating factors. My office has got a return to work strategy. I'm in the office now. Prices have fallen in the inner city markets of Sydney, Melbourne, and Brisbane. So maybe that could really attract people. And the other thing about that migration data to the regions is that we noticed a deterioration in the internal migration position for capital cities really starts around 2014, 2015, where as we know, that was when housing values were rising pretty rapidly across Sydney and Melbourne. So that suggests to me that at least the deterioration initially, or what really prompted people to the regions initially was an affordability situation. So maybe there've been people seeking properties in regional Australia because they're just cheaper. Maybe rental value increases have taken place at the periphery of the metropolitan because you know, people have lost their jobs or they're on job seeker or something, and they found more affordable rents further from the city. I don't know. I don't really know. Yeah.

Veronica Morgan: And also when you talk about process of born in inner city markets specifically, what is the data saying there? Because you know, as a center, we see two-speed market houses, Oh my God, they're just nuts, crazy growth and crazy competitive, and yet apartments, just a lot of stock. And if certain types of farmers in certain areas is that, are you sort of saying that it's inner city areas is predominance of apartments? And so that's what you're referring to.

Eliza Owen: That's part of it. Absolutely. The fact that the, so I had been researching and when I talk about a lot of the value declines in property markets, I refer to the dwelling value decline. So I'm talking about the, the all house and unit stock that combined value and how that changes over time. So often when you're talking about an inner city Sydney market, for example, that would be, that would be represented by a lot of units. Right. And it has all those characteristics. It has a high investor concentration. It has a high exposure to overseas migration and it's been more vulnerable to declines through. COVID-19 so yeah, if we look at some of the Waco performers over the ear, it's, it's definitely been Sydney's city and in South in a Melbourne inner city Brisbane. But I mean, as I mentioned earlier in the show is, well, we are sort of in more of a recovery trend now. So those value declines have started to move towards a recovery trend. And but definitely the stronger performance has, I guess, they've correlated with more distance from the CBD. That's what I found.

Veronica Morgan: If you like, what you're hearing here, please share this episode with others, you feel would benefit. And while you're at it, why not leave us an iTunes review five stars, please. Every review helps make it easier for other people to find us and hear what our amazing guests have to say. We love hearing your questions and we're planning more listener Q and a episodes. Please send your questions in. You can send them via the website, which is the elephant in the room.com.edu or directly via email. Two questions@theelephantintheroom.com.edu.

Eliza Owen: I'm interested because for lots of reasons, one, we also, we always talk about understanding when you're buying a property, whether it's delivering or as an investment, you need to go granular. You need to understand local dynamics. You need to know what's going on in the ground. And yet you're talking sort of dwelling, dwelling not, and for instance, and that's of no use to an individual buyer trying to make a decision because if they're relying, pulling data for instance, and they say, well, process of falling, and they're trying to compete for a house in Navigant to buy a house. And so where does the data that you're talking about? How does that become useful? Because obviously it's useful for decision-making various institutions and organizations. How is that useful on the, on the greatest, in the greatest sense? Totally. So I think talking for me in synthesizing information around the property market and COVID-19, it's allowed me to, I mean, usually when I group housing markets, I look at it at a pretty high level, right?

Eliza Owen: Because I'm a property analyst who's expected to report on the Australian housing market of which there is no single market. Right? So when I grew up into regions, I usually group into what's called an [inaudible] region, which is there's 88 of those across Australia. And it helps me to break up capital cities and regions. And in that, because the essay for boundary that we use to define markets is guided by the abs. So the Australian Bureau of statistics who publish employment, data, population, data and various other demographic and economic metrics to those same regions. So that's how I sort of can make comparisons around exposure to overseas migration and capital growth performance. But, you know, if you want to go down to a more granular level, we certainly have those capabilities. And we sell reports that are, you know, top rental market performance and top capital growth performance, and things like that. And that can be done at the suburb level, for sure, with certain parameters, ensuring that there's enough data to create a, a valid metric. But I always get, so one of the most common questions I get asked is where should I buy?

Veronica Morgan: Yes,

Eliza Owen: It's such a hard question to answer because, well, I don't know someone's situation. Right. But I would also say even when we're looking at say high level geographic data, or, you know, of course when you talk about 12 month windows of growth, there's going to be wildly different performance across parts of Australia. Yeah. But I would also say don't judge your property purchasing decision on the 12 month window of performance, because you're not going to own a property for 12 months. You probably are in a property for several years. And that's where if we look at say the 10 year annualized growth rate of different submarkets across Sydney, Melbourne, Brisbane, there's not too much in between the annualized growth rates over a long period of time because markets sub markets do tend to follow the same broad patterns over a long period of time. So, you know, if you're looking at those sorts of long-term trends, I would say that the average long-term annualized growth rate across Sydney dwellings has been about 5% as opposed to 4% in Melbourne. I'd say for Sydney, it's been, you know, above 5% in houses, about 3% in units. So that kind of long-term trend looking at that and maybe helping people guide decisions that way. But even then, like maybe you're not off the capital growth. Maybe you want to live on a beach somewhere, or maybe you wanna although I'm sure living on a beach would coincide with capital growth in some form. Right. You know, it's just, it's a very personal thing. Yeah. Right. Roaming and, Oh my gosh.

Eliza Owen: So true. Paul Byron. I know, I know. Yeah. So it's a really hard question to tackle, but we do have data, I think that can service both institutional decision-making and broader economic information as well as helping people with that personal property journey and researching that as well.

Chris Bates: Yeah. One of the interesting bits of the data that I would love to sort of see just like when you were working at one of the big listing portals the data that you were getting access to there, you're out to look at it, but I mean, you know, search stats are and where people are engaging with certain listings. And we know there's lots of buyers per listing, for example, at that sort of data is just impossible to get, unless you go into every single open home, if you can get it as sort of a group or a sub level and get some pretty good insights on where it demands shifting. One of the things that you definitely do get potentially sellers potentially do with CMI or real estate agents do sort of valuation report on the property, which is hard to say that it's worth a lot of money because it's, it's a lot more complex than that, but, you know, the actual, you actually, you know, the actual getting real estate agents going and doing same as you saying that as a huge increase that people are doing that over these last few months, I upgrade is thinking, what can I sell my property for can actually go into a real estate agent.

Chris Bates: So while these things aren't going up now, for example, that you're getting a lot of CMOs in different cities, for example.

Eliza Owen: Yeah. So that was a piece of metadata, basically, that we started tracking with the onset of COVID looking at the amount of CMA reports being generated and that dictated the volume of listings or the direction of the volume of listings by about two weeks. So yeah, I haven't actually checked the CMS.

Veronica Morgan: Sorry, what am I going to play with today? 

Eliza Owen: Last I checked, it was still pretty stable and much levels that we're seeing this time last gr but they grow, I've learned my lesson. I need to check that in case I get asked about it on a project,

Veronica Morgan: Just in case, how many do you know though? I mean, how many agents actually use that facility versus actually work it out themselves or don't bother because let's say you still see plenty of that. Don't bother. Is, is there a, do you have an idea of a proportion or is it, is that another question you go, don't ask me? Oh, well

Eliza Owen: That it has a very high correlation when it's lagged by two weeks. So it's correlation of like 0.9. So very high incidents of increased generations of comparative market analysis reports to the direction of listings and the volume of listing, or, sorry, the volume of CMS generated per listing has kind of changed over time as well. So coming out of COVID 19, we started to notice more CMA has been generated for each listing that, that had come onto the market. Suggesting agents were working a bit harder coming out of a little while after coming out of stage two restrictions. Now it seems as just been an absolute surge of listings, particularly across Melbourne over, you know sort of monthly period amid stage three and four restrictions. There was about 2000 listings being added a month coming out of stage four restrictions that shot up to over 8,000. So it's just been yeah, an enormous increase in, in stock, across Melbourne, and again, tracking how that compares with sales volumes on the aggregate. It seems that sales haven't done quite as much to absorb that new stock in, in Melbourne at the moment. And I think that could be a bit of a, that could weigh on the recovery trend across the city as well, even though we did see values across Melvin increase in November I think it could, you know, potentially dampen momentum in that market.

Chris Bates: Yeah. I mean, I was a bit surprised that the listings in normal is so high. You think, you know, if you were selling a property, you'd want to start to see some decent results of similar properties to yours, sort of leased and sell, you know, to have the market sort of be tested before we go through the whole effort of styling at paying for marketing costs. And maybe everyone's just, well, I want to get out of here. I really want to make this change. I don't want to waste any more time. I lost all 2020, and let's just take the market and try a lot. I guess that's pretty dangerous when lots of people list at the same time, because you have more choice. But anecdotally, as well as being different buyers agents down in Melbourne it sounds very similar to Sydney in terms of the two-speed market.

Chris Bates: You know, the houses in good areas, still very, very low stock in massive competition, you know, three or four strong bidders on at auctions. You know, there's just not enough quality properties, but when you look at those numbers, you think, Oh, well I have lots of listings. But it's just those two markets, which it's really kind of, the vowel is getting lifted on the way you've got your asset at the moment. You know, investors probably thought that I could just get away with it. And you know, the first time buyers will buy the apartments, but the first time buyers are saying, well, actually, you know what, let's go to Dallas, but let's go to Jalong. Let's go to Mornington peninsula. So even though you are going to buy these apartments, you know, we've been complaining about lack of stock for years. Really. I think you mentioned it's been five years and certainly in Sydney I could track it. I could see it real change in 2016 and, and transaction numbers. Haven't, you know, if I look at suburb level, you know, in the suburbs that we buy in, I haven't seen a massive difference in transaction levels over those last say, four years. And so that says to me that listings levels, this might be hiding something because there have been a lot more off market properties. And it's certainly the, in which agents are

Veronica Morgan: Selling. And I've said this before on the podcast. So do you have access to anything that, that shows, I guess, a correlation or chosen a difference between transactions and listings? Because we there's so much commentary around listings and so much, you know, put down too low listings, but I wonder if the same amount of properties actually transacting, whether that's actually probably an argument, we shouldn't be having a conversation that it's not, it needs some nuance to it. Yeah.

Eliza Owen: I think there's definitely a lot in, in that and some things that we can do, right? So we, we obviously have various sources for listings information and we follow the whole property journey, right. Is as well as the, the transaction of the property. So retrospectively we can go back and say, okay, well, how many properties sold that didn't have a listing attached to it. And in that sense, we can retrospectively get a sense of same off market sales. And we have done a little bit of work in terms of correlating that with market movements. And we generally find that in a downswing, there is a bit of an uptake in the portion of properties that are sold off market. But I think I don't know that, you know, given the rebound that we've seen in listings volumes at the moment that we would see, you know, given the recovery in the market that we seem to be entering at the moment, I don't think we'd be seeing an uplift in off market sales, but we will monitor that data because it might be, you know, if there is a higher incidence of distress sales, maybe people want to do that more discreetly.

Veronica Morgan: I'm just saying, because traditionally what you're saying is exactly as we've always experienced it, when markets slow down and off markets go up, because people are more nervous about exposing their property and they don't want to invest in marketing and all that sort of stuff, because they're not in, they're not convinced they're going to get their price, but I just noticed, it's just, it seems to be driven by agents is their sales, their sales process now is to sort of offer or Lou or the the idea of an off-market sale to owners. And so therefore there's a higher proportion of properties that does sell in that pre-listing phase, if you like than before. And when the market started turning again and turning up after the election last year, you know, I was expecting to see that fall away. And it didn't, and agents was telling me, no, we're still selling 20 something up to 30% off market. Now, some of that, I wonder how much of that is just agent bull, but, but it does, you know, when I'm looking at transactions like, Oh yeah, that sold off market that did that. You know what I mean? I could see evidence of that actually being the case. And so I just was wondering whether, because that seems to be like a structural shift in just in the way. And I'm only talking in a Sydney, of course, I know it's not necessarily The case elsewhere. But it does seem to be a structural shift if you like in the way in which property gets to market,

Eliza Owen: As always, I've got a new research project coming away from this

Veronica Morgan: Excellent questions and, you know, and, Oh, and on that, because you know that when your favorite research projects that I so love this time round, we don't want to take away from that one, by the way, I'm waiting.

Chris Bates: For your charts. But one thing that really is quite striking is that the portion of new home sales is crazy, right? Is it 20 year highs for new houses, like detached homes? When you look at the sort of approvals for apartments, they're sort of back to like they were in the nineties and early two thousands. So a massive contraction for the construction industry, if they're building apartments, but if you're a home builder, you know, it's basically the most busy you've been in 20 years. How do you think that's going to potentially play out? You know, obviously the home builder policy was a B stimulus to, to encourage that, but do you see this real lag of unit approvals to a sort of confidence is back for investors? Or how do you think it's going to play out?

Eliza Owen: Yes. So construction patterns have always followed market movements and whether prices are going up or down is kind of a signal to develop is whether to be letting more property to market and things like that. The construction space at the moment. And I might think the property space more broadly is so interesting because overall this year has seen a shift from a focus on the inner city to the periphery of Metropolitan's and regional Australia. It's seen a shift from the apartments, as you say, with approvals sitting below the decade average to detached housing construction, which is now sort of rocketing above its its decade average. So that, that real divergence and shift between houses and units as well. And a lot of that has been informed by policy. Homebuilder was obviously introduced for occupy segment and investor participation in the market actually tends to correlate with unit sales as well, which suggest to me that investors prefer unit stock, right.

Eliza Owen: Which is a pretty safe assumption we make anyway. So the fact that all of the housing stimulus introduced post COVID has been directed at new property and it's been directed at owner-occupiers has done a lot to support the detached house and land construction with a lot of that construction happening on the periphery of CA days. And for example, in new home sales, we've seen a significant uplift year and year in areas like or in PAC Gregory Hills the basically suburbs on the periphery of the Northwest and the Southwest of Sydney. And it's yeah, been, been really interesting. I mean, there are other nuances as to how home builder has been implemented. For example, I believe in South Australia, they had more flexibility around the contract signing date and the commencement of construction. So there's an argument that the grant was more strongly utilized in South Australia because of the way it was implemented. And indeed we have seen new home sales increased very strongly across South Australia as well. So I think it's just incredible how much institutional responses shaped the housing market through the pandemic and how that continues to be filtered through the banking sector as well.

Chris Bates: Sites start at 2021. Now, when this gets released, we always do a full forecast, the report. So you'll have your pretty guts to make some forecasts, but if we're going to go around the grounds and a bit of tiny and shake here, what, what do you think is going to happen? You know, if we were going to, you know, do you think Perth say, know if we go around, do you think you're going to, would you be game to put some figures on what you think these places are going to rise over the next 12 months?

Eliza Owen: I'm probably not a good enough research to be able to put numbers on it. I mean, okay. To give you some perspective, I think I said, I may have already told you this story, but I think it was this time last year, I said that the housing market was going to be at a record high by April and then a global pandemic happened. So I was a bit off, but look, are you on track? I said, if it didn't happen, I mean, certainly I don't know about the Australian property market. I can only speak for Sydney, but you were definitely on track and Sydney, you guys, I think by April next year. No, I'm kidding. Okay. So yeah, I think that property values are likely to increase across yes, Darwin. I think the momentum will continue across Adelaide. The act act in particular because it's got a long way to be squeezed in terms of the affordability metrics, if that makes sense.

Eliza Owen: Which sounds like a really, that sounded like a really weird way to put it, but basically ACP is currently the third, most expensive market in terms of median prices of the capital cities. But I believe it's actually the fourth most affordable in terms of local incomes. So with record low mortgage rates and this market being particularly popular with owner-occupiers well, I think that that is set to see further increases over 2021 Brisbane, Perth, Sydney, Melbourne. These are markets that haven't performed as well since the onset of COVID-19 Melvin's down about 5% from where it was in March this year. However, we're already starting to see these markets being brought into a more broad-based upswing and recovery trend. And again, it's purely off the back of that cash rate reduction. So I would expect a kind of recovery to be happening across Melbourne and Sydney.

Eliza Owen: I think we already saw the start of an upswing in Perth and Darwin. It was kind of disrupted by COVID, but I think that will continue next year, Southeast Queensland. I think the house markets potentially have more momentum. I think we could start to see a cap in growth rates across the gold coast and sunshine coast just because they've already performed so strongly over the past few years. And I think they would start to come up against affordability constraints. And I think the inner city market of Melbourne until we see overseas borders reopened, that's probably more of where the risk is. I don't really see as significant recovery in rental markets or improvement in, in value performance across inner city Melbourne's unit market until we get international visitation

Chris Bates: Highly risky. Isn't it. When you think about that, you think about buying investments in those areas and then really being at the mercy now, I mean, obviously a pandemic, but other things could have halted immigration as well.

Eliza Owen: It's a funny old world for sure. And I think the other thing we've got to look out for in 2021 is that um you know, household debt levels or, or housing debt levels for households are extremely high sitting at I think it's above 140% for Australia's housing debt to income ratio. So the other thing we would be looking out for in 2021 is potentially opera stepping in again, around rising house prices and rising debt levels which might be triggered by high levels of debt to income ratio or, or high loan to value ratios. So, you know, previously when we started invest in boom and they stepped in to limit interest only lending and all that kind of thing. Now we've got an owner-occupier in particularly a first-time buyer boom, or, or lead recovery, I would say. So maybe there is room for Prudential regulation around how much debt, young people in our NeuroQuant pies are getting into.

Chris Bates: Yeah, it's really interesting because you've got what they did through the last sort of trying to slide the market. They talking to the investors with interest only loans 

Veronica Morgan: You know, the banks growing their investor book. So they said, look, if you're going to do it too fast, and then the interest rates for those were not through the roof and that kind of really discouraged sort of borrowers, but it's really hard to do it on a, if you're gonna put limitations, you really gotta have first-time buyers. And it wasn't that long than the last may where, you know, Morrison 75% deposits for first time buyers. So yeah, you potentially could see that in New Zealand you need a minimum of 20% deposit, which I think would be a good outcome for, you know, first time buyers. And I think the big problem is now, you know, with responsible lending potentially changing is that people can borrow more than they ever can at the cheapest rate they can. And so ultimately, you know, in two or three years time we'll have an affordability crisis and then we got back to the same cycle. So yeah, I agree with you, I think late 20, 21, it's going to be hard for the government just to sit on the sidelines and say, Sydney is up 20%. You know, we just keep going, I guess.

Eliza Owen: Yeah. I think opera has been very active in monitoring the Prudential standards of the banking sector more generally, but they've also tried to, I mean, some would argue maybe a bit late in the game, but they have intervened to reduce risky housing lending. And the thing about the RBA is that although rising house prices are a mechanism through which low rates can stimulate the economy. I think governor Lowe's made it pretty clear that the direction of the housing market isn't really in that Raymond, so my eyes are going to be on opera and what they come out with to, to see how that affects the lending space and how ultimately that will affect price growth and transactions and things like that.

Veronica Morgan: It's interesting, isn't it? Because it's so hard to slice and dice the property market when you're using these big, big clunky tools to stimulate, that can be a bit of a blood. Yeah, yeah, yeah. And then you've got a situation like, you know, I remember the first time we interviewed you Eliza and we asked you, you know you're, you're, you know, not a first for you were looking at getting the Mark at that point, you know, would you do it given everything, you know, and you said, well, I think the property market might be too big to file. And of course when that happened, I still remember you saying that, of course, there's all these vested interests in keeping it supported and you can see it play out with all the stimulus it's happened. And and then there's the unintended consequences of prices rising. And of course then people being locked out of the market and I worry that, you know, if they do start trying to clamp down, they don't clamp down on the stuff. That's the riskiest stuff. The pit, the first time buyers are buying, you know, all the brand new stuff, clamped down and other things, because I don't want to stop the economy by, by squeezing, you know, the, the new house land development and apartment building. So it's, it's all a bit, it's all, all vested

Eliza Owen: Interests or partly on top of each other. And I'm sounding good sound like Chris, the conspiracy theorist, you know, I would say as well, I remember saying that as well about the property market being too big to fail. And then I'm, I am aware that there is that very big caveat in there where we talk about Perth and Darwin starting this recovery and Darwin being a you know, a star performer since the onset of COVID, but it is worth noting that Darwin dwelling values of still about 30% below their peak value in 2014. And for Perth, they're still sitting about 20% below where they were in 2014. So yeah, that, that was a crash that, that housing market has undergone a severe correction. So I guess it doesn't, you know, it can't always be helped, but it's the, you know, that's, that's the role of appro to manage the Prudential standards, ensuring that banks are not at risk of collapse and, and within that, they do have an influence on the trajectory of housing values as well. So it's interesting to see that you think Cassano Chris's raises a number of times in our recent interviews. It's interesting to say that you think that that 20, 21 may well bring some, some more some more controls. Do you have a Dumbo for us today? Eliza, the Dumbo. Oh, I completely forgot about the Dumbo. I want to come on one of your friends, you're crazy. We are in our own homes. What have we done? Well, it could a Dumbo bait. Someone didn't take an opportunity in 2018, perhaps.

Chris Bates: Have you got any friends that have gone regional without a return to work thing? If you've got anyone?

Eliza Owen: No, no, it's more, it's not really a property Dumbo, I suppose, but on the return to work, I did order a very fancy office chair. So my heart it's beautiful and it's like green velvet. And when I ordered it, I saw it was I, I didn't check how long it would take to arrive. And it took 16 weeks and by the time it arrived, I was invited to go back into the office Because you know, that is a, you know, we'd be talking about work from home is, you know, being a real theme over a lot of our interviews over the last few months. And so, yeah, I think we'll accept that as a property Dumbo buying the chair until you went back to work, sorry, it's not more directly property-related, but it does tie into COVID and logistics and and whatnot. So there you go.

Chris Bates: Interesting point about that is you at a point in time where you needed something, cause you were feeling the pain you've looked for a solution and that's what a lot of people were doing at the heart of COVID. They were thinking, okay, I don't want to be an apartment. I know I'm never going to get back to work or they're going to allow me to work from

Veronica Morgan: Home. And I think now that's not the case. You know, you've got this real battle between employers and employees and your return to work policies and how to employees get people out. Well, we'll definitely get people back to work. It's just, you know, is it two days? Is it three days? Is it one day, four days. So I think having that sort of feature thinking everything's going to stay the same is not really what's going to happen in the next couple of years. Yeah. That's a really good guiding principle is that populations and you know, they're always reaction, right? They're always fluid. It's important to keep that in mind. Absolutely. I'm sure that if anyone, or if you perhaps had said right, COVID Exelon got a bit of work for her forever, I'm going to go and buy a couple of hours out of Sydney. We could have called you a Dumbo then since you're going to be back in the office now. Yeah, for sure. I really appreciate you coming on. Thank you both for having me and yeah. Have a wonderful Christmas holiday. I hope you have a restful break. You too am very much looking forward to talking to you when the next pain or gain.

Speaker 5: Yes. Sorry for the delay.

Veronica Morgan: Well, we'll look forward to that one. Have a great Christmas yourself. Eliza. Thank you. Thanks. I'd better elephant rider and this week's elephant rider training is well, it's interesting that Eliza said that the most asked questions she gets is where should I buy? And I have to say that been working on home buyer Academy, the most asked question that first home buyers ask us is where should I buy? And in fact, you probably do too as a mortgage broker, right? Where should I buy is just such a common question. And the problem is, of course, they're looking for a short, sharp answer like, Oh, these are the go suburbs. This is where you should get into, but it that's sort of misses the point. The point is property, as long as the city is a long game. And so therefore you have to be looking with a long lens and then trying to look at short-term data pointing you in any one direction is, is just fraught with danger.

Veronica Morgan: So we actually came up with a a workshop in homebuyer Academy, which, which people can buy for 39 bucks, right. And download, but basically takes you through the process of how to work out where you should buy a property. Because the thing is that it's, the answer is unique to everybody. And the big problem is that most people don't pull themselves out and have a helicopter view about what all the possibilities are before they're narrow back down in. And, and so by having a really focused view, a lot of biases that have to be focused in where they're looking. But they don't realize that they're missing out on so many other things and they may not have considered what compromises they're prepared to make in one area versus another, and also what their price buys them. And so there's those three PS that I've talked about many, many times, which is the, the property itself and the position or the location.

Veronica Morgan: And so you got to systematically look at past sales to work out exactly what you get for your money. And so the idea of where should I buy being this sort of easy to answer question is, you know, it's compelling, but it's completely and utterly misleading because there's a process you need to go through. And if you don't go through that process, you'll go chasing off and chasing advice that can be highly misleading. And so I highly encourage anybody. Who's asking that question to go to home bar Academy it's bar academy.com that I use workshop is that simple. And actually go through the process, learn to go through that process because if you do it, it will actually save you months and months and months of your own time. Because to do this yourself, you need to get out there and just pound the pavement. You need to learn property values. You need to learn what you get in different areas. You need to think about what your needs are, not just today, but tomorrow in five and 10 years time there there's, you know, there's, as I said, it's a helicopter view that you need to have rather than trying to pinpoint a location and going for it that way.

Chris Bates: I do really love this as the elephant, our boot camp, because I think it's, you know, you've got to ask them, find out the questions you ask are going to potentially depends on who you're asking that question to. And I remember I reflect on a clot now, quite recently, actually she said to me on the phone you know, wish I bought and just going back over her previous couple of property decisions her learning out of that was she asked where to borrow to the wrong people. And it's, you know, there are people out there that will tell you where to buy and and they're so confident and now pull it out in that little display pack, and this is the raw, then they've got their sales page. And so you gotta be super careful with the questions you ask because they kind of lock, you know you know, whatever the candy to a spruiker I guess, you know, it's kind of, you know, you're basically giving it up on a plight and sighing sell to me and I will sell to you and they'll sell pretty hard. And they'll convince you that it's there

Veronica Morgan: The next growth corridor.

Chris Bates: Yeah. And there's a whole page behind it, airports, you know, everything. So just be really careful asking that question because it's, you know, the right answer is what you talk about. Veronica, you got to go through a process, you've got to look at your personal circumstances, should go look at how your personal circumstances could change. Long-Term you know, when you have a family or what's going to happen with your work, are you going to stay living in Sydney? Are you going to move overseas? You know, what can you afford? You know, are you better to wait, you know, to get a pay rise or get commissions? Like there's lots and lots of questions which we do with clients. And ultimately then we figure out, okay, well, you know, actually it might be, that could be a good decision to borrow. Now you've got a budget of say a million, where are you going to get something that maybe you can grow into? Or if it's an investment, that's a great investment. So, you know, it's a whole process and it takes hours. And then weeks of sort of research till you get that clarity

Veronica Morgan: Rather than best place to buy is this suburb in this city, and this is what you need to buy right now. And the scary thing is that if you're looking for shortcuts, when you're buying a property, you're almost certainly going to do your money. Because yes, it is overwhelming. Yes it is. Time-Consuming yes. All. Yes, yes, yes. But the problem is it's so much money involved and you've got one shot at it, particularly when it's your first home, but even when you're upgrading it, you can unravel all the good work you did on the last property. If you get this one wrong, you know, and this is what people don't realize the risks and Eliza was talking about, you know? Yeah. The person Darwin. I mean, when you get Darwin, it's 30% median price or median dwelling value, 30% down on what they were at peak.

Veronica Morgan: And was it perse was 20% down. So people had bought property, you know, that's worth 30% less than what they're paid for it. And somebody would have had property that it's more than that, you know, and other people would have done better and actually has property that hasn't gone down that far. And so it's not like every single property in that area went up or down at the same rate. But for those who actually didn't sort of follow advice from people who aren't themselves, you know what I mean? The best advice in this case is to really deep dig deep and look at what your needs are. As I said now, tomorrow and in the future. And you're going to make much better decisions. If you zone out and tune out all those people, trying to tell you this, give you the shortcut to where to buy your first one.

Veronica Morgan: You do need to put more emphasis on it being a quality investment, because ultimately you are going to potentially sell that one day in the future. And so, you know, taking the easy route when you're younger as your first property is even more sort of catastrophic to yourself, longer term. So, you know, you want to put your lifestyle to one side as a client today that wants to buy an apartment in Waterloo. And you know, that's where he is and that's where his family are. And that's where his friends are. And through that process, we realized that's not a great investment, you know, because of what he wanted. And you know, through that phone call, we realized, well, hang on a sec. Maybe I could still live in an apartment. I could still live in Sydney. I can still get a grinding best mate.

Veronica Morgan: I'll be a bit further away from my friends. But ultimately when I sell that place, I'll be much better off the next decision. Be careful you ask these questions too, cause it's asking to be sold to please join us for our next episode. When we're talking about the future of work, what's this got to do with property? Well, the lot to do with commercial property, we talk about that, but we also talking about how the decentralization of our CBDs will impact on property prices. Is it a fact, is it a fiction? Is it going to be longterm? Is it structural change or not? Wait episodes to join us? When we talk to CEO of work, blobs, Soren, trumpet, please join. If