Episode 187 | The Property Market After Lockdown | Jarrod McCabe, Wakelin Property Advisory

How will this current wave of lockdowns impact property prices?
Joining us today to discuss the aftermath of lockdowns in Melbourne on the property market is Jarrod McCabe, buyers agent and director of Wakelin’s Property Advisory. Jarrod’s property career spans two decades covering valuations and investment advice and has played a critical role in adapting to purchasing property during periods of lockdown. 

With no better expert, Jarrod discusses how last years lockdown impacted the property market and draws similarities to the current wave including what buyers and sellers should expect from the aftermath.

RELEVANT EPISODES:
Episode 180 | Are buyers agents worth the cost? | Cate Bakos
Episode 159 | Why hasn’t the property market crashed? | Eliza Owen
Episode 42 | How to invest in Melbourne and avoid overdevelopment | Jarrod McCabe

GUEST LINKS:
https://wakelin.com.au/

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: calendly.com/wealthfulbook/30min

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 in July 2021.

Veronica Morgan: As we record this over half of Australia is back in lockdown and questions again are being raised around what the property market will look like. Once restrictions are lifted, will it be business as usual? Will it take off even faster? Is there a looming COVID cliff after all

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.

Chris Bates: 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.

Veronica Morgan: Don't forget that you can access the transcript for this episode on the website, as well as download our free full forecast report, which experts can you trust to get it right? The elephant in the room.com did I use

Veronica Morgan: Last March when the entire country plunging to lock down, there were a hell of a lot of doom and gloom predictions about property prices and let's face it a year ago. We had no precedent to guide us. Now, as Sydney faces the prospect of months of restrictions, we can look to our Southern neighbors for a hint of what ruined for joining us today to discuss the aftermath of lockdowns in Melbourne on the property market is Jared McKay, buyer's agent and director of Wakeland property advisory. We've met Joe before way back in episode 42, where he gave us a bit of a tour of the Melbourne property market and shared the fundamentals of success down there. Thank you for joining us again today, Jared. Thanks Veronica. Thanks Chris.

Chris Bates: Jared. So good to have you on again, mate. I guess Melbourne's had a bit of a journey over the last 12, 18 months, but coming out of that lockdown sort of last year and going to this nother lockdown, how would you just sort of describe the change? And I guess the sentiment on the ground

Jarrod McCabe: In Melbourne becomes second nature almost at the moment. It was very different last year and there was still a hell of a lot of uncertainty around when it was the end of September and the start of October that the restrictions were initially eased after our sort of eight weeks really hard locked down. So it was a bit of an easing out of things at that stage. And, and people were, were coming out and having the ability to look at property. So it was a little bit softly softly to start with, but certainly as we got closer to Christmas, it really started to ramp up and we saw that there was quite a bit of energy there. And certainly by the time 2021 hit, yeah, by certainly hit the ground running. And there was a lot of competition

Chris Bates: Things a bit slowing down at all, or was it all levels? You know, a lot of desperation in the market, even in the last few weeks or prices have run a bit people a little bit more picky.

Jarrod McCabe: The interesting thing at the moment that we've noticed since not the current lockdown that we're in, but the previous so 4.0, which was 70 twos from that one, that one was interesting because following that we've had really good supply in terms of numbers. This year, there's been a lot of property for sale and Melbourne is very seasonal when it comes to its auction numbers. And typically when you get into, after the Queen's birthday, long weekend in June, things start to quiet an offer as you come towards the school holidays in June, July, and then it's usually fairly quiet going into July, August, but this year was very different. We, I looked at some numbers, obviously ignoring 2020 because it was a different market, but not 2019. If you looked at the school holiday auction numbers the first weekend. So if I looked at the three weekends of the school holidays, plus the weekend after that, the first weekend had 450 auctions.

Jarrod McCabe: The second weekend had about three 80. The third had about three 50 and the fourth went back up to about four 50 this year, over those same four weekends, we had 1500, 1200, 1300 and 1200. Wow, that's spring numbers for Melbourne. I'm getting those sorts of auction numbers. It's huge. It is huge. So it was really interesting to see that and see how the clearance rate held up in it. And it did still hold up fairly well through that period of time. So there was a number of reasons. I think vendors are still very confident that there's buyers around. So they're happy to put property on the market, but also there was a bit of the market compacting because people were pushing back campaigns that were meant to go in that late may, early June period and holding off if they could. And so that there was an increase in stock levels in June that perhaps wouldn't normally have been there, but that's continued on. And even before this new lockdown kicked in, we were still in the projected numbers for the bulk of July. We're still expecting over a thousand auctions. So there's a lot of vendors still prepared to hit the market. And normally they wouldn't be in the cold dreary months of winter. Hmm. That's really, really

Veronica Morgan: Interesting. And when you say the clearance rights have held out, what are the, where are they been sitting out

Jarrod McCabe: In a year that we're consistently around 80% or higher? They've probably consolidate it a little bit, but they're still being consistently over 70%. I think we might've dropped below 70 once or twice, but even then, I mean, our view on the market down here has always been, if you're in excess of 70%, where in a sellers market below 60% where a buyer's market and anywhere between sort of 60 and 70 is fairly balanced. So it's still very much a sellers market.

Chris Bates: You notice any major changes like, you know, in the buyer preferences where people are coming to you and they're saying, you know, I want an investment or they want a home. They're looking at different things than what they would look at say two years ago, I

Jarrod McCabe: Don't think, and I don't think this is likely to stay, but there hasn't probably been as much whether it's just been because it's out of sight out of mind almost, but it hasn't been as much conversation around public transport this year. Now, I think that's partly to do with the fact that people aren't going anywhere and haven't had to use it, but I don't think there's necessarily, as it's not as much of a thing to be really, really close to it, it's still important. And it always will be in Melbourne. So it's not a dismiss it at all, but it probably just, hasn't been a, a strong topic of conversation. People are very mindful of having, working at home environments, whether that be for children in terms of studying and things in lockdown and working from home from a school perspective, but also having some study space. So we've, we've certainly had that as a conversation a lot more as well. And those that are looking at perhaps more high density living, whether that be apartments or, or Villa units probably putting a great deal of focus on outdoor space as well. You know,

Veronica Morgan: It's funny, I was looking at some CoreLogic data and noticing the Melbourne prices. Hadn't reason they've been strong, but they haven't risen at the same sort of stratospheric levels as say Sydney or even Brisbane. And they're even a little behind Adelaide. And I guess that listings numbers that volume, that you're talking about, probably accounts for that in a way, but there's also a key difference between Sydney's lockdown and Melbourne's numerous lockdowns. And that is the definition of essential work. So real estate in Melbourne, absolutely ground to a halt like everything else. Right. Whereas in Sydney, we're still able to one at a time look at a property. I mean, obviously that's had an impact on a pent up supply, but do you think that would have made a difference to the recovery? I mean, how do you think that sort of played out?

Jarrod McCabe: I certainly think the supply has the, the level of supply that we've got certainly impacts directly on the demand levels because it means that it gets spiced out a little bit more. I guess if you look back over history too, from my understanding Melbourne does tend to have, when, if you comparing Melbourne and Sydney directly, Melbourne probably tends to have more consistent growth over extended period of time. Whereas Sydney has had a tendency to have significant sparks,

Veronica Morgan: The Brisbane, everyone outside Sydney says that it's hilarious.

Jarrod McCabe: It does. There's some pretty big jumps that you've had over time, whereas no one does. I mean, probably more so than Brisbane, but it has been fairly consistent. If you look back over the last 20, 25 years, it's it has had its ups and downs, but it's probably been a little bit more consistent over that period of time as, as an upward trend. So I think it's probably more in terms of this current wave. I think it is partly to do with the supply and that it gets knocked on the head fairly quickly. When you can't go and look at anything, I've got a couple of vendor advisory clients at the moment who are ready to go and want to sell. But my advice to them at the moment is don't waste your money on advertising to a market that can inspect your property. It's just going to be beneficial. So, and a lot of vendors have that mindset. There's no point in committing to something that is not going to get you the best result at the end of the day.

Chris Bates: So a lot of listings, do you think that that's a lot of homebuyers listing to upgrading, to sort of bigger places or the typical upgrader, or is it a lot of investors trying to get out? What are you sort of Fonny is the quality of asset? You know, even though there's a lot of properties on the market, do you find the quality asset better or worse than

Jarrod McCabe: Traditional? I think that's a really good point, Chris. I think the quality hasn't been the greatest this year. I don't think that there's been as decent quality stock. I think a lot of the buyers, I don't think it in Melbourne, it's being driven by investors at the moment. It's very much around people looking to upgrade. They've been in there been a hell of a lot of time in their homes over the last 12 to 18 months and realize the faults perhaps that it's got and decided that they do need to upgrade, or perhaps even for some that have been looking to downsize, they've been echoing around in large homes that are beyond name needs these days. So are looking to do the downsize and have realized that if they are going to be spend more time at home, that perhaps rather than having a large home, they'd rather have a higher quality or a more renovated home, it's going to make their requirements better.

Chris Bates: Spins well-publicized has been a bit of an Exodus out of Melbourne. And we've had clients who wanting to Skype, which is not really what traditionally Melbourne Victoria has, has had a going for a massive population, growth and immigration. And a lot of people didn't leave even in state migration compared to say, say Sydney, but are you finding a bit of an Exodus in terms of, you know, let's say the, you know, the older generation wanting to go further north or young families looking to escape the city, you're going to the regions. Like, you know, the Julong's are morning turns, et cetera.

Jarrod McCabe: Yeah. There's certainly been a lot of demand in the regional areas and looking to make that move. I think most of those that we're looking to move into state and have probably done that. I think that's probably most of that has occurred. Whereas the regional moves are, are still because some people can't just pick up and move overnight. They need to plan it, whether that's kids with school or whether it's jobs, that sort of thing. But there is still consistently. And from speaking to I've got my background is formally in Ballarat, so I've got a lot of contacts in property up that way, who I spoke to still on a fairly regular basis and the market up that way, he's still very, very strong. Ballarat is very close to Melbourne, the train lines. Very good. So from an accessibility perspective, it's good. You talk about Melbourne being cold Ballarat to next level, but it does offer a lot of things. There's a lot of employment opportunities. There's some fantastic property there in terms of styles, fantastic education facilities as well. So it is a really good alternative for people. And there is a lot of demand, both from young families, from people looking to just get out of Melbourne from a Dan size perspective and looking just for a general change. I mean, you've got Dallas for very close by as well. So there's, there's a lot of opportunities there that, that people love to leave that lifestyle too.

Veronica Morgan: It's funny though. I think because the whole Victoria gets locked down at a time, doesn't it? I mean there's

Jarrod McCabe: Well, this time they did not previously, they've, there's been a tendency to differentiate between metropolitan regional, but this time, because there's been quite a number of cases in regional Victoria, I think it's just gone. As far as Mildura, New Jersey always been the case, the example of why do they keep getting locked down when they haven't had a case, but this time they have. And so there hasn't been the differentiation this time. So I still do. I mean, being from regional Victoria myself, I still do feel sorry for a lot of them in that there's just no risk in a lot of those areas or very, very minimal risk. And they still have to suffer. What, what, when in metropolitan, Melbourne are bringing on them,

Veronica Morgan: Do you think lockdown in the country as soon as preferable to lock down the city for some people?

Jarrod McCabe: Oh, I think that it's it's you can do a lot more, you can get, you can get outside, there's clear air, but I think there there's far, you're far less likely to get locked down in, in regional Victoria than you are in Melbourne. They might, this, this, one's probably a little bit unusual, but generally yeah, you may get a weight in regional Victoria and then it'll get eased. And so you'll be able to do a bit more. So that's probably why people are venturing that way. Can we go back

Veronica Morgan: To, you're talking about, you know, the quality of stock on the market and you were saying that it's not, hasn't been that great and yet such huge volume, you know, you would think in amongst all that, there'd be some good stuff. What do you think sort of underlying that? Why, why do you think that might be the case?

Jarrod McCabe: Yeah, look, it's an interesting one. I can't probably put an exact finger on it, whether it's because it is a lot of the properties that are being upgraded. So it's a selling pat times that they, they found to not be as desirable. And if they're not desirable to you, then they're probably not going to be desirable to someone else for the same reasons if you're looking to upgrade. So it may well be that that perhaps that's why the stock is not meeting with the quality that you would expect, but it's not unusual either when you do see large volumes that the, as a percentage quite regularly, the quality is considered to be inferior.

Chris Bates: Yeah. I see a big construction boom going on there as well though. Like the, where, you know, a lot of people are renovating. And when it's definitely saying that in Sydney, but you noticing that in Melbourne,

Jarrod McCabe: Certainly hard to get tradies at the moment, whether that's to do major works or whether it's to just do slight improvements to properties in terms of preparation for sale, tradies are extremely busy. And even though they've quite regularly during the lockdowns, they've been able to continue to work in different levels. And depending upon the property that they're working on, there's a lot of work going on. And so a lot of people have, if they have found that their home is satisfactory in terms of location and space, they're looking to do the extension, the renovation as opposed to moving. But if it is a case of, well, it's going to take another 12 or 18 months before we're able to get this work completed, perhaps we'd be better off just selling and moving on. Then that's the other consideration that people are looking

Chris Bates: At where you stand Judy down there is enormous. You know I remember when we were doing our budgets, the it's like, ah, it's usually say 5% of standard. I'm like, oh no, it's in Victoria. Okay. Let's go to the seats

Jarrod McCabe: Six and a half over the top of the two mil now, too. 

Chris Bates: Which is Addie out. So there was a stamp duty saving up till 30 June. I think it's do you reckon that had a bit of a impact on the market? It was only up to a meal

Jarrod McCabe: And that was for anyone that wasn't just for first home buyers. And so I think that would have certainly helped upgrade as in regional areas and help to drive that market because the median house prices typically not that strong. I mean, so I think that would have certainly helped there, but it would have also helped people moving out of metropolitan, Melbourne into regional areas, because again, most of those properties would be under a million dollars. So we can take advantage of that and perhaps bring it forward. Given that we know that it's, it's going to end on on 30 June

Chris Bates: Typical sort of a young couple that are wanting to get a house let's say, and they would have had a budget. So let's just call around a meal or low one millions before they may have wanted to buy and say the north kids or Brunswick's or Yarraville or something, just a little cottage they could renovate. Are they that type of clientele? Are they looking at potentially going a bit further now getting a four bed house on a bigger block than traditionally they would have just wanted a small cottage around the city? It depends

Jarrod McCabe: On the mindset. It's a fairly drastic change to go from just wanting a little bit in terms of a lifestyle to go from the little two bedroom cottage to going to the family home in a, in a middle ring suburb. So, but what we have seen is some of the double fronted properties in some of those Northern areas around the Brunswick Coburg, Preston, that why of location the double front is over the years, haven't necessarily had the same level of demand people have probably looked at. If we'll, if we want the lifestyle, we're happy with something smaller and more renovated and looked at the single front. If we want the bigger property, we'll go that little bit further out. Whereas they have put, there's been some really strong prices achieved for some of those houses very quickly in terms of changing the dynamic. And I think that sector of the market, along with a couple of others, but certainly that the housing market between a million and say probably 1.7, one point I might even two mill in those Northern suburbs. I think that's probably been one of the strongest sectors within Melbourne this year.

Chris Bates: Yeah. It's the biggest other bigger properties in those suburbs, which traditionally weren't that much more expensive, really? That gaps widened.

Jarrod McCabe: Yeah, that's exactly right. So the gap, if you look at say some single fronted properties in Coburg, for instance, and bill bell street can quite often be a bit of a boundary with Coburg if it runs right through it, but it can be a bit of a, well, I don't really want to go north of bell street, old Cape south. And so they're single fronted places south of bell street for a long time where 7, 8, 900 for a really good one. And now they're up around one, 1.1, but you could have a double front for sort of 1, 1, 1, 2. Now some of the prices for double fronts in Coburg are up at 1 5, 1 6. Most of that's occurred this year.

Veronica Morgan: It's amazing. Isn't it? I mean, the, you look at sort of price data for the entire city, but then you can sort of really focus in on particular areas and see real leaps and bounds. Can't you, would you say that that's because they're in a way they're sort of been slightly undervalued for a long time?

Jarrod McCabe: I think so. I think what Chris said before is exactly right. So for some of the double fronted properties in those areas that they have been undervalued. Yeah. And the apartments

Chris Bates: Though, in Melbourne of, you know, it's a long standing issue of more supply matching, more demand, and you've got the investors and, you know, no foreign students, no immigration is anything really shifting in the apartment in terms of people making those compromises, you know, because house prices are running on them or you still finding people that are willing to do whatever it takes to get a house, rather than just buying an apartment

Jarrod McCabe: Apartment. Market's still pretty soft. It needs to have a fairly significant point of difference. And if it does, there's, there's, there is good demand for them. And we've seen some, some pretty good results for some of those apartments. But as a general rule, it's certainly not been anywhere near that, the strengths or saying the same strength that the housing market has had. And that's for the exact reasons you've just said there, Chris, that there, there isn't the same demand from a tendency perspective as well. So the rental market has had a bit of an influence there in that a lot of the international students, or even workers that come into Melbourne do typically stay in the city and do take up a lot of the tenancy demand for the high-rise type apartments, which has a flow on effect to some of the old, better quality, older style ones as well.

Jarrod McCabe: But it's meant that the rental demand and the, and the rental dollars has certainly taken a hit and that hasn't recovered to the same extent yet. Whereas the housing market from a rental point of view, if it's not back where it was, it's not far off on a, on a value point of view. So that's, that's meant that investors, even though there's some affordable options to be had, probably haven't taken up the slack as you may have expected them to because they, I find it hard to get a tenant for summit, particularly for some of the modern apartments

Veronica Morgan: I was already, I mean, well, publicized oversupply, you know, Melbourne's apartment oversupply situation has been the case. I mean, throughout the last boom yeah. People losing money on properties, whereas the rest of Melbourne is going gangbusters, rested, you know, Sydney, et cetera. It sounds like there's no light at the end of the tunnel. If you left holding one of those sorts of properties,

Jarrod McCabe: Certainly those modern ones, Veronica, you're not there yet. It's really, it's really tough. And it's, it's a case of, well, do I just cut my losses and move on? Look, it's a case by case basis. And it's a financial decision that you need to make yourself, but from a property point of view and those high-rises there's, there's not a lot of scope there. Some of the older style apartments, I think once borders do open up and we get back to some form of normality, we'll, we'll start to find their holding and, and perform better than they have been. But it it's, it's probably, at least at least two, I would say 12 months away before even the older style ones are going to really start to rebound.

Veronica Morgan: Yeah. One of the things that vendors in Sydney, particularly holding off, because of course there's a real shortage of stock here and I'm talking pre lockdown even more so now I guess, but there's a real shortage of stock. So one of the issues is, well, I, don't not confident that I'm going to be, to find the property to upgrade or downsize to. And so therefore I'm not going to actually list my home until I found a property. So obviously there's a massive a bottleneck because of that. Your saying though, that with the huge numbers that were three times really what, by the sounds of it, prior to the lockdown, he had three times as sort of stock volume we'd normally experience at this time of year. Do you think that people are quite comfortable to list without having board? Has that, is that something that's different?

Jarrod McCabe: I think it's a case by case basis and that I don't, I mean, it's different people have different opinions and different positions that they need to take. So look, if you can afford to buy first and find the right property and then sell it really also, I guess depends on the type of property that you're selling and the type of product you're buying. So if you're buying a property, that's hard to come by and you're not sure how long it will take to find and you sell first and you have to then sit out of the market for six, six months and watch it, watch that gap continue to widen. Then that's not, not really what you want to do, but if you're going to sell a property, that again, let's just use those modern apartments as an example, if that's what you're holding and you're looking to upgrade from that, well, it's not necessarily going to be a traditional four week campaign. That's going to get you the price that you want. Chances are, if it's a private sale, it could be sitting there for a few months before you get the result that you'd be after. So I think the, the types of properties that you're buying and selling really comes into that decision and the planning around what to do first. Do

Veronica Morgan: You think that most people would realize that though, because you know you, and I know that, I mean, we all know that because we're professionals in this industry, it's like, you, you basically do the thing that's most difficult first, you know, like basically what you were just saying, but I don't, I wonder how many owners, I think owners tend to think of, they sort of capsulate each part of the process, I think about selling and then I'll think about buying or I think about buying now, I think about selling. And I'm only asking about that mainly because we've had a real problem with, with volume in Sydney, really for the last five or six years. So we're, you know, our, our COVID volumes, if you like, are even tighter. And, and I wonder whether it's just almost like you just got to tip the balance, but basically if there's, if there's suddenly an influx of stock, which might happen after we're all ad locked down and people had that confidence that there's more in the marketplace and that might just, it's almost like a self-generating flywheel or so not. I mean, it's a self perpetuating and I'm just, I'm looking to Melbourne for some light and the end of our tunnel.

Jarrod McCabe: I think the supply side of things, I mean, typically you'll find if you're not sure, and you're unsure about what you will or won't do. And there's a degree of conservatism around your approach in most people liked the idea of selling first because they know what they've then got. So if I sell and I get a million dollars, well, then I know that I can go to 1.5 on the next property that doesn't necessarily mean that's the right thing to do, but that's, that's typically people's mindset when they first come in and that's what I think I need to do. Well, then you need to work through the other options and why buying first may well be a better thing to do, but does that necessarily lead to more supply coming onto the market? Not necessarily.

Chris Bates: I agree with that. I think when we first chat to the upgrader, they naturally want to sell first because they want to know what they're going to get. And it's not through an education process of how it's actually logistically going to work with buying first. Can they do it? Can they buy on a long settlement before they even want to consider it? But most people want to sort of sell first, but I think you're right, Veronica, they don't sell because there's not enough properties on the market that they really sort of get enticed to think about selling, oh, that's actually nicer than what we've got when we should try to sell and buy something like that. The return to work conversation around flexible work. I mean, Melbourne is a very much a service driven economy, correct me if I'm wrong. But yeah, it has the attitudes around that. You guys went through a lot of lockdowns, a lot of work from home companies had to adopt to that arrangement. Do you think that it's going to be something that's going to stick around and people are going to be able to work from home two, three days a week, or it's going to flip back into the power of the employer, making sure you sit on that chair. I think

Jarrod McCabe: There'll be a greater degree of flexibility around working from home then what there, what there has been in the past. But one thing that we've certainly found is that there's been a real want to get back to work. And that's, I mean, I talk about that just from our team and from, from us working together is that people get sick of only talking to each other on today screens rather than actually being able to stand around the office and talk about property that we've seen and talk about strategies and get a really good understanding. And I mean, that's not just a property thing, that's a, a working environment thing. So I think there will be greater degrees of flexibility, but we've found that a lot of people have wanted to get back into the office just to have that interaction.

Chris Bates: Maybe it's gone too fast. So maybe the, you know, people are like, actually I don't really want to be working from home five days. This has been too much

Jarrod McCabe: For me when you get back into the office yet. Yeah. Locked down as much as we have. That's typically what I think people get to that point and just sell it. It's, it's great to work from home. And the novelty was certainly there for a little while, but I think it gets to a point where, yeah, one or two days at home and two and three to four days in the office, he's probably a better balance for others. It might be the reverse where three or four days from home and only one or two days in the office, it really depends on the industry that you're in. And and how you work. If

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Chris Bates: But Melvin's a city city, right? It's like a hustle, bustle, cafes, restaurants, you know, that sort of inner city vibe. It's not as sort of live around the beaches and exercise, you know, that type of mentality. Do you think that plays into a little bit as well?

Jarrod McCabe: Yeah, I think so. I mean, the CBD is a, a good a great area to be in, but there's a, there's a lot of small hubs around Melbourne in terms of local retail strips and things. And the interesting thing in talking to it, even just a few small businesses, the cafes and things around where our offices and we're out in the Eastern suburbs. Yeah. I said to a couple of the coffee shop guys, what, how have you found it? And I said, well, what we've lost on businesses not being here we've made up for, because it's a residential area as well. We've more people working from home and looking to come in and have a break and get a coffee. So they've still made up for things in other areas too. So yeah, I think look, the ma the CBD is certainly doesn't have the vibe and, and certainly hasn't got the hustle and bustle back completely yet. And didn't even when we were sort of April, I think it was April may when we had a fairly clear run without any cases. And I, and it still didn't really get back to its full capacity. I think that's going to take some time before it does. And even that part of that is, again, you go back to opening the borders and things because there's a lot of international students that live in the city in those high rise apartments, and they're not there. And the tourism,

Chris Bates: I mean, that's it, the Sydney CBD isn't hustle and bustle, we had the regions and popcorn around the city is, but it's because there's no tourism. Right. And that's where most of the tourism goes is to the center. Yep. Yep.

Veronica Morgan: Knock on effects is interesting. I mean, we're talking to our local cafe owner today and because of course, trades can't work within a two week construction shut down here in Sydney. And that actually is, has a knock on effect to, you know, smaller jobs around houses as well and renovations. And so they were saying that their customers dropped off remarkably. I don't even think they realized how many tradies I had getting coffees and takeaways and whatever from them,

Chris Bates: He loved to spend money on food. They're doing spend a lot of energy, right. So I'd try these at our house for the last six months. And then now we're at eight and buy stuff from the cafes. It's a, they're a big part of the military.

Veronica Morgan: Hey, what's happening with your garden? Cause you've had, you've had basically been, you know, re terrorist outside. It's all ready to be washed down the hill or the next rain.

Chris Bates: That's all it is now. But yeah, it's the best opportunity I had to record the podcast because there's no hammering in the back.

Veronica Morgan: Chris is always putting his Mike on mute, he's skipping delivered or something. So Jared, and so with Melbourne and just sort of drawing some distinctions here. And of course, as of today, I mean, whoa, you know, maybe by the time we release this in Waco, so Adelaida we back out of lockdown, but Adelaide has gone back into lockdown. I mean, Northern territory has been in lockdown. Perse been in lockdown, breezy goes in and out of short lockdowns, but you know, the construction has continued. Has that been the case in Melbourne, you know, particularly in the big lockdown last year, did construction continue?

Jarrod McCabe: Yep. Yeah. Construction did a lot of the way through last year. I remember from just locally, from at home, there was some townhouses being built and nothing stopped there. They, they were still there every day and still kept the work churning through. So interesting thing was, there was another, and again, they all run into one another, but one of the early ones that we had this year, where it was only a short one, there was changes to, I think it was gardeners weren't allowed to, and that's the thing. It hasn't been consistent. So sometimes to try and think back on what that one was and what the other one was. Art is hard to recall around tradesmen, but as a bit, generally trades have been able to do most things, particularly on properties that are vacant. There hasn't been really any restrictions as much there, but there has been some at different stages, but most of the time they've been able to keep working.

Chris Bates: He's saying that in terms of that townhouse, it's one of the interesting things I find when I go to Melbourne and say, family inside, say the middle rings. And I always sort of look at the road and I look at the street and look, how many townhouses are getting built. There, there is a lot of in the middle and outer rings development going on and cutting up blocks, et cetera. He is noticing that sort of still continuing. And it's still a big part of the future supply of Melbourne.

Jarrod McCabe: Yeah. Huge amounts. It's still very much going on. And you're exactly right. It is in the middle ring suburbs and the outer ring suburbs where there's more and more of them being built in by no means to the same extent as apartments, but they certainly don't have a great deal of scarcity value to them in that there's, there are so many entities are a fairly easy thing to do in some of the middle to outer ring suburbs. If you've got a property that some type of mid century brick veneer or weatherboard home constructed on it, chances are, there's not going to be a huge amount of protection overlays on that. So to be able to demolish it and construct two or three 10 houses, depending upon the size of the block is not a, not a really tough thing to do. I had a conversation with, again, some clients recently about that, and they asked about in preparing the property for sale. Should we get plans and permits approved? And I said to them, well, it's really not going to add any value plans, add value when they're hard to get. And you're really going to be adding any value by spending the money on that. So don't, don't worry about it. That's

Chris Bates: One of the things I noticed when I'm talking to clients around those suburbs is just, you know, they'll say, oh, there's a bit of development going on. So I'm like, well, it's probably not a good thing, right? Like you don't really want to buy a house in a street, come back five years later. And the whole street is new townhouses, right? And you're the last house standing

Jarrod McCabe: Exactly. The reason that these people are looking to move because there's been too many townhouses built in and around the area and the congestion in the street in terms of parking and things is really hard because they might put a three bedroom, two bathroom on and their requirement for the council might be a double garage for Austria parking. But if it's, if it's a mature family, that's moving in there, there could be four or five cars with the with the house. And as a result, the streets just get congested. And that's what they found. And that's part of the reason why they're looking for an alternative.

Chris Bates: Yeah. Another thing in Melbourne is they sort of Greenfield to states amount. I saw that Stockland border massive block of land in the north of Melbourne. I think it was coming with a suburb, but they make all these amazing names. So these new suburbs anyway, but you know, it just, all of a sudden there's a new suburb, a thousand homes, but now we're talking 40 Ks north. And you know, this just shows you the amount of stock, you know, house and land packages that are getting preplanned, you know, like 5, 10, 10 years away. And so you just gotta be very careful in these Greenfield areas, just because, you know, there's never going to be a shortage really in, in any type of investment lifecycle. And so, plus the new townhouses, plus you new apartments, this sort of the areas that you don't buy from Jared, I assume. Yeah.

Jarrod McCabe: Look the urban sprawls massive in and around Melbourne. It just continues to go, go sit in the world. It just continues out. And you're exactly right though. As soon as demand even remotely gets anywhere near supply, there's another land release and off you go again. So yeah. It's, and then the problem really with it is that, is there the infrastructure around it to accommodate it? So the public transport has to be continuously extended, but with Melbourne's public transport, it's, it's like a spider way, but fans out as it goes. And so there's big gaps. The further out you go and big holes where the public transport just doesn't exist.

Chris Bates: Any apps surprises last year, like the El firms or bell gray, or, you know, suburbs that maybe a little bit further out like in the middle ring that have got big blocks, surrounded by nature that, you know, typically people didn't want to move to, but then a like, wow, this is an amazing place to live. I can still get to the city. I mean, it'd be found like buyers willing to consider those types of areas.

Jarrod McCabe: I think I saw somewhere recently you had some pretty good growth as one of the core logic releases had one of the larger changes to its median house price. I think they did quite well, but the bigger ones were probably more the regional areas rather than the city fringe. Yeah. It was probably more the regional areas that had the greater jumps in prices. And a lot of those were probably outside the traditional error and a half, two hour drive because that's where bang for buck really took a, an extra step. So cities, like, I think Wharton will did quite well. And that's a bit of a distance from Melbourne that is a fairly regional city too. So employment opportunities and things are quite good

Chris Bates: And the Geelong's of the world. Yeah. And we've understood quite a few clients by down there, but I guess it's just grown so strongly over the last say, five years. Do you worry that as affordability starts to get stretched that the, I guess, excitement or the desire to move to these locations starts to decrease again, that

Jarrod McCabe: The Geelong's and things are interesting in that it's a little bit like, as you mentioned before that urban sprawl, because if you go out onto the fringes of Jalong, there's a hell of a lot of land places in the states and things in particular, if you go down towards the Bellarine peninsula and talky and around ocean Grove and those sorts of areas, there's a, a huge amount of estates that have been released down there. And a lot of house land packages that have been built and look there, there's the infrastructures getting there with some of the houses and things that have been built and, and shopping facilities, that type of thing. But it's a, there's a lot of land down there and the congestion to get out of there to get into Jalong, if that's where employment is, or then to get through to Melbourne can create some bottlenecks and things too. But look Jalong if you're in the city itself and sort of following principles around period style homes and close to packing and straight, or the city, those sorts of things, then it's shown some great levels of growth. And some of the gaps between the period homes in Jalong versus some of the even inner city period homes in Melbourne have closed in recent years too, because there has been some fairly strong demand before COVID even in some of those regional cities.

Chris Bates: Yeah, exactly. So that gap is getting smaller. So the benefit of moving to a different city to get that same type of property is no longer as, as enticing, I guess. And that discount has to be there because of, you know, the desire to potentially be in the city versus the region or in terms of the mass market. So do you think that as process Roz in these areas, that's going to lose a bit more steam and people are going to be back into the city a little

Jarrod McCabe: Bit more, again, it depends on the mentality of the move in the first place. So if the mentality is to just perhaps buy an investment property, as opposed to making a lifestyle change, then yeah, the regional areas may not be as attractive as perhaps what they once were, but from a lifestyle change point of view, if you comparing a single front to a double frontage along the gap might not be as big. But if you're looking to make the change and most people who do want to make the change are doing it for, for lifestyle and for size of home reasons as well. So being able to afford a four bedroom, two bathroom home within a kilometer or two of your services, which you can potentially do in Jalong, you might not be able to do that and be reasonably close to the city of Melbourne. So the lifestyle probably still outweighs the smaller gap of now there are other regional

Veronica Morgan: Centers because when everyone talks about Ballarat and, and Jalong, are there other areas that are starting to really pick

Jarrod McCabe: Up and guys the other one it's probably just that little bit further away. It's not significantly further than Ballarat, but it is a little bit so, but that's probably the other one. That's, that's, that's quite good too. And then it's a matter of, well, how much further do you want to go? Because those three are within the two hours of Melbourne. So you still want the proximity to the capital city. If you're going further, then you start to look at it perhaps going out to, if you're going towards Gibsland towards Ben style. And that's significantly further, if you go up into the Wimmer, it's up towards Horsham, or if you go down into the the Western district down on the coast there, you've got one of the, as I said before, so, and then you can go

Chris Bates: Mornington sort of potential

Jarrod McCabe: Other, not necessarily class that as I original city, it's almost because it's proximity and things. It's probably got more. And if you look at the lockdowns it's been included within Melbourne's metropolitan area, most of the time as well. So it probably, but again, it does give a great lifestyle change, but the, the difference in prices and things is probably not the same, because it is a pretty, pretty popular and well-regarded area as a holiday destination too. Are

Veronica Morgan: You finding anybody wanting to move to Melbourne from elsewhere?

Jarrod McCabe: I think most of the movement around or the, the property growth and price growth in Melbourne has been by Melbourne needs rather than, than regional areas, that sort of thing. So I don't think so at this point in time, I'd expect that to change though, once in a year or two's time. I mean, the fundamentals that make Melbourne a great city is still going to be there. So once the lockdowns and things are under control and the virus to a degree is under some form of control and borders and things are opened up. I think the importance that Melbourne brings to Australia will, will still be there. And I think the lifestyle opportunities that it does offer will still mean that people will want to leave here and it will still be a desirable location.

Chris Bates: Yeah. The open and the F1, but we'll find and say, Hey, you got a property Dumbo forest. I do

Jarrod McCabe: One of the things that I've been, I guess, one of the avoidable mistakes that we've been, and it's something that's probably come to light a lot this year has been that urgency. And that fear of missing out that a lot of buyers have, particularly if they've missed out on a couple of properties in submitting offers before auction and really doing it without a huge amount of insight and knowledge can be a very risky strategy. And it's something that people are getting caught up in a lot. At the moment we had one recently whereby we had a property that we were quite interested in for a client was an investor client. And it was quoted initially at six to six 60. It was a, an art deco apartment quite was too low, but that's okay. They increased it halfway through the campaign to six 60 to seven 20.

Jarrod McCabe: And then someone decided that they'd like to put in an offer before auction. So it brought it all to a head that person wasn't successful. But what it did was make the offer process go quite dark. These, this company doesn't do a zoom auction or a boardroom auction type process. It's just highest and best. So I want ended up happening was the, the person that had submitted an offer ended up paying well over 900. Now we were told that we were the underbidder and our offer was about a hundred grand less. So by getting caught up in this, putting it off, and this is always the issue with putting an offering before auction is that you are going to run the risk of paying too much. And particularly if you are going to do it in a scenario where the agents decided that it will be a highest and best scenario, as opposed to allowing the transparency of having a zoom or a boardroom auction. So if you want to submit it and there is going to be competition and they are going to do a zoom auction, well, at least you can sit back and then eyeball everyone, and know that you've only paid one to maybe five or $10,000 more than everyone else. That wasn't the case with this one. That's

Veronica Morgan: A very interesting, I literally just in the last few days, come across a number of different scenarios in pre-auction offers, of course, where you know, in the online auction space currently. And, you know, I remember being a sales agent and the pre auction is, is really horrible for everybody. You know, nobody comes off feeling very good. And I remember one of my colleagues, you know, introducing me to their best and final offer process. When I was a sales agent, I thought that's gold. That's what we're going to do. I'm going to create the rules and send that out to anyone who wants to play. And these are the terms you give me your best and final by X, and we're going to deal with the best offer. And that's it. You don't get a second bite of the cherry. And there were some times when all the officers had come in and they're quite close together, you know, and there might be a couple of grand difference, that's it?

Veronica Morgan: And you know, we're talking a good 15 or so years ago now. And the best difference I had was 26,000. I thought that was a really good, you know, that was definitely better to do it that way than go to auction. But a long time ago, Veronica was a long time ago that property sold in the four hundreds ancient history. But, but the principle is, is an interesting one because sometimes it does flush out a ridiculous offer compared to everything else. And other times it doesn't, but as a buyer going into it, I know when I'm advising our clients. So our God, here we go. This, you know, it's pretty much. And whether we've set it off or whether somebody else has set it off yep. Strap yourself in because this is not going to be fun. You know, you've got that transparent way where they run around. They just basically shop it around and they call everybody and they just keep going until the last person standing or this sudden death scenario. And only afterwards when they disclose the price and only the underbidder really knows the difference. No one else knows.

Jarrod McCabe: I do. I guess the only thing is that, and you can, as long as you're fully aware and fully able to set up your strategy around it. So it's not to say that putting an offer in beforehand, isn't valid. There's certainly times where it can really work well. Particularly if you feel that the property has been significantly underquoted, but in this instance, do you go that hard? I mean, I'm always, and the interesting thing is I'm always low with clients of ours on a buying side of things. If it's a highest and best scenario to go to the absolute max that I would, if I was able to sit in eyeball everyone across, across the dial from me,

Veronica Morgan: But then there's that risk of missing out. If they would have paid on the 10, you know, that's the thing you have to have with them, isn't it. And that's where I find

Chris Bates: This out last way, by a thousand dollars and deep down, they wish they'd offered more. And it was so have the conversation. It was, you know, like, you know, the night before is, oh, what do I do? You know, we had a big chat and, you know, I always refer that, you know, this, the benefit of advisor you're having that intuitive knowledge, doing the pricing for you, having these conversations, but they haven't got a buyer's agent and yeah, they were a bit conservative and they missed out by a thousand bucks and they are regretting it. But it it's that whole like thing, you talking about the edge and it's like, you know, you don't want to be, feel like you're losing in this transaction, but the focus goes a little bit away from trying to get yourself the price two. Is it a good asset?

Chris Bates: Is it the right asset for you? Are you still happy with that price? If you paid a little bit more like unhappy with the price, but super happy with you've got something. I mean, a client this morning, same situation cracking property is the market on the central coast. You know, it's quite straight everything's, you know, I said, this property is Jeremy underquoted. It's like super desirable bang. First open, obviously a hell of a lot of interests Monday morning, right? We're doing a best and final to tomorrow. What are you willing to offer? And then we're doing the best and final tomorrow. And it's like, you know, so short timeframe, 24 hours to get everything lined up and then make an offer. And, you know, it's just, it's so hard for the buyer to know what to do. Right. Cause they haven't, it's just a horrible situation, but you've got to play the game sometimes. And so you do, what is your advice, Jared, for that person who's getting thrown in the deep end there? What are you, what's your conversation sort of protocol

Jarrod McCabe: Preparation is always key with anything to do with buying property. You've got to be organized and ready to go. When it comes to discussing figures alone, for something like that, you obviously have to come up with where value sits by looking at sales and market sentiment and all those sorts of things. But quite often, when it gets down to the crux of it and trying to select a figure, I'll have a conversation with a client around rather than where do you want to buy it? Where are you prepared to miss it? So at what point does it get to the, to the stage where if I tell you that this is what it's going to sell for. Yeah. You're going to be disappointed because you've, you've invested in this property. You really like it. It's what you wanted, but disappointment versus regret. So are you going to wake up like your clients have Chris tomorrow and say, gee, we should have gone further. Don't wake up and do that if it's within your budget. So look at it from a, I would love to buy it for as little as possible. You absolutely. I want to buy it for as little as possible, but where are you prepared to miss it? That's

Veronica Morgan: Exactly the conversation we have as well. It says it's not the time to play games, trying to second guess wild bars are going to do. It's actually, it doesn't matter about any of that anymore. It's like waived the pricing research. You know what your budget is, you know how uniquely this one suits your requirements, what doesn't, and we've also discussed how good an asset it is. There's a four pillars that where you look at when we're setting prices and it's, then it's a point at which the next morning, Hey, do you want to wake up? And it's the same as setting a limit for an auction. It's just that obviously in an auction, it's you get to look around and see what's happening and who else is bidding? And this one you've got to go blind. And just you know, deal with this deal, with that sick feeling that you have.

Veronica Morgan: But, you know, we've, we've got a situation literally today and I can say this cause it will be well and truly dusted by the time we go to where with this. But, you know, so this is a property that is, you know, it's got a fair amount of scarcity around it and we liked it for lots of reasons, but it also had some issues with strata and the agent was saying, no, no, no. We're going to watch and go in and watch and go in and watch. And then all of a sudden it's like, oh, now I get this surprise phone call tomorrow midday, best and final offers. Okay. What's, what's your process. And you know, we'll be exchanging it straight away with the, with the best offer. And I said, okay, well you're quoting 1.45, clearly someone's given you an offer. That's triggered this whole process.

Veronica Morgan: So what's your new high bar? We have to clear, oh, no best offers over 1.4, am I hang on? You're going backwards. Like, that's not the way this thing works. Like if you were going, if you got a good offer, that was so good that basically you're going to now sell it prior to auction. Just tell everyone what that offer is. And, and everyone plays above that or they don't play, oh, no 1.4. He absolutely refused to give any guidance beyond that. And I'm like, okay. And I went back to my team and I went, well, this one's a bit weird because normally at the moment we find that they're, they're boiling the frog, right? We're all in the pot. We're all basically the simmer the SIM is on. And then they just slightly turn up the heat and they start ratcheting up that quote and getting everyone to a certain level.

Veronica Morgan: But this one, we've all been shocked into a pot of boiling water, like, and anyway, midday we've we submitted our offer in writing, you know, expecting it sort of five passed. You know, you should be on the phone letting or at least emailing saying no you're unsuccessful or, or you are successful. And we're going to move ahead with you. We've heard nothing. We're recording this. It's only five o'clock in the afternoon. Still. Haven't heard. I suspect they didn't have the interest. You know, there's some issues with stridor and I suspect maybe that spooked them and they've decided to try to make this thing happen. They have, it's a half bait effort of doing it and they've completely. Yeah, exactly. So, and no one, no offers have had to be issued on a contract. So it's not like they can just quickly exchange with someone and then just, no one will be any the wiser. This is nothing they're going to blow themselves out as perhaps potentially not having the interest that they thought they did have. I'm going

Chris Bates: To Dumbo today as well, actually climb by and facing Melbourne, looking to upgrading that in you know, around the sort of St Kilda pocket to Brighton, Elsternwick sort of area buying before selling. So fall in love with his property, you know, last week asked the agent for the contract. Yeah. I'll send it to Monday. Foundry out, asked the contract, I'll send it to Tuesday, comes around and ask for the contract and send it to auction. Isn't this weekend. They still haven't figured out how to, I haven't got the contract ready. So that client is four days away from the auction. Still hasn't seen the contract. Like why would you list a property, run an auction campaign and risk losing buyers who are super emotional and ready to buy without even having your contract ready to sale like Victoria.

Jarrod McCabe: I mean, frankly, with the auction campaigns, the contract won't be available, or don't say radio say available until a week or two beforehand, but to be full days before, beforehand and not have it. Yeah. That's not normal.

Chris Bates: Can I someone's hot and ready to buy a property and is willing to pay over the rocks. And they're asking for the contract and they want to make an offer and you're stuffing around like the next day they can wake up and say, you know what? I fall, we think the impulsivity in the property market is a massive component like auctions and you know, the desperation of FOMO. So I dunno, I'm just shaking my head for my client, you know, cause they need to make changes to negotiate a smaller deposit, potentially a longer settlement. When are we going to make those negotiations? Is it Friday 4:00 PM?

Jarrod McCabe: And then there'll be complaints. Oh, we haven't got enough time to speak to this person about that. And now we won't be able to change that. Well, yeah. Who, whose fault is that? That's awesome.

Chris Bates: Chatting to Jared. I mean, Melbourne is, you know, one of the greatest cities in Australia or probably the world people think down there, but it's always interesting to say what's happening on the ground because it is usually a mirror image to what's sort of happening in Sydney, but I'd say Sydney suspended a little bit harder recently, but maybe after this locked down, it's going to flip the other way. Who knows?

Jarrod McCabe: Yeah. Look, I, I think, expect to say Sydney if it follows Melbourne, I don't think you'll, you'll expect to see anything slow down anytime soon, I think is as soon as then doors are able to feel confident to put their properties on the market and get the exposure they want. They'll it'll continue on. And if you've got the buyer depth, which it seems as though you do the market should continue on for at least the rest of this year.

Chris Bates: We are actually saying that to be honest, we've surprisingly the last couple of weeks, a lot of pre-approvals that conversations I've had clients, right? You want to get pre-approved, but this is what we need to get going. And then it's crickets for a few months, you know, life takes over and no emails sort of thing. And then bang in the last sort of two, three weeks with this lockdown, like people from, you know, January, February, March, it's just setting their docs in and all that were keen to get pre-approved. And I think this is what happened last year with the lockdowns with people, got their ducks lined up, really wanted to go out into market. And then when things got opened up way too many buyers, not enough properties. So yeah. Well I'm hoping we'll get

Veronica Morgan: More properties this time round. Cause there's there's the, the backup is starting to build now that you can't get trades into to fix things up and top things up to put on the, on the market, you can't painted, can't get your carpet, you can't do all that sort of stuff. I just looked at a property today that, you know, has been trashed by tenants. It's actually fundamentally a pretty good property, but it's been neglected and it needs someone to come through and give it the big ones over and they can't. So it's going to sit there vacant so that one may well sell, but if you you're living in it and you don't have to actually put it on the market's on empty, then a lot of people are going to wait. They can't get stylists in there to, to dress it up. You know? So I think that's going to be one of the extra reasons why we might have a bit of pent up supply in Sydney. Yeah.

Chris Bates: I mean, and also it's hard to list, right? Cause you want to present it in the best light. You could see this kind of can't list it because I can't get trades to paint it and yeah. Et cetera. So yeah. That's another thing that could make the supply versus demand. Things not be good for potential buyers. Awesome. To chat Jarrett. Thanks guys. Thanks for having me. Thanks Jared. We want to make you a better elephant rider and this week's elephant rider training is

Veronica Morgan: I know that you've spoken a lot about this in the past. And certainly Jared did too about the townhouse development in the middle ring of Melbourne and there's suburbs in Sydney, too, where you can do that. You can, the frontage is they get, and then the land size is big enough. You knock it down or duplex or, or even just in areas where you can knock down an old weed, you know, and often they are those mid century homes that sort of then nothing sort of special. It's nothing sort of architecturally Meritus about them and they get knocked down and some mansion is put on them. And I think that where, you know what, I look at a suburb say, say in Sydney, a couple of examples, one is, will it be in the north shore? You've got part of Willoughby that's conservation area. And the other part that is not where you can do this compliant development.

Veronica Morgan: And to be honest, long, those areas that are conserved are better areas. You know, they generally, they, they hold their value. They genuinely are much more desirable. And so it's, you know, if you can look at it suburban, can, you know, cut it down the middle and say, well, one's a, one's B huffs a and half's B, then you're going to buy in the A-grade grade section of the suburb. So it's really important to understand the zoning when you're buying a property and you can find this stuff out because nearly every council has this stuff available online and you can get in there and you can get a real understanding of what is possible in the area. And a lot of people might, but most people, I don't think do it, but sometimes people do it because they're thinking about how they want to improve the property themselves.

Veronica Morgan: What can I do? But they're not necessarily thinking, but what could the neighbors do? And I think that that's a really important thing to do when you are looking at buying, because you need to understand what can change around you. And there's one particular property. Very recently that I went to look at Emeric Phil. And as soon as I got there, I realized I shouldn't have gone there. Like, you know, if I just looked at the map, I would never have gone and looked at this property. And when I say this, it was one block back from, I think, Sydney road and all along, you know, you see these whole warehouses there and it's like, well, they are going to get knocked down and turned into six story apartment blocks, which is most of these areas. And most of these roads that are flanked by these apartment blocks.

Veronica Morgan: And so I just knew immediately, I wasn't, we weren't going to be recommending that property. It doesn't actually matter what's inside the actual houses. So I don't care because exactly for me over the, and this was on the corner of the lane. And so literally across the lane, you would one day have a six story apartment block. Now I didn't even really didn't even follow it up until recently. I was actually looking at some pricing research on another property Merrickville and it came up just in the recent sales. They're so shocked at what it's helpful for, what it sold for was it really blew me away. And I, and I've really very much doubt that the buyer, ultimate buyer who bought that property would have even given it a moment's thought. Whereas to me, it's the first thing I noticed. Yeah,

Chris Bates: That's right. When clients will send properties to me and it's not, I'm not a buyer's agent. I'm not saying that, but sometimes I'll just play devil's advocate and come up with a few ideas for them. And that's the first thing I'm looking at. It's also, you know, if you're looking at properties and there's yeah, there's maybe it's people we know they're doing well, people are pretending and know what they're doing, but the people at the back of the property, walking up the lane and looking at the neighbors and most of them probably don't know what they're doing, but yeah, usually it is a good thing to do. Right. See what the neighbors are doing, you know, check out what potentially could change, what, you know, who's gone up, who's gone out, who's gone that could affect your privacy or your lights and, and things like that.

Chris Bates: And if it is an unknown, you need to factor that into your decision to buy. Because you know, if that is not discounting the price and it's a big risk. Yeah. You can easily shoot yourself in the foot. And if something easily, you know, all of a sudden a DA's larger, right. That person you're talking about in Merrickville bank, you've been discounted because that DA's online or the buyers are gonna know about it in the area, but you could have avoided that pain by just thinking logically it's a busy road, they're all warehouses that are probably not renting for that much. It's much more profitable to develop a view of townhouses and apartments at some point that's going to get capitalized on. So just got to sort of think these things through, I

Veronica Morgan: Think in the current market, FOMO drives too many of the decisions and they're just, they're thinking now rather than tomorrow. So yeah, I guess

Chris Bates: Another part to it is a client. Sometimes, you know, this place in the east there's spaces, in some suburbs in premium suburbs where you can do, you know, new townhouses and you are buying an older house in that area. Some think, oh, well, I'll do it. And then I'll do the development. I'll be able to do Plex. I'll live in one, I'll rent out in the other. And that's great if you either are going to, can afford to do the build because to do a duplex build is, you know, a million or 2 million or $1.5 million of debt that you're going to have to be out of service plus your current debt. And so, you know, sometimes I've had clients come up with this idea of buying in the suburbs, then doing the duplex and then renting one and living in the other, but logistically how to actually make that happen. They haven't thought through. And so now I've just got an older house in the suburbs that aren't voltages duplex. They kind of, there's no point renovating it cause it's better to do a duplex and renovate it and you get stuck. And so if you, if you think, even if you think you can capitalize on these things, you've got to logistically think, how am I going to make it happen from a finance point of view,

Veronica Morgan: You're living it. You know, if it's unrenovated, there's no point throwing any money at renovating it, then you're going to stuck living. I think that's not that great. Yeah.

Chris Bates: And that sometimes you will see that as problems, right? Like some houses, just a, not worth throwing money on money, on money because something structurally or fundamentally wrong with the way the house is or located or something. Right. Yeah. Be very careful buying those lines. Yeah. Next episode, we're talking

Veronica Morgan: About a lot of elephants in this one. We're talking with Rob Broadhead, he's the CEO of 2020 fire protection. I've had a question in my mind, niggling away at me for some time. And that is all around fire orders in apartment buildings. Why would one be issued? What's the responsibility of owner's corporation to look after their buildings and provide adequate fire protection. What's the cost of doing so and what are the risks of not doing so, and this is a very interesting conversation. And I have to say that if you own a property in an apartment building, or you're thinking about owning a property in an apartment building, you do need to tune in. And even if you live in a house or own a house has a few things for you as well. If you're looking to buy your dream home or an investment property in Sydney's inner west Eastern suburbs or north shore, my team, and I can help you by, without regrets, reach out by my website. Good deeds.com.edu. If you're looking to buy your first home, thinking of upgrading into a new one or purchasing any investment property, anywhere in Australia, my team love to carefully guide you on this journey. And most importantly, get the finance right. Reach out via our website. [inaudible] Dot com today. Thanks for joining us. We'd love to see you again. And remember don't be a Dumbo.