Suburb Trends September 2020 | What Suburbs are booming due to COVID & the housing or unit market? w/ Kent Lardner

What areas are we seeing the greatest growth and what suburbs have had the greatest losses.
In this edition of Suburb Trends monthly report the team and Kent Lardner crack the lid on what suburbs are only now feeling the effects of Covid, including what areas that are seeing a massive influx of consumer demand. On top of this we analyse the data between housing prices and units prices and what this means for suburbs future growth.
Here’s what we covered:

• Why do certain suburbs always outperform the market?

• What suburbs are cold?

• Properties that vendors have a hard time selling?

• How low are the current listings?

• What is the current vacancy rate?

• Using LMI guidelines as an insight into the quality of property in an area.

• What happens when Sydney incomes move more regionally?

• Why you should never judge regional property by Sydney standards.

• What are the worst areas to be buying units?

• What is the news for home finance?

• Will mortgage brokers dominate in the future when it comes to your home loan?

RELEVANT EPISODES:
Episode 123 | Martin North
Episode 135 | Eliza Owen
Episode 140 | Nicola Powell

Suburb Analysis (file download):
Mangerton (Wollongong), NSW, 2500
Beachmere (North Brisbane), QLD, 4510
Merewether Heights (Newcastle), NSW, 2291

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 16 September, 2020.

Veronica Morgan: This is our suburb trends report for September, 2020. And we'll be looking at where prices are moving across the country, either up or down and why they're moving in this episode, we'll be discussing the latest lending and mortgage stats, as well as how Kent's been using machine learning to refine his hot and cold suburbs lists.

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 cohost of Foxtel's location, location, location, Australia, and author of auction ready.

Chris Bates: And I'm Chris Bates mortgage. 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 fall forecast report, which experts can you trust to get it right? The elephant in the room.com did I, you as usual, we're going to do a deep dive into the suburbs where prices are most likely to go North or South in the very near future. But before we do that, Kent, what are these geeky tweaks you'd be making to your methodology?

Kent Lardner: Yeah, one of the paid gigs that I do is some forecasting and modeling for JLL. I thought I'd get in the plug for them. What we do is we do a regional level forecast using machine learning. You know, what does that look like? We take time series data panel data, which is lots of property information. We couple that with rental market information, we coupled that with census information, even though that's a little bit older and let the machine do its thing. And what it does is it spins up hundreds and hundreds of different models that work different ways in different locations with the objective of forecasting in advance three months out, what the inventory levels will be like. So what we've done is a couple of, couple of key things. The reason why we use for that is there's a lot less volatility within the region.

Kent Lardner: So if you do it at a suburb level, there's a lot of volatility month to month in the suburbs. So it doesn't really work. We tried that at a, the next step up, which is the again, a lot of volatility when we started to introduce, when I introduced the essay three, it was a lot smoother and at the model started to predict a lot, lot better. So we're using essay threes. And then what we do is we adopt that as a model to filter out and select the regions that are in or out in the hot list or the cold list. And then we look the suburbs individually.

Veronica Morgan: So has this, I guess what I'm curious about with the actual machine learning is because, you know, it basically will throw up reasons that we not may not be aware of. Right?

Kent Lardner: Well, it does. And they're asked, there are, there is a tendency for overfitting with a lot of these models. So you need to be rather cautious. It can sometimes give you insights that you're not aware of. It will find patterns in the data that you would struggle to do yourself, but before you accept anything as gospel, you really want to look at the, the, the regions and the suburbs individually to give it a sanity check because of that. Over-Fitting

Veronica Morgan: Yeah, because we can't give all of our faith to the machine, right. Is what you say.

Kent Lardner: No, no. And you've got, you've got a couple of problems or challenges. One of them is that you've got data blips and data anomaly she needed to look for. So you put in some dodgy data, but it fit to the dodgy data, but equally the models have a tendency to fit against spurious data sets as well. So you need to look at all of those things and use it as a tool.

Chris Bates: That's one of the things that these lists or top 10 suburbs that have grown, or that are likely to grow very often. You look at those and there's usually a reason behind a few of them that just don't make sense. If Veronica, you said a lot on the podcast where you've looked at these things, and it's just the medians risen because of lots of new stock, or there's been lots of price growth in the media. And because there's been a very few number of styles or et cetera, what you're saying is the machine will do lots of searching for us, but we still need to go dig deep on a suburb level and figure out what's happening on the ground.

Kent Lardner: Yeah. I don't like using mediums. I wrap it all about that a lot, but specifically you can use medians wisely at an essay three level more often than not a change in the median at an essay three level does reflect a shift in values at a suburb level. It more reflects a shift in what's selling at the time as we've covered. So let's say compositional problem, but the essay three price median does seem to work rather well as an index. However, for you to rely upon the price index at that regional level, you know, you look at the distribution safe, it's that damn bell or that bell shaped curve. So if it's a normal distribution throughout the different time periods, it's a pretty dang good index. What we're doing now is we're forecasting inventory which is slightly different, very correlated, but slightly different.

Veronica Morgan: Yeah. And it's, it's a, I guess it's the leading indicator to prices, right? Yeah. Yeah. So let's look at the data. Can the cold spots and where things are up, starting with listings for houses, I noticed the top two suburbs in the hot list currently have zero listings that might account for why they're there. Imagine the competition where even one hits the market in those areas.

Kent Lardner: Well. Yeah. One of the things we look at, we, we try and filter out suburbs that have a reasonable sales volume on average. So they get in because of their sales history, their monthly average, there is, there are sales volumes there. But what we found is a limitation or very reduced volume of listings at the moment. So to your point, some of these suburbs get in because historically they have some sales volume, but right now they're all tight and that's across the board. We've seen a significant drop in the number of listings. So if you compare it to 12 months ago, we are down. I think I just did a, I did a little bit of a summary of it. And we are down in total of listings if the houses across the country we're down 30% on where we were, same time, 12 months ago.

Kent Lardner: So I think that that's a good summation of what's going on. There's a reduction in that against 24 months ago. It's only down 7%, but our, I remember a lot of people complaining of what was happening in the market. 24 months ago. Things were very, very few listings two years ago.

Chris Bates: Yeah. I mean, that was 2018. So that was when the Sydney market was probably down 10%. You know, a lot of people were fearful, right. That all the doomsday day 40% talk was going on. But I mean, I think you have to look at the listings data now with a little bit of apprehension, obviously COVID and the second lockdown in Melbourne, I think if you look at Sydney listings, maybe they're still pretty strong, but Melvin's listings like must be just falling off a cliff right now, when you look at the state level, that's true.

Kent Lardner: The, the Melbourne situation with vacancy rates with a lot of things stand out. So, you know, vacancy rights is probably a really good example of what's happening in the market and across the country, vacancy rates have actually dropped, but they've spiked in, in Melbourne. So I think that's a, that's a really good lead indicator. So for example, I'm just looking at the here's pardon me, or look at the screen. You know, overall you've dropped down from 1.8% overall, your median for the, for the capital cities, 1.8% last month at 1.6, that's a significant drop. However, Melbourne's jumped up to 5.7% up from 4.6. So

Veronica Morgan: Well with Melbourne mill, considering Melbourne in anything at the minute is that whereas the previous lockdown, we all still transacted, you know, yes, auctions were banned, but basically you could still inspect properties. You could still buy properties, you could still move house. You could still, you know, get out there and rent something new, all that could still happen there. So there was a sort of a, a confidence crisis in terms of people thinking, well, what's going to what is going to happen? And will this stop now, obviously in the most recent lockdown or in Melbourne, that all has stopped. So it's no surprise that vacancy is going to go up because anything that was biking at the beginning cannot be rillette in this period. So you know, and I actually, I really feel for any landlords that have been stuck there, cause that will be very, very painful. But so how useful, I guess is Melbourne data at the minute?

Kent Lardner: Yeah. It's upside down. So yeah. Listings or download just looked at the numbers down there down by about 1500 less listings, Acosta, greatest city at the moment for houses so down, but it's not significantly down. There's still a number of listings out there, but just there's snow activity. Yeah. That's yeah.

Chris Bates: So there's lots of not Maine, probably new listings, but there's not enough listings going off the scenes cause no one's buying because you gotta be pretty courageous to be buying a property without going through it. I think a lot of the people would want to buy properties when they look on domain or real estate until they rock up and do one walk through Veronica about, there's been lots of times you've walked through properties and you got excited about it when you looked at it before you went and then you got there and you're like, Oh, how did I make that look so good.

Veronica Morgan: Yeah. Photoshop wide angle lenses and you know, judicious judiciously you know, Oh, think of that. The image of the house with a massive big water tank behind it. And if you take a photo of the house it's, you can see the water tank. It's so obvious if you go out in the middle of the street and crouch and take a photo of the house, the water tank is obscured behind the house and Google earth would tell you that story, but still it's ridiculous to buy a site and say, okay, so in the, in the top five houses least, you know, it's interesting three out of the five are in Newcastle slash Lake Macquarie, one in Woolongong and one in Coringa, which is sort of very leafy part of Sydney. And it's, I recently just went on a holiday where I spent a couple of nights actually just outside of Newcastle, in maintenance, just out near Maitland.

Veronica Morgan: And then went up to the hinterland of Byron Bay and each, you know, talking to people about property prices and this, and who's buying property up there and how quickly properties are being sold. And then very recently talking to a number of people about the, and the site on scene as well, that's going on and this, this is in new South Wales where people can travel, they can go and look at these properties and yet they're still not you know, that, that sort of regional push seems to be quite busy at the minute and quite real in the sense that it's not just people looking they're actually transacting.

Kent Lardner: Yeah. the, the broader regions. Yeah. We've got Newcastle Lake Macquarie East and like Macquarie waste a Wollongong and Coringa so you know, they all are just on the outskirts and you know, so there's a lot of, the, lot of the fundamental data is really, really strong for these areas. So your inventory levels are quite low. The only question I'd have is in ritual level for like Macquarie West is a little bit higher than those other regions. I've mentioned it's up around four months, but that's still low. But by and large Newcastle, like McQuarrie swollen long have done extraordinarily well.

Veronica Morgan: And I guess then there was also yeah, 20 houses. Right. And I noticed that 14 of those suburbs are in new South Wales and then got three and ends up three a and tells me, what do you think is going on there? Nothing in Queensland, nothing. Well, it's sort of no surprise. I get nothing in WWI or no poetry, nothing in icing T nothing in Victoria. That's maybe no surprise as well. What's what is the story there?

Kent Lardner: Yeah, I'd probably say more that we've got a lot of air, a lot of these areas. A lot of these regions and pick on Victoria, for example, if you look at the map of Victoria it's all very good, but not great because of the lockdown situation. So there's nothing really, really bad through Victoria. So very hard to pick bad regions. H just this situation with the the lockdown, we need to probably get six months out of a lockdown for the data to start to make sense again. But the map for Victoria looks quite quite good. It's just not bubbling to the top of the moment. If we look at the map of say Queensland, there are a few good pockets. I look around Capella bar and a few of those locations, just South of Brisbane, quite solid. So what we're doing is we've got a list here that we were trying to pick the top just to, to talk to for the show, but that doesn't mean that we don't have a lot of solid regions. And by and large bulk of Australian regions,

Chris Bates: Specifically for the housing markets are doing very, very well. And when you say specifically on the housing market, is that because you think completely different story in the unit market and you know, and as investors, I guess it would look at the same suburban, so actually houses at very low, but the units in that area potentially extremely high for supply.

Kent Lardner: Yeah, exactly. So just to sum that up, I just looked at my notes, 75% of the regions that we analyzed are all very, very low risk for houses. So they look solid. So that sums up the market 8% I would consider high risk, of course. So that's off, that's off of about just over 300 regions that we analyze for houses. So it's, it's, it's pretty solid.

Veronica Morgan: Yeah. And before we get to units, let's talk about those high risk areas. You know, I mean, there was one, actually the worst performing suburb on your lease or the coldest spot is a place called guru. Hadn't even guide Western new South Wales. I looked it up knowing for fat lambs and potatoes population, 2061 houses currently on the market. And on average, it takes 143 days to sell each one of them. But these listings are all established homes, not pages of newly released house and land packages, which is what we've been talking about in the last couple of episodes. So I'm wondering what the hell's going on there.

Kent Lardner: Well, I did my magic Twitter and Facebook search. So just trying to get a flavor of what people are commenting on, you know, trolling, it's fine. But the only thing that I could uncover with my limited desktop research was there was a significant water problem about a year ago, but now, now the dams are full. So I'll wonder if I wonder if there's a correlation there. I wouldn't know, until up here, we probably do need to talk to somebody up there, but a year ago the headlines were reading that there was a water crisis.

Veronica Morgan: So when you, when you say watercourse, did we know there was a drought? Is that in that particular area? Did they have a problem with that?

Kent Lardner: I had a problem with this. But now the lightest weights to complaining about type, take away our water restrictions now because the dam is full. So there's still, but the dam is full, crazy how the area, you know, I've been a drought for it, completely transforms the area.

Chris Bates: And then a bit of Ryan comes and then, you know, it's back to business a little bit. Right. And say, you know, it sounds like a lot of people couldn't hang on and, you know, had to list their properties and yeah, well that's, yeah, it is. It is. But.

Kent Lardner: I want to highlight highlights Australia, doesn't it?

Chris Bates: It's not pretty that as well, Veronica was saying that when you're on your travel, as you will find that Sydney side is a buying site on the same, we're starting to see clients that would usually send us. Yeah. We're thinking about buying an investment property in Brisbane or Melbourne or an asset, and he is Mudgee or central coast, or, you know, they're real. And, you know, I haven't really spent that much time in these areas and haven't seen the properties and they're getting excited before they even see them and the heart's going, you know, do day trips there or go and see it. Something it's really interesting how, you know, there's not that many investors out there, but a lot of the investors you typically would go for a capital city yet are also trying to, you know, by these hotspots, I guess, outside the city. So it's, it's going to be seeing, see if that trend continues.

Kent Lardner: Well, the vacancy rates solid yet the vacancy rates in these outer regions look better, the yields kind of look better as well,

Veronica Morgan: But then that capital growth usually suffers, you know, when you are a good yield and that's the thing, isn't it? I mean, I was talking to someone I need today about buying apartments in Armadale. And I'm like, why would you buy it? You know, like, I don't know the market that well. So, but the questions I would be asking is who would be renting an apartment in Armadale, you know, is it only students? And if it's only students, you've got one type of tenant and that's highly risky, is it, is it low associate economic groups in which case that's also risky. If any time you've only got one, one sort of typical demographic that is going to be your typical tenant, then you don't have that diversity, which gives you, you know, spread your risk basically. And how common is an apartment in the country town?

Veronica Morgan: You know, I don't know the answer to that, but these are the questions you should be asking before going, Oh God, you know how cheap I could buy a whole building? You know, I could buy three apartments for 750,000. It's so cheap. It's like, yes. Cause you're thinking with Sydney, you know, with a Sydney mindset, it's cheap and cheap in terms of borrowings and bricks and mortars, very different to cheap in terms of buying an investment. You know, it, it amazes me that people got that much money to spend and they still think about it in those terms. But anyway 

Chris Bates: The thing is it's hard to get relativity relativity in that market. So, you know, you think for 800,000, that's a lot of house, that's a lot of land for that money, but what you actually should be doing in that market, am I getting great value for money? Is this a, a great property within that market? Is it scarce, et cetera. And when you compare it to the local lens and you know, again, got up for an extra 300,000, we can get this property or extra 200,000, we get this or extra, you know, and that's where I think you know, I think a lot of people are looking at, say, for example, the central coast, and you know, it may be around a million dollars. You don't get that much, but if you've say got 1.5, you go to a whole other ballpark, you got to an acreage or you go for a beachfront or et cetera. And so it's all about relativity in that market, but unfortunately you know, a lot of investors look to invest outside of where they are or exactly where they live. And it's the danger. When you do both things, to be honest,

Kent Lardner: You use the term scarcity. And that's what I worry about. A lot of the specifically the medium density stuff outside of the cities even on the outskirts of Brisbane are, I remember my first property I bought was a townhome down in Wellington point and you blink and there's another set of townhomes being built. Cause all they had to do was buy one big old Queenslander on a big block. So the supply was constant. Soon as that market started to heat up supply ramped up to match it. So that's what I worry about. The, the, the medium median density strata space outside of the cities. I worry, I worry about Strada and apartments, full scope.

Veronica Morgan: You're not going to get that in a minute. You do, you also in your notes that we looked at before this recording this, you mentioned Morton Bay is a good cold spot to talk about not a danger zone, you call it.

Kent Lardner: Yeah. There's a couple of suburbs that are arena of supply for that very reason. So that, so the whole region, the region is Beachmere, it's An essay three region, but it's been impacted by three specific summers. Now. I hope I'm pronouncing them properly. We're Bon and Berry and Belara, so they've all got high levels of inventory, which has our standard go to across the board though, if you look at that region it's about 75, 76% houses, which is good, not an oversupply, a rental properties in terms of rental tenure, it's about 27%. So it's slightly below the national average. So there's nothing extraordinary there other than unemployment rate is a bit higher. So it's up around 7.6% at the moment, you know, I kind of drawing the line and starting to get worried about the national average, which is creeping up. But at the moment I'm saying about 5.5%, is that a concern income levels alone? I think that's more correlated to the fact that you've got a very, it's an aging community there. So your most common age bracket is over 65. So it's a retirement area it's lower, lower socioeconomic. It looks like based on the, the top five occupations, et cetera. So, you know, it's an area that I would be cautious about buying an apartment

Veronica Morgan: At what house would you be cautious?

Kent Lardner: Yeah, well, the housing market seems to be doing quite well across the board. You know, there's only unless you're in one of those regions that we've selected. I E the 8% of areas. It doesn't look bad as a housing market at all. It's the, it's the unit market. The the question I have is how much impact we have when one market starts to fall, you know, they're not, there's not a clear line of separation between houses and units. If one suffering, it will impact the other equally, especially in the rental market. We see that there's a bit of a stronger correlation between unit rental, housing, rental.

Veronica Morgan: Yeah. But there's also, I mean, when you look in the cold spots for houses, though, there are all the usual suspects in there, which is, you know, the Oren part, Astros Rouse Hill, you know, they're all pretty permanent fixtures. And so that's why I'm not going to labor the point and talk about the same suburbs every time we meet. But you know, so in terms of housing, I just, we probably need to just sort of distinguish between existing and new or recently built. When we say that, because you know, that there's huge amounts of infantry in those areas.

Kent Lardner: Yeah, yeah. Not that, but the point is obviously the holding costs for the developers as low cause it's a patch of dirt with a rendered image of a house. So the, the, the risk is more for those people who want, who need to sell or want to sell, who've already bought in a year or two or three ago. So obviously they will be doing a tough, and, you know, you only have to look through your, find a few listings in there that are a year or more old that are trying to compete against all those government in settings and new stock. Very tough, very tough for the secondary market.

Chris Bates: Yeah. So I'd say the whole molten by region is you know, it's to the North of Brisbane. You've also got Ipswich to the West and then you've got Logan to the South and there's three areas. We've spoken a bit about Logan, you know, the oversupply problems with new housing down there. The growth corridor between Brisbane and gold coast. We've seen that a lot. I've seen a lot of investors sort of buy houses in that area, same as Ipswich where you on around three, 400,000. And they've been that for 10 years. And a lot of buyer's agents have recommended people, those areas, and they're highly risky and they always come up in your data. My other worry with Brisbane is this Morton Bay area, because I've also seen people, you know, places like Warner, Coalinga, Northlight deception Bay, there also lots of new house and land packages in there, same story as Logan, et cetera.

Chris Bates: And it's just, it's a very, it's the same problem, you know, all sides of Brisbane. Cause a lot of investors have gone there because it's, you know, Queensland lifestyle it's affordable, it's three, 400,000 and people go and buy not one, but they buy three or four in these areas. And I just worry, you know, even on the NIU side units can't, but I would say the houses that still extremely got a massive supply risk. And when you say numbers like unemployment, unfortunately this sort of downtown's really shine that unemployment's not evenly split. It does affect some areas harder than others. And generally it is those younger people. And you know, the outer suburbs, unfortunately. So it's, it's definitely a real area to watch, I think, as well as it switches

Kent Lardner: A lot of the things aren't new phenomenon. If you go back, if you look at the, the LMI policy guidelines or security location, guides are really good insight to what's been happening over the last 20 or 30 years, because that there's reasons why certain postcodes get on their category three lists or their high risk list. So I always recommend have a look at those now. I don't have them in front of me, so I can't quite immediately, but it's a good reference because I remember a lot of those areas, Chris, that you just mentioned, we've paid a lot of big claims over the years in those locations,

Veronica Morgan: Is that publicly available that.

Kent Lardner: QBE have, have it published on a I'm trying to remember what they call it, but Genworth calls call there's the security location guide. So I think it's a really handy and we might cover that in a future.

Chris Bates: It's a funny thing. It's a deep so what gets at LMI claim is a default on a mortgage, right? And then that goes to the lenders mortgage insure. And what, you know, RBI did a sort of report recently, and it basically said that people who are in positive equity and have an Much lower default rate and then those people who are in negative equity, which makes sense. Right. and so, but what it kind of shows is that areas where there potentially is negative equity issues, which is new stock are always a hot, more likely to default on their mortgage. And so you can start saying, you know, what kind of basically shows is that the compounds the problem, right? If you've got lots of people who think they got lots of people, five selling with sort of defaults, it's like a double whammy. And I think that's the big worry with these things. If, if you start to say price falls and you start to say negative equity, and he starts saying day fall, she starts saying 5,000 minutes, like a race to the bottom.

Kent Lardner: Well, that's the problem with a new estate or a new apartment block. Um everyone's coming in and there's a higher proportion of people who are buying with mortgage then established suburb. So you've got an influx of people who come in at all exposed to the same economic risks. And then when, when things get tough, a lot of them are forced to sell at the same time. And I recall four claims in one small street in Sawtelle or just South of Sawtelle. You know, because it was a, a new, a smaller state. Everyone moved in, in one fell swoop and we had four claims in one street and that's happened time. And again,

Veronica Morgan: Really sad, isn't it? It's, it's awful. Now what, I mean, you highlighted a few other suburbs to talk about, you know, there's Merewether Heights managing Vogel, being shed laid city. Let's have a quick chat about that. Okay.

Kent Lardner: Let's start with Mary, where the Heights is is an interesting one because I'm familiar with our drive past that a fair bit, but yeah,

Veronica Morgan: We know you always check a Newcastle suburb.

Kent Lardner: I got my, my some on the scale here. So it's, it's an interesting market because there's two distributions. It's not a beach side suburb, but it's a beach view or a water view suburbs. So typically you'll see two distributions in prices, those with the views and those without there's not enough units in there to really worry about it's 97% housing rental properties very, very low. So it's an 8.7%. So not, not a lot of rentals. And I think there's some of the things that they had some of the foundations as to why an area is really interesting. So yields are not bad, either 4.2% for houses. So, you know, that's, that's pretty good. I look, I look at a lot of areas that are down below half unemployment rate for the essay too, which is kind of the, the couple of suburbs in and around. It is 1.5%. So that's, that's extraordinary income level, household income, 2.17. So just over two grand, it's quite significant full of professionals and managers. So that's the number one

Kent Lardner: Occupation is professionals is 37.8%. So that's pretty big age brackets, even spread a lot of families a high proportion of people on the line team. So it's a family suburb very much. And again, there's not a lot of range, but if you do need to rent there at $750 on average. So it's not a, not a cheap place to read either, so it's good, but properties come on and die, disappear.

Chris Bates: And I will because you know, I've got a client trying to buy there at the moment to be honest whether it's there or whether the junction or Merryweather or Adamstown Heights they're all in that little pocket and growing up in Newcastle, not having you can't that's the, you know, it's arguably the best place to live in Newcastle, right? And yet you've got beach on one side, you got to sit in a town you know, great walking and, you know, get all the lots of benefits of living in Newcastle. What I think is going to be interesting. A lot of the locals probably you know, Tom's is tough there as well. Coal price, drugs drive a lot of the sort of Newcastle market. But what I think is happening is a lot of young couples in Sydney that are now starting to get to that family stage.

Chris Bates: And now falling back in love with Newcastle and then going back to Newcastle with the Sydney incomes and works, allowing them to do a commute from Newcastle, which wasn't possible product COVID. And so that's a prime example of what one of our clients is doing so that they're moving back in it, but they're still keeping their Sydney income. And so you're getting Sydney income in Newcastle and that wasn't happening just to the last six months, but everyone knew leaving there so they can live a more combined capacity than the local. So they were doing their job in Newcastle. They would probably be earning 50, 60% less. Right. And so, you know that they're going with Sydney borrowing capacity and then basically pushing out the local. So yeah, it's funny. It's a funny dynamic that COVID is allowing that sort of Newcastle locals to go back true.

Veronica Morgan: And I'm guessing from what you've said there as well, that it would be one of those suburbs that if the market did fall, you know, on, on, on a grand scale, that they'd always be local buyers that want to buy there. Right.

Kent Lardner: Everyone in Newcastle would love to live at Marietta. Like, would you agree? Well, it's funny you say that I'll talk to some of the people who are kind of in the 60 age, 60 years and older bracket. And they said there was a period where Mary, where the hot spots to go to that was the preference over Mary weather. And there's a lot of properties that are being built in sixties, seventies, I think so, or 50, 60, 70. So you can obviously see what's happening. It was, it was exciting. Um you know, so that's probably what happened. But there's a lot of renovation work going on in and around that area right now. So you know, those, the Merryweather through to you know, Newcastle East, they said there's some really expensive real estate there. I really like cook field. So yeah.

Veronica Morgan: If I was going to move to new castle, that's where I'd be moving.

Chris Bates: Yeah, yeah, exactly. That's like next door, right? So you've got lion, Merryweather cooks, they all got Dhabi, charade, et cetera, is that it's a whole lot walk around on the bait cafes, et cetera. Yeah, it's a very special part of Newcastle. It's completely different market. And what I think is going to drive that market that is Sydney people that have left Newcastle and going back and or, or people cause it's, it's not the commutable, it's a big call to move to Newcastle rather central coast. Do you feel like it's still part of Sydney, but in castle, you know, it's a mission to get back to Sydney. So you've got to really, it's a big call to move there.

Kent Lardner: Chris, that's a segue to evoke a beach. Um so the next one on the list is a VOCA beach. So very distinct to price distribution, because you do have the water side properties that each side properties. So a significant spiking in percentage, well, over 10% of the property sell over $2 million. So it's, it's not a cheap suburb. But there's a, there, there are an abundance of properties in, and around that eight to 800 to 1 million Mark back from the beach. So it's still relatively affordable, right. Compared to Sydney. So if you were exiting Sydney and you wanted a beach side suburb, it's not a bad option. Unit prices, there's you know, there's some, some units there, again, a lot of those seem to be focused on, on water views. So they're more prestigious just under 84% houses. So it's still dominated by freestanding houses, rental properties just under 9%. So again, not dominated by by rentals yields are a bit,

Veronica Morgan: You do have a lot of how old are they homes there? So how do you sort of pull that apart? Pull that out of it.

Kent Lardner: Yeah. I think what they do is they well know what I know they do with the census is it's the people in the house at the time to tell you whether it's a rental. So they're the only properties that get calculated as a, as a rental

Veronica Morgan: With the census, just as a curiosity here. So basically if everyone's in their normal home in Sydney for argument's sake and nobody's sitting in their holiday home on census night then a lot of those houses won't get counted.

Kent Lardner: So you got to be in the property problem with the data. I think as, as it's a statistically relevant sample, it's not really an issue, you know,

Veronica Morgan: And the reason I asked that is because if say 18% are rented and the tenants are more likely to be occupying the homes on census night. So you're capturing the data of the tenant population, not of the owner population,

Kent Lardner: Right. And they're the ones telling you what it rented for. So, you know, it's a great little tool that I've just deployed looking at the relative rental price for the, which has that little neighborhood pocket relative to the and then making more adjustment, whether it's a higher rental or a lower rental for that neighborhood. And then I just apply that same adjustment factor to today's essay, to median. And I'll put that on the website and you can, it's a really interesting to see, and the bulk of the adjustments are all within 30%. So it looks like a root half reasonable metric, but there's some interesting things that come up census. The other interesting thing is I'm on I'm about to apply or use the total number of properties in each area that's track quarter by quarter by quarter by the government part of the geocoded national address fall. So that's a beautiful thing is that you can then index up and make adjustments to the census data, which is pretty old there, right. 2016. But you can say how many properties were in the suburb in 2016 and how much has that changed according to this count or properties that the government does.

Veronica Morgan: Interesting, but just laboring the point on the census for a minute. So if you're looking at say income data, you're looking at employment data or that sort of stuff that comes out of the census then, and you might be looking at a suburb like a Boca beach it's, you're not really capturing a true sense of, you're only capturing the occupants, the fulltime occupants. You're not necessarily capturing what's driving that market, right?

Kent Lardner: Yeah. The, yeah, the, the unoccupied home and I haven't given a lot of thought to it. So I'm not, I'm not going to be able to give you a really assertive,

Chris Bates: I think in that I got 20 in that JSA, you know, up where I am up in that sort of peninsula, you know, Palm beach, left side perhaps like smashed because a lot of offloaded that holiday homes when things got tough. Right. And so you saw massive price falls is interesting with this pandemic sort of situation. You kind of wish you had a holiday home. Right. And, and the way the change can work from home is all sides signed? Well, actually, actually I live at my holiday home and come to the city, you know, rather than all that wasn't safe. I think that's what probably tends to they not driving people, just shifting their holiday homes.

Chris Bates: Like they would have potentially done that in the JSA people a lot, actually. That's what I really want to do. But I bike is definitely, we we had a trickle of people buying the central case. I've you know, the last five or six years, not that many you know, cause they, they went in there in 2015, 16, cause I got tied up with Sydney and then the market cooled off in 17, eight days and they're like, Oh, I don't want to buy anything. And then in 1919, they're like, actually now I can still afford in Sydney. And, but now I guess we're starting to see lots of clients by you know, your mind [inaudible] we had a client buy him one girl on the weekends and et cetera site, you know, but they were all probably going there with Sydney budgets. Again, they're not going there with a million dollars. They're going for 1.5 and you know, they've got an Anchorage

Veronica Morgan: And often, and often Sydney price relativity in their heads too. They find it very difficult to really separate their, Oh my God, this is a bargain because they're comparing it with Sydney prices rather than actually with local prices, which is always dangerous.

Kent Lardner: Yeah. It's interesting though. You mentioned that the holiday houses, the volatility of these holidays, home centric areas is something that's otherwise noticed. I know somebody was always a standout full of holiday and over the last 20 years, whenever I've watched it, you know, it would move into oversupply rapidly. So I remember covering it yeah. 10 years ago, 20 years ago when there was massive amounts of inventory every time the market went down a bit. There'd be a pile on interesting

Veronica Morgan: Adelaide city.

Kent Lardner: Yeah. Adelaide city was again, it's, it's, it's like the other cities where we've got a higher vacancy rates due to apartments, but very low number of houses. So you know, again, it's, it's your stereotypical inner city area, right? You've got, you know, high, high density areas that are Marcus sort of suffering, whether it be Melbourne or Sydney or Brisbane or Adelaide. So yes, it is suffering from higher vacancy rates and the associated higher inventory levels of apartments

Veronica Morgan: And manga tin was another one on your list.

Kent Lardner: And was that on the good list? Interesting suburb again, two distributions cause abuse. Is it NWA? Oh no. It's down in in Winnebago, just adjacent to the freeway there at Wollongong with views out you, Chris looked at it on the map for me, cause I said, where is this? And, and he said, this is beautiful. It's leafy. And it looks out there, they scab it. But the, you know, the numbers, the numbers look interesting. And there's a few properties to look at. One of them that I saw listed was a whole block of units. I think it was two units or duplex. Yeah, the whole block. I think it was listed for around a million bucks. Not too bad at all.

Chris Bates: I'm thinking I just, I want, yeah, absolutely. But there are expensive properties in there. So yeah, some of the properties sold, I'm looking at a number of streets, they're up to 2.5 million. So it's a mixed bag of, of, of price ranges in that location. Yeah. So what's happening down there. We're saying is there's nothing available North that will and go in the B side suburbs, like the rules, et cetera, all those places. Yeah. There's nothing. And you know, even the pole properties, a guy for big prices and a lot of the buyers have been looking for months and months and months, they feel like they've missed the boat a little bit because they're saying a lot of the other people, the orphans and nail about it. People like them coming down from Sydney. And so what's that

Veronica Morgan: Commutable because of the train line along there,

Chris Bates: Because they're trying a lot, but you look at this magazine it's probably, I mean, you can't argue with the beauty of it, you know, tree lined streets, it's like a an upper North shore sort of suburb right next to kind of, and so yeah, if you wanted to get to the city, it's, you know, couple of kilometers, there's a grammar school there. You can say why, if you can't buy in the North it's actually not a bad place to be buying new will and on. Right. So it's a, it's interesting that, that, that potentially, you know, a lot of the buyers may be going a bit further South and saying, hang on a sec, why don't we check out these suburbs? So that doesn't surprise me at all.

Veronica Morgan: The bottom five units, suburbs are dominated by mining towns and coastal Queensland in particular. So that's that sort of holiday unit market, you know, other than that, what interesting things have you sort of uncovering in the unit side of things?

Kent Lardner: Yeah. are you, you mentioned the mining town too. I found a property last week in Laurinburg where it's listed for a significant drop as well. But again, I think it's just generally the you've got the inner city CBD areas. We know that we know the cause of that just a lot of ex Airbnb extruded properties, but equally I think an exit us from high-density living. And I think probably there's another couple of factors too, especially in and around Sydney and build quality. You know, people are worried about that. So so that's kind of sums up, you know, your Sydney and Melbourne, but as we moved outside of those, it's just purely green and white. The fact that you know, there's a lot of available stock and it's just pure and simple, you know, you get the high density, the higher, the density of the high risk right now,

Veronica Morgan: The thing too anecdotally, I've been hearing about, you know, agents sort of not wanting to list one bedroom units. You know, and so as I said, only and studios, you know, and I guess that's sort of easy in line with what we are hearing is that you know, people working from home, they don't want to be working in the dining room table, so they need a study or a second bedroom and particularly a studio apartment, you know, you leave if you're locked in, you go nuts. So it's sort of interesting that and, and that would go for tenants as well as owner occupied tenants are fortunate enough to be able to move out and your friends are falling and they're in a small apartment. They think, well, you know what, at the same rent, I can actually get a two bedroom place or why wouldn't you do it? You know? So it's, yeah, I mean, I guess, is there anything showing up about that, that correlates with that, or

Kent Lardner: If I'm moving it's more anecdotal. So I pick up on information by looking at Twitter comments. Actually funny, I was sitting in the HADR, so listening to the, the lady sitting next to me and she was saying, I can move out of Newcastle city and I can move down to Belmont and save a hundred dollars and get a three bedroom property with a yard for the same price. And I think that maybe that just sums it up.

Veronica Morgan: I think it probably does. And on one of your Twitter conversations that you were following was some suggesting that that there could be a flood of sales with unlit rentals you know, in potentially in this sort of unit space, if you've got the smaller apartments that are hard to rent, you know, they will be coming onto the market to sell. And then if those agents are seeing that, that, and they're going well, bugger it's too hard. I don't want to,

Kent Lardner: Well, I remember the time when we drew a hard line in the sand of 50 square meters when we were accepting fo for mortgage underwriting now LMI, and we were challenged constantly obviously to try and accept stuff smaller. So I went in and saw a studio in in the Eastern suburbs of Sydney and it was stunning. And based on that, I was influenced, I said, look, given their prime position, you know, we'll accept this one at below. It went below 40 square meters. So know, I think as, as demand pushed up, you pick the right spot. We lowered our guard and we, we, we started to accept these smaller and smaller units because they were so beautiful and so well designed and so well positioned. So that's the, that's the backstory. And then what happens is one thing leads to another and you you're, you're letting these smaller and smaller properties through without that same degree of quality.

Veronica Morgan: It's also about affordability, isn't it? I mean, you know because I've argued for him in my first apartment was 36 square meters, you know, it was in Newtown in Sydney, but and it was well designed, very well laid out, but, you know, there's only so long you could live there and, and then the rules change and I had to sell it to buy a house because it was, as I said, under 50 square meters. But, you know, for many, I thought, well, a well designed small apartment was a good way for people to get into a very expensive property market. And so a lot of those studios are in sort of pots pointless with, by,

Kent Lardner: I forgot the name and I'll just remember it was Paddington. It was stunning. Yeah.

Veronica Morgan: Yeah. And you know, and a lot of them are fabulous lifestyle around. I just think that we've all been a bit reminded. That space is very important. Personal space is very important. And also if you can't get out, there's no point if you're being in a great area, it really is that now you also do some interesting analysis on houses, things by distance from the CBD.

Kent Lardner: Yeah. Chris asked me to do this one. What did that turn up? What did we get it? We got, what are we going expire by distance? I call it in my little worksheet here. So so what we do is I look at the listings have sampled, or how many do we got here? We've got about 700,000 house listings. And then we took the distance of the listing to the GPO. And so we just focused on Sydney. So we did the zero 15 kilometers, 15 to 30 kilometers, 30 to 45 and 45 to 100. So we gone, gone big on the last one. What, what did we learn? What are we trying to learn? We tried to find out whether there were higher or lower volumes of expired listings in each of those areas or inner ring, outer ring. And it was, we found that was the case 24% of the listings that we found in the inner ring and hit that 90 day Mark. Now a lot of those are have already sold. They're just still appearing whatever. So it's a less of an absolute figure and better used as an, as a comparative figure. The 15 to 30 kilometer ring jumped up to 32% and then it went down again, 30 to 45 to 28, but so did the overall listings numbers, that's 30 to 45 K distance was only 2,700. So it was a very, very low count, which probably coincides with the geography of Sydney. I'm guessing.

Veronica Morgan: Yeah, because I guess it's like rings of an onion, isn't it? But you know, that they get bigger and bigger. And so as long as geography as in no rivers, no mountains, no, you know,

Kent Lardner: National parks. But yeah, so I think that the focus would be more of a zero to 15 versus the 15 to 30. There was a statistically significant difference between the inner and outer ring, a lot less expired listings.

Veronica Morgan: So therefore, yes. So it's, if you draw the inference for that, it's quicker to sell property in the inner ring than it is in the next ring, but then the furthest ring, what was that percentage again?

Kent Lardner: 32. So that was about the same as that 15 to 30. So I think the 30 to 45, if we look at the map, we'll probably find some geographical reasons for that rivers and stuff. Yeah. The national parks, but I'm 45 to 100, there was 3,499 total in the soap sample. And all of those, we found 1100 of them hit that 90 day Mark

Veronica Morgan: Hundred once we, then that, that you know, that distance range. So you'd have Penrith's. Would you, would you have, or is that within it? No, that'd be still closer than 45. K

Kent Lardner: No, I think that would be pen with them or the pen is at 58 and 60. I think what we were trying to you think about saving you, it's built on a card you got from Sydney CBD to Bondai, maybe six Ks. Right. And so at best, so, you know,

Veronica Morgan: 13 to four clues, I can tell you that.

Chris Bates: Yeah. Okay. Alright. So yeah, it's maybe by driving, but maybe not distance by the Crow flies. Yeah. So, you know, and so you've, yeah, you've only got half an onion really. And then you've got the Harbor, then you've got the national parks, the etc site. Well, I think why I was asking you to do with that Kent was basically to show that on a big number, when you look at it seven, 8,000 listings in Sydney, I think it is is that right? Kate? I'm just going to mouse over the four cells and it's going to tell me 16,880. Yeah. And then when you take out apartments, which we know there's problems with investors, this is just houses it's houses. Okay. And so then we're just trying to figure out how many of us, 70,000 ah, sort of still hot and fresh in the inner ring of Sydney.

Chris Bates: And is there a lot of, you know, stock just sitting around and what we basically found out is that 17,000 quickly dropped all the way down to 1500 in the, you know, in our 15 K ring, which that hasn't been sitting on the market for three months and I'd argue a lot of the stuff sitting on the market for three months is generally not great. You know, that's why it hasn't sold. And so it just shows that there's not that many properties for sale really in that inner tank, 15 K ring of Sydney in the housing market. And when you compare it to these big numbers, it's still quite a lot of properties out there, but once you cut it up there's not that many available yes.

Veronica Morgan: Transacting, but also be interesting, you know, over time just to see how that, that non of the expired listings proportion changes, wouldn't it?

Kent Lardner: Yeah. Yeah. I think as the market gets softer, we see those, we see an increase

Kent Lardner: Obviously in expire loosening. So an equally, I think it's, it's, it's a symptom of unrealistic expectations,

Veronica Morgan: A monthly normally, do you have one?

Kent Lardner: Yeah. My monthly normally is the inner city areas where effectively we've got so few houses. So it's very hard to measure the housing market for these in a city or in an inner Melbourne or inner Sydney or in Adelaide because the count of houses is so very low yet it's swamp, it's swamped by all these other negative variables, which are high vacancy rates, high listings over 21 days, which is part of that same metric, but equally very, very high inventory levels for apartments. So that's the big challenge. And obviously there's, a lot of them are zoned differently and they're being sought after by property developers. So the anomaly problem that I've got is they're very, very tough. It's a tough market to measure houses in the inner ring

Veronica Morgan: And the vacancy rights. I mean, you pull it apart, right. Units versus houses.

Kent Lardner: Well, I, I roll them together because of that, the problem with the census and what they do is I'm trying to measure how many properties are managed by our real estate agents. So manage rented via real estate agent is my baseline metric. What the census does is it splits two units, but then it rolls in townhouses and row houses and terraces into two one. And so, and then how's it. So how do I split that middle bracket? Because when you're measuring or looking at listings townhomes are typically thrown into the unit bucket. So I put them all, I put them all into the one. It makes sense for some things, but it causes me some challenges on, on other things,

Veronica Morgan: Right? It's the, the trials and tribulations of the data geek last month, Chris promised to share the latest lending and mortgage debts with us. So what he got to tell us about that crease?

Chris Bates: So there's a few sources that I like to look at is the ABS every month release lending data has a little bit delight. So then it just relates to the July numbers. You know, the RBA does beautiful graphs every month, which kind of gives you a really good understanding of what's happening. I have J which is probably the arguably the biggest mortgage aggregator. It is definitely going to be not in distance future, they're buying the other biggest one. So they're going to be this sort of massive aggregator. They do a quarterly index. The next one comes out in October. So there's lots of ways that you can figure out what's happening with the lending market, but they are generally a little bit delights. They going to be two or three months behind what's actually happening. The interesting thing now, if you look at the June quarter at generally, does about $5 billion a month of refinances, it went

Chris Bates: Well over 10 billion, maybe even 12 billion. So what happened in the lockdown? Lots of people, there was lots of good deals, especially IMSA had this amazing deal. And there was a huge increase of refinances. Usually something that's quite sticky, people would just, you know, even though they know they can get a bit better deal on their mortgage, they just, there's generally only a small portion, you know, 5 billion out of say $2 trillion of mortgages. It's just refinancing every month. So it's not a big,

Veronica Morgan: What's interesting about that though. Cause I know that CBA and Westpac were having a bit of a war going on. There were offerings. So I was at four grand a pop and to, to move your mortgage to them. So there was quite a lot of competition in that space, like you say, and they had a really good deal, but, but I was I guess observing particularly on LinkedIn, for instance, the amount of brokers such as yourself, really promoting, you know, this is a time to do it. And of course, if no one's going to write a new loan, then that's a great way for brokers to keep busy. Right. And so given that what 60% of people are using brokers, well, those brokers all got a database of people to go to to suggest this. So, you know what I mean? Is it people saying, Oh, now's the time to refinance my, you know, and take advantage of these deals? Or is it actually brokers initiating a large proportion of this?

Chris Bates: Oh, I think was a bit of a bit of both when rates drop people think, hang on a sec, maybe I should review my mortgage. You know, what happened? Did the banks not pass it on? How much did they pass on? So is it greater awareness when rates are dropped, the rates have sort of dropped to not 0.25. So now I think part of it was that I think part of it was so much advertising from the banks, you know, like everywhere you looked or the TV, the buses, et cetera, that, that awareness. And then you write like a lot of brokers were going, we need to get through this as well. Let's target our database. Let's say if we can get drum up more business. So those factors combined shifted refinances to a whole new level yet, even the RBA, you know mr.

Chris Bates: Stevens was out there saying, you know, refinance your mortgage because they know when you do that, you reduce your expenses. You free up cash flow, which you can spend in the economy and you lower your biggest expense, which is your mortgage interest. So that's what the government was even trying to say. But also even the fixed rates that the fixed rate deals out in the marketplace were just so far below the variable rates. So it was an easy pitch for people to go, you know, what you could refinance and get this amazing fixed rates. So the thing is that purchases that down massively. So in the Boone you're getting, you know, maybe 22, 23 billion a month of sort of purchases or what more purchases than refinances, but that's only 17 billion at the moment. And so you can see there's a lot less activities, a lot less transactions compared to, you know, say in the boom.

Chris Bates: And that, that lines up perfectly with listing. So not only these listings down, but sales volumes are down because the mortgages, you can see that the thing is, well it's you know, you like to say, when markets are really booming, you've got owner occupied and you've got investors competing. That's the perfect storm. If you're ever going to sell a property, he'd want the investors want yet, you want to owner occupies, you want downsizes who are cash buyers. And so you have all these people who have, you know, a different forces trying to compete for your property. Investors just aren't really in the market. You know, there's only roughly about 4 billion, 5 billion of transactions a month in the boom. It was over 10. So yeah, you can say there's half the number of money from investors. You know, it's not far off longterm averages, but you know, it's, you know, if you think about you know, time and prices, rising investor lending still well under what it was, you know, eight, 10 years ago.

Chris Bates: So that's a really big story that investors on around. The interesting thing you know, for listeners is the major market share is dropping every year. And a lot of that is because at the same time as the majors are losing market share, brokers are gaining market share. And so that's one of the reasons why the, you know, in the Royal commission state, I try to kill brokers is cause they knew that every year they they're losing their market share to smaller lenders like Macquarie or ING. And so it's gone from about 80% to the majors to about 50%. But then there's recent price war. The majors kind of went in all in with AINS and CBA, et cetera. And so they got a bigger market share, but like you said, Veronica broken market share now is around 60% now, just six, seven years ago. It was around site, you know, maybe eight years ago it was around 40%. And maybe an eight years before that it was 20% of loans were going through brokers. So you can say that the brokers that are a lot of driving, these sort of more competition in the market,

Kent Lardner: Chris, a question for you. So we've got an increasing listings that are coming out of the rental space and being sold. So, you know, I did the analysis about six months ago and it was hovering around idol, 9% of every listing that I sampled then was an ex Randall. And now that's jumped up. I did the analysis last week. I think it was around 13% were ex rentals. If, if the investor space is dropping down there's obviously a risk there that those properties won't cycle back into the. Rental pool at the same rate as before. So we could see a reduction in the rental pool, which could have a significant impact in the coming six to 12 months on the rental market. What are your thoughts on that?

Chris Bates: So what you're saying is that the hits the rent high vacancy area they try to rent it. I can't rent it cause there's 700 other apartments. So they got, well, let's sell it and then try to sell it and then no one wants it. Or, and there's no other investors wants it. So the only person who's going to buy as an owner occupy. So what you're saying is it potentially could create an under supply the future

Veronica Morgan: For the fact that they're selling it because I can't rent it

Kent Lardner: Well, it, where it came from. So if it's, if it's come out of the pool, which was student accommodation I would say students over it's come out of the pool of Airbnb. Then the risk is significantly lower because it like, it may balance things out with that longterm space, but I've seen some interesting post on, on, on LinkedIn of lights saying how vacancy rates are going down. And with this happening, I lead increasing sales of X rentals. Could it get worse? And there's some evidence to say it might be geographically based. So we know that there's not a single market, we know that, but there's going to be some areas that are going to be rather roller tough without the investors coming in, in increasing numbers.

Chris Bates: Yeah. A hundred percent. So, you know, like the renters need a lot of houses or apartments to be built, to keep rents down. Right. And that's one of the benefits you know, if there's oversupply sort of thing, it is keeping rates down, you know, you can't just keep growing your population of the city without building new stock. Is that man, isn't an opportunity for listeners to sort of hope for this under the oversupply to go to undersupply and then push prices up. I think the problem is there's still a lot of buildings to still get completed. Like you can drive around these high supply areas and you know, there's still lots of apartments and cranes around site. Yeah. And so Amy, if it's this, all this new stuff that hasn't even hit the market, yet, that's going to be available for rent. That's going to be newer and better. You know, then the stuff that's available. So yeah, I don't really, I how oversupply then under supply and the opportunity there, I just personally prefer to buy an area that's always under supply and and never going to get more stock. Right. So, yeah. But yeah, I remember as an example is a, is a great spot because you can't build any more there. Right? Exactly. So you've got to run on the beach. So my land left,

Veronica Morgan: So this has been a very interesting chat because we've gone and really looked into other dynamics outside what we found to be really dominating the hot and cold lists in the last couple of months. You know, we've, we've looked at other other aspects of, you know, other aspects under, what am I trying to say here? Great thing about editing. Hang on. Oh yeah. We've looked at, say Gordy, just chop out that whole messy bit before. So this has been a great chat because we've been able to broaden the outside of those sort of the normal suspects, the usual suspects that we talk about all the time, the areas of oversupply and the impact and how covert is really basically a, you know, what's, the tide goes out and everyone's been through without their undies on get seen. And that's what Cove is doing in, in a lot of these areas of oversupply with investors have been actually buying stock that's investor stock rather than invested grade and all that sort of stuff.

Veronica Morgan: But today we've opened the conversation and looked at a lot of other aspects to what underlies where the areas are doing very well or not including the lack of water supply during a drought and what that can do to an area. So it just really just speaks to the importance of understanding the local dynamics. You know, you can top line it. And I think this is what your research is so important to help us sort of filter through and understand, and then have these discussions at the local level that really gives us such incredible insights into what drives the property market across the country. So thanks Ken and another great chat. Thank you. Thank you, Ken. I'm looking forward to next week, next month. And as promised we can put a feature in the next month is looking at that the LMI security location guides. And I think that will be rather telling as well in terms of him. It definitely is some historical insights into areas where the mortgage jurors are wanting to avoid and let's face it. They got x-rays all over the numbers on this stuff, so they don't want to go there. I think individual buyers should definitely be very cautious now. Thanks for listening. We'd love to hear your questions and feedback connect with us via the website or email us@questionsattheelephantintheroom.com. Did I, you,